SaaS Interviews with CEOs, Startups, Founders
900 He Helps Hospitals Make More Money By Connecting Data Sources, $1m+ ARR
10 Jan 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everybody. My guest today is Kyle Robertson.
JD, he's the founder and chief executive officer at NarrativeDX. He founded and was the CEO of another company called iCare, the first mobile crowdfunding platform for charitable causes and disaster relief.
Before entrepreneurship, he was an intellectual property attorney for a big firm up in Boston where he worked on cases for Intel, Cisco, and Facebook, as well as the landmark cell phone wars as defense counsel for Apple. Before attending Dell, Boston College Law School. Kyle works as a software engineer at National Instruments in Austin, Texas. Kyle, are you ready to take us to the top?
I am ready. All right, man. There's so many questions I want to ask you real quick. Since Puerto Rico is on everyone's mind and you have some experience in disaster relief, how would you solve that problem? I would get the money to them faster. I would make sure that the money is being used as efficiently as possible.
I think some of the key problems have been inefficiencies and lack of transparency in how the money gets from the donor to the actual intended recipient. That's a tough problem to solve. First company was in the nonprofit tech space. I didn't solve it. You're talking about iCare? Talking about iCare, that's right. It's a difficult problem to solve.
There's some cool companies out there like Buoy Up. It was just on Product Hunt the other day. They put a little donate. Whenever you see a story on the New York Times, you click a button, donate instantly. Things like that I think are helpful, but no silver bullets. Okay, so you don't like charity, so you start becoming a cold hard capitalist. You launched NarrativeDX. What's it do?
To be fair, I was a lawyer before, so I feel like I came back to the good side with the nonprofit tech, but fair question. So I'm not a healthcare guy, so I've learned quite a bit this time around. NarrativeDX is the AI platform for patient experience.
So we provide actionable insights from patient comments that help hospital leadership improve their patient experience, increase their referrals, and actually improve staff satisfaction.
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Chapter 2: How did Kyle Robertson transition from law to entrepreneurship?
So hospitals are surveyed to death. So it all started with this change on how hospitals are reimbursed. It's called HCAP surveys or CGCAPs. But basically, if you don't give a good patient experience, you get dinged with a reimbursement withholding from the So they administer these surveys, maybe one that you got when you left the hospital, on a piece of paper.
And it says, did your nurse listen to you? Who is they, though? What technology powers that? The hospital or what? They is legacy survey providers such as Press Ganey or National Research Corporation. So the government mandates that these surveys are administered with pen and paper or a phone system. No electronic surveying. So that's kind of a problem.
Where the market has gone on the outpatient side, that regulation isn't in place. And there are a lot of companies like Biveris that provide the tablets that you talk about. And we, since we don't do data collection, we partner with all of these companies and collect the data where it's at. So to answer your initial question, how does the hospital collect it? They try with these surveys.
The problem is people go talk on Yelp or Twitter or Facebook or a doctor review site or some demographics of patients write a hand letter to the grievance department. Nobody is looking at all of that. And that's what my company does. We monitor these comments wherever they come in so you don't have to have one focused thing.
It turns out if you want elderly patients or certain demographics, these government mandated surveys are perfect. But if you want people under 30, you need to go to social sources. The only way to understand it all is to get it wherever the patients provide the feedback. This is maybe the most unsexy, boring, frustrating space I could ever imagine. What the hell is wrong with you?
I saw an opportunity and I went for it. What opportunity did you see? So the opportunity was that hospitals are scary and that unhappy patients are really expensive for hospitals. So in fact, if you do a good job of actually a really great job of providing an exceptional patient experience, it's actually a 50% increase to your top line revenue. So there's real dollars at stake here.
Subsidized by the government. Well, that and 84% of patients look online at Yelp or a review site before they choose a provider. So there's actually quite a bit of dollars flowing and leakage from systems and referrals and things like that. Interesting. How do you make money? We make money by providing a software as a service solution to chief patient experience officers.
So the chief patient experience officer is a new role in the hospital that oversees quality patient feedback and the financial implications of that. So the person who cares, not just was your knee replacement done correctly, but what was the experience like? Were you there too many days where you transferred around when you didn't need to be? Were people rude to you? Those sorts of things.
We give them the ability to see exactly what patients are saying. So if you recall those HCAP surveys I mentioned earlier, they asked, did your nurse listen to you? The hospital gets back, yes, my nurse listened. What we tell the patient experience officer is actually your nurse was marked as not listening because they ran out of blankets on cold nights.
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Chapter 3: What is NarrativeDX and how does it benefit hospitals?
So you're right near there. Yep. Oh, very funny. Okay, good. So 20 people, 5.5 raised. And then how many doctors are you working with now, like paying customers? So we, I think of it as facilities, you know, like health systems are working with, but right now we're working with 15. Some great ones, including Christiana Care, the Cleveland Clinic, Cedars-Sinai Medical Center.
We've got a great deal that I can't get the details out yet, but we'll be going into 180 hospitals over the next three years. Very excited. So you're working with 15 customers and then obviously I don't multiply that by 250 per doctor per year because you have, that's not the 15 number because there's more doctors per each facility. That's correct. How many doctors per facility on average?
So that ranges too. Some of the bigger ones like Cedars-Sinai, they serve a 700 doctors. Um, some small ones survey 50 doctors. We have a 50 bed hospital that doesn't even have 50 doctors. So it goes all over the place. What's interesting is if you look at multiple data sources, you get enough data, even for a small set of doctors.
