A Health Care Giant’s Plan to Outlast Venture Capital

To date, there hasn’t been a huge string of hits from Silicon Valley’s top venture firms in digital health. That’s partly because the typical venture capitalist has a five to 10 year investing time horizon. But getting new technology adopted in places like hospitals requires thousands upon thousands of employees to change their behavior, which can take longer than that.

That’s one of the key reasons that Tom Rodgers thinks the $250 million venture fund he oversees has an advantage in digital health. It’s the venture arm of McKesson Corp., a $179-billion-a-year pharmaceutical wholesaler and a major maker of software for doctors and hospitals. Because McKesson has decent visibility into what its customers will buy over the next few years, Mr. Rodgers can afford to invest with a much longer time horizon than the typical venture capitalist.