Shabbir Dahod, president and CEO of TraceLink, has been working in the pharmaceutical industry for over 11 years, and in the last 30 years, has founded three companies prior to launching Tracelink. When asked how he comes up with the ideas that have brought him so much success, Dahod credits a very specific approach he learned about during the commencement speech at his wife’s college graduation. The speaker was the president of John Hancock at that time, and Dahod says he made a comment that sticks with him to this day. “He said what you need to do is look for connections and patterns from one segment to another,” says Dahod. “What it forces you to do is think a little bit more about what’s happening at the meta level. How could that pattern be applied somewhere else?”
To find these connections, Dahod says you must immerse yourself in the industry you’re targeting and talk to customers to find out what it is they really want. While speaking with pharma customers, he found that many wanted the industry to go from a where it currently is, a vertically-integrated industry, to one that is more virtual. “Over the coming decades, they wanted to effectively become what they termed as a fully-integrated but virtual network. In order to accomplish that, you have to connect the people, processes, and information,” explains Dahod.
|Shabbir Dahod, President and CEO of TraceLink|
Using the advice he heard that day, he recalled an idea he originally heard about while working as a venture partner for FirstMark Capital, a venture capital firm. “Two people walked in with an idea to use the mobile platform for cutting pictures from websites and posting them, so friends could look at things they were interested in,” explains Dahod. This idea eventually became Pinterest, a virtual discovery tool currently valued at $3.8 billion. “This very small team was able to create this very massive solution by connecting processes through a cloud platform,” he says. “I started relating the issues that were occurring in the pharmaceutical supply chain and asked myself ‘How do I take these ideas like Pinterest, Facebook, and LinkedIn and put them into something like the pharmaceutical industry?”
An Idea Is Born
Dahod began to pursue this idea of a virtual pharmaceutical network and started with what he says is step one of developing an idea – test your idea in the marketplace. “I went back to the people I spoke with in the past, shared my ideas with them, and made them partners in order to help generate more refinement of the idea,” he explains.
Next, he and his team came up with an initial solution that was very rudimentary, but it got the concept across and gave them something they could now poke holes in. “The highest risk is at the earliest stages, because you have the least knowledge about exactly how your solution fits the market opportunity,” says Dahod. “The only way that you can accelerate that is by doing something very small that is the essence of what you want to bring to the market and then engage the market because it’ll immediately tell you what’s right and what’s wrong with it.” He says this knowledge will guide you through the process of maturing that idea into a marketable, saleable solution.
“One of the things I’ve learned is that many companies will go in, ask a customer what they want, build it, and then they’ll iterate on that. That’s not innovation,” explains Dahod. “Rather than going with the thought process that information is driven from ideas specifically from industry, which can be evolutionary or step by step, what I’m trying to do is put something together that is really beyond the current thinking of the industry but put it out there so they can react and iterate on the fit and finish of the idea.”
Identify Your Assumptions
One of the biggest mistakes Dahod says he’s made, and one that he believes many other entrepreneurs make, especially if it’s their first time starting a business, is not recognizing that the final form of a concept and idea is based on assumptions. “Most failures occur because somebody thought they knew the full answer, spent 12 to 18 months building it, learned that a lot of that time was wasted, and now they’re in a position where they have something that’s very rigid and they’re out of money,” explains Dahod. “What you need to do first is identify all of the assumptions you’re making and then very aggressively and methodically work with the marketplace to test every assumption as cheaply and as quickly as you can.”
So how do you test your assumptions? Dahod says the best source is to work with who he calls the “extreme beneficiaries,” or the people you believe will benefit the most from your product. “You want to identify senior people who have authority, responsibility, and who have the greatest pains,” says Dahod. “If you can’t get a reaction out of them or a commitment to spend money or time with you, then everybody else is probably going to be a lot worse than that.”
He says part of the learning process is determining if they have evidence confirming or denying any one assumption based on what they have learned and feeling free to admit that an initial assumption is incorrect. “It doesn’t mean the overall idea is incorrect,” adds Dahod. “It just means it’s taken a slightly different path. We do that today, not just on big, innovative ideas, but just generally how we run the business on a yearly basis.”
Shift And Reinvent
According to Dahod, one of the biggest challenges during this process of making and testing assumptions is one that happens internally. “You have to constantly shift and reinvent the idea, and this journey can take a toll on the team. This is a challenge you have to be able to recognize,” he explains. During the initial phases of creating the Tracelink Life Sciences Cloud, Dahod says he and his team would meet every month and assess what they’d learned and then what they were going to do with that knowledge. “I’m sure the team was wondering if I really knew where the product was going, and the answer was no, I didn’t,” he says. “However, each change was methodical and based on actual input from test cases that we were running in the marketplace.”
Dahod and his team continue to have meetings, but as the product has flourished, they’ve been able to limit these meetings to quarterly sessions and business continues to thrive. And with the recent passing of the Drug Quality and Security Act, companies are looking now more than ever for a way to secure their products and brand. By providing the visibility and connectivity the regulators desire, Dahod and his team have met the needs of their customers while also preparing for the future of the industry.
Other articles in the "Where Do Ideas Come From?" series: