Neoforma Designs Website to Offer Medical Search Engine.
Online matchmaker. A website takes a page from amazon.com by linking healthcare professionals to medical products, hardware and services . . .
American Medical News, October 19, 1998
Healthcare Goes Online
Neoforma brings medical community closer via the Web. Until now, the healthcare industry has been slow to move its business processes to the Internet — but that’s changing. Neoforma Inc. is joining VHA Inc. and other companies building online trading communities for the healthcare industry . . .
Information Week, October 19, 1998
Neoforma Makes Itself Indispensable to Buyers and Sellers
The reactions of some of the first buyers and sellers to Neoforma, a new market targeted at hospitals, are the kind that any infomediary could envy. These guys are doing several things right . . .
Net Market Makers October 26, 1998
So much that hadn’t been possible before suddenly seemed inevitable. We passionately came to believe that it was our responsibility to pursue every opportunity.
The Chief Medical Officer of one of the world’s largest aid organizations was going to be quoted in an upcoming article saying that Neoforma was the—sort of—“medical Yahoo” of search engines...
The Chief Medical Officer of one of the world’s largest aid organizations was going to be quoted in an upcoming article saying that Neoforma was the—sort of—“medical Yahoo” of search engines...
We were being repeatedly compared to Yahoo and Amazon in the press, two of the most successful online businesses with a market value of more than $20 billion. And the new theory was that businesses that served businesses would be much larger than businesses that served consumers.
So there was great pressure on us to stake out as large a territory as possible. We had no credible competitors at the time, but everyone knew that some well-funded start-up would come after us soon. Rumors regarding the B2B land-rush were flying around the venture community. We were instructed to move very quickly. The process of raising our next funding round was already beginning. Alexander and JP made it clear that the more ambitious our reach, the higher our valuation would be, and the more money we could raise.
Following the first mover directive — the idea that the bulk of the spoils would go to the first player in a market—we were lulled into thinking of our markets subtractively. That is, we saw the world’s healthcare markets as consisting of customers to lose rather than customers to gain. We were the clear market leader, but that did not mean that we had actually captured these scattered and complex markets at all.
At the time, projection of potential seemed more important than projection of success. Certainly our investors didn’t want us to lose any potential growth opportunity, right?
The robust rewrite and upgrade of our website seemed like a great opportunity to add a few new features too. Our new and expanded development team was the best there was. Certainly they could handle some modest additions to the design specifications.
Denis gave me a copy of Net Gain, one of the latest business fad books. He told me that I had to read it, that it had great ideas on how we could monetize the value of the substantial traffic at our site. It was a book about the importance of customer participation to the success of an Internet venture. It was filled with phrases like virtual community, member loyalty, fractal depth, and value extraction.
I enjoyed the book. Even though it was focused on the consumer markets, it seemed to be talking about us. It did not provide me with any particularly new insights. We had founded Neoforma on the importance of leveraging and listening to our visitors. What the book succeeded in doing was greatly enhancing and validating the language we had used to describe what we were doing.
Many of our investors had evolved from simply being interested in the financial potential of our business to being thoroughly engaged in the intellectual challenges of predicting what would work and what wouldn’t work in this new world. Other investors saw a moderately lucrative investment turning into a potential windfall. But whatever our motivations, we all began to speak a common language for the first time. And we all felt the electric energy created by knowing that we were in the middle of a spectacularly unique place and time.
Everyone’s dreams were awakened. We each entertained the possibility of fulfilling previously unattainable fantasies. The problem was that we did not share common fantasies.
I wanted to improve our already-effective, supplier-messaging system and our already-cool, virtual-tours interface. I also wanted more links to other websites offering valuable content, like books on Amazon, and reports from ECRI.
Jeff wanted us to offer our own branded email addresses. (For us, branded meant that we used technology from other companies and put our name on it.) Hard as it would be to imagine only a couple of years later, one barrier to our growth was that a large percentage of our potential customers did not have email at work yet.
Several investors felt that we should offer connections to healthcare job listings. Alexander believed that offering space to allow healthcare aid organizations to match needs with donations would provide a valuable service and great PR. Emma wanted to implement a state-of-the-art search engine. We all wanted a simple user interface.
