How Samm Built DocStation to Increase Value-Based Care
Samm Anderegg is on a mission to fix healthcare through his company DocStation. DocStation a software platform for healthcare teams, enabling pharmacists to provide value-based care to patients. Samm talks about his shift from a traditional career path to starting his own company and how his work with DocStation aligns with his vision for the future of pharmacy practice.
About Today’s Guest
Samm Anderegg is Chief Executive Officer at DocStation, a software platform for healthcare teams, enabling pharmacists to provide value-based care to patients. After graduating with distinction from the University of Iowa College of Pharmacy, he completed post-graduate residency training and a combined Master’s degree program specializing in Health-System Pharmacy Administration at the University of Kansas. Anderegg spent two years working in oncology and ambulatory care management at Augusta University Health System in Georgia before founding DocStation.
Summary
Samm Anderegg is the CEO of DocStation, a software platform for healthcare teams that enables pharmacists to provide value-based care to patients. After graduating with distinction from the University of Iowa College of Pharmacy, he completed post-graduate residency training and a combined Master’s degree program specializing in Health-System Pharmacy Administration at the University of Kansas. Samm spent two years working in oncology and ambulatory care management at Augusta University Health System in Georgia before founding DocStation.
While he was working at Augusta University Health System, Samm saw that there were a lot of barriers to do things and that it was hard to justify the value of pharmacists and their services. He saw this as an opportunity to build a tool for pharmacists from the ground up and decided to leave his secure job to focus on his passion.
Before quitting, Samm had to assess his financial risk as he’d be leaving a six-figure salary behind and suddenly not have an income. He knew that he could eliminate some of his expenses, make minimum payments on his student loans and use his savings if needed. Luckily, he was able to get paid hourly for an IT job he’d been doing project work for which gave him the income he needed to live.
Samm found Josh, a software engineer, who became the other half of DocStation. Together they created a care management platform and electronic record system built for pharmacists. As the profession of pharmacy is changing, Samm knew that a single record system was needed to bring pharmacists into this new age. Now, it’s a tool for value-based care connecting health plans to pharmacists so they can be paid for their services.
DocStation is currently used in the Midwest across 7 states with 300 pharmacies, 700 pharmacy users, 1 major health plan and has 32,000 patients.
Mentioned on the Show
- Refinance Your Student Loans
- DocStation
- The Pitch
- Techstars
- PillPack
- Ohio Pharmacists Association
- Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers by Geoffrey A. Moore and Regis McKenna
- Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry by Marc Benioff and Carlye Adler
- Good to Great: Why Some Companies Make the Leap and Others Don’t by Jim Collins
- The Hard Thing About Hard Things: Building a Business When There are No Easy Answers by Ben Horowitz
- Get Started with DocStation
- Connect with Samm on LinkedIn
- Follow Samm on Twitter
- Connect with DocStation on LinkedIn
- Follow DocStation on Twitter
- Follow DocStation on Facebook
Episode Transcript
Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. It’s a pleasure to welcome onto the show Samm Anderegg, CEO of DocStation. Samm, excited to have you on the show. Welcome.
Samm Anderegg: Tim, thanks so much for allowing me to be here.
Tim Ulbrich: Absolutely. So let’s start off and talk a little bit about your career path into pharmacy, why you went into pharmacy, and ultimately why you decided to go on and complete what is known as a fairly intensive training path of a PGY1-PGY2 combined MS in healthcare administration.
Samm Anderegg: Yeah, it started really simple. Grew up in small town Iowa and had friends and family that worked in my small hometown and had a cousin that flew the coop and went to university and got into pharmacy. And so I was a younger cousin, I looked up to all my older cousins, and you know, I was very interested in math and science. And I wanted to put that to use, so I think the big thing is, you know, knowing that you want to be interacting and helping people in the most simple sense and how do you make a career or profession out of that? And went to the University of Iowa, kind of debated between medicine and pharmacy but ultimately chose pharmacy and I’m sure glad I did it.
Tim Ulbrich: So then you make the decision and a program that’s near and dear to my heart, I direct this program at Ohio State, the combined PGY1-PGY2 MS degree, obviously a very niched, focused pathway, very intensive. You know, you’re full-time resident, full-time student. So there certainly is some strategic decisions that go into making that move. So what was it that drew you into that focus of administrative pharmacy training?
Samm Anderegg: Yeah, I think as you journey down this path that is your career, you’re constantly checking in with yourself and asking yourself, you know, what do you want to be when you grow up? And after I made that hurdle into pharmacy, it was then, you know, how can I blend my interest in what I believe that my skill set is to be fulfilled in my career? And you know, originally I thought being like in a primary care clinic and taking care of patients and building those relationships would be the way to go, but I realized that you can make a larger impact on a greater scale, be a little bit more creative, which I felt like — or what I held important — you could do that in an administrative role or a management role as the leader. And you know, I had some really great mentors at the University of Iowa that directed me to these administrative residencies, and I knew it was going to be a rough two years, but I’m a glutton for punishment, so I was a little bit excited about that as well. So that led me down the path and again, it’s just one of those decisions that you make along the way and wanted to keep myself versatile, so that’s the route I took.
