Shiv Rao
Frontier Insights
Thesis: Clinical dialogue—not structured EHR data—is healthcare’s ultimate source of truth. Capturing ambient conversation upstream unlocks clinical documentation, billing, and trial workflows while drastically cutting physician burnout.
Strategy: Abridge built a defensible post-training flywheel powered by millions of physician-edited encounters across 110+ health systems. By keeping clinicians strictly in the loop, pairing targeted proprietary models with regulated workflows, and out-executing incumbents like Microsoft in head-to-head enterprise deals, they secured category leadership.
Risks: High enterprise customer concentration, intense Big Tech platform competition, and the reality that fully autonomous, high-risk clinical action remains a slow, unsolved regulatory frontier.
Key Views & Dialogues
The Five Year Desert to Product Market Fit & a $5.3BN Valuation with Shiv Rao, Founder @ Abridge
Abridge held its clinical-conversation thesis through a five-year desert, pivoting product, go-to-market, and business model before healthcare’s 2023 opening. Regulated workflow depth, daily user-edit post-training, and notes-to-orders-to-billing underpin the moat, with 40% of outputs already in-house for binary tasks. OpenAI and Anthropic’s enterprise push is a bull signal, but HITRUST, trust, model costs, and the 2-3 year execution window bear watching.
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- The company’s five-year desert (founded 2018, three months after the Transformer paper; hot only since 2023) distills to one survival rule: hold the thesis, pivot everything else. Shiv Rao was willing to pivot product, go-to-market, and business model, “but I wasn’t willing to move on the thesis” — that clinical conversations are “the most human signal” powering healthcare. Until the market opens, “you just need to not die” — be standing when the sky opens.
- On the existential question every vertical AI founder gets: “If you are fighting against them, you’ve already lost.” If foundation-model tailwinds aren’t yours to leverage, you’re screwed. The company’s defense is depth — a regulated, $5.3T industry (18-19% of US GDP) where post-training on daily user edits across doctor types, settings, and languages is the product: “people in 2023 thought that was last mile. That’s actually most of it. The model piece is much less.”
- ~40% of the company’s in-product model outputs come from in-house models — possibly 60% next month as distilled open-source models replace frontier calls. The rule: binary, ring-the-bell tasks go in-house (faster, cheaper, set-and-forget); never-perfect tasks where the market rewards continuous improvement “ride the frontier wave.” Owning the lower stack gives “agency on the P&L” — a lever he doesn’t need now but “my future self might care more.”
- The healthcare GTM trap: it’s not one $5.3T market, and founders who take the “start down-market” advice literally never time their “YOLO shot” up-market — 800K practicing doctors are concentrated in large delivery networks. The company’s opening came in 2023 when burnout (40-50% of doctors; a JAMA study saying 30% of nurses wanted out within 12 months) met LLMs: “when the sky opened, we ran right in.” Now doctors reportedly refuse to join hospitals that don’t have “a bridge.”
- The note was never the product — the note is a bill. Clinicians “are compensated for the care that they documented that they deliver,” so the company sequenced notes → orders → billing along jobs nobody wanted, threading CMIO, CIO, and CFO. Result: Microsoft/Nuance (a $20B+ acquisition) and likely Nabler “we don’t see either of those companies much anymore” — not through bundling defense but category creation; Emory doctors now use “a bridge” as a verb.
- OpenAI and Anthropic hiring forward-deployed engineers and partnering with PE firms is, to Rao, a clear bull signal for vertical AI: “If that wasn’t a sign that there is absolutely an incredible opportunity… I don’t know what is.” The mess is the moat — “it’s not SOC 2, it’s HITRUST,” behavioral-health data handled differently, enterprise data cleanup that takes real machinery to scale.
- Offered frontier-model access six months early versus the best talent pool for six months, Rao takes talent, “no question about it” — great people build your own primitives and the frontier arbitrage “is not the be-all and end-all.” On Goldman’s estimate that agents drive 24X token consumption in five years: directionally right — jobs you’re never good enough at are “bottomless pits,” and Jevons means “a tsunami of healthcare needs” the system can’t deliver.
- Founder mode, via investor Jensen (who cold-called Rao at midnight replying to a two-line email): not micromanagement but “tours of duty” — and “your job is to fall in love with whatever the job is,” CRISPR-ing new DNA that loves living on airplanes. Rao is unapologetically a wartime CEO (“who’s a peacetime CEO?”), envisions flattening his 450-person org around “super ICs,” and hires for Josh Wolfe’s “chips on shoulders makes chips in pockets.”