My Health-Tech Startup Journey
I am not Don Quixote.
I had a career. In the late 1980’s I was an M&A tax lawyer working on corporate acquisitions and dispositions. I was just a grunt, but I got to work on several of the most exciting transactions of the decade. Then, in 1991, I became an investment banker. By the time I left, I was the global co-head of the top-ranked project finance advisory team in the world, assisting equity consortia on billion-dollar projects ranging from toll roads to airports to power projects. I even advised on the first all-electronic toll road in North America, but this road did not indicate where my life would lead.
In the world in which I lived, I had the “typical” job. I loved the intellectual challenge of what I did, but I always knew that it was a place for me to build skills and learn — not the place from which I wanted to retire. After 15 years in the “professions,” I realized that what I did on a daily basis was no longer fulfilling. And then, my mother was diagnosed with pancreatic cancer, and it reinforced my feeling that there had to be a more meaningful way to invest my time.
The Initial Journey
And so, in 2004, I started to explore opportunities in the world of health-tech. A great thing about health-tech is that almost everyone is there because of a personal story. Another positive is that very few of us “newbies” understand the market, allowing us to naively set lofty goals. In general, it’s not that “insiders” don’t want change, but the existing incentives, structures, and technologies make that problematic. Those embedded in the system often look to make incremental adjustments, as they realize that real change is a Herculean task and probably won’t work. Gradual improvement is better than fighting a windmill.
To learn about the market, along with two NYC cardiologists, I started a cardiovascular imaging business. The point of this endeavor was to give me an insider’s view of how a segment of healthcare works and then figure out the problem(s) I wanted to solve.
I learned:
- how physicians perceived their practices versus the reality of how others viewed them. As remains true today, although physicians provided the ultimate clinical value to patients, the team around them was perhaps even more critical in building the patient relationship and meeting the patient’s needs:
- that empathy and smiles mattered, even if the conversations were mundane and “just” around scheduling or billing. I found that the vast majority of offices undervalued their staff, but those who did not were frequently the most loved by their patients; and
- the tech products designed for healthcare typically did not consider any user's needs except the billing office, and on occasion, the physician.
My First Aha Moment
I love to initially solve mundane workflow problems, and grow from there. I see them as the best way to begin a relationship. In our new cardiology business, I saw a significant problem in cardiac imaging workflow. Why were we making physicians stay in the office for hours to read and report on imaging exams? Why did patients need to take a trip to an office to pick up their images, bring them to another office, and then have the practitioner unable to read those images due to technical incompatibility issues?
In 2007, along with a team of devoted colleagues, we began to build a substantial “niche” solution for medical image management. For the first seven years, few people understood what we did. And potential clients asked confusing questions. While it seems strange to think of now, this was 2008, which meant that the tech solutions most healthcare groups used were designed pre-Y2K. Some sales prospects credited us with inventing the internet instead of understanding that we were simply a SaaS solution utilizing the internet. Others questioned why they would ever want to do anything other than keep their medical images on a hard drive. (Or at least they thought they were still on a hard drive.) Eventually, people began to understand “the cloud” and how Software as a Service could benefit healthcare.
Building our company was a long and slow path. Have you ever awoken with night terrors wondering what would happen if your product failed and you lost all of the patient data? Our system design addressed this risk, but…what if? Why did I give up my prior security and achievement to worry about everything that would or could go wrong tomorrow? My only answer as to why was because, on most days, I loved it.
Few things exceeded the excitement of the first time I saw a cardiologist using our product during a medical conference. Instead of listening to the lecture, he was doing his work from his seat. And then, a few years later, I saw a cardiologist using our product on an airplane with United Wi-Fi. What a thrill. That’s why I chose the path I did. We were making a difference (and making money).
In 2016, we sold our company. By most “real world” standards, the sale would be considered a success, but compared to the world of “overnight” unicorns, we had just managed our way through the process. It was a slog with a nice financial outcome. But building in health-tech is really slow…
Didn’t We Just Have an Exit?
