(This blog post is based on our conversation with Abboud Chaballout for the Fundraising Radio)
Fundraising Radio was proud to host Abboud Chaballout in our recent guest lineup. He has built himself an amazing portfolio as he is the Cofounder of Diagnoss, a licensed attorney by education, and a healthcare entrepreneur for many years. In fact, prior to Diagnoss he launched several other healthcare startups. One of the healthcare companies he started bought and litigated unpaid medical bills owed to providers from insurance companies. Furthermore, he managed an urgent care and a pharmacy, all while operating a medical billing company. All his experience in the healthcare business propelled him to start Diagnoss. This company helps providers select better medical codes through the use of artificial intelligence. Medical coding is a translational exercise between providers and insurance companies. Medical codes also help governments understand the general state of their population’s health.
Healthcare Sales Cycle:
In Abboud’s experience, within the world of healthcare revenue cycle, when you prove that you can do something that leads to inbound traffic, it will ultimately facilitate the sales cycle. In other words, once you prove that you have something in value, the ability to sell is accelerated and becomes much easier. However, getting to that point is tricky, because at the beginning you have to be able to sell a vision and that can be a slog. In essence, Abboud advises that the primary thing is figuring out how to validate your technology as quickly as possible.
How to make sure that people need the product that you are developing:
Abboud approached this problem in a similar way he approached raising money for his startup. That is, he and his co-founders would go and find interested parties or find publicly available data sets to work with. They would then work on the product and use an incremental progress to get investors and clients interested and then get more data and so on and so forth. It was an iterative process in which every time they made more progress on their product, more doors would open for them. This in turn, gave them data that allowed them to make more progress, money, and fresh content to work with.
Diagnoss’s Funding situation:
Diagnoss raised their first round of financing from the House Fund, which is a fund focused on financing UC Berkeley entrepreneurs. Which means they mostly invest in businesses run by UC Berkeley graduates or people affiliated with UC Berkeley in some way. Abboud advises early stage founders to focus more on their product than on fundraising. He cautions founders that the early stage companies who raise lots of money from prominent investors and VC firms, have already made a name for themselves in Silicon Valley or in whatever community that they are in. So, if this doesn’t apply to you, then he highly suggests that you focus on product development and validating the most cost-efficient way possible. Shortly after you launch and receive feedback from validated products/customers, this is when Abboud suggests seeking fundraising in earnest.
How Diagnoss was able to secure US Government Contracts:
After raising from the House Fund, Abboud and his cofounder foresaw more for Diagnoss’s future. They sought for a second round of fundraising. However, they didnt want to raise money from traditional VC’s or investors, so while looking for alternatives they discovered that the USA government is very interested in early stage technology. Especially so if you have some proof points. Government agencies will usually have programs called SBIR’S which will issue contracts for innovative technological advancements. In other words, they will fund the innovation on a commercialization track.
Abboud’s advice to early stage founders:
Abboud’s number one advice to early stage founders is for them to focus on their psychology, because being an early stage founder comes with a lots of highs and lows. In other words, he believes founders should not be driven too much by their emotions and that founders should look at this startup endeavor as a journey. His other piece of advice is to just talk to everyone and anyone who is willing to listen to you. Abboud also strongly suggests that founders should renew their intention on what they are doing and on what it is that they are trying to build. He believes that it will give founders a renewed sense of clarity.
This blog post was written by Luis Bravo.