Tourists visit the bars and country music venues within the Lower Broadway entertainment district in Nashville, Tennessee, Sept. 1, 2019.
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On a flight from Fort Lauderdale, Florida, to Nashville, Tennessee, earlier this month, 36-year-old Robin Shah settled into his seat and ready 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 attention of the enterprise 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 repeatedly. 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 greater than 680,000 people, including Shah, who love town 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 town supports greater than 900 health-care corporations that generate a complete of $97 billion in revenue annually, based on the Nashville Health Care Council.
Consequently, town is bursting with opportunities for founders equivalent to Shah who’re searching 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 is growing larger by the day.
“Great corporations are being born here,” Shah said.
Nashville’s history with health care
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Nicknamed Music City, Nashville is chock-full of country singers and perpetually buzzing with live music. It has also develop into a preferred destination for bachelorette parties, so groups of ladies, often donning pink or bedazzled cowboy hats, will be seen wandering out and in of bars on the favored 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 town’s repute as a health-care hub was catalyzed when HCA Healthcare, one among the primary for-profit hospital corporations within the U.S., was founded there in 1968. HCA operates greater than 180 hospitals across 20 states and facilitates greater than 37 million patient encounters annually, based on its website.
The corporate 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 greater than 670 senior living communities, and Acadia Healthcare, which operates greater than 250 behavioral health facilities, are all headquartered within the greater Nashville area.
Outstanding higher education institutions equivalent to Vanderbilt University, including the Vanderbilt University Medical Center; Belmont University; and Meharry Medical College are also based in Nashville.
“Fundamentally, Nashville is form of the health-care capital of the world. That is 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 may help patients with conditions equivalent to chronic kidney disease manage their care from home. The corporate 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 town that it’s hard to miss.
“You’ll be able to’t literally go a block here without stumbling across a health-care company,” he said.
Downtown Nashville, Tennessee.
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Consequently, health-care talent and expertise is plentiful in Nashville, which is a considerable perk for founders constructing corporations there.
John Bass, a Nashville native and the CEO of a enterprise studio called Hashed Health, said town is such a “highly concentrated” environment of health-care professionals that it may possibly be hard to go away. He founded Hashed Health, which goals to de-risk and spin out health-care startups, in 2016.
Bass said VCs in Nashville are likely to take a realistic and conservative approach to investing, which reflects the difficult reality of constructing solutions for the traditionally technology-averse health-care industry. He said innovation on this space requires a careful understanding of regulations and constraints.
Bass said he’s considered trading in Music City for the Rocky Mountains in Colorado but that he’s glad he stayed.
“Moving to a distinct city could be fun, but I do not think every other town has that very same level of concentrated talent that Nashville has,” Bass told CNBC in an interview. “It still looks like it’s the appropriate size, it hasn’t grown so big that it’s too diluted.”
Ellen Herlacher, a partner on the health-care VC firm LRVHealth, grew up in Nashville and lives in Boston. She said Boston is a powerful city for each academic and clinical innovation in health care, but Nashville is the middle of the health-care business.
Herlacher travels to Nashville every six to eight weeks to satisfy with portfolio corporations 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 town gives founders easy accessibility to the “heavy hitters” of hospital operations, which will be difficult to achieve, let alone hire, from elsewhere.
Nevertheless, he said startups also need traditional technologists equivalent to software developers and engineers, which will be harder to seek out in Nashville.
The broader tech talent pool has improved lately as tech corporations equivalent to Amazon and Oracle have established hubs in Nashville, but Bass said it’s still not at all times easy to seek out true technologists.
Amazon announced it will construct an expansive latest office space in Nashville in 2018 and promised to bring greater than 5,000 corporate and technology jobs to town. Oracle, which accomplished a deal to purchase the electronic medical records company Cerner in 2022, is constructing its second U.S. headquarters in Nashville for $1.2 billion, based on The Tennessean.
“It’s still the fact that you just’re probably not going to seek out every thing you wish here,” Bass said.
Support for Nashville entrepreneurs
The Regions Bank constructing looms behind a neon sign over the doorway to a Nashville, Tennessee, bar and live country music venue in town’s Lower Broadway entertainment district, Sept. 2, 2019.
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 Enterprise Capital Association, or GNVCA, officially launched. The organization is membership-based and goals to make capital and talent more widely available to investors within the region by attracting latest VCs, organizing networking events and sourcing investment opportunities.
Vanderbilt provided a grant to support the GNVCA’s initial operations, based on a blog post.
