I’m often asked by hedge funds, investors, and private equity firms to evaluate start ups based on their management savvy, product maturity, and business models.
I’ve been on several calls with startups in 2014 in which the grammar was all “present future tense”
"We will have a product that does…"
My response to the investors is to clarify
1. they will have a product that might...
2. they have a product that does...
There is a great difference between
"We will invent a flying car that does improve commuting"
"We have prototyped a drivable plane that has demonstrated reduced commute times of 50%"
When I was in my late teens and early 20’s (I was at Stanford 1980-1984) the PC revolution enabled young entrepreneurs to invent technologies in their basements that made millions after years of hard work.
Earlier this week, the New York Times published an article reflecting on the generation of entrepreneurs that followed me at Stanford, graduating in 1994 as the web began its hyper growth. Some made billions after months of work.
Now, there is a sense that an entrepreneur can write an app over a weekend and retire. There are enough folks “winning the lottery” with this approach that many believe a career that lasts until age 30 is enough to fund a comfortable retirement. That belief has led to present future tense, with folks promising that they have solved a complex problem before widespread adoption and customer satisfaction have really occurred.
Using a metric of adoption and satisfaction is a great countermeasure to present future tense.
KLAS recently issued a report about interoperability, defining simple versus sophisticated data exchange objectively as simple=pushing summaries, sophisticated=pulling documents. To me, getting simple interoperability fully integrated into workflow with high provider satisfaction, maximizing the meaningful use stage 2 transaction volume, is a good metric for 2014. You’ll see that using that metric reveals AthenaHealth and Epic achieved the combination of technology, adoption and satisfaction per the KLAS analysis.
Another framework to counter present future tense is Dixie Baker’s excellent JAMIA paper, “Evaluating and classifying the readiness of technology specifications for national standardization”
It identifies 3 Maturity criteria and 3 Adoptability criteria to objectively evaluate standards readiness.
Many of the present future tense entrepreneurs have products that require standards which do not exist or are not yet deployed.
My advice to all those pitching to investors - either clearly state what is and what will be, or if you are speaking in present future tense, enumerate the gaps in technology maturity, adoption, and user satisfaction, so that everyone understands the business potential for the product without overstating its true market readiness.
Wednesday, December 24, 2014
Present Future Tense
Posted by John Halamka at 3:00 AM
Subscribe to: Post Comments (Atom)
Brilliant and right on target, John.
To which we might add the following questions for entrepreneurs in this arena:
"If this is such a good idea, why hasn't it been done before?"
"What distinguishes your proposition from the hundreds of others out there?"
"How would you explain to a health system CIO CFO, CMO, CNO, and CEO--all of whom you will have to convince--how and why this will make life easier for clinicians, improve patient care, and save money?"
john, Thanks for all your work. I gave you a very small
quad copter after you signed my copy of your book at
HIMSS last year. I forgot to include the charging cable
and don't know if you ever succeeded in obtaining one.
Let me know if not and an address as I have several still.
Chris Bickford MD
la jolla CA
Chris - please email me at firstname.lastname@example.org
Post a Comment