Hemant Taneja on Industry Transformation with Applied AI

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Introduction and Guest Welcome

[00:00:00] Omar Haroun: Welcome to the Augmented Intelligence Podcast. I'm your host, Omar Haroun, the co founder and CEO of Eudia. I'm really excited to be joined today by Hemant Taneja. Hemant is a very well known and one of the more successful investors and entrepreneurs and visionaries in Silicon Valley. And we're all talking about augmented intelligence.

[00:00:23] Omar Haroun: In many ways, he had this vision and wrote about it in his book, Unscaled, in 2018, which feels like Decades ago. So I'd love to start by having him on just maybe introduce yourself and share more about. Who you are, what you do, and a bit about your vision and thesis.

Hemant Taneja's Background and Vision

[00:00:40] Hemant Taneja: Yeah, sure. First of all, thanks for having me.

[00:00:42] Hemant Taneja: I think Augmented Intelligence is a great name for the podcast. We talked a lot about the philosophy that you and I have discussed in our work together as well. So I have been an investor and entrepreneur for the last 25 years. Most of it at General Catalyst. And I would say the first decade was in Boston, where I did a lot of work around mobile and clean energy, and then I moved here in 2011 to build the firm's presence in Silicon Valley.

[00:01:10] Hemant Taneja: And a lot of that has been, in my, try to summarize it, really about reorganizing society online. What is that going to look like, and the role that technology and data, and the AI that got activated because of cloud and data, and the role these technologies are going to play over the next 20 to 30 years.

[00:01:29] Omar Haroun: And one of the things I was really intrigued by and I'd love to hear more about is we had obviously this revolution with the foundation models that are Very generalized, but even since 2018, you've been talking a lot about the opposite of looking at a very specialized set of industries.

[00:01:47] Omar Haroun: Can you talk a bit more about that part of your thesis? 

[00:01:50] Hemant Taneja: Yeah. 

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Applied AI and Augmented Intelligence

[00:01:52] Hemant Taneja: I think there's this theory around You build these foundation models, they're going to do everything, right? This whole idea of someday there is artificial general intelligence, which we can debate about as to do we want that to happen or not.

[00:02:06] Hemant Taneja: And our belief is that in certain industries where we have a huge amount of responsibility in the way we touch people and we touch their lives, that Just having a generalizable language model is not going to be sufficient. So our focus has been on what we call Applied AI. And the Applied AI thesis really is aligned with this whole idea of Augmented Intelligence to say, how do we empower humans to deliver important services in society, whether that's legal services, that's healthcare, that's financial services, in a way that's best for our citizens.

[00:02:44] Omar Haroun: Excellent. 

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Transforming Industries with Technology

[00:02:44] Omar Haroun: And speaking of healthcare, that, that is the area that you've obviously had a tremendous amount of success and which is an industry that I talked to a lot of other founders and people almost give warnings, don't even try because it's just so complex. And there's so many a graveyard full of startup skeletons.

[00:03:02] Omar Haroun: Can you talk about just what you've done in healthcare and how you were able to have some success there? 

[00:03:08] Hemant Taneja: Yeah, so I've been for over a decade now working on transforming the healthcare industry. And if you close your eyes and you said, what should the healthcare industry look like 30 years from now?

[00:03:19] Hemant Taneja: You would say it needs to be proactive because consumers want to be healthy first and foremost. They don't want sick care. It needs to be affordable so we can serve everybody and accessible. So that it's actually available everywhere. So I've worked with that design principle to say how do you go about doing that?

[00:03:35] Hemant Taneja: And the reality is that when you take on the task of transforming an industry, you can't do it alone. So first thing is you have to think about this idea of radical collaboration, where us as technologists, how do we team up with experts from the industry? And so there's been this whole idea of can we partner with the health systems?

[00:03:51] Hemant Taneja: Then the question is, how do you actually deliver health assurance? Proactive, affordable, accessible, and that's all been about if we can make our health systems be vibrant institutions. If they can be more profitable, if they can have better use of technology in keeping people healthy, then they can use those resources to invest in technology and in their communities so that everybody can have affordable and accessible care.

[00:04:17] Hemant Taneja: And this idea that there's no mission, no margin, that profit and purpose are deeply aligned, and can we actually use innovation to help these institutions get there, that's a lot of the work we have been doing at General Catalyst, towards the healthcare transformation. 

