By MATTHEW HOLT
Last week Mark Cuban tweeted out 12 rules for tech startups and Jessica DaMassa challenged a bunch of people to respond for health care. VC and general health care wit Lisa Suennen came out with quite the list (she got to 13) but I thought someone ought to write the real rules…
1. Never start a health tech company if you can sucker someone into giving you a real job
2. When VCs at conferences say raising money isn’t a problem, throw a milkshake at them
3. Never work with a technical co-founder who won’t give you the last M&M in the packet
4. When a clinician wants to quit their job and co-found with you, remember that the good ones could be making $500K a year reading X-rays and be on the golf course at 4pm
5. Do the 50/2 diet. Starve for 50 weeks of the year then eat and drink as much as you possibly can at HIMSS & JP Morgan parties when someone else is paying
6. When the incubator/accelerator/matchmaker says that they “chose you from 700 applicants” remember that there are roughly 700 of them and every company applies to each one
7. When you get the elusive partnership deal with the big hospital system, tech company or corporate, you’re going to expect to work at the speed of the startup and the scale of the corporate. It’ll be the reverse . (I stole this from Michael Ferguson at Ayogo)
8. After your first few clients and funding rounds you’ll be losing money at a exponential rate that matches what you had for revenue on the hockey stick chart in your pitch deck
9. Hopefully you’ll eventually be able to start making the money the health care way, by establishing a monopoly that can arbitrarily raise prices to the moon and stick it to your customers. If not, start prepping for the really big Oscar/Collective/Clover type round.
10. Pray to whatever God you follow that Softbank is still in business when #9 happens.
11. If after a decade or so of slog, you finally get the IPO, or semi decent exit, try to ignore the fact that the Instagram guys sold for $1 billion 11 months after they founded the company
12. Hope that you can disrupt health care, but remember that UnitedHealth Group’s revenue is $220 billion and CMS spends $900 billion a year and they both appear mostly powerless to make anything better.
Matthew Holt is publisher of The Health Care Blog and advises startups at SMACK.health using these principles and a few others too!