Michael Gorton is a serial entrepreneur, author, and most-recognized as the co-founder of TelaDoc. Michael founded Internet Global in 1993, selling in 2000 in an interesting story told in this episode. From the success of iGlobal, he co-founded TelaDoc with Dr. G. Byron Brooks, growing it to a sizable subscribers and revenue base before leaving the company in 2010. He’s gone on to do a number of other things, write best-selling books, and most recently started Back to Space, LLC and Recuro Health. Couple book links: Broken Handoff: Saving Your Assets (https://amzn.to/2RxHinZ), Forefathers and Founding Fathers (https://amzn.to/2PQe6YV)
#110: Teladoc and the power of persistence with Michael Gorton
April 13, 2021 • 1:01:47
Aaron Spatz, Host, America’s Entrepreneur
Michael Gorton, Founder, Teladoc
You’re listening to America’s Entrepreneur, the podcast designed to educate, entertain, and inspire you in your personal and professional journey. I’m your host, Aaron Spatz. And on the podcast, I interview entrepreneurs, industry experts and other high-achievers that detailed their personal and professional journeys in business. My goal is to glean their experiences into actionable insights that you can apply to your own journey. If you’re new to the show, we’ve spoken with successful entrepreneurs, Grammy Award-winning artists, bestselling authors, chief executives, and other fascinating minds with unique experiences. We’ve covered topics such as how to achieve breakthrough in business, growing startups, effective leadership techniques, and much more. If you strive for continual self-improvement and enjoy fascinating and insightful conversation, hit the subscribe button. You’ll love it here at America’s Entrepreneur.
I’m incredibly honored and excited both to have Michael Gorton on the show. Michael, for those of you that are not tracking, Michael has written books, but he is a serial entrepreneur. He loves to mentor others. You would probably recognize very quickly that he’s the Teladoc founder. So he’s one of the founders of Teladoc or the founder of Teladoc, the CEO and chairman. So we’re just very, very excited to have him here. And Michael, thank you, sir. Thanks for making the time to be with me this morning. Thank you.
Good morning. So, we’re chatting off camera. And so your background is really an incredible background in terms of your education. So I don’t think a lot of people realize just all that you did in terms of just your baseline of education. And so you finished everything up at Texas Tech getting your bachelor’s in electrical engineering and engineering physics. So what was the thought behind that? Because that is a ton right there.
Yeah. Yeah. Well, when I was a kid, I was insane and thought I was going to be the first man on Mars. And so I kind of felt like, okay, I’ve got to get all of these degrees. And when I do, NASA will have to accept me to be that first person to go off to the red planet.
I mean, it’s not too late, but time’s running out.
I think I’d be going with Elon Musk now.
Yeah. You’ll definitely, definitely have to give him a call, see what you guys can figure out. Because I mean, that day is coming, that that day is coming for sure. But give us a little bit of a sense of your background. So, I love to lead off with the, you know, are you DFW native? If not, where are you originally from?
I’m an air force brat. I was originally born in Burlington, Vermont, which doesn’t make you think that I would ever become a Texan, but boy, am I a Texan. You know, my parents traveled all over the world, I went to three high schools and my dad ended up moving to San Antonio for my last year and a half. And just, you know, you can’t come to Texas and not love Texas.
And so here I am.
Yeah. No, the joke I love to tell people is, you know, you’ll get here, there’s a lot of mixed responses to the initial one or two years of living in Texas. And there’s just one day where you just roll out of bed and you’re like, you know what? This place is pretty awesome. I don’t think I ever want to leave.
That’s usually how it goes. So yeah. So you have done a tremendous amount of things across your career. You’re doing a lot of amazing things right now that I can’t wait to get to and talk about. I would love to promote some of the stuff that you’re doing currently. But take us back to, you know, you finished school, some of your first work out of school, you’re working Texas Utilities. And then at some point, whether it was while you were there, at some point, the entrepreneurial bug I’m sure had already bitten yet at some point, but what was going on during those 12 years leading up to you stepping out and taking on a couple of different opportunities?
Well, believe it or not, when I was at the power company, I went to graduate school at night to do physics and space physics. And I was planning on going to med school. So I took the MCAT, and all of a sudden, I realized that we weren’t going to Mars when I was young enough. And so I thought, okay, what do I want to do instead? I spent a year thinking about it. And in that time period, Wesleyan had opened its law school. And I thought, you know, I can go to law school at night and not have to be poor again. Because the essential ingredient is I grew up poor. Air force sergeants don’t make a lot of money. And when there’s five kids involved, it’s a tough lifestyle. And so all of a sudden, I had enough money for food in the refrigerator and I didn’t really want to give that up again. So if I was going to take another college degree on, I wanted to do it when I could work full time. So I did. I continued working as an engineer, went to law school.
Wow. Yeah. I mean, your background – so for those of you that don’t know, I’ll just go ahead and read you all with diverse maters. So space physics and magnetospheric modeling, and then you just couldn’t get enough of it, so you decided to go and get your Juris doctorate. So that’s nuts. I mean, good for you though. I mean, so you’re kind of weighing and debating some of the different future career paths and things that you may want to do. And then at some point, you decided, you know, you went ahead and founded Internet Global, iGlobal. And so what was the story and what was the motivation, what was the backstory to that?
