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Dean Sawyer

• Co-Founder, CEO and CXO of Sentrian, the

world’s first remote patient intelligence platform

aspiring to eliminate all preventable hospitalization

• Advisor to Frost Data Capital and SeedHIT

• Former Senior VP at Allscripts

• Former Chief Business Development Officer at

Physicians Interactive

• Winner of largest business plan contest in the

world

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• The Lean Startup up isn’t just about how to create a more successful

startup, it’s about how to use Lean Startup tools and methodologies to

improve just about anything we do in any industry

• In this Webinar you’ll learn how to apply the Lean Startup process,

learn how to use Lean tools and hear real-world examples

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Using Lean Startup Tools in Healthcare

My first use of the Lean Startup

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• August 2012

• Met Dr. Jack Kreindler at Exponential Medicine Conference with a vision for a new company

• Asked me to be co-founder and CEO

• No technology

• No business model

• Seed funding from Frost Data Capital, a new and unproven incubator and investment vehicle

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Why do startups and new products fail?

• They spend too much time, money and effort building the

wrong product

• They don’t validate their hypothesis

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Lean Startup Objective

Systematically eliminate risk and uncertainty from the business plan, product or idea

1. Document your Plan A

2. Identify the riskiest parts of your plan

3. Systematically test your plan

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The traditional business plan is a form of waste

• Because it’s wrong; includes

dozens of unproven hypothesis

• Incredibly time consuming

• No one reads it

• Not action oriented

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Waste: Any human activity which absorbs resources but creates no value

Lean Startup uses a one-page Lean Canvas

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Deconstruct your business model into 9 distinct parts

that are then systematically tested from highest to lowest

risk

Validation stages

Stage 1: Understand the problem – Conduct formal customer interviews or other techniques to understand whether you have a problem worth solving. Who has the problem, what is the top problem, and how is it solved today? Will they pay for it?

Stage 2: Define the solution – With knowledge from Stage 1, take a stab at defining the solution, build a demo that helps the customer visualize the solution and test it with customers. Will the solution work? Who is the early adopter? Does the pricing model work

Stage 3: Validate Qualitatively – Build your Minimal Viable Product (MVP) and soft-launch it to early adopters. Do they realize the unique value proposition? Are you getting paid?

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Validation stages

Stage 1: Understand the problem – Conduct formal customer interviews or other techniques to understand whether you have a problem worth solving. Who has the problem, what is the top problem, and how is it solved today?

Stage 2: Define the solution – With knowledge from Stage 1, take a stab at defining the solution, build a demo that helps the customer visualize the solution and test it with customers. Will the solution work? Who is the early adopter? Does the pricing model work

Stage 3: Validate Qualitatively – Build your Minimal Viable Product (MVP) and soft-launch it to early adopters. Do they realize the unique value proposition? Are you getting paid?

Stage 4: Verify Quantitatively – Launch refined product to larger audience. Have you built something customers want? How will you reach customers at scale? Do you have a viable business?

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The validation team

• The Problem Team – Mostly involved with “outside-the-building” activities such as interviewing customers, running usability tests, etc. (CEO, CMO)

• The Solution Team – Mostly involved with “inside-the-building” activities such as writing code, running tests, deploying releases, and so on (CTO, Chief Architect)

• The team must have the following combined talent:

✓Product Development - Experience and expertise in the specific technologies you are using (CTO, Chief Architect)

✓Design – Aesthetics and usability (marketing)

✓Marketing – Everything else (CEO)

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The Lean Startup validation cycle

Pivot BEFORE product/market fit, optimize AFTER

Problem Interview structure (“get out of the

building”)

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Problem Hypothesis: Preventable hospitalizations are the biggest chronic disease problem

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Validated

Problem Hypothesis: MA plans have the most pain around the preventable hospitalization

problem

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Validated

Problem Hypothesis: Biggest problem is remotely detecting heath deterioration

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Invalidated

How is the problem being solved today?

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Problem exit criteria

1. Identified a problem worth solving

2. Identified customers with the greatest pain

3. Identified the most important components of the problem

4. Can describe how customers are trying to solve the

problem

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Solution validation objectives

• Confirm early adopters interested in a solution

• Validate how we will solve the top 2-3 problems

• Identify the minimum viable product

• Determine initial pricing model

• Determine customers wiliness to pay for a solution and the

price they will bear

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Solution Interview structure (get out of the building

again)

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Sentrian’s first “minimal viable product”

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Limitations:

• Poor patient selection

• Only focus on one condition

• Single measurement

• Primitive analytics in the form of binary alerts

Results in:

• Missed patient deterioration

• High false alarms

• Staff inefficiency

• Only hours to act

MVP: Product with the highest return on investment versus risk

Sentrian’s first “minimal viable product” resulted in 3 customer commitments

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Determine initial pricing model and price customers are will to bear

Hypothesis before interviews:

• Devices: Customer would purchase upfront (Capital)

• Analytics: We could charge $10.00 PMMPM

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Results post interviews:

• Devices: Invalidated - Customer wants to lease devices (PMMPM)

• Analytics: Invalidated - Customers willing to pay $40.00 (PMMPM)

The highest form of validation is a PAYING customer

How viable is your minimal viable segment?

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Can we scale this business model?

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4 million members/patients x $1,000 year = $4 billion in annually recurring revenue

Solution exit criteria

1. Identified early adopters with the problem

2. Defined the minimum features needed to solve the problem

3. Identified a price customers are willing to pay

4. Confirmed we can build a business around it

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Lessons learned

1. Don’t skip problem validation!

2. Some customers don’t know what they want (iPhone)

3. Lean Startup books are B2C focused, must adapt to B2B

and to enterprise software solutions

4. Healthcare regulations makes it more difficult to validate

products but you can get creative

5. Sometimes your MVP is all you need (Craig’s List,

Minecraft)

6. Getting venture capital is easier

7. Board meetings are easier

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Lean Canvas training tools

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Lean Stack training tools

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Questions?

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Dean Sawyer

Sentrian, Inc

dean@sentrian.com

www.sentrian.com

GO FORTH AND VALIDATE!

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Leveraging the revolution in biosensors and machine learning with

the aspiration to eliminate all preventable hospitalization