I’m sharing this for two reasons:
1. Paying it forward and sharing my learnings with other founders.
2. A chance to thank my amazing team (and the 100’s of people who have supported me).
So what is Tuki Health? Tuki is a product I started working on about two years ago. Our vision was to form a layer on top of the food system, helping people with chronic conditions develop better eating habits by making it easier than ever to develop personalized routines (leveraging Instacart & Amazon’s delivery infrastructure). The platform was a two-sided HIPAA compliant application, that allows dietitians to easily create nutrition programs, re-challenge potential trigger foods (for people with digestive health issues)for their clients, communicate with their patients easily, and also allows them to connect to the food system via Instacart for grocery delivery. We worked in partnership with health professionals from UCLA, Stanford, Cornell University, Monash University, Miami Hospital. Below is a list of key learnings from a first-time founder.
What we didn’t do so well:
#1. We were to mission-driven and not ‘money-driven’ from the start. Early on we failed to look at momentum with the business. Healthcare, in general, is an extremely difficult market, understanding who will pay and how they will pay is critical to nail down. I desperately wanted to change healthcare, but I failed to gain financial momentum to impact it. Momentum is incredibly important for an early start-up, finding a way to make money early is critical. Some businesses choose to sell services first and then develop product later once they have momentum (and easy access to customer feedback).
Lesson Learned: Make money from day 1 — sell services or whatever you need to do. Understand who is paying, how they’ll pay and validate it as soon as possible. Make money first — mission driven second. Recommend reading ‘Playing to Win’ .
#2: We hit a ton of friction from multiple angles: from the product, human capital, and the business model.
Product Friction: More so than any industry, healthcare workers have no time. Your product can’t disrupt their workflow — you must understand that and design appropriately. Our first product did not factor this in (we quickly learned and revised design). Technically we opted for a third-party data source (Edamam.com) which provided ingredient level nutrient data (over 60 variables per ingredient: macro, micronutrients, diet labels etc). At first, this was amazing and a differentiator for our product, however, it added a lot of complexity for the engineering and took a long time to get right. It also meant we were locked into that provider, and we had to wait on them for dataset updates. Due to the space we were playing in — bugs/errors are incredibly dangerous (i.e Nut Free or incorrect foods for people with kidney disease). Which meant there was a lot of time spent communicating QA from our dietitians and trying to communicate these issues to our engineers (as we didn’t have a full-time dietitian this made it hard). We also went down the HIPAA route so we could process insurance payments — which meant heavy compliance. We successfully made our app HIPAA compliant (on Google Cloud Infrastructure), but this really slowed down development and our ability to get to market.
Lesson Learned: Keep your product as simple as possible early on. Avoid custom development early (if you can opt for Squarespace + Typeform or Thunkable), and don’t choose high regulation products unless you have plenty of funding or a team of software engineers with experience in that space.
Human Capital Friction: In my mind this is one of the most critical pieces of starting a company (Noam Wasserman talks about it in Founder’s Dilemma). I am not a software engineer, doctor or dietitian by training — and I’m also Australian with zero US healthcare experience. Therefore starting a healthcare company I needed to hire other individuals to help me fill those gaps. In a place like Silicon Valley hiring engineers with little money is almost impossible (I was so lucky to find the amazing team that I did). It’s important to really assess what you can deliver before starting a project, and to define your technology stack/business model based on what you are most comfortable with. Or work harder to recruit a cofounder & CTO (which I managed to find — but unfortunately it didn’t work out).
Lesson Learned: Take a look at what resources you have (especially you as a founder) , what are you really good at? Is it design, engineering, marketing? Are there tech products you’re really good at using? (for me Squarespace). Try to adopt your technology stack, product, business model to align with that. You will give yourself the highest chances of success. If you don’t have a technical cofounder then don’t opt for a custom built app.
Business Model Friction: Going after a fragmented market (like dietitians) is difficult, because many of them aren’t working full time and are struggling to get their business going. Post pivot (after our B2C model) we didn’t pressure test their willingness to pay for our service enough. We started off a direct to consumer product and boosted the company to 2000 users (without spending a cent on advertising). But we only converted 10 paying users and understood that although our product was providing great outcomes, willingness to pay was low. I knew early on that people won’t actively pay out of pocket for a dietitian, so we decided to pivot and create a HIPAA compliant platform where we could accept insurance.
