How do you start a company as a physician?
Many physicians are looking to start new ventures. In this presentation, Dr Michael VanRooyen discusses his esperiences building for-profit companies as well as his ventures building humanitarian solutions.
Michael VanRooyen MD MPH FACEP
Dr. VanRooyen is the Director, Harvard Humanitarian Initiative as well as the Director of the Division of International Health and Humanitarian Programs, Department of Emergency Medicine, Brigham and Women's Hospital. He is also an Associate Professor in the Department of Global Health and Population, Harvard School of Public Health and an Associate Professor of Medicine, Harvard Medical School.
Dr. VanRooyen has worked extensively in humanitarian assistance in over thirty countries affected by war and disaster, including Somalia, Bosnia, Rwanda, Iraq, North Korea, Darfur-Chad and the Democratic Republic of Congo, both as a physician and a policy advisor with numerous relief organizations, including CARE, Save the Children, Physicians for Human Rights and Samaritans Purse International Relief. He has served as a special advisor for the World Health Organization and as a member of the UN Inter-Agency Standing Committee's Health Cluster. Domestically, Dr. VanRooyen has provided relief assistance at the site of the World Trade Center in New York on September 11th with the American Red Cross and also helped to coordinate the American Red Cross public health response to Hurricane Katrina, sending over twenty physicians from the Harvard system to hurricane-devastated regions.
Dr. VanRooyen teaches courses on humanitarian operations in war at the Harvard School of Public Health. His textbook, Emergency Field Medicine, is considered one of the key reference texts in this area, and he has authored over 50 publications related to international emergency medicine development and humanitarian assistance. Dr. VanRooyen has served on numerous advisory panels and boards, including International Rescue Committee, the National Academies/GAO evaluation of mortality studies in Darfur, and is chairman of the Humanitarian Action Summit. Dr. VanRooyen has also been awarded the Reader's Digest Health Heroes Award, the Raoul Wallenburg Foundation Humanitarian Award, the Hippocrates Society Humanitarian Award and the AMA Pride in the Profession Award. He was given the University of Illinois Alumni Humanitarian Award and was featured as one of two US physicians in the American Medical Association's publication entitled Caring Physicians of the World.
This video is from the Medical Fusion Conference in 2009.
Thanks Greg, and thanks. It's great to be here. This is new for me because, as Greg, mentioned I always talk about international health issues or big problems in global health and I've never really talked much about this. So when I thought of the type of work which I usually do in the humanitarian front and the type of work I do in the entrepreneurial front, I realize that maybe staying at the Wynn is the difference so maybe I'm gonna lean more towards the entrepreneurial front. Instead of staying in some cheap hotel in Rwanda. This is much nicer.
I wanna talk a little bit today about... I won't get into numbers. I think that the notion of starting up, first of all how many people have started in LLC? Okay, so lots of people. So the notion of starting up a company really comes or a new venture or something of interest really comes out of curiosity or sometimes frustration and sometimes looking at an opportunity that just kinda lands on your lap. Of course, opportunity favors the prepared mind so it's kind of combination of knowing issues in your industry and being open and interested in things that could affect that or change it and that's kind of what brought me into almost every venture that I've involved in.
You know certainly healthcare's changing and maybe that's one of the reasons why there's a lot of people in the room. Anyway, to look at diversifying their own interest. And there's a lot of changes in the way healthcare is moving, we'll talk a little bit about that because it provides opportunities and some risks in our current fields maybe. And then major movement towards health information technology and emphasis on quality and standards and further opportunity to look at ways that we can affect that climate and maybe start businesses as well, whether it's in medical devices or alternative manpower task shifting which we'll talk about in a few minutes.
Today I want to talk briefly about kind of a few macro trends in the field, discuss opportunities as I felt it for medical entrepreneurs, and really pepper it mostly with some anecdotal experiences however valid or not that come from me, and some lessons learned, pitfalls, perils and a few examples that might, again.
