The first thing you need to create a highly successful startup is a clear and simple vision. Too often we as entrepreneurs get excited about the problem we’re trying to solve and our ambitions can steer us in a direction that adds difficulty and muddies the water of your original great idea. If you can maintain your simple direction from the start, you can build something strong in its foundation that you can evolve and grow in time as the market changes.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.
Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?
In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.
I had the pleasure of interviewing Pelu Tran.
Pelu is a serial healthcare entrepreneur who studied both medicine and engineering at Stanford University and was four months away from receiving his MD when he dropped out to start his first company, Augmedix. Pelu led the product and commercial teams, growing the company to over 1,000 employees in five countries and $20M in annual revenue from over half of the largest health systems in the US. After watching his uncle pass away from a preventable medical error in 2018, Pelu founded Ferrum Health, an enterprise AI deployment platform with the mission of improving patient outcomes by democratizing health systems’ access to the most innovative and impactful clinical AI technologies from around the world. Today, more than 500,000 unique patient records have been clearly analyzed via the Ferrum platform. At the age of 31, Pelu has started 2 extremely successful medical technology companies, been awarded Forbes 30 Under 30, is Technology Pioneer and expert contributor for the World Economic Forum, and more. His start-up success would be a valuable contribution to this series to inspire and inform others.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I am originally from New Jersey and grew up with parents who had immigrated to the US. I attended Stanford to pursue a Bachelor’s degree in engineering, and continued on to med school.
Fast forward to 2018, I was 6 years into building my first company. During that time, I was also spending hours every week helping my family navigate my uncle’s late-stage lung cancer — a terminal condition that should have been treated years earlier, but had been missed by his physicians until it was too late.
I knew that there were dozens of artificial intelligence tools in oncology that could have identified the medical error that led to my uncle’s death. However, none of them were being used then, and few are being utilized even today. I saw then that healthcare leaders needed a trustworthy partner to help them keep up with the pace of and new AI disease diagnosis technology, and could deploy solutions to protect patients like my uncle before their lives and healthcare journeys become just another unfortunate statistic.
I approached my friend Ken, knowing his unique skill set could support me in starting a business to combat these medical misses. Together we founded Ferrum Health to manage the technological complexity of securely deploying new applications in health systems to support their patients, allowing healthcare leaders to focus on what they do best — delivering care. We believed this was the future of radiology.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
The story I mentioned earlier about my uncle’s unfortunate diagnosis and preventable death was a big “aha moment.” However it wasn’t the only one I have regarding this business and the concept of AI and medical diagnosis.
When I was in med school, I recognized my passion for patient care and surgeries, and was absolutely convinced that I would become a surgeon.
My trajectory changed when I spent a few months working at the county hospital in the Bay Area in California. At the time, the hospital was transitioning patient medical records from paper to electronic, and the process was chaotic. There were weeks that we witnessed patients lying in hallways incredibly sick and desperately waiting for medical attention, but the nurses simply could not find them. Their medical records were inaccurate, and it resulted in them literally getting lost within the hospital.
This experience gave me a first-hand understanding of how deeply healthcare providers are affected by tech disruption. I witnessed universal frustration and provider burnout, and knew that something had to change.
Physician’s (rightfully so) react to new tech tools with distrust and fear, because implementation of new systems almost always means more work, confusion and ultimately burnout. If healthcare is going to advance, and if artificial intelligence technology is going to be used widely, we have to find better ways to support clinicians and make their lives easier, rather than lean on them to deploy change.
Since my experience at the county hospital, I have been passionate about finding ways to improve healthcare processes, improve patient care, prevent physician burnout and avoid making the technology problem in healthcare worse. That’s why we started Ferrum Health and developed an AI Hub, a centralized function that enables healthcare organizations to deliver consistent and high-quality care to their patients. This hub enables universal access to quality, unbiased healthcare decisions with a scalable approach that delivers economically across facilities and patient populations.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
My journey with this business catapulted forward after my Uncle’s passing and the understanding of the misses in his radiology scans. My friend Ken had been working in deep enterprise technology at the time, and I knew he would be the right partner to help bring this vision to life. His unique skill set in building platforms across the range of security and storage technologies would be instrumental in leveraging AI to change the future of radiology.
Ken and I started our business journey together in 2018. With our technology, we aspired to serve as a safety net to catch patients who might slip through the cracks of diagnosis and peer-review, empowering physicians to use AI technology without disrupting their workflow. Together with our health system and developer partners, we’re building a future in which every patient can benefit from the best technologies in the world, no matter who or where they are.