Well, the first thing that I did was a thing called G Squared, where I was doing consulting and building computers. And I was losing my tail. And I was in the car one day and I heard that Congress had moved the ARPANET into the private sector. And I thought, man, I helped build the ARPANET for one of the schools I was at. And so I could do that. And so I started building an internet company and that really took off. We created some new technologies. We built one of the first super high-speed networks. It’s funny because in the beginning of the internet, I would go around and hold a business card up and say, “This is an email address.” It sounds almost crazy now because everybody knows, you know, I don’t even know how many email addresses I have now. But back then, it would say, “This is the at sign and this is what it means in dot com.” And some people would say, “Wow, he’s really thinking about the future.” And others would go, “Man, that guy was a kook.” But here we are now. So we were right. The internet did change everything.
Yeah. Well, sorry, go ahead. Oh, yeah, no, I was just going to say your timing too, it was really impeccable obviously. Because I mean, 90s, late 90s, I mean, that was the gold rush of the dot com, you know, just complete sprint and explosion of technology. And so, I mean, I can’t imagine going around and explaining to people how it all works and it’s just like, I think it’s a fascinating time in our history to look back and realize just how quickly we went from everything analog to now, I mean, we’re making this digital trend and we’re still making this digital transformation, but I mean, it was a fundamental shift in the way things were done.
Right. But it wasn’t as fast as you think. So, this is the thing about overnight successes. Guys like Chris McFarland and Jeff Smith and me, we started our internet companies back in ‘92. And so I don’t know about Jeff and Chris and some of the others who are building internet companies in North Texas, but for me, going up to all of these clubs and organizations, giving that speech about this is an internet address, I did that for years. It was the 1996 Olympics when I see at the bottom of the screen says: For more information, go to www…” and most people went “What’s www?” probably. But I was like, hallelujah, we’ve finally gotten there. So, you know, it was four years. Four years is a long time when you’re building it and try to convince people that this is going to be the next big thing.
Yeah, yeah. And I’m sure in the middle of it all, when you’re in the thick of it, that four years feels like an eternity. So it’s just like, can’t happen fast enough. But, so, I mean, so you grew that, you’re building high-speed DSL networks and doing other work. I mean, one of the, one of your claims to fame here with this company is you develop first DSL network in the world and construction of the nation’s first voice over IP networks. And so, I mean, what was that like? I mean, I can’t imagine seeing all that happen and that being like, man, this is something new, especially voice over IP. I mean, that’s something that people are still trying to get people to adopt to this day.
Well, actually I think almost everything – for those that do remember, some may not, but in the 90s, if you made a long distance call, the person on the other end stopped what they were doing and they took the call because it was going to cost whatever, $1 and 50, $2 and 50 cents a minute to talk, right? And the reason is – I’ll take really complex technology and make it simple with a little analogy. And that is, I want to ship a package to Chicago. What do I do? I put the address on it. The big brown truck comes, it goes onto the big brown truck and gets sorted with a bunch of other things that are going to Chicago and they all get delivered. But in the old days of the phone company, there was a dedicated wire between my house and the person I’m talking to in Chicago. And that was done with these very expensive switches called class-5 switches. And so I make the phone call, all of these switches close, and now I have a wire dedicated to my phone call. That’s expensive.
With voice over IP, now that same wire can have thousands of phone calls on it simultaneously because each one of them is a little packet with an address on it. And it knows, okay, go down this line, turn right here, turn left there, and boom, I’m at my cousin’s house in Chicago, right? That’s voice over IP. In the beginning of the phone company, we’re like no, our class-5 switches are the way it’s always going to go. Now, you know, I can call my friends in Switzerland now over voice over IP. So we were right about that one.
The DSL, the high-speed thing, in the beginning of the internet, what I was building was all these little modems that would ssssh. They’d make all these noises and I’d have a room full of a thousand of them where people were dialing in to get to the internet at speeds that are so slow right now you wouldn’t be happy. And I was saying that someday our internet is going to be fast enough so that we can watch TV over the internet. And other people would go, “Yeah, you guys are crazy. I knew he was crazy.” And now, I mean, everybody in the world is unplugging now. You watch Netflix over the internet and Hulu and everything else, right?
So true. So true.
That’s high speed. And so the DSL thing was really important. It was a critical step in making that happen.
I mean, it was a proof of concept. It proved, it laid the foundation for where this is going to head. And so we’ve gone a long ways from what I remember the 56K modems and the screeching and squawking and all the crazy noises that thing would make just to get connected. And then the worst thing was if the connection was interrupted or dropped, you had to go through the whole sequence all over again. It wasn’t like it is today where you lose connection, it will repair very quickly, as soon as it’s able to. You don’t have to go through this whole reconnection sequence, which is nuts. So it looks like you sold that company off in 2000. What was that like?
