Jonathan Langer On Raising $50 Million To Protect Every Connected Device In Hospitals
Jonathan Langer is the cofounder and CEO of Medigate which owns and operates a medical device security platform that protects all connected medical devices on health care provider networks. The company has raised $50 million from investors like US Venture Partners, Partech, Blumberg Capital, YL Ventures, and Maor Investments. In this episode you will learn: Company culture and choosing to move to NYC Successful product launches How big Medigate is today SUBSCRIBE ON: For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here). Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below. About Jonathan Langer: Jonathan Langer is the Co Founder & CEO at Medigate. Jonathan Langer leads the vision and strategic direction for the company. Jonathan Langer brings nearly two decades of cybersecurity experience to Medigate. Formerly a leader in the Israeli Defense Intelligence Corps, Jonathan Langer commanded a team of technical analysts focused on the research of cyber-related domains. Connect with Jonathan Langer: Linkedin Crunchbase Twitter * * * FULL TRANSCRIPTION OF THE INTERVIEW: Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have another founder from Startup Nation, and I think that we’re going to be learning quite a bit. So, without further ado, Jonathan Langer, welcome to the show. Jonathan Langer: Thank you very much. Thanks for having me, Alejandro. Alejandro: So, originally born and raised in Israel, so how was life there? Jonathan Langer: Life was tremendous. Israel is a fantastic country – lots of sun and lots of good vibes. I learned a lot from growing up there, and I think it was a big part of my turning into an entrepreneur. Alejandro: And talking about turning into an entrepreneur, you had that in the genes in the family. Your father was also in the tech scene. Is that right? Jonathan Langer: That is absolutely correct. I think I’ve been hearing about closing deals, and QVRs, and raising capital since I was probably six years old. So, some of that sunk in, I guess, and forged the way forward. Alejandro: Any particular lessons that you recall from your father as you were growing up and perhaps certain things that you really learned from seeing him? Jonathan Langer: That’s a good question. I think maybe off the top of my head, I would say the biggest lesson is persistence. Not everything works as well as you would want it to work the first time. My father also had to do things a couple of times until he was successful. But that perseverance was a big lesson for me. Alejandro: Nice, and obviously, for you, a really big thing was the army. You were in the army from 18 to 31. That’s a long time, Jonathan. Jonathan Langer: Yeah, that was a very long time, and I owe a whole lot to the army, to my commanders of the army, and instilling a culture of excellence in me and in my surroundings. It was a very, very unique experience. I guess that’s why I stayed there for so long. I really owe a lot to those guys. Alejandro: While you were there, you also studied law. Why did you think that law could be interesting? Jonathan Langer: That’s a good question. During my army service, most of the work was technological. We were working on cybersecurity and other large-scale technological projects. So, with law, I wanted a break from the tech and really wanted to try some other things, and it gave me a different perspective on how to do business, on how to think. I think all-in-all, it was a good selection. Alejandro: On the army, at the end of the day, doing a startup is like going to war, so what kind of lessons did you learn in the army that you think have helped you as now you’re an entrepreneur? Jonathan Langer: I definitely agree that a startup is like going to war. It’s a good question. I think maybe two similarities that I could draw – I think, just like war, just like in a startup, on the one hand, there has to be strategy. Strategy always wins war and always wins the fight. There has to be an overarching strategy, but there also has to be very good technical execution. So looking at both layers without losing sight of the other one is really something that I learned in the army and trying to navigate, as well, and hopefully, successfully as I can. Alejandro: What about being with uncertainty because I’m sure that when you’re in the army and even when you’re doing those trainings and when you have guns involved and people involved, and lives involved, perhaps that taught you, as well, as to how to be with uncertainty. Jonathan Langer: Absolutely. I think there’s a lot of uncertainty involved in what we’re doing as a startup. What I like to do – the exercise that I do with myself and key team members is just assess and reevaluate the situation all the time and to try to limit the level of uncertainty that we see in the market, that we see in our sales cycle, that we see in our competition all the time. It’s all about collecting intelligence, and assessing, and then reassessing, and adapting plans accordingly. It’s probably a loop that we do, I would say, almost on a daily basis. Alejandro: Got it. In your case, at 31, you leave the army. They finally let you go, Jonathan, after all those many years of service. Amazing – right? You really got at it, and you went for it in terms of the startup world. So tell us about that moment when you got discharged, and then you started to think about a world where you could create something, and maybe a problem that you saw and how you went about, “Hey, I’m going to bring this to live.”