Health 2.0 in South Texas?
April 30, 2008
Our friend Scott Baradell introduced us to Cary Byrd, the founder of eDrugSearch a South Texas family business, who offered to contribute a post about his startup for the blog titled, “Great Health 2.0 Startups Can Come from South Texas, Too“:
I live in Spring Branch, Texas – not Silicon Valley, Silicon Alley or even Austin. I don’t particularly like small talk, about Web 2.0 or anything else. I haven’t prepared a PowerPoint deck full of made-up numbers showing my company’s path to $100 million in three years. I’ve self-funded my company rather than seeking VC funding – which means I don’t have to play the BS game and, more importantly, can build my business without interference.
The result of all this is that, to some people, my startup and I are not part of their club. That’s OK, though. We’re winning anyway.
My company, eDrugSearch.com, is a vertical search engine offering comparison shopping services; our closest competitor is a publicly traded company called HealthPricer. The difference is, we focus solely on prescription drugs – because we know it can be difficult for consumers to purchase affordable medications safely online. We created eDrugSearch.com to give these consumers a safe haven, where they know they won’t be ripped off, or worse.
The eDrugSearch.com Community
Most of our customers are among the 65 million Americans who don’t have prescription drug insurance. I know this because they share their concerns with me every day, in e-mails and now in the eDrugSearch.com Community forum.
We started the eDrugSearch.com Community, a social network, in February, and it already has had a dramatic impact on traffic and time spent per visitor on the site. The result has been an estimated $435,000 in sales for eDrugSearch.com member pharmacies in March alone, propelling our pharmacies’ overall revenues to more than $2 million since our launch last year.
The eDrugSearch.com Community enables site visitors to rate and review drugs and pharmacies ; monitor the latest FDA updates, price changes and other news related to their current drug regimens; and share experiences with others taking the same drugs or who have similar health conditions.
Before we launched our social network, most of our visitors bought some – but not all – of their prescription drugs through our site. Thanks to the community, we’re beginning to form much stronger and more personal relationships with these customers. The site is ‘stickier’ now.
Why a Social Network for Prescription Drug Consumers?
An estimated 150 million Americans sought health-related content and services on the Internet in 2007. According to a recent Harris poll, 71 percent of U.S. adults use the Web to search for health information — a number that continues to rise. Millions of consumers are also purchasing prescriptions drugs, medical equipment, and other supplies online.
Prescription drug consumers, in particular, have shown significant interest in blogs, social networks and specialized search. They relish the opportunity to share their experiences, and often their frustrations, with one another.
In short, consumers are turning to one another, rather than relying exclusively on DTC advertising and rushed doctor’s appointments, to learn about prescription drugs. We thought this was a sufficient rationale for starting a niche Health 2.0 community. And so far, we’re clearly being proven right.
eDrugSearch.com Community Features
When you join eDrugSearch.com, you gain access to a number of tools and resources that can help you to become a better healthcare consumer. For example, you can:
- Rate and review drugs and pharmacies; .
- Monitor the latest FDA updates, price changes and other news related to your current drug regimen;
- Make friends and form groups to share experiences with others taking the same drugs or who have similar health conditions; and
- Ask the community to get answers from informed healthcare consumers.
To reward community members for their contributions, we award them eDrugSearch.com Points, which will soon be redeemable for drug discounts at participating pharmacies. Our brand will always be focused on saving our members money – because that’s why they come to the site in the first place.
Ultimately, It’s the Customer Who Counts
Oh, sure – we may never be a Silicon Valley darling. But we’ve been fortunate to have been discovered by our fellow pharmaceutical industry bloggers and Health 2.0 bloggers. We were also mentioned recently in the Wall Street Journal for our creation of the Healthcare 100 blog ranking system (www.healthcare100.com), and we were a sponsor of the recent Health 2.0 conference in San Diego.
So yes, successful startups can come from South Texas – or anywhere, for that matter. We hope to help light the path for others like us.
We also welcome feedback on our site from the Health 2.0 community and anyone else interested in the future of healthcare in the United States. We want to be an example of Health 2.0 making a real difference in people’s lives, by helping them to learn, to share — and to save a little money along the way. You can reach me directly at carybyrd@edrugsearch.com.
—
Cary Byrd is founder and president of eDrugSearch.com. He shares his viewpoints on Health 2.0, prescription drug marketing, and healthcare public policy at www.edrugsearch.com/edsblog.
Programming Note ~ New Features/Look
April 29, 2008
You may have noticed several days of silence here on the Texas Startup Blog. We have been revamping our WordPress systems, added a couple of new servers and generally done a bit of house cleaning. I have been trying to help the Architel team kick start their blogging effort so I have been doing a little blogging over there.Several of you have IM’d and emailed me about the new theme I am using. Just a few tweaks here and there. We are now hosting the site on WordPress MU so there will be a few bugs here and there so please let me know if you run across something screwy. By June everything should be up and running perfectly ~ expect big things!
About to get funded? Assume the worst.
April 29, 2008
My advice to entrepreneurs: Assume you aren’t even close to closing your round of funding until the money is in the bank. I know it sounds a little obvious and a little negative, but I have had signed term sheets on the table that never closed despite the fact that the venture capitalists on the other side of the table had every intention of funding my deal. I have seen my friends waste valuable time working on deals, to the neglect of other possible deals, that never had a chance of closing. The truth of the matter is that you will NEVER know all of the potential reasons why your venture capital ‘partner’ won’t be able to do your deal ~ their limited partners refused the capital call, another deal is in serious trouble and they will need the dry powder to bail it out, the partner you are dealing with might be on the way out of the firm, the partner you are dealing with is conducting undue diligence (i.e. competitive intelligence) and so on. It really doesn’t matter. What does matter is that you keep selling, you keep trying to raise the money necessary to keep the business going. NEVER TELL ANYONE YOU ARE ABOUT TO CLOSE A ROUND. Instead tell them you are actively seeking the right partner to fund the deal. The right partner will most frequently be the one whose check clears the bank. Let me tell you a story about a good friend who prompted this advice.
Over the past year a very good friend of mine has been ‘about to close a round of funding‘ for his startup. He raised several million dollars the year before and has executed on his plan flawlessly. The venture capital market has turned it’s back on his space and raising money has been, to say the least, difficult. Three or four months ago he was on the verge of running out of money, but had an un-negotiated term sheet from a small venture capital firm in hand. After reviewing the term sheet he convinced his ‘angels’ to give him a little more runway to get the business funded.
This was a red flag in my book. In my experience an interested venture capital firm would have taken this ‘weakness’ as a perfect opportunity to get involved at the ‘right price’ if they were truly interested. I didn’t say anything to my friend, but I did try to make a few introductions to alternative investors. He didn’t have the time to invest with the ‘new’ investor because he figured he didn’t have the time to get another venture group up to speed. My thought was he didn’t have the time NOT to get another venture group up to speed. Needless to say I was annoyed at my friend.
Each month my friend would come close to running out of cash. They were just limping along trying to make it until they could close the round. The investor was ‘very close’, but there were always problems. Finally the investor prepared a negotiated term sheet for the company’s review and after a couple of weeks of convincing he got the investors on board with the deal. It sounded like everything was done, but then my friend mentioned to me that they were almost there, just the venture capitalist’s investment committee was going to meet the next day and that would be that. I couldn’t contain my frustration! The investment committe hadn’t already approved the deal, i.e. signed off on the term sheet? I knew my friend was in trouble. It took a week, but when he had to finally close the doors the investor explained that he couldn’t get the investment committee on board. The term sheet was worthless and now it really was too late to talk to another investor.
You can do everything right, but without capital your startup won’t make it. Never give up. Never assume you have a deal until the money is in the bank. I know, it sounds obvious, but remember, venture capital firms are selling to - sometimes they are selling what they can’t deliver.
Sun is blowing up MySQL!?!
April 17, 2008
MySQL is the most popular and widely used database on the planet for one reason ~ it is open source. Sun bought MySQL earlier this year and has now decided to release new features in a closed source version of the database only available to paying customers. Are you kidding me? Did Sun forget that the ‘community’ built the damned software in the first place? Guess what will start to happen? The MySQL community will simply move to PostgreSQL and soon it will supplant MySQL.
Buy my phone number on eBay!
April 13, 2008
I figured that if Andrew Baron could sell his Twitter account I could sell my phone number. The number has been called thousands of times. I really love my phone number but I feel like I haven’t been using it the way I want to. Quite honestly, I feel sorry for all of my callers because they wind up with my voicemail and I haven’t been able to utilize the medium the way I want to. I also participate in another telephone number over on my cell phone so I’m thinking I’ll start taking more calls over there and start up a new phone to do what I want to do next.
It would be silly to just delete this phone number, especially if there is someone out there that had like interests and had something to say or wanted to get involved in some relevant conversations. In terms of monetary value, I have no expectations or needs at all so I decided not to put a minimum bid on this. Whatever will be, will be. I have a strong community of telemarketing representatives who call it quite frequently.
The number is 214.550.2003 if you want to give a try. Here is the ebay auction for all you interested buyers.
Google takes aim at 37 Signals!