Okay. So let me go back to November of ‘99. So I love this story because I’ve just brought in this world-class CEO. I’m going to step into the chairmanship slot. And then we’ve got this world-class CFO. And I’m sitting in my office in early November and they come in and they throw down a bunch of paper on my desk and they go, “We need to call a board meeting.” And I’m like, “Okay. What’s up?” And they go, “Well, we got to close the company down.” At first, I think they’re joking with me. “We do what?” And they said, “Yeah. We don’t have enough money to make payroll in the end of December.” And I went, “Gentlemen, I’ve come in on payday when I didn’t have enough money for payroll, figure it out.” “Nope, we’ve done everything we can. We don’t know what to do. We don’t want to get in lawsuits. We need to close the company down.”
And so I think about it for a minute. And I said, “Let me take over for 30 days, I’ll fix the problem.” So 30 days later, I’ve raised enough money to get us through the next year. Early December, a company comes in and says, “Really love what you’re doing. We want to buy you.” Three months later, $122 million transaction. So we were that close to the finish line, and I learned something really valuable because this is not intended to pick on my new CEO and CFO, they were big corporate cons. When they needed money, they just put a requisition in and money showed up and it doesn’t work like that in the entrepreneurial world. So, you know, I had to go out and figure out how to solve the money problem, but we were that close to the finish line and they wanted to shut it down. And instead, we got an amazing transaction, $122 million acquisition. So, it’s a lesson to all you entrepreneurs out there to stay persistent.
Yeah. I mean, that’s a great word: persistent. And seeing just how close – I mean, I would love to see the look on their face when 30 days later, here you are, you fixed the finance problem and you’re moving forward. But I mean, what was their reaction if you remember?
Yeah, I do, I do. No offense, but I think they believe that they made it happen.
Okay. Gotcha, gotcha. Okay. Well, you know, win’s a win. We’ll just leave it there then, I guess.
That’s exactly right. That’s the other thing. Great entrepreneurs don’t go there for the ego; they go for the victory.
That’s right. That’s right. Wow. So your first major success, I mean, I can’t imagine what that felt like seeing just the culmination of all the years of hard work, you’re explaining email addresses to people and building DSL networks and building voice over IP networks. But what did that feel like? You’d put in so much time, effort, energy, and here you are, somebody actually wants to buy you and you’re like, is this really happening?
Yeah, yeah. Well, two things. One is, I remember after sitting with a friend of mine named David, who had built another company that was fairly successful. And I said, “David, I want to meet so-and-so.” I don’t even remember who it was, but it was somebody important. And he said, “Well, he wants to meet you.” And I’m like, “How do you know?” And he said, “Well, because you’ve built a successful company.” And he explained this to me, and he said, “Well, remember your mom said get a degree and you’ll be able to get a great job? Build a successful company and people who build successful companies would want to know you.” Because it’s a collegial thing. And the best thing that you can do to help move your path forward quickly is surround yourself by people who have succeeded before. We all know that.
So that’s part one of the story. Part two is that with that big sale, I called a bunch of my friends. And I said, “I’ve always wanted to climb Kilimanjaro. I know it’s expensive. I’ll buy your equipment. I’ll pay for your training. I’ll pay for your trip. Come with me.” And one of those people that went to Kilimanjaro with me was a longtime friend named Dr. Byron Brooks. And while we were climbing Kilimanjaro, Dr. Brooks said, “We got to build this telemedicine company.” I’m like, “What’s telemedicine?” And so that was the beginnings of Teladoc.
So it was born on Kilimanjaro because we didn’t close the company yet on December 31st from Internet Global.
Wow. Yeah. I mean, right. And so, you’re making a great point there too. Just seeing the success of one thing and then how that’s able to snowball into other things.
And so, yeah, there would have been no Kilimanjaro trip. You and Dr. Brooks may not have been talking about this on the slopes of Kilimanjaro. And so I mean, that’s mind blowing just to think about there for a second. But then what was that like then? So, you’re taking your technology background, you’re taking obviously his medical background as well. And so how did the two of you come together and figure this thing out? Because I mean, that was quite a divide that you guys had to cross.
That was a very great point that you just made. Teladoc was a combination of some obvious things, the medical doctor and the technology, but it was also a combination of another thing that I didn’t quite realize at the time. And that was during the years at Internet Global, we had lots of challenges like that. Oh, we need to close this thing on December 31st. I mentioned one of them. Sometimes you come to work on payday. I remember when one payday coming in and there were probably 80 employees. And I looked at the parking lot, all those cars, I thought about the names of the employees and their spouses and the children at home. And I went, I do not have enough money for payroll today. And all of those car payments, all those mortgages, all those children at home are depending on me to solve this problem.
And so it’s a huge weight. And we always solve the problem. But learning how to solve those problems led us to the success at Teladoc because the problems at Teladoc were much bigger. Ultimately, people wanted the internet. But our resistance to Teladoc was much more fundamental. It was governmental and it was bureaucratic. I mean, the people who had the power to throw us in prison literally told us, “If you build this, we will throw you in prison.” And so that was a battle that we had to fight and we had to figure out how to do it successfully.
