A recent survey collected insights from more than 200 CEOs, CFOs and CTOs.  Here’s what they found:

• 70% of respondents viewed patents as beneficial to innovation and nearly half believe business is better of with patents.

• 78% believe people should pay a license fee to use technology that is patented and 87% say that patent rights need to be respected.

We caught up with Venture Partner Alan Ying to discuss how protecting IP is crucial for startups to remain relevant and competitive in the fast-paced technology industry.

Q:  Must a company have a patent on a technology for a venture capitalist to consider investing?

Alan Ying:  It certainly is something all VCs look at when doing their due diligence.  Venture capitalists want to know where an invention or innovation fits in the marketplace with reference to existing and potential competitors.  Most VCs want to work with companies that have exceptional intellectual property and are in a position to achieve fast growth — something difficult to do without their intellectual property protected.

We caught up with Venture Partner Alan Ying to discuss the data:

Q:  Are you surprised the data for Q1 hasn’t budged much – in terms of the number of companies in these regions being funded and the amount of capital invested?

Alan Ying:  No, not at all.  We continue to see these geographies building lasting companies.  While the numbers don’t compare to investment in Silicon Valley nor Boston, these are consistently strong numbers — at least 15% of the companies receiving venture funding over the past few years are located in these geographies.  Venture investors like to see steady, long-term investment data — a strong source of innovation in this country.

Q:  What will it take to see a significant increase in the number of companies in this region to receive venture funding?

Alan Ying:  Well, there are so many variables VCs take into consideration when deciding to fund a company.  Venture capitalists will FIND innovation — it doesn’t need to be in their backyard.  More and more we’re seeing entrepreneurs build businesses in middle America.  As we discussed in this post, geography will become less and less of an issue to entrepreneurs, venture capitalists and, most importantly, customers.

Why Product Management Is Everything

Many companies think they’re doing product management, but they’re not. Here’s what it looks like, and why you need it.

This is not a question any entrepreneur likes to get. When I heard it, it hit me like cold water: “Are you a product or a company?” Coming from a bunch of potential investors, it was an unexpectedly profound query. We had some happy customers, zealot employees, and a hit product, but at that point we were mostly chutzpah and Gates-ian ambitions.  We were “just a product,” and we had to change to become a big-boy company. In the process of making the jump I realized that, of all things, lowly product management was the key.

As a VC now, I see many companies hit the same speed bumps we did: A product takes off, competition comes in, customers become pickier, and sales slow down. A typical entrepreneur reaction is to spend more on sales and marketing, with the justification being that “more people just need to see what we have, and then of course they will buy.”

So we get more salespeople, jargon-y press releases, shiny brochures, new websites, trade pub ads, SEO, forced social media efforts, and convention tchotchkes. These activities–what I call “easy” marketing—just end up stroking the egos of non-customers: partners, the board, the entrepreneur, or industry pundits.

“Hard” marketing, on the other hand, are activities that authentically engage customers:  finding them, grokking their needs, crafting a solution with shoe cobbler-like attention, patiently educating them about your approach, making it easy to buy from you, and being a likable vendor. This “hard” marketing is the essence of what I refer to as product management.

“Well,” you’d be wise to ask, “we’re just an early stage startup and ‘product management’ sounds very GE-ish and bureaucratic. How will I know when I need to get serious about it?”

Product management becomes critical when your prospective customers need you to sell them more than one thing in order to become paying customers.

The moment that happens, a) pat yourself on the back (“Yay, people think we’re big enough for them to buy more than one thing!”) and then b) roll up your sleeves (“Uh oh, what’s our story and messaging and product roadmap and sales training and resource allocation and … uh oh”).

That’s why I call it “hard” marketing–it’s hard to do product management well. Not because it’s rocket science, but because its execution crosses so many organizational boundaries that good intentions almost never make it out the other side intact.

For example, technology companies often have a mid-level project manager on the development team. CEOs usually point to that person as the product manager, but that person is an operations or development person whose job is to keep engineers on track and make sure they meet their milestones. In return for allowing themselves to be “managed,” engineers use the project manager as a human shield so they don’t have to deal with non-engineers. This is not product management.

Successful product management happens when one team reports to one leader. That leader is  responsible for the information loop from customers back to product development and back out to customers. This team must work with:

● Sales people (“What are you hearing from prospective customers or competitors?”)

● Implementation/support staff (“What stumbling blocks are preventing the customer from having an ecstatic experience?”)

● Developers (“If you can’t include X and Y by the release date, can you push X to the next release? Customers don’t need it as much.”)

● Business development (“The customers really need product A to supplement our next upgrade. Can we find a solution for them?”)

● Accounting and legal (“Customers hate our contract because it doesn’t fit their budget processes. Can we change the contract?”)

● Marketing, communications and PR (“Here are the key product points to emphasize as we go to market. Can you do a case study?”)