Tim Ulbrich: So talk us through the work that you did after completing the combined residency and MS but before DocStation. So we’ll get there in a little bit about how you started that, what the work is you’re doing there. But what happened in between after you finished up the administrative training?
Samm Anderegg: Yeah, I think, you know, again, I wasn’t quite sure what I wanted to be when I grew up, even after residency, right? And so I was looking for full-time positions in which I could, you know, lead a team, but the responsibilities were broad, meaning they weren’t specialized in necessarily operations or clinical management. And so I took a service line job. It was at the Medical College of Georgia. I was one manager on a team of five others with a director. And so a large amount of responsibilities, had about 18 FTEs. And you know, I was curious, I wanted to build things, create things, and really make an impact in that first job. And it was a great fit for me.
Tim Ulbrich: Awesome. So eight years of training, so your pre-pharmacy, your pharmacy work, your administrative residency two years plus the MS degree, several years of experience, and then you make the decision that you’re going to walk away from that and start your own, start your own company. And that, of course, would be the work that you’re doing with DocStation. So tell us a little bit about that decision and how you’re able to reconcile walking away from I guess what you could say is somewhat something known and secure to then starting your own company.
Samm Anderegg: Yeah, it’s a great question. I think, you know, when I made the decision on the first job, again, going back to that creativity piece and the ability to really build things, so the job was great for the first like two and a half years is how long I lasted there. Learned a lot, implemented a lot, but I didn’t realize how much that creativity was important to me. And so after you get quite a few things done, you start getting — you start pulling back the layers of the onion and realizing that there are a lot of barriers, you know? You cross quite a few in those first two and a half years and build a lot of great relationships, but there’s some just political, structural, operational barriers to be able to do new things like if you want to implement a new software or if you want to hire more FTEs, you know the ROI is there, but it’s not just a matter of convincing someone or showing them value, it’s things that are out of your scope of influence. So I was a little frustrated by that and I think what it came down to is we were trying to implement clinical services in the ambulatory care. And you know, built proposals, submitted them one year after the next, but what I realized is it’s really hard to justify that value. And looking around for all the like different clinical tools, pharmacy documentation tools that were able to do that, there just weren’t any. And so going back to that creative piece, I was like, you know, I’ve learned a little bit, enough, throughout my career to know that there’s an opportunity here to build a tool for pharmacists from the ground up. It sounds crazy when you say that if you’re in a position to be a manager, but the more you keep thinking about it, right, and I’m sitting here burned out in my job a little bit, working hard, still enjoying it but knowing that I don’t want to do it for the next 20 years of my life. So I spent a lot of time thinking and debating, but ultimately it just becomes more and more real the more you think about it. And when you look at the other people that have started companies, you know, they’re just like you and I. They’re just regular people. They were just willing to take that risk. And so then it became analyzing the risk and the financial piece, how do I actually do this? So you know, I kind of went from there and jumped off the ledge.
Tim Ulbrich: So let’s talk about that for a moment before I jump into exactly what is DocStation, what’s the problem you’re trying to solve with that, but talk us through, talk our listeners through how you did analyze that risk. I think that’s something that often, people are thinking about as oh, maybe I’ve got a great idea or I see people like Samm doing some cool stuff, but I can’t imagine walking away from my known six-figure job or I’ve got lots of student loan debt, got all these issues to deal with. So how did you walk through that risk and really try to objectively evaluate what the risk and the opportunity was?
Samm Anderegg: Yeah, so I think even before I got to that point, it was making sure I found something that I was extremely passionate about, right? It hit all of my boxes like the technology piece, the creativity piece, the leadership piece and really building something, creating something out of nothing. I was extremely motivated to try this out at the beginning, right? And it’s, you know, the risk at that point is really just time risks. So I was working a full-time job, and I would go home in the evenings — you know, eat dinner, throw something in the microwave really quick, and then spend the next five or six hours just reading and listening to podcasts and trying to absorb as much information as possible, building out financial models, like whatever I could do to validate whether this was going to be a viable business or not. And you know, as that progressed, that got into a couple months’ worth of time where I was like running on no sleep basically to the point where I knew there was an opportunity there, it was just a matter of whether I wanted to take that next step of risk and ultimately decided that if I wanted to, what would I need to change? And I just needed to create more time. I needed to create more time for myself and really, the only way to do that was to eliminate those 40-60 hours a week that was my full-time job as a pharmacy manager. So you know, analyzed how I would do that and happy to kind of walk through those steps as well. I know a lot of people have ideas. It’s like, how do I actually put this into action? But the first thing is the risk of time. And that’s a good test to make sure that you are passionate about it if you’re willing to stay up until 2, 3 in the morning doing those things because you love it so much.