April 11, 2008
Jason Fried, of 37Signals, was livid when Google (or their proxies) developed a chat application called HuddleChat. He felt it was wrong for Google to make an application that was similar to his company’s Campfire application. Google immediately took down the application. Mike Arrington and others suggested that by taking it down Google was engaging in censorship setting a bad precedent. Today Mike revealed that Google might be launching a ToDo list application. Um, 37Signals has a ToDo list application too (http://www.tadalist.com/). I suspect that Jason won’t be too happy about this either. Perhaps Google should start checking with the 37Signal guys before they begin developing applications ~ might save everyone some time. Just for the record, 37Signals owns the following application areas:
- Project Management and Collaboration (Basecamp)
- Online contact management and simple CRM (Highrise)
- Intranet, group calendar, organizer (Backpack)
- Real-time group chat for business (Compfire)
- ToDo Lists (TaDaList)
- Collaborative writing (Writeboard)
- Open-source web-app framework (Ruby on Rails)
FYI - we are a satisfied 37 Signals customer (just having some fun, so don’t turn off our Basecamp sites, please).
DoubleClickers Don’t Worry!
April 11, 2008
First, I am not a lawyer and I don’t play one on TV. Valleywag recently reported that Doubleclickers got screwed by Google when they asked them to sign non-competes and then terminated them a week later. Do no evil, eh? Anyway, Valleywag reported that these Doubleclickers are being ‘forced to find jobs outside their industry’. This isn’t true.
First, the agreement is overly broad and wouldn’t be enforceable in most states (including Texas). Second, Google is so big and broad itself that it would be VERY hard to find a company that wasn’t “a client or customer within the last twelve months of my employment with the Company.” Under this clause I suspect that Doubleclickers wouldn’t be able to work for Valleywag, much less an internet related company. So if I was ‘forced’ to sign such a contract a week before I was fired I would feel VERY comfortable ignoring it.
LAB802 in CNN Money
April 11, 2008
In February I was asked to judge a business plan competition for the SMU Cox School of Business. The winner was a group called LAB802, I wrote about them here. Alex Bagden, one of guys from LAB802 let me know that out of 230 teams invited to the Rice Business Plan Competition only 36 were invited to compete in the final round. Alex and his team got to pitch to 70 VC and angel investors. Way to go guys! Check out the article about them in CNN Money:
Team name: Lab802
School: Southern Methodist University, Cox School of Business
Team members: Matthew Vroom, Alex Bagden, Chris Irvine, Lauren McGehee, Simon Mak, Alex Wimbush
Concept: A digital imaging device that records visual events 30 seconds before and after a car accident. The goal is to shield drivers from liability by creating a visual record of the accident.
An onboard accelerometer enables the device to detect and record an accident. Drivers can then download the images to their computers via USB.
The box is designed to be easy for drivers to install and use. With no moving parts, it’s also durable and can withstand accidents. The target market includes car buyers and anyone who has suffered financial liability because of a car accident. The company has filed for three provisional patents and hopes to sell 10,000 units in its first year.
Timeline: Product design is nearly complete, according to the management team. Manufacturing is scheduled to begin in August 2008.
Don’t Piss Off the FAA
April 10, 2008
I didn’t pay much attention last week when Congress held hearings into the FAA’s relationship with airlines. Representative Oberstar (D-Minn) clearly pissed off Robert Sturgell (Administrator of FAA) when he suggested that he had a “cozy relationship with the airlines and lacked an enforcement mindset.” The biggest loser appeared to be Southwest Airlines who flew planes with cracks in them evidently with the approval of the FAA. The boys at the FAA didn’t like Congress suggesting, “All eyes are on this now. We have a fundamental problem here. It’s time for a giant step back for a top-down strategic review of the FAA.” Oops!
The FAA, in response, is clamping down on the airlines. Yesterday the FAA forced American Airlines to shut down half of their flights and today more than 1,000 flights have been canceled. Today the FAA suggested that they are going to expand their scrutiny of passenger planes resulting in more groundings for American and other carriers including Alaska, Delta, Continental and Southwest. These ‘audits’ will result in more and more canceled flights through June.
I am not sure what Congress was thinking. The FAA has an amazing record of safeguarding our skys, the only real problem we have is our air traffic control system. Our economy is going to lose billions as a result of the FAA’s crackdown, too bad we couldn’t use some of that money improving our air traffic control systems instead. Our economy is in the tank so Congress decides to screw up an entire industry ~ thanks Representative Oberstar!
How to prevent your investors from selling!
April 10, 2008
One day everything is going along great with your business and your investors decide they want to sell. You don’t want to give up your personal secretary, the company car or the free Cokes. Your investors keep talking about getting a better return on their money or some such nonsense, but you are happy with the status quo. Then one day, POOF! Your investors get a letter from another company who wants to buy the company. You would do anything to prevent them from selling. You and your friends still control the board so you have a little time to try to stop the deal from going through. How do you prevent your investors from selling?
