Bootstrapping Lessons: FairWarning CEO Kurt Long (Part 5)

Sramana Mitra: What area did you decide to go into and how did you determine what problem you were going to solve next? Talk to me about the thought process.

Kurt Long: When I started Open Network, I was scrambling. You don’t have anything. You’re trying to find a customer problem and you’re interacting with customers. By the end of that cycle, I sat in a corner office at the top of a building and had everybody doing everything for me. Quite frankly, I had forgotten how you actually start a company. I know that sounds funny but I really started from scratch. It’s a little bit of a process. At first, you start thinking, “I’m going to study things. I’m going to read analyst research. I’m going to talk to all of the people that I talked to as I exited from Open Network.” It turns out it’s not a great way to start a company. I had a few business plans and didn’t like any of them. I put them all down one day and said, “If I were going to sell here in Tampa Bay, who would I sell to again?”

I looked around and saw a lot of hospitals. I went down and explained that I was an entrepreneur to this gentleman. He told me what the emerging problems were for security within a healthcare context. Because I’ve been all around the world in the previous 10 years and because I had done all this research, I was able to take that problem that was described very tactically and frame it into a bigger market opportunity and have a good solid understanding of the competitive landscape. What was the size of the opportunity? What would I need to bring it to market? Who I might and might not compete with? I, instantaneously, once I stopped trying to do things academically and rolled my sleeves up, had identified what I felt was a major market problem.

Sramana Mitra: By the way, from a process point of view, this is what we recommend to all our entrepreneurs – customer immersion. What was that problem?

Kurt Long: The problem was, electronic health records and all the applications that are used in healthcare contain an incredible amount of valuable personal information. It’s not just in the form of medical records but also in the form of personally identifiable information and financial information. This was 10 years ago. All of the rage was identity theft in Finance and within public companies. Healthcare was just a remote outpost. It was a complete afterthought. No one would have ever imagined that healthcare would become the victim of identity theft and other kinds of information crimes.

My friends didn’t believe me when I said I was going to bring an information security company to market in healthcare. They thought that it was too slow, that the problem didn’t exist, and that I wouldn’t be able to have any success in protecting patient information within electronic health records. I chose to see them as competitive advantages. I viewed it as, “If I can build support for all applications, I’d be difficult to compete with.”

The sales cycle might be slow but if I form relationships that are long-lasting and I change the common outlook of a salesperson into building relationships over time, then my relationships would form a competitive barrier to entry. If I were to be patient and bide my time to see when identity theft hit healthcare, I would have an incredible customer base and product footprint. All of those things, instead of being problems, would be assets.

This segment is part 5 in the series : Bootstrapping Lessons: FairWarning CEO Kurt Long
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