How many, if you just add up all the doctors across your 15 current customers, about how many is it? 1500. 1500. Okay.
Chapter 4: How does NarrativeDX capture patient feedback?
So about, okay. Interesting. So about that's a guess, but more than a thousand. Okay. Now, if I, if I do that math, so I take 15 places, right. Or if I just take, if I just take the 1500 times 250 per year, I mean, you guys are over 5.6 million in ARR.
Oh no, we, um, so when you, when we start out selling these things, we have, or, you know, early adopter clients have sort of special arrangements and then as you grow, um, so really the first enterprise deals are where it really kicked into overdrive. So not just, uh, 200 bed facility, but now multiple 200 bed facilities and a medical network and things like that.
Can you share with me last month, what was your monthly recurring revenue? I cannot, but I can tell you that we're going to do well over a million this year. No problem, man, that we're growing at three X year over year. Okay. But currently like you're, you're maybe by December, 2017, you'll hit that beautiful $88,000 per month mark, which is the million dollar AR, but you're not there yet.
Is that accurate? No, no. We'll be well beyond that by the end of the year. Okay, so when you say a million, you're not talking about a run rate. You're actually talking about cash collected this year. You will do over a million. That's correct. Okay, got it. Very cool. And in terms of growth, I mean, you said you're growing 3x year over year. Is that in terms of revenue?
That's in terms of revenue. That's right. So it's kind of interesting. Momentum builds up with these things. So we've had this strategy of get a pilot facility in a geography and use that to ā sell around the geography. It's gone very well for us. So the way that that sort of manifests is where we'd get one client, now we kind of get two or three on the direct sales front.
But the channel partnerships has really been what drives it. So we, through our two channel partnerships, we have access to about 50% of the market. So really on our end, it's How do you facilitate going through that? How do you show value in a short amount of time and then convince people to go from a pilot to a full install?
All sorts of new problems that we didn't have at the beginning of the business. It's exciting for me to figure out. As I'm traveling the world on planes, trains, and automobiles, you guys hear it, I'm closing loads of different deals, whether it's buying a company, closing a new account for getlatka.com, you name it, I've got to do it.
And part of my issue is signing documents while I'm on the road. So I just found this new tool. I'm using it pretty aggressively. It's called SignEasy. So you can get started for free at getsigneasy.com forward slash podcasts. you'll see contracts that I've signed there and boy, oh boy, are they big and they work and the app is so easy to use.
Get started today at getsigneasy.com forward slash podcast. Has anyone started paying and then stopped? Have you churned anybody yet? We have really low churn, but we have some people who like switch their survey vendor. And that's like a traumatic process.
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Chapter 5: What challenges do hospitals face in collecting patient data?
What's really low churn? So really low churn, like I think we've lost one client. Okay. In four years. So super low. Yeah. And what do you spend to acquire those customers? So all over the place. So we have a direct, it depends on which, you know, which vertical we're attacking. Let me change my question then, Kyle.
Last month, what did you spend on marketing and sales, including salaries and any paid marketing? probably $50,000. Okay. That's fair enough. So that includes any, any of your, your salaries there or any Google ads, Facebook, anything like that? Yeah. So we do, we do no advertising actually.
It's all organic thought leadership and marketing done by our chief patient experience officer, which focuses on things that we learned from data analysis, writing about that. So people can actually go put it into place. It's not like, you know, puff sort of stuff. It's actual real value stuff. So one new customer per month, is that accurate? Yeah, that's about right.
Okay, so I can average that out and say if you're spending 50 grand last month on and you added one customer, CAC's about 50 grand, something like that. That sounds fair. And so the channel partnership allows us to change all of this because now we've got captive audiences and the game switches to show value to the captive audience instead of market to get the eyeballs in front of you.
Yep, that makes good sense, man. Let's wrap up here with the famous Pfizer one-word answers. Number one, what's your favorite business book? How to Win Friends and Influence People by Dale Carnegie. That's a good one. Number two, is there a CEO you're following or studying right now? Yeah, Elon Musk, everybody would say that, I'm sure.
Number three, is there a favorite online tool you have, like a QD scheduling? LinkedIn, actually. LinkedIn. Number four, how many hours of sleep do you get every night? Nine. Nine? Yeah. That's really good, great. I got a bed at nine. And you also get nine hours? Yeah. And what's your situation? Married, single, you have kids? Single. Single, no kiddos that you know of, right? That's right.
And how old are you, Kyle? I'm 36 tomorrow. 36. Ooh, happy early birthday. Very cool. Thank you. And take us back 16 years. What do you wish your 20-year-old self knew? I wish I would have known that I'd be happier if I found a job that fulfills me rather than one that just pays a lot of money. There you guys have it.
Go after a job that is fulfilling, not one that just helps you make a lot of money. His company is called Narrative DX. He's on something. I don't know why the hell you'd go into this space unless you're crazy, but he's doing it. They're having some success. Launched the company back a few years ago in 2014.
Now, 20 employees here in Austin, Texas, again, helping connect these data sources to help hospitals really make more and save more money. 15 customers currently, 5.5 million raised, doing over 88,000 bucks per month in revenue. We'll do over a million in cash collected this year.
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Chapter 6: How does NarrativeDX help improve patient experience and hospital revenue?
Thank you so much, Kyle, for taking us to the top. Thank you.