Friday, October 11, 2013

Greg Jacobson talks about KaiNexus

Gregory Jacobson, MD, CEO, KaiNexus
1. What is the idea behind your company?

The idea behind KaiNexus is that organizations who want to create and sustain a culture of continuous improvement need a way to harness the collective brain power of their staff, and to track the progress and impact of the resulting improvement initiatives.

KaiNexus provides this solution with a web-based communication platform that enables everyone in any organization to collaborate on innovation and opportunities for improvement that drive immediate, measurable impact to bottom line performance. The platform architecture is such that it is easily implemented via a SaaS business model.

2. How did you come up with the idea?
I am a doctor who, during my residency, found that improvement ideas from front line staff in the Health Care industry were consistently being lost or ignored because there was no systemic solution to manage these ideas to fulfillment and impact. A lot of these ideas didn’t need a complicated process and heavy-footprint project management solution; in many cases, these ideas could be more effectively addressed locally in changes that the staff themselves made. The complex, large-scale project management solutions available at the time impeded the progress of improvement. I identified this gap in available technology, and realized that an easier, more user-friendly platform for managing improvement work needed to be developed.

3. How long have you been in operations?
My co-founder Matt Paliulis and I worked on the architectural ideas and built a pre-production early adopter version on nights and weekends from 2005-2010, eventually licensing the resulting technology content from Vanderbilt University. Friends and family invested and a Beta Version that went live in January of 2011, and the first paying customer was secured in the Fall of 2011. This was followed by the KaiNexus 1.5 release with additional project management and event management functionality in summer of 2012, which is the current version today.

4. Did you seek investment when you started the company?
Yes. It was a very difficult process that took four months of hard work. Approximately $600K was raised from friends and family.

5. Did you bootstrap the company?
Yes. Matt and I both worked at other jobs until March of 2010. I still works two weekends a month to keep up my medical skills and generate further development ideas for new product features. We were also able to bring in an influential thought leader early in the company, for sweat equity.

Early customers have had massive impact on the product design features. The vision of KaiNexus is still the same, and fundamentally the way the software works is the same, but the nuances of how it works as well as all of the major features have been enhanced and refined based on customer feedback.

The KaiNexus team has learned a lot in the last two years. Sales and delivery methodologies have been aligned to customer buying profiles, and customer traction is dramatically accelerating with an average of two new customers being added each month. 

6. What was the most challenging aspect of starting your business?
Neither Matt nor myself have any real experience in marketing and selling, so learning these skills was the most challenging barrier to growth to overcome. An experienced software sales executive joined the advisory board in 2012, which helped greatly. There was also significant “learning on the job” experience as each new sales prospect was converted into a customer. Another experienced software entrepreneur has joined the team, and greatly contributes to the sales, marketing and business development abilities of the team.

7. What is the next step for your business?
Our next step is to raise a $1M Series A investment to be channeled toward developing greater sales and marketing capacities. In particular, we will be focusing on automation of the marketing process so as to drive sales prospects successfully through the funnel, and to put in place the necessary sales talent to close deals from this growing pipeline. A new platform version will also be developed and released in late 2014. KaiNexus 2.0 will contain additional modules that can create upsell opportunities with current customers as we also expand the user count in these customers. This additional module portfolio in the product will also create additional selling opportunities in other vertical markets beyond healthcare, such as Transportation, Logistics, Financial sector, etc.

8. What advice do you have for other entrepreneurs?
Being truly passionate about solving the problem your company is trying to solve is vitally necessary to withstand the many obstacles that you will encounter. Make sure that you really believe in, and care about, the work that you do. 

Be patient; raising the necessary funds requires time, effort, and dogged persistence. 

Be willing to talk to your customers; figure out what their problems are and how you can solve those problems is critical. Be willing to adapt your product to better solve those problems. 

Arrange your family finances in a way that allows you to bootstrap as long as possible.

9. What Texas-based resources have you found to be the most helpful and why?
Austin and Houston in particular have very active Angel networks. It has been good to have an experienced entrepreneur as part of the team who has raised money in these markets for software companies in the past and has a solid network of contacts. It is also great that the Angel groups TEN and Incubators like ATI and Capital Factory also augment CTAN.