SaaS Interviews with CEOs, Startups, Founders
Doctor Turns SaaS Founder, $0 to $1m Revenue Instantly with OroHealth Software
04 Feb 2022
Chapter 1: What is the main topic discussed in this episode?
Okay. So you raise a $3 million seed round. Most people are selling 10% to 20% of the business in those rounds. Did you do the same? It was around there? Around there, yes. Okay. So call it like $20 to $30 million post-money valuation, something like that. We have a... So our valuation is at $10 million pre-money. Okay.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Dr. Bourgeau.
She obtained her Bachelor of Science degree from McGill University before returning to Ontario to study at the Northern Ontario School of Medicine. In 2011, she received her doctorate in medicine and then completed a five-year specialization in dermatology at Laval University. She co-founded Oral Health in 2020 to help with asynchronous telemedicine specializing in dermatology.
Dr. Bourgeau, you ready to take us to the top? Yes, definitely. Thanks for the invitation. You bet. Okay. So how does a doctor learn to code to build a SaaS tool? So the doctor doesn't learn to code. The doctor has an idea and then hires coders to build a SaaS tool, basically. Makes a lot of sense.
Now, there's a lot of doctors that have these great ideas and they never know how to motivate, lead, or find someone to actually write the code. Tell me about how you got your MVP built. Yeah, so what happened was that in 2017, one of my co-founders, Dr. Daré, who's another dermatologist, him and his brother were having these discussions about how to increase access for patients for dermatology.
So, you know, they had this idea. We decided to bring it to the forefront and use technology to increase access for patients. So we hired a small firm of developers in Quebec City. And we presented them with our idea and we worked, you know, for a few months to develop our MVP, which is called Dermago.ca. Interesting. Okay.
Can I ask you how much you paid the dev shop to get the MVP off the ground? How much did we pay? We probably paid about $20,000 to $30,000 out of pocket just to get this MVP out. Yeah. And what year was that? 2017. Okay. 2017. Okay, very cool. And then talk to me about today, who's buying this technology and about how much are they paying per month to use it? by seeing patients.
And we slowly but surely increased the amount of volume of patients on our site. And at the same time, we had other people, other physicians, other clinics saying, hey, we'd like to have a tool, a similar white label tool for our clinics, for our specialties. And when we created this MVP, there was no plug and play, sort of like the Shopify of medicine that you could just, you know,
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Chapter 2: How did Dr. Bourgeau transition from medicine to tech entrepreneurship?
have a clinic online within a few days based on your image, based on your colors, based on your specialty. So we decided to create Oral Health because of the success of Dermago to provide this possibility for other physicians and other healthcare professionals. That's who you're selling to?
Yeah, so what we did is we took all the RIP from Dermago and decided to create the best dermatology platform to be able to offer it in different jurisdictions, different countries for dermatology. But at the same time, concentrate on building a scalable platform that is white label and can be used by any other specialty if they want to create their own online clinic.
And what do these online clinics pay to use the technology per month on average? So we were modelizing it actually. So we're still in the, you know, we just raised a seed round to make this tech. So we, you know, rebuilt the whole tech and we just released our new platform at the end of November. So we've migrated our old Dermago into this new platform and
And now we're starting our commercialization plan to go and have new Dermagos across the world. Basically, we do have a few announcements to make in the new year and also to start our white label. And so, doctor, what was the size of the seed round? Three million. 3 million. Okay. Wonderful. And is it fair to say that you guys are pre-revenue in terms of the SAS model oral health? Okay.
I would say our major client right now is Dermago. And we also launched another clinic, which is called Tontest Poincea, which is a virtual STI clinic. Okay. So the Dermago product, which really is seeing patients, making money off seeing patients, how much revenue did that do last year to help support the new software? We make about $150,000 per month. Okay, got it. So that's nice scale.
Now, did the investors respect that when you went out for the seed round? Did they give you credit for selling that much, even though it wasn't SaaS? So what happened is that, you know, because Dermago is a medical clinic, so Dermago is a medical clinic that uses the technology of Oro. So we do have an MSLA, a master license service agreement between our MVP and our new tech company.
Separate companies though. Separate companies. And so Dermago is definitely the biggest client of Oro Health as of now. How much does Dermago pay Oro Health? 50% of its revenues. Oh, wow. So 70 grand a month, 75,000 bucks a month already on Aura Health. Yeah. So what we are, our modelization for, you know, dermatology and specialty clinics is that, you know, I mean, physicians are busy.
They're busy seeing patients and they need to see patients. That's, you know, that's what they do, right? They don't do coding, like you said, and they don't also do Google AdWords or online marketing. So what we offer is is a, it's more of a pass, but a business turnkey pass. Uh, so you want to start a dermatology, a clinic in Texas while you come see me and we can plug and play.
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Chapter 3: What was the process for building the MVP for OroHealth?
We have a doctor that makes complete sense. And it's your, your operating system for anyone that wants to launch this. It's fantastic. But just, just to be clear, your, your, your model's not going to be to take 50% of everyone's revenue signs up for you. You just did that with Dermago because you own that business and you want to give a sweetheart deal back to oral health. Is that right? Yeah.
