
I killed my startup hours before closing a seed round - rmason
http://www.tamccann.com/how-i-killed-my-idea-hours-before-closing-a-seed-round
======
ubasu
_I made my first offer to a full-time employee, who could add necessary
medical expertise to the team. She chose us over an existing offer and gave
notice to her current employer._

What happened to this employee? Just curious...

~~~
jonas21
Also, what happened to his team of "night-time hackers" who actually built the
MVP. Did they have any say in the decision to shut down or were they just cast
aside?

~~~
adamloving
I was one of them. We had many spirited discussions. TA was completely
transparent about what was going on and we tried hard to find an angle to make
it work. I look forward to future hacking with the others.

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wbillingsley
I might just be being contrarian, but it sounds a little as if it's the
investors that dodged a bullet.

As I understand it, there's plenty of ups and downs in a new venture,
especially e-Health where you're somewhat at the whim of government (most
countries' health systems are highly government regulated) and there are
already plenty of past-failures, even one by Google. But surely the investors
would already have been aware of that, and had decided to take a risk, because
e-Health is also inevitably going to be a very big market eventually (just who
knows when the ducks will finally start to line up), and if they want to play
in that space they have to try.

But it seems this entrepreneur had last-minute cold feet at even the thought
of the hurdles they will encounter.

It's that question -- whether this team has enough perseverance to stand a
chance in that stormy sea -- that seems to have been answered at the last
minute. The investors already knew the chances would be low.

~~~
7Figures2Commas
The investors dodged a bullet not because this founder lacked the mental
fortitude to face challenges but because he did their due diligence for them
and was honest enough to pull out of the financing once he discovered his
concept was likely not viable.

The market for seed-stage investments is very frothy today. Lots of investors
are spraying and praying, and as a result often lack domain expertise in the
areas in which they're investing. Founder pedigree and social proof weigh
heavily in what seed stage investors consider "due diligence."

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Mz
I looked at the three competitors he listed in his letter and this describes
his idea in a nutshell:

 _The goal was to make a mobile app that worked something like; install, find
your doctor, take a photo of your drivers license, “sign” on the phone (to
validate identity) and then magically (after a few days time) you have copies
of all your past health records, accessible on your phone. Obviously, we had
many ideas of what you could do next (visualize your health history, find
correlations and causation, compare with norms, share with others, enhance
with other data…) but we wanted to make it fast, easy and free to get your
records. After a few months, we had this working (with lots of issues) and it
was really cool!_

I am having trouble understanding why medical records are apparently central
to his vision. Why? I mean, if you are frustrated with how medicine currently
works, why not do something "non medical" as a real alternative?

~~~
Animats
It's a hard problem. Huge efforts are going into getting medical records into
some machine-usable form without making medical care worse or overloading
doctors. That alone is hard. Doing it across multiple providers is very hard.
The business plan seemed to be "do cool app", and then magically the huge
back-end problem somehow gets solved.

Jim Clark, the founder of SGI, tried to do this in 1995, with Healtheon.[1]
After several failures but a successful IPO (dot-com boom) which raised $40
million, the business pivoted into medical billing, and is now Emdeon, which
does about half the commercial medical/insurance billing in the US.

So bailing out at the seed round was a good idea.

[1]
[https://en.wikipedia.org/wiki/Healtheon](https://en.wikipedia.org/wiki/Healtheon)

~~~
marktangotango
Fantastic info, thanks for sharing. Great example of a pivot.

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pavornyoh
This shows great character thus being honest and knowing taking money isn't
ideal at that stage.

~~~
itake
yeah, that could be true. But starting a company is a huge risk for him as
well. He felt like this idea wasn't something he was willing to put his time
for yet and backed out of the arrangement.

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drumdance
Whoa, I had a similar experience about 15 years ago. It wasn't hours before
closing but it was looking like a go. And it also was with Brad Feld.

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jrochkind1
Personal Health Records are a nightmare, the whole system doesn't make a lot
of sense and is solving the wrong problems in the wrong ways in the first
place (and legally mandated to do so). I think he's totally right that he just
dodged a bullet.

~~~
rokhayakebe
_solving the wrong problems in the wrong ways_

Can you please elaborate?

~~~
pcurve
On the surface, comprehensive, coordinated, and centralized PMR sounds like an
appealing notion. It plays into the idea of Big Data to produce better
healthcare outcome, and also empowering consumers to make informed decisions.

Much of the frustration stemming from lack of PMR is rooted in the the way our
de-centralized and privatized healthcare function. This isn't something you
fix through better technology; it's something you have to fix through
legislation. Our healthcare problem is mainly a legislative one.

Some are tackling PMR because it appears to a contributing cause of poor
healthcare, when in fact is a symptom.

~~~
rokhayakebe
What legislative changes would you propose?

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7Figures2Commas
Kudos to the author for doing the right thing. But his post highlights just
how frothy the market is and just how much weight founder resume and social
proof are being given in seed rounds today.

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rajacombinator
The real gem hidden in this article is the way he approached structuring the
round.

~~~
ajmurmann
Totally agree. Is there any other good writing on this topic. Most of what I
find is usually about how to pitch, but there is typically very little about
how to select investors.

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jdp23
It must have been a tough decision. But, far better to pull the plug than
commit himself (and investors) to something that he really wasn't confident
would work. To me this is the key line: "as the days marched forward ... the
negatives mounted and my confidence decreased." The trend was in the wrong
direction.

And, kudos to him for sharing it!

------
logicallee
This blog post doesn't add up for me, but I can't put my finger on it.

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ajhit406
Entrepreneurship is more about conviction, determination, and will than ideas
and market opportunities.

To me, this letter is basically saying you're just not up for the challenge.
That's fine -- it's certainly better to admit it now, and it's likely a
rational decision.

But the best companies usually aren't created by rational thinkers. The best
entrepreneurs can take a horribly broken system and contort it in ways that
nobody else even thought of, and then execute on a vision to make it the new
reality.

You're not telling your investors "this market is too tough, let's not go
here", you're basically just saying "This market _really_ needs to be un-
fucked, but I'm not the guy to do it".

Nothing wrong with that, let's tell it how it is.

~~~
alexdevkar
I believe your generalizations go too far. The "crazy" founder who succeeds
despite all odds is only one archetype. There are others. Many outliers are
successful by creating new markets.

This guy (T.A. McCann) has successfully built and sold a startup, so he
doesn't lack the will -- he just lacks the will for this business.

Markets can be so tough that the time/cash/energy to succeed in them means the
opportunity is not as attractive as others.

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justinkramp
I got a 500 response and a HostGator error page. I thought you were making a
point about making sure your website is up or at least not running campy error
messages with a cartoon alligator.

~~~
peachepe
Seems to be going down, so:
[http://webcache.googleusercontent.com/search?q=cache:iV6Xc7-...](http://webcache.googleusercontent.com/search?q=cache:iV6Xc7-C4agJ:www.tamccann.com/how-
i-killed-my-idea-hours-before-closing-a-seed-round/+&cd=1&hl=en&ct=clnk&gl=ni)

------
awakeasleep
You have to put it into perspective. There are job creators, and there are
takers.

~~~
dang
We detached this subthread from
[https://news.ycombinator.com/item?id=10441543](https://news.ycombinator.com/item?id=10441543)
and marked it off-topic.

