When in Start-Up Hell, Keep Walking


This is part of my Series on Entrepreneurial Culture.

Let's face it- sometimes, no matter how much you prepare, anticipate and execute- things can go terribly wrong in your start-up. It's happened in varying degrees to every entrepreneur for sure. Sometimes though, you get hit by an absolutely devastating blow that comes out of nowhere. It's the start-up equivalent of a ten on the Richter Scale and it ain't pretty.

An entrepreneur friend of mine recently got hit with one of these punches and I shared with him the experience I had in my first company of having been hit with not one, but with two of these seismic knock-out punches over the seven or eight years I was building out treatment facilities across the country.

The first time around the Director of Blue Cross/Blue Shield & Medicare of a certain region (which I will not name) gave us his approval in writing that our treatment would be covered in-full for our patients should we open a facility there. On the strength of that official letter I re-located, hired a terrific staff including therapists, physicians, admin folks, etc. and signed a six-year lease on a 3,500 sq. ft. facility, (committing to it with a personal letter of credit!), and got to work. Before we knew it things could not have been going better and everyone was absolutely loving life. Our team was humming along, patients were getting much needed help and were incredibly grateful and it was just pedal to the metal for everyone. And then, a few months into this charmed existence- suddenly and without warning, the hammer blow came:

We received an official letter from BCBS/Medicare telling us they would no longer cover our patients' treatment. No reason was given. In the region we were in this was equivalent to a death sentence for the business.

When something like this happens in a start-up, everyone, especially the founders, get shaken to their core. All the herculean efforts of the past however many months and years seem all for naught. It is a physically sickening feeling that does not go away for a very long time. I'll bet a lot of you have been through something like this. It's a time when the temptation to fold up your tent and go home is at its strongest. I went through all the negative emotions that bubble-up- outrage, anger, hostility, and worse frankly. Thankfully some better part of me prevailed and at some point in the ensuing days I decided that this would not stand. We were going to fight this.

Basically I was in start-up hell and decided that we were going to keep on walking...

Over the next 12 months we waged an all-out battle for survival. We steadily closed deals with all the HMO's in the region, cut costs wherever we could including lowering everyone's salaries, (I didn't have one myself), lobbied congress intensely, organized letter-writing campaigns, enlisted the assistance of support groups and national advocacy organizations, law firms, physicians, patients, journalists, you name it- and all this well before any of us had even heard of the internet! Everyone chipped in and performed tasks they never imagined they would be doing when they first joined the company. In some ways it was beautiful and humbling to be a part of this sort of inspired effort.

After twelve months of this unrelenting siege, our opponents finally reversed their decision and relented. Of course it never is quite so simple. It probably took us another 12 months to get back on our original stride, recoup what we had lost- and this doesn't even account for the psychic, physical and emotional damage of going through such an experience whether one realizes it at the time or not.

What a nice story, right? Well, a few years later, despite taking extra precautions with all sorts of official guarantees, and with a new facility in an entirely different state to which I had relocated once more, the same thing happened to us all over again.

You guessed it... I kept on walking.

And the buddy of mine I mentioned above? Yea- him too- he's walking.