What do you think makes your company stand out? Can you share a story?
We’re one of the first companies that brings emerging technology together with clinical care and a physician’s practice in a way that can actually improve the quality of care that they deploy without bogging down their processes or systems. We have been deeply rooted in Silicon Valley technologies for the last few decades, and have expanded our collaborations globally. We also have hands-on clinical experience and know how to take the use of artificial intelligence in healthcare to a whole new level that can improve the healthcare system in America.
When you build an AI solution from the ground up, it requires a level of understanding of current capabilities and issues paired with a vision for improvement. What we’re doing is bigger than AI-powered administrative work. We’re looking at statistics like 99% of healthcare decisions go unreviewed — meaning quality in healthcare is reactive and not proactive — and the fact that less than 5% of all radiology studies are peer reviewed. We’re solving these situations using artificial intelligence and the AI Hub to be more proactive and support radiologists and doctors in being the best version of themselves.
How have you used your success to bring goodness to the world?
Absolutely. Bringing goodness and improved healthcare was the impetus that started Ferrum Health. Here’s an example. We recently partnered with a large health system to leverage AI in radiology and found 118 clinically significant undocumented lung nodules that directly impact patient care.
The existing peer review process for lung cancer screening, where lung nodules are identified early via a second scan review, is limited to a random screening of only 3% to 5% of all CT scans completed at a facility. AI expands the peer review process, enabling a second scan on thousands of studies to assess for undocumented lung nodules, increasing the opportunity for early lung cancer detection.
After 8 months of using our Ferrum Heath technology, this one health system:
– Had more than 30,000 CT studies scanned by AI
– Received 1,137 studies flagged for missed findings
– Discovered 200 studies identified as true lung nodule flags during original radiological review
– Was able to act on 118 studies that had clinically significant lung nodules, directly impacting the course of patient care
When you look at lung cancer, survival is all about early detection. And that’s what we’ve built.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
The first character trait that was instrumental in my success was being a good storyteller. One of the mistakes we made early on was using accusatory language like “patients deaths” or “mistakes.” We quickly realized this and pivoted our messaging to tell a story that the doctors were already experiencing so they could better identify with our vision and goal.
The second character trait is retaining my idealism. We exist in a horrifically broken healthcare system and we must stay above the negativity surrounding it. We have to be able to observe people’s pain and struggles in their craft, and then bring them solutions that make sense and can do the work they’re dreaming of — even if they don’t know they’re dreaming it yet.
The last is to always pursue simplicity. This is how you drive change and improve lives. The chaos of today’s healthcare system became what it is because of advances for improvement, but many of which were missing the simplicity component. Our AI Hub can solve for inefficiency, fragmentation, low quality care and inconsistency within the healthcare ecosystem in the most simple way currently available.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
Everything I’ve learned and experienced along the way in my career, good or bad, has led me to the technological evolution and success I have today. And I can’t say anything bad about that. However, there was an evolution in my approach that I wished I had learned sooner. We are often taught that if you can perfect your messaging, hone in on your “why” and tell a meaningful story about your business, then you can win and have your idea adopted. However, in the beginning, our messaging was accurate but off putting and it took us time to understand how people couldn’t see the clear evidence of “medical mistakes” and “patient deaths” that we saw.
As we learned and evolved, we instead sought an ally and champion within an organization who believes in the future we are building, and made it our goal to make them successful.
Can you tell us a story about the hard times that you faced when you first started your journey?
Early on when building our AI technology, we had this err of self righteousness. Once we identified the errors reported in the studies, then built the platform to find them in everyday use, we couldn’t fathom how others couldn’t see what we saw.
This was a rough reality, because we were basically telling brilliant, caring, hard working doctors that they were basically committing malpractice regularly. Through our conversations with doctors, we realized we were using accusatory words or phrases in our discussions, such as “patients deaths” or “mistakes” that caused physicians to shut us down.
We knew they were doing the best they could, but it’s a system that’s failing them. They care, we care, and we couldn’t go at them with this antagonistic language. We learned OUR mistakes, and rephrased our approach to those conversations to communicate what we knew: there’s more data, more patients getting sick and more complex scans that are all pieces of a broken system that were coming to a head to cause this.
Once we communicated our vision accurately of the benefits of marrying artificial intelligence and radiology, we had countless doctors who believed in our approach and we got a much larger adoption rate after we changed our positioning.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
If you approach your business with a drive to improve, instead of a drive to succeed, then you will make it through the hard times more easily. As business owners, we have to remember that you’ll get rejected far more frequently as a start up. This is why that concept of finding allies and champions is so important. Talking to those champions is always a great way to reconnect with why we’re doing what we’re doing.
