I’m a physician. I really appreciate Tom’s enthusiasm, but I think that enthusiasm led him to overestimate the significance of the problem. Moreover he didn’t really understand for whom he was building this product. At first he thought it would be a consumer product. But he realized that consumers would not pay/subscribe and later learned that advertising wouldn’t work. Next he thought doctors would pay because “Doctors have money, right?” Again paying for this or any service is an expense. Its value has to justify the expense. We pay hundreds of dollars a year for UpToDate because it’s valuable. Cochrane is the gold standard for meta-analyses and they’re publishing for topics that are of clinical significance. Ultimately I doubt anyone is going to change their practice based on this product because there isn’t a compelling reason to do so.
My major observation is that Tom tried to make a healthcare startup with negligible understanding of healthcare: the players, how payments work, how physicians practice, and what patients want/need. By not understanding the environment you’re not going to be able to understand the Problem which means your Solution will probably fail. This is a mistake repeated by most of the engineer founded health startups I’ve read about.
Finally for anyone wondering I usually recommend ibuprofen 800mg every 8 hours and Tylenol 1000mg every 8 hours. This isn’t medical advice, just something you may find from a quick search.
If the COVID-19 pandemic has taught me anything about science, it's that if you do a "meta-analysis" without reading each paper carefully and critically, you can end up proving anything regardless of its veracity. You cannot replace domain-expert scientists spending huge amounts of time painstakingly going over every detail of many papers to weed out mistakes and fraud in order to write a meta-analysis, with a computer program. Well, at least not until we figure out AGI. Until then, it would be irresponsible to rely on such a program for any clinical decisions.
I think the generalised lesson to be learned is that in reducing complexity (and all modelling requires reducing complexity), you get to make decisions about which bits of data are cut out, and this is a decision that can introduce bias. We can't just blindly trust reductions, especially in areas where there are competing interests. This is why transparency is so important! If I can reproduce your methodology, I can critique it for bias.
I agree. And what Tom didn't realize is that Doctors aren't financially incetivized to give better healthcare. There is no money in it for them. If anything, return visits because of a partial prior resolution make more money.
Now clearly I'm not saying that doctors try to give bad diagnoses for profit (because they don't). But beyond a certain minimum bar, and on a purely financial basis, improving diagnostics or prescription accuracy doesn't not make a medical practice more money. And the responses here illustrte that.
Now, whether that's the right/wrong incentive strucgture is a whole 'nother discussion. And I personally can't think of something better than what we currently have - but it is a truth of the current system.
I see this take all the time but it’s kind of misleading. Realistically things like uptodate, clinical journals and conferences mint money. Doctors are one of the prime demographics of people who do things for non monetary gains. Yes if you want to be nihilist you’ll find a minority of docs where this isn’t true, but the point is there’sa huge market to doctors willing to improve care without direct monetary gain.
This startup product failed because it wasn’t shown to improve outcomes— it just compiled study results by a non expert. At the very least the founder should have at least attempted doing a study on the tool showing using it resulted in better outcomes. But it didn’t make that link and so people didn’t know what to do with it.
> Doctors aren't financially incetivized to give better healthcare.
I think that's an overly nihilistic and not entirely accurate viewpoint. Good doctors get more patients through referrals, and once they have enough patients they can be more selective about which patients they take on. And they make more money. Bad doctors will lose trust and patients.
What doctors aren't incentivized to do is provide marginally stronger drugs. If aleve works a little bit better but tylenol is easier on your stomach, then is Aleve really "better"? If you actually need a stronger painkiller you can just up the dose. Medicine is rarely a black and white "best" situation.
He actually received a clue from 'Susan', one of the doctors he demonstrated his application to: "in many cases I’ll just prescribe what I normally do, since I’m comfortable with it"
He should have sold his tool to sales and marketing at pharmaceutical companies who would use it to convince doctors to prescribe their product.
> If anything, return visits because of a partial prior resolution make more money.
I don't know what system you are referring to, but in the EU, for common physician services, this is (fortunately) not how it works. Physicians are by and large being paid per case, not per visit. In Germany a case is being defined as the same patient visiting the same physician in the same quarter of the year (https://www.kbv.de/tools/ebm/html/3.1_1623969609994938562151...)
The financial incentives behind care differ greatly between states and health systems, so you can't just make blanket statements like that. Look up accountable care organizations and value-based care. We're still in our early stages, but our country is trying to figure out how to properly incentivize care, I hope.
your comment makes sense from a layman's perspective of logic and economics. but in the industry you'll find most doctors actually do not want to see patients for revisits and would rather a pill or injection solve the problem in one go. unfortunately due to biology this is rarely the case, and managers/pharma reps/business dev are keen to capitalize on it- not the overworked doctors.
> But beyond a certain minimum bar, and on a purely financial basis, improving diagnostics or prescription accuracy doesn't not make a medical practice more money.
But giving better diagnostics and better prescriptions can result in improved profits if it's marketed in an efficient way. Would you go to a clinic that will give you the best diagnostic and prescription possible or to one where you are unsure about the result?
Some mediocre restaurants in tourist areas are doing well because they are vouched for and have TripAdvisor stickers on their front door. What if clinics had GlacierMD stickers on their front door? To sell GlacierMD to doctors you have first to convince the patients that is something great about it.
Barring that aside, at least the doctors I'm related to would love nothing better than to give better care. I always hear about how they need to stay up on the latest stuff.
Yeah I adopted my confused face from the 'problem' statement/'killer' start-up pitch on. Have a headache and don't know which drug to buy? Come on. You have a headache and you take either acetaminophen or ibuprofen, both of which you already have. You don't buy anything.