Each of these tasks seemed manageable for our growing staff of thirty-three. However, the sum of these tasks could have kept five times that number of people busy.
But we were special people. With proper motivation and creative energy a team like ours could achieve miracles.
That was the theory anyway.
What actually happened instead was—well, everything went wrong. Absolutely everything.
For our email system, Bret, our VC guy, wanted us to use a company he had invested in. At first, they seemed fine. They promised that they could do anything we needed. Our deadline had been determined by a major trade show.
As the date approached I realized that we would never get what we needed. I was being duped. The company didn’t want to tell me bad news because of my connection to Bret. In spite of resistance from Bret, I switched to Critical Path, who would need a miracle to succeed in getting us up and running by deadline, but they would try.
Monster.com was great to work with when it came to connections for healthcare job listings, but it would really stretch them to create customized links to our system in time to meet our deadline. They said they would try.
We had endless arguments over the user interface. Everyone’s level of intuition must be radically different, because we could get no agreement on what constituted an “intuitive” interface. At Alexander’s insistence, we contracted an expensive human interface firm to help us out. They told us we needed a better user interface. They then showed us their suggestions, which clearly indicated that they didn’t have a clue what was on our website or how it was used. That wasted a good month of everyone’s time.
And then there was the question of search or browse? It is amazing how much time and energy can go into the simple decision on how best to lead site visitors from the home page to their destination. Should we offer them a search box to type their query into (which could lead to results that were too broad) or should we offer a complete directory of categories (which would require that they know exactly what they were looking for)? For a site that had more than a thousand kinds of forceps alone, this would’ve been a challenge.
Our product catalog had to be completely reformatted and integrated with ECRI and other information. This could have kept content teams with dozens of people busy for a long time. We had six people.
We were adding so much stuff at once that simply keeping track of everything taxed our development team. And we were changing all of our hardware and software applications at the same time.
Then there was the fact that the team building this new site had not worked together long. Everyone was busy being human—staking out territory, testing boundaries, establishing a pecking order. We couldn’t just raise our voice and let everyone in the company know what was going on. We had grown past that stage—in size—but hadn’t caught up with it in organization.
Teams would arbitrarily form to address an issue, but fail to consult with key people who were working on the same issue from another angle in a separate team.
I was still the architect of the site. I was responsible for figuring out what it should contain and how it should work. But for the first time, I didn’t know every detail of the technology. I had to rely on others.
As Alexander reviewed our progress by meeting with various groups, he began to panic about the development side of the process. Nobody seemed to be reaching consensus on key technology decisions. Factions were forming. One afternoon, a livid Alexander walked into my office, closed the door and said, “I just sat in this meeting for three hours. And I’ll tell you, Wayne . . . NOTHING HAPPENED! I wanted to fire everyone on the spot! Nobody takes responsibility for anything. They complain about every little petty thing! They drive me nuts, these people. We have to do something--now!”
Alexander reluctantly agreed to take on the daily supervision of the group. Alexander couldn’t limit himself to one area. The key to getting the development effort optimized was to ensure that the connections between them and the rest of the company were efficient. So he became involved in more and more parts of the process.
In addition to my attempts to keep pieces of the site coordinated, I was busy developing particular areas of the site and running much of the company. I was so busy that, sometimes, it would be several days before I was updated about how various parts of the site were coming together. Invariably, I would be shocked when I heard about the current status of the site.
I had laid out prototypes for the entire site on walls in our development area. As each page was developed in code, a printout would replace the prototype. More often than not, there was very little resemblance between the two. Instructions I left were ignored. Critical interface issues remained unaddressed. Decisions were made that completely failed to make use of the lessons we’d learned in our earlier days.
Whenever I presented my list of corrections to Dave and Emma, who were responsible for coordinating the development and content for the site, they’d say that I was being too picky, that changes had been decided in meetings I hadn’t attended, or that either Alexander or Jeff had approved the changes. Then, since Jeff was traveling much of the time, they’d complain to Alexander about how intrusive I was. They wanted to be left to do the job they felt they were hired to do. They told him, “It isn’t just Wayne’s site anymore!”
Alexander expressed sympathy for my dilemma, but gently insisted that I be more selective in my suggestions to the development team. We could address my other issues later. I had designed the site, now I should trust the people I had hired to build it.
