Growing up, I met a lot of hardworking people, the most influential being my parents. My father was an engineer who developed bridges and encouraged me to build something that would outlast me. That idea – to create something long-lasting that can be used by the masses – stayed with me. Through my travels, I made attaining this legacy my priority.
After grad school, I set out to create my own version of my father’s bridge. After working many odd jobs developing software, I created credit check software for an acquaintance’s business. This made him a lot of money, which prompted me to ask (perhaps naively) for a share of the profit. I had developed a very successful facet of the company – didn’t I deserve it? His response surprised me, but I will never forget it. He said, “If you build something you like, don’t sell it.”
Twenty years later, I still remember my acquaintance’s advice. For that reason, my company, eClinicalWorks is, and always will be, a privately-held company. I have no interest in selling it, regardless of any offer I may get. In addition, we don’t use investor cash or spend money we don’t have.
In today’s world of startups, emerging brands and frequent flash trends, it seems I’m often reading about mergers, acquisitions and dissolutions. For young entrepreneurs, especially in the healthcare space, my advice is to stay focused and think carefully about your direction. Tempting offers will come your way, as will opportunities to make a quick buck. Remember the startup mission and really consider if selling is the best thing for the brand and your customers.
Based on my experiences, here are three questions for young startups to consider:
1. How long should the company last?
I have always envisioned that eClinicalWorks would long outlast me. Selling eClinicalWorks means it will change hands, potentially change names and lose the founding ideas and principles that it was built on. When a company is acquired, massive change to the vision, brand and culture are a certainty. The hypothetical bridge that I wanted to build would not be what I’ve worked so hard to create and would not be here for future generations. If the goal is to horizontally integrate more ventures as the business grows, the question of longevity and brand becomes an even more important consideration.
2. How important is independence?
Selling the company means giving up the independence of a company leader when it comes to hard business decisions and balancing work with family life. New stakeholders and owners may not appreciate the unique decision making processes that were utilized in the early growth stages of the company. They may be concerned with the unusual work schedules of the founding team.
3. What is the company’s mission?
Crafting a mission statement defines an organization and provides direction as new employees, trends and objectives emerge. When starting up a company, think about the business plan and the desired direction for the company to target. For example, the goal of eClinicalWorks is to provide efficiencies for the healthcare system and enhance patient care. Going public would give investors a voice in company operations and a direct impact on decisions to determine how we will conduct business.
A public company must always factor into the decision making process the wants and needs of investors and Wall Street. Our commitment to ongoing investment in the latest and most innovative healthcare information technology might be challenged by new investor voices.
Remember the startup mission. Some companies are started with an exit strategy to sell the company. If that is the goal, it is perfectly acceptable. But, when building a legacy, selling is seldom the best thing for your brand and your customers.