Epic Systems (MyChart)

1. BGBen Gilbert0:00

   The answer is somewhere in the middle.

2. DRDavid Rosenthal0:02

   Well, you texted me last night that you've made it to Singapore.

3. BGBen Gilbert0:05

   I made it to Singapore, yes. Anytime you are researching anything in U.S. healthcare, you know it is time to stop your research process and start the episode once you've found Singapore. [laughing] [sighs] All right, let's do it.

4. SPSpeaker0:21

   Who got the truth? Is it you, is it you, is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down, say it straight, another story on the way. Who got the truth?

5. BGBen Gilbert0:38

   Welcome to the Spring twenty twenty-five season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

6. DRDavid Rosenthal0:45

   I'm David Rosenthal.

7. BGBen Gilbert0:46

   And we are your hosts. Listeners, today's episode is about a quiet company in rural Wisconsin that plays an enormous role in our lives, Epic Systems.

8. DRDavid Rosenthal0:56

   Indeed, whether you know it or not.

9. BGBen Gilbert0:58

   Yes. You probably know them from their medical patient software, MyChart, that if you're listening to this, you most likely use. Epic is a very unusual company in so many ways. They do no marketing. They basically don't do any sales either. They often say no to potential customers who approach them. They don't negotiate, they don't discount. They never raised any venture capital, and they've never done any acquisitions in their forty-seven years of existence. They don't work remotely. Everyone is in person all the time. They notoriously have one gigantic campus on a farm, with buildings designed to look like the Land of Oz, a wizards academy, a tree house, a barn, a replica of New York's Grand Central Station, and an eleven-thousand-seat auditorium underground. They have the majority of the US's major hospital systems using their software, and of their over six hundred customers, they have never lost a single one.

10. DRDavid Rosenthal1:50

    Yeah, that is the craziest thing to me about this company, is forty-seven years old, they have never lost a customer. Actually, we found out that's not totally true. They lost one customer once for six months, and then that customer came back six months later.

11. BGBen Gilbert2:04

    Yes. The company's founder, Judith Faulkner, is undoubtedly one of the great founders of our time. You probably don't know much about her or the company because the company is still privately held, and Judy and her family foundation own about half of it. Despite being large, and I think at this point they're close to six billion in revenue and over fourteen thousand employees, they have a stated goal to never go public and never be acquired, and Judith, at age eighty-one, has created a succession plan and a trust structure for her voting shares to ensure that that will stay true forever.

12. DRDavid Rosenthal2:38

    Yes, we heard all sorts of stories about companies sniffing around Epic over the years trying to buy them: GE, Microsoft, Google. You know, everybody you would imagine wants to buy this company, and it's never gonna happen.

13. BGBen Gilbert2:50

    Yep, and we'll dig into this at the end of the episode when we sort of have all the context and all the numbers, but I believe that Judith Faulkner, in starting one of the most valuable companies in healthcare, is the most successful female entrepreneur in history.

14. DRDavid Rosenthal3:05

    Almost undoubtedly.

15. BGBen Gilbert3:06

    Well, all right then, spoiler alert, listeners. [laughing]

16. DRDavid Rosenthal3:10

    [laughing] We'll discuss that at the end.

17. BGBen Gilbert3:11

    Yes. So the healthcare industry, there is so much wrong with the American healthcare system. That is an incontrovertible fact. There's nobody that's gonna tell you, "Oh, actually, it's pretty good." It's not pretty good, it's a disaster. Runaway costs, burdens of administration, so much excess and waste causing... I think healthcare costs are now eighteen percent of our GDP.

18. DRDavid Rosenthal3:32

    Ooh!

19. BGBen Gilbert3:32

    So rather than trying to eat that whole elephant today and unpack the entire system, today's episode is about understanding Epic's role within it and how Epic became so dominant.

20. DRDavid Rosenthal3:42

    Yep, and if you wanna understand the system, you have to understand Epic.

21. BGBen Gilbert3:46

    Yep. Well, listeners, if you wanna know every time an episode drops, check out our email list. It is the only place where we will share a hint at what our next episode will be. We'll share corrections from previous episodes and little tidbits that we learned along the way. So that's acquired.fm/email. After this episode, come join the Slack, talk about it with us and the entire Acquired community afterwards. I bet there's a ton of people in the medical ecosystem hanging out in the Acquired Slack. That's acquired.fm/slack. If you want more Acquired between each monthly episode, check out ACQ2, our interview show, where we talk to founders and CEOs who are building businesses in areas that we've covered on the show to go a little bit deeper. Search ACQ2 in any podcast player. So as we announced last episode, we have a very fun save the date for you. We can't say much yet, but after incredible listener demand over the years, we are finally coming to New York City with our friends at J.P. Morgan Payments. So July 15th, mark your calendars, and if you wanna be the first to find out what we are up to, sign up at acquired.fm/nyc.

22. DRDavid Rosenthal4:55

    This is gonna be-

23. BGBen Gilbert4:56

    A night of absurdity.

24. DRDavid Rosenthal4:56

    An incredible night.

25. BGBen Gilbert4:58

    Yes. All right, listeners, before we dive in, we want to briefly thank our presenting partner, J.P. Morgan Payments.

26. DRDavid Rosenthal5:04

    Yes, and just like how we say every company has a story, every company's story is powered by payments, and J.P. Morgan Payments is a part of so many of their journeys from seed to IPO and beyond.

27. BGBen Gilbert5:14

    So with that, this show is not investment advice. David and I may have investments in the companies that we discuss, although not Epic, and this show is for information and entertainment purposes only. David, take us in.

28. DRDavid Rosenthal5:27

    All right. Well, we start our journey in August 1943, when Judy, today Faulkner, then Judy Greenfield, is born in Earlton, New Jersey, which is part of Cherry Hill, New Jersey, suburb of Philadelphia, right across the Delaware River there, not too far from where you and I grew up.

29. BGBen Gilbert5:47

    That's true, and Taylor Swift.

30. DRDavid Rosenthal5:48

    And Taylor Swift, that's right. Fertile ground for entrepreneurs-

Episode duration: 3:57:01