We talk about being a social enterprise, how long the journey can take for start-ups, and Angela reports back on the pricing exercise that she undertook to find the "right" price for Clinnect. Starting out initially as a government funded project, this company had a few roadblocks to overcome in becoming an incorporated for profit business; along with the typical issues to overcome like sustainability, scalability, and revenue.
Healthcare issues are complex and Clinnect had to learn to focus on issues, we delve into the pros and cons of trying to find a niche product to address a narrow, but important, issue.
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Produced by Jonathan Bowers and Angela Hapke
Jonathan: Wait, I want to get one of those. Um, I think, do you think in the audio world they use those, those clacker things like in the movies, those, um,
It's called the castanet.
it's called a castanet? You know the word for that?
Like the clackers like that.
No, no, no, no. The thing at the beginning of a movie where they go, you know, act one or scene four, take three.
Oh, I don't know what those are.
Sorry. I couldn't see you when you were, when you were saying it. And that's
a castanet are those tiny little symbols on your fingers, or that we should get one of those cat little castanets
I have. I have some, because my, um, my daughter uses them for music class.
and I'm Jonathan Bowers and you're listening to Fixing Faxes, building a digital health startup
and we just got some new mics.
New Mics! Uh, This is episode five. We've recorded the first four episodes on our headphones. No, what are these called?
No, these aren't, these aren't
like the standard headphones that you get with your Apple iPhone.
]but now we've got these great new, uh, very cheap, the cheapest ones. We could find Audio-Technica 2005USBs as recommended by basically every podcast blog I could find. Um, but they were sold out.
Well, and I didn't do any research. You did all the research and you, I just said, tell me which ones to buy.
Yes, but you found where to buy them because they're sold out everywhere.
I know, I know the weird places to buy things.
So that was helpful because I was starting to panic that we were going to have to buy $300 microphones instead of a hundred dollar microphones.
well, the package was $200.
Yeah. Yeah. Well, it comes with the, it comes with the boom arm and the monitoring headphones. Um, the Princess Lea headphones. They, they hurt my, hurt my ears just a little bit. Cause I like, do you notice
The glasses. yeah, they dig into your head.
I've been wearing them a lot the
doing all my Zoom meetings like this with the microphone.
Is everybody commenting on the quality?
loves it. Uh, Yeah, everyone is saying Wow it sounds so good. And now Chris wants to get a microphone. He's he's got microphone envy.
That's definitely a thing in, in, and Zoom COVID days. Microphone and camera envy.
I, uh, we had a client meeting this morning and, uh, cause you can see the boom and the mic in the video call. And he says, Hey, what's that? I told them about the podcast and he holds up his really expensive microphone and say, well, let's. Let's compare. This is not, that's not
You're like, no. How about not?
he's got one of those pop filters and I think it's like a really cool condenser mic.
] It is just sitting on his desk though. So he doesn't have the arm,
see, I don't know. This arm is like I'm that's most of what I love about this.
Jonathan: Uh, you know, what we need to talk about so speaking of the prices of things, so this being $200 and us thinking about, um, wanting to buy cheap. So this felt like the right amount of money to spend for where we are at in terms of our journey as podcasters. Um, but in the, in, uh, I think episode three,
I think it's episode three.
gave you some homework to go and use the Van Westendorp.
] Pricing meter or price, price, sensitivity,
Price sensitivity meter.
Which is basically four questions that help you understand the pricing of a product. What are the results?
Okay. Uh, so, so we made the survey and I put it in linked it in an email, and then I just use my, my personal contact list and sent it out to a bunch of primary care providers and specialists that I know that I would hope that I could kind of ask a personal favor to
] um, I sent it out to about 30 people, uh, nine or 10 of them got back to us. And there was some big trends showing up. So what you, what you have to understand is the four questions really kind of give you an idea of like the absolute basement. I wouldn't buy this because it's, it would be so cheap that it doesn't have any value all the way up to ,this is way too expensive for what I think the product is. So those are two questions and then the other two questions help kind of narrow in the, the, the sweet spot. So, um, just, , like what would you pay that's I, I think they use the word bargain and then what would you pay? And the, they use the word expensive.
