John Sculley Sees $10 Billion in Revenues for RxAdvance (Audio)

now at ten sixty seven. The Dow is up a hundred and thirty four points, gaining seven tenths of one percent to eighteen thousand, three hundred sixty one, the record on the Dow eighteen thousand, the old record eighteen thousand, three hundred twelve SMP up seventeen twenty one fifty four now a gain of eight tenths of one percent. Nez stan Cup forty, also a gain of eight tenths of

one percent. The ten year down twenty five thirty seconds, the yield one point five one percent, Gold down twenty one ninety out four, a drop there of one point six percent, and crude oil West Texas Intermediate of a dollar ninety five v one. Uh, that is a gain of four point four percent. I'm Charlie Putt, and that's a Bloomberg business flash. You're listening to taking Stock with Kathleen and Pim Box on Bloomberg Radio. How do you

build a multi billion dollar business? How do you satisfy customers? How do you know the right questions to ask in order to get the right investors? Well, chances are he turned to John Scully. He is, of course, author, entrepreneur, former chief executive of PepsiCo and Apple, and the author of a new book entitled Moonshot, Game Changing Strategies to Build Billion Dollar Businesses, and John joins me in the studio today. John, thank you very much for being with us.

Let's start off by understanding what makes this book different than other books about how to build businesses. You've done that and one of the things that I wanted to zero win on. First of all, is you talk about a customer plan, not just a business plan. Explain that, sure, Well, first of all, this is not an autobiography. Uh. This is really made up of the conversations with so many successful entrepreneurs that I've known over the years, and the

lessons we've all learned. Most of the lessons we've learned PIM come from our mistakes, not from our successes, And a lot of people are afraid to talk about their mistakes because they're afraid of getting ambushed by it. Well, I can talk to the two entrepreneurs. They know I'm

not going to ambush them. But going back to the customer plan, so many people in business are used to the tedious process of writing an annual business plan, which is really a budget, which is really looking back and saying, so, where were we before and how much further do we think we can go in the future. The customer plan starts in a totally different place. It says, what's the really big customer problem that needs to be solved, and can you be the ones to solve it? And if so,

how are we going to do it? And how are we going to engage the customer? What's the cost of customer acquisition? All the metrics are customer metrics. What's the cost of customer retention? How do you monetize the customer? What's the lifetime value of customer? And when you're building the customer plan, you start with the customer problem what's in it for the customer? And you look out green field out into the future, and you say, you know, let's look at what could be, not what was in

the past. To follow up on that, the questions that a potential entrepreneur, or indeed someone that is currently running an entrepreneurial company, the questions you say are really more important than the answers. Well, of course they are, because we're in the era of Google, We're in the era of Wikipedia and many other sources. If you want to go check answers their commodity, you can get them for free.

The problem is the way most of us grew up and went to school, Uh, we were measured on memorizing the answers. But what you really discover in life, it's learning the context of the right questions. Ask the right questions, and it's amazing how the same set of facts you

know looks entirely different. So I encourage people, particularly those who want to be in an entrepreneurial world where you wouldn't be doing it if you didn't think there was a better way to do something, to ask the right questions. In my opinion, it's always around the context of what's in it for the customer talking about asking the right questions.

I want to turn your attention to a specific industry that you have a lot of expertise in and that you are working in right now, and this is healthcare. What are the right questions to ask when it comes to things like the price of pharmaceuticals or dealing with health care as a huge, uh tangled mess of of bureaucracy. Well, it goes back to what we've been talking about ask the right questions. The right question in healthcare that I

focus on are the chronic care patients. About five percent of the population in the US, about one point five three dollars have health spent. Around fifty of every dollar spent in healthcare goes to that five of chronically old people. The whole movement today is to move these chronically old people out of the hospitals and to serve them even better,

better customer experience, better patient experience in their homes. And the high technology that we have today with sensors that can measure their vital signs, the ability to use video conferencing, which is really becoming increasingly increasingly accessible and expensive. The part of the business I'm focused on are the pharmaceuticals, because the pharmaceuticals UH represent hundreds of billions of dollars of annual cost savings if you can be able to