The GNVCA was capable of launch partly because a “critical mass” of VC firms have now arrange 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 greater than 20 years, but he said the VC and startup ecosystem has modified “drastically” within the last five years. He said town is attracting latest residents from business hubs on each coasts, including founders, VCs and investment bankers.
“We glance loads more like a tech and innovation hub than we did 10 years ago, that is of course,” 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 middle opened its flagship facility in 2010 after the Nashville Area Chamber of Commerce commissioned a 75-person “Entrepreneurship Task Force” in 2007. It has worked with greater than 10,000 entrepreneurs since 2010, based on its website.
Benda said the Entrepreneur Center is an “amazing hub” filled with mentors who wish to help founders, even when the founders do not know what they’re doing. Landon Gibbs, managing partner at Nashville-based Altitude Ventures, said the middle is the “front door” for entrepreneurship in town.
“The community is really behind that,” Gibbs said.
Eligible Nashville entrepreneurs may also develop into members of the Greater Nashville Technology Council and the Nashville Health Care Council. The Nashville Health Care Council is made up of greater than 300 corporations, including HCA Healthcare, and it offers networking opportunities and academic 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 which can be very casual. Peer Supply, a platform that helps to enhance health-care supply chains, is Wilson’s first enterprise as a founder.
“I can not let you know how often people wish to grab coffee or grab a glass of wine or something simply to talk concerning the industry and share lessons learned,” Wilson told CNBC in an interview.
A robust community feel
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Beyond the sensible business benefits, many health-tech founders and investors have found that Nashville is simply a fun place to live and lift a family.
Live music is ubiquitous in town, and Tennessee has no state income tax, which Whitney said is attractive to many residents. Whitney helped bring skilled soccer to Nashville, and Tennessee is home to skilled football, hockey and basketball teams as well.
“We have now, I feel, all of the things that you just would want from a city, but probably a bit bit more community than possibly a few of the more aggressive tier-one cities have,” he said.
Nevertheless, Whitney said there is still “lots of work to do” to enhance the education system in Nashville. Tennessee ranks thirty third in education within the U.S., based on U.S. News & World Report. He said infrastructure can even must keep pace with town because it grows, as he is already noticing more traffic.
Herlacher of LRVHealth said Nashville is still relatively accessible and straightforward to navigate, adding that there is much less traffic compared with cities equivalent to Boston and San Francisco.
“It isn’t hard to go away work, drive quarter-hour, quickly grab a drink with any person after which 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 of the change, she says, diversity is still a challenge. She said it is less common to seek out women in entrepreneurship there, as an example.
Rachel Soper Sanders, co-founder and CEO of the personalized complement company Rootine, has observed this disparity firsthand. Sanders attended Vanderbilt and moved back to Nashville when she decided to construct Rootine. She said it is still unusual to seek out female founders, and particularly venture-backed female founders, in town.
Even so, she said she has found a close-knit, supportive startup ecosystem in Nashville that has continued to blossom because it grows.
“There’s this latest feeling, excitement, energy, where Nashville is not only Nashville anymore, it is not just the Southeast, nevertheless it’s connected to in all places 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 regulate after moving from Recent York greater than five years ago, he said.
The week he arrived in Nashville, Shah said, he met an entrepreneur within the industry who introduced him to 30 health-care executives in 24 hours.
“Inside two months, I went and met all these people, and everybody was so welcoming to me,” he said. “There’s a lot opportunity to learn from one another.”
Bass of Hashed Health said there is a “strong community feel” amongst entrepreneurs and VCs in Nashville. It isn’t unusual to run into peers and colleagues at restaurants, cafes or back-to-school nights.
“I just got here from my neighborhood coffee shop, and I probably saw three people I knew that live within the neighborhood, they usually’re in health care, or tech or enterprise capital,” Bass said. “It’s almost a day by day thing.”
In some cases, Nashville’s health-tech community will be supportive to a fault.
Chase Spurlock, co-founder and CEO of Decode Health, said people can experience a phenomenon referred to as the “Nashville no,” where they’re told “possibly” indefinitely. He said it is a mirrored image of town’s Southern roots and desire to not be too negative.
Decode Health is a knowledge platform designed to assist pharmaceutical, diagnostic and technology corporations discover latest biomarkers and construct latest clinical decision support tools. Spurlock, a Tennessee native, founded the corporate in Nashville in 2019.
Spurlock said he’s “proud” that he has been capable of stay in the world. He said there is a real desire to see entrepreneurs and technology achieve Nashville, and that the community is committed to paying it forward.
“I even have never needed help and never received assist in the Nashville community,” Spurlock told CNBC. “That is, I feel, 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.