Build Something A Few People Love

 “It’s better to make a few people really happy than to make a lot of people semi-happy.” – Paul Buchheit

This is a common saying amongst tech entrepreneurs.  Successful tech entrepreneurs have noted that something which a few people really love is always better than something which only a few people merely like somewhat.

This has made sense to me ever since I heard it.  It seemed like common sense: If you make something people merely like a little bit then if your product or service dies or disappears then no one would really care that much.  And if you make something a few people really love then it is likely that more people will think it’s “really really good” or just “really good”.

But I’ve thought about this subject a lot deeper and after reading some of Nassim Taleb’s* essays and books, I think I was missing a key insight.  The insight is that minorities, if vocal enough, often win and impose their beliefs and wants on other people who remain indifferent.

Let’s take the example of GMOs and Non GMOs.  If we have a family (mother, father, son and daughter) and the daughter decides she is staunchly opposed to GMO foods.  It is likely that the rest of the family will cave in and everyone in this family will start to eat non-GMO foods to placate the daughter.

As there isn’t a massive price and taste discrepancy between GMO and non-GMO foods the family doesn’t mind eating non-GMOs.

Now let’s say that this same family attends a party.  The host of the party will be informed that the whole family doesn’t eat GMO foods.  The host decides that it would be easier to make all the food at the party Non-GMO, rather than making separate dishes for this one family.  After all the price is pretty similar so shouldn’t effect the budget of the party by very much.

All of a sudden this large party of say 50-100 people are all subject to eating Non-GMO foods without even noticing and more importantly this large group of people don’t even care!

As a result of this party, local vendors will start to realise that they can increase their profits by selling Non-GMO foods.  As a result, a large part of society is made to eat Non-GMOs despite not caring much about eating GMOs.

There are two things at play here.  First the cost different between GMOs and Non-GMOs is not that much.  Also, there is an asymmetry present in this example: The people who won’t eat GMOs will not eat GMOs under any circumstance – they are staunchly opposed to it.  However, the people who eat GMOs do not mind eating non-GMOs.  When this asymmetry is in place, the minority can overtake the majority and impose changes on everyone.

Halal (Muslim approved food) is another example of an asymmetry.  Apparently a large proportion of the meat imported to the UK is Halal.  The asymmetry is present – non-Muslims don’t really care what type of meat they eat, but Muslims won’t eat anything but Halal.  The price of buying Halal meat will also be pretty much the same as non-Halal meat.

McDonald’s is also an interesting example, which is relevant to business.  Everyone I know of has had some sort of McDonald’s food at some point in their lives.  In fact when I go on holiday these restaurants are often packed with foreigners as a respite from exotic food or the possibility of contracting some type of food poisoning.  The fact is that society is largely indifferent to McDonald’s – no one really hates McDonalds – whether upper or working class, no matter which country they are from.  So, we can all agree that McDonald’s doesn’t make the best burgers in the world, but no one really hates them either, which means that people still go.

Now to turn this conversation back to business.  I am wondering whether this effect is what plays out in successful startups and makes business spread.  1 – Do they have a core group of people who love the product, 2 – Is there an asymmetry where people adopt a certain technology/service, refuse to give it up and therefore force people to also use the product or service and 3 – are the rest of the people who end up using the startup indifferent to adopting the change.

Thinking about different startups, I really do believe this is closer to the truth than I had originally thought.

If we take Google as an example.  I cannot even remember when I made the switch between Yahoo! and Google.  It just seemed to happen and I became just another user – I was indifferent to the change.  It is likely that when Google first launched, there were a core group of users that loved it and refused to use Yahoo!.  There was an asymmetry here – Googler’s refused to use other search engines.  The rest were indifferent and the switch to a different search engine was easy to make.  As a result Google spread, when people started to simply set the homepage as Google, no one was staunchly opposed to using Google/in love with Yahoo!.  This is probably how I made the jump without even thinking.

Moral of the story?  Make something people love!  This way, to create a massive success you only need three or four percent of converts to start using your startup instead of penetrating the whole market.

Good advice after all it seems!

* However, Mr Taleb was mainly talking about how this insight effects society, rather than startups and entrepreneurs.

