Danny Chu | Crain's

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

Danny Chu

Background:  

Health Symmetric is an Austin-based emerging healthcare technology company www.socialcare.com. Its product, SocialCare™, is a secure, connected software platform built on open API and open innovation.

Mistake:

My last company was a video ad network. I started it in 2005 and then in late 2008, I sold it to one of the largest ad networks out there. It had become one of the biggest online video ad networks.

When I first brought the product out to the marketplace, the market was not what we thought it would be. We had to convince our investors that we needed to pivot and move in the right direction. The vision I had started with differed from the end product so I learned that in getting something out to the marketplace, you have to be flexible and ready to pivot and change. But in order to have that flexibility, you have to bring in the right team and the right investors.

Everybody has to be on the same page. With my previous company, I brought in institutional investors. Venture funds often see things differently than the founders because they want more control. A lot of startups fail because they bring in the wrong investors who insist the company delivers what they originally sold them. But we were very fortunate we were able to change direction even if it was hard to convince our investors at first.

It wasn’t easy – we compromised. If we had the flexibility to really move like we wanted, I think we could have done a lot more and become even bigger. But they were reasonable enough we were at least able to pivot.

I learned that in getting something out to the marketplace, you have to be flexible and ready to pivot and change.

Lesson:

When we got into this business I wanted to make sure that I got the right investors that saw our vision from day one. Since health care is a very different field from our last company, and one that is generally slow to adopt technology – I realized we needed to bring in strategic investors who could help provide their user base and really refine our product. We brought in large medical groups from across the country to do our first round, and refined our product. Ultimately, we made it very robust because we were working to solve the pain points of our investors, who were also our partners. We were able to put a successful product out into the world.

This company would not be where it is today or grown as fast without strategic investors. We would not have been able to have the penetration we have within healthcare. It helped us get successful faster. Their engagement and their partnership with us was very important. They were offering not just money, but were true partners.

So my advice to other entrepreneurs is that when you start a company, be sure you bring the right team members in and the right investors. And be ready to pivot. No matter how perfect you think your idea or product is, it’s most likely going to change. High-tech is like special forces. You have to be able to change on the dime to survive. For a startup with an idea or business plan, it’s absolutely crucial to bring in the right team and right investors that all share the same vision. If you can find a strategic investor who can offer more than just money, you definitely want to do that.

 

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