My personal background is that my main interest is actually in humanitarian response, but it has actually, out of all the startups or entrepreneurial ventures that I've done, this is the most challenging, difficult, complicated one because this work is really 'war and conflict' so I work in humanitarian organizations to help build their capacity to work in 'war and conflict' which is kind of funky field. It's a little bit of a difficult field to get into but there's a tremendous opportunity and I kinda treat this... my staff always thinks that I talk like a business person and I think, too, I treat it as a business and I talk about service lines and I talk about clients and I especially talk about venture capital, so the way when we want to look at you know how are we're going to define the service needs of the children born of rape in the 'Congo'... some really crazy, difficult topic that we wanna get to and we wanna define that need, but one of the things we have to do is research on the market, find out who's out there. Find out the needs. Find out solutions and the way to do that is that I have to raise essential venture capital to do it. And of course I don't actually pay people back in money, I pay them back in good things we do, I hope. But it is been a very aggressive, interesting, highly mobile pursuit. And then as a result of that, it just spawns issues of curiosity and when I first started creating little companies, some stick to the refrigerator and some slide down and fall in the kitchen floor, and some work and some don't work.
One of the first ones was IBEX which is a little apple thing, and that really came out for two reasons. One is that the joint commission and CMS for making major recommendations about medical documentations 10 years ago was really stressing physicians especially emergency medicine that we were able to document all these crap and get paid for it; and some Mark Crockett who is a resident at that time at University of Illinois in Chicago where I was a faculty member. We were sitting at the back of the room and basically being bad participants in this sort of conference that they were putting on saying like: “This is crap, we can't do this. This is ridiculous. We can do this better.” And so really passing each other back before though writing furiously about what electronic medical record system would look like. And by the end of not paying attention for an hour and a half at the joint commission conference, we thought of a company and then we got in phone calls and people put it together and started this company. And you know the genius behind that company is really Mark. My only genius behind it is actually connecting people who really knew way more than I did and so which is kind of my role in that. Mark Crocket really was 'masterful in it' and started the company. And as that started, it really brought is into this new world where we're really uncomfortable and we had no idea what we're doing. You know you're literally selling this product at the back of the trunk of your car and bring it to emergency physicians and private hospitals will look at you like you're an idiot.
And at ACEP, the American College of Emergency Physicians, you know you get a booth except not the huge booth with all kinds of stuff, you get a little booth that's about 4x4 with a laptop and a Powerpoint presentation that you're trying to sell people on this thing that you have never actually even built yet. So it's a bit of making a fool of yourself as well. But through that then, you know you get to know the business, you get to know the business a little bit of IT and the business of health technology which is really a huge new thing for me.
And then as IBEX matured, at one point we sold our interest in IBEX, but I know that there was a piece of further opportunities within medical informatics especially the way emergency physicians think. So I got to be interested in the way that we use medical information real time to charts, so I was in such an integrated clinical decision support and started this other small company, the Risk Management Consortium, which is now a pretty small company still and I partnered with another software company and we're kind of pushing it forward, which has been very interesting, occasionally profitable, and it takes a lot of work; so a lot of lessons that I draw from or come from the experience of those two companies, and I have another couple of other ventures that we'll talk about as they come up later.
In much of what we do, there are significant opportunities for innovation, looking at things differently, looking at the common things that we see everyday a little bit differently, and trying to come up with alternative solutions for them and then having the energy or the lack of constraints to launch for it and to try something and being afraid to fail, 'cause I failed a bunch, too. I love this quote by Ray Bradbury that I used in my other international health ventures, you know the notion of "starting a business or many of the ventures that you take in life are life jumping off the cliff and building your wings on the way down. You just do it and figure it out as you go."
So when you think about starting a company, and I looked online a little bit, I think every entrepreneur, everybody that starts a company has a top 10 list of things of advice that they give. It also seems the more you see them, it's almost inversely proportional to their success so that if they just "flopped" at about nine businesses, they write a lot of top 10 lists. Bill Gates I don't think has one. I don't know, he probably doesn't bother with those. Therefore, I'm going to give you my Top 10.
So the first that I learned from all of these stuff is that -- is everybody healthcare provider here, physician or nurse or PA or somebody? So nobody has a better idea of what innovation is in health care, particularly your field than you do, because you live it everyday. So if you get frustrated with things that don't work in your clinical setting and you're there all the time and you realize: "you know what, this is in the hallway like freaking all the time. I don't know what this is, I don't know why this really have to be that way. "
But does it have to be that way and are there solutions for it? Maybe there's system solutions or maybe you have to work in a hospital but maybe there's technology solutions or other things that help affect the problems you see. So part of it is actually knowing a little bit about the field itself--the macro part of the field like the trends of the field. And part of it is being opportunistic and looking for opportunities while you're sitting there at a shift or charting or seeing a patient. To be aware of macro trends, this is not deep analysis here. This is stuff that you already know, but to be aware of the way things, macro trends are going to happen and affect your practice or affect the kind of people you'll see and affect some of the problems you'll face, is actually kind of worth thinking about. I'll show you what I mean.
