Jeff Pepper experienced firsthand the isolation and boredom that can prevail in an eldercare facility when his father lived in one during the last years of his life.
After that experience, Pepper decided to retire from ServiceWare, the company he had founded, and launch ElderVision, a venture that would provide seniors in eldercare facilities with easy access to the Internet and a way to stay in touch with friends and family.
ElderVision raised $1.2 million in early 2000 and began to burn it up in development costs and an effort to fast-track the concept to be first to market. The company ran out of money by the end of the year, and Pepper kicked in $600,000 of his own cash.
In early 2001, ServiceWare’s stock, Pepper’s principal asset, took a dive, and his holdings dropped 60 percent in value. After a conference call with ElderVision’s advisory board, Pepper suspended operations.
With no cash, $1 million in debt and 45 investors holding worthless paper, Pepper decided to reboot the company, converting Eldercare from a total solution to an applications service provider.
“I felt if I walked away, I wouldn’t be able to look them in the eye again,” says Pepper.
Pepper and his team agreed to work for no salary to get things running again. They negotiated with vendors for a workable payment schedule. The software development was outsourced to offshore developers, and ElderVision revamped the product to allow nursing home operators to acquire it for $500 rather than the $100,000 the previous version would have cost.
They offer it under a licensing agreement for each resident user, who pays a modest membership fee and a monthly subscriber’s fee. ElderVision is now targeting large national players to purchase the service.
In retrospect, Pepper says, the race to get to market first was misguided. Caught up in the frenzy of the dot-com boom, ElderVision had its sights set on a fast ramping up of the company and a public offering that would make its investors a fast bundle. But getting to the finish line first proved extremely expensive and almost sank the company.
“We slowed it down,” says Pepper. “If you fast track, you burn money real fast.” How to reach: ElderVision, www.eldervision.net
