Why We Invested: Lucid Lane
By Ash Patel & Michael Marquez
Born of passion, healthtech startup aims to become the standard of care
Several years ago our former Yahoo! colleague Adnan Asar faced a monumental challenge. His wife, diagnosed with cancer, had gone through successful chemotherapy treatment. In the process, she became addicted to her prescription anxiety medication (a category of drug called benzos).
Asar looked for programs that could help and found none. So he assembled a team of doctors and behavioral health therapists to come up with a plan. Over nine months, they checked in regularly with her, providing guidance and support as she weaned herself off the medication. The approach worked.
The experience left Asar wondering: What do people in the same situation do if they don’t have the access, time or resources to assemble such a team?
He did some research and discovered two key facts. First, each year 80 million people in the U.S. are prescribed opioids or benzos—both highly addictive—to manage pain and other conditions. Second, no treatment existed for tapering patients off these powerful medications: Doctors were not trained in it, and no medical center or telehealth company offered it.
Out of these learnings, Lucid Lane was born.
Our mental checklist
We keep a mental checklist of things to look for when we consider investing in a startup. When several of the boxes are checked, we're interested to learn more.
In the case of Lucid Lane, the list looked something like this:
- Passionate founder we know and believe in—check
- Significant opportunity in an industry we like—check
- Expert team with proven results—check
- Data-fueled approach with a “moat”—check
Reason 1: Passionate founder we know and believe in
Asar’s passion for solving a significant problem in healthcare is obvious. He had a deep, personal connection to the issue.
He’s also an expert, having founded a telehealth company before and built the type of infrastructure he’d need in his new venture (his former company, Livongo, recently went public).
We knew Asar from our days at Yahoo!, where he served as a senior engineer. He went on to lead product development for a fast-growing tech startup, Tiny Prints, and saw it through an acquisition by Shutterfly. After serving as head of global technology there, he helped found Livongo, creating an end-to-end product for diabetes management.
In addition, he has years of experience advising digital health companies at his alma mater, UC Berkeley.
His co-founder, Dr. Ahmed Zaafran, is an anesthesiologist with Santa Clara Valley Medical Center and practiced at the Stanford University School of Medicine before that. He also has years of experience advising healthtech companies.
Reason 2: Significant opportunity in an industry we like
As we wrote in “Prescription: Data,” we’re excited by the potential for data-fueled companies to transform healthcare.
When we first met with Asar, two slides, in particular, stuck out in the pitch deck.
One slide presented the size of the market: each year 50 million people are prescribed opioids and 30 million people are prescribed benzos.
The other showed the competitive landscape:
- Companies dedicated to general behavioral health: 10
- Companies dedicated to addiction treatment: 4
- Companies dedicated to opioid/benzos dependence: 0
If they could create an end-to-end platform for medication dependency treatment, they’d be the first. This meant they had the potential to create an altogether new market, with a potential customer base of 80 million people.
Reason 3: We liked their approach
Lucid Lane offers three main services to anyone prescribed opioids or benzos:
- Measurement and monitoring;
- Personalized planning; and
- Real-time intervention.
The process starts before a patient leaves the hospital or doctor’s office with a script and continues as long as they need support. Patients access a full medical team that includes doctors, behavioral health therapists, psychologists and mentors, through video, voice and chat. It’s all contained in the same system and enabled by AI, which presents opportunities to offer new services and achieve economies of scale.
We were struck by the comprehensiveness the approach and how well it mirrored the successful approach Asar employed for his wife’s treatment.
Just as impressive, the team had already established partnerships with the University of Texas medical school, Stanford Medicine and a rehabilitation facility.
Asar had researched the medical billing codes for pain management and gotten insurance companies on board to reimburse for their services. The insurance companies loved the concept, because opioid and benzos addiction is becoming a larger and ever more expensive problem.
If Lucid Lane was successful, they could become a new standard of care. For a healthtech company, this is the proverbial Holy Grail.
Reason 4: Expert team with proven results
It was easy to become a believer in Lucid Lane. They had an expert team and had already demonstrated their approach worked.
It was clear they were assembling an impressive team of medical experts alongside a deep bench of engineers. One of the company’s advisors wrote the federal government’s report on responding to the opioid crisis; another serves as chair of anesthesiology, perioperative and pain medicine at a respected cancer center.
We also loved the scrappy approach they took to prove their concept. By the time engineers started putting concepts to code, they had already completed a mini-trial. The initial patients did their therapy over Zoom calls before the app was even built.
Reason 5: Data-fueled approach with a “moat”
In “Our Investment Thesis,” we wrote that we invest in companies that are leading the data-fueled innovation by building and supporting intelligent systems that “collect data, analyze it, and then predict and act on it.” We discussed system builders, which are “collecting and using data or leveraging data algorithms to solve a big problem.”
This is a terrific summary of just what Lucid Lane is doing.
By creating a closed-loop system that constantly collects new, proprietary data on their patients, the company is creating a data moat that it can leverage to improve care, expand services and keep three steps ahead of any competition. (As we wrote before, “Even if a copycat emerges, a system builder can keep its competitive advantage and remain one step ahead.”)
We also liked that the company utilizes AI to analyze video and audio and determine a patient’s stress level.