SaaS Interviews with CEOs, Startups, Founders
741: Exited for $15m, Now Tackling Healthcare Patient Doctor Relationships
04 Aug 2017
Chapter 1: What led Todd Johnson to sell his first company for $15 million?
He sold his first company for 15 million bucks, a nice financial exit for him.
Now plunging back into the world, this time deciding to raise capital for the idea instead of bootstrapping, they've raised $21 million for HealthLoop, which is really playing in the patient engagement space and the communication between patient and doctors, a very special relationship founded in what he joined in 2013.
Again, they're based up there in San Francisco, currently serving about 70 doctors and organizations that pay on average, call it 120 grand per year. This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base.
You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000 unit sold mark. And I'm your host, Nathan Latka.
Chapter 2: How did Todd transition from Salar to HealthLoop?
This is episode 741. Coming up tomorrow morning, we're going to learn from Amanda Newman. She crowns real estate agents as mayors in cities, and she's grown from 700K to 6.4 million in ARR in under 12 months. How does she do it? Hello, everybody. My guest today is Todd Johnson. He's a serial healthcare information technology entrepreneur committed to building a great product team and company.
He's a proven track record in cultivating great ideas and great businesses while striving to build great company cultures and brands. Before his current company, Healthloop, Todd was the founder and CEO of Solar Inc., a Baltimore, Maryland-based provider of acute care physician charge capture and documentation solutions. Todd, are you ready to take us to the top?
Chapter 3: What is HealthLoop and how does it improve patient-doctor communication?
I sure am. How do you get excited about healthcare, man? I would be beating my head against the wall. I'd give up in like two seconds, and I'd run the other direction.
Look, healthcare makes up a sixth of our economy. It is an insanely complex, convoluted, and unbelievable industry. But at the core of it, everyone is a healthcare seeker, right? Everyone needs the healthcare delivery system at some point in their life. And also at the core of it, the healthcare delivery system has attracted people that really want to do good physicians, nurses.
And so you can find a lot of good opportunities to introduce change in the system that I think desperately needs it.
Chapter 4: What challenges does HealthLoop face in the healthcare market?
Yeah. So, okay. So before we talk about health loop, tell me about your, your first gig here is it's pronounced Salar, right? Okay. What was that? Obviously what did that company do and how'd you exit that?
Yeah, so I think the simple example is it was a company that began to replace some of the really mundane sort of paper processes inside of hospitals at the point of service with tablet OS, if you can remember what that was, and then ultimately sort of iPad and iPhone-based solutions to capture information at the bedside between the physician and the patient and automate a bunch of business back-end processes that are necessary to keep a hospital and a physician group running.
And I guess the second part of your question, how do you exit? You know, the race to digitize medicine is dominated by electronic medical record vendors and medical transcription vendors. And we sold that company to the nation's second largest medical transcription firm in 2011.
Chapter 5: How does HealthLoop's business model work?
For how much?
Yeah, it was a $15 million exit. That was a company that had no venture capital, so it was me and my partners and our employees. It was actually a nice exit.
That was your first kind of big financial event, and it was enough for you to really be good for life if you spent your money carefully.
Yeah. Yeah, depending if I can keep my spending and my wife's spending habits in check.
What's the most you spend money on personally per month right now?
You know, we live in Silicon Valley. Woo, rent, baby.
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Chapter 6: What is the customer acquisition cost for HealthLoop?
Yeah, it's a pretty astonishing market. I wish I was in commercial real estate in Silicon Valley.
Do you own your place or do you rent? No, we're renting. Why not buy it so it builds equity?
Well, I think there's a couple of things. You know, I'm an East Coaster. And after we sold our first company, my wife and I moved the family to Silicon Valley. And the transition there was rapid. So we didn't have time to really understand the market.
Chapter 7: How does HealthLoop ensure patient engagement and retention?
And so we started renting. And I guess over time, you get comfortable with where you are. And our kids were in school. And it just seems like it's the right answer for us. And I guess the second thing is that for those that live in Silicon Valley, they understand the madness of that market. It's just hard to get right with the price escalations there. Yeah.
Makes good sense. So let's fast forward now. So that exit you said was in what year again?
Chapter 8: What insights does Todd have about the future of healthcare technology?
2011. 2011, $15 million exit there. Good financial event for everyone. No venture capital. What year did you launch Healthloop in?
So Healthloop was actually initiated in 2009 by a physician in San Francisco. He's the founder. For a few years, it was more or less an idea on a piece of paper and a dream. The board found me and I joined in early 2013 to turn it from idea into company.
The founder's a brilliant guy, just a creative individual who had a really simple revelation, which is he had a patient that was otherwise pretty healthy. She was in her mid-60s, had pneumonia. He put her on an antibiotic, assumed everything would be fine because it usually is.
Then he got a call from the intensive care unit at Cal Pacific Medical Center in San Francisco seven days later, and this woman was almost dead. And she was on a ventilator and respiratory failure. And his first question is, why the hell didn't she call me? If she wasn't getting better and if this medicine wasn't working, she should have reached out.
And then his second really obvious observation was, shame on me, why didn't I call her? As her doctor, I should have been touching base and checking in to see how she was doing. And that was really the genesis of Health Loop. And when I met Jordan Schlain in late 2012... He's the guy who originally had the idea.
Yeah, he's just the physician founder, and he's still active and a board member and a wonderful friend. You know, this basic concept that we can do more with patients and check in to make sure they get better health, I think, is a universally good thing. Nobody disagrees with that.
But secondly, the market timing and our transition of the economy, the health care economy from a transactional system to a value-based system. We can talk a little bit more about that if you'd like. makes for good timing for innovations that can help achieve better quality healthcare at lower cost.
How do you make money though?
Yeah, so it's been an interesting evolution at HealthLoop. Just to back up on the technology, what it is is HealthLoop is a platform that automatically sends push notifications to patients after a new diagnosis or before and after a surgery to continuously sort of check in and give you a daily dose of here's what you need to know, do, and expect today.
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