James Quarles: Build a ‘culture of scrappiness’ | Lessons for Leaders

When startups are aiming to find a place in the market, James Quarles says it’s easy to overreach.

James Quarles, venture chair of Redesign Health (Submitted photo)

Quarles is a venture chair at Redesign Health, which has launched 50 healthcare startup companies in less than six years. He also previously served as chief executive officer of Strava, the social network for athletes.

He says he’s encouraged that people are looking to start new businesses, even in a challenging environment for startups. But he says it’s important to start small and stay focused at the beginning.

“I think it really is fun to build a culture of scrappiness from the beginning,” he says.

Quarles, who spoke with Chief Healthcare Executive® for a recent episode of the Data Book podcast, says it’s vital to ensure that startups should “actually know that you have something” before a hiring spree. He says it’s good to wait to hire a salesperson, for example, before knowing the value of a product and seeing if it’s working for customers. (See part of our conversation with James Quarles in this video. The story continues below.)

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Founders should use existing tech, such as a WhatApp group or even simply pen and paper, to assess the product and ensure that “this need that you think you've identified, is something that you can actually directly solve,” Quarles says.

Quarles also talks about the importance of “product market fit,” which he says is not just a Silicon Valley term.

“It just means that you get a signal that people have tremendous demand and excitement, enthusiasm about what you're selling them,” he says. And he adds that product market fit “doesn’t hide.”

Some startups have invested in products or solutions, but only a portion has found appeal, he says.

“I think staying small, and building around where you just have very bright lights, versus trying to continue to push your own perception of what this experience should be, is a good thing,” he says.

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With Strava, Quarles notes that the app was initially designed for competitive cyclists, and now is used by people who enjoy running, hiking, walking and a host of other outdoor activities to share their results and progress. Strava is now used by over 100 million people worldwide.

He says his time at Strava illustrated the value of narrow focus and simplifying in the early stages, and avoiding the temptation to bite off too much.

“I always say startups die actually of indigestion, not starvation,” Quarles says.

While the term “disruption” is also commonly used in business, Quarles suggests that startups should focus more on working with the healthcare industry.

“I think there's great problems to solve with incumbents who just are in the system,” he says. “Big health systems have lots of problems and challenges, the payers have large challenges.

“For as much as there's this concept of disrupting the system, I think we all like to build with the system, and not try and disrupt it,” he says. “Because there's a lot of challenges, particularly, you know, with time and workflows.”

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When asked if there are common mistakes startups need to avoid, Quarles says emerging companies often fail to match their traction with their expenses.

“It's easy to get excited when you start a company,” he says.

Often, founders start recruiting heads of marketing, or sales, or clinical departments too soon.

“All of a sudden, you have a huge amount of cost in a business before you've actually gone out to market,” Quarles says. “So, that's a big mistake.”

In addition, he adds, “People spend way too much money early on a product that doesn't scale … When you have finite resources, and you put a lot into some sort of technology solution, I think that can be very expensive.”

Founders need to make good decisions in hiring.

“We all make hiring mistakes,” Quarles says. “There's only so much you can assess. But I think in Redesign’s time, we have really come to the conclusion that domain expertise probably isn't as important as just adaptability and resilience.”

He also points to the value of focusing on one problem at a time and being “really obsessed” with the problem they’re trying to solve.

Redesign Health looks for people with the “zero-to-one” skill set.

“I think founders and other startups absolutely need to do the same, for those first two years, at a minimum,” Quarles says. “That's the type of people that thrive in these companies.”