Chris Tackaberry is the co-founder and CEO of Clinithink, a UK-based healthcare software company.
In our interview, Chris talks me through his journey as an entrepreneur, explaining how the idea for Clinithink came about and the challenges faced along the way. In addition, he also shares his knowledge on fundraising and what type of mind-set entrepreneurs should have when going into it, concluding with some great advises for first time entrepreneurs.
Hi Chris, Thanks for doing this. How are you doing today?
Can you give us some background information about yourself?
Sure. I have been working in IT for the last 13 years, mostly in product management for software product companies in the healthcare and telecoms sectors. I am passionate about the power of technology to enable change, particularly in complex enterprise operational settings.
Tell me how you initially got into healthcare?
That’s pretty simple. I trained as a doctor and practiced medicine for 9 years before getting into IT. Early on in my career I did an MSc in Computer Science and I got bitten. It was only a matter of time before I started to think about the kind of software products that would be useful in the highly complex and dynamic business environment that is healthcare. It seemed a pretty natural step to move into the IT sector to see if I could add some value.
How did the idea for Clinithink come about?
For a long time, I and my co-founder at Clinithink, Dr Peter Johnson, had been aware of the shortcomings of existing healthcare systems which force users to record consultations, visits, opinions, plans, etc. in structured forms. That is not how doctors and other clinical professionals tend to think or work.
Whilst I am all for change and continuous improvement, I think in this area, technical constraints meant that systems were dictating how users should behave, rather than addressing the requirement, in this case to be able to record narrative data in a flowing and natural way.
If you are a psychiatrist and someone comes to see you with depression, you are going to struggle to record your consultation using drop-down boxes and radio buttons as though you were buying a book on Amazon. The sharp end of healthcare is fuzzy, organic and the systems designed for use at the point of care need to reflect that.
Pulling that off technically is in fact very difficult and something that Pete had been experimenting with for years before we started Clinithink. When I saw the prototype stuff he had built, I said I bet there are other systems vendors who would kill to be able to embed the capability to process and structure free text into their systems. We figured you should be able to business around that need so we started Clinithink.
Tell me about the early days, what was the hardest part of starting the business?
I am sure there are people who have done it much more elegantly and smoothly than we did, but I also believe that if doing a tech start-up and getting it to survive to revenue and positive cash flow was easy, everybody would be doing it. I think the hardest part is managing the uncertainty and containing the anxiety.
You have to be honest with your staff about where things are up to, how the search for funding is going, but equally, there is no point in freaking them out about the terrible things that could/might happen. I am fine with my own risk appetite, but taking responsibility for other people’s livelihoods whilst they are with the company can eat away at you if you let it.
What is Clinithink? And what are you trying to solve with it?
We are a software technology supplier operating a B2B model with healthcare solution and service providers who partner with us to embed our technology in their offering. Unstructured narrative data is a very important source of information in healthcare records but traditional systems tend to ignore.
Our technology adds meaning and structure to that raw material so that it can becomes usable, computable and actionable data. In turn, that facilitates all kinds of value-added support for the healthcare process in terms of coding, decision-support and big data–type analytics.
How have you been able to fund it?
Our funding journey has been reasonably typical I think. We ran on pure vapour/spare time for quite a while, and then we were fortunate to get support from an angel investor who provided seed funding. We topped that up with investments we made (either in cash or time or both) supported by a few friends and family. When it was clear to us that there was almost certainly a market for the technology and that we could build out a commercial offering we sought and obtained more substantive investment from a strategic partner. About a year after that we secured multi-million dollar funding from a consortium led by a US VC, Vanguard Atlantic in a fairly typical Series A round.
What sorts of advice do you have for entrepreneurs looking to raise money for their start-ups?
In the current climate, securing funding is very difficult. As the CEO you have to be prepared to sacrifice nearly all of your time and focus on the funding process which means you have to have people you completely trust running the day to day business of the company. You need to set their expectation that you will not really be around offering the kind of support you would like to whilst the funding process is ongoing.