Our pivot led us to a B2B model charging a SaaS fee, from which we were able to generate revenue. The product was very similar to the B2C product however had a few other features that allowed for repeatable workflows: think Canva but for crowdsourced meal plans. We helped dietitians save 45 minutes per client and gave them access to an app to communicate & manage their clients. However, there was way too much friction, many dietitians weren’t earning enough money to invest upfront in software, and we quickly realized there was only a subset of the market that were open to using the software (I believe this number will continue to grow as more providers appear). We also went down the enterprise route working with large providers Kaiser, Sutter Health, Cornell, UCLA, Miami all demo-ing and using our product. The sales cycle within healthcare is super long, so it’s tough to wait it out for these deals. If you’re going down this route — you’re going to need funding, bootstrapping is generally not an option due to the length of sales cycles.
Lesson Learned: Before starting, have someone outside of your startup critically assess your target customers’ willingness to pay. Spend the money on a survey (Survey Monkey or similar). From there, analyze business models (competitors, market places etc) and then write a decision tree as to which one you believe is best. Then have an advisor review it.
#3: Focusing on other people + taking advice. A lot of my friends were going through Y Combinator and receiving funding from top tier investors while I was working away bootstrapped. I definitely paid too much attention to this —watching other people will only cause you to lose momentum. Also throughout this experience, I received advice from many people. It’s your job as a founder to 1. Seek advice from the correct people and 2. Review the advice and process accordingly for your business (easier said than done :D). In my experience, people with the most experience (founders) are often the least forceful, they understand how hard it is and how much advice you are receiving.
Learning: It doesn’t matter what happens with other companies, run your own race and focus on your own journey. I know it sounds cliche, but honestly if you have a good product / service delivering value then your company will succeed and cut through the noise. And always remember: weight feedback to those who have actually done what you’re trying to do.
#4: Trying to re-invent the wheel. Everyone talks about building an MVP (Minimum Viable Product) when you build a business. And I’m a firm believer of it, but when you’re building your own business (and you’ve never done it before), your mind has a crazy way of making you over-engineer everything. Customers keep asking for features and all of a sudden your backlog is growing. To be honest — I think we could have avoided building a complete meal planning app and just leveraged one of our competitor's software, made plans with it and PDF’d them on Squarespace. This would have been the ultimate MVP, and would have saved a bunch of time/effort allowing us to focus on other areas. I think many MVP’s can be done without a database.
I think as founders, we always convince ourselves that certain approaches won’t be a good enough experience for the user — I think for the most part this is wrong. If something is valuable then sub-optimal user experience will not stop a user from using it.
Example: One of my favorite products which I won’t name — has a big bug . Every-time I have to restart the app before using it — this is a huge pain for me, and yet I continue to use it!
Lesson Learned: Continue to simplify the product offering (low tech and manual processes to start with). Run a concierge model for as long as possible (do everything manually in background).
#5: Mental health — avoiding burnout. This is definitely something that we didn’t personally didn’t do well. Ned Dwyer wrote an epic article about ‘managing your psychological runway’. In it, he talks about making sure you’re staying healthy throughout the journey and making sure that you make sure to check in with reality (i.e what is available outside of your startup - jobs and opportunities).
What I have realized through this process is that it’s never been about success or failure, it’s about exploring a problem and trying to solve it. As long as you gave it your 100% then you’ve exhausted all aspects of trying to solve that problem — then you can be super proud of that. And along the way you’ll have picked up a ton of skills and met some amazing people.
Learning: Take the emotion out of your business. Look at it objectively, give yourself an hourly rate ($$), i.e a market rate of $X. So if I’m spending this amount of time on my start up, then I expect to get back $XX within 2 months. This will help you be more ruthless with your time and make you start selling quicker or pivoting your model.
Some things we did right:
#6. Formed partnerships with credible institutions: Monash University in Australia, Stanford, UCLA, Cornell, and other key health establishments. Monash University founded a specific diet in Australia called the low FODMAP diet. We based our MVP on the research of this diet, we worked closely with Monash to certify our recipes, develop our product and promote it. This was a really smart move because dietitians and GI doctors loved Monash. Whenever we told people we were working with Monash, it was instant credibility. We cold emailed everyone we connected with: be persistent and genuine.
#7. We formed two advisory boards. Medical Advisory: Because I wasn’t a doctor/dietitian I knew that I would need to have credible members on the team. This was one of the best things I could have done. I looked for the most credible members within the space including:
Dr Neil Stollman who was referred to a ‘The Tupac of faecal transplants” by Wired Magazine.
A senior dietitian at Stanford who specialized in digestive health, a psychologist and another dietitian who owned a private practice and held a senior leadership position with the Crohns and Colitis foundation. I knew that this would be important for two reasons 1. building a great product & 2. in selling to other medical professionals.
Business Advisory: found really smart people who had already blazed a trail before me, so I could learn from them (listed below in the thank you section).
Lesson Learned: Find people that have done exactly what you want to do. Sell your vision and be incredibly passionate about what you’re doing. Nobody wants to help someone who is just in it for themselves. Respect their time and try to act on their advice where possible.
#8. Customer development: I think over the past two years I’ve spoken to about 100 different dietitians. I made sure to document as much feedback as I could and to prioritize feature requests accordingly. I used Word Clouds to pick out recurring themes from my notes, and I also would use the RICE prioritization for feature requests.
Lesson Learned: approach people like a human beings. LinkedIn/Instagram for us was great. Don’t make them think you’re a big company, or selling them something, people love helping the under dog — play to that. Really listen to what they are saying, when someone tells you about how they are doing something currently, ask them to send the document or take a video (these findings were incredibly valuable for product development).
#9: Managing remote teams. At one stage I had team members in 4 different time zones (Bosnia, Australia, US, Philippines). Keeping everyone focused on the key priorities, customer feedback and our overall business goals was really hard!! But thankfully we have some pretty epic tools like Slack, Trello, Mockingbot, Loom and a few others. Loom was an absolute game-changer for our team, it allowed me to ‘show’ rather than tell what we needed to complete. I still think communication is the number 1 skill for managing product teams, this is especially true with managing a remote team.
Lesson Learned: Empower everyone — no matter where they are. Make them part of the result — make them feel like they’re working towards something that will make a real result. Make sure they understand what they’re working towards! And then communicate communicate communicate, daily stand ups, loom videos etc.
#10: Getting scrappy. The start of DJM Growth 🚀🚀. After I left my job at Swirl (I built and grew the data-driven marketing & product team to 7 people), I had to earn some cash to fund the company. Luckily I had a few skills that I could monetize: data analytics & digital marketing. I started off picking off a few jobs from Upwork and then went into a partnership with a close friend. Across the year and a half, I managed to work with over 10 different companies — from gene therapy hardware to cybersecurity. All of which has been an amazing experience. Running two companies at one time is very hard (especially when one isn’t making money)!
Lesson Learned: Find a skill you can monetize. Focus on something and get really good at it, do a few projects for free and get testimonials then put it on Upwork or another site. You can do a bunch of things like consulting, an Airbnb Experience, Uber, Instacart etc.
Thanks to:
Antonella Dewell. Your guidance on digestive health and nutrition science.
Andy Huynh. For being our lead engineer supporting product development.
Nermin Hadzic & Kerim Balic (www.ankorainc.com). Thanks for supporting us with development and product through the journey.
Alex Wood. For being a great CTO and providing technical guidance.
Amir Ebrahimi. Our first paying customer turned team member.
Our amazing advisors:
Matt Sitter — for providing tremendous support around partnerships and BD. Arif Poonawala — for providing awesome product advice and early-stage growth tips.
Karina Knight RDN — thanks for providing continuous product feedback. We learned so much from you!
JC Duarte — for providing strategy and operations guidance. I learned a lot about managing dev teams.
Andy Crebar — for providing invaluable product management advice and early-stage growth tips.
Dr Neil Stollman — for providing medical direction and guidance through development.
Also special thanks to: Eric Strubhar (content marketer), Julie Wu (UX designer), Simon Oshea (UX Design), Alex McCleod (early tech advisory), the Project Zygote community (Health 2.0), my family and friends, our customers (and the 100+ dietitians who provided their time with product development).
What’s next?
I am still incredibly passionate about healthcare however I need some time away to restore my psychological runway. I’m continuing to grow my consulting business DJM Growth 🚀🚀 and also starting to explore exciting roles with companies that I really believe can make a positive impact on the world.
Thanks for reading — check out my video below and leave a response video! Would love to hear about your wins/losses/successes. Or you can email me at dave@djmgrowth.com
