The Data Entrepreneurs Story — Part 4: Connecting the dots

It was 8.30am and the cold fall gust of the Netherlands was hitting us like there is no tomorrow. That day was such a crucial time for us, because finally, after sending a bunch of emails (i.e. spamming) many hospitals, we received a reply from a willing Hospital Pharmacist (HP) for an interview. We biked through the city of Den Bosch and reached a nearby hospital around 8.50am for a meeting scheduled at 9am. Our excitement was hitting the roof when we were standing in front of the automatic door of the hospital. After we went in, we asked for guidance from the information center, still unaware of the upcoming surprise.

“Good morning. We have an appointment with Mr. X at 9am.” we said while catching our breath from biking.

“I am not aware of any Mr. X here, do you have his/her phone number so I can contact?”

Not a good sign, but we checked the phone number anyway at our email and showed it to the lady.

“Wait, this is not a number from this hospital,” said the lady looking puzzled, but not as puzzled as us.

Behold, we have came to the wrong hospital! Even worse, this is the wrong city!

Triple facepalms for when one, or even two, are not enough.

Where were we and how did we end up in the wrong hospital for such a crucial appointment? Other than interviewing any HP in the Netherlands, we have done everything that we could humanly have done. In order to validate that the problem, we have identified the problem of drugs overstock/understock by interviewing abroad pharmacists, scrutinizing EAHP report on drug shortages, posting on social media such as reddit, linkedin, instagram, you name it.

Yes, we got some responses, and those are really helpful for us. However, we believe that having a potential customer nearby that we can talk to face-to-face will be such a relief in our venture and that is why we decided to get in touch with an HP in the Netherlands. We sent emails, filled out contact form, and even asking for referral from our mentors. At first, the indication was not promising, and we wanted to be prepared even if we have to swallow the bitter pill.

Plan B, and C, and D, and …

In his book, Running Lean, Ash Maurya emphasizes how important it is to identify the riskiest part of your plan. For the meantime, it was validating the problem in the Netherlands. What if we could not get any interview? What would be our next step?

First, we figured that the problem of drug inventory management exists even outside the Netherlands and that would have been a possible pathway if we hit a roadblock: focusing on markets abroad. Alternatively, we could have broadened our problem statement to inventory management in general. A huge decision indeed, because we would have to step back and approach various professionals, diving into an unknown territory all over again.

Another risky part of our plan is the data availability. The clue is in the title of this post: “The Data Entrepreneurs Story”. Data is such an integral part. Since we want to provide a solution to improve drugs inventory management, we are craving for drugs stock data. At this time, what we have is the public data of drug shortages provided by the government: KNMP. Taking the effectuation approach, we also spent some time thinking about what we could do with those data that can help the HP.

Data is such an integral part.

Preparing back-up plan is never fun, but the implication is definitely beneficial. We were forced to assess our situation, list every possibility, and think outside the box. It also provides us with an assurance that we still have options should our major plan go sideways. We put a deadline to our effort in contacting an HP. When that time arrives with no particular lead on sight, pivoting is in our arsenal.

It is always darkest just before the dawn

Fortunately, an email from an HP appeared in our inbox out of the blue a couple of days after our team meeting. Interview date was set and words cannot describe how enthusiastic we were to finally presented with the opportunity. This could finally be our breakthrough. Like three children about to go to Disneyland, we were eager and hasty.

And you know the story already.

After that mistake, we immediately contact the HP to reschedule the meeting, but it was not possible because his schedule was full for the following two weeks. The worst part is that the hospital is in another city, which requires around 40 minutes to reach by public transportation.

“If we go right now and reach there in 40 minutes, would you be available?” We asked desperately.

“I have time until eleven.”

And at that very moment, we rushed to “the” hospital.

Lesson learned: always double check the location of an appointment, especially when it is such an important one.

Apart from the incident, the interview was an oasis for us. We can finally quenched our curiosity about how drugs inventory management is currently practiced in the Netherlands. We got to talk with an HP whose daily responsibility is managing the logistics of the pharmacy department. Even better, he provided us with a demo of their current tools and gave us a tour around the inventory itself. As we know how hard it is to request time from an HP, we felt appreciated and this has boosted our morale.

