Former Sun CEO's New Venture: A Healthcare Locker for the "Sandwich Generation"

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a telco with 50 million subscribers, or a social networking company with 80 million users—it was kind of clear that the network-connected consumer is one of the most powerful forces on Earth.

I also wanted to go back and focus on end users for a while. I had spent 25 years focusing on enterprises, and it’s a great business, but it also has very high switching costs, and at times it can be really slowed down by complexity. Whereas consumers are making buying decisions every day. This is a greener field, and it’s one where we can make a difference in how we bring our technology to the marketplace. I have to admit I’m watching closely the debates over privacy legislation around the world. We are just getting to the point where people are realizing that privacy matters. We have the opportunity to not only solve a social problem in building people a safe place, but to do so in a way where we promise to protect people’s privacy.

X: Just from the brief look at the product you’ve given me, it seems like the kind of thing—given the state of Web development in areas like social networking and document sharing—that wouldn’t be all that difficult to build, or for someone else to replicate. So do you think of the privacy promise as your main competitive advantage?

JS: Well, three things. One, it’s harder than it looks to do this at scale and to do it gracefully. Two, we are not standing still—you are looking at our 1.0 implementation, and we have a long road map in front of us. Three, we hope to be able to convey to consumers something that will be difficult for others to convey, which is that we are entirely focused in their privacy and on servicing them for the long haul. We have lots of capital; we are very well funded. This is a business we are building to be durable, not the next disposable startup. Those are things that are hard to compete against.

X: There’s a lot of innovation going on in the healthcare IT space—as you know, there’s a whole startup accelerator in San Francisco, Rock Health, devoted to that. And a lot of the companies entering that market today are looking at health plans and insurers as their customers, the ones who will pay for all these services. You weren’t tempted to go that route?

JS: Like I said, I like being able to know that my users are my customers. As soon as you start dipping into “the payers are my customers” or “the pharma companies are my customers” you end up with a motivation that may not be in alignment with your users. Healthcare is a $7 trillion global market, but it’s also a two-syllable word. I don’t view us as a health company. We are a care company. Plenty of people will focus on health—including great institutions like the Mayo Clinic and the Cleveland Clinic and UCSF. We want to help families take care of their ailing members.

X: Is CareZone compliant with federal privacy regulations like HIPAA? If a family wanted to invite a doctor or nurse access to their account, would they legally be able to share patient data through the system?

JS: It’s not HIPAA-compliant today, but I believe we will be compliant shortly. The only reason we are not now is that I have not seen any user say it matters to them. I don’t think doctors are going to want to spend a lot of time engaging with a social network. We are more focused on what happens in between doctor visits. But to the extent we can, we want to interact with the other systems our customers care about. That may be just as likely a medical supply company or a pharmacy as a doctor’s office.

X: These days, people are gathering more and data about their own health. At the extreme end of that, you have the quantified self movement. It doesn’t sound like CareZone is really intended for them.

JS: When we looked at the market for self-care, we found it was divided into two groups. On the one hand there are people who care about their health, and they tend to be healthy. On the other hand you have people who don’t care about their health, and the problem is that they are not healthy and they don’t care. So you are left with the conundrum of serving either people who don’t need you or people who don’t care about you. The sliver of people in the quantified self movement is really tiny. [At one time] we wanted to build a platform that allows them to aggregate their data, but it turned out that is not a business, it’s a service.

We wanted to follow biology and not try to fight it. With CareZone you don’t have to tell someone what your value proposition is. You just have to tell them “it helps you take care of your child” and they immediately understand what you are talking about.

Xconomy goes the extra mile to bring you the most in-depth coverage of technology and entrepreneurship. Compare this story to:

Jonathan Schwartz Launches CareZone, A Simple Caregiving Site With Big Plans (TechCrunch)
Jonathan Schwartz returns with new start-up focused on caregivers (San Jose Mercury News)
Former Sun CEO Schwartz Back With Startup CareZone (Wall Street Journal)
Ex-Sun CEO launches CareZone (San Francisco Chronicle)
Health Help: Former Sun CEO Jonathan Schwartz Talks About New CareZone Start-Up (Video) (AllThingsD)

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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