In terms of the actual raise, I see people going out to ask for 5 or 10 million dollars on the back of an 8-page business plan. That’s very naive in my view. I think you have to take an incremental approach, relatively small chunks that fund the next logical step in the process to establish the business and most importantly prove or disprove the assumptions you have made in your business plan. If you are doing something truly new and innovative, which we were, you simply can’t know how some things are going to turn out, so you need to do a series of trial and error phases, adapting as quickly as you can to the data that comes back from customers, partners, prospects, competitors.
Investors will look for that open minded-ness and the willingness to “fail fast” – “OK, that didn’t work, let’s try this approach”. Equally, if you are not going to be persistent and resilient in the funding process, an investor will rightly question your capacity to exhibit those behaviours in operating and growing the company.
It’s tough, no doubt about it and sorry to say, my own experience was that risk appetite was far, far higher amongst the US VC’s we spoke to compared to their UK counterparts. So if there is US market for your company, it may be well be worth looking for US venture funding.
About the first few months, how excited were you, tell us about how those months felt, what happened?
Because we began in our spare time and gradually ramped up, there wasn’t a definitive “start” to our start-up. After we got the seed funding and started hiring, then you knew it was for real. It might not be what you want to hear, but I can’t remember being excited. I was too focused on driving towards the objectives we had set ourselves as soon as funding was available. It was a case of head down and push as hard and as fast as you could without making yourself or (anybody else) ill. It’s exhausting but I think that concentration of energy is essential to reach “escape velocity” with enough momentum to carry you into orbit, so to speak.
How did you initially get traction?
Through sheer bloody-mindedness, determination and persistence. We were willing to keep trying different ways of engaging prospects, learning as much as we could from each one. Did they get it? Did they perceive value in our offering a different way to us (which is incredibly useful feedback that it’s sometimes difficult to spot, because you assume they share your world view? I would say our network was important and of course you need a bit of luck.
What are the most crucial things that you have done to grow your business?
I would say its two things. 1) Hire the best people you possibly can, staff to your weaknesses not your strengths. Really talented people will deliver in incredibly adverse conditions. Obviously your job is to create an environment which makes that easy but Rome was not built in a day so you also need to be patient, which is one of my biggest personal challenges. 2) Keeping an eye on the vision and strategy at a 2 -3 year horizon but not being a slave to it, being prepared to accept unexpected steps in the journey and being as opportunistic as you can.
What would you say has been the highlight of your entrepreneurial journey so far?
Two milestones for us 1) Securing our first big commercial deal with a tough, no-nonsense partner that was much, much larger than us. They were very careful in their evaluation of the market and of our technology and selected us. That was excellent vindication for our product and our plan. 2) Successfully closing the Series A funding round was equally satisfying. The investor due diligence was very thorough so again the fact that they were, by implication, agreeing with a lot of the decisions we had made to build the company and create a strategy was reassuring.
What should we be expecting from yourself and the Clinithink team for 2013?
I think this year is going to be fascinating. The market is moving all the time as more people in our sector start to realise the potential that adding technology like ours to their solutions can have. The advent of big data in healthcare and clinical analytics generally are very important trends for us and our goal this year is to exploit the need for our technology that those trends are creating.
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
1) Be very clear about the difference between a cool/beautiful product or service and something that can be monetized because it’s useful, needed or desired. You have to be really honest with yourself about why people would pay money for “this”. It might be your life’s work and passion and that’s fine, but will people reach into their pocket and but it? If so, do you have any objective evidence to support that assumption? I read that one of the richest people in the world is a Chinese woman who built a huge cardboard box manufacturing company. Not a very sexy product but entrepreneurial genius given how many cardboard boxes must leave China every day in containers wrapped round all the products China exports to the world.
2) Be prepared to feel that the odds/ the world/ investors/ competitors/ prospects/ suppliers are all against you at some point. Of course they aren’t but it really is a lonely journey and at times a fairly gruelling one. Ask yourself are you up for that? Are you the kind of person that thrives in the face of adversity? What are your energy levels? Who will you lean on for support, counsel, encouragement? It sounds faintly ridiculous but know where your sources of positive energy and good karma are. You’ll need them.
3) Get in for the long haul or not at all. People quote companies like Instagram, (legend has it that the app was built in 6 weeks and then the company was sold to Facebook for $1B). Even if that is true, it’s the exception that proves the rule.