Why aren’t there more physician entrepreneurs?

As we’re talking to more and more people about Sherpaa, so many people are asking “Why hasn’t someone come up with this idea before?" 

My response is:

  • A health innovation like Sherpaa has to be founded by a physician and an insurance expert
  • The founders have to deeply understand the issues around starting a business, raising capital, designing a beautiful product, hiring the right developers, the right team, the right operations to power the backend of the company, etc.
  • The founders have to execute on the promise in a way that truly resonates with users
  • The business has to be financially sustainable

That being said, it takes a specific set of skills to conceive of a business, fund the business, and execute on it in a way that makes the business successful over time.

There are ~600,000 practicing physicians in the United States. Of these, ~450,000 are specialists and ~150,000 are generalists. Once you become a doctor, your life is set if you follow the straight and narrow. There is a defined professional trajectory making decent money on day one that rises every day you stick to the straight and narrow. It’s a very conservative and comfortable situation and one that the vast majority stick with forever. Upon completing residencies and fellowships, doctors have spent likely 10 years of their life in medical school and residency and are just simply ready to settle down and start making some money. They want to start having a family as they enter their 30’s and they’re in debt a few hundred thousand from medical school. Taking the salaried job, after slaving away for 80 hours a week for the last 10 years is just way, way too enticing. And more and more doctors are being hired by healthcare systems for comfy, cushy, lifestyle jobs. Striking out on your own as an entrepreneur is risky, especially when you’re so deep in debt.

The vast majority of physicians are specialists like cardiologists, neurologists, cardiothoracic surgeons, etc. For the last 10 years their brain has been trained to think in silos. But being an entrepreneur and the leader of a company, you need to be a systems thinker. If you think in silos, your business is over. Companies have a ton of working parts. So if you’re a specialist, you’re probably going to think "If all you have is a hammer, the whole world looks like a nail.” So you’re going to probably try and create a business that impacts your specialty. It would be rare for a neurosurgeon to create a health company that affects the general population. So that means, out of the roughly 600,000 practicing physicians, the 150,000 generalists will be the pool that creates health companies that impact the general population.

Physicians are also notoriously inexperienced business people. I remember in medical school, we’d get a special lecture a year on the business of medicine or the legal side of medicine or personal finances. In fact, the last business class I ever took was in 10th grade. I’ve had to teach myself the fundamentals of business. Essentially, I received my MBA from books I’ve read and experience in my previous two companies. 

Also, physicians aren’t so much team players. They’re paid for their own personal opinions, the buck stops with them individually, and they are legally responsible for their own actions. Giving up decision-making control to someone else isn’t in their DNA. But being an entrepreneur requires being a team player, giving up control, and managing people. It’s a skill we have to learn. 

So health companies that affect the general population will very likely come from the 150,000 generalists.

Now what fraction of 150,000 generalists will actually then deny the comfortable straight and narrow, have the creativity for a realistic innovative idea, have the skills to then raise money, build and manage the team, have the skills to build the product or service that people absolutely love, and execute a financially sustainable business over time? 

That 600,000 is quickly whittled down to, I’d wager, way under 100. And the fact that realistic health innovation is so damn few and far between supports this theory.

Of course, there are so many assumptions in this theory, but I’d still generally stand by them.