If you are Yahoo! you do your best to screw up your business as fast as possible. Make yourself so freaking unappealing no one could possibly swallow the poison pills you have taken. Yahoo began screwing up their business in February by entering into agreements will all current employees that provides 24 months of severance pay if they are terminated. Once Yahoo’s HR department finished operation foobar, the revenue generating side of the business (ad sales) decided to turn over advertising to the companies #1 competitor, Google! Next Yahoo decided to find an albatross to hang around their neck, preferably a company that has already destroyed another company. According to the WSJ, Yahoo is close to completing a deal to acquire AOL from Time Warner. Time Warner could never swallow AOL and it almost destroyed the company, so it is a perfect fit for a suicidal Yahoo.
Of course, some of Yahoo’s investors are freaking out. Legg Mason almost coughed up a lung when Microsoft suggested they would lower their bid. Realizing that Yahoo is on track to ruin their business, investors couldn’t imagine NOT selling to Microsoft. They would be stuck with an asset that is worth considerably less than it was just a few months ago. Ironically, Yahoo’s only hope is to be acquired by Microsoft…
Code is your ticket!
April 9, 2008
Fred Wilson suggests that having a little working code is a much better way to get in the conference room of your favorite VC than to send them a kick-ass PowerPoint. My question, “who uses PowerPoint presentations besides people will real jobs?”
ServiceGuy’s Detroit Numbers Changing
April 9, 2008
If you are a service provider signed up on ServiceGuy in Detroit you likely get calls for ABC Storage. The calls are absolutely hilarious (sorry). We considered post a few of them, but decided to just change the number in Detroit instead. So the numbers for Detroit are changing, please be advised (Service Guys don’t need to do anything).
Credit crunch, time to start shopping. . .
April 8, 2008
Citigroup, Bank of America and Wells Fargo are going to curtail lending to preserve their capital ratios. The FDIC is reporting that these banks will likely be downgraded and will no longer be considered well capitalized. The FDIC is saying, “We are dealing with an unprecedented situation.“ What does this mean? Companies who use credit to finance their operations will have a harder and harder time finding debt. If they can’t find debt they will have to hunker down to survive, slowing their growth turning our mild little recession in a much more serious matter.
I have several friends who are in the middle of equity rounds with venture capital firms and deals that were supposed to close last month haven’t closed. The venture funds are tightening their investment criteria and looking for ways out of deals that haven’t closed. This is especially true for deals that require debt along with the equity infusion. It reminds me of 2001 in the telco space ~ lots of opportunity, but very few people willing to act.
If you have the capital it is time to start shopping for companies. Look for businesses that use debt to finance their operations. Staff augmentation businesses come to mind.
Rockefeller cares more than McCain?
April 8, 2008
Senator Jay Rockefeller criticized John McCain for his actions in Vietnam suggesting,
“McCain was a fighter pilot, who dropped laser-guided missiles from 35,000 feet. He was long gone when they hit. What happened when they (the missiles) get to the ground? He doesn’t know. You have to care about the lives of people. McCain never gets into those issues,”
Of course the great-grandson of the oil tycoon, Jay hasn’t had to work a day in his life so I am not so sure he has much experience ‘on the ground’ (I don’t think the Peace Corp compares to Vietnam). When was the last time Mr. Rockefeller sacrificed anything? As I recall, McCain had quite a bit of firsthand experience on the ground in Vietnam. After being shot down near Hanoi a mob of angry Vietnamese people attacked him crushing his shoulder and bayoneting him, he wasn’t expected to live a week. McCain recovered and was put into solitary confinement for two years. When McCain’s father was named commander of all U.S. forces in the Vietnam theater he was offered early release, but instead of taking the offer he told his captors that he would only accept the offer if every man taken in before him was released as well. After five and a half years McCain was released from captivity. I am no fan of McCain, but I am damn sure he cares about people. He proved that fact when he refused early release. Can Mr. Rockefeller say the same thing?
(picture: McCain being pulled out of Truc Bach Lake in Hanoi and about to become a prisoner of war on October 26, 1967)
Personal Brand Descruction? Nah!
April 8, 2008
Have you ever heard of Shel Israel? He wrote the book on blogging (Naked Conversations). Loren Feldman discovered that Shel hadn’t registered his own name (I registered mine yesterday) and created a parody site at shelisrael.com, basically making fun of Shel’s new show on Fastcompany. Loren has posted several videos of a puppet purporting to be Shel. Lets just say Shel didn’t take it too well. Mike Arrington called it ‘a case study in personal brand destruction‘, but I disagree. Nobody enjoys being made fun of, but in this case I think that Shel stands to gain more than he might lose. Check out the videos here. Shel invited me into his home a couple of years ago for dinner and I throughly enjoyed his company. He is funny, acerbic at times, but very warm and friendly. I never took the time to watch his new show until Loren did his parody. I am sure lots of other folks are checking Shel out because of Loren as well. My advice to Shel ~ enjoy the attention! Loren ~ hilarious!
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