I'm not a physician, I just take (rarely anything other than max dose) them per the label, which is different to your suggestion (1g/4h, max 4g/day) at least where I am. Ibuprofen if something seems 'inflamationy' or if I have drunk/will drink alcohol (on some sort of naïve hand-wavy basis to lighten the livery load).
I’m not a doctor but I watched a friend’s startup have the exact same experience. My personal experience was an early job selling online advertising to all categories of businesses. I quickly learned that medical offices are absolutely inundated with salespeople like pharma reps, and doctors time is already scant. Naturally they tend to want to see evidence in a way most other SMB decision makers do not. Since at time, bundled payments have gone into effect and consolidation means that the purchasing process is exponentially more complex.
Startups: don’t sell to medical offices without deep domain experience, deeper pockets, and rigorous evidence.
> By not understanding the environment you’re not going to be able to understand the Problem which means your Solution will probably fail.
Yes it boils down to politics. Having built a platform for accelerating routine histocompatibility analysis (providing customers a profit from the start) I got to see this firsthand. Risk aversion across the industry, small armies of established technicians working manually, administrators making purchasing decisions with no understanding of the science or impact, the myopic insular bent of academics, the massive gap between healthcare and modern technology. One could pay labs to save time, improve outcomes while reducing risk and they still wouldn't use your product if it doesn't map onto their political priorities.
I think this startup would have more of a chance if it was able to solve the Google/trust problem with medical advice.
From my perspective as an ignorant consumer, Googling medical things always leaves me unsatisfied. I get too much mixed advice when I poll multiple websites and my final feeling is that I've learned no new information, there was no clear information winner. Part of that is the SEO spam problem, part of it is not knowing accurate Google words for medical stuff.
I am developing a non invasive diagnosis tool that uses infrared absorption, electrical activity and a few other sensors with machine learning.
As it stands there are some physicians who think it has potential.
I am also using it to identify people which would make it useful in its own right.
My question is, do you think a quick diagnosis tool would be helpful and would someone be prepared to pay something for it?
This was a fun read, but I think it came to the wrong conclusion. The real issue imo was "I had practically only weeks of runway". You just don't have time to make it happen.
As a fellow start up founder, I see most of my job being just buying time for the business. Buying time to make, to talk, and to think.
It wasn't like the tool had no value to Susan, maybe with a booth at her go-to annual expo, mentioning a few past lawsuits the tool could avoid, and an affinity partnership with her industry association, the tool would have become a fact of life for her.
It's a lot of work, I'm not denying that. Yet, this is the sort of thing YC's idealized startup stories often fail to say. If "instant Product Market Fit" is so good, then how come practically every new high flying SV startup is using loads of VC money to "bend the market to the product"?
Exciting Startups have to venture far, it's not about "we let you buy your potatoes online" anymore. Chances are you won't get deals by talking to people once. I wouldn't say that means your idea is bad.
I agree with your comment about the wrong conclusion. Google didn't have a monetization plan, it launched in 1998 and didn't do adwords(ads) until 2000. It's always better to have positive cashflow, however, enough capital lets you have more runway. At the end of the day you do need someone who will pay.
Not that I dislike attorneys but they could have been a client. If you can show that a doctor didn't prescribe the best drug for their malpractice lawsuit it could bring in some money.
It's not 1998 anymore is the thing. It's obviously better to have positive cash flow but unless you come up with something that is that huge of a hit, in a market where people both understand your product, but also there aren't entrenched competitors to squash you, there's a lot of hard work to get to a place where your product is worth something your customers. Which is expensive, in both time and money. Both of which OP didn't have enough of.
This is why I don't like health related business models. In a similar scenario, who's stopping Susan from sueing over a "bad" outcome from the platform recommendation. When people's health is on the line, shit can get ugly really fast.
Getting back to the product at hand - there was no value, as much as a minor cost saving.
A semi-reliable recommendation on the medication that Susan could prescribe doesn't save nearly enough money. You should realise that medicines aren't 100% reliable and people acquire tolerances to many medications over a longer run.
Basically this product suffered from the get go - because the person who started it wasn't an SME.
In all honesty, I don’t think the author correctly identified his error. And I think that’s a shame. It’s right here:
> Here I was, living the Silicon Valley dream: making the world a better place through technology.
I don’t know how this has become a thing people believe, however widely it might be believed. But if it’s representative of SV or tech innovation at all, it’s either wildly distorted through a wealthy person’s pet futurism project—or held in the imagination of someone aspiring to that stature. SV is about making money, that’s it, that’s the whole story.
The totally overlapping error here was assuming those things—making the world better, and making money—aren’t inherently in conflict. And overlapping that: assuming that a profit driven health care system has altruistic goals as such, rather than in concert with its profit-driving priorities.
This project could have been successful (and could still do if the author or anyone else wants to pursue it). And it could have been a valuable contribution to society.
The author would probably have realized this error if he’d considered entering a global market where health care has different economic incentives. Programs like this which help people are funded by government contracts and grants, not by payment from arbitrary people acting on their arbitrary interests.
> I don’t think the author correctly identified his error.
This is his error right here:
“It had been a bit of a working assumption of mine over the past few weeks that if you could improve the health of the patients then, you know, the doctors or the hospitals or whatever would pay for that.”
Or this tech founder isn't much of a salesperson. Sellers won't say "So you don’t think this product is useful?" and certainly won't be left speechless as OP was,
> So I’d sorta just be, like, donating this money if I paid you for this thing, right?
>> I had literally nothing to say to that.
There may be a sales angle for the product that he could not find.
Improving patient outcomes is absolutely in the interest of doctors, patients, and hospitals. The question is who to sell it to, and how.