This advice was contrary to an important lesson I’d learned in the past. When I designed my second restaurant in my spare time while working at Varian, it was an outside project that was more difficult than the first one. I had far more responsibility. But since it was a local project, I believed I could manage it. I struggled a bit during the design phases, just barely managing to keep up with an aggressive schedule. When the drawings were approved and the construction had begun, I was terribly relieved. It meant I could get by with far less time dedicated to the restaurant project and catch up on my Varian work.
But my distraction with my daytime job allowed the contractors to make onsite decisions and revisions without my review or supervision. The owner’s bad taste, which I had so carefully restrained during the design phases, flourished in my neglect. My clear and clever design ended enshrouded in mud and mundanity. I vowed never to let this happen again.
But here I was again. It felt like a nightmare, where I was driving down a steep, bumpy dirt road without brakes, steering with a six-inch-diameter wheel. All I could do was to hold on tight and try to maintain control.
By the end of the ordeal, everyone was overworked, exhausted, grumpy, disgruntled. The one thing I couldn’t complain about, the one thing that gave me hope, was that every member of the team had worked hard. Very, very hard. There were people in the office nearly every moment of every day.
As a gesture of support, I often tried to be the last one out the door at night, but I seldom succeeded. I could not stop thinking about my confident statements to Dave, Apar and Mitch, about how we were a family friendly company, providing flexibility and time with the family. Just one more thing for me to feel bad about.
In the wee hours of the morning, a week or so after our original deadline, the site was officially launched. There had been a few tense false starts where the developers had had to roll back to the original site, due to serious problems, but this time, it seemed like the site would stay live.
The next morning, I received lukewarm compliments, via email, from a handful of customers and investors regarding the site, but everyone else was furious.
In spite of the heroic efforts of the quality assurance team, our shiny new search engine could take up to a full minute—which felt like eternity—and then return irrelevant results. The pages were a muddled mess of mixed fonts and other formatting nightmares. The user interface didn’t interface well at all with human users.
Our pride and joy—the catalog and supplier messaging system—was nearly impossible to find and, often, didn’t deliver messages properly for those few people who did manage to find it.
To make matters worse, the colors we had selected for our navigation system made text illegible on nearly half of the computers that viewed them. Of course, all of this was true only when the site was functioning. The only consolation over how bad the site looked was that only a relatively small percent of visitors could visit. It was down more than it was up.
Our traffic dropped precipitously overnight from tens of thousands of visitors per day to hundreds.
I didn’t go into work that day. Although my body was relatively healthy, I was feeling too sick to go anywhere. I knew that, for the first time, I would not have been able to hide my growing despair.
We had tried to be everything to everyone. All at once. In the process we turned our innocent, obedient child into an adolescent monster. On the surface, it looked much larger and more grown-up than it had been before, but it was raw and unstable underneath.
I was pissed at everyone, but could only blame myself.
So there was great pressure on us to stake out as large a territory as possible. We had no credible competitors at the time, but everyone knew that some well-funded start-up would come after us soon. Rumors regarding the B2B land-rush were flying around the venture community. We were instructed to move very quickly. The process of raising our next funding round was already beginning. Alexander and JP made it clear that the more ambitious our reach, the higher our valuation would be, and the more money we could raise.
Following the first mover directive — the idea that the bulk of the spoils would go to the first player in a market—we were lulled into thinking of our markets subtractively. That is, we saw the world’s healthcare markets as consisting of customers to lose rather than customers to gain. We were the clear market leader, but that did not mean that we had actually captured these scattered and complex markets at all.
At the time, projection of potential seemed more important than projection of success. Certainly our investors didn’t want us to lose any potential growth opportunity, right?
The robust rewrite and upgrade of our website seemed like a great opportunity to add a few new features too. Our new and expanded development team was the best there was. Certainly they could handle some modest additions to the design specifications.
Denis gave me a copy of Net Gain, one of the latest business fad books. He told me that I had to read it, that it had great ideas on how we could monetize the value of the substantial traffic at our site. It was a book about the importance of customer participation to the success of an Internet venture. It was filled with phrases like virtual community, member loyalty, fractal depth, and value extraction.
