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How to Succeed as a Scrappy Startup

Posted in Surgeon as Entrepreneur | Aug 2015 | Comments (1)

Tags: research and developmentfinancial advicewealth managementbudgetinnovationbusiness plan

Starting a company requires the ability to balance limited time and resources, especially if you’re an orthopaedic surgeon focused on providing the best care for your patients. Surgeons should not be deterred simply because they think they lack time and capital to do so. There are various ways to trim costs and work around roadblocks, while still realizing success in your entrepreneurial endeavors.

Three surgeon entrepreneurs from the ORTHOPRENEUR Editorial Board shared their advice and experience from starting their own companies.

Participants included:

  • C. Scott Humphrey, M.D., Founder and Chief Innovation Officer of Shoulder Options, Founder and Director of Humphrey Shoulder Clinic
  • Blair Rhode, M.D., Founder of Rhode Orthopedic Group (RōG), Founder of Orland Park Orthopedics Center for Sports Medicine
  • Blaine Warkentine, M.D., Healthcare Innovations Architect, Founder of Vimty and SurgeryTrack
     

ORTHOPRENEUR: What is the key to starting a company without a lot of resources?

C.-Scott-Humphrey WEB_copyHumphrey: What worked for Shoulder Options was partnering with others. I partnered with a manufacturer as well as a company that had regulatory expertise. Going this route allowed Shoulder Options to get started without a lot of up-front capital. There was shared risk among the involved parties without the need for a lot of funding up-front.

Still, to execute any company’s business plan, you’re going to need a certain amount of capital at some point. Shoulder Options is at that stage right now. On a shoestring budget we’ve developed what we feel is going to be the next generation shoulder arthroplasty system, but in order to properly execute its release, we’ll either need to raise capital or partner with/be acquired by a larger company. So, while it might not be hard to start a company with limited resources, it will likely become difficult to achieve success at a later stage without substantial resources. Marrying a wealthy spouse might be a good move.

Blair-Rhode WEB_copyRhode: If you want to start a company and maintain majority control, you have to be willing to accept a significant amount of risk. When I speak to other surgeons about starting a company, they typically have the belief that they can implement their ideas without any financial outlay of their own. I don't understand the angel capital process and have never attempted to gain access to funding. I wanted full control of my idea, so I accepted full financial risk.

From the beginning, I wanted to minimize employees. Therefore, I chose to outsource most of the startup components of the company. I utilized a design team for our product that provided a total cost quote. They also performed the 510(k) submission. I have essentially maintained my company with a single employee.

Blaine W_crop_copyWarkentine: If you want to do it cheaply, then do it yourself. The other thing is to do something minimal and find some use, then let it grow organically from there. Both of these routes are the easiest things to do, because trying to raise money early on for an idea on a napkin—you lose too much of the company when you do that. You lose control. They [investors] go off in their direction based upon the fact that you have some money to spend.

What you need to do is learn from your user. Even in the long run, it’s better to be scrappy and find your product market fit before you get bigger investors involved. If you have your own bucket of resources that you can spend, that’s obviously ideal—you can get the job done and do it quicker. If you don’t, there are still ways of doing things. You have to pick your solution based upon your budget. The nice thing about orthopaedics is you typically have a group of friends, family and fools (they call them the 3Fs) who have the same philosophy. Generally, the concept you’re trying to bring to the table is universally applied, so if you have friends in the industry—medical school buddies, residency buddies and people you’ve worked with in the past—they’re typically the best people to go to, to not only get validation of your idea, but to even ask them for early investment. That’s a pretty successful way of trying to get through that first phase.



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Mr Dumbas 08/20/2015 11:18 AM
Do it cheaply. Makes sense when referring to patient care.