Transcript of How to Sell to Hospitals (Like a Boss): Kevin MacDonald, Kit Check // Startup Elements
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0:00[Music]0:11so kit helps hospitals be more efficient0:15and safer with their medications what0:16we're doing is putting RFID tags on0:18drugs and we take a process in the0:21hospital that typically takes about a0:22half hour bring that down to sub three0:24minutes and in the process uh make it0:28safer and allow the hospitals have real-0:30time visibility into the medications0:31that are flowing through it so you guys0:34have grown from two hospitals in0:372012 to over 140 which is the stat I got0:41last week and I'm sure it's more than0:42150 now yeah okay um and I'm assuming0:45it'll be 350 uh by the end of the year0:47we hope so um so how have you guys0:50handled such just really incredibly fast0:52growth well uh the key to it is having a0:56great team around you and I feel like0:57we've done a good job uh building out1:00A A great sales team a great delivery1:02team a great product team uh you know1:04there's certainly challenges with1:06scaling that quickly and getting people1:08on board but um scaling that quickly in1:10a lot of ways provides opportunity1:12because for example uh the delivery team1:15you know there there's not a lot of1:17people on the bench so the moment they1:18come in they're sort of right into the1:20fire they're out at customers they're uh1:22working with people who have been doing1:24uh projects now for a year plus and uh1:27you get great experience right out of1:29the gate and if you're hiring Hing1:30bright people um they really add to the1:33equation pretty quickly so how do you1:35look for those bright people to hire you1:38know especially when you're you know1:39really early that you guys you guys1:41obviously have grown a lot but yeah so1:44our first hire was actually our first1:46pharmacist as well actually our only1:48pharmacist at the moment um Doug and1:51Doug was a uh actually a prospect1:54originally so he had spent time both as1:57a pharmacy director as well as out and2:00technology companies so um just kind of2:03got to know him over a period of time2:04and some of the SE most senior hires2:07actually we ended up getting to know2:10through sort of third party channels2:12where we weren't necessarily trying to2:14hire someone for that role at that point2:16we were we had questions about2:18anesthesiology or we had questions about2:20uh this or that aspect of the business2:23and uh getting to know that person ahead2:26of time in a sort of working capacity2:28allowed us to be sure that when we2:30brought them on they were going to be2:31able to be successful in the RO you've2:33been really successful at selling to2:35hospitals so what what advice do you2:37have for companies trying2:41to get their first hospital customer you2:44know the the very first is different2:46than sort of scaling so let me kind of2:48split that into two pieces um and the2:51first you know cold calling and reaching2:54out to people is not the sexiest of2:55things but um if you look at it the when3:00I was doing market research I just cold3:02called a number of hospitals number of3:03directors of Pharmacy uh one of those 153:06first cold calls was our very first3:08customer of the University of Maryland3:10um you're going to have to pound the3:14pavement and really do things that may3:16feel uncomfortable But ultimately get3:20you in the conversations with the right3:21people um as you scale it's really about3:25identifying all the different barriers3:27and then breaking down those barriers so3:29for example Le with us we found that um3:33hospitals have a really hard time with3:34capital budget cycle so being able to3:37position the product in such a way that3:39it's not a capital purchase was a a big3:41change for us and allowed us to really3:43accelerate our sales3:45growth what are some like tangible3:47strategies you'd suggest for somebody3:48who's looking or growing you know3:51they're finding that they're getting3:52more customers and their team is maybe3:53small still um how do you kind of handle3:56that3:57operationally yeah well so from an3:59operation side or a sales side um either4:03whatever you so from a sales side I I4:05really think it's important to look at4:08every place where a deal is stalling so4:10is it stalling because of budgeting is4:13it stalling because of you know4:15different people in the organization are4:16trying to evaluate it um is it because4:19of legal is it because of it and figure4:23out how do you eliminate that barrier so4:26for us as we kind of systematically4:28looked at it um from the outset we4:31structured the proc product in such a4:33way that we didn't need it involvement4:35that it would just be a a web server um4:39and not even a web server on site just a4:41web page uh from a legal perspective we4:43worked with our Council to develop a4:46two-page contract so that it was as4:47simple as possible from the capital4:50cycle we moved it to be a an RFID tag4:53based sales so just kind of constantly4:55being aware of where are those sort of4:58slowdowns and then kind of coming up5:00with um Alternatives around it uh from5:03an operational perspective5:07um you know a lot of it's just putting5:09in extra hours and having the right5:11people around you so uh you know at the5:14very5:15first hospitals Tim and I were out5:18installing and doing sales and support I5:21remember when we were raising our series5:23a uh our lead investor said well you5:27have a support infrastructure so where5:30you know where does the support line5:31ring pulled out my cell phone and you5:34know that that's really the operation so5:36if a printer is going down at you know5:39Hospital X or Y you just have to fill in5:42the Gap with uh what you have there and5:45then I want to go back to that other5:46question I had about um getting your5:48first kind of Hospital customer does the5:51process get easier as you you know get5:54maybe one and then five and then 105:56hospitals does it get easier um maybe5:59just because because you're getting the6:00Buy in from hospitals and I don't know6:01what the communications are like between6:03hospitals but do you find that it's6:04easier to sell um you know once you have6:07the Buy in from hospitals I'm not sure6:09it's ever easy to sell to a hospital6:11however um the S cycle has gotten6:13shorter and I attribute it to three6:14things one is overcoming some of these6:17barriers the second is um we just6:21understand the process better and our6:22team is able to better6:24articulate uh our value and vision the6:27product is frankly better so the third6:29piece P um is reference ability and that6:32doesn't really happen at 5 or 10 when6:34you start to get north of 100 you get to6:38a point where any director of pharmacy6:41is really only one degree away from6:44someone who's currently using the system6:45so we are getting to a situation where6:48there is word of mouth and the other6:49thing that happens um we've had several6:52clients where a hospital will be6:54visiting another hospital to do a6:56reference visit for a technology other6:59than s and they see the uh blue box and7:03they say what is that and uh we end up7:06getting a call because uh they they7:09weren't purchasing whatever technology7:11they were going to see but they they saw7:13our thing and it was uh you know7:15interesting and cool that's really cool7:18okay so let's talk about selling to7:19hospitals what was the process like for7:21you to determine your value proposition7:24hospitals well it's interesting we7:27started with just talking about Labor7:31savings and we knew that the process was7:35about 10 times faster and we were7:37actually able to7:38do enough work to figure out sort of7:42broad brush what the time savings was7:44and you could translate that into labor7:45savings but it was only after we got7:48into five or 10 hospitals that we were7:50able to develop a defensible Roi around7:54reduction in inventory reduction in7:56exporation waste safety and a Regulatory8:00Compliance so um even now we constantly8:06are refining what is the overall Roi and8:09value based on the data that we have8:11from our customer8:13base and how do you kind of identify key8:17decision makers at hospitals it seems8:19like startups often have such such8:21challenges getting in touch with the8:23right people who can make the right8:24decisions and work with them partner8:26with them how do you how do you go about8:29that you find those people we're in a8:31fortunate situation where the director8:32of Pharmacy is the right person so8:35that's a very well-known title at each8:37hospital and um you know it's pretty8:41well- defined list so for us if we get8:44to the director if the director is not8:46making a decision it's typically an8:48assoc assistant director that uh they8:50can easily refer you to but8:53um unlike a lot of companies where8:55they're trying to figure out is it you8:56know X or yvp for us it's always8:58director ref Pharmacy so what kind of9:00advice would you have for somebody who9:01has maybe they're just trying to reach a9:03you know an innovation group or cmio9:05what is that what is it like working9:07with them you know we haven't we've9:10we've worked a little bit with the9:11innovation groups and um I find they're9:14always9:15very9:17enthusiastic uh but sometimes have9:20trouble getting the organization to get9:22operational and um you know I think the9:26reason9:27is they they've got a charart to bring9:29Innovation But ultimately they need the9:32business unit to most likely fund it and9:36certainly uh provide the human resources9:38to do it so if you don't have the Buy in9:40of uh in our case the director of9:42pharmacy anyway you're sort of dead in9:44the water so um we found those to be9:48interesting introduction points but not9:50necessarily great from a um operational9:53perspective you know I guess my advice9:55to others is to the extent that you can9:58find a9:59well- defined and repeatable title that10:02ideally is not something like CIO or10:07CEO um the better off you're going to be10:09because the more efficient you're going10:11to be at being able to call and quickly10:13get to yes or no answer as to whether10:15they're worth talking to or10:17not so let's talk about jumping from10:20like Tech to healthcare yes so you were10:23in Tech you were working with10:25rfids um before starting kit check so10:27how did you come up with the idea to to10:31automate Hospital Pharmacy kits yeah um10:37over the years with RFID I'd sort of10:39come up with this checklist of what10:41makes a good or bad use of the10:42technology and had to do with you10:45know what are you tracking is it worth10:48tracking you know are there reasonable10:51choke points is there uh a real savings10:54in terms of Labor or um Supply I was10:59talking to a friend of my wife who was a11:01pharmacist and she had talked about she11:04had spent an entire day picking up these11:06vials and looking at expiration dates11:09and it seemed to me you know here's a11:11person top of their field and you know11:14highly compensated and is doing this11:16incredibly mundane task so it checked a11:19lot of those check boxes and it was from11:22there that I was curious enough to say11:24you know maybe there's a solution to11:26this problem so dug in a little bit more11:29and as to whether this is something that11:31is a problem with cross hospitals and11:33whether uh people would actually want to11:35buy it and then sort of secondarily we11:38had to figure out could we make it work11:39from a technical perspective because11:41there were some uh challenges around11:43liquids in11:44density so what advice would you have11:47for a tech entrepreneur looking to kind11:49of break into Healthcare yeah I think11:51that11:53actually it's good to perhaps come from11:56outside healthcare because you're11:57bringing a different perspective so if12:00you12:01[Music]12:02can pick out where there is something12:06that's being done in a completely wrong12:10way which there's lots of in12:11healthcare and it feels that12:15the institutional barriers aren't12:18necessarily set up to prevent their12:22fixing that problem that you know you've12:25got a great opportunity and actually12:26coming in not from Healthcare allows you12:29to have that different perspective and12:30be truly Innovative in the space so uh I12:34actually think that uh there's a lot of12:36opportunity in healthcare and not having12:38the healthcare background helps you in a12:39lot of cases what are you like most12:42excited about what do you want to see12:43from Healthcare from any you know any12:45kind of standpoint regulatory or12:48operational or you know12:52I I don't know if I'm excited about sort12:54of the regulatory landscape but you know12:57I think there's a lot of interesting12:58things um in our world uh that are being13:02impacted with uh 340b indigen care as13:05well as um the drug quality and safety13:08act which deals with drug Compounders13:11and track and Trace but sort of more13:14broadly um you know how we're dealing13:17with this growing amount of information13:19particularly personal health13:21information um it'd be nice to see a13:24little bit more standardization in that13:26uh space uh it feels that that if you're13:30a company that's dealing with um13:34personal health information the13:36standards from One hospital to another13:39are varying just because the regulations13:41are not all that clear so having13:44Clarity um I think would really help13:49people be able to create products that13:51adhere to the standards and ultimately13:54um can be adopted more widely13:58[Music]
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