Miller and TelePharm Ride the Wave of a Perfect Storm to Entrepreneurial Success

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“I had no idea what I was doing then,” says Roby Miller with an unassuming smile, of the first time he met Mike Colwell in 2012. Miller, Founder of TelePharm Technologies, made his admission to Colwell, Executive Director of Entrepreneurial Initiatives for the Greater Des Moines Partnership, at the September edition of the Business Innovation Zone Start-up Stories. Miller’s timely appearance before a group of entrepreneurs and investors as well as interested parties comes on the heels of the announcement of TelePharm closing a Series A round of funding for $2.5 million from two prominent Iowa businessmen, John Pappajohn and Bruce Rastetter. Miller would recount the path from the business plan Colwell and he sketched out to a company which will soon employ upwards of 15 people with sizable funding and a significant number of clients in the pipeline awaiting the opportunity to purchase its software as a service product, during an hour long Q & A fielding questions from both Colwell and the attendees.

A Confluence and a Perfect Storm

Holding a degree in Entrepreneurial Studies from the University of Iowa and a Certification in Advanced Project Management from Stanford University, Miller was a solution in need of a problem when he found that problem in his own back yard, or rather that of his family. Miller’s family, in the pharmacy business in rural Iowa, was being forced to close several small town pharmacies as they were no longer profitable. While a few tele pharmacy solutions were on the market, they were cost prohibitive, and/or cumbersome in their delivery of service. To help the family forestall the closing of even more locations, Miller agreed to research options but found no viable solutions. “So, I sort of took it on as a weekend project,” recalls Miller, ultimately developing a prototype which became the first tele pharmacy implementation in Iowa. While the software was not scalable and far from what it would become, Miller’s search for a mission, and his families search for a solution had come together to found TelePharm Technologies. d come together to found TelePharm Technologies.

“There is a lot of churn in the pharmacy market right now with the average owner being 63 years old,” explained Miller, noting that 47 rural pharmacies closed in Iowa in just the past year as they could no longer remain viable or recruit pharmacists to small towns. “Somehow we managed to arrive during a perfect storm for tele pharmacies.”

TelePharm offers a remote verification and workflow application with a video conferencing solution for rural pharmacies to operate multiple locations with one pharmacist. The application enables a remote pharmacist to inspect and verify prescriptions at each pharmacy to ensure accurate dispensing filled by the local technicians.

“It’s a total game changer for pharmacies,” relates Miller, allowing them to stay open in sparsely populated rural communities as well as expand into the many locations which currently may have a clinic, but not a pharmacy.


Originally bootstrapped and a recipient of 2012 Demonstration Fund dollars, Miller commented on the differences between seed funding and Series A investors. “In the seed rounds the investors were a little more hands on, they had a greater personal interest in the product. In series A discussions however it was much more intense and official. They are very serious meetings,” he observed, adding that he was helped immensely by J.D. Geneser of LWBJ Financial and a mainstay of the Central Iowa entrepreneurial investing community. “It helped to have a gray hair in the room on your side,” remarked Miller to the delight of Colwell and the other elder statesman in attendance. Miller hopes that any future funding needs can be secured through the banking process.

Sales Process and Cycle

“I wouldn’t say I developed everything,” said Miller responding to a question about his sales process. “It’s more like I made up everything.” Pointing to trade shows and emerging partnerships with both pharmaceutical suppliers and the makers of pharmacy management systems as well as social media, Miller admits that the sales process is evolving and that the solution they offer is at this point so unique more sales calls are inbound rather than outbound. “The cycle is all over the place ranging from a few weeks to a year and a half. As we get further down the implementation it will grow shorter,” he expects, noting that they have 40 clients awaiting implementation at the moment.

Scalability, Economic Growth and Opportunities

Unlike the prototype, the TelePharm software of today is highly scalable meaning not only can existing pharmacies on the verge of failure be saved by linkage to a partner business in a larger community, but new businesses can be added. While some early naysayers saw the software as eliminating jobs, the truth is that by saving pharmacies that were destined to close and making possible new pharmacies the software is likely to become a job creator.

“The cost of opening a pharmacy is really not that great,” related Miller, explaining that pharma suppliers will front the initial inventory, leaving the cost of space and the less expensive technicians. TelePharm makes possible the establishment of pharmacies in locations which were previously considered cost prohibitive, for instance clinics currently without pharmacies. Additionally clinics can utilize the counseling component to offer a consultation with a pharmacist at the clinic as a value add to the clinic services.

“It seems like there are so many different things that we can do from this platform,” says Miller of several future opportunities made possible by the data being collected. Keeping his developers focused on the tasks at hand is his immediate challenge, but he knows there is a richness of opportunity in the near future. 