In early stage companies, all these functions are usually performed by the founder, because  he or she usually has the strongest product vision. As the company grows, customer needs expand, and so must the product vision.  In most cases customer needs will exceed the founder’s vision, and the organization–not the founder–must have a mechanism in place to accommodate the expansion of customer needs.  When a startup masters the art of product management, they can grow beyond the founder and their first product vision and become a real company.

Read more “Growth Factor” posts here, here, and here.

Above is a video of David Jones discussing how America’s healthcare system will improve only if we fix the root of the problem….our health.  Without change, the combined effects of increasing costs, an aging population, epidemic obesity and provider shortages will bring the system to the breaking point.  Change is happening!

Clearly, from the data below, which David referenced, America’s healthcare system isn’t working:

• The United States spent $2.6 trillion on healthcare in 2010, that’s more than any other country in the world.

• One third of the $2.5 trillion spent on healthcare is actually useless and actively harmful to patients.

Cost is a huge issue, but fixing that isn’t the solution to the bigger problem

America’s sedentary and stressful lifestyle produces chronic illnesses and chronic illness costs the country big time.

• 70% of the money spent in healthcare goes to treat chronic diseases — as a result of lifestyle.

• 157 million Americans will have at least one chronic illness by 2020.

Taking Time to Lean Back

By Andrew J. Shatté, Ph.D., Chief Science Officer, meQuilibrium

Printed in The Huffington Post, Less Stress, More Living section

Lean In, the latest book from Facebook COO Sheryl Sandberg, is racing up the charts and has lit up the blogosphere. Her premise is simple and stark — for 30 years now, 50 percent of our college graduates have been women, and yet they are dramatically underrepresented in senior management positions. (In fact, women fill only 14 percent of the Fortune 500′s executive-level jobs.) To remedy this, Sandberg goads women to “lean in” at the workplace, to give up on having it all (work and home), become more involved and assertive and, in short, to become more like men.

Or at least that’s the interpretation that many pundits and critics have taken away from Lean In (here’s where I admit that I haven’t read Sandberg’s book). Whether that’s her case or not, it’s ill-advised. Because as Arianna Huffington points out (in the Wall Street Journal, March 11, 2013), the traditional (male) model of career success is failing. In fact, it’s killing us.

We are stressed in epidemic proportions. One in 4 of us is highly or severely stressed. More than half of us acknowledge that we’re so stressed it’s making us sick. And every day, 1 million Americans are absent from work because of stress. Rather than “leaning in,” we should be exhorting our women and our men, as Arianna does, to take the time to lean back. The problem is, 4 million years of evolution is working against us.

Several years ago I met with a salesperson in my company who was underperforming. In a pool of tears she told me of the pressure she felt to make money — not to keep a roof over her kids’ heads or food on their table, but to keep up with the Joneses. Her next-door neighbors just got new living room furniture and now she had to. The people two doors down got a new car and now she and her husband must, too. She didn’t want to be on the treadmill, but every fiber in her body kept her on it. That’s when I realized this drive for material possessions and status was hardwired.

Continue reading….

The Office of the National Coordinator for Health Information Technology (ONC) published the infographic below showing the evolution of electronic health records….the past, the present and what lies ahead in the future.

]]> http://www.chrysalisventures.com/2013/04/the-silver-bullet-in-healthcare/feed/ 0 http://www.chrysalisventures.com/2013/04/right-radiologist-right-read-right-results/ http://www.chrysalisventures.com/2013/04/right-radiologist-right-read-right-results/#comments Sat, 06 Apr 2013 14:28:30 +0000 news http://www.chrysalisventures.com/?p=4453 Continue Reading…]]> Below is a recent article written by Liz Griggs, Chairman & CEO of Next Image Medical (NIM), a Chrysalis portfolio company based in San Diego.  NIM offers the next generation of radiology services management. Leveraging cutting edge technology, NIM offers high-quality, low-cost health care diagnostic solutions — focusing on the worker’s compensation industry.

“Ninety-plus percent of all workers’ compensation claims require a diagnostic image, providing NextImage Medical with a $1.3 billion annual market opportunity,” said Koleman Karleski, Managing Partner of Chrysalis Ventures who sits on the Next Image Medical Board.  “Our healthcare investments are frequently about applying technological innovation to a large, established market, where the opportunity to deliver more efficient and cost-effective solutions exists.  Next Image certainly fits in that category.”

Right Radiologist, Right Read, Right Results

By Liz Griggs, Chairman & CEO, Next Image Medical, Inc.

Faced with inefficiencies in medical imaging management that continue to produce skyrocketing costs and impaired patient care, it’s time the industry implements available new methodology and technology to create solutions in the workers’ compensation market. In diagnostic imaging—one of the fastest growing sectors of the healthcare industry—misdiagnosis resulting in delayed or ineffective treatment is common yet avoidable when the right system and processes are in place.

