Welcome to another episode of Category Visionaries — the show that explores GTM stories from tech's most innovative B2B founders. In today's episode, we're speaking with Justin Dearborn, Founder & CEO of Praia Health, a healthcare technology platform that has raised $20 Million in funding.
Here are the most interesting points from our conversation:
- Consumer-Centric Healthcare: Justin explains how Praia Health is creating a digital journey for patients that mirrors consumer experiences outside of healthcare, aiming to enhance convenience and personalization.
- Telehealth and Digital Adoption Post-Covid: The pandemic accelerated the adoption of telehealth and digital solutions in healthcare, with patients increasingly choosing providers based on their digital experiences.
- Founding Story and Unique Incubation: Praia Health was incubated at Providence Health System's Digital Innovation Group, which identifies technology gaps, builds solutions, and then spins them out as separate companies.
- Go-To-Market Strategy: Praia Health employs both direct and indirect strategies, targeting innovative health systems and partnering with established companies to enhance existing investments in patient engagement.
- Sales Process in Healthcare: Selling to health systems is complex and lengthy, involving numerous stakeholders and stringent security assessments, but Praia Health's mature platform simplifies implementation and integration.
- Fundraising Challenges: Fundraising in the current climate is challenging, but Praia Health successfully secured funding from notable venture firms with healthcare system LPs, emphasizing the importance of showing a strong ROI.
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[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey everyone and welcome back to Category Visionaries. Today we're speaking with Justin Dearborn, founder and CEO of Cryo Health, a healthcare technology platform that's raised 20 million in funding. Justin, welcome to the show. >> Great to be here, thank you. >> Yeah, no problem. Let's go ahead and jump right in. Talk to us about what you're building today. >> Yeah, great. So we're really building a consumer experience platform and I'll try not to get into much word salad, but it's a platform that we are marketing and selling into health systems and it really allows the health system to provide a consumer or a patient with a digital journey that it starts to mirror what everyone outside of healthcare is accustomed to as a consumer. So the overused Amazon analogy, but really that's kind of what we're building within the healthcare environment. >> And it looks like you've spent your entire career in healthcare, a big chunk of your career in healthcare. What is it about healthcare that excites you so much to stay in it for so long? >> Yeah, I think it's the opportunity to make a difference, a small difference being a technology vendor. But I've spanned all the way from clinical imaging, which do see a tangible result when a cardiologist is using your platform to save lives in some cases. So you feel like other than being a clinician or it's as close to feel like you're contributing something positive to society. So I really like that and there's of course a lot of opportunities. Healthcare is changing, but always changes that a little bit of a slower pace. And typically for good reasons, patient safety is always top of mind for everybody. But I think it's making a small difference with patient outcomes is really what keeps me excited. >> And what are some of those hot trends right now in healthcare tech that you're really paying attention to and excited about? >> Yeah, so I think post COVID, man, it's been talked a lot, but really, the adoption of telehealth has really taken off. And it's reversed a little bit from the peak of COVID for obvious reasons. But I think what we see from COVID, the positive side of it at least, is really an adoption of telehealth and digital solutions. So my willingness, and I think it might have always been there, but health systems maybe weren't sure of it, so they were reluctant to really invest in it. But now I think evidence is there and the proof is there that sort of up a compelling digital solution and consumers and patients will come. And conversely, if you don't, there's some great new studies out there. Some patients/consumers are picking their providers based on the digital experience. 80 plus percent is kind of an astonishing number. They want convenience. And of course, if it's a chronic conditions and the on the oncology space, maybe that's not where you drive your decisions from. But for everything else, it's ease of use. Do you know me? Are you serving up something to my benefit as a patient or consumer, not to your benefit as a health system? And you'll see the loyalty. So I think that's really taken off post-COVID, along with dripping a little AI on everything. But really, it's consumer experience I think is kind of starting and earnest. It's been talked about for decades, but it's really the tools are there and the adoptions happening. Now, let's talk a little bit about the founding story behind the company. I understand it's not your typical Silicon Valley story of Stanford dropouts going and building a tech company. It's a little bit different. So can you tell us a bit more about the founding story? Sure, yeah. So I was incubated at Providence Health System, and Providence has an incredible group of the Digital Innovation Group, led by Saravazi, Nina Chiu. And basically, they're mandated. The system is to identify technology gaps. So areas that the markets are not already serving efficiently. So the market being technology vendors. So they'll identify, they'll build a solution. They'll deploy it internally at Providence. They'll measure ROI. They'll commission voice of customer work. So they'll try to determine, was this a Providence unique problem? Or does this have commercial applicability outside? If they determine the latter, they'll bring in somebody to kind of finish the commercial ventilation process, which ends in obtaining investment from the outside world. Up until April 1st, when we spun out, Providence paid the entire development cost. So this is a fourth company spun out of Providence. So it's fairly unique that the platform is very mature, and the go-to-market side is really what we're heavily focused on now. Well, let's talk about that, go-to-market. So what's the go-to-market look like right now? Yeah, so we are still in early adopter land. We brought on a team after April 1st. We've five people on the go-to-market team now up from nobody, really, as we were incubating. And really combination of a direct and indirect or channel strategy. So really targeting those health systems that are known in the market as early adopters and innovative thinkers, as well as we're partnering with companies that already have a decent