10 Reasons Doctors Make Great Entrepreneurs

Conventional wisdom has it that “doctors are lousy businesspeople,” and they should just take care of patients and leave the business stuff to someone else. Part of the reason is that doctors themselves have been brainwashed into believing the myth.

In my opinion, these beliefs are no longer sustainable if doctors are to thrive in the new US healthcare environment. As someone who works with physician entrepreneurs, I know that doctors have the potential to make great entrepreneurs. Admittedly, only a small percentage of the roughly 900,000 actively practicing physicians in the US have an entrepreneurial mindset and even fewer are innovators. However, it only takes a few innovators to change the system and add substantial value.

When people discuss startups they tend to talk about inspiration and creativity. This leads founders to believe they can imagineer a solution to any problem they’re trying to solve. In reality, executing a startup is a balance between creativity/intuition/instinct and the scientific method: hypothesize > a/b test > conclude > repeat.

Inspiration will help you find a problem to solve. Creativity will allow you to brainstorm potential solutions to that problem. The scientific method will guide you toward which of these solutions will actually solve your customer’s problem. That's one of the reasons doctors have the potential to make great entrepreneurs.

This is not the only myth about physician entrepreneurs. Here are 10 more.

Here are 10 reasons why doctors have the potential to be terrific entrepreneurs:

1. The know how to build clinical judgment. The process is the same for business. Learning from mistakes is called experience. Learning from experience is called clinical judgment. It’s the same with entrepreneurship. Very few entrepreneurs have not had their share of mistakes of failed startups. The successful ones learn from those mistakes and have judgment about pursuing the next opportunity.

2. Entrepreneurship is about research and experimenting, something doctors do well. Doctors do this every day, day in and day out, with their patients.

 The evidence strongly suggests that startups should engage in experimentation along the lines pioneered by the Lean Startup Method. A group of Italian academics conducted a gold-standard randomized controlled experiment on 116 startups. Half of them were taught how to do rigorous experiments on their startup ideas, generating hypotheses and testing them systematically. The others were taught to do experiments but were not shown how to use the scientific method of hypothesis generation. The groups that acted like scientists did much better — pivoting more, avoiding problems, and ultimately generating higher revenues than the control group. Rigorous experimentation is clearly important to startup success.

3. Doctors are used to dealing with uncertainty. Like businesspeople, doctors make decisions with incomplete information. Sometimes they have to do things based on their gut. In fact, they do so more than they would like to admit. Only about 25-35% of medical decisions are based on scientific evidence.

4. Doctors have a bias to action. While obtaining a patient’s history, doing physical exams and tests are a routine part of care, they are all a means toward an end of solving or relieving the patient’s problem. Doctors are trained, admittedly sometimes unsuccessfully, to not do things that won’t make a difference in how they treat patients.

5. Doctors are excellent at pattern recognition. Doctors basically do three things: They make decisions, communicate/educate, and do procedures. Decision-making, whether in dermatology, pathology or multiple other specialties, relies on pattern recognition skills.

6. Doctors know how to question, observe, connect and associate: core entrepreneurial skills. In The Innovators DNA, Christensen et al. noted the core skills of innovators are: questioning, associating, connecting, experimenting and observing. Doctors have them all.

7. Doctors know how to assess risk and make on the spot cost-benefit decisions. Every medical decision is based on the risks versus the benefits.

8. Doctors can fulfill core entrepreneurial roles. They can be technopreneurs, market perceivers, managers, and/or investors.

9. Doctors have access to patients and understand clinical issues more than anyone else. They live in a world of market opportunity.

10. Doctors have the courage to know when something won’t work or should be ended. Doctors deal with such circumstances on a routine basis when dealing with patient’s treatment.

Entrepreneurship is the pursuit of opportunity under conditions of uncertainty. The goal is to create user-defined value through the deployment of innovation using a VAST business model.

In addition, doctors throughout the world assume many different entrepreneurial roles: small business owner, technopreneur, intrapreneur as an employed physician, investor, service provider, edupreneurs, social entrepreneur and others.

Consequently, there are many ways for doctors to contribute to the innovation value chain other than starting and/or running a company, for example, consulting, advising, testing, connecting, product development and assisting with dissemination and implementation. However, since there is no CMO school and the medical education establishment has craniorectal inversion syndrome, doctors are finding other ways to get the knowledge, skills, abilities and competencies they need to practice physician entrepreneurship and add value.

If you think you have what it takes but don't know what to do next, here are some suggestions to get you to the next step.

So, the next time someone raises their eyebrows when you tell them you are a physician entrepreneur, tell them you are not an immoral profiteer, that they should have nothing to fear, that doctors are the solution not the problem and then hand them a business card with this list on the back of it. Maybe they’ll offer to invest in your idea.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs