Cole Hawkins | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Cole Hawkins

Background:  

As a healthcare startup based in Nashville, Dose Healthcare has carved out a unique niche. Dose was born when founder Cole Hawkins realized he could reduce absenteeism and costs for companies with on-site healthcare. The B2B company brings convenient and quality on-site healthcare to small and medium-sized companies, while greatly reducing the cost of overhead associated with a permanent on-site clinic.

The Mistake:

I had the idea for the initial B2C concept, (but) what we think is a good idea that would be widely accepted might not be what people are ready for. We invested a lot of money in the B2C space, and the customer acquisition cost of those individual consumers was extremely high.

This isn't Silicon Valley, and there aren't all these tech early adopters that would jump on something like this. We came down to the line with negative dollars in the bank and I realized we had to really pursue the B2B side. That was our saving grace.

We didn't fully understand the market. Although 2014 doesn't seem like that long ago, you can really learn a lot in four years when you are figuring it out on your own. I figured that we had this tech startup, and Nashville is booming as the healthcare capital of the U.S., and that it made a lot of sense.

B2C investments scare the hell out of investors down here. They're smart, and they understand that you have to have a couple of million dollars in the bank to be able to capture the market, and you need to be on people's radar when illness strikes.

We were trying to scrimp along and do some reasonably priced marketing efforts. When we started looking at what our revenue was per patient, and then dividing the number of patients we had that month by the amount of marketing dollars we spent, it really wasn't adding up.

For some reason, it took us a while to figure out that this was a downward trend and that we needed to do something about it. We were wishful thinking at the time that something big would happen, or that we would get an investment.

When we realized that wasn't going to happen toward the end of 2015, I met with a friend of mine at The Crichton Group who suggested I speak with their senior vice president, Austin Madison. He helped us build out our model and tailor it toward the needs of employers.

Healthcare costs are rising for employers, and more and more are going toward self-funded (plans). He brought us our very first client which was Neely Coble Company and they gave us a chance. And now they are extremely happy.

Don't hold out for a miracle.

The Lesson:

Now we have several clients who are happy and we have continued to grow. B2C may be sexier and you can be that new, flashy startup – or you can be the person that nobody knows about and you're working behind the scenes to really help solve a big issue that employers are facing more now than ever.

We struggled to make that change because we wondered if this was what we set out to do, and if we were giving up. Sometimes you just have to realize that you have to make a change.

Going B2C, and trying to appeal to the masses and targeting individuals, is extremely difficult, and it's even harder if you haven't done it before. If there is an opportunity to go B2B and have your service or product appeal to organizations, you have a much better opportunity for success. Don't hold out for a miracle. The fate of your company is not going to change by sitting around and waiting for something big to happen.

Pictured: Cole Hawkins. | Photo courtesy of Dose. 

Follow Dose Healthcare on Twitter at: @GetDose

Do you have a good story you’d like to share, or know someone we should feature? Email HGamble@crain.com.

And be sure to sign up for your local newsletter from Crain's Nashville.