When good ideas make bad business
tjcx.me
tjcx.me
And here's something that's absolutely critical for all engineers trying to build a startup in healthcare to really understand. Healthcare is so alluring because tech people are so idealistic. We think, "Wow, we we can write some code, and then save lives!" And that's sometimes true. But when you are thinking of your customer, revenue model, sales strategy - all that business stuff - the mistake we make is thinking healthcare is different and the same rules don't apply. We think if we can save lives, we can make a business. But the key insight is that you have to take a step back and just treat healthcare like any other for-profit business. Doctors and hospitals care about what generates revenue. Insurance companies want to save money. Pharma companies are looking to advertise to new customers. It's no different than other industries. The psychiatrist's reaction to the sales pitch is the classic thing a doctor will tell when you're not helping their bottom line. As I was reading the post, I could almost predict how she was going to respond.
And if you figure that business stuff out, who knows, you might just build a healthcare business that saves a life or two.
Health insurance companies are very aware of this, which is why they so frequently deny coverage for various life-saving cancer treatments. If you die while waiting for treatment, not only do they save the cost of the treatment, but also the entire cost of ongoing screening / care during remission.
There isn't a "british" system because health is devolved. There are four separate systems, one each for Scotland, Northern Ireland, Wales, and England.
> requires a stringent cost-benefit-calculation
There are lots of problems with the English NHS, but this is almost never one of them. Unless you have particular examples?
The drug needs to have a proven benefit, which usually comes down to how much longer does it give you, if it's only marginally better than the existing treatment, but orders of magnitude more expensive they work with the manufacturer to bring the cost down to where it can be approved.
A lot of what was written about the UK system during the ACA debate was outright falshoods or misrepresentations (e.g. the infamous "death panels", whilst ignoring the Kafkaesque nightmare that can be the US system).
Tell you what, I'd take the NHS over what you've got any day of the week, as would the vast majority of people in the UK.
If you don't know orphan drugs are drugs that could be a life saving medical necessity for rare diseases that do not have a large enough base of users to make the drugs affordable. I'm not talking about Shkreli "affordable", but it's literally not feasible to spin up manufacturing, or final trials, or educational materials for doctors affordable. So governments offer massive subsidies or cost investments for some of these drugs that often only help TENS of people, not hundreds, or thousands or millions.
What's missing is a similar policy for funding otherwise for-profit efforts like the authors.Educational tools and products are often seen as less valuable but I believe they could be immensely helpful.
Now as to the authors original flaws? Well, his product has a clear sell-through referral potential, but it's not really functional to do so with prescription drugs. That being said, selling this product to a CVS or a webmd as a feature could be really good, or major hospital networks, or heck even pharma companies. But all of that is often year+ sales cycles, you can't just luck into that.
Government-run healthcare isn't a panacea that will 'value human life' any more than the insurance companies. You are still a number in a database somewhere.
Most new drugs come out of the US and socialized governments create generics at a fraction of the cost, because they don't have to put any money into R&D.
The US is the back-bone of the medical system for the rest of the world and also has the best medical schools and best quality hospitals (the majority of people with money come to the US for life-saving surgeries..this has to tell you something).
We need to push the true costs of things to the patient, which will force the price down...not replace the existing inefficient layer of the insurance companies with an even more inefficient layer called the government.
This has worked with many cosmetic surgeries, which used to be very expensive, but aren't covered by insurance.
Insurance should only cover rare surgeries that can't use the free market to reduce the costs.
I can't think of anything that the government runs better than the private sector. Healthcare is no different.
This is a completely false right-wing talking point. It takes 10 minutes to uncover how just totally bullshit this is.
Don't ever repeat again or anything remotely like it (aka the rest of your post).
https://www.ncbi.nlm.nih.gov/books/NBK50972/
https://other98.com/taxpayers-fund-pharma-research-developme...
The government never sees a return in any form on the money taxpayers put forth. But private companies do. Just waiting like vultures to snag whatever makes it through the proof of concept phase and claim credit.
>I can't think of anything that the government runs better than the private sector.
ISP's? Roads? Social services? Schools? Emergency Services?
This is a lie. Marketing budgets are approximately equal to R&D (https://www.bbc.co.uk/news/business-28212223) so you're off by several orders of magnitude.
> Most of the real "hard science" R&D is paid for with NIH grants.
Also not true. NIH grants are ~$40 billion/year whereas industry R&D are around $80 billion (https://www.statista.com/statistics/265085/research-and-deve...).
There are definitely lots of problems with the pharmaceutical industry, several of which are mentioned in that BBC article. But making hyperbolic claims that they essentially don't do any R&D isn't helpful.
Your own source doesn't even say that. In the exact BBC article you linked:
>But as the table below shows, drug companies spend far more on marketing drugs - in some cases twice as much - than on developing them
Here's some very very basic reading on the subject that you can find in 10 seconds of googling: https://en.wikipedia.org/wiki/Pharmaceutical_marketing
In the literally first sentence on this topic:
>pharmaceutical company spending on marketing far exceeds that of its research budget
Imagine living in a society where supposedly rational, intelligent people hold opinions that don't withstand the test of a few keystrokes; opinions that quite literally aid in the needless death and suffering of others while also just generally being a complete waste of time.
If you follow the citations for that Wikipedia claim (a very very basic step) you will see that they don't provide any evidence for an order of magnitudes difference.
I'm not usually in the habit of shilling for Big Pharma, but since you've taken such a condescending tone I'll make an exception and point out that according to that exact Wikipedia article you linked, literally the same paragraph on the topic mentions that the majority of marketing spending is on free samples. Unless you think that drug companies should raise their prices in order to fund more R&D (which would have the same effect as reducing free samples) this doesn't seem very objectionable.
This just means American consumers end up subsidizing health care R&D costs for the rest of the globe — purely because our government prevents us from collectively bargaining the way pretty much every other country does.
The people coming to the US for the “best quality” are generally going to doctors / surgeons in private practice, most of whom do not take insurance and can see you immediately. There is an almost entirely separate (and much higher quality) medical system available to those who can afford it. The system the rest of us belong to ranks right behind Morocco and Costa Rica in terms of outcomes (not joking — this is according to the WHO). We come in dead last among “first world” countries.
The other problem right now is that it's not profitable to create drugs that actually cure anything. It's far more profitable to research drugs that help control chronic conditions (like diabetes, hypertension or Alzheimers) rather than drugs that can cure a condition outright. This is one part of why nobody researches things like antibiotics anymore.
A friend of mine works in pharmaceutical marketing, and the big revelation I got from him was that the marketing departments run the drug companies from the top to the bottom. If marketing doesn't see a billion dollar market for a new drug, it won't even be considered for clinical trials. The VC in biotech knows this, so they won't fund startups that don't have this potential.
There was a HN thread on this recently in relation to antibiotics. [1] Antibiotics are a special case for their own reasons, but ultimately if the potential for insane windfalls isn't there, big pharma is not interested.
Honestly, as long we get rid of the mafia middleman a.k.a insurance company except for real catastrophic situations, I do agree that costs will plummet. Price transparency is another key aspect.
Healthcare doesn’t have this issue (except in emergency services), so public healthcare also doesn’t solve that. It solves problems such as the principal-agent problem, asymmetric information, improves collective bargaining, ...