As my family rejoiced that the albatross was gone, I broke the news to them. I wanted to do it again. They thought I was crazy. But, yes — I wanted to build another health-tech company, and I “invited” them to take this journey with me. This time would be different. My last company was all about workflow; this one would be about genuinely helping people and solving “our” problems.
The Why
Having witnessed three close family members’ care management as they deteriorated from good health through illness over more than a decade, I was astounded by what I saw. Pancreatic cancer, congestive heart failure, and dementia. Three very different paths but unfortunately with many similar challenges. Bouncing between medical offices, hospitals, SNFs, home aides, and so many other market participants — the health system was not designed to allow efficient and effective care delivery that met its users’ needs. Attacking this problem called to me.
Plus, I would be starting this company with the person who joined me as an intern at my last company and had earned the role of COO by the time we sold. She would be with me to manage the day-to-day while I had the freedom to dream about our audacious future.
We had all learned so much, and it would have been a waste to stop. We were no longer health-tech outsiders. We developed knowledge and built a valuable network. We were smart enough to know that we could avoid making the same mistakes again. But we were also smart enough to know that new mistakes would occur.
The What
Personally, in our quest to manage care, I had the benefit of 5 physicians in my family, a strong healthcare network, a legal and finance background, the vast resources available in NYC, and most importantly — an interested and engaged family. But the process was still excruciating.
And it wasn’t just hard for the individual. It was difficult for everyone around them.
The “patient” (rightfully) did not want to give up control and independence, often until far beyond when they should have ceded some of their decision-making. Family members had no idea what was going on, with disjointed messaging amongst the care team. Our (superb and caring) private home aides had transitional issues as they changed shifts. And providers of all sorts only had part of the story.
We were lucky. In each case, we had the luxury of discussing and planning for these issues. If it was so difficult for us, how arduous must navigating this path be for those who don’t know or understand “the system” or have the time, knowledge, network, and financial security to learn?
You Can’t Do This, Can You?
So our goal was clear. Let’s build something that makes healthcare better for all participants — but starting with the patient and their family. Let’s be certain to respect existing systems and workflows. And let’s not just think about the clinical. Let’s consider social, communication, education, resources, etc. Let’s make it usable and approachable for all — almost irrespective of education level or knowledge. Let’s also invite other health-tech solutions to join us. And let’s create a B2B and B2B2C model that generates an ROI to the healthcare system, which subsidizes our desire to help the underserved consumer market that is already drowning from the cost of care.
Okay. We know what we want to do. This should be easy — says absolutely no one who understands healthcare, human behavior, relationships, finance, or how hard it is to build a company.
And by the way, building our vision isn’t cheap. So one of our goals would be to invest both our time and money to learn enough to ultimately attract the “right” investors. For those who haven’t been through this, the thought is that any capital is good. For the experienced, they know that the right partners, whether for product or capital, are critical. What we are doing is hard. If you don’t understand the market, you believe that we are either (i) geniuses solving the world’s problems or (ii) ignorant, with no understanding of the complexities of what this takes. We are neither.
As we have just gone commercial, our Users will begin to tell us what we did right and what we missed. We’re pretty confident that we’ve done a good job thus far, but we’ve only just begun, and we don’t know what challenges are ahead. We only know that they are there. And along the way, we will be looking for partners of all sorts.
How Do I Distinguish Myself From Quixote?
Picture this. I’m at a cocktail party (yes, someday we will be able to socialize again), and someone asks, “what do you do for a living”? Do I tell them that I spend lots of time (and lots of my money) trying to build a solution that the world thinks is almost impossible to create? Or do I presumptuously say I’m the CEO of a health-tech company and make it sound glamorous? Or do I tell them the truth — we have our North Star, and each day we try to figure out how to get closer?
Well, at least we’re trying to do something that will matter.
Are you interested in helping us in any way? We are always looking to connect with smart people who share a common passion. I love what I do, and I am excited to speak with people who share that passion.