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Healthcare & Volatility

Working At Scale

General Practice / Primary Care has been around for a long time in the UK (since 1911).  It is currently going through a massive transition due to funding cuts by the government, the pressures of having to deal with today’s needy patients and the increased work load being transferred from Secondary Care to Primary Care.

General Practice was traditionally provided by small Practices – often one or two doctors looking after the local community surrounding their surgery.  This model of care which has survived over 100 years, is now being radically changed.

To deal with the modern landscape there is a push by the government for general practice doctors to combine to create “MCPs” and “ACOs”.  These are large organisations  which have a very different way of providing healthcare.

Traditionally, patients would register with their local GP and over the ensuing years they would build up a real relationship with their Family Doctor.  This would allow GPs to provide a holistic approach to the care that was given.  Having this connection with patients of course made it a very cost efficient way to provide healthcare as patients could be managed in an appropriate way, rather than the secondary care approach which entails carrying out a barrage of investigations and providing a ton of treatment in a cookie cutter fashion.

This model of care is still proving to be very efficient today – over 90% of patient contact by the healthcare system is carried out by primary care and they are only provided with around 7% of the NHS budget.  That’s pretty good bang for your buck!

The new care organisations which are currently being created are turning GP surgeries into outpatient hospitals.  They will be staffed by “Salaried GPs” who will work in them on a rota basis (much like hospitals).  They will increasingly carry out the outpatient services traditionally ran by hospitals.

The hypothesis behind this shift is that “working at scale” will reduce costs for the healthcare service as a whole, as more conditions will be able to be looked after in the community.  Instead of being referred to the hospital for that cough, you will instead be seen by a GP with a special interest in respiratory medicine and instead of seeing the GP on your first consultation, you will be seen by an advanced nurse practitioner or a trained Pharmacist.

Sounds great!  Patients have more access to healthcare and more healthcare can be delivered at a lower cost.

However, the problem with this new model is that it is just a hypothesis, which is untested and since its inception has not provided the benefits that were promised.

The Lindy Effect

The reason healthcare is so hard to provide and also why it is so hard to change is because it is incredibly complex.

The NHS has to deal with the whole of the UK population and try to provide acceptable care to all people regardless of their backgrounds, it has to deal with the whole gamut of human diseases, psychological problems, social problems, economic problems, governmental initiatives and rules, different vested interests, market rules, changing demographics and so on.  It also has to provide an increasing amount of treatments, social care, investigations, operations etc.

The Lindy effect is the concept that the future life expectancy of a non-perishable technology or idea is proportional to their current age.

For example, the Bible has been around for 2000 years, it is likely – due to the Lindy Effect – that it will be around for another 2000 years.  It is not certain, but it is a statistical likelihood.

The reason the Lindy Effect is so potent is because it means that an idea or a technology has been put through the test of time and has had to have been through a whole host of iterations and complex challenges.  This increases and verifies its robustness.

One can think of it as a type of natural selection.  Put a piece of technology through a whole bunch of stressors, environmental changes, cultural changes, economic pressures and so on.  The technology that survives can continue to exist.

Time also allows us to be as sure as possible that the piece of technology in question works and is as devoid of as many side effects and adverse outcomes as possible in comparison to an alternative solution*.

Exposure To Volatility

Good systems are exposed to volatility and are allowed to thrive or die.  Primary care as we know it today has been exposed to a whole lot of volatility and as such it is a very robust and dependable system.

In the UK the government provides each GP Surgery with a certain sum of money each year.  This mainly depends on the number of patients that are registered at the practice.  With this sum of money the doctors in that surgery have to provide all the healthcare needed for their group of patients**, pay staff costs and run their business.

So in other words, for a limited amount of money, the NHS GP has to provide an unlimited number of appointments and services to meet their patients needs.  Any business-type would run away from this type of responsibility as unlimited supply is not logically possible.  However, this is the value that NHS patients are getting.

Each patient in the UK receives only around £90 of funding from the government.  This is generally less than people spend to insure their pet dog.

So in effect Primary Care has had to survive each year under very difficult conditions.  If demand and costs go up, GPs make less money.  If GPs can’t work efficiently, they lose their business and contract.

