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Back to the Drawing Board -- 2 Years and Millions of Dollars Later

By Matt Dorey, Founder/Managing Director, Curve Dental, Orem, Utah
I started my company, which creates Web-based dental clinic management software, when I was 19. After spending a few years configuring computer networks for dentists in my family and other practices, I knew I had found the perfect application for cloud computing.

But in my rush to get a jump on the untapped market, I didn't spend enough time figuring out what my customers wanted and ended up back at the drawing board -- two years and a couple million dollars later.

Rushing gets you nowhere fast
After identifying what I thought was a $3-4 billion opportunity, I was eager to get the ball rolling. I managed to raise some capital by using the medical industry, which had already started to transition to cloud computing models, as an example. Still, Curve Dental was the typical cash-strapped start up: We really needed to make those first few sales to stem the outbound flood of cash.

I leapt simultaneously into hiring staff, finding additional funding, and attracting potential customers. I know now that I didn't come up for air often enough to ask the crucial question: Is the product that I'm building right for the market?

I thought I had all the understanding of the industry I needed from the days I'd spent installing computers in dentists' offices. But I underestimated the importance of certain tools that dentists need to manage their practices and how much the software would cost to develop.

'Good enough' is not good enough
As we produced working models of the software, we realized that features were missing -- for example, the ability to handle imaging and x-rays or patients' charts. I just kept my head down, though. I didn't question the model; instead, I banked on the idea that if we just got something online, it would be enough to finance further revisions and additions.

That's like building a hybrid car without seats -- saving money on gas is great, but people need to be able to sit down! Trusting the overall ingenuity of a new technology to make up for fundamental shortcomings in the product just won't work.

The software was good enough that we were actually able to hit our initial sales goals. Of course, we were too busy celebrating to consider the fact that our model might not be scaleable. We could sell five units of imperfect software a month, but could we sell 50? In 2007, we did 250 sales demos and most customers said "no."

At a certain point I had to make a decision: work around the flaws in what we had already created or start again from scratch with a lot of new knowledge. The fact that the latter was unavoidable became an elephant in the room. Learning to accept the inevitability of it was gut wrenching -- we're talking about millions of dollars and years of development down the drain -- but the evidence just kept piling up.

Do what's right, not what's easy
Even when you know starting over is the right thing to do, the process still sucks. There was no a-ha moment when things were all of a sudden on the right track again -- the transition was long and stressful. Some key employees felt burned by the change in direction: a few left, and we had to let a few others go in order to bring in fresh faces. There was a lot of accumulated angst to overcome.

In order to make way for the necessary changes I secured more professional funding. That meant investors would get paid before I did when things got rolling, but it had to happen. I also brought on as CEO an experienced insider, Jim Pack, who had recently directed a similar company in the medical field to great success. With his help we completely revamped Curve Dental's platform, and I learned that starting a business is really a two-phase process.

Company discovery vs. company building
When I started Curve Dental, company building seemed like the operative term. Like me, most entrepreneurs rush into raising money, hiring help, and creating something to sell.

The process of company discovery -- doing research, learning your market, testing your concept -- takes a lot of patience, but it's the more important part of the equation. It's easy to think that you understand your market and move on, but in the end, it's the depth of your understanding of your customers and their needs that will determine your success.

Success by folly
They say that four out of five start-ups will find success by doing something other than what they set out to do. American Express started out as a shipping company; Flickr -- the online photo-sharing site -- was born out of several attempts to create an online game. We were lucky: We just needed to create a much more comprehensive product.

Curve Dental is now back on track, and this year we'll cross the $1 million revenue threshold. If our annual growth rate -- 130 percent -- is any indication of how far we've come, I'd say the headaches and heartburn were well worth it.

Matt Dorey possesses a third-degree black belt and is a multi-time Canadian national champion in Taekwondo.
-- As told to Joseph Conway

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