Tim Riser

cto @ savi | seeking better explanations

previous:
cto @ drivably (acquired nasdaq:acva), molten, innosight

[Zack Kanter @zackkanter]

You can read the full announcement on our blog, but I thought I'd editorialize a bit more here and tell more of the backstory of what happened over the past 18 months.

In late Feb 2024, I brought our engineering team into a war room. Change Healthcare – the nation's largest clearinghouse for processing healthcare claims between providers and insurance companies – had been down for almost a week due to a cyberattack that would ultimately take them out for 2 months.

It’s hard to explain the magnitude of the outage to people outside the healthcare industry. Nearly 40% of healthcare claims processed in the United States flowed through Change’s platform. They processed an aggregate $1.5 trillion of claims volume annually – 15 billion claims in total. Healthcare spend in the US is $4.9 trillion annually – 18% of total GDP – which means that when Change went down, it was processing roughly *5.5% of US GDP*.

We worked around the clock to launch our drop-in replacement for their clearinghouse, which we did 5 days later. We were in the right place at the right time, but so were a lot of other people – this didn't exactly happen in private. We were able to do this because we had spent the previous 6 years building the underpinnings of a platform that could power a clearinghouse.

It's funny because by February 2024, we had what we thought was product market fit – our EDI processing platform was used across retail, logistics, healthcare, and more. We had plenty of customers, but even with all of the work that we had put in to make our EDI processing platform easy to use, it still took weeks or months for companies to get up and running, because each connection had to be set up one-by-one. Customers were willing to put in the work, but it was still a far cry from what I had set out to do from the earliest days.

I always loved Uber's original mission statement: 'To provide transportation as reliable as running water, everywhere, for everyone' (its current mission statement – 'To reimagine the way the world moves for the better'– is watered down corporate nonsense). My goal was similar: to make business-to-business transactions as reliable as running water.

In our January board meeting, I said that our plan for the back half of 2024 was to finally move another level 'up the stack' and to offer turnkey transaction functionality in healthcare – the only place where it's currently possible to do so, thanks to regulatory-enforced transaction schemas and robust network of interconnectivity – by building a clearinghouse.

It became clear a few days into the outage that Change wasn't coming back online anytime soon, or perhaps ever. We accelerated our plans and launched over the weekend.

It was pandemonium. For the seven weeks after launch, I couldn't leave my keyboard for more than five minutes at a time – most days from 4:30 or 5am until midnight. Six/seven figure deals went from initial phone call or text message to signed terms in under an hour. A couple of weeks in, I went for a quick walk to get outside, and took three phone calls from CEOs and CTOs who were desperate to get back online. We sent people to their offices and had them integrated and processing claims within hours.

It's strange to tell this story now because our world was almost entirely about the Change Healthcare outage for a couple of months last year, and we've hardly thought about it since. They eventually came back online and the dust settled. None of our customers who signed and went live switched back. But at the same time, Change stopped hemorrhaging customers – the companies who were going to jump ship, jumped ship.

Yet our growth has only accelerated. Last month, we signed 5x the number of customers that we signed at the height of the Change outage. Stedi has become the de facto choice for virtually every new venture-backed health tech company – and as later-stage health tech companies and traditional institutions revisit their legacy clearinghouse dependencies in the wake of the Change outage, Stedi’s cloud-native, API-first platform has become the obvious choice.

But more and more, our growth is driven by GenAI use cases from all segments of the market – from brand new startups to traditional companies coming to Stedi to build agentic functionality into their existing platform. One-third of our customer base is now made up of fully-native GenAI companies.

Development teams hit frustrating roadblocks with legacy clearinghouses. The legacy clearinghouses were built pre-cloud computing (and in many cases, pre-internet), and most are the result of a series of private equity acquisitions with tech stacks that were never harmonized or modernized. They offer only the bare minimum of hopelessly outdated APIs – most of the functionality offered by legacy clearinghouses is not accessible programmatically.

Stedi’s approach is API-first: every piece of functionality available through our user interface is available via API. Our thesis is simple: as more and more aspects of software are subsumed by agentic workflows, companies will shift ever-greater portions of their workloads to the platforms that offer the best accessibility and legibility to AI agents that are performing actions; since other clearinghouses don’t offer ways to perform tasks programmatically, customers will continue to migrate to Stedi as they build net-new workflows, or as they find that existing workflows come to exceed the requirements afforded by other clearinghouses.

We have a single question that we use to guide our roadmap decisions: does this make it easier for humans and agents to interact with our platform? This has dozens of small improvements alongside bigger launches – notably our MCP server last week and our own native agent yesterday.