Tim Ulbrich: I’m so glad you said that too because I think that’s a common theme. I know I felt it when I was starting the work with YFP, but you hear it so often among business owners that are working full-time and then they start their own company simultaneously is that they will talk about it as if you hear the hours and you’re like, oh my gosh, it’s exhausting. But that person is so passionate about the idea that they don’t see that same level of exhaustion. You know, they’re so eager to learn and so eager to jump in and really see is this viable and how do I learn more about the industry and what’s happening? Talk me through more of the financial risk. You mentioned the time piece. I hear you there. But I’m guessing many are listening saying, you know, “How do I go from $120,000 to nothing?” You know, we know many business owners as you start, obviously you’re investing a lot back in the business. How did you assess the actual financial risks and what you might need to change, you know, if anything, to make that a reality?
Samm Anderegg: Yep. So I think I was about two and a half years into my job, so I was two and a half years into being used to that type of salary, right?
Tim Ulbrich: Yeah.
Samm Anderegg: And you know, I definitely like spent money to travel and do things like that, but I didn’t build everything into my day-to-day life where it would be really hard to untangle all of that stuff. It’s still hard, don’t get me wrong. It’s hard for anyone to do that, but what I — I looked at my savings account, how much of an emergency fund did I really have left and how much did I think, how long did I think that that would last? I looked at basically my primary income going to $0, so how do I make up — like what is it that I need to cover the bare minimum, right? What costs can I cut? It was really like a full-on slash of everything. I discontinued all my subscriptions, I eliminated my rent and figured, OK, I could stay with some friends for a little while while I figure this out. I put my student loans down to minimum payments. I was paying more than double what I owed. So did that exercise and then came up with a number, a monthly number that I needed to make up. And what I didn’t mention in my background is, you know, since like about 2010, I was involved in health IT, specifically on the pharmacy side. And so it started off as a project and eventually grew into through residency, I worked on this project. And then when I took that first job, they started paying me a little bit hourly for my expertise I had developed over the last three years, so there was work there. So an opportunity to do more hours and again, I was working on my own thing and full-time job, so I didn’t really have any time to dedicate to that. But that was an opportunity. I just basically said, “Hey, if you need me to do this, here’s how much I need per month,” and was able to negotiate that. So and you know, that was kind of like an opportunity and timing type thing. But I think, you know, whatever you’re doing, you’re trying to figure out any way you can make up that income, whether it’s passive income, whether it’s if you’re partner is willing to help you out in the meantime, if you want to start building up that savings account, that emergency fund early on, you know, lots of different options. It just depends on your situation. And that was mine.
Tim Ulbrich: Yeah, and I think if I could add there too, Samm — I don’t know if you felt much of this — I know for me and a conversation my wife and I often have and really finding value in talking to other people because when you’re in it, it’s hard to see it. But I think often, I project the risk to be greater than it really is. And when you take a step back and you think about, OK, your training, if things were to fall flat in 6 or 12 months, it’s not like you’re not going to have options. You’ve got a network, you’ve got lots of training, right? So really taking a step back to say, not only for your individual financial plan what is true risk, but also career-wise, you know, play out the worst case scenario. And then if that’s the worst thing that could happen, which is likely to be unimaginable, OK, anything else, what’s really the risk that’s associated with that? One question I have for you, when you talked about coming home in the evenings and spending 5-6 hours, you know, really learning more about the business side, doing some modeling, how much of that learning was industry-specific to the area that you wanted to do with DocStation, and how much of it was more in kind of the business side of it and starting up a business and all that was entailed in doing that?
Samm Anderegg: Yeah, none of it was industry-specific or pharmacy-specific, even healthcare-specific. And you know, you kind of start searching to see if there’s anyone out there talking about that in our particular field, but there’s just really not. And I thought, you know, when I first — a little bit disappointed at first, but then you realize that if you’re going to make this work for healthcare, for pharmacy or whatever, it’s industry-agnostic. Building a business, building a startup, there are different rules that you have to play by. And I think it’s better to learn from people that have done it in different industries and then figure out how that applies to healthcare and to pharmacy. And there are some nuances in the healthcare space that don’t apply to social media marketing, e-commerce and things like that. But those are the little things that you pick up along the way and fit into your puzzle as you go forward.
Tim Ulbrich: So let’s talk about and transition to DocStation. What is it? Why is it important? And what’s the problem that you’re trying to solve with DocStation?
Samm Anderegg: Yeah, so DocStation is a care management platform or an Electronic Health Record built for pharmacists. The big thing that we’re trying to do is in the community pharmacy space, you know, the business model for the last dozens of years, decades, right, has been built on dispensing prescriptions and the administrative fees that come along with that and the margin that we make on the actual product. And just within the last two or three years, extreme pressure that is putting that at risk, putting pharmacies at risk. And so, I don’t know, I just kind of saw that, you know, you see every other product that has the ability to be shipped, delivered to people’s door in two days, so what’s going to happen to our profession? And so you know, I looked at community pharmacy, there’s really no one, clinical record or EHR system that folks use that’s built specifically to bring pharmacy to the new age and the clinical age, and that was the gap that I was trying to fill. And so I experimented with a lot of different ways to get started. Like the main thing is like, how are you going to bring in money for this business, right? Where’s your revenue going to come from? And thought pharmacies at first, but you know, the more you look at the market, the more you look at healthcare outside of pharmacy. Everything is moving to value-based care.
Tim Ulbrich: Yep.
Samm Anderegg: And the folks that are going to make the most money in that type of equation are the health plans. They’re going to have the most value from that, right? And so we began to talk to health plans about that. And so the idea, the product itself, has evolved over time. You know, it started as like an EHR you sell to pharmacists as like a subscription fee. And now, it’s really a tool for value-based care or value-based pharmacy, connecting health plans directly with pharmacies to facilitate value-based care models.
Tim Ulbrich: So help our listeners understand how that differentiates from others that have been in the space for awhile. So I remember wrapping up residency in 2008. Here in Ohio, we had a big Medicaid MTM contract that came to be, lots of excitement around community pharmacists, community pharmacies getting involved in Medication Therapy Management services, lots of frustrations that were also happening because the caseload really wasn’t significant enough at the time — obviously, a lot has changed — significant enough at the time to be able to efficiently operationalize it in a store. So you saw these models evolving to where you’d have one clinical pharmacist going around to multiple stores trying to do these cases. Is it really viable? Is it something you can justify continuing? So the MTM delivery and a care platform at the community pharmacy has been around for awhile. It certainly has its challenges. So what is the work that you’re doing at DocStation? How does it differ from those existing platforms?
Samm Anderegg: Yeah, I think going back to how is pharmacy unique, right? You mentioned MTM. Because we have this burden, and now I’m seeing it as an opportunity that we haven’t been classified as providers under the Social Security Act, you know, we didn’t fall down the typical path that physicians at hospitals did, meaning billing fee for service CPT codes.
Tim Ulbrich: Right.
Samm Anderegg: So we have been fighting tooth and nail for any sort of reimbursement for clinical services. And we’ve been very resourceful, so part of Medicare Part D passing was MTM was mandated, right? But MTM is a specific segment or specific way that pharmacists can get paid for services, and it’s wildly different than billing a CPT code for chronic care management. And that’s also wildly different from contracting directly with an outpatient physician’s office to help them improve quality measures. So you mentioned the big thing was how do we get our caseload up to make this actually a viable business for me to open a practice, right?
Tim Ulbrich: Yep, yep.
Samm Anderegg: And so our belief is that if you build a tool that’s robust enough to incorporate all these different clinical revenue opportunities, and you take all of the administrative burden away, you leave the pharmacist with the simple message of take care of the patient and you’ll get paid. You’ll get paid enough to have a stable income, provide for your family, and if you’re ambitious, you know, build a large clinical practice out of it. And so that’s what we’re aiming to do and that’s why I believe that we’re different.
Tim Ulbrich: So what is holding this back from scaling? You know, I feel like one of the things that I’ve always struggled with thinking through the evolution of the community pharmacist’s role beyond the dispensing prescriptions is we seem to have pockets and pilots and areas of success, but we have yet to really see something scale. So in your world, what is preventing that from happening? And you know, is this a solution that can help that scaling happen?
Samm Anderegg: Great question. Well, getting into it, people told me this a million times. Software takes a heck of a lot longer to build than you think it’s going to, right? And that’s true. But regardless, healthcare and pharmacy and all of the different segments or ways to get reimbursed are incredibly complex, like way more complex than really any other industry. And that’s one of those unique things about healthcare. It would take two or three years to build out a clinical billing tool that works really well, designed well, and people are going to use it over and over again. And that’s just one segment, right? Then you’ve got to look at MTM, and then you’ve got to look at direct contracting and all these different things. And all the while, the market’s emerging and requirements are changing. And so you know, I think the first thing is just picking a specialty to start in. Where do you want to start that you think you’re going to generate enough interest and engagement from users and it’s going to fund your business so that you can grow and add new tooling to it? And so you know, I think that’s — the biggest barrier is just, you know, building a HIPPA-compliant, cloud-based platform that’s usable and applicable to a large group of pharmacies and pharmacists that find it useful. And then I think the next thing is really, you know, the marketing and adoption piece. And so how do you — again, this is not anything that I was taught in pharmacy school or residency — but how do you market a software product to a buyer who is really a health plan? Like enterprise sales is, again, not in our textbooks. So figuring out how to do that, what type of people you need on the team, what the strategy is, it’s incredibly complex. And sales cycles, again, thinking about healthcare, sales cycles are 18-24 months. That just means that’s how long it takes from the first conversation you have with a potential customer to actually closing a contract. You know, probably one of the worst industries to try to do that in. And a lot of people are doing it and figuring it out, and we are too. It just takes time.
Tim Ulbrich: It takes time. I want to think through this a little bit more from the user standpoint as well as from your standpoint from the business end. Obviously those are connected, but if we have somebody listening who’s at the frontlines in a community pharmacy and they’re hearing this and they’re like, “Yes. This is what I’ve been looking for, what I want to do,” how do they get this off the ground? I mean, are you working with the payer and then you reach out to the pharmacies that the payer is working with? Or can the pharmacy drive that up through you guys to then initiate the payer contracts? How would somebody listening, thinking about this, begin to put in place how they might operationalize it?
Samm Anderegg: This is awesome. I love talking about this stuff. I’m glad you’re asking these questions because there’s things that we’ve been asking ourselves for a really long time. And what I would say — and again, at this point in time, if we were to do this interview 12 months from now, the answer would probably be different.
Tim Ulbrich: Sure.
Samm Anderegg: But at this point in time, we know that if we have a health plan that’s a partner, and they want to pay pharmacists for services, they just don’t know how to roll out that program, and sign up the pharmacies and make sure they’re credentialed and facilitate the payment. We know that we can walk into a health plan and provide a turnkey solution in the next 30 days. And we know that pharmacists will sign up for our platform and use our platform to get paid with that type of model because we’re doing it in the Midwest, we’re doing it across seven states, 300 pharmacies, 700 pharmacy users, one major health plan. And we’re eager to repeat that. We just need a pharmacy partner, someone at a payer that’s like, yeah, I like what these guys are doing and I believe in it. And on the other end, if you’re a pharmacist, right, you’re like, OK, I don’t know how I can help you with that if you don’t have a contact on the payer side. But on the pharmacy end, what we’re thinking is hey, if we build a tool that provides enough value like it creates more efficiency or it brings you new types of data, it helps you do things easier than other software that you’re using today or maybe you’re paying for software that does something that we can replace at no cost, right? We want to give you our tool for free. Like you can go to the website right now, sign up, we can get you basically turned in less than 24 hours. And you have access to the software. The main barrier right now is OK, now I’ve got to enter my patients in manually, hand type them in just as if you were starting with a brand new EHR. And we’re working to automate that to transfer your patients over automatically. But the key is if our tool is good enough, use it to be efficient, get data to show your value, and that makes the conversations a heck of a lot easier when you do approach your payer or whoever in your region, say, “Hey, you know, I’d really like to provide care for your members, your patients, and you’re going to get value when I do that. And let me show you why.” It helps you fuel your pitch to continue to grow your business. So that’s the second side of the coin.
Tim Ulbrich: So the website, just so you mentioned that, DocStation.co, DocStation.co if you want to go there and check it out, learn more. And I think just to build off of what you said, I mean, to me, the way we — as I hear and understand this, obviously you know much better than I do — but as we think about scaling this, it really needs uptake. I mean, it needs uptake from the payer side, it needs uptake from the pharmacy side. So part of my hope in sharing your story — not only sharing your entrepreneurial journey but also we know that we have a lot of listeners all across the country that might have some of these relationships or their pharmacies may be interested. And I’m hopeful we can see some momentum there. So you mentioned seven states, 300+ pharmacies. How many — you mentioned the payer — how many patients thus far have you served or you’re working with?
Samm Anderegg: So it’s roughly 32,000 patients.
Tim Ulbrich: OK, awesome. And then on the other side — I mentioned I wanted to talk about it from the pharmacist’s side — from the business side of it, as you’re willing to share, talk to use a little bit more about — obviously not specific numbers — but how you think about this from a, OK, at the end of the day, we’ve got to generate revenue. There’s a business model here. So what does that look like in terms of the payer relationships and how you build out a viable business model.
Samm Anderegg: Right. So when you’re in startup land, two ways to bring in money. And by bring in money, it means you’re on a fast track to grow your company, right? So you need to — really the biggest expense is hiring people. So hiring software engineers to build the product, expand the product, new features, maybe build it a little bit faster, but speed is usually not correlated with FTEs in that sense. And so you know, you could sell or you could fundraise. And I think what most people see on Twitter and in the news and on the show Silicon Valley is like you go out there and you raise multiple millions of dollars at these sky-high valuations that just seem fake. And that still goes on to a certain sense today, but it’s really hard for someone who’s coming out of healthcare with no previous experience starting a traditional technology company to say, “I’m a subject matter expert and I’ve got this really great idea that is really complicated to explain, but you should write us a check for $2 million.” That’s tough. It was really tough, and I wasn’t able to do it to get started. And so you know, you start looking at on the customer side and you look at health plans. And so what we’ve done is at first, it was bootstrapping. I drained down my savings account to basically $0, my cofounder did the same. I was able to convince my cofounder to take that risk as well. That was the first step. And then when you close your first customer, you’re saying, “OK. We’re bringing in x amount of money. How many people can we afford to hire?” And it’s really about understanding what — and these are different financial terms from the everyday life or everyday business — it’s about your runway and your burn rate. How much are you spending? How quick? And when are you going to die? And how do you make sure that you’ve got enough cash on hand to continue to extend that timeline? And you’re up — all the while, you’re weighing a lot of different factors. OK, if I fundraise from this group, do I trust them? Do I want to work with them for the next 10 years? Because you’re basically getting married to them. And they’re going to take a significant portion of equity in your company, and they’re going to have a board seat. And so there’s lots of things to calculate and understand and weigh. But you’re doing this pretty much daily, right?
Tim Ulbrich: Yep.
Samm Anderegg: And so yeah, you know, we’re going hard on the sales and the customer thing. We believe that our product’s at a place right now where it’s going to generate immediate value for a health plan. And we’re working on that on the pharmacy side too. I believe the tool is really great. We need pharmacists to tell us, hey, this is what’s missing. I would use this if. And all the while, you’re looking at that bank account every day and you’re saying, OK, how much time have we got? How much time we got? How much time we got? Until you’re ready to pull the trigger and find an alternative source of funding. So that’s the current situation, man.
Tim Ulbrich: And I think just hearing you talk, you know, kind of bringing this full circle, it goes back to you better be doing something that you love here and you’re passionate about, you believe in, because when you’re talking about things like drain your bank account, going into partnerships, cofounders, challenges that come — I mean, don’t get me wrong, I wouldn’t change any of it for the world and if you have that itch and desire and passion about something, you just can’t ignore it. You know as well as I do, you’re going down this path regardless. You can’t stop it. But it better be down something you love because it’s going to have a lot of implications. And I even think on the money side, I’ve been listening to a lot of The Pitch podcast on Gimlet Media, and great stuff. But you know, kind of that fundraising side, and I think often we think of this glorious side of raising money, but there’s also this other side of you have lots of opinions now, you’ve got baggage that comes with that, you’re obviously giving up equity, so you know, there’s pros and cons to that. And obviously you guys decided to try to cash flow as much as you can up front and obviously there’s challenges with that as well. Talk to me for a moment about a cofounder as well as the first hires. I think that’s a lot we don’t hear about in the business trajectory and growth. We hear a lot of the glorious parts of you start something, you got a cool idea, you’re doing your own business, and that’s like cool. What we don’t talk about is some of that next phase challenges I would say like bringing on partners or even hiring your first employee at the expense of paying yourself because you really feel like that’s what you need. So what was that decision like? You know, was it a cofounder from the beginning? Was it somebody you brought on later? And how did you make that decision of what would be additional benefit obviously that they would bring perhaps and a different expertise?
Samm Anderegg: Yeah, I think my administrative training in management, you did some hiring with that. You know, in my first job, I hired quite a few people. But when it comes to starting something from the ground up and your cofounder is really like a first hire but so much more than that, right?
Tim Ulbrich: Absolutely.
Samm Anderegg: There’s so much more risk in choosing the wrong person, especially with that cofounder situation. So you know, when you’re looking at startups and the most successful ones and how they got started, it’s like, you know, these people have been friends since childhood and one ran off to be a software engineer and the other got her MBA and they circled back and found this great idea and they built a $1 billion company. I didn’t have any of those types of friends. And you know, you just — what I’ve learned is you just talk about to everyone that you know. And you know, I had some friends in pharmacy that were interested and ultimately, I needed the skillset that I needed to complement my own was on the software engineering side. Right? You need someone to actually build the product. And so what I did is I knew that this is a person that I wanted to — really, I needed a friend, a friend that seemed like a childhood friend that I knew that was willing to — we could go through tough times together and come out on top and someone that was really empathetic and caring and like understood, you know, the risk and really be in it together. So what you have to do is when you’re meeting somebody blind, which I did — I met like four or five different people that I did some projects with, right? You start with a project, see how that project goes, how you really work together, and then spend time with them personally too to talk through things to see if you’re a match. And so yeah, I found Josh in Austin. I looked everywhere. But met him, met his wife Rachel and you know, I feel like I’m a member of their family now and vice versa. And so you’ve just got to be careful and do as much testing as you can. And I think the people that I met before Josh, it didn’t feel right, but I kind of wanted to continue to try to make it work. But you know, when we did meet up and start working together, you could feel it, you know? It felt right. It felt like it fit.
Tim Ulbrich: Yeah, and I think you often hear about the negative side of partnerships. I know I did. I grew up in a small business family where a partnership went bad, you know, in a family business, so I felt like I heard very much of that side. But I think you don’t hear as much of the positives that can come — and I know speaking from personal experience, sounds like for you as well, I could not imagine going at it alone. And I think if you find that right relationship or fit, what you can get in terms of not only different expertise, perspective, but I think it’s a classic example of two are better than one alone. And I think you get a duplicate effect when you have really the right fit and the different expertise that two people can bring. When I think about a CEO role, I think about things like obviously strategic direction of the business, you’re thinking about the leading the team, and I know you’ve got a team that works with you and that presents its own set of opportunities and challenges. You think about business development, strategic relationships, really being the face of the company, which one, is very different than anything we’ve ever trained for in school or even in the residency you went through but also is very different than likely the role you started out with in the company where you’re really in the weeds on the product side. So talk to me about that transition to that role, maybe struggles you’ve had or how you’ve effectively made that transition where you can kind of take more of that global perspective and when you have other people on board, really serving in that CEO role of driving the strategic direction of the company, allowing the other people to be in the weeds on the other parts.
Samm Anderegg: Yeah. It’s — you learn as you go is the big thing. I know that’s general, it’s not really great advice by any means. But you do. And I think intuitively, you know it’s all about focus. What is the most important thing that you need to do? What is the biggest thing that’s blocking you from taking the next step? That’s what it is at the very early stage. And so the first one was OK, finding a cofounder because I knew I couldn’t fundraise and I knew it would take too long to code. So once I found Josh, it was like OK, what’s the next thing? Well, we need to build something that people will buy. And so you know, we built a prototype and helped work on that. And at the very beginning stage, I was like helping out with the back end architecture and used my whatever I borrowed from Microsoft Access skills that I learned in residency. Like you know, trying to build the database. It didn’t go well. I’m not in that position anymore. I’m not — but you know, you just, priorities change and new things come up and they shift. And at the early stage, it’s really on a monthly basis, maybe. But as your business grows and you bring on new people and you start delegating some responsibilities, things get more complex. I hate to say it. They get more complex, and you’re trying to figure out where can I make the most impact this week?
Tim Ulbrich: Yep.
Samm Anderegg: Or this quarter. And a lot of it — and every company is a little bit different, depending on who you have on the team, what your roles are and what your biggest, what you’re trying to accomplish. But where I fit in now is really sales and leadership and building a team. We went through this accelerator program called TechStars. It’s like a three-month residency program, if you want to put it in pharmacy terms, for young startup companies to try to give you the skills on the tech side. Yeah, it was exactly what we needed at that point in time. But the biggest lesson I took away about the CEO role is when things get so complex and hazy, it’s like you have three responsibilities: vision, people, and funding.
Tim Ulbrich: Oh, so good. Yep.
Samm Anderegg: So that, you know, I can sigh and relax a little bit when I remind myself that.
Tim Ulbrich: Yep. I love that. And that’s a good reminder, reminder for me. It’s just such a shift from the roles that we’re used to, either in our day job or the way we’ve been trained. And I’ve been following along your newsletter. And I think I can see that you’re doing an awesome job of that with your team and really focusing on the team aspect of it. So one question I have for you is about the future — kind of combines the future of the business and the future of the profession. You know, as I understand your product is really focusing on leveraging the community pharmacist to be able to interact with patients and provide the service that they’re trained to do and connecting the payers to pharmacies to do this. Two ways of looking at this: One is that this is an area that’s being disrupted. Will community pharmacy — obviously I’m being dramatic here — will community pharmacy exist in terms of the brick-and-mortar? There’s disruptors like Amazon, PillPack, others that are gaining in the space. Margins are being cut, we’ve got PBM issues, DIR fees, all these things. Will that model exist? And therefore, what’s the threat potentially depending on that model? The other way of looking at that is that you’ve got in this brick-and-mortar pharmacy world, we’re the most successful healthcare professional in the country. So we are theoretically placed and ready to be in the prime position to do exactly what you’re trying to do and grow. So I’m guessing this dichotomy is something you think about often in terms of the disruptions happening in the industry but also simultaneously the opportunity that exists with your business model. So talk us through how you envision that and how you think through that.
Samm Anderegg: Yeah, man, I think you hit the nail on the head. And you’re not being dramatic at all. You know, I’ve been talking about this for years and more critically in the past couple years. We’ve got a lot of industry pressure going on, specifically in the community pharmacy setting. And so you know, we’ve got this coronavirus thing happening right now, and it’s like, man, you know, we could have got out ahead of this, in front of this, and people were downplaying it. I think we’re in the same situation in pharmacy. Right? Like if you realize that there are pressures, if you don’t feel them, if you’re not a business owner or community pharmacy owner and you’re not writing the tens of thousands of dollars in checks back to the PBM for these DIR fees, and you see your volume decreasing as people are shifting to mail-order or PBMs are requiring mail-order, man, it’s rough out there. And it’s going to happen quick. But you know, what I — going back to your second point is it is an opportunity. But we have to be ready, right? And the biggest missing piece that I saw and really, another huge reason to start the company, is that let’s say this happened in a more positive light. Let’s say either federal government gave us provider status tomorrow. And all of a sudden, pharmacists could be reimbursed in the same rate as physicians for the services that were within their scope of practice determined by their state. OK, what next? Right? And I don’t think most people who are advocating for this have a good answer for that.
Tim Ulbrich: That’s exactly right. Yep.
Samm Anderegg: And so you know, we — these negative pressures are — they’re being applied. It’s a little bit longer term, just not kind of an instantaneous need. But we still have that gap, and so that’s what we’re trying to build in this tool. And DocStation is we want to be able to hand this piece of software over to a pharmacist and say, “Alright, provider status gets passed tomorrow or your business starts taking a hit and you need a new clinical revenue stream, here you go. Sign up, start providing care, and money will get deposited in your bank account.” So you know, it’s inevitable. Like our profession is going to change.
Tim Ulbrich: Yep.
Samm Anderegg: And we need to do everything that we can to start preparing for that. I think a lot of entities are, they’re preaching that word, but we’ve got to be in this together you guys.
Tim Ulbrich: I agree, and I think your point is so spot-on that we’ve been spending so much time talking about things like the acquisition of provider status. And we talk a lot here in Ohio and I think nationwide as well that without payment, without contracts, that’s really a symbolic move. And I think the question is how do you operationalize it and not only how do you operationalize it, but are we ready and are we willing and wanting to operationalize it as a profession? And I think the research, a lot of the research and work that hasn’t been done is I know living in the academic circles, living in the association circles, it’s all talked about in a positive tone. But I don’t think that’s representative of how everyone feels about it for good reasons of the challenges they’re facing on the frontlines. And I really want to give a shoutout here, I think some of the work that we’re doing in Ohio, the Ohio Pharmacists Association, my colleagues at Ohio State, Jen Rhodes, Stu Badey, Michael Murphy, Christine Mason, they are asking these questions and really having some of this conversation and doing the work talking about how do we actually operationalize provider status, Bridget Groves at OPA, and really get past just that symbolic passing of the legislation. And I think the work that you’re doing at DocStation so nicely aligns with that as well. Last question I have for you, kind of a fun, light-hearted one, you know, here you are, obviously in this CEO role of DocStation, thinking about the future of the profession, the vision. What are you drawing from? What are you reading, what are you listening to where you draw some of your inspiration and get some of the knowledge that inspires the work that you do?
Samm Anderegg: That’s a great question. Depends on the time and what current issue or stage or what’s most important when I try to find a book that is loosely related to that. And even if I pick up a random book, a lot of times, the timing is right. But you know, at the beginning, there’s a couple books that I took from, Y Combinator Startup School has founders come in and lecture, like successful ones and they mention they’re reading this. And so “Crossing the Chasm” was probably one of the most influential books that I read. It’s about marketing, it’s about introducing a new product to a market and who you need to target. That was huge. Another one, I thought I knew tech, but I didn’t understand what tech really was on a large scale, on a global scale. And so “Behind the Cloud,” which was written by the founder of SalesForce in San Francisco. That was a really influential book. And recently, you know, now that we’ve progressed a little bit as a company and we’re trying to build a sustainable business that is durable for years, I went back to the basics and picked up Jim Collin’s “Good to Great,” and man, what a great read that is about research-based and gives you the right tools and things to focus on and helps you simplify it. That has been the most impactful one lately. And I’ll throw in one more if that’s OK.
Tim Ulbrich: Sure. Absolutely.
Samm Anderegg: Yeah. If you’re starting a business, “The Hard Thing About Hard Things” by Ben Horowitz of Andresen-Horowitz is like my pacifier. Like if something’s going wrong, or it’s just a slog, you’re in that rut, which you do, you go in ruts and then you have peaks. But man, that is — he just does a great job of not telling you here’s 10 steps to building a successful company but here’s what it’s really like and here’s how messy it is and here’s what happened to us, here’s what we did in those scenarios. So you know, when you think times are tough, you know you’re not alone reading that book. So yeah, I highly recommend that.
Tim Ulbrich: We’ll link to all three of those in the show notes. I’ve got two new ones to add to my reading list, “Crossing the Chasm” and “The Hard Things about Hard Things” and then rereading “Good to Great.” So good reminder on those. Two part question to wrap up here, Samm. Where can our listeners go to learn more about DocStation, the work that you’re doing? And then how can they get involved as well if they’ve heard something today and they say, I want to be a part of this.
Samm Anderegg: Yep. Easiest way to get in touch is go to the website, DocStation.co. There’s a “Get Started” button in the top right. Click that, fill out the form. And I know that seems like rudimentary or like not very personal, but it notifies us directly and notifies me directly. And so we’ve got a great couple people that watch that, monitor that 24/7. Response rate is in like three minutes. And so we’ll reach out to you directly. And then we’ll become personal, I promise you. That’s the easiest way to do it.
Tim Ulbrich: Awesome. Samm, thank you so much for taking the time, for sharing your journey. I know you’ve inspired me and I have a feeling will do the same for many of our listeners. So thank you very much.
Samm Anderegg: Thanks, Tim. It was a pleasure.
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