That’s just one facet of the error I pointed out. He repeats the same error in different ways every step of the way. He started with consumers before this point. He may have gone after other incentive-conflicted or fickle revenue sources too if he’d had more runway.
> The totally overlapping error here was assuming those things—making the world better, and making money—aren’t inherently in conflict
They're not in conflict. Competition makes better products. Apple benefited from Microsoft's existence, and vice versa. There's a lot of great free software, but it comes from people who already earned enough to spend time on it.
Better products don’t necessarily make the world better. They often make the world worse. I don’t have a particular chip on my shoulder about Apple, or Microsoft, or free software. There are things I appreciate that all of them produce, and good in the world because of some of those efforts by each. But yes, making the world better and making money are inherently in conflict. That doesn’t mean there isn’t a way to reconcile them acceptably for this endeavor, I even addressed that.
Ugh I have half a mind to post a Wikipedia link, but it’s going to be really upsetting if I play a part in dialectics becoming another inscrutable topic on HN like monads.
I think the takeaway from the blog post is wrong and comments focusing on building a faster MVP miss the point.
Not everything is a startup. This is a research project - and should be approached that way. There should be donors, a foundation, free access to all participants, reputation-building by writing (& publishing in reputable journals / conferences) studies about its efficacy, a board of doctors actually reviewing & cross-checking recommendations, a doctor-to-doctor helpline, etc.
As the author found out - it's not something people want to buy, but the public. So I think if you approach it from that direction - it might just work.
This was a startup that would have required a 2 year run way to get into the B2B sales of a tricky market.
There was clearly value on the table, working out how to make money form it would have been 80% of the effort, but I suggest there's something there.
He should have given it away for free.
There's a 1000% chance that if all of a sudden, doctors all over the place start using a tool because they think it's useful, and recommend it to their friends, that it would find a way to be successful.
Are there really any significant acquisitions happening just for some database? I don't think this happens unless the data is absolutely massive and very unique.
Yeah. Tons of people use Web MD, but its also free. I'm pretty sure I would use glacier MD if given the choice, but if you asked me to pay for it I likely would not.
There is a similar enough service called labdoor. They review protein powders and tell you which one is best. As far as I know it's free and still in business.
The business plan the author came up with here is just bad.
It looks like labdoor makes money through affiliates or letting companies list on the site.
Glacier could have done similar.
It would also work if it included delivery.
If you're sick at home with the flu or a migrain and can get an uber eats style delivery that's already a great product. Couple it with the "science" or "maths" choosing the right product for you and it could have lift off.
I'd love to read a similar article that discussed a wide range of possible business plans.
As it is I'm not sure the author had multiple (or even one??) business plans
Sure, and a faster and less bloaty MVP made in a couple of weeks and subsequently presented in front of customers as soon as possible- would've let the blog author know that their idea was very flawed, so that they could either abandon the idea and/or pivot to a different idea.
yea it's like asking doctors to pay for drug efficacy testing and research. he would have more luck with drug reps and big pharma as clients though with obvious conflicts of interests.
The interesting lesson here is that this could have been avoided, including the building by just going and collecting cash upfront irregardless of who customer was supposed to be.
That's exactly what I was thinking! He couldn't make it viable as a business but it could still be remodeled as a non-profit and make the difference in the world.
The main reason this didn't work is that the founder didn't identify a customer willing to spend money.
A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution.
This is why so many failing startups try to pivot to two-sided business models like advertising. That's one of the hardest businesses there is to start. And it's what the founder did here, too.
It sounds obvious stated as follows, but every startup failure I've read or heard about fails to get these ducks in a row:
- problem to be solved
- customer who has the problem
- customer willing to spend money to solve the problem
- enough customers willing to spend money on solving the problem to fuel a startup
Oddly enough, many of the startup success stories gloss over these fundamental components. The net result is that there's way too much emphasis on the idea and not nearly enough on the customer.
This is right, but it's also clear why this happens: a lot of the best known success stories from a decade or two ago were "if you build it they will come and you will one day figure out how to make money from that". Google, Facebook, Instagram. It takes awhile for the conventional wisdom borne of a mythology like that to shift. Heck, we're probably in the process of shifting it too far; we may well be lamenting a decade from now that nobody is doing anything besides B2B because it's too hard to find customers who want to pay for things outside that space.
The barrier to entry for advertising was pretty small when Google entered it. They worked hard on pricing models, ads relevance, ads quality, and making it unobtrusive to users (in the beginning). That's what allowed them to gain traction. The barrier to entry in advertising is much higher now, but if you have a standout product (like TikTok) then it's possible to gain enough eyeballs to get you through the initial period with advertising.
Over the last 20 years I've consulted with maybe 30 entrepreneurs, and what I find is that some of them get too caught up in the dream of some day being rich and famous. The ones who are successful are the ones who remain pragmatic and stay focused on what they need to do today. The irony is that, even for the dreamers, all their dreams can come true: they might some day be rich and famous and yet, perhaps paradoxically, the best way to make that happen is to not think about it, and instead stay focused on what you can do for your real customers, right now, today. (At the risk of too much self-promotion, I recently wrote a book, "One on one meetings are underrated; Group meetings waste time" and I devote a long chapter to 2 stories of pragmatic success contrasted with 2 stories of failure due to dreaming.)
Then you'll just end up with samey expensive garbage. People don't know what they want until they're told what they want. It's important to create a society where ideas that have no current market can be developed. This is how the future is made. Not by making it aluminum and jacking up the price.
I’m not sure I agree with you about your extra > and will pay for.
People want Reddit, people want FB and Insta. Do they pay for those? I’m not saying those are good or realistic models to follow but I think the scale of your product needs to be taken into account with your statement. ie landing millions of users can forgive the lack of a business plan _at that scale_ whereas a SAAS platform targeting B2B customers should probably require your statement to be true.