]And so what we did is we took all the responses, we plotted them on the sensitivity meter and before I say what the, it came out to be, I think last time, I guess, that it would be around $25.
Yes. I don't remember if that's recorded, but you guessed that it was going to be $25.
Well, and I I just figured it would be cheap enough that I could like, and I think maybe I was thinking that would be pretty, a pretty cheap price. So the price sensitivity meter put us in a large enough range of people, like on a, like a distribution graph. That would pay for Clinnect on a monthly subscription based model, between $50 and $75.
more than what you had thought.
A little bit more than what I thought now let's back that up. I think the original guesstimate that I gave, um, didn't have all the features that we were going to include in the basic model anyway. So we've upped the basic model to be kind of a basic plus model. And then what we did is we gave a really quick video on what we have in the product right now, and what features are coming within that basic model.
]Then ask them to do, to answer the four questions. So we gave them a really good idea of what they're going to get for, for their money.
I love that you went out and talked with people
feedback that was, uh, w would you say it was more encouraging to get those answers back the way you did?
I think when you build a product, your scared to price it, I think that's a scary thing to price it because now you're building a product, but now you're actually asking a very specific amount of money for it and asking people to take that out to their pocket and give it to you. So it was, it was a very, very vulnerable exercise for me.
] And, um, yeah, I was nervous to do it. So happy I did though. Like, yeah, just so yeah, really, really good feedback really. And actually. Even since then it's caused a couple of people to come back at me and ask me like further questions and things like that, which is really great. Yeah. Like one of them was asking about, um, and not to get into the nitty gritty of it, but, well, how many users are you going to have per account?
] And are you going to charge per users? Are you going to cut charge per account and with so many users and yada yada yada. So she had already started to get it into her head and was asking really good questions. And I said that I was like, Ooh, you've zeroed in on something that we've been talking about a lot.
] And so I used that interaction then to ask her, I said, well, we're thinking about this. What do you think? And she was like, Oh yeah, that makes a lot of sense. And so just like stealing more information out of, out of everyone was yeah,
It's not stealing information.
not. It's it's asking your customer what they want. Yes.
Yeah. No, that's that's that's so cool. I think it's exciting that you have gone out talk to some folks, got some real feedback and got some additional feedback.
Yeah, highly recommend that anybody who's thinking and being scared about the pricing process, just ask.
I like that the, that price sensitivity model a van Westendorp is, is those questions. Cause you can just take it kind of copy and paste it, put it in there, remove some of the emotion a little bit, because it's not like you're on the phone talking with someone. You can just send this out somewhat anonymously.
] It's not really anonymous, but you kind of send it out and it just removes that awkwardness and weirdness. And that anxiety, anxiety that you might feel.
Yeah. And I think that's exactly what I was feeling. So when I put it into a survey and I just, I think I threw it into Google forms or something like that and sent it out and just said, and I didn't ask for any identifying information. So, and actually said that right away, like, I'm not asking for your name.
] Will you, you know that I know you were like participant number one, you can kind of anonymous anonymously do it. And I think that felt good for both myself and who I was asking to do it because these were for my personal contact list. So they know me quite well.
what you want us to talk about today was the product development journey of Clinnect.
I want to talk about that today because. Up to this point, we've been talking a lot about like either current state or, um, like what we're doing right now. Hence the pricing thing and things like that. But I wanted to give a little bit of background about how we got to where we've got to and how long that journey took and how we've navigated along the way.
] Um, just so maybe people listening can understand what that journey typically looks like, because so often we read, you know, success stories and you kind of get the story from the success on and not so much the really nitty gritty crap that led you up to that. And I'm not saying that our journey has had a lot of crap in it, but it's been a lot of, a lot of bumps along the way.
] And I think talking about that, um, is hopefully good for people to hear. And, and maybe if they're in the middle of that keeps them, keeps them motivated to keep going.
how long of a journey has it been?
