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Key Idea: Innovate to Attract Investment

New ideas that will impact large numbers of people will win venture capital.

Key Question:

A: 

Come up with a new way to solve a problem, however, we learn here that excellent technology does not a business make.

In fact, Peter Drucker has always said, "The purpose of a business is to create and maintain customers." Therefore, if you don't have a customer, you don't have a business. When Bill Hagstrom joined UroCor, it was a startup based upon technology developed at the University of Oklahoma. The professor who invented and secured a patent for the diagnostic process which UroCor sells today was not the person who could build a successful business.
 
Q:
Why was the professor failing?
 
A: Just because something is the best doesn't mean the customers will choose it over what they are using now. UroCor's product is new and physicians must be convinced to try it. Bill Hagstrom doesn't clearly say that the founder didn't understand marketing but that is the logical assumption. Bill was hired to make a business out of selling a diagnostic test. Bill had a great deal of experience in health care and has taken the company from 12 to 250 employees.

 A key motivation of people who provide venture capital is to find personnel to take a business to the next level so if you are the inventor who takes investors don't get your feelings hurt if your investors hire someone to be your boss.

Bill Hagstrom was hired by the group of venture capitalists who had provided funding from the beginning. This group had already invested thousands of dollars and knew they were not going to get their money back unless they changed everything about the business. A venture capitalist is a person who invests funds he/she is managing for others, into a new enterprise. The venture capitalist becomes part owner hoping to cash out with a nice profit in the not to distant future.

Q:
How did they find Bill?

A: They hired an executive search firm. This is basically an upscale personnel placement business and they do not work for the employee, they work for the employer. Bill was happy in his work as the head of a multi-million dollar division in a multi-billion dollar healthcare related business.

Think about it

Do you have a product or service that you think can change the world?  Can you demonstrate the viability of your idea?  Is is truly unique?  Does it help the potential customer do things cheaper, faster or better?

Clip from: UroCor (acquired by Dianon Systems)

Oklahoma City: This episode of the show was done to learn how to take a company public. Here the founder had raised the first-round of private equity investment to commercialize his invention but didn't know how to run the business and get those products into the market. 

The early-stage investors brought in Bill Hagstrom (pictured above). 

We see that it took a person with Bill's experience to get this disease management business into gear. Today UroCor provides a comprehensive range of services for detecting, diagnosing and managing bladder, prostate and other complex urologic conditions.

Under Bill's leadership, in just six years UroCor grew to $25 million in sales with 200 employees. One of UroCor's biggest obstacles was recruiting experienced leadership from large health care companies in the East.

Bill Hagstrom is all about constantly learning.

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UroCor, Inc. (now Dianon Systems, Inc)

Bill Hagstrom, former CEO

800 N. Research Parkway
Oklahoma City, OK 73104
800 634 9330

Visit our web site: http://www.urocor.com

Office: 800 634 9330

Business Classification:
Also: http://www.dianon.com Health Care

Year Founded:

Innovate to Attract Investment

Bill Hagstrom is not like anyone I've ever met. He left a huge health-care organization to join a small, sinking ship. Come now to Oklahoma City and meet a man on mission.

(Voiceover) UroCor offers its customers a comprehensive range of services for detecting, diagnosing and managing the clinical challenges of bladder, prostate and other complex urologic diseases. Its customers are urologists and managed-care organizations.

BILL HAGSTROM (UroCor): (Voiceover) Our goal is to serve our physician base, which are urologists, in their quest to deliver better care to their patients. And our business model is based on having the best capabilities in place to detect disease, to provide the best diagnosis, to provide prognosis--you know, what might be that patient's outcome--to look at the best staging capabilities or monitoring capabilities.

Now many of these capabilities are available in the marketplace today, but it's how do you assemble them in a way that adds the most value and provides the highest level of quality.

HATTIE: (Voiceover) Urologists send samples to the Oklahoma City-based laboratory, and they receive the most comprehensive analysis available today.

GERRY O'DOWD (UroCor): (Voiceover) This is a urine sample that is derived from a 68-year-old male. These cells are characteristic of a tumor that's the most common tumor in bladder, transitional cell carcinoma, or urothelial cell carcinoma.

HATTIE: (Voiceover) Dr. Gerry O'Dowd is a pathologist. UroCor convinced him to leave his private practice in Washington, DC, to become medical director of the company.

GERRY: A very, very high percentage of men, once they get over the age of 50 and 60, have a latent or trace form of prostate cancer, and we knew that with the demographic shift in the male population, that this relatively high prevalence of prostate cancer would become a major socioeconomic and medical, you know, diagnostic problem.

BILL: The business was actually founded on the basis of a technology that was transferred out of the University of Oklahoma, and it was envisioned that this technology could be the technology to be able to detect early stages of a wide range of cancers. And in their enthusiasm over what type of impact that could have, I think they might have missed some of the fundamentals along the way. And perhaps it could be said that all of the business skills and the finance skills and what kind of return could be available to investors based on the science or technology was not as well-addressed as it might have been.

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