We do it with Dermago because oral health also takes care of all the user acquisition. So we're going to charge 50% ongoing to new customers that are not you? So it depends if they want us to do the user acquisition and the ad buying. So that includes the ad buying, the tech.
If they want to do a white label, you know, they're in their family medicine clinic and they want to also have an online presence. which we see that there's an increase in these types of physicians with pandemic. And our bet is that everyone's going to be online within the next few years. Then they can be, you know, it can be a monthly. I see. But one customer, one customer today, Dermago. Yeah.
Amazing. Okay. I love this story. And then there's your test.ca, which is an STD clinic that we just launched a few months ago. So, but, but the way to think about oral health revenue today is 50% of Dermago's, which is about $75,000 a month in revenue. Exactly. Do you guys care about valuation right now, specifically your valuation?
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Again, both plural founderpath.com forward slash products forward slash valuations. Okay, so you raise a $3 million seed round. Most people are selling 10 to 20% of the business in those rounds. Did you do the same? It was around there? Around there, yes. Okay, so call it like $20 to $30 million post-money valuation, something like that. We have a... So evaluation is at $10 million pre-money.
10 million. Okay. So 13 million posts. That's not, that's not horrible. Where are you going to use the money? So for the tech, so the acceleration of the tech, uh, and it's a hard time to hire people in tech. So if anyone needs a job, we're hiring. There's the promoter, the doctor turns to marketer. Exactly. Um, and we want to, uh, you know, push a commercialization.
So we want to go into a series a, uh, rapidly to, to just bring it to the next level in terms of a commercialization team. What's the team today? How many people? We're 17 now. How many years? Uh, eight. And are you still using that same original agency you used to do the MVP? No, it's all in house. Okay. Why'd you make that decision?
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Chapter 4: Who are the primary users of OroHealth's technology?
Um, so we have a lot of good candidates and we wanted to really build something that was, uh, the highest security standards and something that would be, uh, you know, our own group. So we hired our CTO, Bruno Morel, which he's been with us since last September.
And he slowly but surely built his tech team so that we have, you know, the best developers mixed with some great data scientists so that we can work together as a team. And doctor, what's your go-to-market? I imagine you're eating your own dog food.
So you can go speak at conferences for these people and say, by the way, I'm using my own software to build Dermago, which already does 175 grand a month in revenue. You should copy me, use my software. Is that sort of the go-to-market? And not only my software, but also my business intelligence that we've created over the last two, three years. So with our user acquisition and
with how to basically organize their clinics so that they can make an extra amount of revenue per month. I love this. Do you own 100% of the business before you raised? Are you the sole founder? We're three. Oh, three of you guys. Did you just split it 33 each? Pretty much. You didn't want to debate each other. Just said, you know what? We're all equal 33 each. Exactly. All right. Fair enough.
Now you guys each own approximately like 27% each and the investor owns call it 10 to 15%. And you're thinking hard about what the series A could look like. Exactly. Very cool. What do you think you need to do to go out and raise a competitive series A? I think we need to demonstrate that. Well, we've already demonstrated that our MVP is successful.
So, you know, there's a product and there's a demand. Now we need to show how efficient our tech is. And we need to show how, you know, we haven't done any really trade shows or anything so far. So we've had a lot of people knocking on our door without like with basically trying to put the phone down so that we didn't have to answer because we didn't have a product. So now we have our product.
And I think, you know, we do have a great plan for the next six months. And if we just, you know, stick to our plan and we make things happen the way they're supposed to happen, then we're going to go straight into a great series. I love this. All right, doctor, let's wrap up with the famous five. Number one, favorite book. Favorite book. Yeah.
What man, um, the crowd that there's a, I don't remember it, but it's, I love Reese Witherspoon's book club. So any book that she, she, she suggests, I basically read one a week. So I love that. Okay. Number two, is there a CEO you're following or studying? Is there a CEO that I know that? So one of our investors, Alex from MCI, we really respect him a lot.
So, you know, he really wants to bring a specific tailored medicine to patients. So we really love what he's doing and we keep following him. And doctor, what's your favorite online tool for building oral health? My favorite online tool, I would say my team's favorite tool is Slack, which I'm learning, but I'm definitely learning in this process.
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Chapter 5: What are the revenue models for OroHealth and Dermago?
I'm married with two kids. Oh, wow. Busy. And do you mind me asking how old you are? I'm 36. 36. Last question. Take us home. Something you wish you knew when you were 20. Just keep going and great things are going to happen. You don't have to have a specific plan. You can change your mind. I started in political science in school and I changed to science.
So you just keep going with the flow and keep working hard and things are just going to happen. Guys, she hustled. She got her doctorate. She launched her own facility, Dermago, back at clinic back in 2017. Now it does $150,000 a month in revenue and said, you know what? I need to build software so that anyone else can do what I just did. She's now built that.
Raised a $3 million seed round out of 13 million post-money valuation to scale that up. 50% of the clinic's revenue goes to oral health, the software company. So it
The software company is already doing almost a million dollar run right now, looking to scale out on additional people, 17 people on the team, eight full-time engineers in-house, got the MVP built with an outsourced dev shop for 20 grand. She's scrappy. I love it. Doctor, thanks for taking us to the top. Thank you very much. Have a good day.