Continuing our CEO Profile Series, we feature Howard Mahran in this post. I enjoyed talking to Howard and hope you enjoy reading this post.
I met Howard Mahran, CEO of Deep Domain, Inc., based in Redmond WA, to get his perspective on startup experiences, Deep Domain and other things.
Mindful of the blustery, stormy weather day I had come in from, Howard greeted me warmly and I was excited to sit down and talk to him. He was beaming and I found out they had just signed 5 new customer deals in the Midwest. Congratulations!
Here is an edited transcript.
Krish: Howard, If you weren’t the CEO of Deep Domain, what would you have been?
Howard: If I weren’t CEO of Deep Domain, I would be CEO of another little startup. Startups are in my blood. I have so many ideas – more than I have time to fulfill. But most likely, be the owner of a little restaurant, coffee-shoppish, that serves ladies during the day and couples at night.
Krish: That sounds interesting. Was there something, many years ago that led you into this path of wanting to be a CEO of startup?
Howard: Yes, there was one specific event. It happened during my first job. I was actually trained as an imaging scientist in college and I was hired by a small startup in Chicago called Cell Analysis Systems. We developed the world’s first imaging based Flow Cytometer. It could look at chromatin within a single cell, our technology could detect if that single cell had Cancer. I was the geek developer that helped build the technology. At our initial product launch, we signed up for a tradeshow in Orlando to introduce and demonstrate our new technology. It was August, it was over 100* and I was there with our Sales Manager (Wayne) and our Head of Research (Sarah), who happened to be the wife of the founder. Wayne and I started setting up our booth in a very hot conference center. Sarah left us but said she would be back in time for the opening. I didn’t see her again until Thursday! In the middle of setting up our booth, Wayne collapsed. He was hauled off on a stretcher with a heat stroke. It was 3 PM and show was opening at 5 PM. Sarah was to present to the press and I was just there in the background to make sure everything worked. I could not reach her (it was before cell phones). I panicked and called Chicago to beg Jim our CEO to help. He calmly said “Well, it looks like you are going to have to do this yourself. Go get some clothes from the Hotel Store and do the demo.” I bought a Mickey Mouse tie, Mickey Mouse shirt and Mickey Mouse jacket at 5 PM we were five people deep in our booth. I did the demo , I did the selling and I did the schmoozing and realized t was then that I decided to get out in-front-of-the-bench and not work behind it. When the company sold to Beckton-Dickinson, Jim made $10m and I got a $2500 cheque. I was in awe of the extra $2500 I had made after working three years. I wondered – How can I do this again?
Krish: Great story Howard. Now how did/does your personality influence you or guide you in your CEO role? There must be something in your personality that motivates you to be a CEO. What is that?
Howard: There are probably a lot of different traits, but fundamentally being an outgoing person and self-driven. When I grew up, I also moved 14 times before I was 18. I was sort of forced to learn to interact with new folk, sell myself to new people as I was always the new-kid-on-the-block. I was in 4 different high schools. I don’t know how many folks can claim that? All that moving around trained me at an early age – to sell myself. To top it, I had a rebel attitude and kind of fight-the-man attitude that seems to help with the startups. In terms of taking risks and applying my personality to what is a frightening ride many times requires a lot of steadfastness and blissful stupidity.
I had my own business (selling watches and bike parts) when I was a kid. I was always trying to invent things and got into trouble doing that a few times, but my family supported my entrepreneurial streak and I’m very grateful for their support and encouragement.
Krish: You are in the midst of a funding round for Deep Domain. Talk to us about what you like and don’t like about the fund raising process. Also, how do you keep your focus during this process?
Howard: I am excited about telling our story and I love talking to people who are interested in listening.
