Running Through Walls: Priority One… People Matters
Giovanni Colella, co-founder of RelayHealth and Castlight Health, was a practicing psychiatrist in Italy, but after moving to New York City he needed to obtain the proper licensing before obtaining a medical residency. He pulled shifts as a taxi driver and a waiter, learned English and then practiced psychiatry for a while. But in the decades since arriving in the United States, Colella has picked up priceless lessons in successful entrepreneurship. “I became an entrepreneur about 10 years out of my residency, so pretty late in life,” Colella tells Venrock partner Bryan Roberts in the latest “Running Through Walls” podcast.
Colella had a drive to improve healthcare, and a desire to work with people who felt the same way — which leads into one of his most important business lessons. “Make sure the people you’re building a company with are aligned with the mission,” he says. “People coming into a company — especially one that I want to start — have to be very spiritually driven to make the world a better place. I’m not saying they have to be Mother Theresa — I’m a capitalist, so I believe in wealth creation. But I want them to come onboard because they love what they’re doing.”
Castlight Health, founded in 2008, created a health benefits platform that helps employees choose the best health plans and providers. “The DNA of the company was a lot of curious people,” Colella says of Castlight’s early team. “We kept questioning, we kept questioning. And each one of us was really able to divide and conquer where their skills were.” Which leads to another one of Colella’s entrepreneurship lessons: “Pick people that are different than you — people that you probably wouldn’t pick if you were left to your own devices.”
When a company’s stock price experiences volatility, as Castlight’s has, the talented people chosen by company leaders need guidance on the grand plan — another lesson Colella has taken to heart. “You have to spend time focusing on your employees, and de-focusing on the price of the stock,” he explains. “It’s tough, there is no doubt … if your stock price is not doing well, it compounds a morale problem.”
When Castlight’s stock was down to about $3.50, the company’s investors agreed to a repricing for employees. They were also asked to revest. “Pretty much 100% of the people that were underwater decided to do it,” Colella says. “And that was an act of courage. So it really created the right incentive. Now everybody is already making money, everybody is priced at the right place, we’re all aligned. And we’re growing very well.”
Colella’s entrepreneurial journey started with RelayHealth, a medical digital communications service. RelayHealth was acquired by McKesson in 2006, and today is a highly successful unit of that company. Although its early years were “really painful,” Colella recalls, that experience yielded another important lesson for the entrepreneur: knowing when to pass a business along so it can be successful.
“Understand if your business is a great business as a stand-alone, or is actually a feature of a bigger product,” he advises. “And you have to be really honest with yourself at that point — because if it is a feature of a bigger product, then find that bigger product and aim to be part of it. You optimize for yourself, for your company, for your investors, and for everybody. And it doesn’t have to mean that the business dies.”