It has been three and a half years to now.
Till now, and we've
And we've just launched.
And we've only, we've only really been building, building the product, uh, for three
Three months. Yeah. Two or three months. Yup. Yup. Yeah. And we just launched three weeks ago.
you didn't have the goal of creating Clinnect
Nope. Nope, absolutely
w What was step one?
Uh, at the time I was working, um, at the hospital here in Kamloops as a project manager. And there was a, there was some government funding coming out for innovative projects that were led by physicians. And so there was a group of physicians in Kamloops, uh, the general surgeons that wanted to apply for this money.
] But they needed to have a project manager attached to it. And at the time I was working four days a week, um, and was recommended to them too, that maybe I could take this project on for the fifth day.
This was a side hustle.
Total side hustle. And so what it started off as. Was the general surgeons in town really just wanted a place to centralize all of the referrals and pool them.
] So equally distribute, distribute them or unequally distribute them purposefully, uh, among each of them. And so I thought, Ooh, that's kind of a cool project. I would love to try something like that. So that's where we started out. We got funding, um, in the beginning just to kind of do. Like analysis stuff, like typical government funding, you know, go out and do your, your SWOT analysis and your needs analysis and understand, you know, current state, blah, blah, blah.
]We already kind of knew what we wanted and it seemed to fit with the analysis. So then we started to build a very manual process for centralizing referrals from primary care providers in the Kamloops catchment area, um, for general surgery. So we started that in August of 2017.
] So that's coming up on three years ago. It was by December that year that we realized that we were, we might be onto something. The process that we were building along with the data that we were grabbing was becoming talked about a lot, not necessarily our data, but, um, in the, in the way of like wait time, data and referrals and centralized processes and things like that.
]We also thought that maybe it would get absorbed by like a health authority or ministry or something like that. So we built it in that way that we thought, well, somebody else will take this on in the end.
As in, like, just take over, take over whatever process you've defined?
And there was a lot of advisors even advising us down that road was that if you build a good enough process, the, the health authority of the ministry will, will likely, um, grab that and integrate it into some kind of workflow that they already have. So we got pushed back on that.
From the health authorities?
So what ended up happening in about the same time that we were doing all of this, we incorporated Central Referral Solutions. So when a government funded project gets incorporated, some eyebrows get raised sometimes, and it wasn't an overly popular thing to do. Um, but we needed to do it for ourselves.
] Like we were, there was a lot of us that were, that were, you know, shareholders in it or like stakeholders at the time and shareholders now. And we, yeah, we just kind of thought that we were onto something. So we incorporated, and so then we were seen as this, like this corporate entity that, you know, and there was just this push pull.
] We were also starting to talk about wait times in a way that wasn't overly palatable at the time, because we wanted to talk about the whole wait time journey. And I think we'll probably do we'll deep dive into that at another time. Yeah. Yeah, because there's, that's a whole episode in and of itself, I think right
Well then we'll save that for another
Yeah. and then at the end, you know, when we started to bump into things, people weren't really overly welcoming to take this on from a health authority or a ministry, um, perspective. Uh, we decided to monetize it because that made the most sense. Um, and in a way that we knew we were a social enterprise, uh, we still incorporated and things like that.
]A For Profit Social Enterprise
So you're a for profit
company, right. Your company. So that by definition is for profit, but a social enterprise
but a social enterprise. So a social enterprise has not investors and making money at its core ethos, but rather, um, a social good at its core ethos and its core philosophy. And for us that we're not out to make a ton of money to make a change in a system.
] And so that's why we call ourselves a social enterprise, but we are for profit. And I think that's another reason that it's been so hard to try and explain who we are and what we are. And especially in the beginning, because we weren't maybe even comfortable in her own skin in saying that. And I'm, now that I'm like saying it, I'm like, I don't even know if I still am.
]Um, but. We knew that we knew that we were onto something, but we also knew that we could make a lot of good with it and do a lot of good with it.