Implementing something like what you describe, IMHO, would have the greatest positive impact on the health and welfare of Americans, of anything this century.
I have a friend who is very high up in one of the largest health insurance providers in the US, and I have often debated over the years with this person that same point, that the insurance layer is what creates the model for inefficiency, and abuse at the provider level ($5 Tylenol pill, $10 Band-Aid, minor treatments and return visits of dubious value, etc.), and that if we treated medical care as an ordinary consumer good, outside of the extreme emergencies that are bankruptigly expensive, things would be a lot better. The person I know at the insurance company doesn’t necessarily disagree either.
What happens is that when given the opportunity, business will pollute the market with proxy signals (like brand trust, or fear based selling) that people instinctively respond to.
These proxy signals will be subject to manipulation by well-capitalized actors and will not in general reflect outcomes or value. They will interfere with the fundamental signal, making it even harder to detect and interpret.
Therefore the market will not work, in the sense of delivering the best outcomes for costs.
(Note that I am strictly speaking of healthcare, where even experts are often unsure of causal relationships and the relative value of various therapies. In general I think markets are a wonderful thing. Here is an experiment to try... take a mild condition treatable by OTC medication, such as the symptoms of colds, allergies, etc, and see how long it takes you to identify, characterize and factor the available therapies, and then map this to available products. Evaluate interactions, cautions, effectiveness, risk, convenience, costs, etc. Now ask yourself, where did you get your information? Who did you have to trust? Why did you trust them? Is the basis for your trust and understanding available to the average person?
I've done the experiment. My conclusion is that healthcare large and small is not like other goods.)
I have firm belief in the fact that the market can more efficiently aggregate medical information but above all else create more rapid responsiveness to care. Bad products and actors are always seeded out over time in a society.
But they don't work like this all the time, for all goods.
Tetraethyl lead, which quite probably caused material long-term harm to entire generations, is gone because the bureaucrats banned it. The free market would never have phased it out organically in a reasonable time-frame, we know this because it didn't. The market participants fought for its continued use and obfuscated the issues to their advantage.
GlacierMD was explicitly an attempt to filter, aggregate and make available high-quality health-care information (i.e. improve the quality of the signal, which is necessary for efficient market functioning), and it did not find a value proposition in the market.
Except it doesn't -- what GlacierMD was trying to do is something that's currently done by humans at scale. Which he would have known if he understood the market better. This is a centralized function that is performed much higher up the chain and ends up in clinician / patient hands in the form of clinical guidelines.
This is maybe a useful tool for researchers to be used as one input in the development of clinical guidelines. But the functionality it delivers can be done manually (and will continue to be for liability reasons). In this case, the market worked. The author should be thankful he was able to get out of it only $40k in the hole.
Neither of those scenarios are ideal.
If the only question was genetic differences, that’s a risk I think a lot of people would be willing to take (e.g., that I might be healthy until 100 and then die in your sleep, theretofore paying constantly for others who have had medical problems for 70 years straight). I myself would be willing to take that risk / pay for that style of universal coverage, if not for the aforementioned choice part (smoking, etc.) playing so heavily into the cost, in practice.
Assuming it's genuine, it's also misguided. Almost no-one wants to be obese, alcoholic, etc - accessible healthcare will reduce the incidence of all of these, which in turn will reduce the externalities associated with them.
You also don't need further state control to discourage smoking, drinking, junk food, etc - taxation is the mechanism used globally to discourage undesirable behaviour.
Almost all these things are biologically addictive, and furthermore the companies selling them have long known about their addictive qualities and then built marketing campaigns to ensure the public was not aware of the risks.
Taxation is how you recognize the externalities of this behavior while maintaining a free-market system.
Also, it’s easy to look at something like cigarettes which pretty much everybody would agree are a terrible idea, and say, “fine, tax em”, but what about when it’s sugar, then butter, then red meat, etc. Let people make their own choices instead, and just don’t put the onus on the rest of us to fix the problems of those choices. Banning smoking in public is acceptable because it’s no longer a choice that only affects yourself; it affects anyone near you in a really terrible way. But taxing cigarettes (or anything else) is no solution.
You are probably underestimating your own unknown non-lifestyle associated risk, along with the risks your offspring represent.
It also costs a lot to detect and judge risk factors, manage individual risk pools, assure compliance, etc. You save a lot of money by simply not bothering to risk-qualify eligibility and this offsets the costs associated with carrying lifestyle risks in a single large pool.
GlaxoSmithKline British
Eli Lilly US
Sanofi French
AbbVie US
Roche Swiss
Pfizer US
Novartis Swiss
Merck & Co US
AstraZeneca British/Swedish
Johnson & Johnson US
(edit spacing)
I didn't claim it was. Only that our present standards incentivize fee-for-service and not outcomes-driven, as exemplified by the author's inability to sell his outcome optimizing software. ACA tried to remedy that with preventative care standards, but the current administration is actively dismantling it.
Your model works for cosmetic surgeries because they are cosmetic - optional and not life threatening.
When calculating price, the cost to produce a drug is the last thing on pharmaceutical companies' minds. The question they ask is how much are you willing to pay for something that allows you to continue living. The factors they actually consider: the patient's perceived cost-benefit of continued suffering, the credit/insurance-worthiness of the treatment cohort, and whether the company faces competitive pressures from others selling the drug on the market.
Nothing better depicts the situation than what goes on when pharmaceutical companies merge or acquire the rights to rarely used drugs[1].
The only way to structurally combat this is with the monopsony power of a single payer system.
>I can't think of anything that the government runs better than the private sector. Healthcare is no different.
Government run care has the highest satisfaction rate of any healthcare coverage[2].
1. https://www.nytimes.com/2015/09/21/business/a-huge-overnight...
2. https://news.gallup.com/poll/186527/americans-government-hea...
Between the MRC and NIHR, the UK's NHS puts at least a couple of billions (Sterling) into clinical research each year, making them the largest clinical research funder in Europe. They're not researching generics. Oh and they were one of the original funders of PubMed Europe.
I can think of lots of things the government does better than the private sector, although admittedly outside the US.
How true is this though?
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/
> Objectives. We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.
[...]
> Conclusions. Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.
And
> In the United Kingdom, the pharmaceutical industry invests more of its revenues from domestic sales in research and development than do companies in the United States.
The US pays a lot for medication, but a lot of that money is used for things that are not innovation (eg advertising). Countries that have better free markets for medications don't see less spending on innovation, they see more spending on innovation.
Maybe in the US, other countries (e.g Australia) are not so inefficient.
Then you are not very good at thinking. There is no theoretical, practical or empirical evidence that this should be true. If you _feel_ this should be true, you should really investigate where that feeling comes from.
Basically your post is just ideology without argument or evidence. All evidence shows that free markets in health care are terribly inefficient. If that doesn't align with your ideological priors, well, adjust your reality.
In magnitude, not so much.
I’m for a public system I just think it is very difficult to do correctly, and if we go into it with idealism instead of extreme pessimism we will fail to secure it against those who prey on exploiting public money.
I'm not convinced the distinction between "public money" and "the money of the public" is particularly clear in these situations.
And of course you don't need a hypothetical "correct" solution - just one that's clearly less exploitative of consumers.
Unless idealism is the strategy to combat idealism?
It's a bit macabre, but, to me, "dead people don't pay taxes / generate GDP" seems pretty interchangeable with "dead people don't pay insurance premiums / contribute to a risk pool".
