Founder and CEO of ERG Enterprises. Nationally recognized thought leader on entrepreneurship, investing and leadership.
As Peter Drucker famously said, “Wherever you see a successful business, someone once made a courageous decision.”
If you’re a physician who aspires to become an entrepreneur, this article is for you. Today, the healthcare industry presents the perfect recipe to build and scale a viable business. For one, the sector has built-in, consistent demand for services. The U.S. spends $4 trillion annually on healthcare, and forecasts predict this number to rise sharply in the decades to come.
Healthcare is also rife with problems that present lucrative opportunities. A recent McKinsey study found that the nation could save $265 billion every year by addressing the administrative inefficiencies that result from high industry fragmentation and regulation. Additionally, healthcare continues to attract high levels of funding from angel and institutional investors. Digital health startups raised $6 billion in Q1 of 2022, a significant increase from the same period three years before. With high demand for healthcare, significant market inefficiencies and substantial investor interest, healthcare is fertile ground for entrepreneurs.
That brings me back to physicians. While starting a business in healthcare doesn’t require medical credentials or patient care experience, it doesn’t hurt to possess them. Physicians bring the advantage of understanding health and the systems of healthcare—from workflows to technology, care teams to treatments. They also carry the credibility that consumers and other stakeholders demand of this consequential and important industry—a reason why healthcare startups clamor to recruit doctors for their executive teams or board of directors. In healthcare, physicians gain an immediate advantage when starting a business.
Still, in my conversations and interactions with physicians over the past three decades, I believe many practitioners tend to overlook or discount their abilities to launch a business outside of starting a private practice.
From as early as I can remember, I knew I wanted to become an entrepreneur. This interest in entrepreneurship carried into college and even medical school, where I found the business of medicine as intriguing as the art and science of it. Eventually I would make the leap, first in healthcare and then later outside of it. I would follow the traditional route of owning a private practice and the more unconventional one of buying an independent surgical hospital. Later, I would focus on starting a fully diversified investment company and launch others in hospitality, healthcare and technology.
Looking back on my career as an entrepreneur, I believe four key factors made it possible. I also believe they provide other aspiring physician-entrepreneurs with guideposts for making the career leap.
1. Frame the opportunity appropriately.
Recognize that healthcare entrepreneurship doesn’t necessarily mean starting a private practice. While it may focus on the delivery of patient care, it can also deal with other areas. I know a neurosurgeon who started a healthcare marketing business, as well as a primary care doctor who founded a technology education company. In addition to buying a surgical hospital, I also started a business specializing in orthopedic surgical equipment. The opportunities and avenues remain plentiful. Healthcare suffers from more problems than solutions and not enough people with the know-how or passion to solve them.
2. Nurture your connections.
Practicing medicine is a people business—the people being your source for business opportunities and talent. Embrace this reality and approach your work with an inquisitive mind and an intent to listen. For me, my work as a hand surgeon has put me in contact with people from all walks of life. From oil and gas riggers to software engineers, professional athletes to accountants, medicine has nurtured my understanding of industry and helped me build an expansive network, an invaluable tool for discovering new business ideas and the people to help bring them to fruition.
3. Recognize the limitation and power of specialization and the strength of a multifaceted team.
Invest in your strengths and blind spots. Strengths: your medical expertise and training. Blind spots (likely): software development, marketing, etc. Lean into your strengths. For your blind spots, surround yourself with the right people who see what you can’t.
To help you, use a valuable exercise from Jim Collins in “Good to Great”—seats on the bus. Get the right people on your bus (your business) and in the right seats before knowing where to drive it (the direction as a company). The right people are those who bring the passion and soft and hard skills to create value no matter what direction your business heads. The right seats are where the right people excel. Finding the right people for your bus and seating them appropriately makes your business resilient and agile—two qualities necessary for startups.
4. Stomach the journey.
Entrepreneurship reminds me of a seesaw—only the ups and downs occur unpredictably. You certainly experience your “up” days, just as you undoubtedly face your “down” ones, too. Stay optimistic. Keep learning. Recognize that entrepreneurship never follows a linear path of progress. Your business may fail, but don’t let it become a failure by failing to learn from it. Use the experience for your next iteration. Eventually, you will reach your destination, but not without encountering doubt, trials and stops along the way.
If you aspire to become a physician-entrepreneur, you won’t find better timing to make the leap. Healthcare needs the people who know it best to begin solving the thorny problems of today and tomorrow. As Drucker would say, it’s time for a “courageous decision.”