Building for the Long Haul
The essential steps to take when building a successful health tech company from scratch.
At Healthie, we like to say that we can only make an impact if we are in business. We’ve been building since 2016, operated profitably for more than half of our company life, and 85%+ of our growth continues to come through referral & word of mouth 💬. As such, we’re able to make an impact for our customers, on client lives, and within the healthcare industry overall.
Operating profitably and with a long-haul mindset has influenced hundreds of decisions, big and small, that we’ve made over the years. For us, this has meant that for better or for worse, we didn’t ‘grow-at-all costs’ when it was trendy to do so and have spent ‘less money than is typical’ on things like our website and branding. To be clear, we’ve probably missed out on some great opportunities because of this mindset 🤷 - but ultimately this allowed us to operate profitably📈.
We stand by our belief that it’s one great way to build an enduring company that’ll be around in 10 years.
Three decisions Healthie had to make, in pursuit of the long haul:
💸 #1 Pricing: A Free Offering Isn’t Necessarily a Value Add
There is the SaaS adage that “if the product is sticky, customers won’t switch.” For companies that operate in a ‘growth at all cost’ mentality, this often translates into offering startup or early-stage programs that give a product away for free for a period of time in pursuit of a long-term relationship🤝.
Over the years, we’ve been asked if we could offer a program like this, which would give Healthie away for free, and our answer has always been “no ⛔, and you really don’t want us too.”
Let us explain: Paying for a product is a direct communication of providing value. If customers, even price-sensitive customers, are willing to pay, it means we have communicated our value proposition, and are providing real value. It also means that we’re able to invest in supporting the customer (through successful operations, continuous R&D, and more) without relying on external capital. It’s not easy to turn away customers who would be a good fit for our product but are (understandably) price sensitive.
We recently introduced a freemium offering for early-stage individual clinicians who are starting a private practice 🧑⚕️.This came 6 years into our company-building 🏗️, when we felt that we could adequately and sustainably support this arm of our business because of revenue that comes from other parts of our business.
Our learning: The best way to prove that you provide value is to see if people will pay for it. Don’t give your product away for free just because you ‘have the money in the bank 🏦.
#2 Strategic Funding: Raise Because You Want To, Not Because You Have To
Healthie raised a seed 🌱 round following Techstars in 2016, and then we ran profitably until 2021, when we raised our Series A, entering the process with more money in our bank account than capital raised to date. Candidly though, Healthie probably wasted $1M of $1.9M we raised in our Seed Round 😲.
We speak with many founders, and time and again, our genuine advice is that there’s a time and place to raise external capital, but it’s not for every company at every time. Raise money when you know how it’ll contribute to your growth, what you’re (actually) planning to spend it on, and you’re ready to sign up for the treadmill.
Caveat: we know this isn’t possible for all businesses, for example those with long sales cycles or high CapEx; in these instances, the strongest founders still operate with an “every dollar counts” mentality.
Customers 👥 are your best source of capital, and operating profitably will force you to provide value to your customers, because it is customers that keep your lights on. Even today, Healthie spends nearly entirely on engineering, product, and customer success.
Our learning: Don’t overspend, even if you can. Every dollar matters. Focus on the business differentiation (for us this means our product); for our customers this means their member experience, onboarding & clinician matchmaking, business tooling & analytics, clinical care & outcomes. 💡 This will allow you to raise only when you want to, not when you have to.
⚙️ #3 Product: Don’t Build Everything, Even When Your Customers Want You To
Healthie’s product has been driven by customer input 🗣️ over the years. We keep a public-facing product roadmap and customers submit requests. Internally, we weigh and score the “impact” of a new feature or update based on expected usage and value generated across our customer base. We align this with our own internal Healthie vision 👁️.
With this approach, it’d be easy to slide into ‘feature overload’ and continue rolling out new features left and right. In the past few weeks alone, we’ve been asked if we are planning to add a CRM, clinical ops tool, and more reporting & analytics dashboards (the answer to all three of these is “no” - we’re building partnerships with other companies that excel at this).
Even for a platform like Healthie, we believe that it’s better to be best-in-class what you offer, versus “just okay” at many more. For Healthie, we’ve prioritized three products: scheduling, EMR, and patient engagement. Building towards a best-in-class approach is for example why our scheduling system is used by companies like Hinge Health and Oscar.
Then, we happily partner 🤝 with other great companies for the rest. Our Healthie Marketplace weaves together solutions to serve all of our customers. This is a platform ecosystem play, similar to the Shopify App Store. There is a bias in healthcare to build everything in-house. We fervently believe that that won’t scale in the world 🌐 we live in today. Companies will need to partner and integrate with each other to keep up with the market, aka - the opposite of how platforms like Epic have historically approached tech build in healthcare.
We believe that the digital health ecosystem will find more collective success through partnering across the ecosystem.
Our learning: In SaaS, staying true to your company’s vision is most reflected in product roadmap complexity and partner choices. What separates winners and losers is the ability to stay focused and commit to what you’ll be best in class in. Then, partner for the rest!