I don’t necessarily like asking people for money though. It is not a pleasant experience necessarily. It is a rush when somebody, especially a smaller investor, is willing to invest their hard-earned cash in what we are doing. In general, I don’t like fundraising. It is a necessary evil. I get through it because I like talking to people. The focus part, yes that is the biggest problem. The business has to be run and in small startup you are doing a lot of things like washing the toilet, selling the product and dealing with customers. So I really rely on help, other people to help. I like to delegate where I can. If I can delegate some of the fund raising activities, for instance to Debra our CFO or to others – that really helps a lot. On the other hand, I ask people to push back at me things that I need to be doing. I call that de-delegating so I can focus back on the business – it is easy to get distracted. Having someone outside that you can trust to push you in the right direction and help you stay focused on the important stuff is critical
Krish: Is that what you would advise other CEOs in a similar situation?
Howard: If you have a personality like me – sure. But there are others who are more disciplined. We all have our strengths and weaknesses. It is really dependent on the individual. It is so easy to get consumed by the rush you get from fund raising that you could end up doing it full time and forget about building the business and selling the product. So, it all depends on the environment and your personality. There are also cases I have been in where fund raising is extremely difficult, painful, because your idea is so far ahead of the curve or your message is not clear. When that happens, it’s a good sign that you need to regroup and re-message.
Krish: Is there a good time to do fund raising? Is there a bad time to do it? How do you optimize?
Howard: Iwish there was an easy formula that someone could tell me. The anecdote is to raise money when you don’t need it and when you have the time. That’s very true and less defocussing than when you are challenged to meet payroll or meet a deadline. Fundraising really starts early. You may not be collecting cash, but you are always talking to potential investors and honing on the message, whether you know it or not.
Krish: You are socializing and getting feedback?
Howard: Yes, feedback is important. I can give one anecdotal story. My very first customer bought the product based on a written pitch we sent. We call it our “Father’s Day Hail Mary”. We found they had a bid out for doing some work that was right up our alley and they had come down to final three vendors. They were going to decide which one to go with. The decision was going to be made the week right after Father’s day 2007. We begged if we could submit our proposal too. Mind you, we only had an idea – we hadn’t even incorporated a company yet or written a line of code. We basically rewrote our business plan during the Fathers Day Weekend and sent it off that Sunday evening. We did not expect to hear anything again other than – “Thank you but leave us alone now”. We did not hear anything, but two weeks later we got a call from their legal group asking where they should send the contract. They ended up choosing us for the $100k contract. Pretty cool!
Later on as we began to know them better we made a casual call to the head honcho and asked him if he wouldn’t mind giving us a few names from his Rolodex to help us to find people to raise money from? He asked “Do you want me to give you names or do you want me to invest”? I said – sure, you can invest. He ended up signing up for $1,000,000!. If I were not in fund raising mode, I would never have asked that question and that investment would not have happened. You are always fund raising and you never know when or where it is going to come from.
Krish: Talk to us about your startup career. We believe this is your second or third startup. Is startup like raising a family? Is the second/ third one that much easier? What did you take away from your first one?
Howard: It is just the opposite for me. To use your family analogy: If I had my second kid first – I would only have one kid (laughter). Cell Analysis was a fantastic ride. It was an easy ride for me. I was not responsible for fund raising or other the stress of running a startup day-to-day, but I got involved early. With that experience I said – “Geez, that was easy – I could have a couple more kids!”. It was such a positive experience like my first kid. Then I worked in Biological Detection Systems in Maryland which got sold to Oncore. I was then recruited to a startup in Seattle in Totem Lake called Bainbridge Sciences, which got sold to CR Bard. In 1996, I was working at Bard, when my dad got diagnosed with Prostate Cancer and coincidentally I was working on technology to predict Prostate Cancer tumor stage. He wanted to know what he was supposed to do, specifically. I was on a plane coming back from a demo and while on the flight came to the conclusion that other patients would have the same question. This became the seed for a new company. In 1998 I started a company called CancerFacts.com. We started selling a tool that helped patients make complex treatment decisions for Prostate cancer and grew that to 31 other diseases. We changed the name to Nexcura, worked with American Cancer Society and American Heart Association and eventually sold to Thomson Reuters in 2005. So I want to say Deep Domain was my fifth startup, lot of kids, some adopted. I didn’t conceive all of them. Nexcura was my first from Ground Zero .
