Sramana Mitra: Clearly, you’re getting a lot of traction in the hospital segment. It makes sense to build out that segment.
Brent Lang: In terms of advice to readers who are thinking about starting businesses or growing businesses, I would say that one of the critical aspects that we spent a lot of time thinking about was trying not to be all things to all people. A good example is just in terms of the marketing context. If you’re going to try to serve multiple vertical markets, that means making a substantial investment to be able to address those markets.
There are trade shows that are specific to each vertical. There’s marketing collateral that needs to be written for each vertical. You need to identify domain expertise. You need salespeople with a background in each vertical. It can be very expensive to try to serve multiple vertical markets early on.
SM: Yes. A cornerstone of our philosophy [at 1M/1M] is to tightly segment and position, and stay within the segment. Don’t “spray and pray” is the phrase we use.
Because you’re in this business and thinking about the problem of how to solve workflows or address workflow challenges in a highly mobile work environment, what other verticals have come onto your radar as highly mobile work environments that are looking or are ripe for these kinds of solutions?
BL: Probably the number two vertical after hospitals would be hospitality; that is, high-end hotels. Think of four- and five-star hotel properties like the Beverly Wilshire or the Plaza Hotel in New York or the Trump SoHo Hotel. These are all customers that use our communication system to improve customer satisfaction and improve the efficiency of their operating organizations. We’ve also had good traction in libraries, which is an interesting market for us. Again, a large number of mobile workers; for both security reasons as well as for customer satisfaction reasons, it’s important for them to be able to communicate throughout the stacks in the library or down at the circulation desk. We think there’s an interesting opportunity in manufacturing and warehousing environments. I think, eventually, we’ll see expansion there as well.
SM: Any thoughts on where you would guide entrepreneurs to look in the domains you work in?
BL: I think my guidance would be to focus on identifying a real problem, a real pain point. An important turning point in Vocera’s history was when we were out doing market research, trying to identify which markets would be most interested in a mobile communications solution like what we were building. We did probably more than 70 in-person customer interviews. On that stands out in my mind is a group of nurses up at a hospital on the [Bay Area] peninsula. We were showing them a concept video of what we were going to be building, kind of a plastic model of the badge. We were talking to them about what the functionality of the product was going to be and asking them questions. One of the nurses almost stopped the presentation and said, “You are going to change the way nursing is practiced around the world. You know, I’ve been a nurse for 25 years, and where have you been all my life?” I think that that was critical for us, to identify that many of the other customers that we’d done, people would say things like, “Oh, that’s a cool product,” or “That’s a cool idea,” or “That must have been really hard technically to make work,” or “You guys are using some interesting technologies.” But it wasn’t a pain point that someone was passionate enough about to stop the conversation and say, “You’re going to change my life.”
I think not all entrepreneurs are going to be that lucky, but the goal when they’re trying to figure out how to address a marketplace, is to have a dialogue, ask questions and listen to the problems customers are having and figure out whether the solution they’re building can actually address those problems. Having a passionate customer base where you feel like your product or solution has a direct impact on its ability to work is critically important when you are trying to grow a young company.
SM: Yes. We emphasize heavily on return on investment (ROI). You quantified early on the ROI. You cut down the resolution of a call from nine minutes to 40 seconds. That’s hard-core efficiency that you deliver, and those kinds of hard numbers and solutions to real pains always yield good, solid business models.
SM: Thank you, Brent, for taking the time.
BL: Thank you very much.