Jon Pearce is working towards building a better healthcare system. Twelve years ago he saw a broken healthcare system and wanted to fix it, so he co-founded Zipnosis — which today offers a white label, B2B software platform enabling healthcare providers to offer asynchronous care in just a few minutes.
He didn’t set out to be an entrepreneur, and he definitely didn’t see himself getting into the medical field. But his plans changed after interning at a healthcare technology startup. That’s where he noticed cracks in the healthcare system and saw the cell phone as “the clinic of the future”.
Initially, Zipnosis was created as a direct-to-consumer company. It offered $25 virtual visits to residents of Minnesota in 2010, but the concept never really took off.
The technology and assumptions were correct, Jon says, but the consumer market just wasn’t ready for this service yet. Zipnosis pivoted from B2C to B2B after a large health system contacted him to inquire about licensing the platform.
Jon says that move wouldn’t have happened without the relative success of a competing service launched a few months after Zipnosis entered the market.
“As much as I hated what HealthPartners and Virtuwell had built, it actually was a lifeline and a reason why we had Fairview calling in sort of an ironic way,” he explains.
Zipnosis is now in 53 healthcare systems throughout the country.
“I think competition is good. It definitely sharpens swords.”
Prentice’s Takeaway👉 True challengers are never mild. There’s no shortage of bold statements on Zipnosis’ website. They truly believe in their mission and they know they only have a short amount of time to swallow up market share with so many competitors nipping at their heels.
Featured Challenger👨🦲 Name: Jon Pearce
⚙️ How he challenges: He’s trying to change the broken healthcare system by making it quick and easy for healthcare providers to offer virtual visits.
🏥 Company: Zipnosis
💎 Noteworthy: Jon majored in Russian language and computer science in college — entrepreneurship and the healthcare industry were not on his radar.
🔍 Where to find Jon: Twitter | LinkedIn
Challenger Wisdom 💡 Seeing the potential in the telemedicine virtual care industry“[Telemedicine] represents a step backward instead of the future. It’s sort of analogous to me of using the word videotape or cassette to describe streaming music and certainly how we interact with the world. I think Telemedicine was certainly in vogue forty years ago, but it is not the future [and] in no way represents the opportunity that technology has to form how and where we connect for the care that is now becoming all the more present around us.”
💡 Pivoting after early failures “The cell phone was going to be the clinic of the future, so that was the underlying premise for Zipnosis. We originally launched a sort of MinuteClinic on the iPhone as a direct-to-consumer business. We had a lot of MinuteClinic DNA. It started up here in Minnesota, and I had some of the early founders at MinuteClinic come in and partner with me early on at Zipnosis ... We were offering $25 virtual visits to anyone in Minnesota way back in 2010 ... but it was a horrible business [and] nobody used it. But the technology and assumptions we were making, we’re using. That set in motion a series of pivots and evolutions that get us to where we are today.”
💡 Having the right idea in the wrong decade“[Direct-to-consumer] wasn’t the right business. It wasn’t the right way to go 10 years ago. Today, it’s an absolutely beautiful model. Actually, if you look at some of the very successful direct-to-consumer companies, they look almost identical to what we launched ten years ago. It was the right idea, but the wrong decade.”
💡 Pivoting from B2C to B2B“After two years of not making it in the direct-to-consumer world we got a call from a health system. We were out of money, we’d burned through the initial fundraising that we had done on the direct to consumer model — I think we literally had -$5,000 in the bank account — and a large health system called Fairview called and said ‘Hey, we really like this. We think virtual care or telemedicine needs to be part of our delivery but we don’t want to put your brand on it, we want to put the Fairview brand on it. Are you open to licensing it?’ And that was the pivot.”
💡 Infusing healthcare services with consumer-grade expectations“The goal with Zipnosis is to drive the transaction cost as close to zero as possible … in eCommerce terms it makes a ton of sense, right? If every time you bought anything on Amazon you had to pay $40 just to buy the item before you even paid for the item it would never work. But that’s effectively the way traditional telemedicine works — you have to pay $40 for a consult that’s before the prescription, labs, or anything else that goes into it. So at a high level, we’re here to really plant the seeds for bringing consumer-grade expectations into healthcare and fundamentally changing the unit economics associated with it.”
💡 Coronavirus brought ‘a watershed moment’ to healthcare“From a virtual care perspective, [coronavirus] is the watershed moment … It has changed the industry forever and I can say that very confidently. We’re not going to go back to a world where the majority of care is going to happen in a traditional way. And that’s going to set in motion what I think is a broader disaggregation in healthcare … I think we will look back in ten, twenty years from now, and say ‘Wow, this really changed the way we thought about healthcare delivery and really allowed us to be much more comfortable relying on technology.”
💡 Becoming a savvy entrepreneur“We did a series A, it was about $17 million — so a pretty significant series A, certainly back then — and at the time we had nine customers and nine employees and we just saw the need to grow much bigger. We had been profitable the year before and it just seemed like the right time to go big. We’ve raised about $26 million total through a series B, and I’ve learned a lot through that process and have come out the other side a much smarter, more savvy entrepreneur and certainly a business leader.”
💡 Fundraising shouldn’t always come first “Generally, we’ve gotten a little bit away from the roots of entrepreneurship … raising money has really become a financial exercise rather than a really smart business decision. Going back and thinking about what comes next, whenever that is, I’m going to focus mostly on finding revenue, building great customer relationships, and letting the fundraising come after that.”
💡 Raising capital vs finding new customers “When I was starting here, most people were like “go raise money, go raise money!” But I think there’s a shift back to say go spend the time and find that customer. Get that market validation and get them in the game, and that’s going to be a lot better place for you.”
💡 Getting your piece of the pie in a rapidly evolving industry “My goal and the team’s goal here is to just continue to do exceptional work. We don’t need to fundamentally change our strategy. Right now, we’re in our element and I’m looking for how we [can] best apply these great assets, the strong brand we have, the great customer base and really look and saying, ‘all right if the market’s moving from ten million-ish virtual visits to a hundred million, how can we be a part of all of that?’”
Top quotes from the episode:Quote #1
“As an entrepreneur, you have to be malleable. I think you have to be open and ready to accept the hard truth that may come along the way. That’s certainly allowed us to survive and live in a very prosperous time for virtual care.”
Quote #2
“If you’re going to spend an hour of time chasing a dollar of investment or a dollar of revenue, where do you spend your time?”
Quote #3
“As a visionary who, 12 years ago, said ‘hey we can do a doctor’s visit online and not actually talk to anybody!’, even my family thought I was crazy. But it’s been really rewarding to see those assumptions come true.”
Quote #4
“Our goal is to be able to [make doctor’s office visits meaningful again]. It may not seem like the original intent with it but I think, if we’re successful, we’ll bring meaning back to that face-to-face [visit] and we’ll give consumers a lot better control over how they’re accessing healthcare.”