Silicon Cities
How Durham’s Health Tech Startups are Changing the City – and Future – of Medicine
Kim Lachance Shandrow | June 8, 2017

Nicknamed the City of Medicine, Durham, North Carolina has long been home to a vibrant, cutting-edge health care industry. Starting with the launch of the city’s Research Triangle Park (RTP) in the early 1950s and catalyzed by the rise of the local Duke University hospital system in the ‘70s and ‘80s, the city emerged in the last half the 20th century as a major hub for biotechnology, pharmaceutical and other health care-related companies.

Today, as medical treatments and health care delivery become increasingly digital, a new wave of innovative, technology-focused health care startups are now carrying Durham’s “City of Medicine” reputation into the modern era.

Drew Schiller’s innovative health care upstart, Validic, is among them. His 200-employee enterprise is leading the way in the exploding digital patient data sector — and very intentionally doing so from the epicenter of North Carolina’s Bull City.

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“Startups, especially health tech startups, are at the heart of Durham,” said Schiller, a Consumer Technology Association Health & Fitness Technology Division board member who co-founded the startup alongside serial entrepreneur Ryan Beckland in 2010. “Here, we have access to some of the largest life science leaders, medical centers and health tech companies within the Research Triangle,” a more general moniker given to the Raleigh-Durham-Chapel Hill Corridor amid the rise of the RTP.

Indeed, North Carolina’s Research Triangle Park is home to dozens of future-forward biotech companies, big and small. In fact, some 45 percent of the businesses in the RTP identify as being within the life science and biotechnology/health care industry, according to the Research Triangle Foundation of North Carolina. Two of the largest among them are GlaxoSmithKline and Biogen.

“It’s a smart state, a business-friendly low-cost state, with a wide and deep life science infrastructure,” said Doug Edgeton, president and CEO of the North Carolina Biotechnology Center. He also noted that, according to Biospace, North Carolina regularly ranks among the “top three life science states because of its prolific university research base and its broad life science infrastructure, including its highly trained workforce.” Much of that workforce is located in the RTP, now home to approximately 47,000 local employees who clock in there daily.

Validic co-founder and CEO Drew Schiller.

On a broader geographic level, the Tar Heel State’s famed Research Triangle encompasses the locations of North Carolina State University, The University of North Carolina at Chapel Hill and Duke University, all of which offer tech startup incubators. Each further fosters a local culture of innovation and entrepreneurship across their respective and revered technology programs and, for the latter two, their schools of medicine as well.

“We also have talent feeding in from three academically-renowned schools within 15 miles of us,” Schiller said, referring to the three above-listed universities and their proximity to Validic’s headquarters.

In recognizing additional sources of software engineers and other tech talent to fill the ample positions at the region’s many maturing health-related startups, Schiller pointed to The Iron Yard. The software coding boot camp located in downtown Durham, he said, “provides the needed coding skills and expertise to the area.”

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Another reason Schiller launched his health tech venture out of Durham is the city’s active network of open-minded entrepreneurs. Think outside-of-the-box innovators and early adopters who value creative ideas born out of collaboration.

“The area has an exceptionally well-connected tech and startup community,” he said. “The dynamic between local founders is collaborative, and we are constantly looking for ways to work together and bring our organizations together.”

That sense of community and collaboration has attracted a growing number of health care-minded entrepreneurs and technologists to this Southern city. Validic’s notable neighbors in the biotech and medical arenas include BioAgilytix Labs (focused on large molecule bioanalysis solutions for trials conducted by pharmaceutical and cosmetic companies), Medlio (an app and software platform that seeks to streamline the doctor search and visit process), and SenGenix (trying to revolutionize blood testing procedures). Also located in Durham are biotechnology upstart G1 Therapeutics, which went public earlier this year, and Dova Pharmaceuticals, which just this week filed for an IPO that could raise as much as $75 million.

Validic team members at work, sharing a “singular focus and drive to improve the efficiency, affordability and accessibility of health care.”

Indeed, Durham’s established health tech entrepreneurial ecosystem has bolstered the area’s collaborative — and exceptionally technology-forward — startup environment, according to Innovation That Matters study, an annual research project published by Free Enterprise, the U.S. Chamber of Commerce Foundation and 1776. Data from the report, culled from several local startup founders and public and private sector leaders, suggest that Durham is a national leader in fostering a culture conducive to the open exchange of enterprising new ideas, and to world-class startup entrepreneurship.

