Redox: A Platform For Healthcare Vendors And Providers To Integrate Their Data – with Niko Skievaski [Ep#15]
How exciting it is to think about all the solutions being developed for the healthcare industry! The use of technology for measuring patients’ health, setting appointments, setting medication and improving patient’s overall experience are just a few examples of that. However, to make all these improvements come true, healthcare vendors (technology developers) and healthcare providers have to overcome one significant barrier: to integrate their systems so patient data may be securely accessed and processed by these new applications. Redox is a startup from United States that is focusing exactly on facilitating this integration, through a platform that serves as an effective interface, providing accurate data transfer between different systems in an easier and faster way. In this 15th episode, Niko Skievaski told me about the development of Redox and how it evolved from just an idea into a platform that connects more than 450 health systems SHOW NOTES CONNECTING TWO WORLDS Tell us what is the problem that you are solving for healthcare vendors and healthcare providers? It is a kind of deep systemic problem. For sure, in the United States—as well as I imagine around the world—one of the main barriers to technology adoption within the healthcare space is the inability for new software being built in the cloud for consumers on their phones to actually exchange data with the health systems that they work with. Because for the most part, healthcare organizations who are treating patients, have electronic medical records that were really never designed to talk to the internet. What Redox does is connect these two worlds by taking data out of health systems and standardizing it in the cloud, and then making it available over an API for software developers to use. On the software developer side, they can connect to us once and work with any of the health systems that are on our network—or that they bring into the network. And on the health system side, they can connect to Redox and work with any of the applications that they might want to utilize into. These are all sorts of different types of digital health applications—things like telehealth solutions, remote patient monitoring. Because for the most part, healthcare organizations who are treating patients, have electronic medical records that were really never designed to talk to the internet. How did the idea come to your mind? My background was coming out of the electronic health record world. I worked at a company called Epic—which is a very large electronic health record vendor—and really started to learn and understand the way that the software was being used across the industry. It was there where I also met my co-founders who worked in various parts of the organization and understood both the business and technical aspects of working with electronic health records. After leaving Epic—in 2013—I actually started a different healthcare IT Company, and started to see first-hand the challenges of being an entrepreneur developing a digital health solution for health systems. Through that experience, we went through a number of pivots between that company and then eventually started a co-working space and an incubator focused on health tech. We saw over and over again, how digital health companies were running into this barrier of willing to connect up to the health systems and their electronic health records. Source: https://www.redoxengine.com/company/ It was through that process where I and my co-founder started to realize: “Hey, the biggest problem here is not the development of new innovation in the space, it’s the adoption of it. If we can actually break down this integration barrier, then it can really accelerate the technology adoption across the industry.” […] THE MINIMUM VIABLE PRODUCT Right after we realized that this is a problem we’re solving, we said: “We have to go out and get initial traction because we are running out of money.” We were using our own savings and we knew that we would need to raise money to start a network business like this. So, we said: “Okay. We need to raise money pretty quickly, but we don’t think that we can actually get live with our product to get real traction.” So, essentially, we designed a minimum viable product that would allow us to test the market demand and see if there’s demand out there. We literally called up startups in the health tech space, we went on to accelerators, websites like Ycombinator, TechStars, Dreamit, Blueprint Health, Rock Health and a bunch of these kinds of healthcare-specific accelerators. So, essentially, we designed a minimum viable product that would allow us to test the market demand and see if there’s demand out there. We just started calling those companies and saying: “Hey, we came out of electronic health record world, we want to figure out a way to help you integrate more easily with an API, would you be interested?” And we got amazing hit rates. We had CTOs calling us back had a product type folks reaching out to us and saying: “Yeah, we would love to use that solution. What does it look like? How do I use it? How much do I pay?” THE BOTTOM RUNG At that time, did you have anything? No, we had nothing. We had a PowerPoint deck. But we did have