Yeah. Let’s cover that point in just a second, but there’s one thing that you just said a second ago and I feel like we really should just go back there for just a quick second. I know everybody wants to hear the Teladoc story, we’ll get there. But the pressure – because I feel like for a lot of entrepreneurs, this almost always is something that quickly gets glazed over, and it’s the reality of the pressure. And I’m sure you’ve got Teladoc stories for days on this too, but how are you as an entrepreneur able to cope with the pressure and not let it get to your head and crack you up? But how are you able to harness that and use that as power for yourself? Because I can’t imagine pulling up to the office, you’re looking out and you’re seeing all these cars, all these people and realizing that like, man, I can’t pay for all this right this second, and just that immense weight. And I’m sure that was a very frequent feeling that you had and that’s not the last time you felt that, I’m sure there’s been other things. And so how does an entrepreneur cope with and mitigate and deal with that stress and that feeling?
Yeah. Well, I have two things that I usually keep around. One is an old black and white crusty picture of a British prime minister – go figure out his name – during World War II, the very beginnings of World War II when it looked like the Nazis were just going to roll over the UK, and he said, “We will never surrender.” And so that’s sort of a perseverance thing and a persistence thing. The other thing is a former American president who wrote a very famous quote that I like to keep around called persistence. Nothing in the world can take the place of persistence. And so I think, persistence is what really separates people who want to be entrepreneurs and people who can become good entrepreneurs. And if you have it, you may be able to succeed. If you don’t have it, you’re not going to succeed as an entrepreneur.
Yeah. I appreciate you putting it so bluntly because I think that’s a hallmark trait and I feel like that’s going to be one of the themes of this discussion is persistence. So, on that note, so tell me the persistence journey of Teladoc. And so dealing with all the bureaucracy and all the other hurdles related to that, what was that like?
Well, I think we made a decision early on. One part of the decision was Dr. Brooks insisting that we do everything right. Let’s not cut any corners. And as an entrepreneur and an engineer, I want to cut corners. That’s how you become a great entrepreneur as you figure out what’s the most efficient pathway between point A and point B, and Dr. Brooks was insistent that we not do any of that, which was, you know, it’s saved us in the end. But imagine, we’ve tested this Teladoc thing for a couple of years. Everybody who’s tested it loves it. I mean, who wouldn’t love the ability to have a doctor call you back and try and diagnose over the telephone? I mean, we literally thought we had saved people’s lives at the point we were walking into the Board of Medical Examiners office.
He was a fairly well-known physician. They all knew him. And so I just thought this is going to be a great day of victory. And instead, they pointed at us and they said, “Mr. Gorton, if you build this company, you are going to prison.” It’s a hard way to walk into a meeting, excited. You can see that when I talk, I get excited because that’s the kind of energy you have to have. And so walking in, telling these board members how we’re going to change the world and make their world better, and them telling us you’re going to prison. And so it wasn’t just Texas. I mean, one state hired an actor to try and trick one of our doctors. And they thought that was the right thing to do.
So the Board of Medical Examiners felt like there should never be a case where a doctor doesn’t touch a patient. That’s medicine. To them, that’s medicine. And to us, there was a better way because we can capture things over the phone. In fact, every physician in medical school is told: Listen to your patient. They will tell you what’s wrong. And you can do that over the phone a lot of the time, not all of the time, but a lot of the time. Now, telemedicine is so mainstream. You can’t imagine not living with it. But back then, it was an aberration, an illegal thing that needed to be stopped in its tracks.
Man, I mean, that’s some serious resistance. Some really strong words too. I mean, it wasn’t like somebody come up to you and just trying to discourage you and say, “Man, that’s a crazy idea. You’re never gonna make it.” That’s one thing, right? But then there’s the other thing is like, “You’re going to go to jail for a very long time.” I mean, like, okay, this is pretty extreme.
Well, so sometimes as entrepreneurs, most of your listening audience who’s an entrepreneur will have been asked this question by an investor. What keeps you up at night? Guess what kept me up at night? And this happened 17 times. Yes, I went to the Board of Medical Examiners in Texas to specifically talk to them. After we got running nationwide, sheriffs came to our office with badges and served us papers saying, “What you’re doing is illegal in our state and we’re going to shut you down.” And we had to figure out how to solve that problem.
So how did you solve it?
I don’t think you win people’s hearts by fighting them. We could have lawyered up. And if we had, there would be no Teladoc today. What we did instead was imagine a scenario. You’re in your car, you’re going very fast. And then suddenly behind you, you see those flashing lights, right? You pull over. And so I’m going to give you two scenarios. One, you roll down the window and you say, “Why did you stop me? I’m in a hurry.” Not going to go well for you, right? And instead, you put your hands on the steering wheel, you wait, you roll down the window and you say, “I’m sorry, officer. I got a little carried away. By the way, do you know my cousin over in the third precinct? You know Joe and his wife Sheila?” And he’ll go, “Yeah, yeah, I know Joe. He’s your cousin?” “Oh, yeah.” “Are you a cowboy stan?” “Yeah. I used to be when they used to win.”
