A Failure Story: GlacierMD

link: I wasted $40k on a fantastic startup idea

Intro

"It's good to learn from your mistakes. It's better to learn from other people's mistakes" said Warren Buffet.

This is a failure story. The author founded GlacierMD, a startup aiming to compile the results of many clinical trials into a database and use statistics to help people to choose the best medications, and failed in nine months.

Highlights

[I]n the year of our lord 2017 I had a Brilliant Startup Idea: use a structured database of clinical trials to provide simple, practical answers to common medical questions.

A wave of exhilaration washed over me. Here was a problem that
- Was interesting
- Could help people
- I knew how to solve

Yeah, working on such a problem could be very fulfilling and gratifying. But, as a startup idea, some important factors seem left out. 🤔

When the author told this boss that he was gonna quit, his boss's reaction is surprisingly supportive:

“That’s an awesome idea,” said Carl. “It sounds like something worth working on.” Carl was my boss

And here was Carl telling me that my startup idea would bring such benefit to humanity that I simply had to quit, his roadmap be damned. I nodded knowingly, feeling the weight of this responsibility resting on my proud shoulders.

Then, quit the job and start building.

Over the next nine months I would quit my job, write over 200,000 lines of code, hire five contractors, create a Delaware C-Corp, add four doctors to my advisory board, and demo GlacierMD for twelve Bay Area medical practices. I would spend $40K of my own savings buying clinical trials and paying contractors to enter said trials into the GlacierMD database.

I drew all sorts of inscrutable diagrams with dry-erase pens on my parents’ windows. I hired a motley crew of Egyptian contractors to start entering clinical trials into my database. I commissioned a logo, registered my domain, and started obsessing over color schemes.

Like a montage from the movie The Social Network

The first demo wasn't ideal. The head of the product in the author's previous company brought up a concern: why people would trust the website.

(The head of product) shrugged.“Lots of people make medical claims on the internet,” he said. “Why should I trust yours?”
“... nobody cares about this math crap. You need doctors.”

But this is solvable.

So I called up some friends, some buddies, some friends-of-friends. “Would you like to be an advisor for my cutting-edge health-tech startup?” I’d ask, while eating Dominos in my parents’ laundry room. I’d give them 1% of this extremely valuable, high-growth startup and in exchange I could plaster their faces all over my website.
Four of these doctors agreed.

Next is to find out a viable business model.

Business model option 1: Ads. Probably won't work.

then I look at WebMD’s 10-Qs and start to spiral. Turns out the world’s biggest health website makes about $0.50/year per user. That is…not enough money to bootstrap GlacierMD

Business model option 2: sell to doctors. B2B sales are complicated.

I started cold calling people using scripts from the internet and tried to convince them to sit through a GlacierMD demo.

“Hmmmm,” she said, picking at her fingernails. “Not directly. Of course I always have the best interests of my patients in mind, but, you know, it’s not like they’ll pay more if I prescribe Lexapro instead of Zoloft. They won’t come back more often or refer more friends. So I’d sorta just be, like, donating this money if I paid you for this thing, right?”

Given high expenses but no income, the runway is up in 9 months. He had to shut down everything.

So in July 2018, nine months and $40K after starting GlacierMD, I shut it down. I fired my contractors, archived the database, and shut down the servers. GlacierMD was dead.

A year later when he read a Marketing classic, he realized his oversight at the beginning: market validation.

“To succeed, an offering must create value for all entities involved in the exchange—target customers, the company, and its collaborators.”
- Strategic Marketing Management

If I’d articulated at the beginning how I expected to extract value from GlacierMD, maybe I would’ve researched the economics of an ad-based model, or I would’ve validated that doctors were willing to pay, or hospitals, or insurance companies.

Closing Comments

I don't see the author's startup idea as a good one. Don't get me wrong, I believe things like this are worth our efforts. Making medical research results more accessible brings a lot of value, in general.

However, bringing value alone doesn't guarantee a fast-growing business. It could take a very long time to take off: to-business sales usually have long and unpredictable cycles; trust from the public needs time to build up organically. It doesn't even guarantee a for-profit business: Wikipedia is a non-profit but provides enormous value to the public.

Instead of burning quickly on a not yet validated idea, maybe he could: keep the expense low, focus on making a demo-able feature, and validate with users. Maybe after some trials and error, he could find it a viable business. Or even make it a public good, accepting donations, kicking off crowdsourcing, or issuing NFTs 😝

Bonus

Satyam, a resident physician, wrote a comment on the original article providing some interesting insights from a medical professional's angle: https://satyam.substack.com/p/why-glaciermd-actually-wasted-40k

The TLDR is: Medications decisions are more than statistics. GlacierMD didn’t address enough of the problem.