Lessons from Sarah Jacobson, FairStreet, on product positioning and optimizing your sales process in healthcare
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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.
Today, we’re excited to get to know Sarah Jacobson, CEO and Co-Founder of FairStreet, the new startup Medicare agency that helps independent agents grow faster.
Founded in 2021, Fairstreet empowers the 55 million Americans 65 and older to make confident and well-informed health insurance choices, starting with Medicare enrollment. They’re building the platform used by top independent insurance agents to help older adults navigate the complex world of Medicare.
Fairstreet most recently raised a Seed Round led by Fika Ventures along with Pear and 645 Ventures. We’re proud to be pre-seed investors in FairStreet!
FairStreet was founded by Sarah Jacobson and Tori Seidensteinn after meeting at Stanford Business School. Tori was a software engineer on Facebook’s health team, growing from 0 to 50 million users in two years. Sarah was previously a product manager at Square and Stride Health, a health insurance marketplace.
In this episode, Sarah shares wise insights on user and hypothesis driven prototyping and creating fast iteration cycles, as well as founder sales strategies in the 0 to 1 phase.
Sarah’s path to healthcare entrepreneurship:
- Coming into Stanford as an undergrad, Sarah was dead set on being a doctor. She loved medicine, and she loved the impact that physicians got to have. In her senior year, she had a realization: not only did she not have the personal passion for clinical medicine, she realized that the reason why many patients weren’t improving had nothing to do with the actual care in the clinic — it had more to do with other factors like their access to healthy food, the ability to afford prescriptions, etc.
- This led Sarah to do an internship at Rock Health, where she was exposed to incredible digital health companies, and the rest was history. This was in 2015, when digital health was really taking off. There were a lot of different peer models coming out, and the insurance world was just starting to blossom.
- After Rock Health, she ended up doing a brief stint at a startup called LiveRamp, then transitioned into product management at Stride Health. Sarah shares that it was a fantastic experience to understand the health insurance landscape as a whole.
“I grew up in the UK… When I came to the US for college, I was really struck by how broken the healthcare system was. I had grown up in a country where no one was worried about being able to afford their healthcare, so when I came to the US, that was a huge concern. Coming into Stanford Business School, I knew I wanted to start a company that improved access, and that health insurance was, like it or not, the biggest lever we have to pull in this country to affect how people couldn’t access and afford care.”
- Sarah shares that she went into business school with the sole intention of starting a company. In her Stanford application essay, Sarah wrote about how passionate she was about building a company that would have an impact on healthcare at large. At Stride Health, Sarah was helping people enroll in under 65 health insurance through the Affordable Care Act, and as a product manager at Square, she built health insurance benefits for small business owners. With all of these experiences under her belt, she knew she wanted to build in insurance.
- Sarah and her future co-founder, Tori, first met at a happy hour for admitted Stanford students.
“I really wanted to find a co-founder at Stanford. I remember out of the corner of my ear hearing someone say, ‘I’m coming to Stanford because I want to start a healthcare company.’ And I think I ran across the bar.”
- Sarah and Tori hit it off immediately, then ended up being in the same section in business school. The first thing they did together to test their co-founder relationship was a hackathon. “It was an amazing way to spend a weekend together collaborating on an idea in healthcare and see how we worked together.” It was such a great experience that the two of them ended up applying for Lean LaunchPad, a quintessential entrepreneurship course at Stanford, which is where they met Mar and the Pear team.
Fairstreet’s co-founding team came before Fairstreet itself.
“We started as a co-founding team, and that was the first thing to exist. Then, we went in search of a problem that we could solve in a really unique way.”
- Sarah shares that they knew, based on their mutual interests, that their company would be at the intersection of aging and insurance. Sarah had a passion and background in insurance. Tori grew up with her grandfather until he was past 100 years old, and she had built technology for older adults.
“When we put together both our passions and our professional experiences, we kept coming back to older adults as the user that we wanted to solve for.”
- It wasn’t the right idea from the get go. Sarah shares that during COVID, they spent a summer working on a caregiving idea; they were building a product for adult children who have aging parents and needed help navigating the tough decisions that come at that point. They iterated through a ton of different ideas, but a common and unifying concern coming up in all of their user interviews was Medicare.