And so, in one case, you’re being very friendly, you’re finding connection points, and the other one, you’re argumentative. So we never went to any of the boards to fight. We went to the boards and said, “Look, this is what we’re doing.” And it was never just me. I would bring a surgeon general or former surgeon general or somebody well-known in healthcare with me that could help tell the story. So we would try and go in friendly and say, “Look, this is good. This is good for you. This is good for your physicians. This is good for the patients in your state.” And most of the time, that was enough. There were some states that fought like the one state who hired an actor to try and trick our doctors. And we won that one accidentally. When we found out it was an actor and not a real patient, we called the local newspaper. That fixed it.
That’s a great move. That’s a great move. Well, it’s a great tactic worthy to just chat about real quick. Because you’ve got the, you know, we can go in guns blazing and we’re gonna fight. And you guys kind of saw the wisdom of, look, it’s the bureaucracy. It is this mammoth of just a system. And if we are gonna work against it in any way, it’s going to probably go very, very poorly. And so you went ahead and kind of adopted the reverse strategy of that and like, okay, go in and we’re going to win hearts and minds, right? We’re going to make friends. We’re going to be as compliant and helpful as we can and just build relationships and bridge knowledge gaps or misunderstandings. And so a lot of these people, were they surprised at the non-combative nature? Were they kind of anticipating a fight and you guys kind of walk in and you’re like, hey, guys, how’s it going?
Yeah, exactly. I think we perhaps caught them off guard. But everybody forgets that companies are people, Board of Medical Examiners are people. And we can easily forget that one because they are the true definition of the term ‘judge, jury, and executioner’. They have their own legal system and their own judges. If they don’t like you, you do not win. If they file charges against the physician, the physician better be working really hard to convince them that they just misunderstood something. He’s really a good person or she’s really a good person.
And the Board of Medical Examiners, ultimately, they came around, which was a good thing.
And then, so once they came around, just curious how quickly did it kind of take off and gain traction? Was it still a pretty, pretty uphill battle or was the adoption rate of it pretty steady?
It was a long battle. It really was. The feelings were deeply ingrained. The good news is there is a kind of practice of medicine that has been around since the invention of the telephone. And we helped boards understand that a primary care physician typically works 60 to 70 hours a week. But patients get sick 24 hours a day. So if I’m the patient and Dr. Jones is my normal primary care physician, she’s going to call her colleague, Dr. Smith, and say, “Will you cover for me on Tuesday and Thursday nights? I’ll cover for you on Monday and Wednesday nights.” And so if I call Dr. Jones on an evening when Dr. Smith is covering, Dr. Smith talks to me and she says, “Oh, okay, here’s your diagnosis. I’ll write you a prescription.” That was okay. Dr. Smith didn’t really know that I am who I say I am. She didn’t have a medical record for me. She wasn’t going to get paid.
And so what ultimately we showed the Board of Medical Examiners where that thing which physicians called cross coverage, that was okay. And so some of the board said, “Well, yeah, but Dr. Jones gets to decide that Dr. Smith is going to cover for you.” And we would say, “Well, this is still America. Don’t I get to pick that Dr. Jones is going to be my normal doctor? Does that mean that after hours I can’t pick Dr. Smith to be my normal doctor after hours?” And so a lot of the boards saw it that way and said, “Okay, you’re probably right. Just don’t do anything – don’t write narcotics prescriptions. Don’t do anything extreme. And the first time there’s a medical malpractice suit, we’ll see you in here and then we’ll decide.” But to my knowledge, they’re still not been one. And that’s pretty extraordinary. There’s been tens, maybe even hundreds of millions of telemedicine consults in this country. So it’s working pretty well so far.
I’d say it’s working pretty darn well. I mean, it took a few years for it obviously to gain traction, and I guess that’s my observation to this whole concept, going back to the persistence theme. So you and Dr. Brooks had a vision for what you saw the future to be. You knew technology is heading into a space where this was going to become a necessity, but people maybe at this present time couldn’t fully appreciate or comprehend just the magnitude of that. And so I guess the point I’m making here is you both felt it was a worthwhile and worthy marathon to run. You knew it was going to take a lot of endurance, a lot of persistence, a lot of patience, a lot of funding to get it from here to there, but you knew despite all of the criticism and all of the setbacks, that it was still a worthy venture to continue down.
Because there’s other companies that that would not have been the same story, right? They would have reached a ton of resistance, they would’ve been like, man, you know, there’s too much red tape, this isn’t really worth the pain that we’re having to go through to make this happen. But you guys kind of saw through that, you saw past that and knew that, hey, if we just persist, we just keep going, this is going to take off. What did that feel like then once you started seeing subscriptions and usage and everything else starting to just tick and climb upward?
Right. Well, in the beginnings of a company, typically the people you’re talking to about helping you fund it or helping you grow it will commonly say something like, “Well, if you would do this then UnitedHealthcare or Blue Cross or somebody like that would do it.” And there’s two things. One is an obvious one, and that is big companies are battleships, they take miles to turn around where entrepreneurs can turn around on a dime. And so, entrepreneurs can make quick decisions. That’s part of it. But the other one is that a United or a Blue Cross never would have taken that ‘if you build this, you’re going to go to prison’ risk. To us, it was, you know, we’re gonna march through hell for a heavenly cause. That lines from an old song called the Man of La Mancha or something like that, right?