Um, I mean, I, I agree with you, like I've, I've, I, I've done a bit of mentoring with social enterprises, mostly in the non profit side of things. And one of the things that they often struggle with is how to be sustainable, how to, how to do what they're doing. And, um, yeah, I guess scale that up. Right? So there's, so they're often so dependent on grants and they spend so much time just applying for grant money and not revenue from some product or service that they're offering that can, that can sustain the growth of this social thing that they're trying to do. Some, some organizations are very, very good at this. Most struggle. So you're describing, uh, an organization that is almost engineered in a way too, to be sustainable. There's the profit side, which sustains itself and sustains its growth activities. And then the the impact of the, um, of the activities you do have, have a social good. But you do have to monetize that, which you talked about, uh, just a second ago, you said you're trying to monetize it.
] walk me through that a little bit. at a basic level, I think people can understand, like we're charging for the service,
Yes. So maybe what I'll do is I'll talk about a little bit about how we got there and I, what you just summed up doesn't happen easily and quickly, um, it's not as, as, as pretty as the summary that you just gave. Uh, it's usually ugly and bumpy along the way. And it has been a little bit ugly and bumpy for us along the way.
] So what we started with was general surgery in town and I call it kind of like our R & D department is, um, we've created the central intake and the central referrals, um, to go and then be pooled among the groups of surgeons. And so in doing this, we were able to trial like a whole bunch of different types of workflows.
] We were able to even trial, like the way we say things, which in healthcare can be the, be all and end all of things. Yeah.
Say things to, to patients or
okay. Well even just like literally the wording that would be on a referral form. Yeah. The impression that that word gives when you read it versus what you, the intended meaning versus what maybe the reader means.
] And we've actually had a couple bumps along that way. Also the development of categories, referral categories. And we've talked a little bit about this in the past, but like Clinnect itself has started to create the idea that we should have a very strict set of categories that referrals come in. And like, even that we trialed with general surgery. Just really help in helping us understand what does a wait time mean? And then we've also done a little bit of consulting to help us gain even further insight. And we always say that. You know that this further insight will just help us develop the product even more. So in doing all of this with general surgery, kind of being our R & D department, we were able to go, okay, we have this, we were able to get a really nice workflow going, except.
] It wasn't scalable. It wasn't sustainable. We were hitting we're bumping into exactly what you're talking about with, you know, the social enterprises and not being able to maybe get over that hump. We were able to get over that hump with Clinnect. And so that's where we were able to say, you know what, now we are, we are an incorporated company.
] We are a social enterprise and we are going to be charging for a product. And that is Clinnect. And we were able to kind of take all of the learnings. Through doing this with general surgery over the past three years and finally build something.
When you say it was not scalable. I imagine that means, uh, it's very dependent on manual labor?
Yeah. Almost entirely dependent on manual labor. So when the workflows were, um, disjointed, so it required somebody to do one thing in this one software, take it over here and do another thing in this other software and then take it over here and do X, Y, and Z with it from there. nothing was automated, nothing was overly efficient.
] There's room for error when you have a human doing all of this. So, it was way too expensive to have somebody doing this. So learning all of that is why we built Clinnect. Because we knew we were onto something and then just taking all those learnings and then automating them.
] And it took a long, took really long time to figure that out and what that should look like.
I think, I mean, I think it's interesting to tie that back to the pricing a little bit like the, um, what Clinnect can do for 50 or $75 a month, how much work would that take a person to do?
So we priced that out because we were looking at doing exactly that and it sits around the 400 to $450 a month.
Right. So, so the, I mean, ultimately the value that's being created here is around $300 a month.
Which is pretty neat.
okay. Think back to my economics. What does that piece, when you draw the, when you draw the diagram and in that difference there that's the
I know exactly what you're talking about, but I cannot remember
We've forgotten so much of our MBA,
I think you learn about that in first year, business degrees.
I know my MBA was a lot of first year business stuff cause I didn't take business.
neither. Oh, my goodness. I love it.
So this has been a three year journey. We've we've really just started it's. Um, but it has been three years. So what, what are some of the other, um, some of the other lessons that you maybe have picked up in those three years, besides, you know, besides some of the domain specific stuff around the problem that you're solving.
