Our Investment in Zipdrug — An Interview with Stu Libby
Notation Capital was launched earlier this year. We’ve been busy at work since, and have partnered with six companies during this time. They’ve been quietly hard at work, but in the weeks and months to come, we’ll begin to tell their stories. We’re biased no doubt, but we believe the people that we’ve slowly begun to surround ourselves with — whether it’s our investors, part-time partners, friends, and now founders — are incredibly talented, driven, diverse, and have the capability to build the next generation of great companies in NYC.
Today, Zipdrug announced their public launch. Along with his two co-founders, Stu Libby is beginning to build a special company that we believe has the potential to fundamentally transform the way prescription drugs are delivered to patients. Stu took some time to tell us a bit about his past, his mission, and the worst startup idea he ever had. You can find the interview below.
Kyro, Webster, & Stu
What are the key moments in your life that led you to start this company now?
Two separate forces are attributable to the formation of Zipdrug.
The first was utilitarian: I take a prescription medication every day for heartburn. Every month, I walk into my local pharmacy to pick up my medications and it’s a hassle. I always hated going to the pharmacy and every time I would visit I would think to myself, “This is NYC, I’m surrounded by ambitious people everywhere and they’re constantly on the run, why is visiting a pharmacy to get medications always such a time suck and why hasn’t anybody improved this experience yet!?”. However this thought alone didn’t put me over the edge to shift careers and start a new business.
The second force was much more personal: In December my father almost died from a massive cardiac event. Thankfully he fully recovered. When he was discharged from the hospital they sent him away without his medications — I couldn’t believe it! At that moment I realized that there has been almost no innovation within healthcare for decades in terms of how patients receive their medications — that this is a systemic issue. A few Google searches later I learned that patients who don’t take their medication, ‘medication non-adherence’ as it’s called in healthcare, is a huge problem. 125,000 Americans die every year as a result. It costs our healthcare system over $290 billion dollars per year to treat patients who are in need of medical attention for not taking their medication as prescribed. At that moment, I thought that if we could make it easier for patients to get their medications by not having to drag themselves to a pharmacy, we could literally save lives. That was the fuel I needed to start this company. We are in the business of helping people stay healthy by making their lives easier.
What’s the most important thing you learned having previously founded a company? And why the hell would you want to do it again?
If you are not doing something you have passion for you will make it exponentially harder for yourself to be successful. Starting a company is a labor of love — you have to believe, to the core, that there is a purpose for what you are doing. Everybody says it’s hard to start a company, raise money, attract talent, lead, etc — I disagree. I’m not saying it’s easy, but it’s not too difficult when you are backed by purpose. I didn’t start Zipdrug simply because I wanted to start another company, I believe that this opportunity is my purpose and Zipdrug achieving its mission is my chance to make the world a better place.
What are the worst startup ideas you’ve had?
I almost started a hedge fund called FLP Capital that would have made alternative investments. FLP stood for ‘Future Lease Payments’ and it was meant to provide cash flow optimization against tenant receivables for landlords. You could have also called it payday loans for amateur landlords. The vision was, if a mortgage in its most simple form is just a promise to pay and can be securitized, packaged, traded, etc, why can’t a lease…? It’s a promise to pay from a tenant to a landlord, just like a borrower/lender agreement in a mortgage. Have I bored you yet? I ended up spending a ton of time with bankers, financial engineers and landlords researching this to realize that I would have been miserable in this business because it was absolutely soul-less. It’s potentially a good idea, feel free to steal it if you are still reading and lack a heart.
What’s the Zipdrug mission?
To make it easy for everybody to get their medications.
Who is and how did you meet your founding team?
There are 3 founders at Zipdrug and I met them both through different mutual friends who run venture-backed companies. Kyro, my co-founder, is far and away the most talented product designer I have ever worked with. I met him before we started Zipdrug when he was doing design work at a mutual friend’s company. One of the many things that makes Kyro unique is that he went to medical school before he pursued product design. He is obsessed with the intersection of health + design — a perfect combination for the problem we’re trying to solve. When it was time to think through the idea with somebody, Kyro was my first phone call. Half a cup of coffee later and we were off to the races. Our third founder, Webster was introduced through a different entrepreneur friend. Webster is a double threat CTO — he has experience building technology for both healthcare and on-demand companies. Kyro and I only wanted Webster to be our CTO and we are thankful that he was convincible.
How did you think about and choose your investors?
All capital sources should not be evaluated equally — what investors can bring to the table above and beyond capital is very important. At the very early stages I think of investors as co-founders of the business and we approach working with them that way. In Notation Capital’s case, it was obvious very early on: Nick and Alex bring a ton of insight and value to the table around strategy, product & engineering in addition to their capital contribution. They have been instrumental in helping us build our engineering team. Our other investors and angels bring expertise and experience in key areas such as logistics, infrastructure, distribution and business development.
We also have broadly good chemistry with our investor group, which is really valuable. When the chemistry with your investors is good, it creates this open forum where discussions lead to meaningful developments that can quickly accrete value for the members of the cap table.