To me, the problem is that billed medical costs (what the hospital charges you) have come unhinged from realized medical costs (what the hospital spends on helping you, including salaries, supplies, etc).
If that world is alien-sounding, it's similar to how the billed education costs at universities have come unhinged from realized education costs. In both of those environments, the ballooning costs seem to be propped up by well-intentioned but fundamentally "unnatural" source of funds, in the form of government subsidies.
These have been exploited by profiteering and accounting optimizations, over the course of literal decades. If your surgery costs 2k to perform, the hospital will happily charge you 20k, collect 3k in insurance, and write off the remaining 17k as un-recovered medical expense, for which the government will reimburse some portion.
The more obvious solution to me, would be to take a hard look at how these subsidies are actually used (/gamed), and steadily reduce/focus them over time, so that hospitals don't have an incentive to inflate costs. The source of the problem isn't anything fundamental about "the private market", it's rather about the current set of public incentives that have distorted the private market into it's current form.
[1] - https://translate.google.com/translate?sl=sl&tl=en&u=https%3...
And is the budget-wise national-healthcare-system administrator qualified to make that determination for you?
And, if they do not want you to get better while waiting on line (most people do bet better for most things, except, broken legs, without treatment) or want you to die while waiting on line, why are the lines so long?
In any case, even in Singapore, with arguably the best-balanced system in the world, things are complicated, when people's lives are on the line...
https://faculty.chicagobooth.edu/john.cochrane/research/pape...
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-S...
They can investigate whether you failed to report any preexisting conditions, or otherwise violated terms of your insurance. Things that would seem to you to be a technicality may be to their lawyers a breach of contract. Do you have a lawyer who is up for that fight?
[1] https://www.justice.org/sites/default/files/file-uploads/Ins...
If you notice, when you search for insurance quotes on healthcare.gov, it only asks you for age, location, and smoking status. And gender, but I don’t think gender can be used to price the insurance any differently.
It boggles my mind that people keep bringing up pre existing conditions a decade after they have ceased to be a thing. Also, your link doesn’t work.
https://www.healthcare.gov/coverage/pre-existing-conditions/
This is one of the most concise and effective arguments I have read for Medicare-For-All, Single Payer, etc.
The only thing single payer does is eliminate insurance company opportunism. It doesn't suddenly convert the entire healthcare system into a dystopian concrete monolith.
Although if it did it would make OP's job far easier, because if you could prove there were cost and health outcome benefits on a national scale you would be able to convert the idea into a viable business with a single corporate sales pitch, instead of trying to sell to every doctor individually.
In fact the real resistance would come from pharma. Single payer or not, evidence-based prescribing of empirically proven best-in-class drugs would undermine pharma's entire business model.
As someone who ran a healthcare business in Canada, I can tell you that this is absolutely not the case. Single payers are outrageously conservative buyers... sure, you may convince them in 5-10 years, but no startup can spend 5-10 years burning cash without making revenue. Particularly since, unlike with drug discovery, there's no guarantee that you'll be the only one selling this if the single payer eventually approves it.
What actually happens is that the single payer orients itself to big, slow companies that more closely resemble it, thus devastating small businesses and rewarding large, established players. It is damn near impossible to create a startup that sells to a single payer healthcare system.
Correct me if I'm wrong, but doesn't Canada have publicly funded providers? I'm all for single payer, but with a completely privatized provider network. Make the free market compete for the government's dollars. Technology should theoretically reduce costs because it more automation generally means higher profits.
provider != payer
Providers are actually in many cases like contractors... most family doctors, for example, bill for services rendered and are otherwise free agents (unlike in the UK).
And the same goes for drug prescriptions.
They are hard, but this case isn't really healthcare-related. He tried pitching his product to practices without showing how it could increase their revenue, or decrease their costs. Without that, his product is just another cost-center with some marginal (and ambiguous) healthcare benefits.
What's the t-shirt look like? :)
It is truly humbling because there is no easy solution, there are no unified APIs; you couldn't use them even if there were, because your medical records are highly sensitive. So forget about poking around production to solve a bug, you've got to do it through observability.
You can't move fast and break things because your downtime will get the regulators involved, because peoples livelihoods are at stake. You will get official complaints through various official bodies who can and will sanction the business.
In short, it's not a fucking joke and it takes a lot more time and a lot more money to do something serious here, and for good reason.
Note that I'm not talking about low-key wearables like Fitbits that monitor your pulse, I'm talking about doctors, triage, etc.
There are a few paths I see still:
a. Assuming you own a database, expose your dataset as an API. Consider possible consumers. Open source it, and monitor the usage. Who’s using that data.
b. Cold message a few folks on Linkedin from pharmaceuticals that your algo says has high clinical success. Can you “recommend” them? Do they see value. Maybe you have a research tool on your hands.
3. If you can keep your website alive, focus on SEO and gain traction with more users and play that out. Write blog posts, use affiliate marketing, and grow users. But don’t add new features. Just maintain what you have. Try that for a year at least. What did you learn?
I think the toughest thing here is knowing when to stop building the product. That’s what stands out to me as your demise.
The doctor was spot on, and those are the kinds of things you want to hear. It just means looks somewhere else. Writing a doc beforehand with potential opportunities is always a good idea, but it’s never too late.
Disclaimer: I do product at MEGACORP and love product strategy.
Where should one go/read/listen/watch to learn more about product strategy?
Websites like Indiehacker, stratchery are good. Would also recommend the innovator's dilemma if you're at a big company. There are also a few videos on Youtube by CNBC on products of the past - and I've enjoyed those.
The only downside is that sharing this information may open up the hospital to more liability - i.e. a patient takes an opiate instead of an NSAID and then blames the hospital for recommending the opiate to them because of how much more effective the opiate is at treating pain in clinical trials.
But, it would not be my first business model to try, just an alternative to "we built it but now let's just shut it off".
In this case, similar functionality (drug recommendations) exist within EMR systems. Except the recommendations are issued by other doctors and medical researchers, not some ML algorithm and it works transparently with the pharmacy management modules.
Moral of the story: don't get involved with healthcare startups unless you know the structure and economics of the industry. They are very different from consumer / business tech.
So please, have mercy and cure my ignorance and explain what EMR means.
https://healthit.ahrq.gov/key-topics/electronic-medical-reco...
It's spoken about as a monolith because that's how it's sold -- there are maybe a dozen platforms in wide use (which are then usually customized by a system integrator for a big hospital). They do have every option you could possibly think of.
I'm not criticizing you here (you're not trying to do a medical startup), but anyone who is trying to do a medical startup needs to know a whole lot about EMR systems -- more specifically how they are bought and sold -- if they want to make any traction. All medical software flows through the EMR, and they are closed platforms by design.
"So I built something people wanted. Consumers wanted it, doctors wanted it, I wanted it. Where did I go wrong?"
As far as I can tell, nobody wanted it except the author. The one doctor he talked to didn't, and no consumer ever saw it. I feel like the author learned a lesson, but not the full lesson.
Reading this was like watching someone you don't politically agree with doing comedy. You know they're trying to be funny, but you also know they're missing the whole point and aren't self-aware.
I, as a consumer, find it worthless and they shouldn't have even started it, but now that you're here, might as well give it a bit more of shot than that. To completely bail on what you have after 10 no's is also the wrong move.
