Startup Pivot: Save Cash & Maintain Trust

From Check-In Tablets to Healthcare Automation: The Olive Story

Several years ago, Sean Lane, the founder, initially believed he had successfully identified a strong product-market fit.

During a discussion at TechCrunch’s Early Stage event, Lane detailed how Queue, a secure digital check-in system designed for hospital waiting areas – aiming to decrease patient wait times through the consolidation and correction of electronic health records – was experiencing rapid sales growth. However, upon recognizing that this solution only addressed a limited aspect of a much larger market potential, he made the decision to divest the product.

Pivoting to Robotic Process Automation

Subsequently, Lane initiated a company restructuring, laying off approximately two-thirds of the team associated with Queue and refocusing the remaining personnel.

He clarified that his ultimate vision was to create what his company – later rebranded as Olive – has become today: a robotic process automation (RPA) company. Olive’s core function is to alleviate hospital staff of repetitive, time-consuming tasks, enabling nurses and physicians to dedicate more attention to patient care.

Customer Adoption and Investment

The market response has been positive. Lane reports that over 600 hospitals currently utilize Olive’s services to streamline processes such as prior authorizations and patient verification.

Investor confidence in Olive is also evident. The company secured three funding rounds last year, totaling around $380 million and resulting in a valuation of $1.5 billion. Crunchbase data indicates a total funding of $456 million to date.

Expansion and a New Venture

The faith investors have in Lane extends beyond Olive. In February, they invested $50 million in Circulo, another company led by Lane, which is positioned as a future-focused Medicaid insurance provider.

A Difficult but Necessary Transition

The journey from the initial concept to the current state was challenging, and might not have been possible without certain advantages, including a strong personal motivation to improve the U.S. healthcare landscape.

Lane, a former U.S. Air Force intelligence officer with five combat deployments in Iraq and Afghanistan, became acutely aware of the shortcomings within the U.S. healthcare system when witnessing family and friends in his impoverished Ohio hometown succumb to opioid overdoses while he was stationed abroad.

Identifying a Systemic Problem

Applying his intelligence expertise, he discovered that a significant contributor to the crisis was the lack of data sharing among hospitals, allowing individuals to obtain opioid prescriptions from multiple emergency rooms.

Queue was Lane’s initial attempt to address this issue, but Olive’s current offerings represent a more comprehensive solution.

Killing a Successful Product

Lane acknowledged that discontinuing a successful product was met with resistance, particularly from those who had invested their efforts in its development and sales.

This wasn’t the first instance of strategic redirection for the company. Lane stated that they developed and abandoned approximately 27 products throughout the years. “We fully committed to a product, invested significant effort, and then I would discontinue it, and we’d move forward.”

Restructuring and Maintaining Focus

The restructuring process resulted in job losses, with two-thirds of the 120 individuals who worked on Queue being laid off to conserve capital. Many employees questioned this decision, perceiving Olive as a failing venture.

Lane attributes his ability to remain focused to his military background. “The military instilled a practice of frequent reassignment, with officers typically serving two-year terms before transferring to new roles. This constant movement proved beneficial for organizational agility.”

Supportive Investors and a Clear Vision

Lane emphasized that he wasn’t overly concerned with finding the perfect team to rebuild Olive.

He also benefited from the support of investors at Drive Capital, founded by Mark Kvamme and Chris Olson, who were known for making substantial investments. “Investors who are aligned with ambitious goals will support initiatives beyond incremental improvements. It’s crucial to choose investors who share your vision. Our investors prioritized building something impactful and significant, rather than focusing on minor gains.”

Recognizing True Product-Market Fit

When asked about identifying the right product, Lane explained that the answer became clear over time.

“When you achieve product-market fit, demand surges. Consumers actively seek out your product. The unit economics are favorable – meaning you recoup your customer acquisition cost within 12 months or less, and you achieve retention rates exceeding 120%.”

Lane concluded, “Once you’ve established these metrics and observed the results, it’s undeniable. If you’re uncertain, it’s likely you haven’t achieved it.”