? fgfddd Jonathan Langer: Yeah. When I finished the army service, my biggest concern is, “How could I do something that would ever compete with the level of excitement and personal fulfillment like I had in the army?” It was really something that didn’t let me sleep at night. The only thing that I could imagine, based on conversations, based on my personal thinking, was startup. I thought that would be the most exciting piece and the most fulfilling. That’s what drew me to it, and that’s why I said, “You know what? The best way to go about this is just to try.” And that’s exactly what I did. Alejandro: That’s amazing. Tell us about how you went about putting the team together and going at it in those early days. Jonathan Langer: Luckily, I had good friends and good connections from my previous role in the army. So, what I did was I got in touch with a couple of friends that I worked with previously in the army. We did a bunch of stuff together. Incidentally, at the same time, they were also discharged, so everyone was kind of free, and we got together, discussed the situations, and you know what? “Let’s try to do something.” What we did next is we tried to think of a good problem that we could solve and try to look at cybersecurity issues, interview people to understand where the gaps are. Finally, we landed on the idea that we’re pursuing right now and went at it. Alejandro: That’s amazing. In terms of going at it, what ended up being the business model, so the people listening get it? Jonathan Langer: The business model that we wanted to go after is, we’re in cybersecurity. What we felt is that there are so many cybersecurity companies out there, and a lot of them coming out of Israel. So we wanted to do something different. Different, for us, meant to take a verticalized approach. For us, that was healthcare. We didn’t know anything about healthcare before. We didn’t have previous experience, and just understanding the complexities in the specific needs, it felt like a really, really good fit for our, I’d say, technological team that we wanted to assemble. So we built a SaaS platform for cybersecurity for healthcare and have been developing this platform ever since. Alejandro: So when you were, for example, putting together this team, what were some of the key hires that you got involved in? Obviously, at the early stages, it’s tough to convince people, so how did you go about convincing them? Jonathan Langer: That’s a good question. You know what? I think so much of our success so far should be attributed to the great people that we were able to get on board, not just the founders but the first employees. This is where the army connections also helped us because we tapped into previous soldiers that worked with us in the army, and we convinced them that it was going to be a great ride, that it is a super-interesting problem that we could solve. Ultimately, that convinced them to jump on the train. Alejandro: Then, as you were executing and trying to get customers, too, what were those first big wins, like when that moment when you finally got your first customer and everything got validated? Jonathan Langer: I think that one of the best decisions that we made early in the game was to engage with customers and prospects as early as possible to get feedback. I remember two moments. I remember the first time that I flew to the U.S. for a business trip, and it was really all about meeting the security professionals from hospitals. I sat down a couple of hours, one of my co-founders and I, and finally understood exactly what the MVP product would be. It was like an a-ha moment in terms of, “We’re going back to Israel, and this is what we’re going to do.” Then, another break-through moment that I remember is – this was back in 2018. We convinced a really big customer to give us a shot at winning their business after they had a competitive bid. Our product wasn’t baked at all. At that point, it was, I would say, half a product baked, but still, this person put his trust in us and let us compete. It was against a couple of other companies that were also a part in the bid. We did a POC maybe for a month. I don’t think anyone in the company slept that entire month, or it was more than a month; it was probably 60 days. And, finally, we won. It was a huge moment that goes back to that tactical win that builds up the strategy later, but that was a huge tactical win for the company. Alejandro: Very cool. Then I want to ask you because, obviously, you guys started the business in Israel, but then, all of a sudden, you find yourself in the concrete jungle of New York City. So how was that transition? Why did you decide that coming to New York was the way to go? Jonathan Langer: What happened was, it was all for positive reasons. Our team in team in the U.S., our sales team, marketing team, customer success team, and so on got bigger and bigger. I found, as a CEO, I just needed to be closer to the troops and to be a bridge between our U.S. operation and our Israeli operation. I felt that the most impactful position for me was to be in the U.S., really. I chose the East Coast because it’s much easier to communicate with Israel, only seven hours, which is a lot, but the West Coast is ten. So, New York seemed like a good selection, and I’ve been here ever since. Alejandro: What do you think for you guys was the toughest part of coming to New York? Jonathan Langer: I really think that the toughest part, and it is a tough part – it’s really a governance change in terms of how the company operates because when you’re in Israel, you see your Israeli executive team, that part of the site all the time, next to the watercooler. All the sudden that becomes Zoom, and it’s much, much harder, and the overlapping hours are limited. It just turns the company into something else; it changes the dynamic. It’s very, very important to adapt before it hurts morale, and that’s exactly what we did, and today, it’s much, much smoother. Alejandro: In terms of culture, when you have different offices, every office has a culture of its own, to a certain degree. So how do you manage that? Jonathan Langer: You know what? It’s really a culture of cultures, I’d say. I think we find values that we believe in at Medigate, passion, entrepreneurship, things that we encourage everyone in the organization to do. But the interpretation of the values really depends on the local culture. So, Israelis are Israelis; Americans are Americans, and it is different. We have some European folks, as well. That’s different, as well, but it’s what makes life interesting. We’re learning a lot from the different cultures, and I certainly am on a personal basis, and it’s a big part of our growth, and my personal growth, honestly. Alejandro: From a fundraising perspective, how much capital have you guys raised to date? Jonathan Langer: We have raised 50 million dollars in total, just about, in three rounds of funding. Alejandro: Very cool. And I know that the most recent one was in the middle of COVID, so talking about uncertainty and going into action, how was this experience for you? Jonathan Langer: Yeah. That was an interesting one. We started fundraising – when was it? Maybe February of this year, when a couple of weeks later, we understood that COVID is really hitting the world and changing things for the long-term. So, all of the sudden, some investors get a little bit more concerned, and there are more questions that are asked about the future of healthcare and the future of some enterprises, in general. Also, I think that a big challenge is how to convince someone to give you 30 million dollars over Zoom. No more dinners and no more getting to know someone. It’s just remote. That was certainly challenging, so we spent a lot of time adapting our pitch, being able to articulate the business value, persuading people that we’re going to be successful despite the pandemic, and ultimately, we’re very, very happy that we were able to do so. Alejandro: That’s quite an accomplishment, and I’m sure that there are a lot of people right now listening to our conversation and that they’re wondering, “Oh, my gosh. I’ve got to fundraise too. How am I going to be able to do this?” Are there any main takeaways that perhaps you can share on how was that process of doing it all online because before, you could see the body language, you could establish that human interaction. Now, there’s none of that, so what were your biggest takeaways on doing this online? Jonathan Langer: That’s a good question. I think there are some simple things, and maybe some more complicated things. I think simple is, use a camera, use good sound, enable yourself to connect with the person on the other side to the best way possible, to the furthest extent. Close your cellular phone – everything; just concentrate on that person. It comes across. Then the other thing, which is a little bit more complicated to do is you really need to prepare the meetings. The message that you’re trying to convey, whether it’s on a presentation or orally, it really, really needs to be sharp because you’ve got 30 minutes of limited attention from someone. You’ve got to be super sharp. That’s what I felt we did, and it worked well. Alejandro: One of the things – it’s interesting how history continues to repeat, and we’re talking about war applied to startups, applied to being in the army. People are talking about, also, the next types of wars that we’re going to be experiencing, they’re more like cyber-type of stuff. Obviously, this is a bit different than what you guys are experiencing with Medigate because it’s more applied to medical device security type of stuff. But I’m wondering here, where do you think your space, and more interestingly, with the cybersecurity aspect of it, where do you think it’s heading as a whole? Jonathan Langer: I think that it’s evidence in every industry: healthcare, retail, finance, or whatever it is that all of our critical assets are beginning to be more and more connected to networks. Even in healthcare, probably a pretty conservative industry, medical devices that are connected to human beings are now connected to networks. I think that this is changing that digital experience and really changing the cybersecurity landscape. The attackers know that this is a soft target, and the defenders know that they need to do better in order to protect these assets, and it’s changing the industry completely. It’s super interesting for me as an entrepreneur to witness this happening just during our lifetime. It’s quite a challenge and very interesting to see this. Read More: Chaitanya Kalipatnapu On Raising $160 Million To Transform The $280 Billion Professional Education Market Alejandro: In your case, how big is the team, especially for the people that are listening, how big is Medigate today to get an idea – anything that you can share. Jonathan Langer: Sure. We’re 90+ people, more or less, right now. It’s very different than the three-man team that we were just a short time ago. We’re scattered across the U.S., Israel, and Europe. Alejandro: I know, as well, that you’ve been doing some product launches, and there are some recent ones that you’ve done. How do you suggest, or what have you learned about doing a successful product launch? Jonathan Langer: I think that this goes back to strategy. The biggest lesson that I’ve had in this case is to listen to the customers, listen to the market, gather bits and pieces of information and insights from multiple stakeholders, bring it back to the team, develop the product, and then when you launch, make sure that you come back to all those customers that you talked to and say, “Hey, we listened to everything that you’ve been telling us, and here’s how we address it.” So, to me, the biggest lesson, like a basic product management capacity, is to listen very carefully to the customer and be very communicative when you come back to them with a product that has been ultra-ultra-successful for us. I can’t stress enough. Alejandro: It seems that, also, when it comes to execution, we’re talking about tactical execution. I think that being in the right time in history is critical. Obviously, we’re coming from a world where it was not the usual to see doctors and nurses on the front covers of newspapers, and now it seems that that’s what we see every day with the craziness that is happening. I’m guessing here, how would you say that this entire COVID and healthcare, as well, exploding, is impacting the execution? Jonathan Langer: You know, it’s interesting. I think there’s a short-term and a long-term here. Obviously, in the short-term, everyone is focused on just getting rid of this pandemic, and the healthcare workers are really on the frontlines. So, the focus is there right now. I think in the mid-term or long-term, we’re going to see a lot of interesting developments coming out of this a whole lot more, I think, remote care or virtual care known as telemedicine, people basically getting virtual care from devices or through video chats with doctors is really going to change the way that healthcare is delivered in the United States and globally, and obviously, that is going to have a huge cybersecurity IT impact as well. So, we’re tracking those trends very closely. Alejandro: Got it. Imagine, Jonathan, today that you go to sleep, and you wake up in a world, let’s say, five years later, so an amazing snooze. You wake up in a world where the vision of Medigate is completely realized. What does that world look like? Jonathan Langer: I think that world, to me, is a fully-digital hospital, everything connected, all patient care is digitized to the furthest extent possible, but at the same time, safe. There’s safety, and there’s confidence in these digital processes, and the attackers are shut out. That’s what we should strive to do. We shouldn’t impede the digital transformation; we should adapt to it and encourage it. But, at the same time, maintain safety. I think it’s possible. I certainly think it’s possible. Alejandro: It’s interesting. You were talking about adapting, and earlier, you were talking about the importance of listening to the customer. So, I see here some really interesting patterns, perhaps that you guys are applying to your own execution, which is listening. What you’re saying, and when you’re thinking about listening to your customers, it’s easier said than done. I’m just wondering here, like, how do you go about listening to your customer to extract the data points that are going to help you in your execution. What does that look like? Jonathan Langer: To me, just like I was saying earlier, I think it’s extracting the data points. To me, it’s all about listening to the people that you respect and that you can learn from. In our case, it’s really our customers. I listen, or our key members listen all the time, and there are multiple data points that come back every day that are quickly inserted into the development cycles. I think that has been key. Alejandro: Got it. So, would you say that the customer service needs to be front lines and be able to have a good communication because, typically, what also happens and that I have seen in many instances is that they are a little bit separated or disjointed, the way that the customer support team is, and the way that the tech team is, and that information and those data points can be lost? So, what are your thoughts on that? Jonathan Langer: I think that’s a very, very valid point. One of the biggest challenges that growing startups have is that the organization becomes disjointed in the sense that the sales team, the front line really isn’t able to understand what the client is [audio difficulty 25:23] from a more of a technological perspective, and they aren’t able to communicate that back to a product team, development team. We’ve created a process where we feel, to the best we can, that those valuable insights do not get lost. But it is a very, very key process that we’ve been focusing a lot on to make sure that we’re doing well. Alejandro: One of the questions that I typically ask, Jonathan, the folks that come on the show is – obviously, you’ve been at it for quite a bit now with Medigate, since 2017, and you’ve done multiple rounds. You’ve seen the ups and the downs that come with building a company. If you had the opportunity to go back in time and have a chat with that younger Jonathan that was coming out of the army and thinking about a world where he could bring an idea to life. What would be that one piece of business advice that you would give to your younger self, and why, given what you know now? Jonathan Langer: You know what? I didn’t think about this before, but off the top of my head, I would say this – I would say, “Make sure you enjoy the ride.” Because you know what? There are a lot of stressful situations, and there are ups and downs, and that’s always going to happen in every startup, but I think if you enjoy the ride, it will be good for you, and you’ll be able to have a clearer mindset to make better decisions instead of being stressed, and that’s also what’s good for the personal fulfillment. So, having fun is a key part of it. Alejandro: Absolutely. You know, I think that sometimes founders get too stuck on the outcome, rather than embracing the journey, and I think that they lose the fun part of it, which is getting there. Jonathan Langer: I could not agree more with you. Alejandro: Jonathan, for the folks that are listening, what is the best way for them to reach out and say hi? Jonathan Langer: I’m here for anyone that wants to reach out: email@example.com – I’m happy to talk to any entrepreneurs out there or to anyone that’s interested in this domain, in general – feel free. Alejandro: Amazing. Well, Jonathan, thank you so much for being on the DealMakers show today. Jonathan Langer: Thank you, Alejandro. Thank you for having me. * * * If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.