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By Julinna Davies

2012 has arguably been the year of the medical start-up in Maryland. As the coming article emphasizes, though, entrepreneurs must be both savvy and careful in their organization if the state is to realize sustained growth and prosperity from these new ventures. Julianna Davies, a specialist in the healthcare MBA and its requirements, takes an in-depth look at the need for strong company culture in startups -- and discusses the price of getting it wrong.

Medical Startups Need Company Culture, Not a Room Full of Suits with Healthcare MBAs

Unlike established companies and large corporations, the culture at a startup can change quickly and dramatically. A startup company’s leaders and first employees are setting a precedent for where the company is headed and what they believe in. Thus, unlike a large corporation with values and business models that have in many cases been established for decades, business leaders at startups must develop and ensure their employees are staying true to the ideology that will inform their culture.

While it is important to allow a business' culture to evolve organically, leaders must constantly work to ensure their business practices are in line with their goals, making small scale adjustments or even massive overhauls if necessary. “The early culture decisions set the trajectory and course of the company. It has a major, major impact,” says Dharmesh Shah, a serial software entrepreneur and the founder and CTO of HubSpot, small business marketing software provider.

One of the commonly noted perks of working for a startup as opposed to a large, established company is a sense of freedom enjoyed by employees. Yet, with greater freedom can come increased instability and greater responsibilities. As such, Ackerman asserts that in the early days of building a company culture, “it's essential that every new employee that comes in can fit into it.” For executives, that means having a very strong presence throughout hiring, engaging in active communication with employees in every facet of the business, and even encouraging workers to challenge decisions. An active role by all members of a startup's early culture often helps build a stable and effective long term culture.

While there are many technology startups today, providing web content and software on various devices, the medical industry has been a relative latecomer to the startup boom. In recent years, that has been changing, with several ambitious medical startups springing up around the US. Startup Patients Know Best, for instance, allows physicians to easily access medical records that would typically be trapped in hospital or clinic IT systems. It also gives patients anytime access to all their medical records, as well as care from doctors who may be located across the world but can read blood tests or other diagnostic results remotely. Comprehend Clinical is another health startup that helps manage patient data by allowing researchers to analyze data in myriad ways, looking across various trials or by trial phase.

For companies like these to survive, they will need to innovate at rapidly to keep ahead of the competition and avoid being overwhelmed by massive health industry corporations. Practice Fusion, a a San Francisco based startup providing free Electronic Medical Records technology to more than 150,000 US healthcare professionals has utilized their simple but effective core values to grow from 4 to 160 employees in just four years time, and continues to grow rapidly. Practice Fusion actively seeks employees who are passionate about their company's mission of helping doctors and nurses to become more efficient and effective in their work, and their seven core values could likely apply to many medical startups looking for similar success. “Be scrappy” is one such value, exemplified by CEO Ryan Howard's decision to sell his house and use insurance money from a motorcycle accident to make payroll. “Exhibit integrity with no compromises,” “Give to you community” and “Embrace the Team” are a few other such values. Practice Fusion employees are encouraged to socialize frequently, but they are also trusted with a great deal of responsibility and independence, in the hope that their position will inspire them to do what is best for the company as well as their greater community.

For companies in the medical industry or any industry that fail to make culture a priority, minor issues can quickly become company-destroying problems. In the 1990s, for example, the overly optimistic culture of many startups lead to rapid bankruptcy. was one of these. It was a company that created an expensive, nationwide infrastructure of warehouses that management simply couldn't justify or feasibly account for, leading to a 2001 bankruptcy filing. If a more defined and grounded company culture had been developed early on, WebVan could have likely refocused their business models before it became unsustainable.

Considering the daunting scope of the industry and its challenges, effective culture will likely be particularly important for medical startups. While entrepreneurs are building their ideas, focusing and honing their ideology will allow them to attract employees who share in their vision. Through hiring ambitious and motivated employees and ensuring open communication and shared responsibility among all members of the organization, medical companies, like all start-ups, will provide themselves with the best chances for long-term success.

Julianna Davies is a writer and researcher for Feel free to check out more of her writing!