Bull City, recently named a Robert Wood Johnson Culture of Health Prize Winner, ranked fourth among the country’s top 25 technology hubs in the report, which analyzed data sets focused on talent, culture, capital, industry specialization, startup density and startup connectivity. Additionally, the finance website WalletHub named Durham the sixth best city in which to start a business out of 150 large metropolitan areas in the U.S., due in large part to its synergistic and “favorable business environment.”

Validic’s digital health platform, a cloud-based data tool that, is collaborative by its very design. Leveraging the power of “The Internet of Things,” it seamlessly and securely transfers critical patient health information from 400 digital sources — including smartphone health apps, wearable fitness trackers, biometric sensors and various in-home vital sign-tracking devices — to health care industry professionals across the spectrum.

Key data and facts from a recent survey of companies located in North Carolina’s Research Triangle Park. Source: Research Triangle Foundation of North Carolina

Among the recipients of Validic’s data insights are medical care providers (doctors, nurses and clinicians), payers, health IT vendors, health care systems, pharmaceutical companies and contract research organizations (CROs). The comprehensive digital platform is designed to empower patients and, ultimately, to transform the quality of their health care outcomes, while also lowering health care costs for all stakeholders involved.

“We are solving a critical challenge in health care — making data accessible to better the patient experience and their health outcomes,” Schiller said. “Meanwhile, because they have insight into the patients’ daily vitals, activities and lifestyles, providers have access to the information to improve their decision-making capabilities, so they can better treat, manage, engage and diagnose patients.”

At the time of its founding, Validic was originally based around a wellness platform. However, after gathering some game-changing feedback from health care professionals from across Great Durham and beyond, Schiller and his team pivoted to a purely data connectivity-based platform in 2013.

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“As we shopped this idea around, all we heard was, ‘We want the data,’” Schiller explained. “As we got deeper into the space, we saw that health care has a need for the data from in-home medical devices and that data is not easily integrated into the provider’s clinical workflow … Immediately, people involved in the health care space with a clear understanding of where it is heading saw the value of Validic.”

Without locals’ and others’ openness to freely sharing that critical feedback, Validic might not be the globally successful company it is today, boasting partnerships with several leading companies and universities. Among them are: Philips; Panasonic; WebMD; Sutter Health; Johnson & Johnson; Amgen; The Mayo Clinic; and, closer to home, Duke Clinical Research and UNC.

Validic, backed by investors like Shark Tank’s Mark Cuban, Greycroft Ventures and Kaiser Permanente Ventures, is anchored in the heart of downtown Durham. Tucked in high-rise on Morgan Street, it’s a short stroll from Duke University’s East Campus, and even closer to The American Underground’s inaugural American Tobacco Strickland Building Campus, North Carolina’s largest historic renovation project.

American Underground, a bustling coworking space and Google For Entrepreneurs tech hub, recently co-hosted a Digital Health Innovation Sprint Startup Demo Day. Held in partnership with the AARP and the University of North Carolina’s Center for Health Innovation, the chief aim of the free event was to bring together local digital health care-focused entrepreneurs, engineers, designers and health professionals to pitch innovative solutions to help patients remember to take their medications (and to take them properly).

The gathering also offered area digital health entrepreneurs and tech-minded health care industry leaders an opportunity to network, and to meet with investors and stakeholders from across the Research Triangle’s health tech ecosystem.

Durham’s entrepreneurial med-tech dominance isn’t just making waves at the local level. It’s gaining the attention — and considerable investment — from some of the best and biggest brands in technology. Microsoft, for example, recently partnered with Validic to serve as the foundational backbone of its HealthVault Insights artificial intelligence-driven research project. The initiative uses big data to produce more thorough patient health insights.

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“We are working to bring together critical data sources with machine learning to deliver personalized, actionable insights to both patients and clinicians,” Heather Jordan Cartwright, Microsoft’s General Manager of Artificial Intelligence and Research, said in a statement. “Validic provides a core data channel for HealthVault Insights — enabling device data connectivity to hundreds of devices. This collaboration helps us continue to build a seamless experience for the patient while providing unique insights to the care team.”

For Validic’s part, the new alliance with Microsoft speaks not only to his health care startup’s exponential growth, but to the continued vitality of Durham’s historic health tech community as well.

“With a vision for a health care system built around intelligent insights, we are excited for this opportunity with Microsoft to improve care management and delivery in a way,” he said. “The success we have seen across health care, life sciences and wellness is indicative of how care, research and preventive wellness are coming together here.

We have seen a great deal of innovation in a short period of time, focused on creating a more accessible and cost-efficient system, and we will begin to see many of these innovations integrated into the greater health care system.”