And so that’s what entrepreneurs do. We find those tasks that nobody else would do. And so you start going through the process, the company becomes your child. And so you live and breathe on that child’s accomplishments. And so what does it feel like? You start seeing things like, you know, I can remember walking into the Board of Medical Examiners and hearing them say, “You’ll go to prison.” And then five years later, I’m standing in the US Capitol Building with a former HHS secretary and a surgeon general and we’re celebrating our 1 millionth member. And so that’s kind of like my child is graduating and is graduating cum laude. And so I’m happy because I remember the path and all the times I got knocked down along the way. And here’s the point of victory.
And of course now, you look back at Teladoc and it’s a what, $30 billion NYC company, and you think, that’s my child. I always joke around. I hired Jason Gorevic. I was part of the board and I was still CEO when we brought him in. He’s the current CEO of Teladoc. And so sort of in this figure of speech, he married my daughter. I said that to a reporter once and they went, “Wow, that was an amazing coincidence. He met your daughter and married her and now he’s your CEO.” And I went, “Well, you kind of got that wrong,” but it’s sort of makes sense.”
Oh, man. No, well, in another parallel that I just kind of put together as well, it was like, you know, you saw how Internet Global, I mean, you were days away from shutting it down and then turning into this massive payday. And I think it’s a very similar, kind of a similar idea here at Teladoc. You’re meeting all this crazy resistance. I mean, again, more resistance than normal because of the medical nature of it, all the approvals and all the different hurdles and hoops you gotta jump and dive through. And so it’s like at any point in time, you guys got to throw in your hands and be like, you know what? This is not worth this just massive headache. We’ll go figure something else out and figure out something. But yet you persisted through it. And then sure enough, that’s a great analogy. Like handing your child off in marriage. And now you’ve seen how it’s grown and how proud you must be now to see like, man, I got this started, we got it from here to there. But man, look at how well it’s done since then as well and this continues to grow and flourish. It’s gotta be such a proud moment.
Well, it was about a year and a month or so ago when the pandemic started hitting us. And I got a letter from a former surgeon general, who kind of watched our path and helped us quite a bit. And in the letter, he said, “Thank you for being persistent because as we come into this pandemic, telemedicine is going to be absolutely critical. And the things that you did to pave the pathway is going to say millions of lives.” And, you know, whatever you believe about this pandemic, telemedicine is going to save millions of lives and it’s going to make lots of lives easier. But it is a great realization to think about all those battles fought, and how in the end, they’ll pay off.
Hey, it’s a powerful story. And I appreciate your sharing it because you’ve done quite a bit in this and if people didn’t know Teladoc before, and unless they’re living under a rock, they definitely should have known about it, but during the pandemic, I mean, I can’t imagine the utility and usage of that app and just how critically important that is. And no doubt, you saved tons of lives just because now you’re able to take a call from the house. You’re able to do all the amazing things that this technology enables people to do. And so it’s a tremendous, tremendous accomplishment. And so, yeah, would love to – like I know you’re working on a lot of other things too. And so I don’t want to monopolize our time together talking about Teladoc. I could talk with you about it all day. I would love to. Maybe we’ll do this again as well. But I want to give you a chance also to kind of bring us up to speed in the days and the years after that. What that was like when you left the company and then you’re moving on and doing other things?
Well, it’s my personal belief that when you leave a company, you should leave the company. You build a corporate culture, you try and find the team to replace you. And entrepreneurs probably are good to a certain point. And then if they’re smart, they find somebody who can take it to the next stage. And that may be whether you have the capabilities or not to go to that next stage or maybe you just love being in the early stage. For me, I just love being in the early stage. I’ve worked in a big corporate environment and it was relatively successful, but there’s nothing like the challenges and the passion of waking up every day and saying, “Okay. It’s a live or die day. Today is a fundamental moment.” And that happens to you very regularly as an entrepreneur. It doesn’t happen as often as a corporate. And so that’s the place where I thrive.
And so when as entrepreneurs, we say, “Okay. What are we going to do?” I think staying in that world is kind of what I like doing. But once you’ve reached a success like we did with Internet Global, with Palo Duro Records, with Teladoc, you say, it’s almost like a remember that old song, I want a new drug, one that makes me feel the way I feel when I’m with you. Well, in this particular case, that when I’m with you, it’s sort of like one that makes me feel the way I feel when I build something that changes everything. It becomes an addiction and you start looking for, what can I do next? How can I impact, how can I change the world again? How can I surround myself by super smart people that are smarter than me and listen and learn? And together, we build something that changes the world.
