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NASHVILLE, TENNESSEE – SEPTEMBER 1, 2019: Tourists visit the bars and country music venues in the Lower Broadway entertainment district in Nashville, Tennessee. (Photo by Robert Alexander/Getty Images)
Robert Alexander | Archive Photos | Getty Images
On a flight from Fort Lauderdale, Florida, to Nashville, Tennessee, earlier this month, 36-year-old Robin Shah settled into his seat and prepared to crank out some work for his health tech startup, Thyme Care.
Founded in 2020, Thyme Care helps cancer patients manage their disease by connecting them with the personalized care and resources they need. Shah, the co-founder and CEO, sports a purple Thyme Care sticker on his water bottle, and it caught the eye of the venture capitalist sitting next to him on the plane.
The VC recognized Shah’s company – an occurrence that is hardly unusual for him anymore. As more investors and founders are flocking to explore Nashville’s booming health care and technology scene, Shah said he gets recognized regularly. Sometimes people know his first and last names.
“It happens probably every two or three flights,” Shah told CNBC in an interview.
Nashville is home to more than 680,000 people, including Shah, who love the city for its southern charm and small-town vibe. But while the community might feel quaint, Nashville is a titan of the health-care industry. The city supports more than 900 health-care companies that generate a total of $97 billion in revenue each year, according to the Nashville Health Care Council.
As a result, the city is bursting with opportunities for founders like Shah who are looking for ways to disrupt the industry and redefine the patient experience.
CNBC spoke with a dozen founders, investors and executives in Nashville who described a tight-knit, supportive health tech community that’s growing larger by the day.
“Great companies are being born here,” Shah said.
Nashville’s history with health care
UKRAINE – 2021/04/23: In this photo illustration, the HCA Healthcare logo seen displayed on a smartphone and a pc screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Sopa Images | Lightrocket | Getty Images
Nicknamed “Music City,” Nashville is chock-full of country singers and perpetually buzzing with live music. It has also become a popular destination for bachelorette parties, so groups of women, often donning pink or bedazzled cowboy hats, can be seen wandering in and out of bars on the popular street called Broadway.
But just minutes away from the party vibe on Broadway lies Nashville’s vibrant network of health systems, startups and investment firms.
The city’s reputation as a health-care hub was catalyzed when HCA Healthcare, one of the first for-profit hospital companies in the U.S., was founded there in 1968. HCA operates more than 180 hospitals across 20 states and facilitates more than 37 million patient encounters each year, according to its website.
The company has helped attract troves of health-care professionals to Nashville, and other organizations quickly followed suit.
Community Health Systems, which operates 74 acute care hospitals, Brookdale Senior Living, which runs more than 670 senior living communities, and Acadia Healthcare, which operates more than 250 behavioral health facilities, are all headquartered in the greater Nashville area.
Prominent higher education institutions like Vanderbilt University, including the Vanderbilt University Medical Center, Belmont University, and Meharry Medical College are also based in Nashville.
“Fundamentally, Nashville is sort of the healthcare capital of the world. That’s how we describe ourselves often,” Kyle Cooksey, chief experience officer at Monogram Health, told CNBC.
Monogram Health, headquartered in a Nashville suburb, offers digital tools that can help patients with conditions like chronic kidney disease manage their care from home. The company closed a $375 million growth funding round in January, and former Senate Majority Leader Bill Frist serves as chairman of the board.
Cooksey said the Nashville startup ecosystem is “incredibly supportive” and mission-driven, and now so entrenched in the city that it’s hard to miss.
“You can’t literally go a block here without stumbling across a health-care company,” he said.
Downtown Nashville, Tennessee.
Kruck20 | Istock | Getty Images
As a result, health-care talent and expertise is plentiful in Nashville, which is a substantial perk for founders building companies there.
John Bass, a Nashville native and the CEO of a venture studio called Hashed Health, said the city is such a “highly concentrated” environment of health-care professionals that it can be hard to leave. He founded Hashed Health, which aims to de-risk and spin out health-care startups, in 2016.
