Cracking the Entrepreneur Code
[Editor's Note: This article is a lightly edited transcript of a talk delivered by Ryan Howard, founder and CEO of Practice Fusion, at Morgenthaler Ventures' DC to VC Healthcare IT Showcase on September 22, 2011.]
At Practice Fusion, it took us three years to get to our first million dollars in revenue. Electronic health records is a hard market to crack and I was incredibly naïve. But here are seven lessons I learned along the way.
Know your rock bottom and know your pain threshold. I was watching The Wire, and a woman at a Narcotics Anonymous meeting was saying, “I set a rock bottom I would never go below,” but she kept going below it. What I’ve learned in this process is that your company will be an addiction. Think up front about how far you are willing to go. Will you sell your house? Your car? Give up time with your friends? Family? In 2008, we were close to going out of business. I’d sold my house and car and had another house in foreclosure. I was in denial a lot. I’d gotten into a motorcycle accident a few years earlier. The settlement check came and I used the check to make payroll. When we got funded I was four years behind on my taxes and needed two root canals. What are you willing to give to pursue your dream? You will most likely have to go beyond that.
Pitchman. Imagine the world five to 10 years from now. Imagine customers using your thing. It’s a reality. Now, come back into the present and sum it all up in a sentence. Know your pitch. Ours is “free, web-based electronic health records.” That sounds super obvious, but it took us years to master it. One old pitch line was “collaborative healthcare solutions”—which is directly from the Dilbert guide on how not do it. My ability or inability to convey the vision and goals of the company and the product was make-or-break for my abilty to close funding, attract press, and build product. Get comfortable pitching. A lot of people aren’t. My poor director of PR, Emily Peters, has to deal with me before every presentation. I don’t like doing this. It’s so far out of my comfort zone. I have to suck it up.
People want to believe the hype. The Catch-22 of being a founder is that you can’t get funded unless you have a product, and you can’t get a product unless you have funding. It’s a terrible thing. One day a journalist from Healthcare IT News called me up and said ‘”I heard you guys are potentially releasing a free EHR.” We told her about it and she wrote it up, and it got into two more articles, and I realized that the value of having something written is tremendous. Investors started calling me. Partners started calling me. It started leading to other press. When you don’t have any other exposure, press is currency. I would download e-mail spiders, put in @wsj.com, scrape everyone at the Wall Street Journal and the New York Times, and spam them with press releases. I couldn’t afford to put it on the wire. I made 100 phone calls a day. When I finally would get another press hit, that was gold. When another party writes about you, everyone accepts it as the truth, somehow. I’d take that article and … Next Page »