Does this Founder have a plan? - A Working Theory
And some questions you can use to figure that out.
Working Theories are semi-polished concepts and ideas that I’m screwing around with.
I’ve been doing some co-founder dating over the last couple months as part of figuring out what I want to do after having left Daybreak Health. Over this time I've noticed that the SF startup scene has two main groups, the first understands that they aren’t operating in a vacuum and the latter doesn’t, but how do you quickly spot the difference?
I was at a meetup the other day and a founder was talking to me about how they're going to take over Revenue Cycle Management (RCM) with AI agents. For those of you not knee deep in healthcare, RCM is the term of art for a suite of tools that allows care providers to make sense of, track, and nurture an insurance claim from creation through to being paid (or not!). It is, broadly, the primary weapon wielded by care providers in the hot war between them and health insurers over who gets paid and who doesn’t. This person's plan was to create an AI agent that would replace the user of the RCM and save on the medical biller’s salary. It sounds great on the surface, and it'll probably make a few million dollars for someone, but it isn’t going to shift the dynamics at all, merely accelerate them. When I asked what their plan was to deal with the fact that insurers would just do the same thing on their end, they got mad at me and ended the conversation. Not only did this founder detest feedback, they were only interested in playing “half-court tennis” and I think that’s the tell worth exploring.
I first heard of "half court tennis" from Sarah "Sally" C.M. Paine over at the US Naval War College. Just imagine, you're playing tennis but you can't see beyond the net. You can't position yourself to counter your adversary, you can only react once the ball has soared over the net.
For those of you looking at joining an early startup, here's a few questions for the interview process that might help you figure out whether a founder is only interested in playing half-court tennis.
What three things must go right in the next six months to achieve your vision?
The goal with this one is to figure out the way they think about the road ahead. A good answer here is going to demonstrate prior deep work and include both tactical execution and competitive action (or inaction). A bad answer here will be reactive and off the cuff, it will include their own actions and maybe their organization’s actions, but likely won’t include anything from outside their own control.
What three events would require the company to pivot?
The goal here is to explore the founder’s downside planning. Do they have plans A through D? Or is this their one shot and they have no idea what to do if things don’t go to plan? You want a founder who can easily figure out what to do once the enemy gate is no longer down.
Which trends are currently making this business viable?
The goal here is to get the founder to explain how the business fits into the broader tapestry of current events. A founder who isn’t aware of the world around them is going to make the wrong decisions at the wrong time. A good answer here will be an explanation of the investor zeitgeist that drove or will drive their funding and the consumer or business tailwinds that will drive adoption of their product(s) for years to come.
I think founders who aren’t interested in feedback and only want to play half-court tennis are pretty common and aren’t worth following. Hopefully these questions will help you quickly avoid folks like this in your search for a co-founder or a job at a startup.