The network effect

How a UW technology becomes a startup and its developer an entrepreneur, with a little help from a lot of friends around the Foster School and beyond

It began with a problem. A glaring inefficiency of the modern hospital that is as pervasive as it is puzzling.

In this age of digitized everything, the status of virtually every patient in virtually every medical department in America is manually tracked by erasable marker on an overcrowded white board.

Still.

Such a simple, central organizational hub works great as a framing device for the bustling casts of ER, Grey’s Anatomy, and other fictional hospital dramas. But in the real ward, it makes for a shockingly outdated nerve center—error prone, incomplete, and far too taxing of staff time better spent on patient care.

Ben Andersen (TMMBA 2012) understood this completely when he took up the challenge of modernizing the tracking system in the department of surgery at Seattle’s Harborview Medical Center. Before enrolling in the Technology Management MBA Program at the Foster School of Business, Andersen was a perceptive young IT guy working on the informatics team at Harborview, a branch of the UW Medicine Health System.

Fast forward a few years and his one-off solution has become a nascent company called PatientStream with broad ambitions in the $2.5 trillion health care industry.

Andersen’s jump from developer to entrepreneur is a study in technology commercialization at the University of Washington—of an innovator who is educated, mentored, focus-grouped, funded, challenged and championed by a fabric of experts and entrepreneurial organizations around and affiliated with the UW at large and the Foster School in particular. Complementary nodes in an ever-expanding network.

Creation

When Harborview opened a second surgery site four years ago, coordinating patients and medical staff on twin white boards proved unwieldy, to say the least.

The job of finding a solution fell to Andersen. He first sought an off-the-shelf fix, but found it didn’t exist. So he offered to custom-build a solution. And his entrepreneurial manager, Peter Ghavami, gave him the green light.

Andersen immersed himself in activity around the white boards. “I wanted to capture their language, every mark they made,” he says.

His solution was deceptively simple: an electronic patient tracking and operations management system that drew and displayed information from existing hospital systems on a flat-screen television (or any networked computer). A digital white board.

It was useful. More importantly, it was usable.

“Normally when we roll out a new system, there are groans and moans and no one wants to learn it,” Andersen says. “When we implemented the digital whiteboard, after about five minutes of training they said, ‘That’s it? I can do that.’ Support calls were almost non-existent.”

The Electronic Whiteboard (EWB), as Andersen named the digital display system, worked from the start. Easy to use. Effective. Efficient. Patient waits fell markedly. Accuracy increased. Medical staff no longer had to cruise the white board all day to track their schedule. And administrators could view instant metrics on operations and performance.

Word spread quickly. Other departments began clamoring for the EWB, first at Harborview, then the UW Medical Center. Today, over 50 departments throughout the UW Medicine system are running on the EWB.

“When I began getting request after request from other departments, I realized that this is a need that’s not being met,” Andersen says. “Maybe this deserved to be in other hospitals as well.”

Confidence

Andersen had founded a company before. It was the right-place-wrong-time story of a workflow management firm serving property management/landscaping companies—launched unsuccessfully at the start of a historic housing crash.

Delivering a kindred tech solution to the health care industry, he knew, would be exponentially harder.

But Andersen held a few advantages. He had an author’s knowledge of the software and a proven track record of implementations in real hospitals. And he was enrolled in the Foster School’s TMMBA Program where he added a full suite of management skills that would be essential for a software developer to make the jump to CEO.

Suresh Kotha’s technology entrepreneurship class, in particular, was pivotal to Andersen’s ambitions. The course helped discern whether the opportunity and technology were market-worthy, yielded a working business plan, and, most importantly, demystified the entrepreneurial process for Andersen, equipping him with the requisite confidence to start a business.

“I build my course around the premise that there is nothing special about entrepreneurs—they are not some superior beings,” says Kotha, the Foster School’s Olesen/Battelle Excellence Chair in Entrepreneurship. “They simply have the skill set and confidence to do it. And these can be developed.”

Andersen got one more essential from the TMMBA Program: a team. He assembled an entrepreneurial A-Team of classmates expert in each function that would be critical to developing the business: Marc Brown on sales and custom support, Jason Imani on marketing, Anoop Gupta on technology, and Glen Johnson on finance.

They called the venture Xylemed.

Connection

To test its market potential, Xylemed entered the annual UW Business Plan Competition, signature event of the Foster School’s Buerk Center for Entrepreneurship.

Andersen found the experience exhilarating from the opening investment round, a kind of entrepreneurial trade show where 36 start-up teams fast-pitch to more than 200 roving judges over four crazy hours. “The pitch we started with and the pitch we ended with were radically different,” Andersen says. “We learned to key in on the part of the story that made their eyes light up.”

