PatientFi just celebrated its 5-year anniversary.
And while we have venture backing today, in the beginning, we used a mostly bootstrapped approach: keeping our personnel lean, having our senior players operate as both executives and managers, and spending on little other than product improvements.
If I had to do it again, would I do it all the same way?
Yes, and no.
I appreciate the long-term benefits of early thriftiness—mainly that, as markets sag, we’re not scrambling to cut dead weight like many other startups. We reached profitability on the organic value of the product. But I also believe that, especially on a hiring level, our philosophy was conservative to the point that it delayed our growth a bit.
If I were starting my company again today, here’s what I would (and wouldn’t) change about our approach:
1. CHANGE: As soon as possible, work ON the business, not IN it. Early in our lifecycle, there was a big gap between our leadership team—my co-founders and me—and the earliest people we hired. Though we gave everyone equity awards (more on that in a minute), our earliest hires were relatively inexperienced, and therefore relatively inexpensive.
But with inexperience comes lower productivity and a need for closer oversight. My co-founders and I spent much more time in the weeds of lower-level functions than we would have if we’d hired experienced people from the jump. Once we finally started hiring managers to fill the gap between the C-suite and individual contributors, we saw an ROI nearly immediately.
The bootstrapped hiring approach let us stay nimbler longer. I don’t regret it in principle, but now that I’ve seen the more experienced managers’ impact firsthand, I believe we could have started hiring them sooner.
2. NOT CHANGE: The mindset that venture isn’t everything. In the last 10 or 15 years, venture capital has been propped up as a kind of holy grail for founders. As a result, founders think cash on the balance sheet to fund operations is freedom, and that raising a big round is the surest way to get there.
But this is wrong for two key reasons.
One, raising a big round dilutes your shares and makes you beholden to an investor who may have different priorities than you. Two, venture capital isn’t right for every business—especially those who haven’t yet hit on product-market fit (PMF). Venture capital is an accelerant for companies that have PMF. For companies that don’t, it often ends up as so much wasted gasoline.
3. CHANGE: Prioritize “soft stuff” (employee appreciation). Another consequence of our bootstrapped approach was that I didn’t do enough early on to show our employees how much we appreciated them. The lean mindset made me view things that didn’t directly impact ROI as indulgences.
Today, that’s very different.
When we started hiring managers, we saw the need for a more intentional effort around culture. And my managers knew that a happy employee is a win-win: They feel more fulfilled at work, and the company gets much more value. Things like team parties, retreats, and even spa days go a long way.
4. NOT CHANGE: Give most employees equity upside (stock options). At the moment, startups have a very hard time competing with the salaries that more established companies can offer. One place startups can compete is with equity—offering more generous stock options packages that represent potentially life-changing money in the future.
The investment gap between an employee with no equity and with generous equity is tremendous. Really, giving equity to most employees should be common practice for businesses at every stage. When people are owners, they’re invested in the company’s long-term success.
5. CHANGE: Hire more people who align with our better way of doing things. At PatientFi, we believe elective procedures should be more accessible—and that cash-pay healthcare can be better for both patient and provider. Our approach in the early days to realize that vision was investing a lot in the product—at the expense of recruiting.
It’s rare in our industry to find people who have an appreciation for both the patient and healthcare provider sides of the equation, but had we made a more concerted effort to find the right people earlier on, I think we could have shortened our growth timeline.
None of this is to say that I have many regrets about the way my company has grown. But I do think there were some opportunities for growth that other founders can learn from.
Mainly: Your most important resources are not your runway, your Crunchbase profile, or the names on your cap table. Your most important resources are your people. Especially early on—earlier than you think—you should find the best ones and incentivize them to give you their best.