Rebecca Woodcock – Cake Health 1 of 2

"Founders should learn how to invest their time." Cake Health is a web service that helps users understand and manage their health care.

Matthew: Hi, this is Matthew Wise with FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies.

I’m very excited today because I’m here with Rebecca Woodcock. Rebecca is the founder of Cake Health. Cake Health is an online system that helps users understand and manage their healthcare coverage and expenses. With that said, Rebecca, we’d love for you to give our audience a brief bio.

Rebecca: So, my background is a business background. I come from a market research and competitive strategy background. I started out at Seagate, which is hard drives, so nothing related to healthcare at all. I worked as an analyst in their corporate strategy, learning about end-user behaviors, adoptions of different types of technology, whether it’s hardware, software or online content. And I then worked for a research firm doing similar things for other companies; companies like Google, Intel, Microsoft. So, that’s my background.

The healthcare angle and the idea for Cake Health came about from a need of my own. And I think it’s a need that a lot of people experience, where healthcare is kind of a black box. You don’t know what you’re paying and you only realize that after the fact. And it’s often a surprise and it’s often more expensive than you thought it was.

So, this happened with somebody very close to me. Just watching the bills come in and blowing through that high-deductible plan and thinking, ‘I have no idea what my coverage is. If something similar happened, would I be financially devastated? I have no idea.’

So, I thought to make these tools like Cake Health to help people not only keep track of those things but make better decisions around them.

Matthew: What makes Cake Health unique? Who’s it for and why are you so passionate about it?

Rebecca: So, Cake Health is for just your average person. It’s not for the HR department. It’s not for anyone who already knows this very complex, detailed, insurance speak, like deductible or co-pay or co-insurance. What’s the difference and what does all of it mean? This is for the average person so that it can be jargon-free and very simple: Where am I with my coverage? What do I need to do?

Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?

Rebecca: So, healthcare isn’t a very different space than what we typically see with technology. Technology, if you look ten years ago, especially with the iPod hitting the market and that creating this whole storm around the consumer and the consumer driving innovation and change; these were conversations we were having ten years ago in technology, right? Now, it’s very obvious. It’s not just consumer driving technology. Then it became consumer-driven content, you know, user-generated. Then it’s become social and now it’s developing into even more interactive. But, those conversations that we had ten years ago are just starting to happen in healthcare, where the end-user is just starting to make decisions and impact what is happening with healthcare.

What we’re seeing as trends are, for the first time, consumer-driven healthcare and business models around that starting to emerge, and there are a few things that are driving this. The cost of healthcare, the way it’s increasing so rapidly, that’s one of the main drivers for this. And so, we’re seeing not only several different layers; from the insurance, the brokers, to the HR departments, all these different stakeholders in that industry. In order for them to control their costs, they have to pass them down to the end-user.

So, the individual is paying more out of their income than ever before. And it would shock you to know that about 20 percent is the current estimated out-of-pocket. You know, what you’re spending out of your income for healthcare, even on employer coverage, and that’s for a family of four. And that’s going to continue, right?

So, this is one trend that’s driving consumer decisions. They have to. They have to start becoming more consumerized, shopping more for health services. There’s a big push for price transparency for the actual service so that when you go to the doctor, you can say, ‘Well, how much is this going to actually cost me? And should I actually get the surgery versus getting physical therapy or any alternative decision and is that best for me?’

Instead of it being always covered before, now it’s not going to be. So those types of decisions have to be facilitated and those business models are just starting to emerge. And that’s where Cake Health fits in, too. The decisions around your health plan are also changing. It’s no longer at the HR level and it’s no longer at the broker level.

But oftentimes, one way of employers controlling their costs now, and we’ll see a lot of this next year, is giving the end-user a stipend, a fixed contribution to what they can spend. And they can shop on the open market and make the decision that’s best for their family.

The problem is there aren’t any tools to make those decisions and nobody’s ever had to really make those decisions before, unless you’re on the open market, which is confusing also. But, most people have employer coverage. They’ve never had to think about, “Okay, now I have a deductible and is this the right plan for me? I’m paying more. This $2,000 before my insurance kicks in, what does that mean?”

So, these are all business models to support the decisions at the individual level rather than higher up.

Matthew: Who are your co-founders? How did you meet and what qualities were you looking for? And how did you know they’d be a good fit?

Rebecca: So, my co-founder is Andy Brett. He used to work at TechCrunch. He was one of the developers, and oftentimes the only developer, building CrunchSpace and supporting the entire network. And we met just through common friends and we’d run into each other quite a bit. I had no idea he would ever end up becoming my co-founder. But, it was a long process, looking for a co-founder and trying out different relationships with different people.

The quality that always came up for me and stopped me from pursuing a relationship with other co-founders, before Andy, was trust. And that is so huge. If something doesn’t feel right, go with that gut feeling and keep looking. Because trust, when you’re entering into a relationship like a co-founder relationship, it’s like a marriage. It’s probably even more serious than a marriage, in some cases. But trust was huge.

So, because I knew Andy, I sort of had that filter already. I’d seen how he interacted with his co-workers and so I knew that there was already that trust level that I had with him.

It’s funny, when we first teamed up it was somewhere around this time last year, towards the end of summer in 2010. And I just shared the idea with him and said, ‘Hey, you know, I’m looking for a technical co-founder, so keep your eye out and send them my way,’ never once thinking that he would be that person. But he took the idea away and thought back to a time where he had some similar frustrations with the healthcare industry and thought that should be built. And a few weeks, later he reached back out to me and said, “We should start testing out our relationship and working on a few things.”

So we did. We spent a couple months prototyping and saw how we worked together. And that’s how we made the decision, “Okay, we are both going to be just 100 percent committed to this.”

I quit my job. Before, I didn’t trust anyone enough to quit my job and go full-time on the idea. But, I trusted him enough and he followed through. He was really a dedicated person to the project and to the vision. And so, he became a co-founder and we’ve been running ever since. That was in January of this year.

Matthew: From idea to product launch, how long did it take and when did you actually launch?

Rebecca: So, from idea to product launch took a while because there was a period of time where I struggled with gaining momentum and finding that right person. The initial idea came in September-ish, fall of 2009. So, I started watching the space then and learning about the space. I tried doing some working relationships with other people, potential co-founders, potential teams, but it just kept feeling like spinning wheels. And so, I just kept pushing, kept watching the space.

That actually became a blessing in disguise, because I think, at the time, the idea for a business like Cake Health would have been too early. And so, I needed that time to not only mature the idea but to wait for the industry to mature for our idea. The timing couldn’t have been better for that. So, it took about a year of just working on the idea, moonlighting while I had a full-time job, before I met Andy. I knew Andy, but we had talked about it and started working on our prototype.

But when we really hit the ground was in January of this year. I quit my job, he became co-founder and that’s where the real product development started. So, that actually took only about, let’s see. From January to May is when we launched our private beta and so that was just a few months, right? Four or five months, maybe. So, once we actually, that blend came together, we moved very quickly.

And so, we launched to the public just recently at TechCrunch Disrupt and since January that makes it about eight or nine months. So, once that combination came together, we were able to really move fast.


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