established footprint in the market, like clear within the ID space. We joined press release them last week, and then we would go to market offering with them, as well as self, which has a really nice 30-plus customer install base that we fit in. And basically, I can keep going with partners that we'll go to market with, then have an established footprint, and really with a better-together storage. So how can we enhance what's already been invested in deployment of health systems? And we think we have a great platform and story for that. This show is brought to you by Frontline's Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now, back to today's episode. And who is the ICP that you're trying to reach and really speak to right now? So we typically, two paths, so Chief Strategy Officer, Chief Digital Officer, depending on the system, that's going to be our champion and kind of our path in. But being a platform, will you touch a number of departments? I mean, we'll have a number of different stakeholders. The Chief Information Officer, Chief Technology Officer, is always a key stakeholder. We do handle identity. Whenever you talk about identity, it's a cure to the Chief Information Officer, it can be a key stakeholder. But are most likely and obvious champions that Chief Strategy or Chief Digital Office. What's it like right now for those folks? Can you paint a picture for what it may be like? Yeah, I would say it differs wildly based on the system and where they're at with some other initiatives. We were kind of past COVID, which took all the attention for good reason, or past that. And now I think systems are really focused on growing their patient base. So we help with that in a number of different areas. So I think growth is back to being a focal point and really growth can take a number of paths. You know, one of the obvious is attracting new patients to the system. And they all start as consumers. So we do differentia consumers of patients, but attracting new. But one of the reasons that Providence built this was they were attracting, but they maybe could have been more successful and retention. And so what prior does is retaining patients that you brought into the system. So by providing something more compelling to a lot of patients, once they enter a health system, a big hospital system, they might only engage, run a clinical transaction, but what Providence wants to do, they have a ton of, and they're not unique, they have a ton of incredible content. And it's just hard to get it in front of patients in a systematic way at scale. So what they're finding is if they can serve up relevant content in a format a patient wants, they can keep patients or consumers within the system. And so I think that's an area of priority, not just for Providence, but for a number of systems now that they need to focus on continuing to kind of grow their market share. - What about the market category? What's the market category that they're buying into? And is that an existing category? Or is this the category that you're creating? - Yeah, great question. So definitely a new spin on patient engagement or digital front door. So we'd say we're putting a little spin on that where a platform that's going to make all those investments that have happened in patient engagement, digital front doors, it make those more beneficial to the health system and the patients, consumers using them. So it is a new space consumer experience, really orchestrating that consumer experience at scale, which which really hasn't been done. So broadly speaking from a gardener or a forester, it's really broadly patient engagement, but drilling down and creating a new quadrant there. - And are you currently engaged with analyst firms like Gartner and if not today, do you plan to be in the future? - We are, so we brief Gartner Forester. Class with the K is a health system and payer only for them, but they do incredible work and they're kind of been to go to for health systems as far as, when the health system is looking for a new solution in this space, class is typically an early call. So we're absolutely working with the firms to continue to build awareness. - I've had a lot of healthcare technology founders on it. All of them tell me that selling into healthcare systems or health systems is very hard and it's a long process. What is that process like? Can you shed some light on that from your perspective? How many people are involved in buying decisions? How long does it take? Any information like that, I think would be interesting to our audience. - Yeah, so you're getting accurate information. It is long and then we've made it even longer by it. I mean, you're selling a platform. It's going to touch a lot of different stakeholders and departments. I would say on the low end, it's six to 10 people. It can go a lot bigger based on the size of the health system. So it is long, typically decent reason. Anything touching, patient outcomes, you want to be very careful. And then as I mentioned earlier, we do handle identification, which of course, there's been some very public issues there lately. So nobody wants to be front page news that had an ID rich under their watch and nobody want to be the vendor responsible for that. So a lot of security assessments, they take time and then just slotting in. If you get a green light early, it's slotting in with the existing resources there in which that's one of our value props is once we are in, we do make it easier for the IT group to implement new solutions because we got to become the platform that plug into. So we make that much more efficient. Want a quick example. And then a health system might take six months to enable a use case under traditional methods. So you're integrating with the EMR. And for good reason, there's a lot of checks and balances that go into play there. Once prior is implemented, that can be down to a couple of days because we've already done that heavy lifting integration and synchronization with the electronic medical record or the CRM. So we're taking those integrations away, but yeah, it's a 12 to 18 month sales cycle. You hope to get lucky a few times with some innovators who were looking for you. And that's what happened with our second client. But overall, yeah, it's a long sales process. And you're constantly kind of thinking at the end of the day, you know, do we have the right messaging? Do we have the right and the appropriate ROI story and in data points? So there's a lot of questioning your resolve in the startup world, especially solving the health system with the long sales cycle. - This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit globaltalent.co. - And how have the past, what has it been? Three or four months now, since you officially spun out, how have things been going? Any numbers or metrics that you can share? - Well, I'd say, you know, we built the pipeline