The Role of the Fuzzy in a Techie World
Katelyn Gleason is CEO of Eligible, an innovative health-care technology business she founded when she was twenty-six years old, for which she has raised $25 million in venture capital from some of the most successful entrepreneurs in American business, including Drew Houston, founder of Dropbox, and Ken Langone, founder of The Home Depot. Before she decided to start the company, Katelyn had limited expertise in health care or in technology, and in college she certainly did not anticipate that she would become an entrepreneur, let alone a tech entrepreneur. She was a theater arts major at Long Island’s Stony Brook University, where she won prime parts in many productions, including Kate in The Taming of the Shrew and Adelaide in Guys and Dolls. After graduating in 2008, she pursued an acting career for several years, but jobs proved elusive. She credits her acting experience with contributing significantly to her social skills, confidence, and talent for sales, which were all instrumental in launching Eligible.
In fact, Katelyn became a health-tech entrepreneur by chance. She could have been a poster child for the argument against a liberal arts education made so often in recent years; that it doesn’t prepare students for the jobs the economy needs filled. Indeed, once she determined that acting might not work out and that she should search for other work, she had no clear idea what kind of job to look for. She did know that she was very good at sales. During college she had supported herself by working as a sales director for a company that published a business directory.
Katelyn says that her acting experience helped with that work by teaching her how to be persuasive in her sales pitches, and also how to deal with the emotional impact of people telling her no again and again. Acting taught her how to quiet her self-doubt and forge ahead despite rejections. She proved so talented at selling that by the time she was twenty, she was managing a sales force of forty. As she looked for job openings in a wide-ranging job search, she was drawn to an advertisement on Craigslist for a job in sales for a web-based startup providing services for health care practices, called DrChrono. The company provides scheduling, billing, and management of orders for clinical tests and prescriptions. She knew nothing about the health care industry, but she knew sales, and she felt confident she could learn what she needed to know to get the job done.
DrChrono hired her as a contract sales person, and Katelyn began learning about health care and about building a business. She discovered that she was fascinated by the process of innovating a business and loved being part of a small entrepreneurial team. The founders also loved having her. Her sales ability was so impressive that the founders asked her to join them in pitching the company at the highly competitive contest for startups held annually by Y Combinator (YC), a Silicon Valley startup incubator. Winning startups are admitted to a rigorous three-month program, during which time YC founder Paul Graham and a team of successful entrepreneurs and investors offer guidance about how to develop their businesses. DrChrono won a coveted spot, and Katelyn impressed Paul Graham so much that when she decided to leave DrChrono, he advised her that she should found her own health-tech startup, even though she didn’t have fancy degrees from an Ivy League or stellar connections like some of her peers.
Katelyn still knew relatively little about technology, but she did have a clear idea for a business. She had been stunned by the inefficiencies in the way doctors’ offices verified patient insurance coverage. It was done mostly by phone and involved time-consuming paperwork, which often led to long delays and to mistakes. Quite often, doctors ended up swallowing the costs of procedures because patients didn’t actually have the coverage the doctor thought they did. Other times, patients ended up with crushing unexpected bills. She recalled, “I’d dealt with the front office, and the billing systems. There was one company everyone used called Emdeon.” But the technology the Emdeon system was built with was old, and for doctor’s offices, connecting their own data systems to the Emdeon system was expensive and time-consuming work. Katelyn had heard about another YC-backed startup called Stripe that offered an easy way for one hundred thousand merchants, from Best Buy to Saks Fifth Avenue to Adidas, to handle all the complexities of accepting payments on the Internet. She boldly decided that she would create a similar system for health care providers, a system faster and easier than Emdeon. Though she had no idea what programming would be involved, she believed she could learn what she needed to know in order to hire software engineers to do that work.
Hunkering down in her apartment in Mountain View, California, in the heart of Silicon Valley, Katelyn threw herself into reading about the technology the system would require. She audited free online programming classes offered by various universities, and spent her days in the public library devouring books. She forced herself to read Apple’s software developer kit from start to finish, and asked questions she had on the developer collaboration website Stack Overflow. With that basic knowledge under her belt, she hired two freelance software engineers, and as they built a prototype, she began seeking angel investment. “As a woman with no technical background,” she recalled, “I met lots of skepticism, but again, my acting experience developed my resilience to keep forging ahead in the face of so many turndowns.” Her acting work also helped her understand how to craft a compelling story about the company, which is essential to convincing investors to provide support. “In theater, the playwright gives you the play, but you have to tell the story,” she explained to me over coffee in 2016. “I knew I just had to figure out how to tell the right story. When you start rehearsal, you’re completely lost. You don’t know the characters at all. When you start to build a product, when you start to build a company and you don’t even know what your product is going to be, it’s exactly the same feeling. You’re completely lost. I learned in the rehearsal process that if I worked hard enough, I could gain that internal clarity where I would start to take off like a rocket ship.”
In the summer of 2012, Katelyn found herself back at Y Combinator, pitching Paul Graham and team, but this time as a startup founder. She won their backing, and on the heels of their support, she was able to quickly raise $1.6 million to continue building Eligible’s product. After launch, the company took off, with a growth rate of 60 percent week over week. In 2013, Katelyn was selected by Fast Company magazine as one of its top one hundred most creative people, and in 2015, she was named one of Forbes’s 30 Under 30 innovators in health care.