Given the clear market need for all of these innovations, was there ever any question that these entrepreneurs would become wildly successful? Or were men content with candlelight, telegraphs, and horse-drawn carriages, which caused their man-boobs to jiggle as they rode along?
Today, conversely, as suggested by Jared Diamond, invention may be the mother of necessity. Did we know we needed an iPhone until Steve Jobs showed us the compelling device? Unfortunately in healthcare, too often it seems entrepreneurs and investors are introducing products believing they have invented the next iPhone-like phenomenon, to eventually realize that not only does the market not have a need, in many cases does not even have a want.
When looking to invest in an early stage venture which seeks to address a well-understood but yet-unsolved problem, how does an investor know with which one of the multitude of aspiring inventors to bet?
An important consideration is understanding the motivation and passion of the founder to launch the undertaking in the first place. An example lies in the prolific innovator, Frank Costanza, and the remarkable global embrace of the sensation that is his Festivus, whose origin is summarized in the exchange below.
FRANK: Many Christmases ago, I went to buy a doll for my son. I reached for the last one they had, but so did another man. As I rained blows upon him, I realized there had to be another way!
KRAMER: What happened to the doll?
FRANK: It was destroyed. But out of that, a new holiday was born. "A Festivus for the rest of us!"
In Venture, we often meet bright entrepreneurs seeking funding motivated to build a company that will make them rich and famous. Each time we make this assessment, I am reminded of Philip Rosedale, founder of SecondLife, who once said, “If you have an idea and you know you won’t earn a dime from it but you have to pursue it anyway and solve the issue, then you’re a true entrepreneur.”
While in hindsight most investors would prefer to have backed Mark Zuckerberg ahead of Philip Rosedale, I suggest that if becoming rich and famous is your primary goal, you are very likely going to fail. Financial rewards may be the result of a more noble primary goal being achieved, but should not be your first focus.
I believe this is particularly true in healthcare. Two excellent examples (from reality rather than Seinfeld) of promising healthcare technology-enabled solutions that were founded by purpose-driven entrepreneurs and briefly their inspirations.
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