[00:04:31] Omar Haroun: Amazing. Yeah. And I'm going to talk and ask you about.

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Challenges and Solutions in Healthcare

[00:04:34] Omar Haroun: What are some of the parallels between healthcare and the other industries like legal that we'll get into, but just sticking with healthcare for a minute, can you talk more about I, I completely agree that this cannot be done by one technology alone, one startup alone, even one started the one DC alone.

[00:04:50] Omar Haroun: What are some of the. Incentive problems that you saw in healthcare and how did you go about addressing 

[00:04:56] Hemant Taneja: them? Yeah. First of all, I think your point about no single technology company can do it is right. I always say the Amazon of healthcare is not a trillion dollar company, but a trillion dollar ecosystem.

[00:05:05] Hemant Taneja: So we've actually been building a set of companies that focus on this. The problem in healthcare is a fundamental misaligned business model. And the idea is that who pays and who benefits are two different folks. So you never have a market behavior in this industry because, if you ask a patient, do they want a certain procedure?

[00:05:27] Hemant Taneja: Oh, by the way, you don't have to pay for it. And it's going to do X, Y, Z to you. Cost is never a concern. It's always about, of course, if you, if my doctor is selling me, I should just go do the procedure versus really thinking through economically what's the best thing. And so there's this misalignment because insurance companies are paying providers and consumers and making their decisions.

[00:05:47] Hemant Taneja: And that leads to just all kinds of issues in the way these industries develop. You can actually trace back the evolution of these industries and how these misaligned business models are called. Advertising is another one. Where you'd have the same issues. Advertisers are paying.

[00:06:03] Hemant Taneja: Consumers are the ones that are actually being influenced by the content. And so everywhere that's the case, the way we think about it is that, can you, in the process of transforming those industries, rethink those business models and realign all the stakeholders so that you actually are making sure it's not just about profit.

[00:06:23] Hemant Taneja: You are creating long term impact that's good for everybody. 

[00:06:25] Omar Haroun: I love it. And to this end, you can share a bit about The creation fund, the thesis behind that what you're doing. Within healthcare, then we can move into the other verticals. 

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Parallels Between Healthcare and Legal

[00:08:04] Omar Haroun: And and yeah, maybe now as a segue, I'd love to hear, what are some of the parallels that you see? And we've talked about this at length, but for the audience, between healthcare and legal and as you were learning about UDEA, what about that really appealed to you? What sort of diligence had you already done in this space?

[00:08:24] Hemant Taneja: Yeah, so I think the big opportunity with, AI and augmented intelligence is to create abundance in the industries that we're tackling. So as I mentioned in healthcare, the idea is can you create healthcare abundance? Can you actually serve consumers in a way that is not cost prohibitive in terms of the workforce?

[00:08:42] Hemant Taneja: There's actually a lot of parallels. First of all not everybody can access the best lawyers, so there's this lack of inclusivity when it comes to legal and we need to we think we have an opportunity with augmented intelligence to make everybody that's in the workforce be fully empowered to do the best work in a way that's affordable for everybody.

[00:09:02] Hemant Taneja: So to me, that is a massive unlock. I think we talk a lot about responsible innovation, which is. Inclusive, sustainable, and respecting our civic and democratic values. I think the fact that we can provide that by rethinking this industry, that's an important idea. Third thing I would say is when you have that mindset of, can we bring abundance to an industry with AI, you really do have to think about transformation at scale.

[00:09:30] Hemant Taneja: So it can't be that you're applying AI in some point solution where you have to think about the entire workflow. You have to think about what is the purpose of this industry, this function, and what should it look like and try to get there, in a systematic way, but not not thinking about individual stakeholders because you'll suboptimize with that the eventual abundance is going to be.

[00:09:53] Hemant Taneja: And so I think there's a lot of parallels in legal abuse of health care and one of the things I'm really excited about is how you're thinking about then catalyzing the ecosystem and really a movement around how in our democracies, the legal system can work for everybody.

[00:10:09] Hemant Taneja: That's ultimately the goal that I think Julia's vision will enable long term. 

[00:10:14] Omar Haroun: Absolutely. Yeah. 

