Creating a $15M/yr Business Out of a Common Problem

Hurricane Sandy stranded a medical student in New York City in 2012. The storm canceled all his residency interviews and stuck him with rescheduling conflicts. His future co-founder, a residency program director at his medical school, was also struggling to recruit through Lake-effect snow in Rochester.

These weather-related setbacks would spark a company that now handles interviews for 90% of US residency and fellowship programs. Dr. Jason Reminick talked to us this past week about his journey.

Jason lived the pain that every medical student faces - the chaotic residency interview process. Trying to manage interview dates with your availability. A pain felt more acutely by the residency programs themselves.

The solution seems obvious in hindsight: create scheduling software specifically for residency interviews, like OpenTable but for medical training programs. Applicants can instantly confirm interview dates and have full control over their schedules, while reducing administrative burden on the program.

The best startup ideas are often staring us in the face. While tens of thousands of doctors complained about this broken system, only one decided to fix it.

I really like Jason’s story because it’s a perfect example of where to find startup ideas. Each of us that graduated before Thalamus launched have personally experienced the problem it solves. Each of us had a chance to tackle the problem and build this company. It’s a great exercise to reflect on why you didn’t think about it. How can you correct that the next time you come across a problem that may have a solution that can benefit a lot of other people?

At first, Thalamus remained a side project while Jason finished his combined Peds and Anesthesiology residency. For nearly six years, he balanced clinical work and slowly building the company.

Jason took a leap in late 2018 that many physicians dream about. He left clinical practice to focus on Thalamus full-time. He joined Launch Accelerator run by famous angel investor and All-in Podcast host, Jason Calacanis.

A startup accelerator is a time-bound program that provides early-stage companies with mentorship, funding, and resources to scale rapidly, often culminating in a demo day to attract investors. While Y Combinator is the most famous and successful of them, many other accelerators are highly regarded, including Launch, Techstars, and 500 Startups.

On day one of the accelerator, he felt intimidated as an outsider physician. "Everyone had these really nicely designed decks and mine could have been built on construction paper with pictures cut out," he laughs. One VC was "appalled" by their design.

Despite the rough deck, Jason won the first week's pitch competition. Why? Because he deeply understood a problem nobody else had solved. The accelerator proved transformative, teaching him how to tell his story to investors and providing that crucial first round of capital.

An accelerator’s impact is hard to overstate for outsider founders, like physicians, to get up to speed with our tech counterparts.

A year later, came another inflection point - COVID-19. Jason was exhibiting at an emergency medicine conference in New York when five doctors tested positive for COVID. The next day, while others panicked, his team started building a virtual interview platform. "It was in some ways luck, but it was in some ways responding to the change in times," he says.

The Covid inflection point significantly accelerated his startup’s growth, helping him take over the market. He could have easily missed the opportunity. While some startups brute force their way to dominance, most are built on inflection points.

Thalamus faced a common startup challenge as it was growing - market size. The total market for residency interviews was too small to excite investors. Investors want to know there’s a billion dollar market potential to risk their investment.

So he positioned residency interviews as just an initial wedge where he could gain traction for the startup.

His creative solution? Expand into the broader physician recruitment space:
- Hospitals spend $250,000 recruiting each physician
- It takes six months to fill each position
- During those six months, they lose $2 million in clinical revenue
- Most hospitals do 130 physician searches yearly
- That's a $300 billion problem begging for a tech solution

It remains to be seen if he can conquer physician recruitment as well, but I wouldn’t bet against Jason. He was able to get residency programs to take a chance on his software while they were underwater with thousands of applicants in interview season.

Jason decided to make the company a Public Benefit Corporation this past year. He wanted to showcase his company’s commitment to medical education. While this is a risky move for many companies, because it scares away investors, it paid off for Jason. It helped him land a formal collaboration with the Association of American Medical Colleges (AAMC). This has made them profitable and positioned them perfectly for expansion. Today, they're at $15 million in annual revenue and growing.

Right now, we're seeing another massive inflection point with AI in healthcare. Just as COVID created an opportunity for Thalamus, AI is creating opportunities for physicians who understand healthcare's problems firsthand.

Three Key Lessons:
1. The best opportunities come from problems you face.
2. Recognize and seize inflection points - like COVID for Thalamus, or AI today.
3. Getting into the right accelerator can transform your trajectory.

Your Next Step:
Think about what could’ve helped you see the opportunity that the difficulty of training interviews created. Think about what frustrations you face as a doctor today.

Remember, you are the best person to solve a healthcare problem you face, not a 21-year-old MIT grad.

Best,
Mohammed

P.S. What problems in medicine do you think are begging for a tech solution? Reply and let me know. I'd love to hear your thoughts.