COLLECTIVE MEDICAL: BUILDING A COMPANY WITH FRIENDS.

• Author: Rawle, Chris
• Position: SILICON SLOPES

Wise business people always claim that starting a company with friends is a fool's errand. Today, we examine evidence to the contrary.

Adam Green, Wylie van den Akker and Chris Klomp grew up together in Boise, Idaho. Despite some momentary hiccups in the friendship--Green and Klomp both started rival lawn care businesses during their teens, battling for what Klomp admits were meager profits--they all graduated from high school and roomed together at Brigham Young University in the late 1990s and early 2000s.

While in college, Patti Green--Adam's mother and an emergency department social worker still living in Boise--approached Adam with a problem. Through her work,

Patti had noticed remarkable inefficiencies in the way each emergency department operated as an island, without access to information on a patient's visits to other hospitals. Her idea was to link emergency departments together with a software program allowing hospitals to exchange data and work together for the well-being of patients.

Using Patti's idea, Adam Green and van den Akker built a business plan around the idea of using software to solve this specific problem in complex patient utilization--and Collective Medical was born.

FROM SEED TO SPROUT

The entrepreneurial team entered Collective Medical into a business plan competition, won and set out to sell the world their software.

"They took it out into the market ready to conquer the world of complex patient emergency department care coordination and ... crickets. Nobody was interested," said Klomp.

As it turns out, selling software and explaining complex healthcare problems is not the easiest path for college students, especially when many in the industry didn't yet recognize the problem. All three ended up taking jobs outside Collective Medical--Green and van den Akker writing software for other companies, and Klomp working at Bain & Company and later, Bain Capital.

In 2009, Klomp began attending grad school at Stanford University. He had made a commitment to return and work at Bain Capital upon graduation, an agreement he would end up honoring as vice president of North American private equity. Alongside Green and van den Akker, he had also co-founded a new company--BlackSwan Neuroscience, an artificial intelligence defense technology platform--that ended up winning Stanford's startup competition that year. Just like that, the top VC firms in the world were coming after them with eyes flashing dollar signs.

"All of these VCs were now courting us, who didn't even know we existed the day before," said Klomp. This was a crossroads...