This Entrepreneur Proved That Startups Can Reinvent Themselves When Necessary – Forbes
Chris Riley, Co-founder of USA Rx
Starting a business isn’t easy, and the odds of success are always against you. Entrepreneur Chris Riley learned this the hard way when his prescription discount startup, USA Rx, came close to failure.
Rather than watch his startup fall apart, Chris led it through a transformation into a completely different business model and succeeded beyond expectations. Here’s the story of how USA Rx went from the verge of failure to a thriving enterprise in just under two years. It’s an excellent example of why entrepreneurs shouldn’t be afraid to reinvent their startups when the need arises.
Chris launched USA Rx back in 2012. It began operations as a direct-mail prescription discount program, hoping to capture a slice of what was then a $300 billion market. It was a sound business idea, as prescription discount cards were already a hit with consumers.
But by late 2019, it was clear that USA Rx wasn’t achieving its potential market penetration through its original distribution model of direct mailers and doctors offices. According to Chris, the situation was grim. “We were struggling to increase our customer count, and we weren’t attracting much traffic to the company’s web portal. We had one thousand monthly visitors to the site in search traffic in Q4 2019. We just weren’t getting noticed in what had fast become a crowded market.”
Chris wasn’t willing to throw it in the towel. He and his team went to work on a plan to reinvent the business in a bid for survival.
They decided to completely shift focus and pivot from the direct-mail discount card program and transform USA Rx into a digital health marketplace. The idea was to become the “Kayak of Medications,” showing consumers transparent pricing for online, mail-order, and retail options. However, as the transformation got underway, the situation took a turn for the worse. The COVID-19 pandemic began disrupting the US economy, crippling what remained of USA Rx’s legacy business.
Chris explains, “We had literally everything thrown at us trying to kill the business during this time. First came a global pandemic that brought revenue down 95% in the blink of an eye. Then a costly clawback judgment from our most important pharmacy benefit management partner. It seemed like the whole world was doing everything it could to beat us down.”
Chris and his team refused to give up. “Needless to say, it was a very grim time for the company. For me personally it was a nightmare with little hope or control. The company at the time desperately needed funding and a new management that believed in the pivot the team was executing on.”
As the prior business model wound down, the company’s revenue went with it. “There were months of no pay. That was a tough few months. I actually ended up moving down to Florida from New York because of it,” says Chris.
By April of 2021, the team’s hard work had started to pay off. A new audience began flocking to the new digital healthcare marketplace. It now attracts over 152,000 visitors each month. According to Chris, the company has registered on average 86% month-over-month revenue growth for each month in the second quarter of 2021, beating any other quarter since the company’s inception.
As the transformation of the digital health marketplace continues to improve the top and bottom line of the business, its profile among the investor community started to gain traction. “We received a small new round of funding for the new USA Rx, and for the first time ever, we actually have inbound calls and emails from investors looking to invest in our business. That never happened with the old business,” Chris notes.
The influx of capital is making it possible for the business to continue on its growth trajectory, and even to launch a whole new product. “We are actually about to roll out our first direct-to-consumer health product specific to allergy medications, called Breathe. We plan to build more opportunities like this in the future as we continue to grow our audience via search and find niches where we think we can vertically integrate and win.”
Chris’s journey with USA Rx over the past two years serves as a reminder that entrepreneurs can’t be married to their business plans. The reality is that very few startups go from the planning stage to success without some tweaks in between.
It’s not as uncommon as it may seem. Amazon started its life as a bookseller. Now it owns eCommerce. American Express used to deliver mail before it transformed into the massive financial services giant we know today. Imagine what the world would be like if companies like these didn’t evolve when the market demanded it.
Any startup can reinvent itself when necessary. It may not be easy, and it may not happen overnight, but it’s always an option. “We still have a long way to go, but we have made it past the hard times with a lot of change and are on a pathway to future success. Revenues this year have taken off,” explains Chris about USA Rx’s current outlook.
For a business that was in real danger of collapse two years ago, that’s a powerful endorsement of how startups can find a way to persevere.