Some insights that we gathered during the interview:

  1. Drug shortage is the problem that he mentioned first and foremost when we asked about daily frustration. Drug shortage may refer to hospital-wide shortage or nation-wide shortage.
  2. A network of hospital based on the specialization can help each other during hospital-wide drug shortage. However, if the shortage is a nation-wide event, they have to look for alternatives or import from another country.
  3. Getting an approval to import drugs from abroad takes a long time, i.e. weeks. The procedure is also cumbersome because it involves a lot of paperwork.
  4. Imported drugs come with different languages. The nurses might not be aware of any additional specification of the drugs because he/she does not understand the language written on the drug packaging.
  5. Some contributing factors to drug shortage in hospitals are: change in the stream of medication (for example: the doctor’s policy), unpredictable surge in demand, and emergency drug withdrawals that is not recorded in the system.
  6. The hospital has the capability to order even daily to the supplier, but mostly replenishment happened once every month. However, they have to perform weekly manual check of current stock because there is a lot of unlisted drugs withdrawal.
  7. Overstock is not a financial major issue. The problem is the psychological distress of having to throw out expired drugs that could have been used elsewhere.

The problems that we heard from the HP have validated many of our assumption based on previous interviews. Drug shortage is indeed a problem, but there are many angles to approach it. There are causes and there are implications. With those new information, we plan to go back to drawing board, accumulate all that we have now, and come up with a value proposition.

Illustration of the team activity after the interview. source.

Second-mover advantage

The benefit of having started a venture while we are still in the university is the network that the premise brings. During two separate mentoring sessions, we were introduced to two more experts that have been working in the pharmaceutical area. One of them is actually a recent graduate from JADS who has started his own company. Thankfully, he is kind enough to help us validate some of our assumptions based on his experience. The company itself is focusing on a slightly different target market segment, but they are still facing pharmacists nonetheless.

There are two key takeaways from the interview:

  1. Pharmacists have been working with complicated programs and their (the company) value proposition is that their product is much more user friendly.
  2. Integration with existing tools is the primary challenge. Legacy tools do not provide any API or open data that they can use easily.

We have also sent an email to the other expert that was introduced to us but we have not received any response, so we will leave that for the upcoming journal.

Pinpointing the problem

Adding the two new interviews, we now have an abundance of information to make a decision: what is the problem that we want to address?

Back to the whiteboard and the sticky notes again.

Based on the interviews with the HPs, be it in the Netherlands or other countries, we noticed that all of them are having problem of knowing the current stock. Medical personnel often take some medicines from here and there without recording it in the system. Those small-seemingly-harmless practices add up and present a potential problem of suddenly running out of stock. In such occasion, they have to make an emergency order of drugs.

You may ask: why are they not recording the withdrawal in the system at every occasion? Good question!

A clue from the interview with our fellow entrepreneur is that the current inventory management tools are not flexible enough in time of emergency. That is why the pharmacists are longing for an easy-to-use tool. An analogy would be like a firefighter that needs to manually register every equipment they want to take when there is a raging fire somewhere. There is no time for that, life is on the line. Even if the hospitals have adopted barcode scanning, it is still too cumbersome. What if they have to take multiple medicines at the same time? The personnel need to scan them one-by-one. Worse if the stock management is still paper-based.

There is no time for that, life is on the line.

In the particular hospital that we visited, they are trying to alleviate the problem by having the weekly manual stock check done by the technical pharmacists. This step is important because they have to update the stock number in their system, but this is not sufficient to solve the problem. Drug shortage in the hospital can happen in the middle of the week, or even in the middle of the day, due to an unforeseen demand surge. If the pharmacists can get an overview of how the drugs flow looks like inside the hospital and are notified of any anomalies, they can make a better decision on how to distribute the drugs stock within the hospital to prevent understock from happening.

Next step

Having identified and validated the problem which our target customer segment is facing now, the next step is to formulate a unique value proposition. In parallel, we are in progress of contacting more experts and pharmacists to get extra opinions.

Join us next week when we share about how we squeeze our brains and come up with a unique product that will revolutionize the drug inventory management (maybe, at least we hope so)!

About Us

Hi! This post is made possible by a collaboration of Yosef Winatmoko, Nemania Borovits, and Hameez Ariz. We are master students of Jheronimus Academy of Data Science (JADS) currently taking Data Entrepreneurship in Action III course. In the following weeks, we plan to continue to publish our weekly journal about what we go through and what we learn. Hopefully, you can also learn something from our story.

Read our past journals!

Part 1 — Finding a case

Part 2 — Secondary research on hospital pharmacy

Part 3 — The problem is out there

Find me in your nearest Ramen stall.

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