After shutting down the first version of Ader Group, then Evidty, then the first version of RetraceHealth I became somewhat disillusioned. In all three of these start-ups I was trying to innovate in healthcare using data and analytics with the latter two focusing on clinics as the target market. At least with RetraceHealth I used Eric Reis’ Lean Start Up Principles and only spent 6 months and less than $4,000 to test my hypotheses.
It was after the first version of RetraceHealth that I decided to turn my experience with my kid’s doctor – which I discuss in The Story Behind My Latest Start-Up – into a start-up. But before I got too far I decided to run this by one of my trusted advisors Kyle Rolfing. Kyle has helped guide me over the last couple of years, he has never asked for anything in return. He is a successful entrepreneur that has leveraged his network to help me with my start-ups. When I told him I wanted to start a clinic he asked me hard questions for about 30 minutes. After about 30 minutes more of discussion he told me that it did not make sense for someone with a health care, data analysis, statistics, big data, technology background to start a clinic. Furthermore, Kyle said he could never invest in my starting a clinic since it was so far from my skill set. Also, he was certain that this kind of start-up could never lead to a liquidity event. He told me not to rush into it and and think some more about it. While thinking he wanted me to speak to 3 people in his network. The next day I already had the first meeting set up.
I have spoken with 2 of the 3 contacts Kyle connected me to. They are all successful entrepreneurs with multiple exits. I could fill a short book with the conversations that I had. On a philosophical level, I learned that I need to be patient and ensure that my start-ups have the right fit with my skills and passions. On a practical level I learned that selling to providers, especially clinics sucks and should be avoided at all costs (unless you are selling clunky expensive EMRs of course). Furthermore, if I want to build a business and change healthcare for the better I must start out by selling to the stakeholders who currently hold the power and the money – the health insurance companies.
I thought long and hard about all the advice I had received and concluded that I do not have the appropriate skill set to start a chain of direct pay clinics. I do however have the skill set to help develop a direct pay model for an existing clinic and be part of a partnership that will be the first to bring direct pay membership based primary care to Minnesota. You can read more about that project here: First To Market
In fact, because of my renewed focus on my strengths I have a couple of business ideas that I will be testing using the lean start-up principles while I work on the direct pay clinic model over the next month or so. All the ideas are within healthcare, involve lots of data and statistics with insurance companies as the target market.
And yes, I realize the irony of selling to the very entities I am trying to disrupt into oblivion.