Right Radiology.

Today, innovative and advanced technology delivers higher quality testing and imaging, enabling treating physicians, medical directors, and managed care professionals to make better, and more rapid decisions about the best care for the patient. By partnering with a radiology services management company, offering a nationwide network of leading radiology centers, selected for quality and expertise by a board of certified radiologists and connected via a web portal, communication is greatly enhanced and cases are expedited. Patients are able to receive an MRI, CT scan or EMG in a timely manner and scheduling is within 24-48 hours. Imaging is completed correctly the first time, reports provide the information required by referring physicians to make accurate diagnoses, effective treatment plans can be implemented quickly, and claims adjusters and referral coordinators are able to give the insurance carrier accurate data.

Right Read.

More importantly, the most accurate imaging read comes from the most qualified radiologist. Oftentimes, interpretations of scans are provided by diagnosticians not necessarily specialists in the area that is being evaluated. For instance, a worker may report an injury to the lower lumbar region; to get the right radiology for the right read, the image should always be sent to a radiology center and radiologist specializing in the lower back. The appropriate board certified sub specialist is able to identify the specific problem area and provide a more accurate read to the physician, who then can determine the best protocol for treatment. This approach results in the right read for the injury. Network radiologists are fellowship-trained in their specialty and therefore can produce high quality results in their field. Our extensive database allows us to consistently match injuries to radiologists’ areas of expertise so that the appropriate radiologist reads the appropriate study.

Right Results.

These methods incorporate the essential elements required to improve workers’ compensation: the right radiologist, combined with the correct read for the best results. Misdiagnosis leading to ineffective treatment and diagnostic testing—resulting in prolonged time off work and additional medical costs—is avoided. Rampant inefficiency and escalating costs common to diagnostic radiology testing in workers’ compensation can be stemmed, replaced with faster, more effective diagnosis and treatment and optimized patient outcomes.

By implementing this innovative approach to managing diagnostic imaging services, NextImage Medical is attaining higher quality, controlling costs and creating a more efficient experience for physicians, radiologists, case management professionals, and patients. The network incorporates the essential elements required to improve workers’ compensation diagnostic imaging: the right radiologist combined with an accurate read results in the best outcome. The next generation of radiological imaging management provides the right solutions for today’s healthcare needs.

About Liz Griggs

Liz Griggs is Chairman and Chief Executive Officer and founder of NextImage Medical Inc. (NIM), which she created as an answer to the waste and escalating costs common to the diagnostic imaging industry. Prior to establishing NIM Griggs founded and later sold the largest radiology preferred provider organization (PPO) in the workers’ compensation market. Previously, Griggs worked in the Boston and New York City offices of the investment bank Donaldson, Lufkin & Jenerette (DLJ) with clients that included large physician management groups and healthcare investment funds. Prior to joining DLJ, she provided healthcare financing products for The Bank of Boston, including lending and recapitalization financing.

About NextImage Medical

NextImage Medical is the technology leader in radiology services management, providing workers’ compensation insurance carriers, third party administrators and self-insured employers with the highest quality, fastest and most cost-effective solutions to manage workers’ compensation costs. Based in San Diego, NextImage Medical’s next generation of radiology management services features teleradiology and a digital archiving system, improving diagnosis and treatment, reducing the time from imaging to diagnosis and treatment, and lowering workers’ compensation costs. NextImage Medical also offers the advanced Electrodiagnostic Management Services (EDX), which uses a network of board-certified specialists at contracted rates to guarantee quality and reduce the likelihood of having repeat or unnecessary tests. For more information visit www.NextImageMedical.com.

The respondents ranked privacy and security as the most important healthIT and HIE challenge to address this year.

It’s clear the healthcare industry recognizes they have no choice but to engage with consumers.  So how do they plan to communicate?  Currently, 35% of respondents provide marketing or educational materials electronically.  The most number of respondents (38%) said they would deliver information electronically to patients, followed by offering a patient portal (33%) within the next year.

“Just like any other industry, providing information to your customer in a way they will consume it is imperative.  Widespread electronic delivery of health records and information is the next step in the integration of the health and tech industries,” said Alan Ying, Venture Partner at Chrysalis Ventures.

How to Hold Productive, Tolerable Meetings: 5 Tips

Once you have about 20 employees, meetings are a fact of startup life. Here’s how to make them worth your time.

Most entrepreneurs’ stories have a “refugee from Big Company” angle. As a venture capitalist, I often hear liberated entrepreneurs discuss their escapes from the treadmill of eye-rollingly lame meetings. In their start-ups, they marvel at the absence of meetings–they just have high-energy “huddles” before they “go get things done.”

