Master Class

5 keys to success from the CEO of $3.2 billion healthcare start-up Oscar

Before Mario Schlosser started the New York City-headquartered health insurance company Oscar Health with Josh Kushner (Jared Kushner's brother) in 2012, they co-founded — and he was fired from — a social video-game company, Vostu, headquartered in Buenos Aires.

The once-booming start-up Vostu, replete with scooters, a cafeteria and copious white boards, was toppled by a copyright infringement lawsuit by gaming company Zynga (which Schlosser claims was scurrilous, but it was settled with "a monetary payment to Zynga" and "changes to four of its games," according to the Los Angeles Times.) Employee moral soured and Schlosser was ousted by the board in 2012.

At the time, the Harvard MBA grad, who left his native Germany in 2001, had a wife who was three months pregnant and he needed to figure out his next venture.

"Josh and I have coffee and Josh says to me, 'We should start a health insurance company. That's a crazy stupid, stupid industry that's nobody's innovated in. Let's do that,'" Schlosser tells CNBC Make It in November.

Schlosser agreed to noodle on the idea, despite his own skepticism.

Oscar Health leaders Josh Kushner and Mario Schlosser.
Oscar Health leaders Josh Kushner and Mario Schlosser.

"At the time, I was trying to do three or four things: I was trying to write a data science textbook with a friend of my from my Stanford days [Schlosser was a visiting fellow in computer science there], we were going to do something around the 2012 election, trying to launch a debit card in Brazil, as well and trying to start [an] insurance company," Schlosser, now 40, tells CNBC Make It. "And the lowest probability I would assign to all of these at the time was certainly starting an insurance company."

Schlosser underestimated the idea.

The co-founders created Oscar Health to be consumer focused; the company uses technology to make health care more personalized and transparent. For example, Oscar customer can request a call from a doctor through the mobile app 24 hours a day, 7 days a week, and every Oscar customer has a "concierge team" to help coordinate care.

Oscar now offers coverage in New York, California, Texas, New Jersey, Ohio and Tennessee, and will offer coverage in Arizona, Florida and Michigan in 2019. Oscar has 230,000 members (customers who have paid to be covered by Oscar) in 2018, has 1,000 employees, has raised $1.2 billion including a recent $375 million investment from Alphabet, and has a projected revenue of $1 billion dollars for 2018. The current valuation is $3.2 billion, according to private market data company Pitchbook.

Here are five of Schlosser's best pieces of advice about success, drawn from his experience steering the start-up that has gone from zero to a billion dollars in a complex industry in just a few years.

1. Brace for pain

"My biggest lesson about leadership is that I think nothing worth achieving is without pain. That's not my quote, but I think is pretty true," Schlosser tells CNBC Make It.

"Josh, the co-founder, always likes to quote Mike Tyson: 'Everyone's got a plan until they get punched in the face.' That's also pretty good sort of metaphor for the trials you've got to endure if you start something by yourself. It will be very hard and painful to go through building a company, seeing people come and leave...doing something right, doing something wrong, making mistakes."

2. Capitalize on who you are

"You will have a certain style as a leader. And that may not be the best style for every imaginable situation, but it is your style. And over time, I do think you will learn that you might be better off making sure you use that style to the best of your ability to lead others, motivate others around you — as opposed to listening to all kinds of other people telling you how you maybe should be different," Schlosser says.

"There are many ways which you can learn from more mature leaders and senior people ... how to lead teams and communicate and things like that, but there's a core of you that is a certain way and no matter where you are in life there will be people who want to follow you because of that style because they like that about you ... I think you should capitalize on that and augment that."

Figuring out when to listen to advice and change and when trust your own intuition takes time.

"I sometimes compromised on the way I do things and then sometimes learned that, no, may be the way I did it — with help around it — is the best way to go about leading the company and building the company up," Schlosser says.

3. Carve out time to think

If you don't have time to think, you'll never find good ideas or solutions, says Schlosser.

So he gets up at 6 a.m., about an hour before his two kids (Noah, 6, and Siena, 5) wake up. "I can just do a bunch of reading and writing and stuff like that. I don't try to read emails then. Just literally do something that's creative and requires thinking before they wake up," says Schlosser.

Then occasionally, the CEO tells his colleagues he will be away from the desk and he goes to a coffee shop. "Once a week, ideally, [I try] to take one morning and just tell everybody at Oscar I won't be there. I will be in a coffee shop and will have a couple of hours just reading and writing something and figuring something out," Schlosser says.

"Because if I compare my life now as Oscar CEO today versus you know three, four years ago or so, I just think a lot less and that's a problem.... You [are] just gonna burn yourself out."

4. Push yourself to the point of failure

"The sad truth is that there is just no way you are going to do anything useful in life without just taking it on the chin a couple of times," Schlosser says.

Case in point: Schlosser was ousted by Vostu.

"That company went through a crazy rise and then a very precipitous fall as well," Schlosser says of his firing. "And that was a very painful lesson, obviously. You don't want to see your baby you know taken over by somebody else and not in the direction of you imagine for it."

But it all prepared Schlosser for launching Oscar. Without that experience, "There are many mistakes I think we would have made in building up Oscar and picking leaders and hiring and firing people," says Schlosser. "We had a lesson in failure that we could look back at and say these are things we have to avoid in building the company up."

From Schlosser's perspective, failure is a part of a life well lived.

"If you haven't failed then you probably haven't tried hard enough. I mean it is the old saying, 'if you haven't missed a plane in your life, you are spending too much time at the airport,' and I really do believe that that's the case," the tech CEO says. "You're not stretching yourself if you haven't failed at some points, and I can tell you with where I am now, I respect the way more people try to take a risk and fail at something than a somebody kind of had smooth sailing for most of their career."

5. Find meaning beyond work

"I am very glad that my wife and I had two kids around the time when Oscar started," says Schlosser. "It is not just whether my games work, or the new company works, or whatever else, but just having kids and a family to go back to and say, 'This is something real and something fun to deal with,' was a huge sort of balancing thing that I had."

—Video by Claire Nolan

See also:

No phone alerts, meditation and more: What the CEO of a $3.5 billion ag-tech company does to think creatively

Money advice from budget-savvy moviemaker Mark Duplass: Eat ramen, buy stock

How Anne and Susan Wojcicki's parents raised the founder of 23andMe and the CEO of YouTube