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The appeal of joining a startup as a medical professional is undeniable. Since more than 70% of physicians are currently employed by health systems and other corporate entities, we often feel like invisible cogs in a machine, with every opportunity to contribute to real change. I feel alienated from. Social media seems to be full of success stories of doctors founding or joining startups, engaging in innovation and impact, and potentially benefiting. It’s easy to get caught up in the dream of creating something truly groundbreaking. However, the reality is often very different, and only success stories seem to see the light of day. Ask any angel investor and he’ll tell you that only about one in every 20 of their investments is a huge success. In this blog post, I would like to share my own startup failure story from when I co-founded and worked at a San Francisco healthcare IT startup (Secure Messaging and Handoff Technology Solutions) in 2014. I want to take a candid look at the other side of startup culture: the challenges, stress, and potential for loss.
economic sacrifice
One of the most immediately obvious downsides to joining a startup was the loss of steady income. Many pre-profit startups reward early employees in the form of equity, but some startups that raise seed rounds may offer a portion of equity in addition to a below-market salary. . Before starting my own business, I worked as a practicing hospitalist. The role offered not only a steady paycheck, but also the stability and predictability that came with it. The decision to work part-time and only work 0.5 FTE as a hospitalist for two years effectively meant forfeiting a six-figure income. Since I was still working part-time in a clinical setting, I was only being compensated by the startup in the form of shares (and when the company eventually went bankrupt, the value of these shares ended up being $0) became). The economic impact was not just a loss of immediate income. It was about opportunity cost, the income I missed out on while chasing my startup dream. For about 10 years since then, if I had invested this money in his low-cost broad market index fund, that one decision could have cost him about $200,000 to $250,000. I guess there is. Perhaps even more shocking is that if you extend this to a 30-year investment period, you could end up with $1 million sitting in an investment account you’ll never see ($100,000 is a 30-year investment period). compounded at 8%) with no other contributions). This aspect of startup life is often less discussed, but it can have long-lasting effects on your financial health and career trajectory.
emotional toll
The stress associated with startups is also a significant downside that cannot be overstated. Once the excitement of raising venture capital funding subsided, the constant pressure to achieve results, meet deadlines, and find customers became overwhelming. In my experience, navigating this new terrain was not easy. Although I had no direct responsibility, I have no doubt that his CEO at our company faced fear when providing quarterly updates to his venture capital and angel investors. After completing my medical residency and working in a hospital for several years, I knew what to do on a hospital shift. But little did I know about the different roles I would have to wear as a co-founder of a startup: salesman, marketer, evangelist, product manager. The startup environment is inherently uncertain, and navigating this uncertainty on a daily basis can be mentally and emotionally taxing. The highs may be high, but the lows have an impact.
The weight of unmet expectations
The disappointment of not meeting key performance indicators (KPIs) represents another serious challenge. In the startup world, KPIs are more than just metrics. They are benchmarks of success, proofs of concept, and validations of ideas. Failure to meet these can be very discouraging. It’s not just a matter of numbers. It’s about what those numbers represent: the potential impact of a product or service, investor confidence, and the promise of growth. When these expectations are not met, it leads to a deep sense of failure and leads to doubts not only about the feasibility of the business idea, but also about one’s own abilities and decision-making. Even though I am a doctor and have worked and trained in several reputed institutions, I have never successfully helped our startup build relationships with medical institutions or with large corporate customers. We were not able to successfully conclude a contract with.
ripple effect
Beyond these critical challenges, there are countless other impacts of joining a startup. These range from strained personal relationships due to investments of time and effort, broken co-founder relationships due to company failure, and the impact on professional reputation if the startup is not successful. Some future employers may look at your resume and wonder why you “took a break” from clinical medicine to do something else. Especially if you then have to return to full-time clinical work. There’s also the issue of having to return VC money, which can close off future funding opportunities and sour relationships with investors. Startup failure has wide-ranging ramifications, impacting not only founders but also employees, customers, and stakeholders.
conclusion
My experience with a startup that went bankrupt within two years taught me valuable lessons about the realities of entrepreneurship. The dream of building something from scratch is appealing, but it comes with challenges. The downsides of joining a startup, such as loss of income, stress, disappointment, and various other impacts, are important considerations for anyone considering embarking on this journey. Despite the downsides, this was a deep learning opportunity and provided insight into risk-taking, resilience, and the complexities of bringing ideas to life. If you are considering starting up, please give it a try! However, it’s important to consider the risks and approach with your eyes wide open.
Varun Verma is an internist and co-founder of Andwise. His contact details are available on his website (Varun Verma, MD) and his X @varunvermamd. In addition to writing about his own experiences as a physician on his Andwise blog, he also hosts the Andwise Podcast, where he talks about physicians’ financial journeys and careers in medicine.
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