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Page 23 GO IT ALONE!
Jaffe made one additional, critical point. He noted that “in health care, we see terrific plans to reform the entire system every week. Entrepreneurs bring us business plans describing software systems that could allow insurers, patients, and providers to communicate online, perhaps eliminate billions of dollars in waste, and improve the lives of everyone concerned. Unfortunately, to date, none of these businesses have worked.” Jaffe concluded that “they all required too much change on the part of all of the buyers and sellers in the system, and no new business has the time or staying power to create that kind of change in order to build its market.” The significance of Jaffe’s insight cannot be emphasized strongly enough. The U.S. Secretary of Health and Human Services estimates that if the health care delivery system incorporated information technology common in other industries, the United States would save over $100 billion a year. Indeed, this need has been recognized for decades, prompting a wave of start-ups that attempted to use the Internet to fix the health care system through improvements in information technology. Jaffe notes, however, that “despite raising hundreds of millions of dollars, these companies underestimated the inertia in the health care system and the resistance to adoption of new information technologies by health care providers and payers. They required too much new behavior on the part of the buyers of these systems, and most failed as businesses.” The lesson, again, is that to survive and thrive, go-it-alone entrepreneurs must build a paying customer base quickly. To do this, successful entrepreneurs focus on starting businesses that don’t require dramatic shifts in the behavior of customers, suppliers, or service providers. Though such businesses may turn out to be revolutionary change agents, they typically start out as evolutionary improvements with a value that customers can see immediately.
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GO IT ALONE! Copyright 2004 by Bruce Judson. Reprinted by permission of HarperCollins Publishers. All rights reserved.
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