Covid-19 – What is a Healthcare Founder to Do?
By: David Heenan, Venture Director, Cone Health Ventures
Thursday, April 2nd, 2020
Life was going quite smoothly. You were looking forward to wrapping up a couple pilots, you had some follow-up requests from an RFP moving through your pipeline, and you were closing in on a term sheet for your next capital raise. You took a couple days to spend the holidays with family and friends, then came back to work and began to read headlines about people in a town you never heard of (Wuhan?), on the other side of the world getting sick. You continued to work as you always did, trying to roll the boulder that is your startup up the next hill in front of you. It’s not easy, but it is you. Starting a company is a labor of love and when things are moving forward, it is some of the most fun you’ll ever have.
Then news started rolling in about people getting sick in the state of Washington. A town is locked down in New York and people start getting nervous. Calls start getting pushed off, email responses start lagging, meetings begin to go virtual and all of your trips get canceled. Suddenly, we are all self-quarantining and progress stops. Your labor of love turns into sleepless nights and your mind is consumed by runway (or lack thereof), your employees and how the best laid plans of mice and men often go awry. This is uncharted territory and there is no playbook for being a founder during a global pandemic. There is no strategy for the unlucky healthcare startup founder whose customers are completely consumed by fully responding to this crisis.
When I was growing my company several years ago, it was the hardest thing I had ever done…and that was during a period of unprecedented economic growth and innovation in healthcare. Now I work for an innovation catalyst inside an integrated health system. I get to see behind the curtain and understand, first-hand, the need to balance what is urgent today and what is necessary to innovate and improve care in the future. I feel for you, healthcare founders. This is tough, but not impossible. I am posting today to share with you, my compadres in creating the future, a few tips/insights that might help you mitigate the stress, and even thrive, during these trying times.
First, breathe. This is the time to step back and think. Don’t panic. Office buildings are empty, conferences being canceled, and all those group whiteboard sessions have turned into zoom calls. Yet, in spite of all this, goods are still moving, products are still being deployed, and deals are closing. In short, business is continuing – and it is possible that yours will, too. So, while you are stuck at home, take a moment to assess what is actually essential to your business. Founders often obsess over the minimal viable product (MVP), but have we stopped to think about what is a minimum viable business (MVB)? Do you really need that lease? Have you gotten adequate value out of all those conferences? Could some meetings be emails? This a great moment to stress test all aspects of your business, your vision, and your life. Think of the 80/20 rule (if you don’t know it, learn) and take this time to identify the 20% that delivers the most value, because once the fog lifts the pace will be faster than ever.
Second, adapt and go lean. When investors and organizations encounter turbulence, they retreat to the fundamentals. All the excesses they indulged in a few months ago may now seem superfluous, even trivial. Investors are watching. They will be looking for those companies that were able to weather the storm by making the tough decisions early enough to make an impact and adapt to a new normal without losing too much momentum. This is your chance to show off your entrepreneurial bona fides and differentiate yourself from those that hesitated in the face of a changing landscape. Customers are watching too, and some will be in need of new service providers on the other side. This is the opportunity of a lifetime for those agile enough to capture it.
Third, invest, invest, invest. Invest in yourself, invest in your employees, invest in your customers and your competitor’s customers. You probably can’t remember the last time you had so much solitude. Meditate. No more commute? Use that time to exercise. You are no longer eating on the run so take advantage and eat healthier. As a founder you are the engine that powers your machine and downtime for preventive maintenance can make a world of difference down the road. If you are the engine, the rest of your machine is your employees. Take this time to invest in them with training, development, and strengthening of relationships. They are anxious about their jobs, their health, their world…focusing on personal development can be a welcome distraction and will ultimately add value to your business. Invest in customers too. It might not be the right time to push for that contract extension or the upsell on new features, but that does not mean you can’t engage. They will remember who cared for their business and people and not just their cash. They will remember character and that will create stickiness. I can almost guarantee that some of your competitors are sleeping on the job, so take advantage of this, reach out to their customers, don’t sell them, just offer support. They will remember.
Fourth, prepare. This means start stockpiling content, designing your marketing campaign, trying to boost vanity metrics, culling your target list and then expanding it, revamping your pitch decks. There are probably a million things you can do that don’t require interacting with any people or getting the attention of customers right now. Time is a rapidly depreciating asset, if you let these moments go by while you’re glued to the latest Cuomo press conference then your time will be wasted. There will be winners and losers on the other side of this and the winners will be the ones that didn’t get lost in the moment but tried to peer around the corner and prepare for a changed world to come.
Fifth, be transparent and forthright. Your employees are anxious, your investors are feeling the pressure, and your personal relationships, partners or friends, are likely scared and uncertain like everyone else. Pretending everything is great as your cash dwindles away won’t help anyone and will only make you look foolish. First of all, how can anyone help you if they aren’t aware of your challenges? You will also find out who in your life is a fair-weather friend and who deserves the investment of your time. Trust is the most important commodity in relationship economics. Trust is enjoyed during good times but is lost and won when the going gets tough. Stock up now and let it appreciate over time. I promise it will be useful.
Finally, this is why we do it. It’s during times like these that innovation in healthcare really matters the most. This is a pivotal moment in our industry (and our world). Everyone’s eyes are on healthcare. Digital solutions have become a must-have instead of a nice-to-have. For every story I have heard about sales cycles screeching to a halt, I have heard even more stories from startups who have been asked to fill a vital gap. From producing masks to spinning up tele-medicine or remote monitoring capabilities, entrepreneurs are getting the chance to show-off what makes them different from the rest. Firefighters don’t wish for fires, but they do enjoy rising to the occasion. Entrepreneurs did not ask for a crisis, but the bigger the challenge and the faster it is approaching, the better the fix. I never feel more alive than when helping society avoid unnecessary suffering and death. Now put on your founder’s cape and go take on the world… remotely.
David founded Aces Health in 2015 and successfully exited the company in 2018 to manage BrightEdge, the philanthropic impact fund of the American Cancer Society. In 2019 David joined Prinnovo, which establishes, staffs and manages Health Venture Offices for health systems, and currently serves as the Venture Director of Cone Health Ventures.