I enjoyed the book. Even though it was focused on the consumer markets, it seemed to be talking about us. It did not provide me with any particularly new insights. We had founded Neoforma on the importance of leveraging and listening to our visitors. What the book succeeded in doing was greatly enhancing and validating the language we had used to describe what we were doing.
Many of our investors had evolved from simply being interested in the financial potential of our business to being thoroughly engaged in the intellectual challenges of predicting what would work and what wouldn’t work in this new world. Other investors saw a moderately lucrative investment turning into a potential windfall. But whatever our motivations, we all began to speak a common language for the first time. And we all felt the electric energy created by knowing that we were in the middle of a spectacularly unique place and time.
Everyone’s dreams were awakened. We each entertained the possibility of fulfilling previously unattainable fantasies. The problem was that we did not share common fantasies.
I wanted to improve our already-effective, supplier-messaging system and our already-cool, virtual-tours interface. I also wanted more links to other websites offering valuable content, like books on Amazon, and reports from ECRI.
Jeff wanted us to offer our own branded email addresses. (For us, branded meant that we used technology from other companies and put our name on it.) Hard as it would be to imagine only a couple of years later, one barrier to our growth was that a large percentage of our potential customers did not have email at work yet.
Several investors felt that we should offer connections to healthcare job listings. Alexander believed that offering space to allow healthcare aid organizations to match needs with donations would provide a valuable service and great PR. Emma wanted to implement a state-of-the-art search engine. We all wanted a simple user interface.
Each of these tasks seemed manageable for our growing staff of thirty-three. However, the sum of these tasks could have kept five times that number of people busy.
But we were special people. With proper motivation and creative energy a team like ours could achieve miracles.
That was the theory anyway.
What actually happened instead was—well, everything went wrong. Absolutely everything.
For our email system, Bret, our VC guy, wanted us to use a company he had invested in. At first, they seemed fine. They promised that they could do anything we needed. Our deadline had been determined by a major trade show.
As the date approached I realized that we would never get what we needed. I was being duped. The company didn’t want to tell me bad news because of my connection to Bret. In spite of resistance from Bret, I switched to Critical Path, who would need a miracle to succeed in getting us up and running by deadline, but they would try.
Monster.com was great to work with when it came to connections for healthcare job listings, but it would really stretch them to create customized links to our system in time to meet our deadline. They said they would try.
We had endless arguments over the user interface. Everyone’s level of intuition must be radically different, because we could get no agreement on what constituted an “intuitive” interface. At Alexander’s insistence, we contracted an expensive human interface firm to help us out. They told us we needed a better user interface. They then showed us their suggestions, which clearly indicated that they didn’t have a clue what was on our website or how it was used. That wasted a good month of everyone’s time.
And then there was the question of search or browse? It is amazing how much time and energy can go into the simple decision on how best to lead site visitors from the home page to their destination. Should we offer them a search box to type their query into (which could lead to results that were too broad) or should we offer a complete directory of categories (which would require that they know exactly what they were looking for)? For a site that had more than a thousand kinds of forceps alone, this would’ve been a challenge.
Our product catalog had to be completely reformatted and integrated with ECRI and other information. This could have kept content teams with dozens of people busy for a long time. We had six people.
We were adding so much stuff at once that simply keeping track of everything taxed our development team. And we were changing all of our hardware and software applications at the same time.
Then there was the fact that the team building this new site had not worked together long. Everyone was busy being human—staking out territory, testing boundaries, establishing a pecking order. We couldn’t just raise our voice and let everyone in the company know what was going on. We had grown past that stage—in size—but hadn’t caught up with it in organization.
Teams would arbitrarily form to address an issue, but fail to consult with key people who were working on the same issue from another angle in a separate team.
I was still the architect of the site. I was responsible for figuring out what it should contain and how it should work. But for the first time, I didn’t know every detail of the technology. I had to rely on others.
As Alexander reviewed our progress by meeting with various groups, he began to panic about the development side of the process. Nobody seemed to be reaching consensus on key technology decisions. Factions were forming. One afternoon, a livid Alexander walked into my office, closed the door and said, “I just sat in this meeting for three hours. And I’ll tell you, Wayne . . . NOTHING HAPPENED! I wanted to fire everyone on the spot! Nobody takes responsibility for anything. They complain about every little petty thing! They drive me nuts, these people. We have to do something--now!”
