The phrase won’t let me go. It returns repeatedly. Andy Walshe, the head of Red Bull USA’s “elite performance” group (which trains Red Bull’s top athletes), claimed last week that “if you can’t train someone to do it, you probably don’t understand it.” The entire fields of science and engineering, you could say, are dedicated to this premise: when you really understand something, you can make it predictable. When you understand tides and fluid mechanics, you can manage floods; aerodynamics, you can land airplanes; a disease, you can cure it.
Why should the same not work for growing businesses? Imagine, if you knew the recipe, if you mixed together just the right combination of people, strategy and structures, then with the swirl of a wand you could predictably build a $100 million company.
What we need is a clinical trial.
I got a chance to sit down last week with someone who knows more about clinical trials than most in the world. Glen de Vries, cofounder and president of Medidata has dedicated his working career to helping scientists run higher-quality, more efficient, clinical trials. Along the way he also happened to build a $190 million publically traded corporation, whose stock price has produced 53% returns over the past year and that just reported record quarterly revenues and new client acquisitions. How did he do it?
Now, while Glen won’t claim to know the secret formula for building a successful business, we can still get a glimpse of what such a formula might look like by dissecting what he and his partner, Tarek Sherif, have achieved.
1. Replace what cannot defend itself
Medidata offers a hosted “cloud” solution that helps scientists and life science companies run clinical trials. Their platform essentially simplifies the process of processing data gathered from thousands of physicians spread across the country with “a single solution that replaces traditional paper-based methods.” The beauty of replacing paper is that paper cannot defend itself. It has no entrenched advocate fighting for the status quo. The personal accounting software QuickBooks grew rapidly into the tool of choice for balancing checking accounts by taking on a rival that could not defend itself: the pencil and checkbook log. Home Depot revolutionized home repair by convincing homeowners to do it yourself, replacing a community of independent contractors too fragmented to respond. The first step in building a fast-growing company may be to pick a competitor that, like paper or checkbook logs or independent contractors, is unable to mount meaningful resistance.
2. Pursue what is impossible (today)
Like most soon-to-be-successful entrepreneurs, Glen and Tarek were told they were crazy because they were trying to convince doctors and scientists to collect clinical trial data on a web-based platform, rather than sharing it by paper transported confidentially through FedEx.
“People said, ‘You guys are crazy; you are going to use something that is on the general web to run clinical trials?’” said Glen. “They also would say, ‘Not all doctors have computers.’ But [we knew] they are going to.”
This is like Bill Gates focusing on building an operating system when few really believed we needed one, and Elon Musk designing a rocket for his Space-X venture long before the U.S. government decided to replace the Space Shuttle program with private vendors. When you are doing something that is not possible today, but you know soon will be, your competitors will not rush to take you on.
3. Move upstream
Most consulting firms that help scientists run clinical trials get involved in collecting data. Medidata realized they should move upstream and help life science firms design the trials. They were able to dramatically reduce what their clients collected, streamline the process, and so shorten the time it takes to run a trial.
“We did not focus on what [clients] wanted; we focused on what they needed. We removed a lot of the fat of what people thought they needed [to make their case to the FDA],” Glen explained.
It took some effort to convince them, but when clients saw that Medidata understood how to engineer clinical trial data gathering to save money and, more importantly, time, they were called in earlier in the process, long before their competitors. This is like McKinsey deciding early on only to work on projects that the CEO personally was involved in, which positioned the consulting firm higher up the food chain than competitors.
4. Serve all
Strategies that benefit more stakeholders have a greater chance of success because they have more people pulling for their success. Imagine playing a football game in a stadium in which everyone wants you to win! Medidata’s hosted solution enables three stakeholders to interact more efficiently: life science companies, doctors and nurses, and contract research organizations (CROs). By serving all three stakeholders, rather than, say, building a solution that focuses on just one, Medidata gets more people on its side. Microsoft’s initial success owes much to this strategy. During the early days of the personal computer, everyone was building either hardware or software. By creating an operating system that allowed software to work on any hardware, Microsoft was essentially helping everyone. Software firms no longer had to design a different version for every computer and hardware makers could instantly offer lots of software.
5. Keep tacking to the North Star
It’s not easy to tell clients “no,” but the strength to do so seems present in most great companies. Medidata said “no” when companies asked to include information in the trial that Medidata knew was not necessary; they said “no” when clients asked to keep their trial information out of the cloud (“If you are not comfortable working on the cloud, putting your data there, then that’s alright,” said Glen. “Don’t work with us.”). The courage to say “no” requires a clarity of vision. Only when you are profoundly convinced of where the world is going and what role you play can you comfortably say no to opportunities that will lure you onto a detour. “I see that point in my mind,” said Glen. “The way to get to that point is through a lot of incrementalism.”
Now what we have here is data from just one patient and one patient does not make a trial. But perhaps Medidata has found the cure to slow growth. Try it and let me know if it works. There are five ingredients:
1. Replace what cannot defend itself so your innovation creates no resistance
2. Pursue what is impossible but that you see soon will be possible
3. Move upstream so that your competition never gets a chance to compete
4. Serve all to create more stakeholders cheering for your success
5. Keep tacking to the North Star so you are willing to say “no” to distractions
[Image: Flickr user Diego Diaz]