In a word, traction. More than 50 installations across three medical centers, each one delivered on-demand. Andersen polished the narrative until it was irresistible. “Ben started with a very real problem, came up with an elegant and efficient solution, and demonstrated a tremendous capacity for making people understand what he was out to do,” says Connie Bourassa-Shaw, director of the Buerk Center. “He has a compelling story to tell.”

That story took Xylemed to the final four, where it won the $10,000 second prize. “The money was great,” Andersen says. “But much more valuable are the connections that we made.”

“That’s a wise assessment for an early entrepreneur to have,” says Aaron Coe (MBA 2003), one of those connections. “There’s great value in connecting with people who add knowledge, add perspective, and challenge assumptions.”

Coe, a Foster MBA grad who helped launch 2003 BPC champion Nanostring and had an even bigger success with a pharma company called Calistoga, coached Xylemed before the semifinal, then later secured them a spot at the Technology Alliance’s Innovation Showcase.

There were many others. The team’s semifinal judges included investor Greg Gottesman of Madrona Ventures and serial entrepreneur Terry Drayton of Rainier Software and HomeGrocer.com. Both opened their personal networks to Andersen. “I’ve been amazed at the caliber of people who approached me and offered their help,” he says.

It’s no surprise to Bourassa-Shaw. At the end of the day, the Buerk Center is in the connection business.

Commission

The UW Center for Commercialization (C4C) is in the licensing business. When Andersen’s digital white board first reached the inbox of Angela Loihl, associate director of technology licensing, she shopped it around to a variety of software and health care companies. It’s a common corporate strategy to cherry pick R&D out of university labs, and C4C has negotiated more than 100 licensing agreements of UW intellectual property since 2005.

Recently, Loihl says, an increasing number of faculty and staff are expressing interest in launching their own ventures around their innovations and discoveries. So the C4C has evolved into a hybrid transaction/partnership model—a kind of bus dev team for researchers and innovators.

After the digital white board found no initial takers, Andersen—by this time well into the TMMBA Program—began changing the conversation. What if he sold the software himself?

As he prepared for the Business Plan Competition, Loihl connected him with the C4C’s Entrepreneurs-In-Residence Program. He rehearsed his pitch in its New Ventures Facility. He sought advice from the Law School’s Entrepreneurial Law Clinic.

And while Loihl oversaw the negotiation to license Andersen’s software, she also served as advisor, advocate and fan. “It was obvious that Ben had been taught well at the Foster School,” she says. “He came to us prepared, asked the right questions, and knew exactly what he wanted to get out of every meeting—in the nicest possible way.”

The kind of entrepreneur you want to root for.

Catapult

Today, Andersen is a recent Foster grad, a former employee of Harborview, and a full-time entrepreneur. He has rechristened his company PatientStream, a name that sounds less like a pharmaceutical and more like a software company that tracks hospital cases. He’s incorporated the business, finalizing license negotiations, developing a mobile app, seeking investors, and closing in on several key hires.

Even on his own—his TMMBA colleagues have returned to their lives and livelihoods—Andersen is still breathing the rich air of the UW’s entrepreneurial ecosystem.

Success in the Business Plan Competition earned PatientStream a spot in the Jones Milestones/Foster Accelerator, a resource that provides expert mentoring and advising, work space in the Buerk Center’s new Herbold Innovation Lab, and a chance to earn up to $25,000 in additional seed funding if Andersen can achieve several important milestones over the next few months.

He’s pitching for considerably more money from the newly instituted W Fund. The public-private partnership aims to invest nearly $20 million over the next four years in promising start-ups spinning out of the UW and other research institutions across the state.

For PatientStream, a business that needs to act fast and first, a small slice of that pie would be a veritable feast.

Time will tell whether his company’s promise is proven on the open market, in the notoriously difficult-to-crack health care industry. But Andersen has a viable technology, a running start, an ever-expanding network of powerful allies, and a robust entrepreneurial education, in and out of the classroom.

“Between the incredibly rare opportunity to develop a technology in a hospital IT department, the skills and confidence that the TMMBA Program gave me to start a company, and the networking that came out of the Business Plan Competition,” he says, “the past few years have been a perfect storm.”

Perhaps the most telling testament to Andersen’s growth was his preview presentation of PatientStream, by all reports outstanding, to the newly formed W Fund investment committee—an intimidating collection of the region’s premier entrepreneurs and investors.

“To go in front of these guys as a young IT guy and hold your own is pretty impressive,” says fund investor Dave Marver, the former CEO of Cardiac Science. “Ben wasn’t intimidated in the least.”