#078: The Story of Eren Bali (Udemy & Carbon Health), How Brad Jacob's Pick's Industries, GenAI
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One Biz Story
The Story of Eren Bali (Founder of Udemy & Carbon Health)
From a small village in Turkey to co-founding TWO different billion dollar companies.
Eren Bali is the American dream, personified.
Here's his story:
Eren was born in a small village in Turkey in 1984. His life changed when his parents bought a computer with internet access. He discovered online math forums that helped prepare him to win a gold medal in the National Math Olympiads in Turkey.
His experience was the pre-cursor to Udemy, a business he co-founded in 2010. The goal? Give people the ability to learn anything, anywhere. They grew rapidly, reaching 4 Million students and 15K+ teachers by 2014.
It went public in 2021 at a $4 BILLION dollar market cap.
But Eren didn't hang it up & retire. That's not in his DNA. As he supported his parents through health challenges, he realized how broken the healthcare industry was. He aimed to build a modern software solution for primary care providers that would 10X the patient experience.
To understand what they needed to build, he opened up a primary care clinic inside their San Francisco office. This hands-on approach allowed them to observe and understand the challenges and inefficiencies of the current system. The classic "eat your own dog food" approach.
Eren Bali sketched 50+ ideas for a patient-friendly healthcare experience, focusing on mobile-first convenience and accessibility. He was deliberate in ignoring traditional market research and existing EHR providers so the team could pursue fresh ideas and solutions.
At first, they opened up their clinic to friends & family. Hilarious & amazingly, they provided free care while acting as if they billed insurance, ensuring an authentic test of their model.
Once they felt like they had something, they began accepting folks they didn't know :-)
Post-launch data showed increased patient retention, validating their hypothesis. Realizing how hard it was to sell software into practices, they went all in on the full stack approach. Buying up existing practices & transforming them via technology.
With positive unit economics from the first practice, they stepped on the gas...
Raising $600M+ across 11 different funding rounds and opening up over 100 clinics in 14 different states. Insane growth.
If each clinic is doing ~$2M/year in revenue, we are looking at ~$200M+ of revenue for Carbon.
As you can imagine, this is not a small market or opportunity. The U.S. market size was estimated at 271 Billion in 2023 and is projected to grow at a CAGR of 3.36% from 2024 to 2030.
In January of 2023, CVS announced a $100M investment into Carbon Health, and piloting their practices into CVS retail stores.
WOW. Imagine if every CVS had a Carbon Health inside of it...
Eren is an inspiration. He changed education and now he's changing healthcare. Everything he works on is benefiting humanity. Here's to Eren and the Carbon team.
I'm excited to see how big this thing gets!
One ‘How To’:
How Brad Jacobs Picks Industries To Go After
Brad Jacobs has built seven, BILLION DOLLAR businesses.
I devoured his recent book, "How To Make A Few Billion Dollars" to understand exactly how he thinks about industry selection.
Here's his approach:
Before Brad and his team dive into an industry, they set a clear objective...
Figure out the bearish and bullish trends driving an industry.
Him and his team deeply believe that If they can get the major trends right, they can make mistakes and still succeed.
Now they dive in:
Step #1. Study Scalability Opportunities
"I want to be able to envision how I’ll take a business from a few million dollars to tens of billions of dollars."
Here are the exact questions Brad asks re: scalability:
Is the industry growing faster than GDP so that we’ll generate top-line growth YoY just by showing up?
What’s the base price/volume combination we need to be profitable?
How realistic is it to significantly increase our profit margin over time? What could prevent that?
Is it an industry where companies have advantages of size & economies of scale?
How could AI impact the industry, positively and negatively?
Are there ways to grow the business organically or through M&A?
What multiples will I need to pay for companies I acquire?
Is it at enough of a discount from the multiple I’d expect my company to trade at?
Is there a technology threat or opportunity or both? For example, are there ways to automate business processes and drive customer service higher at a lower cost of labor?
Step #2: Take Your Questions To The Experts
#1. Read everything you can get your hands -- journals, periodicals, newspapers, trades publications, employee reviews, Bloomberg, pordcasts, YouTube, SEC Database, buy-side / sell-side analyst reports, etc.
#2. Attend the industry's conferences -- Futuristic conferences (CES, Wall Street Journal Future of Everything), Sell-side conferences to meet/hear management teams in the space speak, trade associations, etc.
#3. Hold interviews with people that know the industry:
CEO's with a track record of success
Bankers who are active in the space
VC firms investing in the industry for future trends
Buy-side Instituions & Fund Managers w/ battle scars
Industry Vendors
Shareholder Activists
Step #3: Compile all your learnings into one place / report.
The report requires objectivity and open-mind analysis. Brad doesn't pick an industry because it's in vogue. He makes detailed pros and cons list and even word clouds to illuminate macro themes and information.
The report should uncover an industry’s strengths and defects from the standpoint of making money for investors, which is the prime mission of a public company.
Step #4: Go all-in on it or move to study a different industry
Time to fish or cut bait! You have to have supreme conviction and plan on spending the next decade of your life building something in the space.
Again I pulled this from Brad Jacob's book: How To Make A Few Billion Dollars and summarized it. I highly encourage you to purchase it and do the same! It's an AWESOME read.
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He tanked carbon right?