I've noticed this a lot - I think people are far too quick to take face-to-face positive feedback at, no pun intended, face value.
To me, it seems like a pretty elementary mistake, but I think that oftentimes people are more subconsciously desiring external validation than accurate assessments.
That's true, but it's hard. Many people won't pay for what does not exist. Selling what does not exist is risky. Before it exists, you don't always know, and it's not always easy to produce an MVP people will pay for.
the last 10 years of internet history show however that you can create something that one group wants, which creates value and a product that another group will pay for, they are not necessarily one in the same
To be fair, those "ducks-in-a-row" questions are NOT easy to answer and it's easy for someone to fool themselves with a BS answer. Moreover, there are plenty of ridiculous ideas that someone would never think anybody would "pay for" that make tons of money in spite of themselves.
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.
Right, even VCs don't know the answers. But the difference between a VC and a founder is that a VC invests in 100 companies not knowing which will succeed, but a founder only is investing in one.
Yes... All things considered, he got away pretty cheap. I know guys who spent most of their life savings and millions of investor money, working on an incredible opportunity that didn't pan out.
Strongly agree! Often ppl don’t even make it to your second criterion.
I was helping a friend’s son start a consumer service business (automating a manual process for postoperative and elder care with a conversation backed by GPT-3). Seemed like a great idea to me. I asked my M.D. mother if she’d use it. Definitely would, and would pay for it if it worked.
If it worked? Uuuh… I asked my mum a different question: if your doctor told you to use this would you? “Definitely not”.
The kid has a dozen people using the MVP. He knew them all of course, or they were the parents of his friends. So I suggested he let me know when he had n people whom he didn’t know using this for more than 30 days.
First n was 50 people, then 25, finally I said just anyone. So far, nope.
The important thing is that the founder (and probably many of us would think similarly) is that even now after it failed they still think there are other reasons it failed and that there was a great idea that failed due to ... technicalities. But as you mention and seems to be widely believed is that this is a bad idea in general, or at the very least not as good as the OP thinks.
That's the fundamental problem of any startup. How can you identify a customer without any product to show them?
You can define the existence of a market. You can know that there exists some customer with money and a problem you can solve. But that's not the same as being able to say, "Hey, wait a couple of years while I implement this thing. I don't suppose you'd be interested in paying up front?"
Every successful startup has that moment of bravery where they commit their own money and hope that the customer still exists, and is actually willing to cough up money rather than continuing to do whatever they had been doing while they waited. Every failed startup had the same moment, only the customer turned out not to be willing to spend the money.
There are obvious cases where they should have known that no customer existed. But there are also a lot of cases where they simply weren't in the right place at the right time. I think it's a nice myth that the business majors tell themselves that they would always have known beforehand, but it seems more like survivorship bias to me.
You really need a very deep understanding of the pain points in the industry. If you're solving a problem that you yourself have, that gives you a higher probability that others in the industry has the exact same problem.
In the startup world, founders have been taught that "success" means things other than making money, such as large "valuations" that are not tied to profit or even revenue.
Another founder "success" is VC or angel funding, or getting on some list ("top founders under 30!") or media coverage.
"Exit" is also a "success" even if the sale is underwater or not worth much.
> You could also say they didnt identify how to make money.
For a time, there was a school of thought that as long as you had incredible growth/usage for your app or service, making money wasn't important because someone would buy you.
I believe the answer rests in offering a solution to a problem that is worth more time than money to solve on one's own, or a new solution that creates more opportunities for a customer to grow their profitability.
Not an MBA or anything, but IMO startups glossing over their early business practices indicates luck rather than hiding good practices. That touches on another big, counterintuitive trap: listening to successful founder’s personal-myth-derived advice on generating success. Important skills attributed to founders— e.g. recognizing opportunity and talent, vision, etc.— are meaningless without simultaneously having the requisite resources and personal/professional circumstances to act. Chance changes our paths in complex, unknowable ways.
It’s probably not psychologically feasible or even useful for them to precisely examine the unearned factors in their or their company’s success, but so many citing ‘hard work’ as the primary factor proves they don’t try. Implying they committed as much, let some hundreds of times more cognitive, emotional, or physical effort, or even as many hours as an NYC line cook aspiring to be a chef, is laughable. Not discounting these folks’ value, but asserting those with less simply have less ambition or work ethic without providing reasonable points of comparison is justification, not reason.
Yea I agree. You can even be solving a problem in a super amazing way but if there are no customers willing to spend the money for it then you are just making a home project for yourself.
I also see a lot of people fail because they solve a problem that THEY themselves are having but that does not actually happen to a large enough set of people that it translates again to something businesses or individuals will pay for.
Realistically I think the best way to do a startup is being willing to pivot hard and fast and early if necessary or to completely drop a project and move on to something else. If it is a passion project you are doing for yourself that is one thing - if you actually want to start a real business you cannot get caught in the time-already-sunk mentality.
It’s bonkers. I have the opposite problem. I have a live customer (which is an accident, I was sort of doing him a favour), but now I have a waiting list for new paying clients and not enough spare time. I can’t quit my job yet. I’ll get there!
I have a half-baked product in the making for 4 years but never had enough time (and skill) to fully make it, every time I asked potential customers all of them wanted it right away except I could not finish it. Tried to apply for HN to no avail. I just need some investment(500K should do it in one year) to hire one or two developers to help to ship the product really, but I don't know how, which is why I'm back to work full time these days.
Do it in your spare time without burning so much capital. As much as YC wants you to think otherwise, VC money isn't some magical gatekeeper to innovation. Just build.
This is why MVP exists. However validation is often needed much earlier. I think a prototype that works visually only, then collecting pre-orders, is the way to go.