I think what we learned big time as there's no quick fixes in healthcare. I was a little bit naive and we first did the project that I was like, Oh, we're going to do this and we'll fix this right away.
] And there's just, yeah, there's just no quick fixes. good fixes take a long time in healthcare. They require a lot of thought and a lot of understanding because the, the problems can be so complex. Um, and it's hard to narrow in on problems because. In healthcare, there's so many other problems gleaming around that problem.
]So that was kind of another thing that we learned is, you know, laser focus on the one thing that you want to change and go for it. And there was a few times, even you, would I be sitting in a meeting with you and I would have another idea for something else. And you would say, okay, you need to be laser-focused, Angela. I was like, right, right. I need to do that. So that was, that was.
Clinnect does feel very focused. even in some of the, planning meetings, it, we start talking about some features and some things that start to start to lose some of the focus, but yeah, it starts to broaden, broaden that scope of it. But at its core, it's a very focused product.
And I like that. And I think that that's a really hard thing when you're getting into healthcare solutions. It is really hard not to go for a bunch of things at the same time, but I think you're going to have a better success rate. If you really laser focus on, on kind of one solution, one problem, one solution, and then go from there and you can always build out afterwards, but, you know, try and try and focus on that first.
]Um, there's also this thing around solving problems in healthcare that can be really distracting. And especially when you're maybe working with government bodies and things like that is solutions tend to be. Um, system centric versus versus like a patient or provider centric. And you can go down kind of rabbit holes.
] Um, That maybe at the time seemed like you're solving a solution, but you might be talking to the wrong people about what that solution should be looking like. And I think this, once again, goes back to talking to your users and talking to the real stakeholders in this meaning, patients, providers, people that are going to actually be using this stuff.
]For us at Clinnect we definitely had the opportunity to go down that system centric solution road. It would not have felt nearly as good as what this does, because what we're doing right now is we're really working with a solution that's going to benefit, um, the broader, good, not just the system.
]Ruffling Feathers in Healthcare
does that ruffle some feathers a bit?
Of course it does. Yes. Yeah. Um, it can be hard because healthcare is so riddled with what we've always done it that way, which can be a real big barrier to systemic change. But then it's also layered on what I found a little bit with. Um, not just, we've always done it that way, but a pride in that way that maybe they've done it.
] And so when you're asking people to start changing workflows and changing the way that they look at it, it's a, it feels personal when it's really, it's not it's, it is systemic change, not personal change, but, um, in something like healthcare, Right. I just feel like there's so much passion in their jobs and their work and their, and, and things like that, that people can get really defensive very quickly.
] Um, when you're suggesting maybe bigger changes. Yeah. I think also for me, it has been surrounding myself with people that know way more than me.
] In multiple facets. I think of, you know, even my, my, so my cofounders are general surgeons and, obviously they know way more than me when it comes to medical stuff. Then, , I partnered with, uh, with you guys at Two Story Robot and you guys know way more than me when it comes to tech stuff and yeah, just surrounding yourself with people that, that are amazing experts in their different domains really helps.
] And it also like it doesn't put the pressure on, you know, the founder or the CEO to come up with all the solutions, but rather just, if you surround yourself with people who know better than you, then it, it helps also surrounding yourself with really good people because you will get beat up and you will fail and you will have to get yourself back up and you might sometimes need a need, a hand to get back up and
Yeah, I need a little reminder that, uh, why you're in this in the first place.
Yeah, yeah, for sure.
]Thanks for listening to Fixing Faxes, building a digital health startup. I'm Angela Hapke. And my cohost is Jonathan Bowers. Music by Andrew Codeman. Follow us on Twitter at @FixingFaxes. You can find us wherever you like to listen to podcasts. And please do us a favor tell a friend. Thanks for listening.
Did you see the other review that we have?
He is, he's like her biggest fan .
I'm going to steal a joke from Bronwyn, uh, he's such a fan, he married one of the hosts.