3. Even those that survived the 18-month sales cycle often found that successful piloting and implementation once inside required subject matter expertise, outcomes measurement capabilities and political savvy… In this market, distribution is more valuable than capital…Quality allies and partners are often more valuable than capital.
One of the reasons that I love the emergency medical services (EMS) business …though it may be complex, complicated and dramatic…, is the “siren is the soundtrack of the city” — a ubiquitous presence around the world. Yet few people know how EMS works. Even as our heroic partner-clients run toward the crisis, and provide the background hum in many American neighborhoods, 9-1-1 seems like a genie to much of the public, including the investor community.
Even the savviest, smartest investors I know tend to start sentences with, “But I thought EMS…” before they advance a theory of the business that is usually fractionally correct but mostly “not right.” (I can’t say “wrong” because there are so many local flavors of EMS, that every iteration is probably correct somewhere.) I don’t blame anyone for lacking knowledge about an industry in which they don’t operate daily; however, I do blame anyone for assuming that his / her /their preconceptions are correct just because they think they know the entire healthcare business enough to make snap judgments in seconds.
When I explain that there are four primary types of EMS in this country — public, private, hospital-affiliated and fire (plus Community Paramedicine emerging)— and that we serve them all, and that 9–1–1 is far from automated, eyes widen. Yes, there are mandates and incentives akin to Meaningful Use that have started to impact the EMS industry. Yes, preventing readmissions is a real goal nationwide, even though doing so is controversial to many Fire and EMS agencies. Yes, ambulance agencies buy stuff: emergency response vehicles aren’t powered by smiles and coffee. Gasoline and payroll cost money, ECG monitors and saline cost a ton of money. The documentation that justifies this investment is what my company does, and we get paid for it.
Yet I can count on one hand the number of entities in the pre-hospital space that have received venture investment. That’s weird, because I am an investor in companies, too, and a key criterion I look for most of all is a “market discontinuity”. It’s an opportunity that no one expected, away from the crowd, where big money can be made before increasing competition starts limiting returns. Companies that meet compliance standards, have not flouted the law, are not at war with any union, and do not have Jennifer Lawrence starring in a movie about their dénouement, perhaps could turn out to be longer-term successes.
Wouldn’t emulating Warren Buffett’s model be a good thing? Yes, he says to “invest in what you know,” but he hasn’t always been an expert in trains and chocolates and fractional jet ownership. He takes time to learn about the businesses in which he invests — to ensure that they are making money serving their makes — and thus ensures that his investments will be lasting, if not super-fast in their returns. Who says, then, that sustainable is boring just because the shape of its adoption curve doesn’t look like a checkmark…that may be doomed to look like an “A” if the graph extended out further in time?
My old friend Abhas Gupta is sometimes credited with pointing out that the opposite of a unicorn isn’t a smaller mythical creature, but rather a donkey. I’d add that if a company is a donkey, then its CEO could be an ass, if only due to a lack of self-awareness that strong fundamentals — like cash — are still king.
Photo: bowie15, Getty Images