specialized knowledge of the way that it works from our background coming out of Epic. So, that was the bottom rung of the traction ladder—just understanding that this was a problem worth solving. And very busy people, technical co-founders of companies were willing to call us and talk about it. So, that was the bottom rung of the traction ladder—just understanding that this was a problem worth solving. Through those conversations, we started to understand the specifics of the use cases here—what data needs to be exchanged, how the workflows need to work—and that’s what helped us start to design our API. The next stage that we moved on to was going deeper: “Can we monetize simply one side of the network? We know we can’t get both sides simultaneously because the product isn’t there yet. But can we get the vendors, the software developers to pay for something?” We created an API and we put a pay-wall around the documentation of how it would work. So, we essentially charged people—it was something like $50 a month—just to look at the documentation of how the API would work. And that told us that it was such a problem that people were willing to pay just a little good documentation, which is kind of a head-scratcher, right? Because the only value that they were getting was confidence that they could go to the health system they’re working with and say: “I know how to do this, because I have learned, I’ve read up on how it should work.” So, when people started paying, we called those people up and said why are you paying? Who are you? What’s your use case? Where do you see the holes and how this works? VALUE TO INVESTORS Do you think that having that initial validation helped with the investors? Absolutely. It showed investors that we are scrappy enough to figure out how to get people to buy into a vision before it actually existed. It also showed that we can generate revenue like the demand was high enough that people were willing to pay for it. And then we got live with our first two or three sites. That was enough that we raised a series A after that, it was 3.5 million. Because of the feedback we had gotten from the market, we were able to convince investors that we would be able to solve the problem. And there was the market was big enough for it to be a good back. Because of the feedback we had gotten from the market, we were able to convince investors that we would be able to solve the problem. And how many investors meetings did you do? We did a couple of accelerator programs early on before we raise this money, we actually did two of them. And in one of them, they took us on an investor road show in Boston, New York, San Francisco, and Silicon Valley. We probably had 50 meetings, a lot of first-time meetings that have follow-up meetings with various investors around the country, both Angel groups and venture capital, kind of looking at that early stage investment. TRACTION SPIKE From the moment you raised 3.5 million, how long did it take for you to have a similar version of Redox, as you have today? The product kind of iterated at an almost linear rate. Over the years, we’ve improved and added features and made it more stable and more secure and all of that. We’ve been improving that all along the way. But what really changed in the business was between 2015—when we raised that round—until 2018, was Redox really grew because we were working with vendors who brought us into health systems. What happened were some of those vendors started growing quickly. So, we started seeing some exponential growth from that. Then, we started moving up-market from early stage vendors to later stage companies who were already in many health systems. So, we support integrations for Microsoft or Stryker, for instance. And they have an established footprint. So, we started landing those sorts of contracts because we built up trust in the market. And that has really allowed us to grow much, much faster. But, in 2018, what we really started to see was the health system side—this is like the demand side of our market—start to be engaged. So, what happened was, we would go live at a health system and then they would see how easy that project was, and how easy it is to maintain. And then the next piece of software might come along that they want to adopt. And health systems were actually telling software vendors to work with us. So, the healthcare organizations actually became a channel to drive more vendors into our business. And we really started seeing an acceleration in growth after that. To put in perspective, from 2015 until 2018, we grew to about 100 Health Systems, like healthcare organizations that we implemented—which is still pretty good, in three years we got into 100. Within 2018, we got from 100 to about 450. That’s where we saw this spike happen. CONNECTING, NOT SELLING Did you do any intense marketing efforts in that time to generate traction or was this something more like organic or natural? Marketing has always been a way for us to really just communicate and share our vision with the world. Literally, day one, when we decided to do Redox, I wrote a blog post, saying, “this is what we’re doing, this is why we’re doing it.” And from that point on, we are using it as a content marketing channel. [Redox Blog] Did that work? Yeah. To this day, about 70% of our business comes