Ensconced in Dallas, Verily’s New CEO Talks About His ‘Innovation Engine’ and the Hunt for More Recurring Revenue

Digital maestro Stephen Gillett is driving the health-tech subsidiary of Alphabet Inc. to become more self-sufficient as it staffs up its new office at Cypress Waters.

Stephen Gillett, previously the president and COO of Verily—Alphabet Inc.’s South San Francisco-based health-tech subsidiary—thought his stint with the company’s new regional headquarters at the Cypress Waters development in northwestern Dallas was going to be temporary.

Then some things happened.

There was a shakeup in the company’s C-suite, with Gillett promoted to CEO while founder and chief executive Andy Conrad moved into the executive chairman role. Reportedly hemorrhaging hundreds of millions of dollars, the company laid off about 250 employees, or roughly 15% of its workforce. And, after moving into a new home here, Gillett’s family decided they’d like to stay in North Texas instead of returning to San Francisco.  

Now Gillett, a digital innovator and former top executive with Starbucks and Best Buy, has settled for good into Verily’s Cypress Waters office, though he also spends time at the headquarters in California.

His eventual aim is to have 300 or more employees in sales, legal, marketing, IT, HR, and finance at the Dallas office, Gillett says. There are 47 there now, with another 25 expected for sure by year’s end. CIO Preston Simons will remain the Dallas “site lead,” as reported earlier.

Verily’s new Dallas office at 2999 Olympus in Cypress Waters—designed by local firm O’Brien Architects—is a space where the company’s culture can thrive. [Image: Verily]

Staffing up the 8-year-old company’s business infrastructure—the San Francisco office concentrates on the medical, science, and engineering sides—is one of the new CEO’s priorities, alongside honing its mission to “personalize medical care” using software tools and cutting-edge data insights.

Verily currently focuses its strategy in three areas of healthcare, Gillett says: Risk (it provides stop-loss insurance for employers); Care (as in disease-care management for employees through their benefits providers); and Research (including decentralized drug trials and assisting pharmaceutical companies with regulatory submissions).

Being active in all three gives Verily a leg up in bringing modernization, transparency, and data understanding to the field of precision health, Gillett says, adding, “No one else is doing all three like us, that I’m aware of.”

‘Going in the right direction’

While its founder oversaw a number of fast-moving, extremely entrepreneurial innovations during the company’s early years, Verily needs a more narrowly focused, more accountable approach to commercialization going forward, Gillett says.

“What I’ve done as COO and president and CEO is say, ‘Those are great and we want to continue to do those, but we also want product-driven, recurring revenue that adds tremendous value in the market, and rewards that we participate in, as we drive that value,’ ” he says.

The California headquarters has a lab that does “James Bond-level cool” things, he continues, but “I also want to build a business that doesn’t have to get funding from external sources, that can be self-sufficient.”

Toward that goal of “recurring revenue” and self-sufficiency, the company in recent months has:

  • Expanded its existing partnership with Otsuka Pharmaceutical to conduct clinical trials studying treatments for adults with Major Depressive Disorder;
  • Launched with Highmark Health a virtual care, diabetes management program for adults with type 2 diabetes, and
  • Provided the technology for a computerized makeup applicator, unveiled by cosmetics giant L’Oreal, for people with limited hand and arm mobility. The product is part of a strategic, multi-year partnership and research collaboration between Verily and L’Oreal that was announced early in 2022.

It remains to be seen how much initiatives like these will pay off. But Gillett didn’t refute a February report that Verily had already doubled its revenue in the first nine months of last year, to $470 million.

“There was some speculation that we had doubled our revenue,” he says, smiling slightly, before adding, “Our innovation engine, and our ability to commercialize it, is going in the right direction.”

This story was updated on April 14, 2022, at 10:20 a.m. to clarify details about L’Oreal’s computerized makeup applicator.

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R E A D   N E X T

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