So, that’s how you go from one to the next to the next. Leaving Teladoc was not easy. That was my child, but children grow up and they go to college and then they get married. And it was time for Teladoc to grow up and go to college. And the team that Jason has put together, they’ve done an amazing job and total accolades for taking that idea. When I handed it to him, we had about 2 million members nationwide. We were delivering doctors to patients in 12 minutes for $35. That was great success. And most of the boards were okay with us at that point. So the fundamental problems were solved. It was time for them to go in and solve the very specific healthcare industry-related problems, which they’ve done extremely well. So off to something new. Outer space and another healthcare company and writing books.
Yeah. That’s it. Yeah. I mean, so you left there, and I’m just kind of following the chronology here. So you’ve worked at a company for a couple of years at Principal Solar, and then, I mean, did you want to talk about that at all?
Sure. So Principal Solar, we saw the trend line for solar coming down year after year after year. And I’m a pretty fundamentalist and I started my career in the energy sector. And so you wouldn’t think that I would believe solar could be something good. But I saw those trend lines coming down, and I thought, okay, if this continues, ultimately, solar becomes a mainstream energy resource, and we were right about that. So we started putting together the engine to deliver huge amounts of solar, utility scale solar. And we built a bunch of products. But that was a case where the timing just did not work with us. And it didn’t matter how persistent we were. That one, we got knocked down. And my team, which was an extraordinary team, again, people a lot smarter than me. We were cued to go on to the NASDAQ in the summer of 2015 and just days before our IPO, SunEdison crashed and burned. And it wasn’t a pretty crash and burn. There were ethics issues. The whole market fell apart for a little while and IPOs don’t happen in that environment. So we had to pull it.
And unfortunately, we had a number of major projects that needed the capital we would have gotten with our IPO. And suddenly, those projects were sitting out there without capital. And we did everything we could, but sometimes it doesn’t matter how hard you work, there just isn’t a clear pathway. Ultimately, we sold those projects. They did get built but not by Principal Solar. And so the team who worked their hearts out and they didn’t get to see the victory line that the Teladoc team did.
Well, a really important distinction here that I want to make too. Because there was a point at which you realized that persistence alone was not going to be enough. It wasn’t a viable path. And so, real quickly, that way, we can move on to the things that you’re doing right now. And of course, I’d love to talk about your latest books as well. But I think this is a huge value point here. At what point as an entrepreneur do you balance the persistence of going through the pain and weathering that storm, versus ‘hey, this is just this not a viable path’? How do you balance those two things?
Well, I think it depends on the person. For me, we fought that Principal Solar battle for a couple of years after that IPO fell apart. And ultimately, I wanted that company that was already cleaned up and ready to be public to generate some returns for our investors. And we ended up finding a pathway for that. And now that seed is starting to grow again. The dream of Principal Solar didn’t survive as we created it, but we ultimately didn’t give up. And now, there’s a new Principal Solar arising and all of those shareholders could ultimately get a nice return. And so that thing continues, but there were a lot of sleepless nights and heartbroken people as we went down that pathway and it’s unfortunate, but sometimes we learn more from our failures than we do from our successes. And I think that’s the takeaway. What can we learn? How can this make us stronger and better?
100%. So catch us up to present day. And so, what are you currently working on?
Well, my passion project is space-related. So remember the beginning of the story, I wanted to go to Mars. Well, we’re going to help somebody get there. In just Northwest of Fort Worth, we are building a facility under the company banner Back to Space. That will be one of the most extraordinary destinations on the planet. It is called the lunar landscape, and I would invite – we don’t have enough time to go into why it’s so extraordinary, but I would invite your listeners to go to backtospace.com and there’s a tab on the website for the lunar landscape. Have a look at the imagery and you’ll see.
It’s really cool.
Yeah. It’s going to inspire. It’s going to be a destination. People from DFW will go there. Corporate events will happen there. People from all over the world will come there. And what can I say? I get to hang around with the living legends that went to the moon. And in June, one of those living legends, a gentleman by the name of Charlie Duke, who was last year’s Texan of the Year. First astronaut to ever become Texan of the Year. Charlie walked on the moon in 1972, Apollo 16. And on June the 19th, he’s going to go with us to Florida to celebrate the 50th anniversary of Apollo 14. So remember, he was 16, but his best friend was Stuart Roosa, the command module pilot of Apollo 14. And the entire crew of Apollo 14 is now gone, but we’re going to go celebrate their 50th anniversary in Florida.
And Charlie Duke is going to hand the baton from that generation of living legends to somebody really important in space from our generation. And I’m so looking forward to that because of the sort of historic significance those great explorers and everything they did. So there’s still opportunities for some people to join that fray. And so I would tell your audience, if you’re interested in that, ping me, I want to hear from you. So that’s Back to Space. You and I can talk about that one.
Absolutely. Absolutely. I love it. I love space. I love the age that we’re in right now and the privatization, the commercialization of space flight and how we’re not 1000% dependent on federal programs to make that happen. You’ve got some just amazing ingenuity. But the costs of just making it happen are rapidly dropping and that reusability is a huge factor in that. And I think just technology, leveraging technology, from a PR standpoint, is helping garner additional interest and support for it. And so when people can see it with their own eyes, they can kind of track what’s going on, it makes people more excited, right? And so I’m excited for you with Back to Space and seeing that. Because I remember when we talked previously, we’re looking at the website together and examining the layout. And so people have to go check it out and see it for themselves. I’m doing that to tease people to go check it out. But what else? Lastly, Michael, you’re working on Recuro Health. So let’s talk about that.
