MediMOM: Can This Wireless Nurse Succeed?

An HIV-positive entrepreneur's text-messaging business reminds other chronically ill patients to take their medication

In the early 1990s, Joe Nicholson lived the work-till-you-drop lifestyle of so many entrepreneurs: He'd founded two financial software companies and was in the midst of launching a third. With offices and homes in Boston, New York, Philadelphia, and London, he traveled constantly. And his personal life was complicated, too: Nicholson had tested positive for the virus that causes AIDS in the mid-1980s, and he'd begun taking drugs to keep the disease at bay. The problem was, his hectic schedule made it tough to remember his pills, particularly the ones at midday.

So Nicholson devised a solution: He asked an employee to write a computer program that would send the message "1234" to his pager three times a day. "Then I could quietly and discreetly go take my meds," says the now 43-year-old Nicholson. "I didn't have to worry about missing them." Not only did the reminder system keep Nicholson's daily doses on track, it planted the seed for a startup that would combine his interests in the Internet and wireless technology with his desire to improve services for people with AIDS.

Today, the paging concept is at the heart of Reminders On-Line, a nine-employee New York City company that offers one-way and two-way text messaging for individuals with AIDS, diabetes, asthma, and other chronic diseases. Marketed under the brand name MediMOM, the services are being tested in 30 programs across the country, each involving between 50 and 100 patients. The goal is for drug companies, pharmacies, managed-care plans, and other health-care businesses to realize a financial benefit -- either in the form of more prescriptions or lower patient-care costs -- and underwrite the services permanently.


  Can MediMOM succeed? Given the tough environment for early-stage companies these days, it's too early to tell. What's interesting, though, is the path MediMOM has taken thus far. Instead of rushing to secure loads of cash during the dot-com heyday, Nicholson relied on angel investors while researching his target market, revising his business model, and developing a low-budget marketing strategy. "We didn't get caught up in the hoopla and say, 'In six months we'll go public and all be rich,'" he says.

To date, Nicholson has spent about $4 million developing a platform to deliver messages via wireless technology to alphanumeric pagers, digital phones, or PDAs, along with a Web site on which users schedule reminders. Now he's starting a search for $7 million to $10 million in venture capital -- money that would be used to beef up his company's marketing staff. Although Nicholson expects to get "hammered on valuations," he's hoping the earlier groundwork will pay off. "We can make a case to venture capitalists that what they're financing is the time to be successful -- not the time to find out if we can be successful," he says.

Indeed, the business model Nicholson is pitching differs considerably from the one he first envisioned. So, too, is his involvement with the outfit. After selling his second software company, Wall Street Concepts, in 1997, Nicholson planned to retire to Ft. Lauderdale. It wasn't until 1999, at the urging of his own physician, that he began putting together a plan for Reminders On-Line. Not surprisingly, he pictured it serving individuals like himself: Upper-middle-class gay men who are HIV-positive. He also thought he'd hire a CEO or sell the company within six months, then settle back into early retirement and philanthropic activities.


  But once he began to examine the potential market more closely, Nicholson saw what health-care workers have known for years: the face of AIDS today is far more diverse, both racially and economically, than when Nicholson first tested positive in the mid-1980s. Indeed, the fastest growing rate of infection today is among African-American youths from 15 to 22. As a result, he realized his initial strategy of marketing MediMOM directly to consumers wouldn't work. To do so, would have required a broader, far more costly marketing campaign than he had envisioned. "We didn't want to go out and raise hundreds of millions of dollars," he explains. So Nicholson dropped the consumer focus in favor of pursuing health-care companies as customers. And he broadened the target market beyond AIDS to include other chronic diseases, such as diabetes, that require patients to monitor their health and take medications on a regular basis. The new pitch is two-fold: MediMOM provides a tool to help sell more prescriptions, and it offers a way to communicate with chronically ill patients and collect research data at a lower cost.

While those strategies remain far from proven, Reminders On-Line is finding some success. The company is poised to sign contracts with six disease-management and clinical-research companies. By yearend, Nicholson predicts, more than 30,000 patients will be using MediMOM -- though he won't reveal the number of current subscribers or how many companies are paying for the service.


  What's more, a recent study funded by the company found that MediMOM did help patients stick to their medication schedules. The study involved 36 AIDS patients at the Fenway Community Health Center in Boston, half of whom were given the MediMOM reminders for a two-week period. The result? Those with the pagers took their drugs correctly 69% of the time, vs. 51% for the other group, says Steven Safren, a psychologist and researcher at the clinic. The text messages "take something really complex and make it doable," says Safren, adding that some AIDS patients must take as many as 45 pills a day -- some with food and others on an empty stomach.

Still, Reminders On-Line faces some tough challenges. For one thing, MediMOM isn't the only medication-reminder service using pagers and cell phones. Competitors include MedReminder in Portland, Ore., and MedPrompt in Spring, Tex., though MediMOM's basic one-way monthly service, which costs $4.95 wholesale or $9.95 for individuals, is cheaper than both. (Pagers provided by MediMOM cost an extra $7.95 a month.)

Another difficulty is the slow pace at which drug companies and other health-care businesses make decisions. It can take six months, says Nicholson, to sign a contract. But the biggest hurdle may be the perception that MediMOM is too complicated and cumbersome for many AIDS patients, who must often struggle to maintain adequate housing and health care while living on fixed incomes. Reminders can be scheduled only through MediMOM's Web site, though a business that buys subscriptions in bulk can opt to pay extra for a toll-free service so that patients update their reminder schedules by fax or phone.


  One drug company, Agouron Pharmaceuticals Inc., found little enthusiasm for the service among AIDS patients and the doctors treating them. The company purchased 1,000 subscriptions last August, hoping it would boost prescriptions of its AIDS drug, Rescriptor. Today, only a handful are being used. "If [AIDS patients] are so impoverished they don't have food and clothing and housing, how are they going to consider adhering to a complicated drug regimen, whether some pager is going off or not," says Kim Simon, a spokesman for Agouron, a subsidiary of Pfizer.

Nicholson's response: "We can't be all things to all people, so we chose a huge market that's growing every day, even though we knew we'd be leaving some people out." In order to offer the service at such a low cost, he adds, MediMOM must take advantage of the efficiencies offered by the Internet and wireless devices.

If Reminders On-Line can secure venture capital in the next few months and expand its marketing staff, Nicholson expects revenues for 2001 to hit $4 million, with the company turning a profit in 2002. If that happens, MediMOM will also present a successful case study in the marriage of New Economy technology with Old Economy business basics. Maybe Nicholson will then be able to hire that CEO and enjoy the Florida sun.

By Julie Fields in New York

Edited by Robin J. Phillips

Before it's here, it's on the Bloomberg Terminal.