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Innovation Economy

A startup finds its footing during the pandemic

While quarantining in Chester, Vt., over the winter, Cohere Health cofounder Duncan Reece brought a set of new MacBooks with him to configure and send to new hires.
While quarantining in Chester, Vt., over the winter, Cohere Health cofounder Duncan Reece brought a set of new MacBooks with him to configure and send to new hires.Cohere Health

On the last day of March, Duncan Reece put on an N95 face mask and headed to downtown Boston to meet five colleagues. Their objective was to check out four offices to see if one might be right for their fast-growing startup, Cohere Health.

When the pandemic arrived a year before, Cohere had 16 employees and operated out of a shared office space in Downtown Crossing. By this March, Cohere, which focuses on smoothing out the process of getting “prior authorizations” for doctor’s appointments and medical procedures, had grown to 160 people ― all of them working remotely. The topic of needing some sort of office space by July or August had come up, leading to a hunt for what might be available to sublease downtown. For Reece, Cohere’s chief operating officer and cofounder, the day of the office visits marked the first time he’d met any of those five colleagues face-to-face.

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The pandemic has affected every industry differently, but for many of Boston’s tech startups, it has been a period of continued growth — even as they figure out how to adapt to new ways of working. Last year was a record one for venture capital investing activity in Massachusetts, with more than $16 billion pouring into startups, according to the National Venture Capital Association. (Cohere collected $20 million of that funding, fueling its hiring spree.) And Cohere may be an early indicator of the desire among some tech startups to once again have an office to work from.

Cohere was founded in August 2019, with the goal of “reducing a lot of the administrative burdens that can make health care ridiculous for doctors, patients, and the health care plans themselves,” in Reece’s words.

They would start with the prior-authorization process, which requires doctors to seek approvals from health insurers for additional types of treatments or consults. Sometimes that involves phone calls, faxes, or visiting a Web portal. Reece says doctors’ offices may need to use as many as 40 systems to submit these requests for authorizations from various insurers. A recent survey by the American Medical Association reported that 90 percent of physicians say delays caused by the need for prior authorizations negatively affect patients’ health; 21 percent of doctors say they’ve had to hospitalize patients as a result.

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Cohere would set out to “solve the problem using modern technology,” Reece says, along with the health care plans being “willing to change how their processes work.” The goal was to launch a product by Jan. 1 of this year. Initial funding came from Flare Capital Partners, a Boston venture capital firm, along with Humana Inc., the giant Kentucky health insurer.

In the company’s first half-year, it grew from having a single rented desk at the Cambridge Innovation Center in Kendall Square, a shared-office space, then two, and then its own dedicated office at the CIC’s Downtown Crossing location.

By early 2020, Cohere was focused on recruiting experienced people who had built technology companies in the health care sector, according to Kaleb Guion, employee number two. With the help of outside consultants, they’d built a prototype software system that they could show to customers to get feedback. Reece says that he was traveling at least 60 percent of the time, mainly to visit executives at Humana, which was committed to being an early user of the software, and to see doctors who would be part of a beta test in Knoxville, Tenn.

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The idea, he says, was to “spend a lot of time with the folks who work in doctors’ offices, so we’d understand what they experience, and the challenges of patient care.” Often, Cohere staffers would drive the four hours between Louisville, Ky., where Humana is headquartered, and Knoxville.

In February 2020, the company held its first (and so far, only) off-site meeting. The featured speaker was Gary Gottlieb, Cohere’s chairman and the former chief executive of what was then known as Partners HealthCare. It was an early opportunity for recent hires, including chief product officer Gina Kim, to spend time together. Kim recalls playing the strategy board game “Settlers of Catan” as a group.

Gina Kim, chief product officer at Cohere Health, joined the company in early 2020, and almost immediately shifted to working from her home in Waltham. She says she’s eager to see colleagues in person again.
Gina Kim, chief product officer at Cohere Health, joined the company in early 2020, and almost immediately shifted to working from her home in Waltham. She says she’s eager to see colleagues in person again.Cohere Health

March 13, 2020, was the last day of working from the office for Cohere’s 16 employees. “You’re still trying to wrap your head around the strategy, and figure out what you’re going to need for your team,” Kim says. “I think I’d interviewed maybe one or two people in the office, maybe made one or two hires, and then everything shifted to being remote.” Kim says the feeling was that with a target launch date of Jan. 1, 2021, “we just couldn’t afford to slow down. The attitude was, ‘Let’s get people on, and we’ll figure it out.’ ”

Like many other companies, Cohere figured out how to keep making progress in the remote-work era. Kim got her product development team using tools like EasyRetro to understand what was going well, and what could be improved. Everyone became used to writing things down so that new hires could clearly understand what the goals were — rather than absorbing them by listening in on office conversations, Guion says.

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Reece says that while COVID-19 has been “terrible for the world, one thing that has benefitted us” was being able to hire people laid off from other technology companies such as TripAdvisor, Zipcar, and Haven, the failed health care startup formed by Amazon, Berkshire Hathaway, and JPMorgan Chase. “In a typical environment, it would’ve been hard to hire as many people as we did” over the course of 2020, he says.

By Jan. 1, Cohere had managed to launch its product in a dozen states — twice as many as expected. By February, Cohere processed more than 100,000 prior-authorization requests. In April, the company raised an additional $36 million, a funding round led by Boston-based Polaris Partners.

The company also surveyed employees about their desire to work in an office again, including how many days a week they might want to come in. A committee was formed. “Personally, I’ll probably come in three days a week,” says Reece, who lives in East Cambridge. Having an office, he says, “will help us ‘show’ who we are to customers, partners,” and prospective employees. The plan is to design the space “to promote collaboration between remote and in-person staff.”

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“I really want to see people,” says Kim, who says she has barely left her house in Waltham over the past year. Google’s videoconferencing software is fine, she says, and you can try to make small talk within the constraints of scheduled 30-minute meetings, but “sometimes it is nice to grab a beer with somebody.”

Reece says the company is close to signing a lease for a new office in Boston, starting July 1. “It’s hard to plan for, and it’s stressful, too,” he says. Cohere will likely rent enough space for 100 workers, but perhaps only half that will use the space initially.

The company’s culture has taken shape primarily via Zoom — though employees have occasionally planned outdoor activities like bike rides. Reece says, “We’ve had some folks say, ‘I’m worried about going back to the office. What’s that going to do to the culture?’ ”

Michael Greeley, a board member and early investor in Cohere, says in an e-mail that over much of the company’s lifespan, employees, executives, and board members have been “groping through this ‘new abnormal’ together. It will be fascinating to see everyone return to an office and meet formally for the first time — even though they have been working intensely together.”


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner.