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How to Learn a New Market: Othman Laraki’s Playbook
Color CEO Othman Laraki built a billion-dollar healthcare company with zero healthcare background. Former Google/Twitter PM, software guy through and through. His edge? He learned the industry by building into it. Here’s his playbook for founders diving into markets they don’t understand yet.
1. Don’t Marry Your First Idea
Early wins (funding, hiring, shiny pitch deck) feel validating. They’re not.
- Color started as a cheap DTC genetic test.
- Pivots: → to physicians (insurance killed margins) → to employers (too narrow) → to a full virtual cancer clinic.
- Each “failure” was actually the market saying, wrong buyer, try again.
Takeaway: Hold assumptions loosely. Treat pivots as upgrades, not shame.
2. Humility > Genius Founder Syndrome
Healthcare isn’t unsolved because everyone before you was dumb. It’s because incentives are messy.
- Patients ≠ buyers.
- Insurers ≠ providers.
- Employers ≠ clinicians.
Show up curious, not cocky. Otherwise the industry will humble you real quick.
3. Untangle the Incentives
Follow the money like Munger taught. Ask: Who influences, who decides, who pays, who benefits?
- In healthcare, Blue Shield might just be the admin — the employer is the real insurer.
- Regulation wasn’t the real blocker. The splintered buyer problem was.
Rule: If your product makes one player look bad, you better bring overwhelming value so the others pressure them to adopt.
4. False Positives Can Kill You
Warm intros + flashy advisors can get you early “customers.” That’s influence, not traction.
Laraki: “We thought we had PMF because important people said yes. It didn’t scale.”
Check if people buy because the product wins on incentives, not because they like you.
5. Get Real Experts Involved Early
Not celebrity advisors. The people actually doing the work.
- Cold-emailed Mary-Claire King (the scientist who linked cancer to genetics). Won her over by showing rigor + personal connection.
- Hired ex-Twitter/Google engineers who secretly wanted back into healthcare.
- Balanced scientists + builders who bias toward action.
Pro tip: pay advisors simply (cash > equity) unless they’re missionaries.
6. Run the Unsexy Unit Economics Drill
Color started by asking: Can we build a test cheaper than a Vitamix ($250)?
- Broke down every COGS line item.
- Negotiated suppliers like crazy.
- Learned pricing in healthcare isn’t cost-driven — it’s margin-driven by insurers and middlemen.
Lesson: Even if you crack cost, you may still need a wedge beyond “we’re cheaper.”
7. Study Incumbents, Then Redraw the Map
Color’s wedge: insurers wouldn’t buy cheap tests, but employers would buy end-to-end cancer solutions. So they went upstream.
- Cheap test = feature.
- Virtual cancer clinic = product.
- Later: full public health infrastructure (COVID testing, vaccine rollout).
Meta-lesson: Don’t just build a better mousetrap. Redraw the category lines so the old mousetraps look irrelevant.
The Punchline
Laraki didn’t learn healthcare by reading Statista reports. He learned it by building, pivoting, and interrogating every assumption until the business model clicked.
For founders diving into foreign markets:
- Stay humble.
- Follow incentives.
- Pressure-test unit economics.
- Hire insiders early.
- Don’t stop redrawing the map until the wedge is obvious.
That’s how a Twitter PM built a billion-dollar healthcare company.
Color CEO Othman Laraki built a billion-dollar healthcare company with zero healthcare background. Former Google/Twitter PM, software guy through and through. His edge? He learned the industry by building into it. Here’s his playbook for founders diving into markets they don’t understand yet.Was this email forwarded to you?
