When Mike Simmons created andros in 2013, credentialing a healthcare provider—that is, performing a specialized background check—took 90 to 120 days. His next-gen network management solution has brought the transaction time down to about a week. His goal is to resolve provider credentials in 30 seconds.
He attributes his success to building andros as a data, SaaS, and managed services company, “It takes more than any one or two of those components to create a whole offering that will bring the highest value to our customers. This approach has enabled us to grow in healthcare—where technology adoption has been slow relative to other industries.” His team has aggregated data from over 7.4 million providers in the U.S. and graphed meaningful attributes that illuminate patterns and allow for expedited processes that used to take months.
“We still have quite a long way to go to achieve the results that we believe are possible,” he tells us, “but that's the point of it—to make these processes work as they should in the 21st century. As we get more and more of the infrastructure understood and dialed in, we can open pathways for many other companies to build on our infrastructure. For example, we recently launched the industry’s first, and to-date only, NCQA certified credentialing process that product leaders and developers can leverage to build their apps and platforms. Ultimately the goal is to accelerate the rate of innovation in healthcare so that the system as a whole is able to provide more efficient, effective, and equitable healthcare.”
In this Q&A, Mike opens up about an early setback, how it shaped him as a leader, and what advice he has for other founders in the healthcare sector.
What's the biggest challenge you've overcome as a founder so far?
On December 26, 2017, to be precise, an infrastructure engineer made a bad mistake and wiped out all of our data. Four years of credentialing records, gone. Every backup, gone. It was a catastrophic event, and there was nothing technically that we could do to restore the data set that was lost. Incidentally, this catastrophic event happened just five days after I closed my Series A. I had several new investors and two new board members who didn’t know me that well. For a few days, it looked like the company was over, but we chose to fight on.
In early January, I met with or called every one of our customers and told them what had happened, what we were doing about it, how we were utterly committed to coming back as a company from that event, and how we would prevent future episodes. We eventually reconstructed the data we needed. It took us nine months to make it all the way back. It was very, very difficult. But we did it and got smarter and stronger as a result. That was the hardest thing that I've had to overcome as a founder to date.
What did you learn from this challenging experience?
There is more than one lesson here. First one is about team and process maturity. I learned that it was imperative to make sure that we have the right level of experience on our team, and the right level of process maturity at each stage of the business. The engineer who made the mistake was a talented engineer who made an honest mistake. The problem was we didn’t have the right technical leadership or preventive process.
The second is about mindset. Our foundational value at andros is Take Ownership. After this episode, I picked up the phone and called every single one of my customers and met as many as I could face to face. There are other ways we could have handled it; we could have blamed the engineer or our VP of engineering, we could have made excuses, we could have shut down the business. We didn’t. We took the approach that is aligned to our values even though it wasn’t clear at the onset that we could in fact restore all the information that our clients were relying on us for. As a Founder and CEO, I owned the entirety of the mistake to my customers, my team, and my investors. As a result, we didn’t lose a single customer.
Finally, the third lesson was how to recover from a mistake like that with limited impact to the business. We did this beautifully. We didn’t lose a customer or even see a setback in revenue as a result of our taking ownership and effectively communicating both empathy, for the inconvenience we created for our customers, and confidence in our ability to make it right for our customers.
What did you learn from your fundraising journey? Were your investors fundamental in helping the business back to its feet after the software episode?
Conducting reverse diligence on investors by talking to people who have seen them in action is time well spent during a fund raising process. If you actually go through that kind of situation, you want to be confident that you're going to have the right conversations and not the distracting ones.
If I had a board that didn't trust me, we would have been forced to waste a bunch of valuable time at the beginning of this series of events. Five days before the data episode happened, we closed on a five million dollar investment round from these investors. If anybody there had said, "Give me my money back, I want out, I don't want anything to do with this," I would have had something distracting me, instead of working for the customers. I give Brad Svrluga at Primary Ventures, Anya Schiess at Healthy VC, Scott Law at Meridian Street Ventures, Adam Fine at Windham Ventures and Steve Hirschfeld a tremendous amount of credit for the way they showed up for me. The only conversation that we had was, “How can we be helpful?” and “How can you flip this apparent setback into a win?”, even though I was convening our first board session to share very bad news just two days after Christmas.
What are some trends or predictions you have about the future of the intersection between health and technology space?
We’re in the middle chapters of the beginning epoch of change of the healthcare industry becoming a technology-driven industry. If you compare and contrast healthcare to any other industry that underwent a technology-driven shift; banking, stock market, or travel, you’ll encounter that the beginning epoch took decades to build. And then, once it hits a certain curve where the foundational infrastructure has been built, the rate of change can gain speed. In healthcare technology, we’re still building the infrastructure as it comes together I’m really excited about the rate of change and the impact of innovation on how healthcare is experienced by patients and the providers.
What is a piece of advice you’d offer to a new founder coming into the software infrastructure or healthcare industry?
This industry moves somewhat slower than almost every other industry you could be starting a business in which can be a frustrating experience for founders. But the amount of help that’s needed and the opportunity to help people is profound. Founders in healthcare will be well served to focus on the mission beyond just building a successful company. How are you helping people by building a technology company in healthcare? That deeper connection to the mission will provide inspiration to yourself and others as you look to sell your product, your vision and your stock.