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In the last two years we focused on our startup project, GdziePoLek.pl (Where I Get My Meds), and managed to turn it into a recognized player on the pharmaceutical market. Just before Christmas we succeeded in our first fund raising to accelerate growth and expansion to other markets.

Goldenberry started as a consulting company in 2010 and soon after that found itself working in the fast developing private healthcare market, executing several business and technology projects for largest medical operators.

Goldenberry team in January 2017

We wanted to do more in this market and in mid-2014 we started to develop our first stand-alone initiative, with a simple idea: to help patients find their medicines in brick and mortar pharmacies. Creating a new technology company in an unexplored and heavily regulated sector turned out to be most difficult challenge we ever took.

Getting critical mass of patients and pharmacies

After creating the first release of the application, we came to understand why industry old timers were betting against our initiative: we had to convince traditional pharmacies to use the new technology without, initially, patient traffic to make it worthwhile for them, while asking them to make an effort and accept legal risks. We had never worked with pharmacies before, so we started exploring their community, planning to convince first participants within a month.

Couple of months passed with no measurable progress, and it became clear that the challenge required involvement of everyone in the team and every business relation that could be leveraged. We succeeded in getting about a dozen pharmacies for launch only in May 2015, after 9 months of development work. Special thanks here go to Medicover, which was very helpful in this stage of the project.

Now we had to prove that there are patients who find our product to be useful. Also in this area, having no hands-on earlier experience with online marketing, we had no initial advantage and had to explore starting from basics.

However, we were encouraged by the fact that right after we opened for business, patients reached out to us to thank for helping them to find critical medicines, even though we had just a handful of pharmacies available. Because of the feedback from patients, which we receive constantly, we never doubted that our work is worthwhile.

Despite not having budget to spend on marketing, our traffic grew organically along with the product, which we improve on continuously. At the end of 2016 we exceeded the level of 200,000 visits monthly.

Consulting market changes

At the same time that we were making significant investment in our startup, the consulting market, and our niche in particular, took a bad turn on a number of levels.

Industries of some of our traditional clients were hit hard, especially securities brokers, insurers and banks.

Other clients, in healthcare, turned towards in-house resources and purchases driven by the lowest price, from body shops offering loosely integrated contractors.

Goldenberry’s model of maintaining integrated, experienced team on full time employment, requiring pricing premium, started to look increasingly untenable. As other small companies around us folded, Goldenberry became the only remaining independent management practice around.

Core team

Reality of working on a startup everyone was betting against, especially in its actual target industry, and losing ground in the consulting market after previous strong growth did not go unnoticed by the team members.

Consultants who joined us as experienced hires during previous peak were gradually leaving, looking for perceived stability of larger companies, with more reassuring strategies.

Our core team however, often hired before graduation and experienced in Goldenberry during at least one previous up and down cycle, was less impressed.

Our first fund raising

Entering 2016 with product which demonstrated signs of traction with patients, even though not generating revenues, we decided to raise the first external financing round.

Not having raised any external financing before, our expectations were driven by standards we could learn from Western markets. This turned out to be very remote from the realities of fund raising in Poland.

Simplified contract templates for seed rounds (like SAFE) were not applicable in Poland and local equivalents did not exist. Of a handful of VC funds in Poland, only some had experience with marketplace type of startups, which are the most difficult to develop; most were looking to invest in much simpler SaaS projects. Some funds did not like the organisational structure, where Goldenberry represents all founders as a single entity. Valuation and size of the round was divergent from expectations given our development stage, which was pre-revenue.

We developed our own investment agreement to have all the features required, including ability to raise the round over a period of time. We focused on private investors outside the local startup market. After spending good part of the year on the process, the first investors transferred their contributions just before Christmas. At around the same time, GdziePoLek started to generate revenues.

Future

We are excited with the momentum GdziePoLek has and are looking forward to increasing the number of pharmacies and patients that we are serving, as well as to exploring other markets.

On the consulting side, to which we can direct less resources than before due to startup development, our position is better than ever due to having a unique e-commerce asset and experience accrued while building it. We did some of the most interesting projects last year, all of them sponsored on owner or board member level.

To the extent our duties allow, we also plan to help other startups by sharing knowledge and helping them to create relationships with relevant corporate players that we have relations with.

 

References:

• GdziePoLek web site

 

Related previous news:

• Looking back at 2014
• Looking back at 2013
• Looking back at 2012
• Looking back at 2011
• Looking back at 2010