In my second startup, we got cocky and tried to create a second startup inside the first—not something I or your VCs would ever endorse, but what they don’t know won’t hurt them (unless you fail, in which case it doesn’t matter anyway ☺). I dragged one of my best mates, Brad, an Aussie who knew the aesthetics market extremely well, kicking and screaming into the company and he proceeded to create this wonderful little aesthetics company inside the ophthalmic company. Brad is one of those guru marketing people who understands both the technology and the market and knows how to build a bridge between them. It was a privilege to watch him create this little startup inside a larger startup and grow it with a unique product and value proposition that not a single competitor managed to figure out until after he had taken 70% market share.
Now, I have always been a missionary entrepreneur, so I like to believe that the world gets better when my startup succeeds. I have always felt a little guilty about the aesthetics market—you see, my company was trying to cure eye disease using lasers and so everyone in it was a bit of a missionary wanting to change the world. There were big, nasty established competitors, but when you are on a quest, you don’t notice the dragons; rather, you focus on the journey. The doctors loved us because we were an upstart, but it was clear that despite our naivety in thinking we could compete with big pharma, we really understood our market and customers. And those customers also wanted to change the world a little, so they supported us to spite their existing suppliers. We didn’t wine and dine them, but we sure made their work better, faster, and more reliable.
Aesthetics isn’t like therapeutic medicine. The plastic surgeon is a business person, with focus on elective surgery. I don’t want to argue the relative merits of curing disease vs. making people beautiful, but rather just show the difference in culture required to support such disparate markets. You can imagine how hard it was to manage that clash of DNA inside a small startup—even when we went public, the fissure remained. It's a great lesson in what not to do inside a startup, which is so critically dependent on pure DNA. We didn't quite get to the Mac team vs. the Apple team, but you get the idea.
So, imagine my surprise when my daughter comes to my bedside in the middle of the night saying, "Daddy, there is something wrong." I wake up and groggily walk her to the bathroom, turn on the light, and find "Carrie" covered in blood from a small vessel in her nose. You see, there is a fine artery whose name I forget that feeds blood to your nose and face, is connected to the ophthalmic artery (which I only remember because we were an ophthalmic company), and ultimately is fed by the carotid artery (which everyone should know since if you cut it, blood will shoot 10 ft in the air and you will die fairly quickly). It's a fairly common condition where this small vessel pushes up to the surface and ruptures. It's very difficult to stop this bleeding, especially in an eight-year-old who sees panic on her daddy's face at 3 am (I am usually a very calm guy). There is so much pressure generated by the carotid artery that the bleeding will continue for hours, and for a while it ruptured every second day with disastrous results.
Two weeks later, we got rushed into a famous aesthetic surgeon's lab in San Francisco and, using guess who's laser, he cauterized the offending vessel and healed the wound. Now, in our ophthalmic company we had received thousands of letters from grateful mothers whose children and parents had been cured by our ophthalmic laser, but never once had I understood that the aesthetics laser could really treat illness. It was a wonderful lesson in humility and not being so opinionated about what matters and what can change the world. Maybe I'll even appreciate Facebook one day...
As the surgeon finished the treatment, my daughter said, "I am lucky my daddy is a doctor," and he said, "no, you're lucky he is an entrepreneur, and I am a doctor."