Bass said VCs in Nashville tend to take a pragmatic and conservative approach to investing, which reflects the challenging reality of building solutions for the traditionally technology-averse health care industry. He said innovation in this space requires a careful understanding of regulations and constraints.
Bass has considered trading in Music City for the Rocky Mountains in Colorado, but he said he is glad he stayed.
“Moving to a different city would be fun, but I don’t think any other town has that same level of concentrated talent that Nashville has,” Bass told CNBC in an interview. “It still feels like it’s the right size, it hasn’t grown so big that it’s too diluted.”
Ellen Herlacher, a partner at the health-care VC firm LRVHealth, grew up in Nashville and lives in Boston. She said Boston is a strong city for both academic and clinical innovation in health care, but Nashville is the center of health-care business.
Herlacher travels to Nashville every six to eight weeks to meet with portfolio companies and co-investors. Sometimes she makes the trip two weeks in a row.
Luke Benda, co-founder and CEO of the Nashville-based medical robotics company Healing Innovations, said the city gives founders easy access to the “heavy hitters” of hospital operations, which can be difficult to reach, let alone hire, from elsewhere.
However, he said startups also need traditional technologists like software developers and engineers, which can be harder to find in Nashville.
The broader tech talent pool has improved in recent years as tech companies like Amazon and Oracle have established hubs in Nashville, but Bass said it’s still not always easy to find true technologists.
Amazon announced it would build an expansive new office space in Nashville in 2018 and promised to bring more than 5,000 corporate and technology jobs to the city. Oracle, which completed a deal to buy the electronic medical records company Cerner last year, is building its second U.S. headquarters in Nashville for $1.2 billion, according to The Tennessean.
“It’s still the reality that you’re probably not going to find everything you need here,” Bass said.
Support for Nashville entrepreneurs
NASHVILLE, TENNESSEE – SEPTEMBER 2, 2019: The Regions Bank building looms behind a neon sign over the entrance to a Nashville, Tennessee, bar and live country music venue in the city’s Lower Broadway entertainment district. (Photo by Robert Alexander/Getty Images)
Robert Alexander | Archive Photos | Getty Images
Nashville’s health tech startup scene has also benefited from significant investment from local organizers and government officials.
In November, the Greater Nashville Venture Capital Association (GNVCA) officially launched. The organization is membership-based and aims to make capital and talent more widely available to investors in the region by attracting new VCs, organizing networking events and sourcing investment opportunities.
Vanderbilt provided a grant to support the GNVCA’s initial operations, according to a blog post.
The GNVCA was able to launch partly because a “critical mass” of VC firms have now set up shop in Nashville, said Marcus Whitney, a member of GNVCA’s board and a co-founder and partner of the firm Jumpstart Health Investors.
Whitney has lived in Nashville for more than two decades, but he said the VC and startup ecosystem has changed “drastically” in the last five years. He said the city is attracting new residents from business hubs on both coasts, including founders, VCs and investment bankers.
“We look a lot more like a tech and innovation hub than we did 10 years ago, that’s for sure,” he told CNBC in an interview.
Nashville is also home to the Nashville Entrepreneur Center, which helps connect startups with the resources and support they need. The center opened its flagship facility in 2010 after the Nashville Area Chamber of Commerce commissioned a 75-person “Entrepreneurship Task Force” back in 2007. It has worked with more than 10,000 entrepreneurs since 2010, according to its website.
Benda said the Entrepreneur Center is an “amazing hub” full of mentors that want to help founders, even if they don’t know what they are doing. Landon Gibbs, managing partner at Nashville-based Altitude Ventures, said that the center is the “front door” for entrepreneurship in the city.
“The community is really behind that,” Gibbs said.
Eligible Nashville entrepreneurs can also become members of the Greater Nashville Technology Council and the Nashville Health Care Council. The Nashville Health Care Council is made up of more than 300 companies, including HCA Healthcare, and it offers networking opportunities and educational events.