deal with issues like avoidable drug costs. For example, the chronic care patient typically has fifteen meds a day, but they're being prescribed by different specialists who don't necessarily know what the other specialists are prescribing because they can't get the information in a useful form. What we do at our company, our x Advance, we're the first cloud based

pharmacy benefit management platform with actionable intelligence. We use machine learning other technologies, and we're able to dramatically cut the costs. We believe will probably be about a ten billion dollar revenue company. By we expect to be making close to a billion dollars of profit. And with that we can turn back, you know, at least another billion dollars of profit back into the health system and dramatically lower the costs of tens of billions of dollars for patients and

health systems. And we can increase the pay of the doctors. And you say, well, how can you do all of that? It's because the system is so inefficient. It was built thirty years ago and no one upgraded the technology. We're still living with technology that was designed for a different era. So our company is just one example of that, our x Advance, but there are others out there. It's a huge industry. They are going to find different opportunities, but

always start with the customer. In this case, the customers a patient, and always say, how do I give that patient just an incredibly good experience now, something that not many people have always been able to have in the health care systems. I think of the frustrations of standing in queues, waiting and waiting rooms, not knowing really what they want to do, having trouble getting the doctors twenty one days on average to get to see a doctor.

So those things can be dramatically improved on UH and taking advantage of the skills of the professionals in the health care system. There's nothing wrong with our professionals of doctors and nurses, it's how do we get them up to date with the same kinds of disruptive innovation that have taken place in the private sector part of our economy. In putting together are ex advans, you went through some of the same issues that you note in your book

Moonshot one. If you could tell me some of the maybe anecdotes that have illustrated your progress to under standing what it means to put together a new company. Well, one of the real challenges is that, uh, the incumbents really don't want to change, you know, for a whole bunch of reasons. It may be because they're worried about, you know, what does it mean to their particular job. How does it um you know, gonna make life different.

So what we realized was, even though we can build an entirely new pharmacy based management supply chain system, that that's probably not the best place to start because it disrupts too many people's lives in the health care industry. So we said, keep what you got and we'll build

on top of that. So we'll fit in. So you can say, we can stand out with many of the advantages I was talking about earlier, you know, cost savings, better customer experience, more things we can do in the patient's home, make it real simple for people who know nothing about technology. For instance, we're using um the new Alexa smart assistant that was developed by Amazon. Terrific product Amazon development. We had corporate it back into our system

because the Amazon open the technology up. But uh, we are trying to say we can fit in. We can don't have to force you to change everything that you already have. And it's amazing the difference of the reception we get from the insurance industry when we say, hey, we can fit in and by the way, we won't charge your fee for service. We'll take the risk. And when they say you mean you'll take the risk, you of that much confidence and what you're doing that you're

willing to bet on performance. You don't get paid unless you perform to what you've said to absolutely and why can't we do that? Because the inefficiencies of the systems are so incredibly big and the advantages of disruptive technology can make such an incredibly large impact. How big is our x advance today? We launched it in January of this year, we started back in. We'll do about a D five million revenue this year and next year we're looking at well over five hundred million. It could be

closer to a billion next year. We think we'll be at hen billion dollars revenues. Our plan by and we think that we have pretty conservative outlook to get um somewhere around eight hundred million dollars for profit. Now, there aren't many businesses that grow that fast to that size, but it's still very small in the context of a three training dollar healthcare industry. I mean, even then, we'll probably have less than a three percent market here at

that scale. At that scale, well, I want to thank you very much. When you talk about that, it sounds almost like a moon shot, and I guess that's a good way to describe your book because that's the title, Moonshot Game Changing Strategies to Build Billion dollar Businesses. Thank you very much for spending time with us. John Scully, author, entrepreneur, former chief executive of PepsiCo and Apple much appreciate it. I keep him and it's available on Amazon. Maybe you

can use Alexa to order it as well. You can't. Actually, yeah, say Alexa, I want to order John Scully's moon Shot, and if you're connected to Amazon Prime, you'll get the book. Thanks very much, John Scully, author of Moonshot game Changing Strategies to Build Billion dollar Businesses. You're listening to taking Stock, I'm pim Fox and this is Bloomberg