Sramana Mitra: Once you identified what problem you were going to work on, did you then raise money?
Kurt Long: No. At this point, I had my own money. I paid people to build exactly what I wanted. I started selling it personally. I would not take any services revenue. I was determined to be a software company. My strategy was if I want this product to deploy fast, to be easy to understand, and to be up and running quickly, if I had to postpone the first sales because I’m not willing to offer services, all the time and energy is going back to the product.
My go-to-market strategy was first to validate that the problem existed at multiple healthcare providers. The second was to begin building the product in a SaaS environment and to not accept service revenue. The last strategy was to keep the company pretty low profile until I had my first multiple sets of customers that would be public references. That was all with my own money. The only money I raised was with people who knew me for 15 to 20 years and just basically said, “Whatever you do, here’s a check. We want to be part of what you do.”
Sramana Mitra: Cool. Tell me more about what else you did strategically in this company. You’ve already discussed a few strategic positions. Are there other strategic positions or moves that you’ve made in building this company that are worth discussing?
Kurt Long: I don’t know how much you know about us, but today, we have over 50% market share of all of the largest non-profit hospitals in the United States. We are approaching 40% market share for all of the most wired hospitals in the United States. In total, our software protects patients at about 7,000 facilities across the United States and Europe. I don’t even want to call it a bootstrapped company because we have cash on our balance sheet. We are, effectively, a well-funded company at this point without concerns that come with being bootstrapped. We’re way beyond any of those concepts. I offer these thoughts in the context of a company that has invented and dominated its market segment.
Something that’s not intuitive and that entrepreneurs make a mistake at is, they always think in terms of, “I’ve got a product and now, I’m going to run to the biggest company I can think of to ask them if they’d like to resell my product.” I think that’s a huge mistake. At FairWarning, I created many customer successes. I created market demand in the marketplace. Only after having done that did I go to big companies and be able to say, “We have dozens of your customers. We have dozens more. Here’s my pipeline. Here’s the success stories. We’d love to see if you’d like to resell so we can accelerate that process.” That works out better for the entrepreneur and for the big partner because the big partner is now selling into a market that has been validated and de-risked. We generate a lot of customer demand before asking others to sell your product for you.