Sramana: What were some of the interesting challenges you faced when raising VC money?
Rajiv Kumar: What Brad and I decided to do while we were raising our venture round was to return to school and get our medical degrees. We felt that we should be able to do that and have a growing, successful company as well. Part of our story as we were raising money was that we were leaving the company and that we had brought in a management team to take the reins. That was not a popular story when it came to looking for VC investment. Nobody wanted to invest in a company where the founders were going to step out.
Luckily, the new guy was very credible and presented very well. We were able to get some investors comfortable with the idea that we were not leaving the company 100% and that the company did need professional management. They were also comfortable that we had a product that was ready to scale. Not everybody was willing to take that risk but we found some that were.
Sramana: How long did it take you to finish medical school?
Rajiv Kumar: We both had about a year and a half left. Our intention was not to return to the company, rather do a residency and in my case become a pediatrician.
Sramana: So you truly were handing the reins over to someone else.
Rajiv Kumar: Yes. It played out in an interesting way. The new CEO and team turned out to be very competent, and the company continued to grow. They raised capital as needed. Brad and I went back to medical school and we were miserable. All we could think about was ShapeUp. We realized that we had got bitten by the entrepreneurship bug. It turned out to be a miserable life dealing with medical school drudgery. We felt that we had given up our child for adoption.
Sramana: What did you do?
Rajiv Kumar: Ultimately, we decided that we wanted to come back to the company. We knew the company was doing well, but we felt that it could benefit from the founder vision again, particularly around product innovation. The company stopped innovating on the product front and became operationally focused. It was still an early stage company and the product still needed features and evolution.
We lobbied the board, the VCs, and the management team to allow us to come back. At first they were surprised, so we had to get them comfortable with the idea that we could benefit the business. I came back as Chief Medical Officer and my partner came back as Chief Innovation Officer.
Interestingly enough those roles did not satisfy us. Over time my business partner decided that he was going to move on. He left the business in 2011 and started a entrepreneurship accelerator especially for healthcare companies called Blueprint Health. It has become a very successful startup accelerator.
I was able to move into the CEO slot in 2012. The board and the management team collectively decided that we needed the founders vision back in front of the company. Our CEO took a role on the board and I assumed the CEO role.