Alexander reluctantly agreed to take on the daily supervision of the group. Alexander couldn’t limit himself to one area. The key to getting the development effort optimized was to ensure that the connections between them and the rest of the company were efficient. So he became involved in more and more parts of the process.
In addition to my attempts to keep pieces of the site coordinated, I was busy developing particular areas of the site and running much of the company. I was so busy that, sometimes, it would be several days before I was updated about how various parts of the site were coming together. Invariably, I would be shocked when I heard about the current status of the site.
I had laid out prototypes for the entire site on walls in our development area. As each page was developed in code, a printout would replace the prototype. More often than not, there was very little resemblance between the two. Instructions I left were ignored. Critical interface issues remained unaddressed. Decisions were made that completely failed to make use of the lessons we’d learned in our earlier days.
Whenever I presented my list of corrections to Dave and Emma, who were responsible for coordinating the development and content for the site, they’d say that I was being too picky, that changes had been decided in meetings I hadn’t attended, or that either Alexander or Jeff had approved the changes. Then, since Jeff was traveling much of the time, they’d complain to Alexander about how intrusive I was. They wanted to be left to do the job they felt they were hired to do. They told him, “It isn’t just Wayne’s site anymore!”
Alexander expressed sympathy for my dilemma, but gently insisted that I be more selective in my suggestions to the development team. We could address my other issues later. I had designed the site, now I should trust the people I had hired to build it.
This advice was contrary to an important lesson I’d learned in the past. When I designed my second restaurant in my spare time while working at Varian, it was an outside project that was more difficult than the first one. I had far more responsibility. But since it was a local project, I believed I could manage it. I struggled a bit during the design phases, just barely managing to keep up with an aggressive schedule. When the drawings were approved and the construction had begun, I was terribly relieved. It meant I could get by with far less time dedicated to the restaurant project and catch up on my Varian work.
But my distraction with my daytime job allowed the contractors to make onsite decisions and revisions without my review or supervision. The owner’s bad taste, which I had so carefully restrained during the design phases, flourished in my neglect. My clear and clever design ended enshrouded in mud and mundanity. I vowed never to let this happen again.
But here I was again. It felt like a nightmare, where I was driving down a steep, bumpy dirt road without brakes, steering with a six-inch-diameter wheel. All I could do was to hold on tight and try to maintain control.
By the end of the ordeal, everyone was overworked, exhausted, grumpy, disgruntled. The one thing I couldn’t complain about, the one thing that gave me hope, was that every member of the team had worked hard. Very, very hard. There were people in the office nearly every moment of every day.
As a gesture of support, I often tried to be the last one out the door at night, but I seldom succeeded. I could not stop thinking about my confident statements to Dave, Apar and Mitch, about how we were a family friendly company, providing flexibility and time with the family. Just one more thing for me to feel bad about.
In the wee hours of the morning, a week or so after our original deadline, the site was officially launched. There had been a few tense false starts where the developers had had to roll back to the original site, due to serious problems, but this time, it seemed like the site would stay live.
The next morning, I received lukewarm compliments, via email, from a handful of customers and investors regarding the site, but everyone else was furious.
In spite of the heroic efforts of the quality assurance team, our shiny new search engine could take up to a full minute—which felt like eternity—and then return irrelevant results. The pages were a muddled mess of mixed fonts and other formatting nightmares. The user interface didn’t interface well at all with human users.
Our pride and joy—the catalog and supplier messaging system—was nearly impossible to find and, often, didn’t deliver messages properly for those few people who did manage to find it.
To make matters worse, the colors we had selected for our navigation system made text illegible on nearly half of the computers that viewed them. Of course, all of this was true only when the site was functioning. The only consolation over how bad the site looked was that only a relatively small percent of visitors could visit. It was down more than it was up.
Our traffic dropped precipitously overnight from tens of thousands of visitors per day to hundreds.
I didn’t go into work that day. Although my body was relatively healthy, I was feeling too sick to go anywhere. I knew that, for the first time, I would not have been able to hide my growing despair.
We had tried to be everything to everyone. All at once. In the process we turned our innocent, obedient child into an adolescent monster. On the surface, it looked much larger and more grown-up than it had been before, but it was raw and unstable underneath.
I was pissed at everyone, but could only blame myself.
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