The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder?
I’ve had a healthcare startup (in multiple companies) for the better part of 10 years now. Whenever we had great success or felt like things were on fire (the good kind of fire), we always grounded ourselves to think about what could go wrong next. Because it’s a cycle!
If things are looking good now, it usually means there’s an opportunity for change on the horizon. That’s your chance to find the next thing in your product suite, process, daily routine, etc. that you can improve to help you get over that next “low” that is inevitably coming. This way, you can proactively manage those highs and lows, instead of reacting to them as they come. Anticipate everything.
Let’s imagine that a young founder comes to you and asks for your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
I believe VCs should never be the default, but sometimes it is the only way to build companies. You have to look at your own company, and determine if you’re ok with a VC managing your idea. And make your decision from that place in your heart.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
The first thing you need to create a highly successful startup is a clear and simple vision. Too often we as entrepreneurs get excited about the problem we’re trying to solve and our ambitions can steer us in a direction that adds difficulty and muddies the water of your original great idea. If you can maintain your simple direction from the start, you can build something strong in its foundation that you can evolve and grow in time as the market changes.
Second is to remember that a pain point is worth solving because it’s painful for a lot of people. Our artificial intelligence for reading radiology scans and catching early stages of cancer often undetected is absolutely a pain point for doctors and patients alike. But so is the adoption of new technology. Too often new technology within healthcare systems piles on more work for doctors and their staff, thus taking away from them providing the approach to medicine they are working towards. That is another pain point of any type of growth within the healthcare industry, and one we have to solve for. We have to “fix” the way scans, reports and more are read without making it harder on the clinical team — in fact, we have to go further as to make it all easier on them. And that’s a pain point worth solving.
The third thing you need is a team that’s committed to the problem, and not to themselves. Ambition is a great thing, but it can sometimes act as a drug for team members who want to make a name for themselves in the industry as well. A team that’s committed to the problem will put your startup and that solution first knowing that your collective success will come with the solution’s success.
The fourth one sounds easy, but it often isn’t. One of the most important components of a successful startup is to have less of an ego. You have to remember you’re doing great things, and everyone else around you providing ideas or feedback will only help you become more successful. If you let your ego railroad that feedback, you can miss opportunities, burn bridges and more.
Lastly, you have to have an acute awareness of listening to the market. Every startup goes through some key phases of adjustment and adaptation as they learn more about the market. It’s great to drive change by listening for problems and deriving solutions. But it’s so important to listen for feedback to those solutions and new or different needs that may improve your business strategy.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
I believe the biggest mistake that CEOs and founders make when they start a business is plowing through with their idea and not listening to the market. As I mentioned before, this acute awareness of feedback from the marketplace is so important. And yet, ignoring it is the most common mistake I’ve seen.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
Most founders have a natural affinity to working hard, burning the candle at both ends and generally keeping various brutal tendencies in their lives. To some extent, that’s what it takes! Nothing worth doing is ever done easily. So if you’re going to do this, know that it’s going to be lonely. But you’ll get it done.
You have to take breaks, you have to listen to your body, and you have to not let go of those things that you know fuel your creativity and give your brain a break. Maintain or build new routines, use new tricks to stay productive and creative, and protect yourself. Let your passion and dedication to the problem do the rest.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
There’s a lot of great things about our healthcare system and providers within, and there are also a lot of opportunities for improvement to support the physician’s themselves so they can be the greatest doctors.
We need to improve the system in a way that eases the burden on doctors and their staff, and supports them in approaching each patient holistically.
We need a system that optimizes all of the moving pieces within healthcare and eliminates the clogs that have become the norm. If I could start a movement, it would be to bring people together to make smart, necessary improvements to the way patients flow through the healthcare system and drive deeper systemic change together. This could improve the lives of millions of people worldwide.
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
I’d love to sit down with Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS) and have a conversation about the massive hidden cost that medical errors and gaps in care have on our nation’s seniors. When medical errors are the third leading cause of death in the US and a third of lung and breast cancers are misdiagnosed, it’s becoming very clear that as healthcare technology advances, the quality and patient safety systems we have in place simply are not remotely close to doing the job.
About 70% of preventable patient harm arises from medical errors of omission and gaps in care, most of which are not consistently measured in current quality frameworks. I think that CMS would see as much if not more of an impact pushing for and incentivizing quality and patient safety initiatives as it does pursuing outcomes measurement and value based care.