With Nexcura, we started and expanded with the .com bubble, but survived the implosion. The real ride was in the beginning, when the currency was all based on website eyeballs. At one Board meeting, one member recommended that we stop selling our product and instead just build community. If we sold something, then folks would be able to “peg” a valuation on us. We (the Board) actually resisted selling a product to avoid pegging our value. Looking back, that was the silliest thing! It took us three years to get the first dollar in sales. However, American Heart Association bought our tool (paid $500k per year), as well as others, but after a few years realized they were embedding the tool in their web sites, but providing us all with all the traffic. We then shifted to a broader permission based marketing model.
Krish: Business Intelligence for Healthcare is certainly hot. Why is it hot? What is Deep Domain doing to capitalize on this trend?
Howard: Good question. BI in Healthcare is underserved today. Firstly, Information (data) is required to treat patients better and manage chronic illness. Physicians forget about patients they have treated once they leave the exam room. In order to better serve patients, healthcare providers need to be proactive. You need data to be proactive. Secondly, inefficiencies are everywhere in hospital systems. Analyzing various data points and finding the source of the inefficiencies is critical to improving operations, patient satisfaction and costs. And thirdly pay for performance is increasing – pay for performance awards that providers give for keeping patients, such as diabetics healthy. The goal is to turn our current sick care system into a true healthcare system.
Deep Domain allows physicians to ask and be able to get answers rapidly. Our reports do not require trained Analysts to generate them. One customer had to run a report recently after a drug company informed them of glass contamination in a statin batch. All the patients who were taking that drug in the last 3 months had to be notified. Using Deep Domain, they were able to do it in under 15 minutes, instead of the typical 1-2 days or longer. There are other ways to do the same thing, but our way provides the answers, faster, cheaper and in real time. Another example from Community Health Clinics is to find patients who have not had fluoride treatment in the last 3 months that have had a primary care visit.
Deep Domain is not about convincing customers that inefficiencies exist. Our job is to help our customers see all the moving parts, see the bottlenecks, and see the metrics every day (on monitors in their hallways, for example). We found, for example, that patients had to wait an inordinately long time on Tuesdays to be admitted into the emergency room after coming off the ambulance. Using our software, our client was able to see this bottleneck, identify the problem causing it and measure the affect of changing their workflow. The bottleneck was resolved.
Krish: What is your specialization background (Sales/Marketing/Tech etc.)? Were you ever required to lead a different function? How did you pull it off?
Howard: Over my career, I have moved from being a scientist to mainly doing Product Management / Sales and business development. I can’t be easily put in a slot. I am always talking and selling. I am sure I can never get a real job anywhere! If I want to work, I have to do my own thing. I have never entered a big company through the front door; it has always been through an acquisition
Krish: If you were to predict something that would not be found in this planet in the next 20 years, what would that be? – Doctors is not a good answer.
Howard: We will always need doctors in some form or another. It’s cell phones, TVs and other devices we use today that will disappear. There will be major changes in healthcare. We see some changes happening now. There has to be changes if we want a first class healthcare system.
Krish: What are your goals for Deep Domain in 2013? How is it going so far?
Howard: (jokingly) To live till 2014. Seriously – We want to achieve real breakout growth in 2013. Our v3 product has gotten great response so far. We want to greatly expand our customer footprint and manage the growth phase well. In terms of innovations, we will be releasing an online store to sell and share reports.
a. Favorite Recent Movie: Argo
b. Favorite Food: Pork chops and potato
c. Favorite Hospital: I Take the Fifth
d. Best Startup Moment: First Sale in Deep Domain
e. What will Howard be doing in 10 years? : Not Deep Domain (laugh). I hope to be helping other entrepreneurs and be giving back.
Krish: Any parting advice in this interview for budding and current entrepreneurs?
Howard: Have fortitude. Don’t give up. Stick to it. Listen to others. You are not as smart as you think. You need help. Let others fill in.
Krish: Thanks Howard for spending the hour with me. I wish you good luck.