inbound. Because we have established a content marketing channel—so, we get pretty good SEO—we have a pretty good status as a thought leader in the space of how to do this, because we’ve been talking, writing and speaking about it on stage for so long. Then, of course, just having open and candid conversations with customers or with potential customers and being honest about what we can and can’t do, and the way that we want the world to work. I think that’s gaining a lot of trust in the industry for how we’re going about doing this. The other thing that we realized early on was that doing an exhibit at a conference is really expensive. But we could, for the same price or even cheaper, buy the bar down the street and do a party. So, we started doing these parties and the first one was at a Mexican restaurant. We had margaritas and tacos, and everybody loved it. We started just trying to find the closest Mexican restaurant to any conference that was happening and throw these fiestas, these taco parties. People now know us for having these taco parties and they’re really just low key down to earth events where all we want to do is hang out and talk to people who are interested in this. We’re not giving a big pitch, we’re not trying to sell. We’re just trying to build a community around a bunch of people who are trying to make healthcare better. And we’re just trying to make healthcare data useful. GET DEEP WITH YOUR CUSTOMERS A piece of advice for startup entrepreneurs that are just at the beginning of their ventures… I think the biggest thing that I see with early entrepreneurs is they’re trying to solve the problem from inside the conference room or inside the office. For us, the way we really started to see how to solve the problem and how we could break into the market was through deep conversations with our customers or with potential customers, getting to know them really well. Getting out their elbow, discussing the problem and understanding how they’re solving it today and how they want the world to look. That helped us paint a picture for a product that was really designed around those needs. Getting deep with customers is super important. And doing that as fast as possible. I see a lot of entrepreneurs like work on the business model and market research and doing surveys and things like that. But I don’t think anything beats just actually sitting face to face with a potential customer and talking through the problem with them. Even if you don’t have a solution yet, I think of it as a couple of stages of progression with customer discovery. I don’t think anything beats just actually sitting face to face with a potential customer and talking through the problem with them. First is just meeting with them to understand their problems. And then you can go back, a couple of weeks later, maybe to that same person and say: “Hey, we listened to your feedback. Now we have this solution” or “I’d love your feedback on… and maybe it’s at a point where you can actually try it.” And then a couple of weeks later go back to them again and say: “Hey, we’ve iterated again. And now we want you to pay for it”. See if they’ll actually put money, whether they’ve described problems. You are iterating and testing out a minimum viable product. But more importantly, you’re building a relationship with people such that they’re going to give you honest feedback about how your product will affect their lives. That’s the fundamentally most important thing in the early stage of a company: getting deep with your customers. Hey, what do you think of this episode? Leave your comment!Or check other startup stories here. MORE ABOUT THE FOUNDER Niko Skievaski (LinkedIn): As President and Co-founder of Redox, Niko Skievaski leads his team in helping healthcare organizations fulfill the promise of digital health – resulting in better patient outcomes and efficiencies for healthcare providers. In this role, he was named to Forbes 2017 30 Under 30 list of visionaries reinventing healthcare. Prior to founding Redox, Skievaski worked at Epic, one of the largest tech companies in the world, as an entrepreneur and advisor to start ups. After Epic, he co-founded 100state (Wisconsin’s largest co-working community) and created ICD-10 Illustrated-a satirical book illustrating medical billing codes. Skievaski has an MA degree in economics from Boston University and a B.S. degree in economics and international business from the Arizona State University’s W.P. Carey School of Business MORE ABOUT REDOX Redox (Website; Facebook; Twitter; LinkedIn) is changing the way healthcare providers and software vendors share data. Currently, inconsistent data formats and redundant connections slow, or completely prevent, the flow of critical health information, hindering patient care. Redox changes this by dramatically simplifying communication, making data actionable and more shareable. Redox’s technology powers a streamlined workflow for caregivers, improving care delivery and the patient experience. Healthcare delivery organizations and technology vendors connect once and authorize the data they send and receive across the most extensive interoperable network in healthcare. The post Redox: A Platform For Healthcare Vendors And Providers To Integrate Their Data – with Niko Skievaski [Ep#15] appeared first on The Traction Stage.