As a recent episode of HBO’s Silicon Valley wryly noted, tech companies love their garages. The one-car garage in Palo Alto where William Hewlett and David Packard started building HP products is anointed with a plaque that reads “Birthplace of Silicon Valley.” Steve Jobs and Steve Wozniak worked on the first Apple computers in Jobs’s parents’ garage in nearby Los Altos. But for MedaCheck founder Jeffrey Shepard, the pivotal setting wasn’t a garage. It was a basement.
Shepard and cofounder Steve Buck decided to address the issue of medical adherence after googling “What’s the biggest problem in health care?” When patients don’t take medicines as prescribed, their subsequent care costs the healthcare system an estimated $360 billion a year. Shepard and Buck came up with an idea to help people take their prescriptions on time. They got accepted into a startup incubator, received some funding, and built a prototype. The only problem? It didn’t work.
“Steve and I were sitting there and saying, ‘Well this is great, we’ve just raised a quarter of a million dollars and we’re going to have to return the money to the investors,’ ” Shepard says. But rather than giving up, Shepard and Buck huddled in Shepard’s basement and rethought their approach.
“I remember thinking very specifically when this happened that it was my fault,” says Shepard. “We had to pivot based on a problem that I was responsible for. That being said, I was also responsible for making sure that we came out of it and that we solved that problem.”
Making the Complex Simple
Shepard and Buck conceived of MedaCheck as a mobile app that would alert people through their smartphones or tablets when it was time to take their medicine. Their primary audience was seniors over the age of 70, who have the most prescriptions and account for the bulk of medical-adherence issues. But when Shepard put devices with the app in the hands of residents at an independent living facility near his home in Cincinnati, it failed miserably: seven out of 10 couldn’t even figure out how to turn it on.
That night, Buck came over to Shepard’s. After nursing their wounds with a couple of vodka tonics, they got to work in the basement. “We started ripping apart tablets,” says Shepard. “We basically took an Android device and brought it down to its original kernel.” The two worked through the night.
By stripping down tech hardware, Shepard and Buck were able to strip the problem they were trying to solve down to its essence.
“We recognized that we can really make an impact not only in healthcare but also from an innovative standpoint by making the complex simple,” Shepard says. “The focus moved away from this technically savvy, exciting product that Steve and I would use on our smartphones into something that was really basic and easy.”
One of MedaCheck’s early investors had told them the device needed to be as easy to use as a toaster. That became an internal mantra.
The next prototype, nicknamed “The Toaster,” didn’t even have an on-off switch. All a user needed to do was plug it in, and the device would automatically turn on and display a giant clock. When it was time for medication, the device flashed and made noise (the volume was preset to the highest level). A single tap of the screen would bring up a picture of the medication. After complying, the user would tap “Take” on the screen—that was it.
If a patient forgot to take medication within a certain window of time, a member of MedaCheck’s team would call with a reminder. It was an ingeniously simple solution to a problem that had plagued healthcare for years. Typically, 42% of Americans fail to take their medications as prescribed.
Free to Fail
Within a month, Shepard and Buck built a new working prototype and brought it back to the same independent living facility.
“Seniors loved it,” Shepard says. “The results were completely different. The patients thought it was an alarm clock that told them when to take their medicine. Some of them didn’t even realize it was actually a tablet.”
When the time came for Shepard to tell his investors about the pivot, he was nervous. This wasn’t the product they had signed up for. But when he told them about the change, they were thrilled. Shepard had built a product, tested it, discovered its flaws, and quickly produced a new iteration that better addressed the problem: This was exactly what his investors were looking for in their entrepreneur.
“Since then we’ve been told by our investors, ‘We don’t always invest in the great ideas, we invest in good ideas and great people,’ ” Shepard says. “Because you’re going to come to problems like this and you have to be able to pivot and pivot some more and sometimes even pivot some more.”
Today, MedaCheck devices are in nine medical facilities in the Midwest and East Coast. The company plans to expand to the West Coast in 2018. At one hospital in Cincinnati, 86% of discharged patients who were tracked took their prescriptions correctly using MedaCheck devices. At another facility in Columbus, 93% of the patients who were taking 15 or more medications stuck to their prescriptions with the help of MedaCheck.
The company continues to innovate. It has created devices that address medical-adherence issues among adolescents and is developing a platform to synthesize data from devices like weight scales, blood pressure cuffs, and fitness trackers so that doctors aren’t solely dependent on patient visits when making clinical decisions.
Underpinning all of these developments is Shepard’s courage to see failure as an opportunity. “The entrepreneurial process is having the ability to be okay with failing. Failure came early to me. I failed third grade,” he says. “It taught me that there’s a new beginning here. It’s not about sulking. It’s about how can we learn from this and build something better. I still do that today.”
This story was created with and commissioned by Hiscox, which specializes in small-business insurance. Its mission is helping the courageous overcome the impossible.