Podcast: Leading a company to high growth – in the words of the experts

What does it take to drive a paradigm shift, and what are the key learnings founders Florian Otto and Michele Romanow have grown from, collectively and individually?

Founders need to find a conventional wisdom, and innovate. It’s all about problem solving, and some degree of altruism is required. Here are the key takeaways:

Find a problem within your niche and dedicate your time to solving this

Michele has been founding businesses since her early twenties and made the list of 100 Most Powerful Women in Canada in 2015. For her, thee driving force for starting Clearco came from her time on Dragon’s Den. Seeing startups pitching for investment only to worry about releasing equity that they saw as a means of funding immediate business costs.

“Founders are coming along and saying ‘I’m looking for US$100,000, and I’m willing to give away 10 percent of my business’. And when you ask those founders what they needed the money for it was almost always the same two things. It was customer acquisition, which is today, Facebook and Google ads. And then it was inventory.”

“And the other way to think about it is: Why were founders using the most expensive capital in the world, which is always equity, where you give a piece of your company and a piece of control, to do something with a fixed return?”

So the next day, Michele came back to Dragon’s Den to try something completely new. She offered the company the same US$100,000 but instead of taking 10 percent of their business, she asked for 10 percent of their revenue until the capital investment was paid back plus 6 percent. There was no fixed payment timeline or compounding interest or personal guarantee. This became the basis for Clearco.

Adversity can be an opportunity to make the change you want to see

Florian Otto, co-founder and CEO of Cedar, came up with the idea for his business while on holiday with his wife in New York. She fainted unexpectedly and had to be taken to hospital. The medical bills and how they were asked to be paid became a nightmare; a flawed online payment online portal and the appearance of a debt collector for a bill that was never sent in the first place made Florian realise this was a broken system.

“My wife said she lost trust in the hospital because the billing experience was bad although the medical experience was extremely good,” noted Floran. “And it makes sense because trust is consistency over time and this whole experience was not consistent.”

And so Florian started Cedar with a mission to improve the hospital billing experience. He said consumers are used to a smooth experience booking a flight with Expedia or finding a movie to watch on Netflix, so why shouldn’t medical payments be just as easy.

Florian Otto, co-founder and CEO of Cedar, and Michele Romanow, co-founder & CEO of Clearco, were speaking at Web Summit 2021.

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Main image: Web Summit