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All startups are not created equal

Picture of Josh Lopez

The startup world is our time's gold rush. This is a theme that many have observed and identified over the past decade, but in the startup version of the gold rush, it is a lot harder to identify fool's gold. There are a lot of companies that are here today and gone tomorrow which is a necessary part of the innovation and competition that keeps the technology sector moving forward faster than any other industry. A sector where disruptors are commoditized and world-changing discoveries are commonplace. But, for every Elon Musk there are ten Elizabeth Holmes. Usually, the stakes are pretty low for consumers (consumers not investors) at worst you lose some money, write it off at the end of the year and gripe a little. The consequences of a failed startup in healthcare are a lot more severe.

A recent TechCrunch article outlines what happens when startups prioritize speed (features) over compliance:

  • Startups have to make big fixes behind the scenes which can result in instability and a pause in new development
  • Startups can burn through capital in legal fees from compliance violations
  • Startups can leave you disconnected from your patients if they close their doors
  • The list goes on

The implications of leaving your patients alienated because a vendor going out of business are pretty serious. So why would anyone pick a startup as a vendor to begin with?

Frankly, they are the only ones trying to earn your business. The feedback loop between owners and customers in a startup is faster than any other in business.

Hyperbolic conversations:

Startup Corp

Potential Customer: If you had feature X I would subscribe.

Startup: We will have it tomorrow

Potential Customer: If you had feature X I would subscribe.

Corp: It's on our roadmap for Q4 of next year*

*Any feature scheduled more than 6 months in the future has no certainty of ever coming into fruition. This line is often used as a sales strategy. 
There is an argument to be made that the corporate approach is better because it allows time for proper market analysis, tech spec, and business rules but it also means when that feature is deployed (if ever) the likelihood of enhancements based on user feedback is equal to the likelihood that the next presidential election will unite the country. 
 
The point I am trying to make is that startups can be a risky choice when building mission-critical business processes, but if you need something that is relatively new or not widely adopted in your industry, you may not have a choice. Conversely, waiting for a feature to be developed by a more "reputable" vendor can result in wasted time since there is no guarantee a solution will ever be developed. What you can gain going with a good startup is a competitive advantage over others in your industry. Above all vet your choices, vet your vendors!
 
Here is a sample vendor checklist:
  • How many users do you have?
  • Where does your funding come from?
  • Can you provide a referral customer?
  • Ask for a demo of the exact feature you are looking for.
  • Can I pilot with a subset of my users?

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