Doesn't seem like he asked the question, "well, what would you pay for?"
Plus when did the 'we don't have any budget' excuse stop a SaaS company? That's what you raise VC for - build the product, hand it to the customer for 'free' and charge them what it was really worth based on their usage when you threaten to take it away
Edit: Or even Medicaire?
I think it was a great article. Like it said: To succeed, an offering must create value for all entities involved in the exchange—target customers, the company, and its collaborators. And value is literally measured in dollars, so you're either saving or making money for someone, otherwise it's just a fun project.
A tool like this could easily be marketed as a USP for a pharmacy:
"Only CVS has MedFinder: a proprietary system to find you the medication that's most likely to help cure YOUR SPECIFIC SYMPTOMS. No more standing in front of the racks of too-similar sounding medications. Enter your symptoms, get a recommendation backed with data!"
The product here is a kiosk backed with some real data that you can build a marketing effort around as yet another way to try to differentiate yourself in a heavily commoditized business. Pharmacies fight tooth and nail to get people in their door, and especially, to transfer prescriptions to them. One more small detail that you can convince people might help them, that actually gets them through the door? You could build an entire campaign around it.
(Think Dr. Scholls placing those foot-pressure-sensor systems in pharmacies. They drive, pun intended, foot traffic.)
Have that doctor introduce you to her pharma reps.
Find other data that is specialty specific and sell to pharma in that specialty.
I’m a healthcare CFO and this could work. You’re talking to people that’s a great step.
Keep talking. You built the thing, put it on a $30/month server. I suspect you don’t need the cloud stuff. Just make it your proprietary graphics & viz data. It doesn’t have to be freely available.
Raise money for this. You’re in the Bay Area for a reason.
Get commitments from pharma first. Keep more of your company from PE.
Good luck.
It takes years to figure out how to properly sell your product. He didn't find out that his product wouldn't work in the marketplace he just found out he didn't know how to sell it.
“Call me when you have a business plan,” I said, lacing up my Allbirds before and riding my Lime scooter into the sunset.
He then goes on to describe the evidence specifically why doctor's DIDN'T want it. All the author was trying to do with that quote was explain what he was thinking at the time.
are you not supposed to laugh at the jokes of someone you disagree with politically? is it possible someone could be "self-aware" and still disagree with you?
Sure, Aleve is the most powerful. But it also has the most side effects, including ulcers if used for too long. There's a lot of nuanced information when it comes to drugs. If you want to go on pain killers like Aleve for long term, you probably need to take acid blockers as well, like Nexium. So where does that fall into the analysis?
Unfortunately a lot of stuff requires medical doctors that have experience. I just went through a severe health emergency, where I was taking one antibiotic and needed to be changed to another. I needed blood tests and constant supervision for the doctor to make this decision.
Psychiatry, which is what I guess the author targeted, is likely even less reliable. My friend is a pharmacist and was on anti-anxiety medication for a year, but decided to try another one, because of the effects on her were affecting her and now she's doing much better. This requires working with a psychiatrist for a year.
I think there's value in surfacing all this information but to expect people to rush into paying for it is naive. It's a nice-to-have-tool that might be useful like a Google-type research tool but nothing someone would want to pay $5/month for since the actual benefit over a psychiatrist just going off experience is completely unknown. There no inherent home run here.
Am I wrong or isn't solving these issues basically the service UpToDate offers?
Especially the doctor's feedback, she described the possibility of changing her habits slowly as she got used to using the tool.
Unrelated:
"I always have the best interests of my patients in mind, but, you know, it’s not like they’ll pay more if I prescribe Lexapro instead of Zoloft. They won’t come back more often or refer more friends. So I’d sorta just be, like, donating this money if I paid you for this thing, right?”
This line kills me and it's exactly why I hate the healthcare industry. She clearly understands that the software could improve patient outcomes, but describes it as a donation and still wouldn't change how she writes prescriptions (out of laziness, I guess?)
That tool isn't just a physician aid. If that's what doctors are really doing, it's more like a physician replacement. If they won't do evidence-based medicine, and prefer to be legal drug dealers, for profitability reasons, we should all be contributing to the creation of the auto-doc, instead of trying to help them.
That $40k would have been better spent lobbying to remove the guild protections from the practice of medicine.
If all general-practice docs do is take height, weight, pulse, BP, blood oxidation, and run a CBC with lipid panel before prescribing your drugs for the year, that doesn't seem like something only an MD or NP could do. But by law, if you want prescription-only medicines, you have to go to a prescription-drug dealer and pay them for the scrip, before going to pay someone else, again, for the actual drug.
And if they're not actually doing (what I perceive to be) their jobs? If they're just "phoning it in" to collect a paycheck? That's one job I'd love to automate out of existence.
About a dozen years ago, my doctor caught my blood pressure shooting up in my annual exam and started treating me for high blood pressure. High blood pressure is a "silent killer" that leads to premature deaths for millions. You don't feel sick, while your heart struggles and your brain risks explosions. And treating it, once diagnosed, isn't straightforward. It took six months of experimenting with various medications to find the combination that worked for me. That's a doctor's judgment and expertise, not something for some technician with a community college associate's degree. And this summer, when a critical potassium depletion drove me to a scary ER visit, she noted that one of my BP meds could affect potassium and adjusted my dosages.
And it's not just an expert-system thing that could be replaced by a robot, either. She's not just dealing with my measurements - she's dealing with my fears, and helping me decide on best approaches. That requires a human touch.
You went to the ER, because you were not aware that cramps, constipation, spiking BP, and muscle weakness are symptoms of hypokalemia, which could be resolved quickly by dissolving KCl from the grocery store in water and drinking it.
That's patient education that needs to happen before you go to the ER.
Just like with the GlacialMD thing, it's no skin off your doc's nose if you have to drop $500-$2000 on an ER copay because you had an electrolyte crisis from the medication she prescribed, and didn't know ahead of time that could be a possibility.
And the rest of you out there, learn to measure your own BP. You can't leave it to an annual exam to find out it's getting high, and the BP taken in the doc's office may include the "white coat effect" (or as I call it, the "what will this cost me effect").
And when the symptoms started, I wasn't going to go to the chemist to start concocting home remedies for what I feared could be a mild heart attack. I went to the ER. Again, I don't know how old you are, but I'm old enough to have had friends my own age start dropping dead of heart attacks and strokes. Hence I decided to take the safest route.
But "laziness" is something of a trigger word for me in health care discussions, just like "greed" is. It's so easy to attribute what we see as suboptimal outcomes to malice on the part of the person acting - even passive malice like laziness.
I think in general, if you're building a business, expecting anyone to do something that isn't in their own selfish interest in some way is a recipe for failure, even if people in your target market might claim not to have selfish motivations. If you want someone to change their behavior (and/or their organization's behavior), you need to be able to clearly explain why it's a win for that specific person.
A lot of comments criticizing what the author already knows, that the business plan was incomplete. I had the urge to do the same, but read to the very end and realized TJC clearly learned the most important lesson, and it's one I've learned myself, so I have no room to be critical.
BTW, I burned a lot more than $40k and 9 months in my own story, so maybe it helps to hear that other people have made the same mistake and gotten too convinced their idea is valuable without checking carefully enough -- without quite knowing how to check carefully. I know what it feels like to know that I'm doing the right thing, and then find out that it's not good enough.
Fun read, and an important lesson that many very bright people will still learn the hard way, even after reading a story like this. Thank you for sharing.
The real benefit IMO would be marketing this to countries with a top down healthcare purchasing system (eg the UK) or as a tool to drug companies/researchers looking to make their own meta analyses (eg abstrackr). It might also be better instead to diversify into correlating symptom clusters with diseases because then the utility to the end user is bigger.
Sell this product to insurance companies so they can recommend cheaper/safer drugs to their customers, or show the more expensive one and if it truly had better outcomes. Everyone benefits from that.
That said, the medical establishment is a tough tough domain to move.
Eventually we pivoted the tech to a B2B SaaS play because it was too hard to sell.
Why do people shut things down instead of just leaving them there, unmaintained? Even that is better than just taking it offline.
It is unfortunate. Even if the data goes stale and the product is no longer fit for purpose, it shows well and would make a great demonstration for his/her future endeavors. And you never know who might stumble across it in the future and want to revive the technology.
I've had fairly sophisticated sites running on Google App Engine for years after the company was "shut down". One ended up being instrumental as a demo when meeting a later cofounder.
The only way to make money is to get insurers to require these things, or to sell to some big hospital network administrator who you can focus your sales efforts on. I don’t think the product here was mature enough to sign a multimillion dollar contract with a hospital network, and maybe not for insurers either.
Nice narrative style and congratulations on achieving your (first?) failure without too much trauma.
It's possible you invested your own money prematurely, possibly without talking to enough people about the opportunity. Your metric for how much people want something is usually directly tied to revenue, or if you are using engagement as your metric, you should have figured out some way to make money off of it before you invested in development. I suggest that other engineering-minded founders think of sales like writing "hello world" -- for example, if you're doing a physical consumer product, you can start by shipping pet rocks on day one.
More than just identifying a product people want, you also want to find a network effect or viral marketing approach so you can grow with a sustainable advantage.
The startup idea sounds great and I would enthusiastically start working on it right now as a cofounder.
The problem was spending money before having a sense of how to get more.
That’s all.
If the startup could have been run entirely without paying contractors or incurring other serious expenses, the poster could have run it for longer, and iterated on models longer, until the product/market fit got dialed in.
There just wasn’t enough runway, enough iteration.
>It had been a bit of a working assumption of mine over the past few weeks that if you could improve the health of the patients then, you know, the doctors or the hospitals or whatever would pay for that.
This person uses the "X% of Americans" line, so they live in the United States, right? The one in North America that views healthcare as a business to wring money out of? They definitely should have done more market research if they could type that with a straight face.
But hey, hindsight is 2020 and they only spent $40k on some very valuable firsthand experience. Sounds like a win if they're planning to run businesses in the future, but for ideas without a clear path to making enough money to sustain themselves, try to use other peoples' money next time :)
If WebMD owned 20% of his product, for say $300k in Seed Money, he could have used that Runway to build something really cool.
And WebMD would have an incentive to promote his site and help bring free users.
I'm going to try and get this in front of them using my contacts, but it is a long shot.
What could we do to make this the basis of the system? Without driving doctors away from patients who have bad prognocices?
Blaming the insurance companies strikes me as the political equivalent of yelling at the cashier.
Insurance is one of the oldest industries in the US, which means they have accumulated many (probably well meaning, but ultimately stupid) regulations over the years.
For example, to be taxed as an insurance company (e.g. avoid paying tax on premiums that will partially be paid out in the future), most states assign a maximum profit margin.
That means, in order to make more money as an insurance company, it's perversely in their best interests to increase the cost of medical care as much as possible. Medical care is not like cat bonds that might wipe out your risk pool, so it's just a cashflow game.
That's not to say there isn't any downward pressure. On a day to day basis, individual claimants eat more into that margin than was budgeted, so a company might have to raise rates higher than their competitors (essentially they have some pressure to deny claims), but there is very little systematic pressure to reduce overall costs. Also, marketing budget does not count towards profit, which is why insurance companies are in this rat race of brand advertising to steal customers from each other. With auto insurance, for example, upwards of 40% of your premium is just going out the door as ad spend.
Anyway, I would assign a lot of blame in this perverse incentive scheme to poor regulations.
If I were the one making the decision, I'd change American healthcare with one big thing, modeled on the Japanese system... price controls. Japan's system is more or less like ours, but with one key difference - a government panel sets the prices for all medical goods and services. Providers and insurers have to make their profits within that price structure. This incentivizes both to reduce costs, for the sake of their own profits.
Of course, this would be called radical socialism or some such stupid in America, and Democrats aren't even talking about it (Republicans have no ideas at all on health care). But it's politically a much lower threshold than single-payer (throwing out the whole framework and starting over, basically). And it demonstrably works - Japan's system costs less than half what ours does per capita, with better outcomes.
The motivation of insurance is to keep the cost of treatment less than the income from premiums -- it doesn't have anything to do with how healthy people are.
> the motivation of insurance is to keep the cost of treatment that they cannot avoid liability for less than the income from premiums
Sometimes that aligns with keeping people healthy, but other times that aligns with women not getting routine prenatal screening and thus increasing the infant mortality rate.
Unfortunately, they probably won't want to. People frequently change insurance, so the most likely outcome is they'll have to pay for an expensive treatment, but never see the savings.
This is currently playing out for some new expensive new gene therapies.
For the mentioned new gene therapy treatments, people have been asking congress to come up with a new model for how to pay for treatment. Here's a recent opinion piece by a Louisiana Senator where he lists off the proposals he's heard: https://www.statnews.com/2019/06/12/paying-for-coming-genera...
A testament that the demand for healthcare services is not only about health results. Albeit there are grave challenges about the way Kaiser or HMO's have supposedly better health results.
We just raised a series B and are hiring engineers (very remote friendly)!
That was the entire point of the article (written by the founder). What was the point of this comment?
“To succeed, an offering must create value for all entities involved in the exchange—target customers, the company, and its collaborators.”
I believe the point of this comment is 'do market research before quitting your job'. The author could have learned their presented points while operating this as a side project concurrent to their existing job.
This. It is very hard to get real world experience. $40k is cheap compared to a bootcamp that won't teach him even 1/10th of this life experience.
Btw, actual figure is not $40k, but one should consider it close to $100k+ if you factor in that he used up his "make my parents support shelter, food, living expenses, car". Depending on the cultural background, they wont be doing this many more times. If you consider how much he lost on the (bay area) salary he otherwise would have earned, add another $100k
"try to use other peoples' money next time (smiley face)" A++++ douchery. Nicely done.
In the story she describes the project as "fun" before he asks what she'd pay. At that point he probably should have picked up that she was being kind and was not in fact seeing a product she was interested in buying.
He probably could have figured that out by asking doctors before he built the thing.
Which is the entire point of the article, made very explicitly.
I think he should target not WebMD audience, WebMD doesn't provide searchable and visualizable database of trials and outcomes, but more professional crowd: research institutions and universities, government, pharma corps, pharmacists, hospitals, and charge some subscription fee (e.g. $200/m), and it would be totally different story.
He started a business in 2017, and closed the doors in 2018. What?
Recently, I was contacted by a person who told me he saw one of my videos on YouTube about Ycombinator (it had 50 views!!!), he had to meet me in person. We met a couple days later. He was a very smart guy with an impressive resume.