So, if you think about what healthcare things did solve with Teladoc and what’s left? And we like to say that our healthcare system really is not a healthcare system. It’s a sick care system. And what does that mean? It means that I pay my money to Blue Cross every month and they do nothing for me until I become sick. And if I’m an athlete and I want to go get a high-end physical, and I call my insurance company, they’ll say, “Well, you’ll have to pay for that yourself.” The thing that ought to scare the blank out of you is that nobody makes money in our healthcare system unless you’re sick. We are inspiring the wrong thing. Because this is a capitalist country. We want people to make money. We don’t want to inspire them to only make money when you’re sick. And that goes to the fundamental. My company’s insurance is on an annual that ends in June. And I called the other day. And I said, “When? How much?” And they said, “Well, it’s only gonna be 10.6% increase this year.” Can you imagine only 10.6% this year? Because there been years when it’s been 16% or 17%. It’s crazy.
We are paying more and more every year. And what are we getting? We don’t have an engine that keeps us well. And so that’s the next big company. We talk about things that disrupt industries and Recuro Health is about to disrupt that healthcare industry because we are going to create a healthcare system, but we’re going to preemptively keep people well. And the ones that are acting with us to keep themselves as well, we’re going to eliminate their need for paying thousands of dollars a month for their family to get healthcare. Because actuarily, we’ll keep them healthy and therefore we’ll pay for their expenses.
But if we were in an elevator and you said, “Hey, Michael, what is it that you’re going to do?” I would say, “We have a saying these days when we’re talking about age. We say 60 is the new 40. And what Recuro is going to do is make 100 is the new 40.” And I’m a runner. So let me put it in runner parlance. At 100 years old, I want to be able to knock out the same 10k times and 5k times that I did when I was 40. We can do that. And over the next 10 years, we will do that. That’s what Recuro is all about.
That’s amazing. I can’t wait to see the journey that that company is on and the work that you’re doing there. And again, you’re a visionary. You’re seeing into the future and kind of seeing where things are headed and how you can kind of beat everybody there in terms of like, okay, this is where we’re going to end up. We could use it today. But by the time we’re ready to actually use it, you’ll be there ready and waiting. And so it’s a pretty exciting opportunity that you’re creating. And then lastly, you’ve published a few books, Forefathers and Founding Fathers, Broken Handoff. I know there’s a few others, but I’ll leave links below. But is there anything else that you’re working on related to that?
Oh, you know, there’s a whole bunch of books in the works right now. My publisher, Milli Brown, some of you may know Milli, certainly one of the great North Texans. But Brown Books has done a great job of taking care of me. We’ve gotten two books on the bestseller list and that is two of my books on the best seller list. So the Forefathers is a historic fiction. It’s all based on fact, but if you have dialogue in history books, it’s called fiction. So Forefathers was a fun story to write and Broken Handoff is kind of what you and I have been talking about. It’s all the stories about how to navigate the business in entrepreneurial world. So a couple more books and Back to Space and Recuro Health, that’s enough to keep a person busy.
Let’s say I don’t think you have enough going on, Michael. I think you gotta throw something else on your plate somehow. Well, you can throw a podcast in there. So, no, I appreciate you, Michael. Thanks. There’s obviously people can reach out to you. What’s your preferred medium that people would reach out if they want to learn more information about what you’re up to within the company?
LinkedIn. Yeah. LinkedIn is a great place. And I’m always looking for ways – you do not succeed without the help of others. And I’ve said it a couple of times. I’m having a great time here, but the success of Teladoc, the success of Palo Duro Records, the success of all these companies came because I was the cheerleader and I had smarter people around me. And to the extent that the experiences I’ve had can help others, I want to be able to do that. I mean, I got to where I am because people help me. And so, time is our biggest enemy when we get super busy, but you still have to find time to give back. And if people want to, if they have something great and I can carve out a few minutes to help them, I’ll do it.
That’s fantastic. And I’m going to leave the link here for those y’all that want to reach out to Michael on LinkedIn. He’s not exactly a hard person to find. You’ll see he’s got a Teladoc founder and a couple other things in his title. So it’ll be very, very easy for you to identify that you got the right Michael Gorton. I’d hate for you to reach out to the wrong person because I think there’s a few of you out there, but you kind of stand out. But Michael, again, I just want to thank you. This has been a terrific time for me. I’ve really enjoyed getting to speak with you and thank you for spending time with me this morning and sharing some of your hard-earned and hard-fought wisdom and lessons. I’ve really enjoyed it.
You’re doing great work. Keep it up. If I can do anything to help, Aaron, let me know.
Sounds good. Thank you.
Thanks for listening to America’s Entrepreneur. If you enjoyed the show, please leave a review or comment on your preferred social media platform. Share it out with friends, family, coworkers, others in your network. And of course you can write me directly at firstname.lastname@example.org. That’s email@example.com. Until next time.