exponentially, you know, 3x what we had at the spin out and, you know, different stages of opportunities within a pipeline of first meeting to really discussing needs analysis of the ROI case. And that's something we knew would come when we added the resources. The platform has been in production for two years. So it's very solid. That's kind of an inverted startup. Typically, you pre-sell a little bit and try to get that first customer who will go on the journey with you and co-develop or, you know, somewhat of a guinea pig. In this case, the platform is pretty mature. We'll continue to enhance it, of course, but it's mature. So a lot of focus, my focus in marketing and sales to focus is really just adding additional customers to the platform. - Now, let's talk a little bit about funding. So as I mentioned there in the intro, you've raised 20 million to date. What have you learned about fundraising throughout this journey? - Yeah, so I've worked in a lot of different stage companies from startups to publicly traded, plus a billion dollar revenue companies. So fundraising for startups probably as hard as it's been, at least in my career right now. So really hard for early stage, pre-revenue company, we had revenue, but you can still get it lumped into the early stage. So pretty difficult. I feel like it's opening up a little more, but I think we're all paying the price or paid the price for a little bit of the past three to four years of over indulgence. And it kind of felt like the .com hangover a little bit. There was thousands of companies, software companies funded in healthcare during the early days of COVID. And I think the market's not big enough for thousands. So there's a little bit of a wash out. So I think a lot of the venture groups who were really aggressive in the early stage have pulled back a little bit and reassessed their models. And then of course, SVB is back, but they had a little bit of a stumble there that froze the market a little bit. We were out in the market at the time and we weren't looking for debt, but it just, it has a ripple effect across because they were a great partner to a lot of firms, both the vendor side as well as the equity checkwriters. SVB was always there and a great partner. So that did not help matters at all. And I feel like it's opening up a little bit, but really all the venture groups we met with, there were quite a few we ended up with were great ones with Frisk Crassie and Signal Fire and Epsilon. Really, they all have health system LPs to some extent if you're selling into the health system. So they have health systems that are investors in their funds and they're gonna check those, they're gonna bring your story to their advisors within the health system to say, "Is this something to be of interest to you?" And really, the category we're in ROI matters. So you have to show return investment. We're not an absolute must have to keep the lights on and health system around a clinical solution per se. So you have to demonstrate a very compelling ROI that comes across pretty quickly. But the amount of, I think diligence that's being done is probably as high as it's ever been and that's a result of kind of maybe the past couple of years of big decisions and maybe expedited diligent processes. So hopefully we're kind of the tail end of that and a lot of lessons learned, but it was fairly long. But again, in the end, very successful with some great capital partners. - And in those conversations, how are you thinking about this opportunity and how are you thinking about the vision? And maybe a better way to ask that is let's zoom out three to five years from today. What is that big picture vision that you have for the company? - Yeah, so to the credit of our investors, we didn't show a hockey stick, but we showed them the aggressive growth. They wanted to see that the market's big enough and that you're projecting growth. But to their credit, and they all kind of said, well, let's tap the brakes a little bit and be a little more thoughtful in the investment of the go-to-market side. They knew we had to invest because we didn't have a go-to-market team per se, but they do look at this as a three to five year journey on the short end. And what success looks like for us at the end of five years is about 50 health systems, so we don't need 500 or 5,000. We'd 50 health system customers. And with that, we'll have a successful business and hopefully we'll be a valuable partner and be a pretty sticky valuable partner to the health systems and allow the systems to grow efficiently and add new patients without adding necessarily new staff because that is one of the concerns of health right now is the immense staff shortage is coming. So 50 health systems in five years, we've got a really successful business and delivering a lot of value to the system as well as contributing to better health and wellness outcomes. - And final question for you before we wrap. So you've obviously spent a lot of your career and you spent a lot of time in healthcare and around healthcare technology. Based on your whole career, all of this experience, what's the number one piece of advice that you'd have to a founder who's building healthcare technology? - I will say we haven't had to do it yet. We did a lot of pivoting pre-launch and you'll make decisions on product, market fit, but be open to feedback and you look at some of the great companies and they've pivoted dramatically from when they started to where they're at and where they achieved success. So be open to feedback, listen to the market and be nimble enough to pivot it because very rarely if something gets started in the garage and 10 years later, the same go-to-market strategy, the same product is where the company ends. So we're open, we're listening to the market and we have to have some conviction, of course, what you brought to market, but be nimble enough and open enough to pivot when the market's signaling it. - Amazing, I love it. All right, Justin, we're gonna have to wrap here. Before we do, for founders that are listening in that wanna follow along with your journey, where should they go? - Yeah, so we're building a lot of great content on priorhealth.com as well as a LinkedIn presence. And given that we are building market awareness, we're trying to be the thought leaders here and creating a lot of unique and fresh content to the basis. - Amazing, love it, Justin, thanks so much. - Thank you for the opportunity, great to be on. (upbeat music) - This episode of Category Visionaries is brought to you by Frontlines Media, Silicon Valley's leading podcast production studio. If you're a B2B founder looking for help launching and growing your own podcast, visit frontlines.io/podcast. And for the latest episodes, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we'll catch you on the next episode. (upbeat music) (upbeat music) (upbeat music) (upbeat music)
