Six Questions with VC-Triathlete David Jones Jr.

peHUB, October 15th, 2009

DAJ26f It isn’t often that you feel young at 51, but that’s one of the benefits of competing in the Senior Games.

Just ask David Jones Jr., founder and chairman of Louisville-based Chrysalis Ventures, who came in 9th in the triathlon portion of the games in August. Jones was a relative kid compared to some of the other competitors, one of whom was 85.

I caught up with Jones and we talked about his passion for health and fitness and how that ties into his investment strategy.

Q: How’s your firm doing these days?
A: We’ve had two good exits since the market cracked. We sold a company called HealthMedia in Ann Arbor to Johnson & Johnson for about 18 times our money in October of ‘08. And we’ve got another company called MedServe down in Houston that Stericycle, which is the leader in medical waste processing, is buying for $185 million. We did well on that one, too. It was a multiple of our invested capital.

Q: HealthMedia offers a Web-based coaching service to help people manage health problems like diabetes. Did you take away any lessons from the success of that deal?
A: Thing One I learned from HealthMedia is that you can affect health by using technologies that have already been invented—call them off-the-shelf—but you’ve got to apply a ton of domain expertise, in this case behavioral science, to make them relevant. Because just spamming people and telling them ‘don’t eat that cheeseburger,’ that’s not going to work. You’ve got to meet people where they are and give them meaningful interactions.

Q: What else did you learn?
A: Thing Two I learned from HealthMedia is that it can work as a business. Johnson & Johnson paid cash for the company in October of ‘08 and look at what they told the Wall Street Journal about their plans, which extend way beyond this small company. They see a future, as I understand it, where the medical device or the drug is not just a thing but a gateway to an interactive coaching relationship that helps the individual achieve their health goals. And it also helps the physician, or whoever the health care player is, achieve their goal in prescribing it.

Q: Are there other HealthMedia-type opportunities out there?
A: I think there are vast opportunities, because 70% of the costs in the health care system come from these things that are related to lifestyle rather than what hospitals and doctors do. This is only a belief, but it’s a strong one: As a nation, we can’t succeed if the trend lines continue and at some point in the future half of 18 year olds have adult onset diabetes and half of the population needs serious heart surgery. We won’t have a workforce, we won’t have a military.

Q: Let’s talk about sports. What’s your workout schedule?
A: I usually ride three days a week, swim two and run two or three. I ride about 140 miles a week, I’ll swim 5,000 or 6,000 meters a week and the running is probably about 12 to 20 miles.

Q: What’s your favorite sport in the triathlon?
A: Cycling, because it has taken me into the countryside and hills around Louisville. I’m an early morning rider. We tend to ride with big headlamps and be done by 7 a.m. or 7:30 a.m., and riding when the sun is coming up—especially when there’s fog and the hollers [valleys] and the lowlands—is just spectacularly beautiful.