- Sarah shares that people were overwhelmed with the decision-making of choosing from an average of 57 different Medicare plans in their zip code. There’s a lot of marketing out there, and it’s unclear who to trust in the process — on top of that, the implications behind choosing the right plan are huge. This same problem kept coming up again and again, and they knew their company’s mission would be to solve it.
FairStreet helps older adults in Medicare health insurance when they turn 65 by building software for independent insurance agents to use with their senior clients.
“This is a weighty decision that has lots of consequences and potential penalties if you get it wrong, and there’s a lot of noise out there.”
- Most people today work with an independent local insurance agent when they turn 65. FairStreet builds the software these local agents use to power their business.
- Sarah shares that choosing a Medicare plan is an extremely high-stakes decision: older adults rely on it for their health insurance, use it monthly (if not weekly) to see their doctors or fill prescriptions, and with Medicare, there are a lot of decisions that you can’t go back on.
- As an example, your decision to choose Medicare Advantage vs. Medicare Supplement is a one way door.
- People turn to a local agent because the knowledge required is extremely local: what doctors are in and out of network, which hospital systems are good or bad, etc.
- A lot of other startups in the Medicare space are serving customers direct-to-consumer. Sarah shares that the decision to focus on brokers, the independent agent market, was the result of a lot of market research in the space. There were three elements to this:
- Sarah and Tori interviewed over 100 adults turning 65. Most interviewees that were confident in their health plan decision had worked with an independent local agent.
- They interviewed over 100 different insurance agents. They were all running their business off pen, paper, and Excel. There was no software built for this user, and they were in search of better solutions to run their business.
- Looking at the market, the majority of people enroll with the help of an independent agent. The majority 60% of seniors will use an independent Medicare agent. The next largest segment are people that go directly to the insurance company; direct-to-consumer is actually a much narrower segment.
- From market research and talking to users and agents, Sarah and Tori had the conviction that building for the agent would be the best path forward for serving seniors.
0 to 1: ideation, MVP
If you know your problem space before you know your solution, use a customer and hypothesis driven model to get started.
- Some founders have an idea from day one. Sarah shares that she and Tori knew the problem space they were passionate about, but needed to find that specific problem to solve. They tried a ton of different approaches — asking smart people in their network for their input, brainstorming out of the blue…
“The most effective thing was actually just getting started somewhere and using a very hypothesis driven model.
- The pair first planted a flag in senior healthcare. Then, Sarah shares that they designed a set of hypotheses around pain points that people had at this particular point of life. Every single week, they would interview 10–20 potential customers using a very structured interview process to identify a hypothesis they had. Doing this week over week was what guided them to FairStreet’s idea, and that’s when they started to think about an MVP.
You don’t need to know much to know if you’ve built something that people want to buy. Use sales as your customer discovery engine.
- From a tactical perspective, FairStreet’s product today is a vertical platform for agents to run their business, at the core, a CRM, and on top of it, there are automated workflows and integrations.
- They had a hypothesis about the pain point, but they still needed to validate the solution. To do that, Sarah and Tori created a Figma prototype of the product. They sent cold outreach emails to agents and would demo the Figma prototype during their meetings. Sarah shares that they listened to their feedback and iterated dozens and dozens of times until someone said, “How do I sign up?”.
- Sarah and Tori were joined by their founding engineer, Declan Sander. He built a CRM from scratch in two weeks and they onboarded our first few users. Sarah shares that it was a great exercise that built a model that they still follow: using sales as their customer discovery engine. To this day, Sarah will still use prototypes to test a design with new customers to see if there’s market pull. She believes that in the 0 to 1 phase, user interviews = sales.
“I used to think that sales was this buttoned up process, and you’d be a stereotypical salesperson. In the earliest days, I realized sales is customer discovery, and what you’re doing is trying to put something in front of your customer that resonates with what they want.
To solve the cold start problem, 1) set specific, achievable goals, then 2) find scalable channels.
“I thought we had to find scalable channels from day one… Ajay and Vivien’s advice to us was, you don’t need to figure that out. Get 10 customers and change their lives.”
- Sarah and Tori participated in the PearX accelerator, and during this time, “Get 10 customers and change their lives” became a mantra. They had a whiteboard where every week, they had a goal for the number of user interviews they wanted to do and how many people they wanted to sign up. Sarah shares that this helped lower the bar for what marketing or what sales needed to happen at this phase.
- Sarah shares that they experimented with a lot of different methods to reach their target customer, many of which didn’t end up working out:
They tried virtual events on Zoom, where the first one had two attendees.
They tried an in-person meetup where one person showed up.
They showed up to conferences with FairStreet t-shirts and cowboy hats trying to get people to talk to them.
- What ended up working was a plain, cold email. Sarah shares that they were lucky because the email addresses for their target customers were publicly available, and so they were able to design really personalized outreach to local agents who were willing to get on the phone with them.
“I think in the earliest days, just finding one channel to reliably get in front of your customers is all you need. You’ll figure out and discover more as you go.”
Have single minded focus on achievable, sub-goals.
- Sarah shares that they were solely focused on signing up 10 customers because they couldn’t learn fast enough until they had a critical mass of people engaged. Everyone on the team was sending cold emails, talking to customers, demo-ing the prototype. In the evenings, they’d get together to update the prototype based on what they’d learned that day — and then repeat.
- The team solely focused on this for four weeks, and it was transformative for the company.
“It taught us the power of focus and how powerful it is if everyone in the company is running towards the same goal, and in front of customers.”
Design thinking approach:
- Sarah shares that they identified early on that distribution was going to be challenging, and that was related to product market fit and their MVP. Brendan, a freelance designer who was working with them full-time, pushed the team away from product development to focus on whether or not they could get 10 customers to sign up for FairStreet.
Ask users questions that get them to tell you what they really think, not what they think you want to hear.
- The team made a lot of improvements as the interview process went on. Early on, when a customer said “I’d sign up for FairStreet”, the team would count it as a conversion when it shouldn’t have been. Sarah also shares that they would ask leading questions looking for evidence that people needed their solution. Just saying “I’d sign up” isn’t sufficient — the top learning at this phase was to become more metrics driven and more accountable to having short feedback loops.
On staying motivated as a founder:
- Deeply believe in the work that you’re doing.
Sarah shares that she’s extremely motivated by seeing the impact of FairStreet on customers, agents, and the seniors that they work with. Beyond even the impact of a customer transforming their business with FairStreet, Sarah is motivated by their long-term goal to make Medicare more accessible.
“One of the biggest unlocks for me was knowing how I was motivated, and then just creating that environment for myself.
That can look a little unconventional, especially in the early days. You don’t need to go and hire a big team — you can create that through a network of investors, coaches, advisors, friends, things like that.”
2. If you’re motivated by people, rely on your team. If you don’t have a team, create one.
As a product manager, Sarah had always been surrounded by a team. When it was just her and Tori in the earliest days, parts of it could be lonely.
Sarah realized how much of her motivation came from being part of a team — so she created that structure for herself. They brought in a freelance designer, Brendan, and joined the PearX accelerator program. Later on, Sarah ended up working with an executive coach who also felt like a team member, creating that support system.
Sarah’s executive coach is a GSB alum as well as former founder, and she discovered him through an email blast from GSB. A lot of people interview multiple coaches, but Sarah hit it off with her coach and has been working with him for over a year. As a former founder, he can empathize a lot with the entire founding experience.
When it comes to choosing the right executive coach, Sarah shares that it looks different for everyone. Some founders work with coaches who don’t have a founding background; there are coaches with a more tactical approach to improve your performance/efficiency and others who feel more like therapists.
“The thing that is most valuable is an outlet for me to be able to speak to someone outside the company that I can just be totally transparent with …
I’ve learned at a much higher rate. I’ve been able to improve the way that I function and show up at work at a much higher velocity compared to before when I wasn’t working with someone.”
The future of FairStreet:
“Our vision in five years is that every single person turning 65 in the US is enrolling in Medicare with the help of a FairStreet agent powered by our software.”
- The FairStreet team believes in a future where the Medicare process isn’t stressful or confusing, but empowering. A senior will partner with someone local and trusted who will have their back all throughout retirement — and it’s all powered by FairStreet.
- FairStreet is hiring a Founding Growth Marketer. If you’re passionate about distribution and getting in front of SMB customers, apply!