As the name implies, the Minimum Viable Product exists as a way to build the least amount necessary to start generating enough revenue to keep the business viable while you expand the scope of the product to realize your full vision. The MVP isn't for proving the market, but rather capturing a small segment of the market to fund expansion into the much larger market. The validation that there is a market should take place before creating the MVP, like you say.
His enthusiasm overtook everything. He felt the pain, rushed/designed a solution and everything. But he never followed the money trail. I felt like this was a glaring omission.
Another consideration is you consider : your solution, the end-consumer , and stop there ... and if you forget there's a middle-man (the doctor in this case) thats a miss too.. Middle-persons always complicate the situation.
OK, how about a startup that built something that was better for a completely solved problem on the web?
They had no idea at all how they'd make money but there was a significant cost building and running the product.
Yet VC's had no problem funding this moonshot startup. Then another startup invented a solution that could allow them to monetize. Only problem was that it was very controversial and there were dozens of blog articles criticizing the idea. But they adopted it anyway and found incredible success.
That company if you haven't already recognized it was Google. Anytime you try and take your experience and generalize it across all startups you would be wrong.
somewhat implicit in "customer willing to spend money to solve the problem" is: are they willing to spend time to solve the problem right now (integrating your software into their application, migrating to your app, etc). Often times customers will have the problem you can solve, but it's far down on their list of priorities.
before spending $40k and his own time he should have made a mockup of the software invested just a few hundred bucks in interviews with his intended customers, would have found out quite soon that it had no product-market fit
Feels like a failure of business model imagination or just not enough runway to try something different to me. OP didn't even take three swings at bat.
It's not the sexiest market if you're looking to win a Nobel prize (lol) but insurance companies seems like a potential customer with a large financial incentive...
I mean I guess it wasn't really that "fantastic" of an idea, but that aside it feels like OP was lacking imagination in terms of the addressable market. He tried the two markets with the most obvious business model -- consumers and doctors.
But if consumers weren't going to work because the advertising revenue wasn't lucrative enough, and doctors weren't willing to pay for the solution, then it's time to get creative.
What about insurance companies? Insurance companies have a vested interest in picking the right drug because they are on the hook if the outcome isn't good. Or what about the pharmaceutical companies themselves? Would they pay for the data for use in their own marketing campaigns much like "4 out of 5 dentists agree"?
TLDR; OP went all in on two obvious markets but didn't think out of the box in terms of who might be willing to pay for his product.
I always feel discomfort when this gets parroted. It's clearly not true, unless you're willing to shift the definitions of "idea" and "execution" around after-the-fact.
Indeed the article comes to the conclusion that the idea is near-impossible to execute – due to realities within the business domain of healthcare. If the idea was "nothing", good execution could've fixed it.
The founder pitched a great idea at the start – help consumers who don't know what kinds of common drugs to buy at the store, but then immediately pivoted to selling the service to doctors and medical practices. They should have realized that the second one would be impossible to break into.
> But then I look at WebMD’s 10-Qs and start to spiral. Turns out the world’s biggest health website makes about $0.50/year per user. That is…not enough money to bootstrap GlacierMD. I’m pouring money into my rent, into my Egyptian contractors, into AWS—I need some cash soon.
The take away here should have been not to pivot entirely, but raise money. You are in Silicon Valley! This is literally why this entire ecosystem exists. Sometimes bootstrapping can be beneficial, but when you have spent $40K of your money, have a good enough prototype with a clear story, and are going up against giant established competitors, forget customers for a while and sell to VCs instead.
If you are really sure that the service adds value for doctors, give it to them for free for a year and prove it. Open up your service for users without worrying about AWS bills or ad revenue. A boatload of money in the bank makes all of this trivial.
You're not wrong at all, but this line at the end really stuck out to me:
> If I’d articulated at the beginning how I expected to extract value from GlacierMD, maybe I would’ve researched the economics of an ad-based model, or I would’ve validated that doctors were willing to pay, or hospitals, or insurance companies.
The impression I got was this failure was induced by a complete lack of planning. It looks like the author had an idea, got some positive feedback, then drove the entire project based on random inputs they got from people. At no point do they talk about sitting down and doing the boring stuff. Like feasibility analysis, market studies, and developing a very, very basic concept of where the money will come from. The fact that the project had to fail before they realized they didn't think of how to monetize it is... baffling. That should be the one of first things you consider when trying to start a business: how will it make money?
> They should have realized that the second one would be impossible to break into
Why is that impossible? I had a long time idea of making a software for doctors in my country, it's not in Silicon Valley, everyone here use cash and it's hard to keep up with how many visitors they have or patient history (everything is stored in paper), my idea is to make a website for them, i can see how hard it would be to sell this but will it be impossible?
Software for scheduling, accounting, payments – sure. He was trying to sell a service which would suggest medical advice for doctors to give to their patients.
Like the last time this was posted, OP didn't have the right co-founder who could sell this. Drug Formulary management is a legitimate problem and a business, currently someone pays a pharmacist 6 figures to present and clean drug study data to hospitals and insurance companies who decide what to include/exclude from their drug formularies.
The work flow currently is Drug A comes to market with expense X, it is competing with older Drug B with expense Y. There are no head to head trials, but an expert (usually a pharmacist) can reach solid benefit/harm conclusions. That pharmacist writes up a nice summary with a recommendation and present to a committee made up of other experts (usually doctors w/ academic background). They discuss and come to a formulary decision for the whole hospital.
In insurance companies, some background financial shady stuff can take place (kickback schemes) that influence this process, but some form of honest data analysis takes place anyway.