Currently, it is a robust system and works incredibly well – no one can deny this.

Denial of Statistics & the Removal of Volatility

The governments proposal to make general practice work at scales denies the existence of the Lindy effect (i.e. it dismisses statistics as a whole).

The fact is that statistically speaking, coming up with a whole new system of providing healthcare in a boardroom is incredibly naive and there will be a ton of unforeseen consequences.  I can guarantee that this will be at the detriment of patient care.

This type of “forward thinking” is a very “MBA type” of thinking.  It is all based on hypotheses  (aka guesses) by people in dark blue suits.  It ignores the existence of complex systems, second and third order effects which are not predictable no matter how smart you are.  It is the opposite approach to how successful businesses get created in the first place i.e. test a hypothesis and if it works then scale.

Not only is this new model of care worrying from this perspective, but it also removes the volatility faced by Primary Care currently.

As noted above, Primary care is exposed to the realities of having to provide care in a cost efficient manner.  Recently, as the potentially infinite workload is increasing alongside an increasingly finite remuneration, GPs are leaving the UK to work elsewhere, work in the private sector or retiring early.  In effect, the relatively reduced amount of funding is causing General Practice to fail.  This is volatility at work and indicates that something should be done to continue to provide good healthcare.

These MBA types have come up with a solution which they think avoids simply funding general practice adequately.  Their solution is to “work at scale” which involved GPs pooling resources together in the hope that this will somehow reduce costs.  A more logical process would have been to observe that General Practice is incredibly robust and cost efficient and simply increase funding.

These large “MCPs” and “ACOs” usually have over 70,000 patients on their registered lists.  These organisations if they fail economically and are not efficient will simply not be able to go out of business.  The government will have to intervene and bail them out as otherwise whole regions of the UK will not have healthcare provision.  Inevitably in the long run this will cost the tax payer/the government more than if they just persevered with the current system and funded it properly.

With these new systems as they will not go out of business, inefficiencies will increase.  Just think of the inefficiencies faced in large hospitals and it becomes clear that these large MCPs which resemble hospitals will face the same issues.

People In Blue Suits

This lack of understanding of the Lindy Effect, the lack of understanding of healthcare and its complexities by MBA types in their dark blue suits fares poorly for the future of the NHS.

It is astounding that such important issues are left in the hands of people who simply have no idea of what needs to be done.

In the mean time it is the front line staff – nurses, pharmacists, administrative staff and patients themselves – that will have to bare the brunt of increased risk, uncertainty and poorer healthcare outcomes.

*Thinking of religion in this way is quite an interesting thought experiment.  Could it possibly be that certain aspects of religion have benefits which we are unaware of, but due to the very fact that they have lasted for so long have untold benefits?

For example, many religions recommend fasting.  Only recently are the benefits of fasting being demonstrated in scientific research.

** In the UK, GPs are not able to close their patient list.  As a result anyone can go to a GP surgery in their region and register as a patient.  GPs are swamped with work and would rather close their lists, than to have more patients, more revenue, but not be able to provide good healthcare.

NHS Startup Part XVII – The End

Gosh, it’s been a long time since I posted about my startup.

I’ve decided that this will be the last blog post which talks about the minutiae of my startup and the challenges a new company in the healthcare scene has to face in the UK.

The reason this will be the last update is because the specifics of my startup are not helpful to other entrepreneurs / healthcare innovators out there.  The fact is that everyone will have to traverse a terrain which is different and face challenges which are different.  This I have come to realise is why so much advice surrounding entrepreneurship is so general.

“Solve a problem”

“Expect the unexpected”

“Provide value”

“Make connections”

These platitudes may seem clichéd and obvious, but they are cliched for a reason – it’s the truth and giving advice more specific is often not relevant or helpful.

Having said that here’s another update!

I Am a GP Partner Now

GP partners are owners of clinics in the UK.

This is a very privileged position I am in.  Basically I now have a test bed to test my application in.  I also have an allocation of money from the practice to keep building my app.  So, I am very lucky indeed to be have been given such a massive opportunity.

This is the best position a founder could be in!  Solving your own problem with outcomes which will be beneficial to yourself validates your idea for a business and ensures that at least one person will benefit from your product or service!