So the Boom Generation is well-known. You all know it, some of you are. So the Baby Boomers just represent this kind of bulge in the population curve that kind of moves along. The Boomers start in 1946 and continuing on for several years, created this big bulge of population that moves along and we're riding that. We're surfing the wave of the Boomers and we're going to continue to do so whether we like it or not. This demographic profile of our population is getting older now, and as the Boomers get older, healthcare services are going to become more important and changes in healthcare services are going to happen. Those changes we'll see in our clinics, we'll see in our operating rooms, and we'll certainly see in our emergency departments.
So don't worry about all the numbers but this is born out by the data so that ambulatory medical survey of the CDC shows that a larger percentage of the people who were seeing the doctors are older. Gee go figure. But not only that, the number of people who are older--about 45--are greater as well. In other words, more people are older and more of those people are visiting the physicians more times. They're doing so to manage their chronic medical problems, to manage their drugs, to get access to drugs therapy, and to seek preventive care and in-home services. The demographic bulge of the Boomers are going to drive medical care and just going to continue to drive it. We just have to know what it's going to do to us and what it's going to do to our practices. The Boomers are going to need things that are different, and one of the ways to characterize it is actually bottom point and that is that in many of the boomer generations, they grow older in the next 10 years, they're going to transition from consuming goods like cars, homes, and material wealth, to consuming services like in-home care and variety of services that will help them age gracefully. This means that you're going to have more nursing home retirement centers and you're going to have the infrastructure demands for all of those things. Not just nursing home retirement centers but you're going to have the services to go with that, the people that go with that, the software that manages that, drugs that get applied in that setting.
All of those things are going to move that way and your emergency departments, maybe emergency physicians, will change as well. This leads me to my next point and that is figuring out and defining your niche and what your things is going to be because this is obviously a huge movement that you can see whether you're tailoring your care to the Baby Boomer generation or you're looking after the stimulus package and the degree to which IT is going to be a bigger thing in every hospital.
How do you choose your market niche, how do you understand your market niche and focus on it so that you can decide on something that's going to be important to go after, certainly anything in health information technology which is dicey. It's a pretty saturated field in many ways but there's always room for innovation; pharmaceuticals, a little bit difficult so unless you're in pharmaceuticals, the development and Josh is going to talk about this I'm sure, the development cost is pretty massive; Biomedical devices and various products for consumers that they may need. That could be very simple or can be complex. For example the urinal . I think this is dumb. It spills all the time, doesn't work very well and every time I see that thing I think: Somebody's got to design a different urinal man! This is a dumb thing. It opens out and it doesn't work very well and it's all a mess and patients hang it off beside their bed, you know it's nasty. Somebody have to invent another urinal. I think there's some cash out there for this. If you got to start up going with that, I'd invest in that. So anyway, know what problem you're solving. If you're looking at a specific problem, whether it's specific or not, looking at a problem you're solving, think of the solution that you're proposing as better than what's out there already. Is it profitable? In other words would you buy it or would somebody buy it? It doesn't really have value inherent to the product that you'd say: Oh definitely for 30% more I would buy a urinal that has an ingoing valve and doesn't spill all the time and is more organically correct.
Who are your clients? Understand who your clients are and your competitors. Many of the new businesses nowadays are not coming up with a brand new thing. They're coming up with something they're competing against an existing competitor. So the urinal will be competing with the curved urinal company. So you need to know your competition because you're going to learn from that competition. I also think, well I've got some thoughts about the competition because as you start up any venture, you're going to run into somebody who's doing the same thing or a variation of the same thing and maybe can infuriate you because either they're obnoxious better or faster than you are. The first step in all these things is to create a realistic business plan, a blueprint. Part of it is getting a realistic opinion or assessment of what it is you plan to do. So if you're going to make the urinal company for example, write out what it is, what's the market, what's the volume, what's the pricing, what's manufacturing. This is stuff you know, if you went to business school maybe you'd learned. I never went to business school so you just make it up. You can find anything on the internet. You can find out copies of the business plans....