Venture capital is a wonderful thing – it would not have been possible to spend 6+ years building a platform without it. This latest funding allows us to accelerate hiring of world-class talent across engineering, product, design, business operations, and more.

If that sounds exciting to you, send me a note.

[Alex Danco @Alex_Danco]

I’m joining @a16z !

After five years at Shopify, I’m moving onto my next adventure in life, and heading to Andreessen Horowitz. Shopify is an incredible place, and Tobi is one of the great founders of our era. I’ll remember those years as one of the golden chapters of my life. Now, onwards!

I’m joining a16z as Editor at Large, and I’ll be responsible for the written output of the firm. A16z has always prioritized great thinking and writing as a deliberate instrument of the firm’s purpose and power. It starts with Ben and Marc: both generationally talented high-agency thinkers, writers, and company builders. And there’s a burning new energy in the firm today, brought by @eriktorenberg - who I’ll work with closely as he takes a16z’s narrative presence to a new level of ambition.

Writing is power transfer technology
I’ve had a few different vocations over the years - I’ve been a founder, touring musician, venture associate, worked at Shopify - but most people on the internet know me from my writing online. I’ve been blogging since my early twenties, and in that time I’ve seen different online content metas come and go - the golden years of VC blogs like AVC and Haystack, the Medium years, now Substack; the rise of “Go direct” and the crisis of traditional media.

What hasn’t changed is how valuable great writing can be. Something special happens when you give someone words to express an idea they always knew, but couldn’t articulate: you give them power. And it didn’t cost you anything.

“Power transfer technology” is what the business of VC is. Why does a VC firm care about content? It can’t just be to advertise the firm; or promote their partners and their theses. Those are both consequences of success, but they can’t be the actual goal.

The primary objective of a VC firm’s content, particularly their written output, should be to give founders power. The goal is to give them writing that transforms them into someone with more legitimacy, which is what power really is about.

Traditional media sometimes helps you accomplish this. A well-written op ed, thoughtfully crafted, can serve this purpose. But I think bloggers are naturally better at this craft, because bloggers have to grow their franchises under the constraint of not having built-in distribution. If you’ve mastered the craft of writing online, you know something important about how to reach and influence people, and what exactly it is you offer to an audience that gives them power.

Blogging is a trade
Winning, for bloggers, means writing the reference take on a good topic. My favourite example of this is how Byrne Hobart broke out with his piece on the 30-year mortgage. It’s kind of surprising that this kind of post had such influence - it’s wonky, it’s not written for a general audience whatsoever. But it turns out that people think and talk about their mortgages a lot, and like to feel competent when they do. Reading that piece equips them with a kind of legitimacy to speak on the topic.

One lesson hiding in plain sight here is that most of the audience of any successful post does not actually read it. They are told it by someone who did read it. There’s a primary audience who carefully reads the piece and does the cognitive work of “restructuring their consciousness” (Walter Ong coded) around good writing. And then there’s a secondary audience, who are re-told the content, either verbally (including group chats, podcasts, Youtube) or in other oral formats like Twitter.

(This is broadly true both inside and outside of organizations; e.g. a lot of work goes into writing an annual plan, which only a small number of people actually read, but a lot of people are “re-told” in some way.)

The primary audience gets something out of this sequence of events: they get power. This is the great secret of writing in public: the writer and primary audience both put in effort (to pack and unpack the idea); and they jointly reap the rewards, which is the legitimacy earned when the idea gets subsequently retold verbally to the wider secondary audience.

This is why, paradoxically, to reach the widest audience, you write to the narrow audience. Your objective as a writer is to give your primary audience material they’ll want to re-tell. They do the work of translating it to wider audiences in specific contexts; you do the general articulation in rich detail.

The secret of magic is to transform the magician
Today, there’s an amazing idea-sharing format that’s swallowed a lot of the “smart people discourse” on the internet, which is podcasting. The rise of podcasts has been astounding to watch, in the six years since I wrote The Audio Revolution. And a16z has both a great past and a great future in this media format, especially with Erik at the helm and seeing the caliber of talent he’s bringing on board his New Media team.

But podcasts are not enough on their own. Great writing, which has gone through the crucible of thinking and editing, transfers something into the reader, and transforms something within the reader, that talking does not.

I know a lot of smart people who correctly intuit that blogging is powerful, but can’t justify it on a return-on-effort basis compared to other ways of getting their message out. This is a mistake. Writing matters.

It takes more effort to read something than to listen to it. (And much more to write something than to talk about it.) The cognitive work of writing and reading is a real cost, but the benefit is that you get “restructured consciousness” from factoring and negotiating with the idea in written form. When you read an important idea and put in the work to understand it, you gain the subconscious competence and legitimacy to talk about it: you are transformed into someone with more power. Whereas, when you hear an idea, you can usually repeat the idea but not with the same authority. The deep competency is not transferred to the same degree.

This is an important idea to understand in a world where most of our information diet is shifting towards oral communication in various forms - “the internet village.” Now, people have been complaining that “nobody reads anymore” for decades - the point here is, the benefits of reading have never been more disproportionate, nor less obvious.

The farther we move towards being a default-verbal information culture, the more powerful the trade between writer and primary reader, but the less obvious it is to do. (Why write things if people would rather watch or listen?) If your goal is “I want to maximize the number of people who receive my message” then oral formats like podcasts, Youtube, and Twitter will appear like the obvious choice. But if you articulate the goal as “I want to give people power” then clearly you’ve got to write something down.

Founders are customers for legitimacy
I remember some days when I was a founder and no one would take me seriously, except for when I could produce a blog post from someone like Paul Graham or Semil Shah and speak to that idea. Something incredible would happen in those moments - people would actually listen to me, as if I’d suddenly become magic. Magic works because it is communication. The founder equipped with the VC’s writing should communicate something higher-signal than the founder alone. Ask, “what must be true of the content for this statement to become real?” and you’ve got a good guide for what kinds of things to write.

This relationship between VC and founder scales all the way up to real power-politics: the job of the VC firm is to be the “legitimacy bank” where founders (and other high-agency people) can go to take out legitimacy on credit, or make a legitimacy deposit. I find this to be a wonderful way to frame the founder-VC relationship because it does NOT imply the VCs are the “grownups” in some patronizing sense: it celebrates legitimacy as a thing that VCs and founders incept together, just like how blogging is thing that the writers and their primary readers incept together.

This is why VC blogs were such a good product in their heyday. As the “free tier” of the VC, it naturally frames the relationship as one where legitimacy is jointly incepted (by the writer and primary reader), not as one that’s benevolently bestowed.

The meta is different now, but the purpose is the same, and I think a16z is probably the best spot in the world to pursue that craft and that thesis. I’m incredibly fortunate to get to join this group of talented investors and company builders, towards a mission that’s never been more important: giving the world’s founders the power they need to build a bright future.

Let’s go!

[Tim Riser @alteriseculo]

@carlrivera “Signing up for” is an apt way to reflect the time, energy, and life investment it takes to participate in a community of mutual care.

[TuskedUp 🦣🏒 @TuskedUp]

I’ll 100% give New Orleans the Jazz name… but Toronto has to give us the Raptors name.

[Kyle Harrison @kwharrison13]

Lock in, fellas. The B2B SaaS market just got a whole lot bigger.

[Patrick Collison @patrickc]

In which domains are elite practitioners celebrating the kids being better than ever before? Would love to read about a few instances. (Not just where there's one particular genius, such as Ashwin Sah's recent success, but where "the kids" as some kind of aggregate appear to be improving.)

[Tim Riser @alteriseculo]

@nvpkp Can only be a gardener

[“paula” @paularambles]

it’s called mt tam because you can see all your potential users from the top

[George Mack @george__mack]

My most contrarian belief:

We could increase the global economy by 2-3% by installing large whiteboards in every home.

[Tim Riser @alteriseculo]

@tjparker We need ways to shift our founder production function to the right, and I like this one.

Let a thousand flowers bloom to solve @thogge’s startup bottleneck

[Emmett Shear @eshear]

Go eight times harder. Commit to the byte.

[Tim Riser @alteriseculo]

@Kamil_SaaS Nice work

[Kamil @Kamil_SaaS]

4/ If you think this could help you, check it out at: https://t.co/kcE7NLNBIC and let us know your feedback!! First 100 ppl to retweet and comment will get free credits to try it out

[Tim Riser @alteriseculo]

There’s only one thing we can do to recapture a culture of epistemic precision and that is to rename overalls as oversomes

[Tim Riser @alteriseculo]

Anna of Arendelle escaped a treacherous cave and overcame a trial of moral courage by using the strategy to, “Just do the next right thing”—Underscoring yet again the unreasonable effectiveness of greedy optimization. In this essay I will

[Tim Riser @alteriseculo]

@jonnym1ller Yes

[Tim Riser @alteriseculo]

@McFranchisee @McDonalds How many on-site employees do you think it will take to run one of your sites in 2035?

[Tim Riser @alteriseculo]

@McFranchisee @McDonalds What parts of the software stack - from store operations to above store insights - would be hard to reproduce outside of McDonalds?

[Scott Wessman @scottew]

We are gonna build nuclear in Utah.

[Tim Riser @alteriseculo]

@nlsanders And it's the 26th epoch to boot