About this episode
Part two, where Joe gets into Butterfly Network itself, is episode 141.
Joe DeVivo is the legendary medtech CEO who sold InTouch Health to Teladoc in a $1.1 billion deal, and is now the president, CEO, and chairman of Butterfly Network. Joe is known for having a very specific skill set in his industry — taking over when companies get stuck, often when founder-led companies need a new kind of leadership — and he shares his turnaround playbook step by step. He also opens up about something that's rarely talked about: what happens after the big exit, when you've made life-changing money and never need to work again.
Over time, Joe moves up in the medtech world, and he develops a reputation for something very specific: when companies are in trouble, he's the person boards call. I wanted to understand where that instinct came from, and where he learned those very specific skills. So I asked him.
In this conversation
- The exact playbook Joe runs on day one of a turnaround: find the people actually doing the job, get brutal about who's "core" versus who's just along for the ride, and cut from there.
- Why he insists on publicly honouring the founder he's replacing — even while stripping the company down to its essentials — and how that trust is what lets him actually change direction.
- The $600M deal that became $1.1B mid-close: InTouch's sale to Teladoc ballooned as the stock tripled between signing and closing.
- A rare, honest account of what happens after a life-changing exit — including the panic of selling Teladoc stock near its peak, before it fell from $220 to $8.
- Grew up in a family garbage-container business in Connecticut, went door-to-door to a neighbour who ran US Surgical, and talked his way into a sales territory with no interview process — the start of a career built on listening, not credentials.
Transcript AI-generated
That's so interesting. So being this kind of turnaround, catalytic-type leader — it sounds like you've done it a few times. I know you've done it a few times.
I promised I would never do it again. And I just jumped into another one.
Because I like a playbook — I doubt there are books or guides on this kind of thing, and I can appreciate that every scenario must be so different. So what I'm asking is: are there general principles or frameworks you use when you come into these situations, that broadly apply?
“People will quit their bosses, they'll quit their environments — they don't leave because of pay.”
Joe
I probably should write them down — but off the top of my head, yeah, there are things you do.
The first thing is you have to find the people in the company who are actually doing the job. The people who run the company aren't the leaders of the company — it's the person in operations who's getting stuff out every day, the person leading customer service who's listening to the complaints and triaging, the sales leader who knows how to train and knows how to slay the dragon, the R&D or technical person who understands your core competency. You have to know who to listen to first. And then when you come in, you've got to get rid of everyone who's along for the ride. You have to be brutal.
So you spend your time learning the business, understanding who's core to it — who, if they left, we'd feel the impact. And when you ask yourself that question, you realize there are so many people you're paying who are not in that category. "Oh, well, this is a good person, they work really hard" — that's not the question I'm asking. Are they core to the business? Would the business stop if they weren't here? Would we lose our core technology? Would we lose our ability to deliver? Once you know who's really running the business — the core people — you listen to them, and they'll tell you exactly what needs to be done. And they're frustrated to all kingdom come, because they're doing things they shouldn't be doing, and it's drawing their attention away.
Once you listen to them, you understand what's operating well and what's not. And then you've got to spend a lot of time with your customers, because you have to know why they're buying from you. What is it that we do that you value? Sometimes it's not exactly what you think — sometimes there are other reasons why they buy your product — and you have to understand the essence of the value prop you bring.
I'm now in the third or fourth company I've taken over from a founder. Founders are amazing — they're like your parents, the people who went through the early days of having to create something from scratch. But the hardest thing for a founder to do is to listen to the customer, because sometimes the founder just thinks their technology is so good that everyone needs it. Everyone thinks they're Steve Jobs and can just tell you what you need. There aren't many Steve Jobses out there who know how to do that.
But once you understand why your customers are buying your product, and you know who's running the company, you strip it down to its bare bones. You get rid of the projects that aren't core, and you get rid of the people who are distracting you, costing you money, and taking you away from your mission. And once you've aligned around the real people running the business, you have to align yourself with your mission and your passion — whether it's InTouch, which was about the democratization of care, bringing specialty care anywhere in the world, or Butterfly, which is democratizing imaging with an all-in-one probe at a low cost. You create a big vision for the business. You create an emotional tie — because being in healthcare is just awesome. You can work with great people, you can work in an economy that makes money, you can grow your career. And then, by the way, you realize you helped somebody — that the technology or service you provided changed the course of someone's life. There's nothing more powerful than that. Nothing.
People will quit their bosses, they'll quit their environments — they don't leave because of pay. And the exact opposite is true: when they believe in the mission of the business and believe it can be successful, they will work so hard and be so passionate.
So in any one of these environments, I select my team — the team I think can get there. I create a vision that inspires them. I make sure they have the resources, so they all believe they can accomplish their part of the mission towards the ultimate goal. And if I have the right people, the resources, and a mission that's worthwhile — wow, you just sit back. After you've re-architected it, your job is working for your people. My job now is making sure each of my people is successful and has what they need. It's not me saying "you do this, you do this." Once I have great people in place, a plan we believe we can get to, and a vision that inspires, my job changes to empowering each of those people to execute, and doing everything I can for them.