Keep in mind that 88% of founders fail because they fail to make something that people really want and will pay for.

To Spread or Not to Spread

The app is being used in a few test beds now.  As such I haven’t pushed for it to go into more and more healthcare settings.

The reasons for this is that the app has potential to become really killer.  But I need time to build the rest of the necessary features.  This will take 8 months or so.

It may seem risky to not keep pushing for it to go into more and more places, but there are a number of reasons why  think it’s a good idea to not spread to quickly in the healthcare space.

The first is that it’s very difficult to get into anywhere – but now that I am convinced that I will be able to get into more places, I need to make sure to not blow it by providing bad services or a crappy product.

The other reason is that when you’re creating enterprise software, the app itself is a small part of the whole business.  This is another reason why it’s a bad idea to learn to code just to make a business.  The fact is that people don’t just pay for an app (particularly in healthcare), but infrastructure, support, insurance, certification, governance etc etc.  Also, as you provide software to more settings and businesses, more code needs to be written to provide infrastructure for billing, handling new data and new protocols have to be written for implementation.  The legal implications and finances also becomes a whole lot more complicated.

Looking at it this way, I’ve figured that the best way to go forward is to really make an awesome product, get sales lined up and then launch in more places once we’re happy that we can deliver something remarkable.

The Future

The future looks good at this point.  I’m solving a real problem, we have customers, the scope of the app could make a really positive change for both patients and healthcare providers.

There will be plenty of challenges up ahead.  However, just because I’m not writing these in-depth updates doesn’t mean much for followers of the blog.

The fact is that anyone who really wants to do what I am doing can just read my blog and follow me.  As the whole blog is about entrepreneurship and healthcare, people will learn a lot more by reading and understanding the general view-point of an entrepreneur than to follow all the details closely.

Because let’s face it, how many other people out there are GP Partners and creating software for the NHS?

This Blog Post Was Written At 2.45AM

When I was at University I found that I studied best in the middle of the night.  I used to keep reading until my vision went blurry as a result of the small muscles in my eyes getting fatigued and slowly giving up.

Prior to medical school, the only other thing I dedicated my soul to was playing the guitar.  It was my first love.  Even then I noticed that I used to make the most progress in my abilities late at night.

Tonight reminded me of my younger days.  I’ve been up tying up some loose ends, sending some invoices for my startup and updating our upcoming workflow.  I think I’ve realised why I and so many others prefer to stay up late to do work.

It’s because there are no interruptions.

No phone calls.

No e-mails.

No one knocking on my door to distract me from what I am trying to accomplish.

I’ve realised that my whole day is full of interruptions.  Even when I am in clinic seeing patients, there is always someone who calls me while I am with a patient, or there is someone waiting outside of my office door, someone waiting for a patient to leave so that they can pounce on me for another request of some sort…

I think to get important work done, you need alone time to let your mind wander and to allow it to make those connections that can only be made during deep work.

Politics Is The Opposite Of Entrepreneurship

There seems to be one main similarity between politics and entrepreneurship; they both try to create change.  However, the methodologies that they use to make change happen couldn’t be more different.

Politics may seem like the older brother of entrepreneurship, but when you inspect politics close up it seems more like that unsightly Uncle, who smells a bit odd and may have spent time in prison.

The Entrepreneurial Journey

This is a summary of pretty much every entrepreneurial autobiography I have read.  I should stop buying these books, but there’s usually a few nuggets of valuable information in each book which are quite insightful.

The classic story of the entrepreneur goes like the following.  A young (usually male) person gets exposed to a gap in the market place or a pain point in their own life.  Fuelled by ambition, a longing to create a real impact and the hope of breaking away from a life of monotony the young entrepreneur experiences what is commonly called an “Entrepreneurial Seizure”.   This is the moment where he says “Screw it!  I’m going for it!”.  At this point no matter what his family and friends say, it only adds to the fire of ambition to go for it*.

Our young protagonist then gets started on creating their product or service.  Due to a lack of funds he sells his belongings, downgrades his car, takes on more shifts at work, rents out spare rooms in his house and starts wrangling banks and family members for some money.

