SaaS Interviews with CEOs, Startups, Founders

EP 575: Fruitstreet Raises $6m From 180 Customers for HealthTech, New Kind of VC with CEO Laurence Girard

19 Feb 2017

15 min

3031 words

19 Feb 2017

Audio

Description

Laurence Girard. He's the CEO and founder of Fruit Street. He was a pre-med student at Harvard University Extension School for three years before he decided to pursue Fruit Street full-time and move to San Francisco. In high school, he played soccer for the New York Red Bulls Academy as a goalkeeper, which sparked his initial interest in health. Later, he decided to pursue a career focused on social impact and spent a year volunteering in an emergency room unit in Huntington Hospital, Long Island. He's now exclusively focused in Fruit Street. Famous Five: Favorite Book? – The Science of Growth What CEO do you follow? – Milton Chen Favorite online tool? — eShares Do you get 8 hours of sleep?— 5 out of 7 days If you could let your 20-year old self, know one thing, what would it be? – Laurence would tell himself to put significant emphasis on the team when you are starting a company Time Stamped Show Notes: 01:25 – Nathan introduces Laurence to the show 02:10 – Fruit Street is a telemedicine software product that is licensed to healthcare professionals 02:19 – Fruit Street allows professionals to do HIPAA compliant video consultations with their client 02:32 – Each patient has their personal info integrated with gadgets like Fitbit 02:48 – Fruit Street uses a SaaS model and the professionals will pay a monthly licensing fee 03:09 – MRR is $15K 03:15 – Fruit Street was launched in May 2014 03:33 – Average customer pay per month is $200 for the software 03:43 – Fruit Street is starting to expand to get enterprise customers 03:57 – Current customer number is around a hundred 04:10 – 2016 total revenue 04:37 – Gross customer churn 05:30 – Current LTV 06:00 – Team size is 9 full time and Fruit Street has a joint venture agreement with Vsee 06:33 – Fruit Street is located in New York, and San Francisco 06:51 – Laurence wanted Fruit Street to be funded by physicians and not VC firms 07:00 – Getting the feedback from the physicians would help Fruit Street to improve 07:17 – Physicians can get Fruit Street more customers 07:29 – "Fruit Street is actually a public-benefit corporation" 08:08 – There is no tax benefit in being a public-benefit corporation 08:26 – Laurence wanted to attract investors that are primarily motivated by social impact and not by the financial outcome 08:54 – Fruit Street reached out to physicians through LinkedIn advertising 09:00 – Fruit Street gave the physicians a one-on-one call using Fruit Street's telemedicine software 09:18 – Fruit Street's lawyer is using eShares to manage their cap table 09:47 – Fruit Street has a structure that allows them to make quick decisions 10:00 – Fruit Street has 180 shareholders that are not in a syndicate 11:45 – The Famous Five 3 Key Points: With new technology comes the advancement in telehealth, making it easier for patients to reach out to their physicians. Choose an investor that shares the same vision as you. Put a significant emphasis on the team you build when you are starting your business. Resources Mentioned: Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments Drip – Nathan uses Drip's email automation platform and visual campaign builder to build his sales funnel Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn't have to hire a co-founder due to the quality of Toptal Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible. Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books. The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences Jamf – Jamf helped Nathan keep his Macbook Air 11" secure even when he left it in the airplane's back seat pocket Freshbooks – Nathan doesn't waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW Show Notes provided by Mallard Creatives

Chapters

1. What is the main topic discussed in this episode? 2. What is Fruit Street and how does it generate revenue? 3. What are the key features of Fruit Street's telemedicine software? 4. How much funding has Fruit Street raised and from whom?

Transcription

Chapter 1: What is the main topic discussed in this episode?

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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.

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And I'm your host, Nathan Latka. OK, Top Tribe, this week's winner of the 100 bucks is Jose Avila. He is a 17 year old that doesn't want to go to college and he wants to start his own business. For your chance to win 100 bucks just like Jose every Monday morning, simply subscribe to this podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it.

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Top Tribe, you know I don't have a lot of time to waste. That's why I use FreshBooks to send out invoices and make sure I'm collecting my money. To get your free month, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Nathan Latka here. This is episode 575. Good morning, everybody.

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Hope your jog is going well or your ride in is going smoothly and you have something to look forward to tomorrow. We've got Road Loire coming up. I simply asked, will this mobile payment startup survive? It's really on the edge. We'll see. Top Tribe, good morning. Nathan Latke here. Our guest today is Lawrence Gerard. He is the CEO and founder of fruitstreet.com.

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He was a pre-med student in the undergraduate degree program at the Harvard University Extension School for two years before he decided to pursue Fruit Street full-time and moved to San Francisco. In high school, he played soccer for the New York Red Bulls Academy as a goalkeeper, which sparked his initial interest in health.

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Later, he decided to pursue a career focused on social impact and spent a year volunteering in an emergency room at Huntington Hospital in North Shore, Long Island Jewish Health System. He's grown obviously since then, now focused exclusively on Fruit Street. Lawrence, are you ready to take us to the top? Yes, thanks for having me on the show. Yeah, thanks for coming on, man.