Raelyn Wilson, co-founder and CEO of Nashville-based Peer Supply, said there are “constant” social events for the startup community in Nashville, including many that are very casual. Peer Supply, a platform that helps to improve health-care supply chains, is Wilson’s first venture as a founder.
“I can’t tell you how often people want to grab coffee or grab a glass of wine or something just to talk about the industry and share lessons learned,” Wilson told CNBC in an interview.
A strong community feel
Downtown Nashville skyline with a beautiful pink, orange, and blue sunset, with the blue and pink of the sky reflected on the Cumberland River.
Davel5957 | Istock | Getty Images
Beyond the practical business advantages, many health tech founders and investors have found that Nashville is simply a fun place to live and raise a family.
Live music is ubiquitous in the city, and Tennessee has no state income tax, which Whitney said is attractive to many residents. Whitney helped bring professional soccer to Nashville, and Tennessee is home to professional football, hockey and basketball teams as well.
“We have, I think, all the things that you would want from a city, but probably a little bit more community than maybe some of the more aggressive tier-one cities have,” he said.
However, Whitney said there is still “a lot of work to do” to improve the education system in Nashville. Tennessee ranks 33rd in education in the U.S., according to U.S. News & World Report. He added that infrastructure will also have to keep pace with the city as it grows, as he is already noticing more traffic.
Herlacher of LRVHealth said Nashville is still relatively accessible and easy to navigate, adding that there is much less traffic compared to cities like Boston and San Francisco.
“It’s not hard to leave work, drive 15 minutes, quickly grab a drink with somebody and then be at home for dinner at 6:30 p.m.,” she said.
Herlacher said Nashville is almost “unrecognizable” from when she grew up there. But despite all the change, she says diversity is still a challenge. She said it is less common to find women in entrepreneurship there, for instance.
Rachel Soper Sanders, co-founder and CEO of the personalized supplement company Rootine, has observed this disparity firsthand. Sanders attended Vanderbilt and moved back to Nashville when she decided to build Rootine. She said it is still unusual to find female founders, and especially venture-backed female founders, in the city.
Even so, she said she has found a close-knit, supportive startup ecosystem in Nashville that has continued to blossom as it grows.
“There’s this new feeling, excitement, energy, where Nashville is not just Nashville anymore, it’s not just the southeast, but it’s connected to everywhere else,” she told CNBC in an interview.
Thyme Care’s Shah said Nashville is very welcoming to newcomers, and he found that the health tech community embraced him immediately. It was surprisingly easy for him to adjust after moving from New York more than five years ago.
The week he arrived in Nashville, Shah met an entrepreneur in the industry who introduced him to 30 health-care executives in 24 hours.
“Within two months, I went and met all these people, and everyone was so welcoming to me,” he said. “There’s so much opportunity to learn from each other.”
Bass of Hashed Health said there is a “strong community feel” among entrepreneurs and VCs in Nashville. It’s not uncommon to run into peers and colleagues at restaurants, cafes or back-to-school nights.
“I just came from my neighborhood coffee shop, and I probably saw three people I knew that live in the neighborhood, and they’re in health care, or tech or venture capital,” Bass said. “It’s almost a daily thing.”
In some cases, Nashville’s health tech community can be supportive to a fault.
Chase Spurlock, co-founder and CEO of Decode Health, said people can experience a phenomenon known as the “Nashville no,” where they are told “maybe” indefinitely. He said it is a reflection of the city’s southern roots and desire not to be too negative.
Decode Health is a data platform that is designed to help pharmaceutical, diagnostic and technology companies identify new biomarkers and build new clinical decision support tools. Spurlock, a Tennessee native, founded the company in Nashville in 2019.
Spurlock said he is “proud” that he has been able to stay in the area. He said there is a genuine desire to see entrepreneurs and technology succeed in Nashville, and that the community is committed to paying it forward.
“I have never needed help and not received help in the Nashville community,” Spurlock told CNBC. “That’s, I think, what really makes us special.”
TUNE IN: The “Cities of Success” special featuring Nashville will air on CNBC on Dec. 6 at 10 p.m. ET.
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