He quit his job in equipment manufacturing to pursue entrepreneurship. He was a former USC student, so naturally he traveled back to California, rented a small room where him and his business partner churned on their idea. It was a sort of classified for colleges.
Not a terrible idea in anyway. He knew the college life so he must have known things I didn't. I told him he should have tested his idea before quitting his job and moving into a whole other country where he had only been a student. He showed me the website, and it was obviously made by someone who was learning React. There is no need to go fancy when you are still testing your ideas. But there was a problem.
They were paying thousands of dollars a month to keep this barely functional app running.
This is something I see a lot of young people entering web development are doing. They get beefed-up cloud services that eat up a good chunk of their money. Most people think this is the regular cost of being online. It's not! A year later, the domain name doesn't resolve either.
In the story, OP alludes living with his parents. I imagine to save money. But then there is $40k. I hope that it wasn't mostly on the AWS cost. But he gathered valuable data that did cost money.
Don't shut down the website. Keep it running and make the data available in read only mode and add a donation button (alternative to ads). It should cost $5 a month to host on linode or digitalocean. Don't let the money you spent go down the drain.
> “Hmmmm,” she said, picking at her fingernails. “Not directly. Of course I always have the best interests of my patients in mind, but, you know, it’s not like they’ll pay more if I prescribe Lexapro instead of Zoloft. They won’t come back more often or refer more friends. So I’d sorta just be, like, donating this money if I paid you for this thing, right?”
I've never seen such a concise indictment of the American healthcare model.
Convince the government your product is a benefit to their doctors and by extension their citizens, and a good government should pay you for it after a proper trial.
Instead he walked into a situation where the incentives are utterly fucked by an atomised, privatised, and consumer-oriented healthcare system.
I personally suffer from some sort of headache disorder (symptoms are a mix between migraines and cluster headaches, I've had different diagnoses). I went to a neurologist every 3 months for 2 years, at $200 per 30 minute visit, and usually less than 10 of those minutes were spent with the doctor. Every time he made some seat of the pants guess as to what to do next (adjust the dosage I was receiving, or change medications). In the end, I never found anything better than taking a bunch of ibuprofen at the first sign of a headache, and that was something I figured out on my own.
I wouldn't pay a dime to see a comparison of generic and name brand NyQuil, but if a trustworthy source offered me a personalized report on what medications I should be looking at based on my headache symptoms, and had studies to back it up, I'd gladly pay $100+.
Better data aggregation is desperately needed in medicine and sadly I think the creator has walked face first into the horror of cost merely to access clinical trials. Plus, the cost of paying contractors to extract the actually useful information from those trials.
These are key reasons why Open Science and Open Data are so critical, to produce tools like this one. Sadly I don't think there is a "Startup" level of money available for it even so.
I'm sure there is a researcher out there who can find hosting for this service, and maybe continue to keep it up to date with new trials.
One way to look for a similar business is examine.com (disclosure: I do not use them but read their write ups and articles about them on indie hackers-like sites and podcasts). It is a site that gives information about supplements. The supplement landscape is much more wide than that of painkillers, they are hard to compare, and supplements are usually chosen by consumers themselves, and supplement information is unlikely to be treated as a medical advice.
At their scale, they can use the data to drive their costs down, and can build a business case for paying you something.
However, insurance companies are perversely cost conscious, because they are paid as a percentage of medical costs, not as surplus between premiums and costs.
Walk into any physician office and ask them how many faxes they get everyday from pharmacists requests the Dr. change their prescription. Then ask the pharmacists what triggers them faxing requests to the Dr.'s requesting change in therapies...hint: insurance companies dictate to the pharmacists their recommendations for Docs.
Edit: I should have noted the "tips". When a pharmacist faxes a Doc a recommendation the pharmacy gets a "tip" and if the Doc actually makes the change, then the pharmacy gets a 2nd "tip." In my experience the Doctors have no idea pharmacists are paid by insurance for recommendations and changes.
Although the typical SF startup drum is about changing the world, it takes a lot more than just a good product to do it, as you've found out, and especially in healthcare, where the barrier to entry is extremely high.
Also, your doctors forgot to mention that Pharma companies actually pay them (indirectly) for prescribing a certain drug. Your software was not just not useful to them, it was actually telling many a story they did not want to hear. Sure, Tylenol might actually be #3 of the list, but their sales rep is a real friendly one, and next time they go out for dinner, it would be a shame to have prescribed something else...
Anyway, now you know. Isn't that an amazing feeling that you've learned so much that others would never dare, and it had only cost you $40k? Keep going, good lessons are worth it!
p.s. Just because your original iteration of the product was not needed by doctor and not valuable enough to be paid by the consumer, it doesn't make it useless.
Perhaps if you made it the #1 on Google, consumers would notice, and use it, then you could use it as a lead-gen for other products, and sell that space/time/data.. whatever.
The funny thing about startup ideas, your first iteration is probably almost always wrong.
But this part:
> “And that isn’t worth something? Prescribing better treatments?”
> “Hmmmm,” she said, picking at her fingernails. “Not directly. Of course I always have the best interests of my patients in mind, but, you know, it’s not like they’ll pay more if I prescribe Lexapro instead of Zoloft. They won’t come back more often or refer more friends. So I’d sorta just be, like, donating this money if I paid you for this thing, right?”
So, what's the obvious next step ? Prescribing things that won't work so patients keep coming back but not badenough that they flee to another practice ?
If such a product existed I would use it continually and challenge my doctors when they contradict it. If patients aren't educated and care, health professionals won't care enough to purchase it.
I do like the quip at the end about lacing up all birds and jumping on the bird scooter. This makes me think how badly I need allbirds to join the sharing economy...how great would it be to have allbirds scattered all around your city sidewalks so you have a paid on demand when you need them without having the overhead of actually owning them. Its not sexy and doesn't scale well, ticking all the VC boxes.
who has a very clear understanding of the margin of the various products in the shelf. Maybe competent but certainly not unbiased.
>Maybe competent but certainly not unbiased.
I suppose they have a bias in the form of legal liability and professional licensure which guide their recommendations. That is, they can be sued for negligence, malpractice and otherwise potentially lose their license to practice. Tech startups are notorious for placing profits before users, and lack accountability in the same way as licensed professionals. In a worst case scenario they fold up shop and move to the next industry to "disrupt".
I think it's fine motto for startups that are going to be fueled with angel money.
For bootstrapped startups I think it should be: "Make something people want (to pay for!)."
Why are you in pain? have you had a lot to drink recently? What kind of painkillers do you usually respond to? Why not simply combine them? Are you going to keep track of all of these predicates for each query?
This guy's mistake was not that he mismanaged a company. His mistake was having a shitty idea and being utterly deluded about its value.
Admittedly, this is Survivorship Bias, since the overwhelming majority of startups fail. As PG said: "startups don't fail, founders give up"
The fatal flaw here was building a product "in secret" and not launching soon enough.
But overall, the goal of health care as a commercial Endover is to keep you sick (I.e., not healthy, since then you will not spend, and not dead).
So the goal of selling to health care professionals is actually the opposite of your goal of helping patients.
However, I would be on board with saying that when situations get dire, risk management begins to diverge incentives between patients and providers.