With these basic principles, once you take the weight off — you know what you're doing, you know what your customers want, you focus on it, and you inspire your team — just sit back and watch. Things really, really fly. And that's happened for me multiple times. You can see it, because all of a sudden sales start accelerating beyond the collective bandwidth of your people, and things start happening that you didn't have to wake up that morning to create. The momentum in the business starts to happen.
A couple of questions on what you've just said. I'm going to really butcher the quote here, but I think it's a Dostoevsky book that starts with something like: all happy families are happy for the same reason, but all unhappy families are unhappy for their own unique reason. Basically, there's one path to happiness and there are thousands of paths to misery.
That's right.
Okay, good, I got it right. So in the companies you've turned around — when you're at that listening-and-diagnosis stage, have you found common themes or bottlenecks holding a business back?
“When I was at US Surgical, there were ten techniques of selling, and the US Surgical sales process taught me that listening was the most important way to sell.”
Joe
Yeah. Businesses at times try to do too much. And sometimes companies are really not companies — they're products.
Rita Medical, a company I went to later, was an ablation business with a needle that used RF energy to destroy inoperable tumors in solid organs. Nice business — $14 million in revenue, $15 million when I got there. But you couldn't sustain a public company off $14 million in revenue, especially with Sarbanes-Oxley coming in and all that public-company cost. So we weren't really a company, we were a product. We either had to sell ourselves to someone who wanted to add our product in, or we needed to broaden our portfolio to get ourselves cashflow positive.
There are a lot of instances where you have to look at the business with a very critical eye and not be emotionally attached to it — a lot of founders get attached. By listening to those key people and to your customers, they always tell you which path to go on. And that's probably the biggest commonality: people get defocused, they get scared, they start going down all these different paths, they spend money. So you strip it to its core essence, align with the people who actually do the job — not all the C-suite people who make too much money — inspire them, resource them, and support them. It's just that simple. The common thread is people lose sight of why the customer is buying their product. They lose sight of what their essence is.
I'm not an academic. My wife is a Cornell grad, Ivy League undergrad, she has a Mercer MBA and her PhD from the Rockefeller Center of Public Policy. I am a lightweight in my own home. My daughter has designs on Princeton, and I've never seen anyone work as hard as she does. I do not have that intellectual capacity, so I've had to work through brute force. I can't just walk into a place and figure it out — I have to roll up my sleeves and get close to people, and then they tell me how to figure it out. People know everything. Your customers know everything. You don't need a PhD to figure that out. If you did, maybe you could — I didn't, and I couldn't. So it's just elbow grease, and you have to get out of your office. You have to be with the people. You have to be with the customer and listen.
When I was at US Surgical, there were ten techniques of selling, and the US Surgical sales process taught me that listening was the most important way to sell. If I'm trying to persuade you, Mustafa — you will tell me exactly what you need, the things that matter to you, what you're willing to pay, what direction you want to go. And after I ask you all those questions, I will represent my product to you to meet all the needs you just said you wanted. And then you'll be so happy, and you'll buy my product. That's sales. Listening is just communicating — connecting to another human being, hearing what they need, what they want. And being willing to take the really hard feedback, because a lot of people don't want to hear bad news, and they're not willing to go through that. That's why sometimes you need someone to come in and clean it up — because it's difficult to take the company down a direction and fail, and then turn and fix it yourself. Sometimes you've just got to let someone else do it.
One pattern keeps repeating across Joe's career. He's often brought in to take over from a founder — not because the technology has failed, but because the company reaches a point where invention and scaling become two different challenges. For example, when he took over InTouch from Dr. Yulun Wang, its much-loved founder. By the way, InTouch later sold to Teladoc for over a billion dollars, which we'll get to later.
When I went to InTouch, his office was next to mine — when he hired me, he didn't leave. He just hired me, and everyone was loyal to Yulun. And what I learned was: you only have one mother, and you only have one founder. What I learned day one was you have to honor and respect the founder. The business wouldn't be there without them. You can't come in and say, "oh, I know better, I'm going to do this, I'm going to do that." You come in and you listen to the founder, you understand what they're trying to accomplish, and when you communicate to the rest of the company, you honor the founder.
A lot of founders don't have the ability to scale commercially. They have the ability to create — but scaling commercially is a whole different skill set. It doesn't mean they didn't find one of the most incredible technologies and businesses. And so they need to be honored.
