What happens when you can’t afford the best team for your startup?
Building the right team is one of the toughest challenges for a healthcare entrepreneur. But what happens when you have the ideal team and you can't afford them? That's what happened to Paul Sandberg, CEO of PHRQL (pronounced: freckle), in the early days of his health IT/consumer marketing startup. "As much as they were passionate about what we were doing, they had bills to pay," he said. "We lost a lot of good people early."
PHRQL bounced back from that early blow with a combination of hard work and industry traction, Sandberg said. The company, whose vision is to make the retail supermarket a partner in people's health, eventually raised enough money and generated enough revenue to hire team members with the right skill sets, he said. "If you stick with what you're doing," Sandberg said, "you'll be able to attract the people you need and bring them on your team."
Here are other entrepreneurial insights from Sandberg:
Seek out specialist investors -- Sandberg said he's had the most success with investors who specialize on investments in the same space as PHRQL. "When I talk to those investors, they understand the problem," he said. "They ask intelligent questions and they're interested in our company. Some of them make investments." While some entrepreneurs are advised to pitch their idea "to anyone who will listen," Sandberg said that hasn't proved the right strategy for PHRQL. "If you really have to explain the problem you're solving to the investor," he said, "then they're unlikely to be a good investor for your company."
Pursue partnerships -- PHRQL teamed up with a company that could do technology and development work for the startup in exchange for equity, Sandberg said. "It was probably easier to get them to buy into our vision and work with us," he said, "than it would have been to get the investment community to put the same amount of money in so early in the process."
Consider co-working -- Setting up shop in a co-working space, where several startups work in a common area, has been helpful for PHRQL in terms of sharing with peers, Sandberg said. "Co-working spaces are great," he said. "Typically, the terms are pretty friendly for early-stage companies."
Photo by LyndaSanchez