Some of Nashville’s successful (and now former) health care entrepreneurs share mistakes they made in the early days of building their company.
HCA Healthcare’s Dee Anna Smith, right, talks about what she learned as an entrepreneur with one company inside of another at the Entrepreneur Center on July 12, 2018. Smith and (L to R) Angela Humphreys, Dan Hogan, Michael Brody-Waite and Chris Booker shared their experiences. Photos/ William DeShazer Photography
No two start-ups take the same path: the obstacles, successes and lessons are as distinct as the mistakes and and decisions made by founders.
Nashville is booming with young health care companies looking for their niche and some seasoned entrepreneurs, along with a corporate attorney and investor, doled out their hard-won lessons and advice on getting through the early-stages of launching a company.
Read some highlights, and lowlights, from Chris Booker, Michael Brody-Waite, Dan Hogan, Angela Humphreys and Dee Anna Smith from the “what healthcare entrepreneurs get wrong and how to get it right” panel at the Entrepreneur Center on July 12 to kick off the 2018 Project Healthcare class.
Dee Anna Smith, CEO of HCA Healthcare’s Sarah Cannon Cancer Center
Smith started and sold two companies that she and a cofounder bootstrapped.
“He was in it for 20-times what I was — we had our net worth on the line.”
Smith, an accountant by training, said if you’re not financially-minded then find a partner or co-founder with that strength because it’s critical to achieving success.
The accountant background “has saved me 10,000 times… I could make up for all my stupid mistakes because i could pivot somewhat quickly financially. (I understood) the money and how you’re going to make it or not.”
Her advice is “recruit and retain people smarter than you are.” She likes being surrounded by people who know more than she does. And “know when it’s time to pivot.”
Michael Brody-Waite, CEO of the Entrepreneur Center and founder of InQuicker
“Get the first customer any way you can,” he said explaining his partner’s father happened to run a hospital. In the end, the first three customers of InQuicker were not the target audience for the product.
He built a database with 40,000 people he emailed to try to get a meeting. His response rate? About 1 percent, but it was enough that he thought the value proposition was resonating.
Once he got some meetings, he could count on about eight to “throw you out,” two to say that’s cool, one of whom would sign a contract.
“It was agonizing. I found out you could automate mail merge after,” he said.
Brody-Waite underestimated “how quickly the market would come for me” when companies of all sizes began to get into the online scheduling space.
“For me it was, I never want to sell, I don’t want to exit, I don’t want to raise money, but now I have to raise money” because that’s best for the company over the next five to 10 years. “I was really naive and thought it would be a lifestyle company disguised as a healthcare company and (I could) wear flip flops all day.”
Brody-Waite’s advice: Don’t believe in the hero CEO paradigm.
Dan Hogan, executive chairman of Medalogix
Hogan said a big mistake was that he didn’t go out and validate his assumptions about the product — the thought everyone would think about the problem like he did. But the initial product didn’t hit the bottom line, which was critical to potential clients.
It took 25 months before the company signed the first paying client.
“Once I started listening to the client base, we signed nine clients,” he said.
Hogan and his team had vision and energy but growth in the beginning was slow. They continued to prepare for the future by finding and vetting the people they wanted to hire when they could. But the challenge was keeping a relationship strong with the prospective hire when the open spot could be way down on the horizon.
Hogan’s advice: Get good at the pitch, and hire smart, quality people because that’s visible to investors and customers.
Angela Humphreys, chair of Bass Berry & Sims’ healthcare practice
She’s not an entrepreneur but she’s guided a host of companies through quite a few pain points.
“Your initial idea may not be your end product. Be willing to pivot along the way.”
Remember it’s a business decision on both sides of the equation: “Plan for your divorce…(write the contract) then put it in the drawer and never look at it again and have a great working relationship.”
Chris Booker, partner at Frist Cressey Ventures
Have fortitude and stamina: Booker and his colleagues see about 600 deals. They invest in three or four.
“Mathematically — forget politics — according to an Irish betting site, it’s more likely Trump is will be impeached in September than you are to get investment from us.”
Booker said often investors spend too much time trying “to save face” on investments that aren’t doing well when they should be focusing on the entrepreneurs that are doing well.
His advice? Keep going and go find a co-founder. Companies with a co-founder do significantly better.