So what I did — whether it was Computer Motion, or InTouch, or Rita, or AngioDynamics, or now with Butterfly — is honor the founder, and give tremendous respect to the founder. When you do that, the founder steps back, and you have a relationship of trust where they know your intentions are to do what's right for the business. Sometimes you've got to let go of their friends, or cut their pet project — but if you honor them, and they know you're doing it with the right intentions, then they trust you. That's the most important thing. It doesn't mean you have to listen to everything they say or do everything they say — that's totally different. You listen to those key people and to your customers, like we talked about, but you respect the founder. You publicly honor the founder — because if you become CEO of a company, you will never be that founder. You will never be more important than that founder. So embrace your role, and embrace their role. It works wonderfully, because the people in the company who love the company, who were there before you, typically have a profound respect for the founder. When you honor the founder, you're honoring them too, you know what I mean? You're not putting them in a situation where they have to choose. Now, the direction might be different, but that's fine — we're still going to honor the founder.
You said many founders are able to build an incredible product, get to that first inflection point in revenue, and grow out that initial team — but then struggle with the skill set to scale it commercially. It's interesting that the scaling gap seems so consistent across the industry, when founders seem to learn so many other skills very quickly.
“Typically what happens over time is the founder spends a lot of time listening to customers, they develop the technology — and then they stop listening to customers and fall in love with their technology. You can never stop listening, because the market changes.”
Joe
Well, typically a lot of founders are technology geniuses. They've been able to solve some incredible problems. But building process around marketing, sales-force education, product development, prioritization, resource allocation — those are just different skill sets. The founder would have had to go through a whole education inside a company — not as a founder — to learn a lot of that, or gone through formal education.
But typically what happens over time is the founder spends a lot of time listening to customers, they develop technology — and then they stop listening to customers and fall in love with their technology. Sometimes it's as simple as that. You can't stop listening to your customers, because they change. The market changes, your competition changes the market, economics change the market. You can never stop listening. And when you've had some success and you sit back and just run your old playbook, that's the beginning of decelerating growth. You have to constantly be pushing the envelope.
After repositioning InTouch from a single-use telestroke business into a broader virtual care platform, the company sells to Teladoc at the height of the virtual care boom. And most of the time, that's where the story ends — big exit, big number. What we don't usually hear is what happens after the deal closes. This is Joe's version of that part.
We had agreed to a $600 million sale, but Teladoc stock went from $54 to $195 in the six months between sign and close, and it turned into a $1.1 billion deal by the time we closed. So I kind of figured I wouldn't really have to work anymore. I learned the definition of being retired.
I have young kids, they're in school, my wife was a professor and she's working — and I'm at home. After the first five or six months, every single leaky faucet, every rattling door, every doorknob — everything in the house was fixed. And the people I'd golf with — who golfs on a Tuesday afternoon? They're all about eighty years old. So I started getting a little bored. Then one day my son came home from school and said, "hey dad, since you're not doing anything, would you run to Target and grab me this, this, and this?" And I was just like — is this what I've been reduced to? This is no fun. This is not retirement. This is torture.
So I learned: when you retire, your whole family has to retire — or at least your wife has to retire. Because for me, retirement has meant taking my wife to Italy for a couple of months and experiencing life. That's retirement. It's not sitting at home being everyone's errand boy. So when Butterfly came knocking, my wife was like, "you need to go back to work." My whole clock reset — not to when I could financially retire, but to when it's the right time for my family. In a few more years the kids will be off to school, and I'll enjoy my time.
Yeah — after the InTouch acquisition, it must be a pretty phenomenal feeling. You might have been building up to that throughout your career — a big economic outcome that means you're kind of set for life. You become post-economic, you're not worried, you don't have to work anymore. Sounds pretty insane, right?
I've seen it happen to a lot of my colleagues — I've seen them go run companies and sell them, I've seen them do a lot of sensational things. The reason there aren't a lot of US Surgical people out there is because they all made so much money, they're all retired. I'm the stiff that's still working.
But it's extraordinary. There's no... you feel it in your core, and you just can't believe this is happening. And all these anxieties and fears and survival anxieties that you've had — that you never really realized were in there — start to leave your body. You're just like, "oh my gosh, we just made this amount." It allows you to go through the day with a certain level of fearlessness, because you know you've created your base, the kids' college funds are fully funded, you have no debt, and your goals are your goals. It's an extraordinary feeling. I hope everyone listening to this — and yourself, my friend — experiences what I've experienced.
Then came the day I realized I needed to sell the stock — when I no longer believed. Teladoc stock went from $195 to $300, and then around $220 I sold it all. Today it's $8. Some of my colleagues didn't take that advantage, and they rode it all the way up and all the way down. But I knew in my core it was going to go backwards. The amount of anxiety I had the day before I started selling, and while I was selling, was extraordinary. And then once it was all sold, once it cleared, and I looked at the bank account — I just couldn't believe it. I couldn't believe it. I hope you get to experience that.
Wow, what an incredible feeling. So, as you probably heard, we only really got through about 25% of what I'd planned to ask Joe — we didn't even touch on Butterfly. So I'll be following up with a part two. I just wanted to release this because I thought Joe's story and lessons were so great. I hope you enjoyed it, and please leave a review if you're enjoying the podcast. See you in the next one.