The entrepreneur then realises that no matter how much money they gather, they won’t be able to create the business they saw in their vision by simply gathering money.  He needs to actually create a business which generates money and allows him to re-invest in the company and grow the business with money from actual customers.

With this knowledge in mind, the entrepreneur creates a streamlined business serving a small group of customers with a very niche product.

After months and possibly up to a year of hustling for new customers, autodidactism and networking the young entrepreneur finally hits product-market fit and has several million dollars worth of business a year.

Now it’s just a case of scaling the product or service to serve as many people as possible.

Before the entrepreneur knows it they are entertaining offers to sell his company at sums needed for an early retirement.

The Political Journey

Contrast the above journey with those involved in politics.

Someone in a given organisation or society wants to make a difference by changing policy.  Usually the ideas which inform these changes are borne out of class rooms, books, meetings and gossip rather than the kind of acute pain which causes someone to start a business.

Let’s take the example of an employee who is in a large organisation that wants to work his way to the top and make change happen.  She will necessarily go through a number of jobs and work up a hierarchy.  On this journey she will discuss her thoughts with people at the coal face and have a clear idea of the type of change she wants to make.

However, as she gets nearer to the top she will realise that the system is not as simple as she thought.  All of a sudden she will have to work hard to please shareholders, board members, unions, lobbies, fringe groups and also the people who are actually doing the coal face work which she wanted to help in the first place.

Usually this person will end up doing work which is ethically questionable on the way to the top.  “I know it’s not the right thing to do.  But, if I do this I’ll be able to get to the top and make the positive difference people need.  It’s for the greater good.”.

This type of cognitive dissonance seems to be quite prevalent among politicians.

When this person finally does get to the top, the policies and change she wanted to create will also get tainted by all the different vested interests mentioned above.  The fragment of a good idea that our politician had will be deformed from the start and likely not result in much of a change at all.

Contrast

My main point with this post wasn’t to display why politics is inefficient, but it’s to show how entrepreneurship and politics are fundamentally the opposite of one another.

Entrepreneurship is bottom-up.

Politics is top-down.

This also explains why politics rarely produces change that people want and why entrepreneurship must always result in change people want.

In entrepreneurship, when you build a product or a service, you have to generate money to allow it to keep growing and spreading.  To generate cash, you must have produced something that the market has to pay for.

All entrepreneurs know that their initial idea for a business will be way off course.  In fact because of this there has been a whole movement in the last decade called “The Lean Startup” which advocates getting something out into the market place, learning and iterating your business plan.  The assumption in entrepreneurship is that the founder actually knows very little with regards to what people want.  So you may as well get something out there and see if there is any traction.

This way entrepreneurship must produce products and services that serve people’s wants and needs from the get-go.

In politics, ideas are usually made in something like a boardroom.  Ideas do not get validated by something like “The Market”.

I find it quite interesting how even if politicians want to make change, they can never do it in the way they wanted.  This is obvious if you understand that there are too many vested interests pulling you in different directions, that the world is far too complex to understand let alone predict and that the world is in continual change.

*As I’ve mentioned before, starting a business, as long as it sticks to Thalesian principles is actually the wisest decision someone could make.

Thalesian Principles And Why More People Should Start Startups

The purpose of this blog post is to illustrate how startups are different from traditional businesses, but also why more people should start a startup.

What’s A Startup??!

There is a misconception that any business “is a startup”.  In fact most businesses are not startups.

Is that corner store a startup?

Is a website that you have created which is bringing in a small amount of revenue a startup?

Is a digital agency (web development company) a startup?

If you register as a freelance doctor/artist/consultant/web developer are you a startup?

The answer is no, but could be a yes.

Allow me to explain.  Startups are a special type of business as they are designed to 1. scale and 2. scale fast.

If you look at the above examples it is incredibly unlikely that any of these will be able to scale to serve a massive number of people or do it quickly.  There are exceptions such as Starbucks which found a way to scale and do it quickly.  However, businesses which require a lot of human resources are the hardest type of business to scale and likely will never be able to do so.

Equally a digital agency will find it hard to scale.  The bigger they get, the more people they will need to hire, the more they will have to charge to cover their overheads and therefore they will price themselves out of the market.  Again, anything which requires human intensive work is very difficult to scale.

How about websites which bring in a little bit of money?  Most are not startups as they won’t be able to scale and grow to serve large numbers or people.

In essence a “startup” is synonymous with growth.  They are the one and the same.

Thalesian Principles (A Story About Startups)

Startups are old news.

Thales was a pre-socratic Greek philosopher.  He also became very rich.

Thales invested in olive presses.  When there was a good harvest and therefore high demand, he would rent out the presses at a high rate.  One version of this story says that Thales predicted a good harvest one year and so bought all the olive presses due to his analytical skills and prediction that olive presses would be of great need.

Indeed Aristotle himself said that this shrewd business decision was due to Thales’ philosophy skills.  However, others have noted that it wasn’t Thales’ extreme intellect that helped him to make the decision to invest in something which may not have returned any money, but because Thales understood that some investments have a convex (unpredictably high) return on investment.

Thales understood that it didn’t matter what he invested his money in as long as there was a convex return on investment.  All he needed to make sure was that there was a limited downside (the initial investment) and a convex (near unlimited) upside.  He understood that even if he lost the money he invested in olive presses, it wouldn’t affect him too negatively and that he would simply be able to invest in something else down the line.

Why More People Should Start Startups

They have finite limited downsides and possibly unlimited upsides.

It may seem to outside observers that entrepreneurs seem to risk it all by going on their ventures.  But most entrepreneurs are actually very safe and know how much downside they can handle on a given venture.  As long as there is a limited downside and an unlimited upside, entrepreneurs are happy.

If you can design a business* which will grow and grow quickly (as in a few years), this means that you may end up with an incredible return on your initial investment.

This is why I think more people should be starting well designed startups instead of putting their money in traditional investments such as 401Ks and pensions etc.

Let’s say that you can put aside several thousand dollars a year to invest and do what you want with.   If you put your money into a 401k or something like property then after a certain number of years you will get a certain predictable amount of money back.  The problem with these more traditional investments is that it takes many many years to get anything back.  Also, you are handing over your fate to society, the government and the economy.  If the markets crash, if there is a recession or if Wall street screws up then either you’ll break even or you’ll end up losing your money as so many people did in 2008.

So, the options you have are to either put your money into something which will give “predictable” returns (which will be either low or non-existent) or put your money into something which can actually generate lots of wealth – like a startup!!

*There are ways to design your business in a way which allows it to become scalable, but this topic is too large for this blog post.

Everyone Should Be On Statins!

This is the mantra of the medical profession.

When I am seeing patients basically every man over the age of 60 and every woman over the age of 75 is advised to be started on a statin.  The algorithms on my computer (anyone with a QRISK2 score over 10% is advised to start on a statin as per the national guidelines) tell me to give it to them.

It seems that every few weeks there is a news article singing the benefits of taking statins.

Just to step back for a moment.  Statins are a group of medications which lower cholesterol.  Lowering cholesterol, it seems is associated with lowering the risk of death from a heart attack or a stroke.  Statins have always been controversial as such a large number of people are advised to take these medications.

I think statins are a perfect example of a drug class which has a lot of evidence espousing its benefits but little evidence showing that it may be harmful.  As I wrote in my previous blog post, the absence of evidence is not the same as evidence of absence.

The fact is that studies will show that statins “cut the risk of having a heart attack by X%”, but the hidden side effects and long term health disadvantages are not measured and in a lot of cases cannot be measured.

For example are statins associated with breast cancer?  Are they associated with bowel cancer?  Does it increase the likelihood of other diseases such as diabetes?  How about if you’re already a diabetic, does it make your diabetic retinopathy worse than if you weren’t on a statin and cause earlier blindness?

None of these questions have answers and they never will have an answer until it becomes painfully obvious as drug companies and the scientific community will always go looking for evidence which should result in treatment.

What do I do with my patients?  I explain that guidelines advise that they should be on a statin as it may decrease their chances of a heart attack or a stroke.  But I also tell them of the possible listed side effects and also explain that “all medications have side effects and risks which vary from person to person” and that if he/ she doesn’t want to continue it then they are free to stop at any point”.