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Vision for Legal Industry Transformation

[00:10:15] Omar Haroun: And I think one thing we've connected over a lot is this concept of responsible innovation which to your point, when in healthcare, people's lives are on the line in the case of legal, it's, it is also their lives.

[00:10:25] Omar Haroun: It's not their health per se, but a single legal event could still bankrupt the average American. Yeah that really is core. What would success for you to look like from your perspective? 

[00:10:38] Hemant Taneja: So look when you and I, and our firm decided to be partners, we said, this is our.

[00:10:45] Hemant Taneja: Platform commitment in this space. So for me, I again, think about long term success is we'd really did transform the space. So the question is, what does that mean? I think to me, first of all this idea that we make legal services fully accessible for everybody. I think the second thing is we do it in a way that truly is augmenting intelligence to humans so that we maintain the agency.

[00:11:11] Hemant Taneja: To make sure the spirit of the law is manifested in the way business gets conducted broadly. We do a lot of work with large enterprises, and one of the things I'm very excited about is how their engagement and their legal department is going to transform because of this. I think the visionary CLOs are going to be looking at this thing.

[00:11:32] Hemant Taneja: Can we actually transform the workforce? Can we actually have a partner with who we can do these deals in a cost effective, concise, and intelligent way such that our Business teams are also aware of what we've actually done. I think a lot of times what happens is that you do these deals and the businesses don't fully understand what you're accomplishing and the consequences of those and the intelligence you're going to be able to bring to that whole process so that the chief legal officers can be better business partners to their management teams.

[00:12:04] Hemant Taneja: It is something that you're going to be able to accomplish through this process. The other thing I would say is I got to imagine Engineering talent, legal talent that wants to go transform this industry is going to find this very interesting because the kinds of problems you guys are working on, some of the demos I've seen and in our board meeting, it's pretty compelling.

[00:12:24] Hemant Taneja: I think these are pretty interesting societally interesting and technically interesting problems. So I do hope that in the few years we're going to see and say this is the best team that got together to take on this problem. And then I would say, I think, the legal industry at large this is a workforce transformation play.

[00:12:46] Hemant Taneja: I think there's a lot of things that are extremely interesting and exciting that lawyers do, and then there's a lot that's a drag for them. And I think taking that burden away so they can focus on, again, being better business partners to their clients which is in some ways what UDA is going to be able to do is architect a model for the future law firm that's.

[00:13:08] Hemant Taneja: Powered by AI is going to look like. And so I think the workforce is going to be happier in the industry. I think your team's going to have a lot of fun, fun sort of building we're set out to be building. And I think your business customers, the legal office is going to feel like we made their role more important and relevant in the companies as well.

[00:13:28] Omar Haroun: One of the things that I was curious about. 

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Long-term Goals and Industry Impact

[00:13:32] Omar Haroun: Given the thesis, and it's a very creative, non conventional set of moves for a traditional VC to make, what do you say to people who ask, how is this different than private equity? 

[00:13:46] Hemant Taneja: Yeah, first of all, we have stopped calling ourselves a VC firm. We actually describe ourselves as a global investment and transformation company because our goal is to partner with folks like you and then really finish the job in terms of transforming these industries because a lot of what's happened traditionally in the tech industry is you build companies, you take them public, you get out.

[00:14:05] Hemant Taneja: And you let society deal with them and their consequences. And our view is, let's have much longer term game plans around transformations and therefore work with you on a much longer horizon. Make sure you're capitalized to play the long game. And we do it in a way that profit and purpose continue to be aligned for all stakeholders.

[00:14:24] Hemant Taneja: So I think that's the core philosophy in the way we think about it. And I think in that context. Our belief is that it's not just about building companies, it's about building ecosystems, it's about aligning business models, and it's about innovating in partnerships with the industries that we're working with.

[00:14:41] Hemant Taneja: And I think that's a lot of the apparatus we're going to apply here to Judea as well. I'm excited to do that work with you. Absolutely. 

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Conclusion and Future Outlook

[00:14:51] Omar Haroun: Hemant, this has been a really informative and rich discussion. I'm incredibly excited about the work that we can do together and hopefully provide a blueprint for the rest of the industry and the industries that we're both thinking about to continue to follow.

[00:15:04] Hemant Taneja: Absolutely. Thanks for having me. And I do think we have a great journey ahead. So looking forward to it. 

[00:15:08] Omar Haroun: Excellent.