Clint Phillips founded 2nd.MD, which sold to Accolade for $460M, and then pivoted his next company, Medi.ci, when COVID-19 changed telemedicine. He went back to shareholders to admit the original assumptions were wrong and built a new vertically integrated model. This page recaps his Founders Network talk on dealing with the unexpected.
Clint Phillips, who was CEO of Medi.ci – Curing Health+Care, an end-to-end virtual care medical platform, at the time of this talk, is no stranger to dealing with the unexpected.
In 2009, when his two-day-old daughter Gabi suffered a stroke that paralyzed the right side of her body, the need to provide her with adequate care led him to found 2nd.MD, which sold to Accolade for $460M. 2nd.MD, which helped thousands of people gain access to high-quality second opinions, set Phillips on the path of healthcare reform. So, when the pandemic hit, and his next venture Medi.ci came up against challenges, he was ready to adapt. He shared those experiences in a Founders Network keynote talk. See if you qualify for membership.
To learn more about how to deal with the unexpected in your startup, see if you qualify for membership and check out the webinar recording.
In his webinar, Phillips covered:
- How to examine your company’s vision with objectivity
- Ways to approach investor relationships during a pivot
- What Elon Musk said about failure and how it can help you
- How to cultivate a flexible founder mindset
A pandemic pivot
Medi.ci was planned as a SaaS business, with medical practices simply buying the platform and using it without oversight. But as a result of COVID-19, practitioners shifted to medical care via video, and telemedicine laws changed to facilitate new needs. Phillips watched as entities like Zoom and low-budget apps captured a large amount of the market share. He felt he needed to do more than offer doctors a software platform. He wanted to model the perfect medical practice, helping the staff and patients fully maximize its benefits.
“We had to take a hard look in the mirror. We had not raised all that money around changing healthcare to be a little niche product in a doctor’s office. We had to do something meaningful that we could be proud of,” he says.
To do this, the company required a much larger vision, what Phillips calls “a major pivot.” They had to go back to shareholders and admit that some of their assumptions had been wrong, and that to affect change, they would need to own the value chain, to hire primary care doctors and specialists, train them and build a vertically integrated model.
“We were going from being the WhatsApp of healthcare to being the Mayo clinic of healthcare,” he says.
The challenges of change
As exciting as this felt, Phillips describes a humbling process: “We had funding; we had the team, but we were all wrong. I had to lose credibility with some investors who felt we were changing our tune.” The change also meant that half of the employees were no longer needed, including the sales team hired to sell the platform to medical practices. Although those individuals were able to get other work quickly, Phillips says laying them off was not easy.
Still, the team trusted their instincts. It helped that Phillips had experiences at other companies with investors who initially doubted a direction, but were pleased with the long-term success. “One day they got a check and were like: “Oh, you’re a genius,” Phillips recalls.
Feeling the wind in your sails
With time, the difficult move began to pay off, says Phillips, and Medi.ci began to “feel a little wind in our sails.”
“All of a sudden, we had the first few people call us. Nobody had ever called us. We had banged on every door, but then customers began asking us to solve their problems. It’s not a future guarantee, but it feels good.”
Phillips recommended the book Getting to Plan B: Breaking Through to a Better Business Model to other founders dealing with a similar fork in the road. Its main thesis is that flexibility is key for a founder and that “you’re increasingly likely to find your right model when you aren’t as bullheaded around your original idea.” He noted that it is natural for founders to want to stick to their original idea, but that humility is crucial.
Phillips advised other founders to allow their perspectives to change. He told of some expert advice he had received from one highly successful investor. “So, you spent $20 million on the wrong platform. It’s unpleasant, but it’s behind you now. You can’t beat yourself up every day. Now, you have to go forward.”
To learn more about how to deal with the unexpected in your startup, see if you qualify for membership and check out the webinar recording.
Frequently asked questions
Why did Medi.ci pivot?
Medi.ci was planned as a SaaS platform sold to medical practices. When COVID-19 pushed care to video and telemedicine laws changed, Zoom and low-budget apps captured much of the market, so Phillips decided to model the whole practice rather than only sell software.
What did the pivot cost?
Phillips lost credibility with some investors who felt the company was changing its tune. Half of the employees were no longer needed, including the sales team hired to sell the platform.
Which book does Clint Phillips recommend?
Getting to Plan B: Breaking Through to a Better Business Model. Its main thesis is that flexibility is key and you're more likely to find the right model when you aren't bullheaded about the original idea.
What did the webinar cover?
How to examine your company's vision with objectivity, how to approach investors during a pivot, what Elon Musk said about failure, and how to cultivate a flexible founder mindset.