And in the market consumers revealed preference is for $1000/yr treatment over $20K vaccine, or equivalent multiples. When a new vaccine is invented, people balk at the price and complain it shouldn't have been created.
Far more investment is in "managing" conditions.
There are easy businesses, and there are hard businesses. Your business fell in the latter category, but your tactics to succeed were based on easier businesses. I still think you could have succeeded if you persisted and weren't so eager to get sales and play startup.
I think the general takeaway is:
1. have an idea 2. make some mockups with plain HTML/CSS 3. run it past your target market to see if they'll pay for it 4. if so, build it
This works even better if your target market is willing to fund the development costs.
I still feel like there's an idea somewhere in here – maybe with medicine, or maybe with supplements, nutrition, etc. You could position yourself as a knowledge base and use the data as a marketing funnel for related products. Examine.com has an interesting business model along these lines. (If I was about to start an anti-anxiety medication, I'd sure as hell pay to know which one worked best.)
I'm currently working on an idea that has no business plan in the near future. It's a cryptocurrency. I hope to make money from in the future by either selling my stash or providing software and services. But in the meantime, I'm running it as a fun/side-project. The project is picking up steam. I've seen interest growing, some coin trading on an exchange.
I don't expect to make money soon. So I do everything myself. I spend little money on the project, 3-5k per year. I enjoy working on it and learning. It helps me learn not only about my project but also about other cryptocurrency. I think that I will make some money, eventually.
1) Tried this in a different country. Healthcare in the US is very different from Canada or the EU. Maybe it would fail elsewhere too, but its a completely different marketplace. I have a hard time imagining a Canadian doctor saying "This is better for my patients, sure, but will it help my bottom line?"
2) Worked on a solution that didn't involve so much labour. It was data processing, right? Might be a good fit for ML. (God knows it's being used for everything else.)
That being said, I'm in awe of anyone who goes out on a limb like the author did. He didn't just try an idea, he invested in it. And then he had the courage to tell us about his failure. Bravo!
Was this analysis written up somewhere? The author links to Cipriani's study in the Lancet but not to their own.
Find a problem, find potential buyers for a solution, figure out what they say they're willing to pay, determine other design constraints, rough design a solution matching the constraints (IE that can be sold for what people will pay), create a business plan, including estimates of how much funding is needed and a method to get that funding, build a prototype, pitch the product to faculty as though they were VCs/banks/other funding sources.
If you're trying to make a product you need to know how it will sell. If you're trying to run a business, you need a business plan! If you can't make money you're better off planning to register as a charity, and your budget will need to take that into account.
This product could maybe have been a good business, if it was aimed at someone willing to pay for the data. Mainly, the insurance companies. They want to make money, so if they could profit by denying coverage of drugs that are less effective they might pay for it.
This could also have been a good charity. Providing helpful information is what educational charities do. Making a nonprofit would save on costs, and might have been enough to make this viable (though certainly not a lucrative money-maker).
Please consider approaching some academic institutions, or some medical professional associations to see if they would be interested.
While I doubt any will have any money to pay you, they will almost certainly be able to host this for free, probably indefinitely. You just need to find one interested researcher.
It's hard to tell exactly what it is you made, but informative, interactive, visualisation tools can have really powerful public health effects if marketed well.
Guy did everything wrong and blames his failures on others. Typical.
There was this giant thing called healthcare, and its main purpose is applying well known treatments to people whose symptoms more or less indicate that treatment might somewhat improve their condition—trillions of dollars are earned trying to do this.
What problem are you trying to solve? Googling "what is the best pain killer" is a very "average user" question. It's also 99% useless.
Pain killer for what? Headache? Muscular pain? Nerve pain? You have a partially severed limb that's bleeding profusely? Oh you mean an OTC pain killer?
Ok do you have stomach problems? Liver problems? Kidney problems? Diabetes? "Oh I don't know" oh well...
"But I'm just trying to get the best drug for your situation" yeah, that doesn't exist. And there are personal preferences (doctor), personal preferences (patient), limitations, marketing pushes, etc.
Finding out drug X is more efficient than drug Y in 5% is just background noise. Hence why the doctor didn't see much value in this.
What would be valuable is finding which drug X to try if drug Y didn't work or can't be used (though doctors usually have that in their heads).
His problem is that this product neither increases the revenue of the practice nor does it reduce(or remove) any existing cost. Without that it's a cost center without clear benefits.
> It had been a bit of a working assumption of mine over the past few weeks that if you could improve the health of the patients then, you know, the doctors or the hospitals or whatever would pay for that.
No. Or at least you better show clear benefits becuase EVERY medical product makes claims that they improve patient health or patient outcomes.
What he needs to do is figure if there is some costs that are currently incurred by hospitals and practices that could be reduced or removed by using his product. If he can do that, he'll get sales (and in fact, there is a lot of money in 'population health' and related fields). Otherwise, he's got nothing.
So you would search like "Mirtazapine", and then it would create a word-graph where the drug was in the middle, and it would be connected by things like:
Mirtazapine --> Reduces --> Anxiety/Depression
Mirtazapine --> Increases --> Hunger
It was meant to be a tool for clinicians and prescribers to be able to enter a medication and get an easy overview of its effect.
Do you have any interest in pursuing this further?
I know a few investors who I think might still be interested in this.
Or maybe you could have been a small acquisition target for Google to incrementally increase their search superiority. I imagine they would be able to monetize eyeballs with searches like these at (very) roughly 100x the rate of WebMD.
They usually just put me on a concoction of various pain killers (e.g., migraine specific stuff like sumatriptan). These prescriptions actually work great. But so did OTC aleve/advil/tylenol too.
The problem was that I didn't really care for more effective pain killers. What I really want is to fix the root cause and stop having these headaches.
So yea, I can totally see why something like this would fail. If the solution is still qualitatively the same, a small percentage improvement is just micro-optimizations that most doctors and patients won't care much for.
Doctors have suggested it before but since I am borderline I don't really need to be on meds yet. I think it sounds worse than needing to take pain killers occasionally.
Keto diet supposedly helps drop the bp too but diets are really hard to maintain and stick with.
Selling anything to medical practices is remarkably difficult, due to the difficulty of getting a meeting. They may have to lose $250 in billable time to meet with you, and they are bombarded with sales calls from everybody under the sun. Getting adoption is worse, with overworked staff actively hostile to change. I watched a friend sink his heart and cash into a medical research survey system only to find out how impossible of a market it is to break into.
And it is a land war. Selling into large companies is hard fought, but possible. The long tail is practically impenetrable for a software system, not when they could allocate capital to revenue generating marketing, equipment, and staff. I worked at trying to market a low priced medical supply item into a long tail of allied healthcare professionals and found that there is virtually no network effect. That is to say, people who share the same medical profession have very little interconnected outside of a very local level, and the work they perform is so physically and mentally draining that they don't really want to spend a lot of time online after hours talking about vendors, or talking with others in their field at all. Durable medical equipment and consumables sales are really driven by incumbent field sales reps more than ecommerce, even still in 2020. Land war.
Look at how difficult a time big tech has had taking on electronic medical records systems. Technology is not the bottleneck.
There are plenty of health tech startups finding traction, and I do believe medical professionals want to continually improve themselves and their practices with whatever tools and information is available to them. The fact is, $40K isn't enough capital to win a land war, no matter how great the solution is (and its looks great). I'm sorry OP had to find that out the hard way.