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So tell us first, what does Fruit Street do and how do you generate revenue? Fruit Street is a HIPAA-compliant telemedicine software product that's licensed to healthcare professionals.

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And it allows the healthcare professional to do HIPAA-compliant video consultations with their patients, but also monitor their patient's health, diet, and lifestyle with medical devices, wearable devices, and mobile applications. For example, each patient that uses the software has a personal health record that integrates with Fitbit products to track physical health.

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activity and sleep, wireless bathroom scales, FDA-approved blood pressure cuffs and glucometers, and then our mobile application, which allows the patients to take pictures of their food and get feedback from a registered dietician, for example.

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Chapter 2: What is Fruit Street and how does it generate revenue?

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And the purpose of that is just to make sure that if we eventually have 500 physicians as investors, that we don't become a very slow moving organization since the primary advantage that startups have over big companies is the ability to execute very quickly. But we still engage these physicians and get their feedback. But we do have this structure that allows us to make quick decisions as well.

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Do you put them all in a syndicate and just that one syndicate company is listed on your cap table?

Chapter 3: What are the key features of Fruit Street's telemedicine software?

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Or are there literally 180 different line items in your Excel sheet for your cap table for every name of every investor? Yeah, there's literally 180 shareholders. So they're not in a syndicate. We might have to do that if we ever reach the point where we hit the SEC's investor limit. Which is what? It used to be $2,000. I think they raised it to $5,000. I don't think we'll hit that.

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I mean, we'd have to raise quite a bit of capital to hit that. So we try to keep the minimum investment to $25,000 to $50,000. We've had some positions put in like $100,000 or a quarter million. So I don't think we're going to hit that limit. But if we did, that would be one reason to start moving them into like special purpose vehicles or something like that.

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Okay, Top Tribe, as many of you know, I sold Hayo and everyone is always asking me what my expenses were when I was building Hayo. Well, a big expense was that I spent over three grand per month on financial services to keep me out of trouble in terms of taxes. You know, my mom would always harbor me, Nathan, you got to

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keep all your receipts and put them in a freaking box or something to make sure you don't get an audit or things like this. I'm like, mom, I'm a millennial. You think I'm going to keep all these receipts? I now use FreshBooks. I use their mobile app to take a picture of receipts and it makes taxes a cinch. Additionally, I don't have to hire a $3,000 per month person to manage all my finances.

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It's like saving so much money and my mom's happy. Additionally, I don't waste a bunch of time creating invoices. I use their templates and I can avoid using Word templates or Excel files. I just use FreshBooks to quickly send out invoices and it works like a charm.

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To get your free first month, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Again, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Yeah, make complete sense, Lawrence. Let's jump into the famous five here. Number one, what is your favorite business book? Favorite business book.

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I'm actually reading a book right now called The Science of Growth, which talks about how a lot of entrepreneurs think that the way to build a successful company is to build a product people are willing to pay for. But then there's this whole separate science of growing that product. Things like why did Facebook win against Friendster? And so I would say that's my favorite right now.

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Number two, is there a CEO you're following or studying currently? CEO I'm following or studying currently. Tough, tough, tough question to answer there. I would say, I would say Milton Chen, who's the CEO of VC. He's my personal life mentor, you know, maybe not, you know, world famous on the level of Mark Cuban or Larry Page quite yet, but I think he will be one day. He's the CEO of what?

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Of VC, which is our software partner. Oh, got it. Yeah. So Milton, Milton has a PhD in computer science from Stanford and it's kind of one of the world's leading design experts when it comes to telemedicine software. Interesting. Number three, is there a favorite online tool you have like TopTel? So many good ones, tough decision.

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Chapter 4: How much funding has Fruit Street raised and from whom?

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Take us back five years. Lawrence, what do you wish your 20 year old self knew? My 20 year old self. Hmm. I would say, um, I would say, um, Put significant emphasis on the team when you are starting a company, which really comes down to the most important thing at the end of the day, and people that you could see yourself working with for 10 or 20 years. Top Tribe, there you have it.

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Put significant emphasis on the team when you are launching your company from Lawrence. Again, launch this company, Fruit Street. Raise $6 million from over 180 different potential companies.

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customers which is a great way to go did about 100 grand in 2015 revenue ARPU is about 200 bucks per month current MRR is about 15 grand looking to grow that this year as they double down and focus on unit economics like lifetime value CAC and churn Lawrence thank you for taking us to the top thank you If you enjoyed Lawrence today, go back and listen to Luke Stronach yesterday.

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Luke takes us through why he's buying a $2 million, 600 acre pecan farm and how he's gonna plan to make $450 per acre per month, literally shaking money from these fruit trees and pecan trees. Top Tribe, I love giving away free money. I feel like Oprah giving away cars, and I have something special for you today.

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HostGator.com forward slash Nathan. Again, that's HostGator.com forward slash Nathan. Okay, Top Tribe, I'll see you bright and early tomorrow morning. And don't forget, before you listen to any other episodes, subscribe on iTunes right now for your chance to win $100 every Monday.