Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 3)

Sramana: What did you do after you sold the company in 2000? Did you make enough to fund your next company?

Dan Rodrigues: I made enough to take a few years off and fund my next venture, but not enough to retire on. After we sold that company, I teamed up with two of my former co-founders. We spent 10 months working on a startup in the online gaming space. We thought we were pretty early identifying what was going on with multimedia search when we started Scour. The second company that we worked on was a similar type of company. We saw a lot of grassroots interest from young adults and college students in competitive gaming. Kids were organizing LAN parties where they would set up their computers in a warehouse so they could play networked games against each other. They even had cash prizes for the winners.

Our idea was to create an online competitive gaming league that would have offline events as well as an online subscription based service. We spent 10 months building a prototype. During that time we realized that what we were creating was really a media company, not a technology company. To become the de facto standard would require a lot of marketing dollars. We realized that we would have to raise capital to make that happen so we put together a business plan and a deck. We identified potential investors and were ready to press forward, then 9/11 happened.

The whole world changed at that time. The economy changed. We took a hard look at our business and realized that the timing was now bad. We took that business plan, put it on the shelf, and decided the timing was not right. Me and another founder went off and started a small software consulting company. We wanted to keep our skills sharp.

We started Skematix as a boutique consulting firm, and grew it to about 15 engineers. The idea was not to grow a large business, rather to work on interesting projects. That is where I shifted gears away from consumer applications and started focusing on businesses and enterprise opportunities. We took on projects for a lot of different companies. One of the projects we took on was in the healthcare industry.

We were contacted by a small company that did outsourced medical billing for small doctors’ offices. They were using archaic software. The main interface they had with their clients was sending batches of paper documents over a fax machine. They would then return a monthly paper report and invoice to their clients. The CEO of that company was hearing more about the Internet and application service providers. He had an idea for some Internet-based software to create a more modern customer relationship. They hired us to build that software. We did not know the first thing about the healthcare industry. We built the software to the client specifications. Over the course of 18 months, the project grew in scope from a small lightweight project to being an end-to-end front and back office management system for a healthcare practice.

This segment is part 3 in the series : Startup, Survival, Scaling: Kareo CEO Dan Rodrigues
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