Podcast: When a Startup Goes Bust, Pt. 1

When healthcare communications entrepreneur Gail Zahtz sat down to meet with her client, she couldn’t have known how much her world was about to change.

“If you had some money, what would you do with it?” the client asked.

“Huh. How much?” Gail responded.

“Well, let’s say we start with $800,000 and we cap it somewhere around $2 million.”

Writing on a napkin, Gail sketched out a business plan for a digital media outlet called Working Weekly. The publication would focus on workplace health — mental, physical, emotional — and make its money from hungry employers with advertising dollars slated for recruiting. It might not seem like it now, but Gail’s project was indisputably high-tech for the era, even requiring the expertise of a chief technology officer and a chief information officer.

The year, after all, was 1998. Websites cost a million bucks. The internet was a new, mostly untapped frontier. The dotcom age had yet to boom, much less bubble up and burst.

And with this stroke of good fortune, Gail secured $1.8 million and launched Working Weekly into orbit. In almost no time, she had a sprawling office in Charlottesville, Virginia, 60 dedicated employees and a burn rate of $250,000 per month.

But it wouldn’t last. In just a few short years, Gail and her project were swept away in the chaos of the dotcom bubble.

What Healthcare Can Learn from Failed Tech Projects

Perhaps the greatest challenge for any writer in health tech is getting innovators to discuss their disappointments or shortcomings. But it’s through these experiences — dead startups, tech implementations gone array and so on — that healthcare leaders can learn so much. Maybe it’s how to choose the right vendor for your health system, or it could be a greater lesson reflecting on the frantic, hype-driven state of health tech.

This is the reason why we wanted to talk to Gail, and it’s precisely why she agreed to speak with Data Book: What might we learn from the tale of Working Weekly?

Before we go, yes, we understand that a health-focused digital media outlet doesn’t face the same challenges or enjoy the same benefits as, say, a company that develops artificial intelligence systems for clinical use. But this dispatch from the dotcom bubble draws overt parallels to health tech’s continued evolution in 2019.

Here’s another note: This is a very special episode of Data Book. It’s the opener of our first ever two-part series. We even broke our traditional format — you know, story and then interview — by using all 23 minutes and 48 seconds to tell this cohesive story. Half of the story, at least. Our conversation with Gail is interspersed throughout the narrative. We’ll drop the second and final episode on Friday, June 14.

And we must extend a final thank-you to Shereese Maynard, our friend and colleague, who tipped us off to this story. Thanks, Shereese!

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