Exit Strategy

Asked if he had an exit strategy, it became clear that Miller enjoyed the team he had put together and the work they were doing far too much for exit to be on his mind. “I have no idea,” he replied. “I’m doing what I want to do.”

And after all, isn’t that one of the enticements of entrepreneurism.

AJ Nelson Speaks of clusterFlunk and Other Fun Things to Say

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“I guess it all started with some self-realization.  We didn’t pay attention in class. So there must be a tool out there that can help us we thought,” explained AJ Nelson, Co-Founder and CEO of clusterFlunk. “We quickly found there wasn’t a social network built around the classroom and connecting people by that thread, and that is where clusterFlunk came from,” he said, explaining, that like many start-ups, this social networking and virtual study group platform was born not of an idea, but in response to a need.

Nelson, the August guest of Executive Director Mike Colwell at the Business Innovation Zone’s Start-up Stories, covered a variety of subjects as he shared the experiences he and his partner Joe Dallago have accrued since launching a beta version of the site at the University of Iowa in January 2013 and growing University of Iowa student participation to the 75% level while also expanding to 14 more universities this year.

Described as “the way our generation does education,” clusterFlunk is an on-line social networking site built around university classes and intended to remove the social barrier that naturally exists in the lecture hall environment, encouraging students to share notes and work together in a virtual study group. In response to questions from both Colwell and a room of attendees which included a number of local tech entrepreneurs, investors, and entrepreneurial community supporters, Nelson touched on some common themes.


“It seems like fundraising in this area is getting much more straightforward,” observed Colwell, noting the success of Igor, TelePharm and Men’s Style Lab who have all recently closed rounds. Nelson concurred commenting on several rounds of funding successfully achieved by this bootstrapped start-up and culminating in the July announcement of $1 million in funding from Lightbank, a venture capital firm founded by the principals of Groupon.

Revealing the secret to the clusterFlunk approach Nelson shared, “We figured out that it is not about business plans, presentations or introductions and connections; it’s about making the correct product and the right people will come to you.” Nelson advocates the creation of relationships well before the need for fundraising, noting that the best time to meet people is when you don’t need money from them. “You shouldn’t be looking for money, money isn’t going to help you, it’s the people and the product that can take you to the next level that is going to help you,” shares this entrepreneur who argues the money will find you when the product is ready.


Sharing advice given by Dwolla Founder and early clusterFlunk investor Ben Milne, Nelson discouraged scaling for the purpose of scaling. “There is no reason to scale when you haven’t gained traction or hit a tipping point in your first market,” commented Nelson, explaining that they have developed a recipe for scaling that requires 10% plus of each new university to register in the first semester. 


Being a social media entity within the unique confines of a college community, clusterFlunk has been successful at growth by eschewing virtually all traditional marketing and utilizing what are becoming the new traditional social media venues. Twitter, Facebook, e-mail and choosing a product name that piques mainstream media interest have all helped clusterFlunk grow virally. Nelson offered his own formula for growth, G=c+op-mm, or growth equals content plus other people minus marketing messages, arguing that your users voices are much stronger than any marketing message.

“These are the things companies don’t talk about,” said Nelson with a smile as he shared a number of activities that have helped create buzz and garner attention both in the press and the on-line community. “We have always acted a lot bigger than we are,” he chuckled, citing the time he tweeted an Iowa City CEO that they could not meet until their engineering team returned from Palo Alto, not mentioning that Joe was the whole of the engineering team. The tweet spread, and clusterFlunk’s cred grew.

What no one tells you

As they grow and expand, opening offices in Chicago, clusterFlunk is hiring and experiencing the less glamorous side of start-up success. “It’s the stuff that no one tells you about that is the hardest, like hiring and management.You think that the money is the hard part and once you have that everything will fall into place, but that’s not true at all,” he relates. He and Colwell both underscored that while it is vogue in start-ups to disdain structure, when you start to grow, you realize its importance.

Revenue models

With angel and venture capital at their back from a variety of sources, the discussion eventually turns to potential revenue models and Nelson unabashedly admits he has no idea how the revenue will flow when the time comes. While the answer on the surface may seem flippant the thought process behind it is not. Quoting the philosophy of The Social+Capital Partnership, a tech funding partnership in Palo Alto, clusterFlunk is focused on “Doing social good first and the revenue will follow,” building a solid value proposition for its users and growing its user base is pre-requisite to chasing revenue.

Nelson does observe however that while he has no idea what the final model will entail, they have given it much thought to the possibilities and are not unprepared for the day when that becomes an issue; but that day is still in the distance as they capture and cultivate the most highly prized consumer demographic.

While it may be true that Nelson and his partner didn’t pay attention class at the University, it’s equally clear that they’ve gotten quite an education while there!

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