SaaS Interviews with CEOs, Startups, Founders
OnCallHealth Grows 150% to $3m Run Rate for Virtual Patient Care HealthTech
20 Dec 2020
Chapter 1: What is the business model of OnCall Health?
Those customers are paying us anywhere from about $1,000 to $20,000 a month. Oh, wow. So I can do the math for you. We're well over 3 million ARR now.
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My guest today is Nicholas Chupswick. He is the founder and CEO of OnCall Health. Prior to starting the company in 2016, he was an early hire at education technology company Top Hat and marketing technology company Turnstile, which was acquired by Yelp. Nicholas, you ready to take us to the top? Let's go. All right.
On-call health sounds like something that would be taking off in our current era of pandemic around the world. What do you guys do?
Yeah, so we're a SaaS company. We provide a solution to healthcare providers all the way up to large brands so they can launch and grow their own virtual care program. So essentially offering virtual appointment options over video or text to their own patient base. And what makes that complicated? Why hasn't somebody done that?
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Chapter 2: How did OnCall Health achieve 150% growth in revenue?
So there's a ton of upsell as part of customer success is actually the largest team in our organization. And how many people? I think close to 10 right now.
Oh, wow.
30.
Out of 30 total? Yeah. That's interesting. Now, there's kind of a big trend in media stats right now where there are CEOs and CROs and VPs of sales giving the customer success team quota targets and incentivizing them on an expansion metric. Do you guys do that?
Yeah, again, I think we'll start to look at more individual metrics next year now that we've really started to refine our processes. But yeah, absolutely. We base it off net revenue retention. But yes, exactly. We want to give our CSMs a commission as well.
What's your target net revenue retention?
So we've been well over 100 for as long as I can remember, just especially because of a lot of that account expansion. But yeah, definitely at least 100% net revenue retention is our goal.
And what allows you to drive the expansion? You can't drive expansion without an upsell. So what are you upselling?
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Chapter 3: What challenges does OnCall Health face in the virtual care market?
Is it number of seats? Is it product upsells? A utility-based upsell?
Yeah, so there's two components to our pricing. We charge for our enterprise package, which includes our fully branded apps. The customers get to become the publisher of their own virtual care apps that we help them create. And then it's essentially like a white label rather than being a custom development and analytics. And and then we do charge per seat, which is just per health care provider.
So tell me how that works. If if I'm a small health care provider that signs up today with you for seventy five dollars per month and I'm buying more seats next year as I'm expanding with you, it's because I'm hiring more health practitioners at my little shop.
That's right.
I see.
And the larger brands will buy licenses at scale for thousands of providers, for example.
So they have a bunch of providers working under them and they're paying for all those providers to access your tool.
Yeah. The interesting thing is, you know, we do work with some kind of conventional hospital systems, but the larger like our largest customers are, like I said, pharma companies and insurers that don't directly employ health care providers, but they have networks of them.
And so it's really interesting nowadays that they can launch a completely new revenue stream by using their network of health care providers that they don't have to directly employ. And they also don't have to pay for the overhead of running physical clinics.
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Chapter 4: How does OnCall Health price its services for different customer segments?
So for me, I think it's really important to, I come from a sales background, so we had paying customers from day one. And I think, you know, that's the engine of the business. And I yeah, have always just been focused on always growing revenue at the same time as we develop the product.
Yeah. Well, I mean, obviously just raised around now you have to deploy the capital to drive future growth. So your burn is going to go up a little bit currently, but you don't want to drive it too high. You want to see a path to profitability, right? I mean, how comfortable are you? Are you in terms of how high do you want to drive burn? How high would you be comfortable driving burn right now?
It's a great question. I think we are really going to ramp up, like I said, the go-to-market team, and we will see more significant burn. But at our current growth rate, I think we can keep up and have a pretty manageable burn rate without having to take on any debt, which we haven't had to do to date.
what would you consider manageable? I mean, if you're doing a two 50 a month right now, right? So you could maybe get up to spending three 50, 400, 500 grand a month. So your net burns to 50, you have six in the bank. That still gives you plenty of runway. I mean, would you feel comfortable burning total expenses annually or monthly, like 500 grand?
I think we will have to get up to that for, for a while. Uh, and yes, I would be, I would be comfortable with that. Uh, just because it's, it's,
such an incredibly hot market right now for this technology it feels like a very unique uh sort of moment in time in which we're well positioned to capitalize yeah no it makes a lot of sense to me um interesting okay very cool um last one i'll ask about is payback period so i mean what are you willing to spend to get a new 75 a month customer
That changes quite a bit, especially since we have really only started spending significantly on marketing this year. But the unit economics have been working quite well. Let me just see. Yeah, I think our payback period is a few months for or six months for an SMB and two months for an enterprise.
That's really good. Yeah. Those are really healthy. Very good. All right, Nicholas, let's, let's wrap up here with the famous five. Number one, favorite business book.
I just finished a principles by Ray Dalio and loved it.
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Chapter 5: What was the impact of COVID-19 on OnCall Health's growth?
I'm 29. 29, last question. What's something you wish you knew when you were 20?
Always be present.
i love that guys on call health they went from a million dollar run rate a year ago to over three million dollar run rate today they've just raised an additional six million bucks to drive growth helping practices handle the now because of the pandemic virtual demand they're getting from their patients launched the company in 2017 again well positioned currently 700 customers on the platform 600 smaller practices 100 enterprises looking to drive growth of the
company, 30 people on the team today, three quota carrying reps as they look to scale well over 100% net revenue retention rate as they upsell white label product and additional seats. Nicholas, thanks for taking us to the top.
Thanks so much, Nathan. Take care.
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