PS. There is a growing array of health focused startup accelerators that can provide seed money, but more importantly the expertise to navigate the sales and regulatory challenges unique to healthcare.
But another problem is lacking the conviction and traversing the idea maze[0]. Several comments here have provided good paths for possible methods of execution like offering a free API and seeing who is using it.
[0] Summary of Balaji's concept here: https://cdixon.org/2013/08/04/the-idea-maze
Why GlacierMD? You know glaciers tend to melt these days.
You'd be surprised that the dumb and not so noble idea of your buddy with Doppelganger could gain much more traction and make much much more money than your idealistic thing... this is usually the thing.
People are attracted more to fun than to pragmatic usefulness.
You feel almost like a martyr who wanted to save the world, but nobody understood you. I am very sorry and I see great value in your idea, but looks like people don't want to consume that.
Indeed, why would a medical practice want to completely cure the patient and never see them again?
Really fun read and with lots of useful references.
At least you gave it a go; even if it didn't work out, you don't have to wonder "what if?" for your entire life, and I think it's pretty cool that you built something you were passionate about; at the very least, stuff like this is pretty good resume fuel, right?
Wow. That's not how any of (especially 'for profit') healthcare works.
I think it's a good heuristic that you definitely shouldn't build a product if you rely on getting money from 'some profession or some institutions or whatever'. This indicates that much more research into your future customers and motivations is needed before you attempt to create business.
If the author reads this, do not be like Google, don't give up, just pivot. Yes, I think it's Brilliant Startup Idea that could be back in a few months better than last time. :)
Pretty similar to https://www.ibm.com/blogs/watson-health/hospital-pharmacists... even.
Product sounds fine, but not selling them 1 by 1 to doctors.
I think this is literally why salesmen exist.
One of my good friends is a real estate agent and he is helping me find a house. My job is to complain about every place we see. Every single time he finds a way to spin my complaint into a positive or something constructive. Roof leaky? You can get it fixed for $X dollars and we can work that into an agreement.
For a great salesman there is no objection that cannot be overcome.
Also, selling houses to people who did not have enough money for a house was the basis of an entire financial crisis. It looks like creative salesmen found a way around that.
You can argue some extremes if you want but exceptional salesmen are expected to sell ice to eskimos and sand to arabs. And I would expect them to handle the pretty simple objections raised in this article, especially those around price concerns.
Are there people that don't know acetaminophen is for headaches and ibprofin is for muscle aches?
Actually taking both together is more effective. Take one tablet of ibuprofen and one of acetaminophen.
Admittedly, side projects can grow into something over time, as you evolve the idea. But there is zero reason to quit your job for such ideas.
So, even if it were financially successful, it wouldn't likely survive the competition.
"Doppelganger has created value for the customer but not for the company."
Isn't the value for the company created through the value for the customers? I.E. you take a percentage of the value for the customers as the value for the company.
What would be an example of creating value for the company?
Maybe he just tried to sell to the wrong people, maybe pharmaceutical companies could have been interested, maybe re-packaging the product differently...who knows...
The fact that it could provide real value for many people already sets it apart from most ideas.
There just isn't a product you can sell here.
Like as a United Healthcare sponsored portal that helps you pick OTC drugs, or similar. Those guys love stuff like this. And I've actually worked in this space so I'm not just making things up.
With that said, the way to do that would be to make it a destination with a growing userbase and then approach them for partnership. Which would have cost money and taken a while to ramp up, so you'd need some runway. Also it's not a strategy to actually get rich, that wouldn't lead to tens of millions in revenue or valuation probably.
But it was in fact a good idea and there were some paths forward you could have taken. Had you done so there's an excellent chance you would have discovered some interesting and perhaps lucrative product extensions along the way.
This story is fantastic, honest and educational. Clearly the author is smart, yet this doesn't prevent him from making some stupid mistakes. I know it is obvious, but this story is very educational.
Thank you for writing this.
This sounds like a scam or fraud.
Maybe try selling the tech asset, you might be able to more than recoup your investment :)
Definitely a questionable move to quit their job for a business with no market research, but I enjoyed the second-hand learning experience.
you could make a "reference database" out of it and charge for access to the latest version
As for the medical industry: the idea is to keep people sick as long as possible. You can't make money from people who get better or people who die.
yeah, right.
If you don't realize what's going on, that companies pick their founding myth based on which story sells the best rather than which story occurred on the earliest calendar date, it's very easy to get a false picture of how good startup ideas originate.
It was always a business-first mindset in an area of high growth.
That one short video filmed in 1997 should be a masterclass by itself.
Such an impressive list of deft moves that he made (in a range of different areas) one after another between '94 and 2000 to set Amazon on a path to meteoric growth.
I'd also add that in his stints at different firms pre-Amazon he was quite clearly an outlier among high-achievers.
For example, a recent Musk biography spent maybe a page on the part where he became successful, and a Jobs one just a paragraph or two.
I'd like to see a compilation of these details.
In a certain harsh sense, if you're gullible enough to believe in those stories you're probably not ready to start your own business.
It's hard to say what exactly can be learned from such stories.
Uber 'bought' their market - it might not even be viable when they run out of dumping money and have to raise prices.
I think there might be some opportunity in this guys startup with some pivoting.
Also I think there was some funniness on the feedback: Doctor used 'cost' as an excuse, but it may have simply been that the product was not hugely valuable.
Maybe for common drugs it won't help, but there are a zillion drugs out there, maybe doctors want a good reference.
The revenue model he didn't articulate comes from the drug companies. If Doctors used his tool, drug companies might pay for it in some way.
Finally, I have to say 200K lines of code sounds like a lot ...
It just _has_ to be satire, though!
He had an idea, that seemed good, and invested $40k that apparently he could afford to loose. He made some mistakes that could be avoided in hindsight (like everyone trying something new). The dreams of being billionaire and stuff is just to make the reading fun (it did for me).
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
Thoughtful critique is good, but this post breaks the guidelines and falls outside the kind of thing we're going for here. I know it's the internet default generally, but please be more thoughtful when posting comments to HN, especially about other people's work.
...and that is kind of why you hire a doctor rather than a computer who has looked at some studies...that isn't really what medicine is.
More generally: this just sounded like a terrible business model. Consumers and probably doctors would value the end product but are you going to get back the money spent on contractors manually going through these studies...no. I can see this making sense for a larger company but these kind of projects are terrible for one guy alone, they just tear through cash.
You also don't seem to have asked how doctors/insurance companies actually look at this data either. I am sure I have no idea but the first question should be: is the user looking through these studies manually? Did you survey doctors: how many studies do you look at a week? Do you look at them before prescribing? Etc...and probably do this before you build obv (and try to get money upfront).
Too many people come up with a great idea and then hope for the best when it comes to market fit and actually getting customers and achieving profitability.
Silicon Valley doesnt necessarily suffer from a lack of engineering talent as so much a lack of marketing talent. Far too many ideas go to market without any understanding of the actual market. But hey, people get to say they were a CEO for a few months and that sounds great on their Tinder, I mean LinkedIn profile. Right?
10 meetings is inadequate. You should be willing to do 1000+ meetings if you really want this to fly (or prove it cannot).
You could also explore other business models (ie. rather than charging the practice directly find another way to make money).
Even if it fails, valuable experience, not a waste. Cool idea, and admire your initiative.