Compliance! Yuck!

According to the San Jose Mercury News, 23andMe has gotten in trouble with the FDA. Their service allows an individual to test their personal DNA and compare it to a database of almost 1 million DNA samples.  The idea is that the comparison will tell the client if the individual shares genetic information with someone with particular diseases.  The results might provide insight into the client’s health that can then me used by the client’s physician to work towards better health.  It sounds like a really interesting idea that would yield interesting results.  One company back is Google, so they have deep pockets.

The problem? The FDA has ordered 23andMe to stop marketing their genetic tests.  Within days of the FDA order, the company became the subject of a class action lawsuit regarding their product.

I have no idea if their service works or not.  But, I do know that 23andMe ran afoul of a common small business trap: compliance.  The larger a company becomes the more complex the compliance issues.  By 3 employees, the company should have a worker’s compensation policy in Georgia (though the company is responsible for worker injuries after 1 employee).  401Ks require certain paperwork.  Eventually the company is subject to laws and regulations such as PPACA, FMLA, HIPAA, and the FLSA and has to manage issues with state and federal agencies.

Another company who has been in the news recently concerning compliance issues is UBER.  They offer a web-based black car service that users rave about.  Their challenge is that they often run into taxi and limousine regulations.  Generally, UBER chooses to fight both legally and in the public forum.  They also have very deep pockets to fight regulatory structures.

The problem for the business manager is we do not have unlimited resources.  The challenges can end up in court or with stop work orders.  There are settlements.  The agency with oversight can literally close the company down or make it impossible to continue on.

Our company is newly large enough to realize the joy of regulation and compliance.  We’re big enough to have the challenges, but small enough not to have the resources for handling everything easily.  We’re committed to understanding the rules, but don’t to spend all our time on compliance issues.  We’re involved in health care, so these issues are all around us.  We have to be good at it.  We’ve also discovered the joy of checklists.

I’ll write more on this issue, but suffice it to say, I can’t get overly excited by the compliance issue I face; however, I see the value in developing expertise in this area.

Any other thoughts?

Domain Experts Requested with No Technical Co-Founder

We’re needing a new software product for my current business. We’re old school: health care. Our current commercial software is dated. We found something new, but it doesn’t help us at all with compliance which, after the operations, is our biggest challenge. I’m not a technical person, but we’re going to have to conquer this problem with technology or be conquered by it.

David Cummings on Startups

One of the ongoing questions in the startup world is around the importance of having a technical co-founder. The idea is that by having a strong technical person on the founding team, the startup will be able to move faster, make more intelligent architectural decisions, and build a better product. Several days ago PandoDaily published an article about Quotidian Ventures and their focus on “founders who have domain expertise in large, opaque old school industries.”

I agree that having a technical co-founder is great, but is no longer a requirement. Here are a few reasons why it isn’t as important as it used to be:

  • Cloud computing, and specifically Amazon Web Services, are much better understood and have more ready-to-use scripts and tools that remove many of the previous challenges
  • Languages and frameworks, like Ruby on Rails, have significantly reduced the learning curve to not only get up-and-running…

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5 Steps to Startup Success in 30 Words

I feel like I’m stealing from David Cummings today. I’ve been on hiatus these last few weeks as my wife and I brought a baby boy into the world September. The first step, “Find a problem in a huge market,” is key. Small problems are just as time consuming as big problems, but it’s harder to be compensated for one’s time and energy properly when the problem is too small.

David Cummings on Startups

Earlier today I was talking to a student about entrepreneurship. Naturally, he was very focused on the traditional model of identifying a problem, writing a business plan, building a product, and finally talking to customers. I told him that everything he was doing was backwards except for identifying a problem. After the conversation, I thought to myself that there had to be a concise way to describe the necessary steps for startup success.

Here are the five steps to startup success in 30 words:

1. Find a problem in a big market.
2. Line up customers willing to buy it.
3. Build a great team and culture.
4. Build a great product.
5. Build a repeatable customer acquisition process.

In 30 simple words we have five actionable steps in order of priority. While there are many more details, this provides a great outline for entrepreneurs to follow.

What else? What…

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When Disaster Strikes: Creating a Business Continuity Plan

We had an ice storm in Atlanta once. We were out for a week. No business, no revenue, and the customers took a while to return fully. Something to think about and implement.

The Turnaround Authority

The pipes in the office on the floor above yours burst and your entire floor is flooded and all the computer equipment is destroyed. There is a weeklong ice storm that shuts down the power in your building and no one can work there until it is restored. There is a flu epidemic in your town and half your staff is unable to work for several days.

These are just a few among many events that could occur that could temporarily shut down your business. What would you do then? Do you have a business continuity plan?

In this two-part series we will cover what should be included in a business continuity plan and how you get started creating one.

You have probably also heard of a disaster recovery plan. That is essentially the same as a business continuity plan but because of our human nature and our “that can’t…

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Getting Involved in the Atlanta Startup Community

I found this article to be quite helpful. I’m not the world’s biggest extrovert (might be on the introverted side), so know where to start can be invaluable.

David Cummings on Startups

On a regular basis I talk to someone that wants to be an entrepreneur or wants to help entrepreneurs. I like to ask what steps they’ve taken to make that happen and there usually isn’t as much concrete progress as I would hope. My response is always the same: get involved with the startup community and begin participating. There are so many good resources, places, and programs now that it’s super easy to get involved.

Here are a few ways to get involved with the Atlanta startup community:

With so many events, it actually becomes easy to attend too many events and not make enough progress on…

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Business Model Generation

In the world of technology startups, four ideas/books seem to be quite influential: Business Model Generation, Steve Blank‘s Customer Development model, Eric Ries’ The Lean Startup, and Agile Development.  I’m not a technology guy, but they talk about launching companies often and with abandon.  What can we learn from them that we can apply to the non-web venture.

We’re in the process of launching a new company.  Really, we’re spinning out our transportation operations into a separate company.  I’m in the process of reading Business Model Generation and The Startup’s Owners Manual.  I’ve read The Lean Startup.  I’ll be looking for a book about Agile Development.

We’re starting out with the Customer Development model and speaking with many potential customers.  We’re working on a Business Model Canvass.  One initial thought is that we’re moving pretty quickly.  We’re starting to send proposals out.  If we create customers, we’re on to something.  If not, we’ll have to try again.

Four Areas for New Venture Success

We’re starting a new venture; rather, we are in the process of spinning off some transportation operations into it’s own company.  We’ll be in the transportation space, so it’s a service that everyone needs (but will anyone pay for it?).  There’s lots of competition: planes, trains, and automobiles.  We’ll be focusing more on non-emergency medical transportation, shuttle services, and senior living services.  We’re writing a business plan or perhaps we will use the ideas presented in Alexander Osterwalder & Yves Pigneur’s Business Model Generation using their Business Model Canvas. What questions do we need to answer?  I came across a great article by William Sahlman in the Harvard Business Review entitled: “How to Write a Great Business Plan.”  We’ll explore the ideas more fully in future posts, but here is the basic framework:

  1. The People
  2. The Opportunity
  3. The Context
  4. Risk and Reward

The questions begin with who is involved and what expertise do they have. Then we want to understand the opportunity, who the customers are and why they need our services.  Can we create economic value? or Will we simply be throwing money down the drain?  We need to understand the context of the opportunity.  This clearly looks at the industry and other macro-questions.  But, it also asks the questions about LEGAL requirements.  We’re looking at transportation, so we’ll be spending a lot of time at the US Department of Transportation Web site.  Finally, we need to understand the risk and the reward.  The article has a great chart showing this: consider the hole created at the beginning of the venture as well as the possible positive outcomes.