His Banking Industry Software Never Caught On, So Bill Randle is Now Targeting the Health Care Market

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The Decision Attempts to raise more capital failed. EDS, though, came through with more business than Randle had been expecting, providing Synoran with a little breathing room. Still, Randle felt he had no choice but to reduce spending. He slashed two-thirds of the remaining Synoran work force last September. This left a skeleton crew of just 10 to maintain contract obligations. Randle and the board felt that the focus on selling to banks and other financial institutions was no longer viable. "The feedback we got from the market was that they didn't like our product as much as we had hoped," he says.

In a radical shift, Randle decided to turn to the health care sector for new customers. The logic was simple. Large health care institutions face tech problems that are similar to those of banks. They deal with a mass of incompatible computer networks among insurance companies, testing labs, third-party plan administrators, and others, all of which must function in a highly secure environment. Synoran's technology, when adapted to health care, could also help customers conform with government compliance rules. "We see that 18 percent of total GDP is spent on health care," says Randle. "Out of that, about $800 billion is spent through Medicaid and Medicare." He believes Synoran's products can not only provide cost savings to medical customers but also reduce fraud and waste.

To increase its chances of selling to big government insurance networks and hospitals, Synoran retained George Vorys, a former Medicaid administrator for the state of Ohio and a well-connected medical consultant. So far, Synoran has had no takers, but contracts in the health care sector can take months or even years to work out. That's cutting it close, because Synoran's backlog of business with EDS gives Synoran only another year or so of life. Randle is hoping that EDS, which has a strong health care IT practice, will help peddle Synoran's medical offerings. But in this sector, just as in banking, Synoran and EDS face stiff competition. Every major IT consulting company is working to get a piece of the business created by the rapid digitization of the health care system.

At the same time, Synoran is trying to sell its secure document software to consultants like Accenture and large Web players such as Google and Yahoo. Consumers and businesses would pay either a subscription (in the neighborhood of $20 a month per user) or a per-document fee to use the network. "The market could be huge, in the billions of dollars," says Orkis. "Our product is something that didn't exist three or four years ago."

Still, such fee-based consumer and small-business Internet offerings have so far been a hard sell. What's more, a key question Randle needs to address is to what degree Synoran, with its skeleton staff, should be splitting its focus in its attempt to succeed in two highly competitive yet very different markets. Randle and Orkis are keeping their fingers crossed that their offerings are impressive enough to reel in customers, because, with just a handful of staff and limited funds, they no longer have the resources to develop new products or mount big marketing efforts.

Will the customers come through this time around? "The timing is finally right," says Randle. "We've got a great shot." That may be wishful thinking. But Randle figures he's still got a year left to finally breathe new life into a business most other entrepreneurs would have long ago given up for dead.

The Experts Weigh In

Get real

Bill Randle is a terrific example of what it takes to be a CEO of an emerging technology company. You have to passionately believe in your business and somehow manage through the ups and downs. However, the ultimate challenge for CEOs in this situation is to retain objectivity on the soundness of the business model and prospects for providing shareholders an attractive return in a reasonable period of time. Eight years is a long time with no return and no clear sign of return in sight.

Anil Arora
CEO
Yodlee
Redwood City, California

Stick with banking

With a skeleton staff and no budget for marketing, splitting the company's focus is a sure-fire recipe for failure. Synoran's core competency lies in banking, and that is also where Randle's business connections are. Synoran should focus on smaller banks, savings and loans, e-banks, and online financial service providers. Randle should leverage EDS and Huntington as references and turn all of the company on selling. As for the remaining products, mothball them. What's needed here is laser focus and relentless execution.

Christine Crandell
VP, Corporate Marketing
Ariba
Sunnyvale, California

Identify key risks

The question shouldn't be about focus versus diversification. It should be whether the CEO has identified all key risk factors and has a plan to avoid them. It's not only about identifying growth markets. That's pretty easy to do. That said, the company still exists, while many similar start-ups have failed. However, it's doubtful the company has generated the type of return the company and investors initially envisioned. So, is success survival, or is success a blockbuster IPO?

Dave Couture
Principal
Deloitte Consulting
San Jose, California

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