I used to do this for a while, it can work. Just have to convince the right people that your software would be better than the pharmacist. The market incentives doesn't really encourage that kind of automation/savings, so it will be an uphill battle that need experienced sales folks and good VC money.
Readit News
https://news.ycombinator.com/item?id=29249686
https://astralcodexten.substack.com/p/ivermectin-much-more-t...
https://ivmmeta.com/ (Note the long list of things in the right sidebar which the "meta-analysis" shows have huge positive effects on COVID treatment)
Now clearly I'm not saying that doctors try to give bad diagnoses for profit (because they don't). But beyond a certain minimum bar, and on a purely financial basis, improving diagnostics or prescription accuracy doesn't not make a medical practice more money. And the responses here illustrte that.
Now, whether that's the right/wrong incentive strucgture is a whole 'nother discussion. And I personally can't think of something better than what we currently have - but it is a truth of the current system.
This startup product failed because it wasn’t shown to improve outcomes— it just compiled study results by a non expert. At the very least the founder should have at least attempted doing a study on the tool showing using it resulted in better outcomes. But it didn’t make that link and so people didn’t know what to do with it.
I think that's an overly nihilistic and not entirely accurate viewpoint. Good doctors get more patients through referrals, and once they have enough patients they can be more selective about which patients they take on. And they make more money. Bad doctors will lose trust and patients.
What doctors aren't incentivized to do is provide marginally stronger drugs. If aleve works a little bit better but tylenol is easier on your stomach, then is Aleve really "better"? If you actually need a stronger painkiller you can just up the dose. Medicine is rarely a black and white "best" situation.
He should have sold his tool to sales and marketing at pharmaceutical companies who would use it to convince doctors to prescribe their product.
I don't know what system you are referring to, but in the EU, for common physician services, this is (fortunately) not how it works. Physicians are by and large being paid per case, not per visit. In Germany a case is being defined as the same patient visiting the same physician in the same quarter of the year (https://www.kbv.de/tools/ebm/html/3.1_1623969609994938562151...)
But giving better diagnostics and better prescriptions can result in improved profits if it's marketed in an efficient way. Would you go to a clinic that will give you the best diagnostic and prescription possible or to one where you are unsure about the result?
Some mediocre restaurants in tourist areas are doing well because they are vouched for and have TripAdvisor stickers on their front door. What if clinics had GlacierMD stickers on their front door? To sell GlacierMD to doctors you have first to convince the patients that is something great about it.
Doctors are incentivised to provide better healthcare. The incentives are not directly financial.
Barring that aside, at least the doctors I'm related to would love nothing better than to give better care. I always hear about how they need to stay up on the latest stuff.
It is like saying that software engineers write bad code, so that they can get paid to fix it. (Which is really not true at all)
I don't think any doctor deliberately prolongs the illness of their patients to keep the money flow coming.
Do you have any evidence to back up what you said (other than a flawed game-theory hypothesis)?
Dead Comment
I'm not a physician, I just take (rarely anything other than max dose) them per the label, which is different to your suggestion (1g/4h, max 4g/day) at least where I am. Ibuprofen if something seems 'inflamationy' or if I have drunk/will drink alcohol (on some sort of naïve hand-wavy basis to lighten the livery load).
Startups: don’t sell to medical offices without deep domain experience, deeper pockets, and rigorous evidence.
Yes it boils down to politics. Having built a platform for accelerating routine histocompatibility analysis (providing customers a profit from the start) I got to see this firsthand. Risk aversion across the industry, small armies of established technicians working manually, administrators making purchasing decisions with no understanding of the science or impact, the myopic insular bent of academics, the massive gap between healthcare and modern technology. One could pay labs to save time, improve outcomes while reducing risk and they still wouldn't use your product if it doesn't map onto their political priorities.
From my perspective as an ignorant consumer, Googling medical things always leaves me unsatisfied. I get too much mixed advice when I poll multiple websites and my final feeling is that I've learned no new information, there was no clear information winner. Part of that is the SEO spam problem, part of it is not knowing accurate Google words for medical stuff.
As a fellow start up founder, I see most of my job being just buying time for the business. Buying time to make, to talk, and to think.
It wasn't like the tool had no value to Susan, maybe with a booth at her go-to annual expo, mentioning a few past lawsuits the tool could avoid, and an affinity partnership with her industry association, the tool would have become a fact of life for her.
It's a lot of work, I'm not denying that. Yet, this is the sort of thing YC's idealized startup stories often fail to say. If "instant Product Market Fit" is so good, then how come practically every new high flying SV startup is using loads of VC money to "bend the market to the product"?
Exciting Startups have to venture far, it's not about "we let you buy your potatoes online" anymore. Chances are you won't get deals by talking to people once. I wouldn't say that means your idea is bad.
Not that I dislike attorneys but they could have been a client. If you can show that a doctor didn't prescribe the best drug for their malpractice lawsuit it could bring in some money.
Graduate students wouldn't have demanded that raise only a few weeks in.
(Just kidding. Or am I?)
A semi-reliable recommendation on the medication that Susan could prescribe doesn't save nearly enough money. You should realise that medicines aren't 100% reliable and people acquire tolerances to many medications over a longer run.
Basically this product suffered from the get go - because the person who started it wasn't an SME.
> Here I was, living the Silicon Valley dream: making the world a better place through technology.
I don’t know how this has become a thing people believe, however widely it might be believed. But if it’s representative of SV or tech innovation at all, it’s either wildly distorted through a wealthy person’s pet futurism project—or held in the imagination of someone aspiring to that stature. SV is about making money, that’s it, that’s the whole story.
The totally overlapping error here was assuming those things—making the world better, and making money—aren’t inherently in conflict. And overlapping that: assuming that a profit driven health care system has altruistic goals as such, rather than in concert with its profit-driving priorities.
This project could have been successful (and could still do if the author or anyone else wants to pursue it). And it could have been a valuable contribution to society.
The author would probably have realized this error if he’d considered entering a global market where health care has different economic incentives. Programs like this which help people are funded by government contracts and grants, not by payment from arbitrary people acting on their arbitrary interests.
This is his error right here:
“It had been a bit of a working assumption of mine over the past few weeks that if you could improve the health of the patients then, you know, the doctors or the hospitals or whatever would pay for that.”
> So I’d sorta just be, like, donating this money if I paid you for this thing, right?
>> I had literally nothing to say to that.
There may be a sales angle for the product that he could not find.
Improving patient outcomes is absolutely in the interest of doctors, patients, and hospitals. The question is who to sell it to, and how.
They're not in conflict. Competition makes better products. Apple benefited from Microsoft's existence, and vice versa. There's a lot of great free software, but it comes from people who already earned enough to spend time on it.
Ugh I have half a mind to post a Wikipedia link, but it’s going to be really upsetting if I play a part in dialectics becoming another inscrutable topic on HN like monads.
Not everything is a startup. This is a research project - and should be approached that way. There should be donors, a foundation, free access to all participants, reputation-building by writing (& publishing in reputable journals / conferences) studies about its efficacy, a board of doctors actually reviewing & cross-checking recommendations, a doctor-to-doctor helpline, etc.
As the author found out - it's not something people want to buy, but the public. So I think if you approach it from that direction - it might just work.
There was clearly value on the table, working out how to make money form it would have been 80% of the effort, but I suggest there's something there.
He should have given it away for free.
There's a 1000% chance that if all of a sudden, doctors all over the place start using a tool because they think it's useful, and recommend it to their friends, that it would find a way to be successful.
A drug company would buy that just for the data.
There is a similar enough service called labdoor. They review protein powders and tell you which one is best. As far as I know it's free and still in business.
The business plan the author came up with here is just bad.
Glacier could have done similar.
It would also work if it included delivery.
If you're sick at home with the flu or a migrain and can get an uber eats style delivery that's already a great product. Couple it with the "science" or "maths" choosing the right product for you and it could have lift off.
I'd love to read a similar article that discussed a wide range of possible business plans.
As it is I'm not sure the author had multiple (or even one??) business plans
[1] That's how the author described his own dayjob, pretty much.
Exactly. This is what taxes are for.
A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution.
This is why so many failing startups try to pivot to two-sided business models like advertising. That's one of the hardest businesses there is to start. And it's what the founder did here, too.
It sounds obvious stated as follows, but every startup failure I've read or heard about fails to get these ducks in a row:
- problem to be solved
- customer who has the problem
- customer willing to spend money to solve the problem
- enough customers willing to spend money on solving the problem to fuel a startup
Oddly enough, many of the startup success stories gloss over these fundamental components. The net result is that there's way too much emphasis on the idea and not nearly enough on the customer.
Build something people want and will pay for.
Not just say they want.
Not just say they'll pay for.
Make something that they see and will immediately take out their cash/cc/paypal/venmo and pay for on the spot.
This is big - lots of people (on HN and other places) say that they'd pay "$x for y" but aren't actually willing to.
I feel like I saw a post that had some pretty good evidence of the disconnect between those two things but I can't find it.
People want Reddit, people want FB and Insta. Do they pay for those? I’m not saying those are good or realistic models to follow but I think the scale of your product needs to be taken into account with your statement. ie landing millions of users can forgive the lack of a business plan _at that scale_ whereas a SAAS platform targeting B2B customers should probably require your statement to be true.
To me, it seems like a pretty elementary mistake, but I think that oftentimes people are more subconsciously desiring external validation than accurate assessments.
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.
I was helping a friend’s son start a consumer service business (automating a manual process for postoperative and elder care with a conversation backed by GPT-3). Seemed like a great idea to me. I asked my M.D. mother if she’d use it. Definitely would, and would pay for it if it worked.
If it worked? Uuuh… I asked my mum a different question: if your doctor told you to use this would you? “Definitely not”.
The kid has a dozen people using the MVP. He knew them all of course, or they were the parents of his friends. So I suggested he let me know when he had n people whom he didn’t know using this for more than 30 days.
First n was 50 people, then 25, finally I said just anyone. So far, nope.
Idea: valuable (to humanity). But not yet “V”
https://news.ycombinator.com/item?id=25827610
https://news.ycombinator.com/item?id=25829290
>With all the negative pushback this is getting, it’s making me think he was onto something.
Or maybe the idea is bad. I see this line of thought all the time sometimes implied by the misattributed Gandhi quote.
You can define the existence of a market. You can know that there exists some customer with money and a problem you can solve. But that's not the same as being able to say, "Hey, wait a couple of years while I implement this thing. I don't suppose you'd be interested in paying up front?"
Every successful startup has that moment of bravery where they commit their own money and hope that the customer still exists, and is actually willing to cough up money rather than continuing to do whatever they had been doing while they waited. Every failed startup had the same moment, only the customer turned out not to be willing to spend the money.
There are obvious cases where they should have known that no customer existed. But there are also a lot of cases where they simply weren't in the right place at the right time. I think it's a nice myth that the business majors tell themselves that they would always have known beforehand, but it seems more like survivorship bias to me.
The big question is how do you get people to give you money for your services/product. Classically people answer this with emphasis on the idea.
In the startup world, founders have been taught that "success" means things other than making money, such as large "valuations" that are not tied to profit or even revenue.
Another founder "success" is VC or angel funding, or getting on some list ("top founders under 30!") or media coverage.
"Exit" is also a "success" even if the sale is underwater or not worth much.
> You could also say they didnt identify how to make money.
For a time, there was a school of thought that as long as you had incredible growth/usage for your app or service, making money wasn't important because someone would buy you.
It’s probably not psychologically feasible or even useful for them to precisely examine the unearned factors in their or their company’s success, but so many citing ‘hard work’ as the primary factor proves they don’t try. Implying they committed as much, let some hundreds of times more cognitive, emotional, or physical effort, or even as many hours as an NYC line cook aspiring to be a chef, is laughable. Not discounting these folks’ value, but asserting those with less simply have less ambition or work ethic without providing reasonable points of comparison is justification, not reason.
Location, timing, access and mistakes on the side of market players - are all a matter of luck.
Google could not have started in 1998 in Russia. Microsoft would not have been Microsoft, without landing the MSDOS from IBM. So on and so forth.
I also see a lot of people fail because they solve a problem that THEY themselves are having but that does not actually happen to a large enough set of people that it translates again to something businesses or individuals will pay for.
Realistically I think the best way to do a startup is being willing to pivot hard and fast and early if necessary or to completely drop a project and move on to something else. If it is a passion project you are doing for yourself that is one thing - if you actually want to start a real business you cannot get caught in the time-already-sunk mentality.
Do it in your spare time without burning so much capital. As much as YC wants you to think otherwise, VC money isn't some magical gatekeeper to innovation. Just build.
But since you don't: what kind of help are you looking for? Web development?
Another consideration is you consider : your solution, the end-consumer , and stop there ... and if you forget there's a middle-man (the doctor in this case) thats a miss too.. Middle-persons always complicate the situation.
They had no idea at all how they'd make money but there was a significant cost building and running the product.
Yet VC's had no problem funding this moonshot startup. Then another startup invented a solution that could allow them to monetize. Only problem was that it was very controversial and there were dozens of blog articles criticizing the idea. But they adopted it anyway and found incredible success.
That company if you haven't already recognized it was Google. Anytime you try and take your experience and generalize it across all startups you would be wrong.
That seems to cover Google just fine.
Yahoo and AltaVista weren't great and Google Search was far superior.
Making things work better is way easier, than creating a completely new market.
I really need to publish and share that thing…
Or do you mean he should have invested into a designer to create mockups?
It needs to be the first one to be big.
It's not the sexiest market if you're looking to win a Nobel prize (lol) but insurance companies seems like a potential customer with a large financial incentive...
But if consumers weren't going to work because the advertising revenue wasn't lucrative enough, and doctors weren't willing to pay for the solution, then it's time to get creative.
What about insurance companies? Insurance companies have a vested interest in picking the right drug because they are on the hook if the outcome isn't good. Or what about the pharmaceutical companies themselves? Would they pay for the data for use in their own marketing campaigns much like "4 out of 5 dentists agree"?
TLDR; OP went all in on two obvious markets but didn't think out of the box in terms of who might be willing to pay for his product.
I always feel discomfort when this gets parroted. It's clearly not true, unless you're willing to shift the definitions of "idea" and "execution" around after-the-fact.
Indeed the article comes to the conclusion that the idea is near-impossible to execute – due to realities within the business domain of healthcare. If the idea was "nothing", good execution could've fixed it.
> But then I look at WebMD’s 10-Qs and start to spiral. Turns out the world’s biggest health website makes about $0.50/year per user. That is…not enough money to bootstrap GlacierMD. I’m pouring money into my rent, into my Egyptian contractors, into AWS—I need some cash soon.
The take away here should have been not to pivot entirely, but raise money. You are in Silicon Valley! This is literally why this entire ecosystem exists. Sometimes bootstrapping can be beneficial, but when you have spent $40K of your money, have a good enough prototype with a clear story, and are going up against giant established competitors, forget customers for a while and sell to VCs instead.
If you are really sure that the service adds value for doctors, give it to them for free for a year and prove it. Open up your service for users without worrying about AWS bills or ad revenue. A boatload of money in the bank makes all of this trivial.
> If I’d articulated at the beginning how I expected to extract value from GlacierMD, maybe I would’ve researched the economics of an ad-based model, or I would’ve validated that doctors were willing to pay, or hospitals, or insurance companies.
The impression I got was this failure was induced by a complete lack of planning. It looks like the author had an idea, got some positive feedback, then drove the entire project based on random inputs they got from people. At no point do they talk about sitting down and doing the boring stuff. Like feasibility analysis, market studies, and developing a very, very basic concept of where the money will come from. The fact that the project had to fail before they realized they didn't think of how to monetize it is... baffling. That should be the one of first things you consider when trying to start a business: how will it make money?
Why is that impossible? I had a long time idea of making a software for doctors in my country, it's not in Silicon Valley, everyone here use cash and it's hard to keep up with how many visitors they have or patient history (everything is stored in paper), my idea is to make a website for them, i can see how hard it would be to sell this but will it be impossible?
https://news.ycombinator.com/item?id=25825917https://news.ycombinator.com/item?id=21947551
The work flow currently is Drug A comes to market with expense X, it is competing with older Drug B with expense Y. There are no head to head trials, but an expert (usually a pharmacist) can reach solid benefit/harm conclusions. That pharmacist writes up a nice summary with a recommendation and present to a committee made up of other experts (usually doctors w/ academic background). They discuss and come to a formulary decision for the whole hospital.
In insurance companies, some background financial shady stuff can take place (kickback schemes) that influence this process, but some form of honest data analysis takes place anyway.
I used to do this for a while, it can work. Just have to convince the right people that your software would be better than the pharmacist. The market incentives doesn't really encourage that kind of automation/savings, so it will be an uphill battle that need experienced sales folks and good VC money.