This “no meeting” model is necessary to survive the early, infant-mortality phase of your company. When I was an entrepreneur, there was nothing as invigorating and productive as gathering and mobilizing my team like a guerrilla army, probing to find paths to conquer the world. Having made it all the way to the other side as a Big Company CEO, though, I can see that you need to get rid of the “no meeting” model if you want to grow beyond the start-up phase.

I’m not making a case for report-driven, Big Company meetings. But at some point–usually around 20 employees–businesses need actual meetings with scheduled times and agendas. The reality is that, despite celebrated efforts by Zuck, Larry, and Sergey to purge them, you can’t grow and avoid lots of meetings.

What you need to do, then, is remove the Big Company parts of meetings (“bad bureaucracy”) and add critical entrepreneurial elements (“good bureaucracy”). Here are five ways to make your meetings both useful and tolerable.

1. There are two types of meetings. Founders should be at only one of them. “Sausage-making” meetings are operational, detail-oriented gatherings required to execute specific tasks. “Taste-testing” meetings are where decision makers evaluate options and set plans that others execute. The former make entrepreneur/CEOs want to stick pencils in their eyes. The latter, you can handle–at least for a while.

2. Meet individually with staff members before every meeting. This is the single most important thing a founder/CEO can do to create a culture of good meetings. You need to do this when your company is fewer than 10 people and when it’s more than 1,000 people.

Here’s why: Every key executive wants to be heard, but it’s impossible to hear everyone to his or her satisfaction in a group setting. As the founder or CEO, you need to listen to everyone individually, so each employee knows he or she has had his or her say with the Big Kahuna. After the individual meetings, you then have a brief follow-up interaction–a quick call or stop by the person’s office–to communicate the plan you want to advance in the meeting. Yes, that’s two mini meetings in advance of the actual meeting. Though this seems unnecessarily redundant, it absolutely works because of the next point.

3.  Meetings are for getting leaders on the same page, not for making decisions. All human beings–even your handpicked, egoless management team– are susceptible to groupthink and face-saving behavior when their pride and credibility are on the line in front of their peers. Your job is to get your team’s honest and best efforts. The most reliable way to do this is to discuss all employees’ private thoughts, concerns, and vulnerabilities outside of and before meetings so you can get to a consensus and unified position inside and during meetings.

The result is that in the actual meeting, each executive will not feel the need to fight for airtime and get in his or her nuanced 2 cents, because he or she has already had his or her full say with you. With all that need-to-be-heard energy out of the way, you’ll spend the meeting on the most important parts–deciding who is responsible for which deliverables and in what time frames. This is getting your people’s best efforts on the things that matter most so they can leave that meeting and “go get things done.”

Do an experiment. Try your meetings the old way and then try one this new way. I’ll bet you’ll reduce the common let’s-take-this-offline-later defense mechanism that mucks up the agility and focus of your management team.

4. Founders should attend or lead meetings only when absolutely necessary. Remember this: You’re the Big Kahuna, and despite your best efforts to be egalitarian and just another member of the team, you’re the founder. Your opinions carry more weight simply because they’re yours. When the founder or CEO leads meetings, the leader is inevitably going to exert a gravitational pull to his or her unconscious positions and undermine the team’s independence and authority. That won’t get the team’s honest and best efforts. Let others lead the meetings–you do your work before and after the meetings. When you are leading a meeting, it should be a morale-boosting, vision-setting, charge-the-hill meeting.

5. Don’t be in any meeting with more than three topics.  Otherwise:

• It’s a sausage-making meeting, and you shouldn’t be there.

• The later topics are not really important and should be managed without the meeting.

• Anything after the third topic will get short shrift and be poorly addressed or require another meeting.

You want your team to know that meetings will be short, sweet, focused, and about important things. If meetings become the kitchen sink, where you address every single thing, you’ve got one foot in the grave of the Big Company bad bureaucracy you so hated.
 Take control of your critical cultural infrastructure by establishing good bureaucracy through good meetings. Good meetings won’t guarantee success, but bad meetings will guarantee failure.

Since then the industry has exploded and one of our portfolio companies, HealthTeacher, has developed an interactive game that stimulates the brain and gets kids moving.  Introducing GoNoodle! GoNoodle provides teachers with invigorating brain-break games for their classrooms.

“There’s science behind this,” says Koleman Karleski, Managing Partner at Chrysalis Ventures who sits on the Board of HealthTeacher.  “Every minute of student physical activity provides three extra minutes of focus.  Four five-minute games per day translate to 60-minutes of more focused time.  HealthTeacher provides a curriculum to teachers, making learning about health and wellness fun and interactive.”

“Childhood obesity has more than doubled in children and tripled in adolescents in the past 30 years.   Children and adolescents who are obese are likely to be obese as adults and are therefore more at risk for adult health problems such as heart disease, type 2 diabetes, stroke, and several types of cancer,” mentioned Karleski.