Ep. 36 - Bootstrapping a Billion-Dollar Underdog with Mike Wessinger

In this episode, Fahd sits down with Mike Wessinger, founder and Executive Chairman of PointClickCare, to explore his journey from installing desktop computers in nursing homes to building one of Canada's most valuable tech companies. Mike shares how a firsthand look at an industry still running on paper charts and binders led him and his brothers to bet on cloud-based software before "cloud" was even a word, taking on Goliaths in one of the most regulated industries in tech.

From bootstrapping through the early days of hand-to-hand sales to de-risking adoption for an industry that couldn't afford to gamble, Mike discusses what it really takes for a David to survive long enough to win over an entire sector. He also shares insights on leadership, resetting culture through hypergrowth, and how PointClickCare has stayed nimble and innovative even after becoming the Goliath itself.

Transcript

SPEAKER_03 0:00

If you're going to go up against a Goliath, don't go head to head. Figure out how to flank him. Find this thing over here that they can't focus on and just be that annoying thing and they'll never be able to focus on it. And that's how you crack into them and then expand from there. But do not go head to head. You've got to flank it when you're going after Goliath. Don't let your ego get the best of you because you had some very early success.

SPEAKER_00 0:20

I think you're right. A lot of folks think that the Goliath, oh, is dumb, is blind, doesn't see it. If you try to go head to head, you will lose. Hello and welcome back to the Unicorn Leaders Podcast. I'm your host, Fada Tab, the founder of Unicorn Labs, and we're in season two where we're telling the stories of the Davids versus Goliath of teams, how small but but unstoppable teams overcome the odds. What is it that they do? How do they show up? What is their leadership like? What's their teamwork like? What's their strategies like? And today's guest didn't actually set out to revolutionize healthcare, but in many ways had a huge impact. We've got Mike Wessinger here with us, and he wasn't chasing hype, he wasn't raising VC or building in a hot space. In fact, the space he chose was probably the least sexy sector in tech: nursing homes. Back in 1999, Mike Wessinger was hauling desktop computers into long-term care facilities that had barely seen email, let alone the internet. Paper charts ruled the day, regulation was brutal, and the margins were even worse. The tech non-existent. And so I bet everyone told him the exact same thing, which is don't bother, because this is archaic. But Mike saw something that others missed: a massive underserved system that cared for the most vulnerable people. Yet it still ran on pencils and binders. And so his brother Dave and a scrappy team in Mississauga, in Toronto, here in Canada, they did the unthinkable. They built a cloud-based platform for long-term care before cloud was even a word. The company we're talking about is point-click care. And today it's used in over 30,000 facilities across North America. 92% of US hospitals discharge into it, and yet somehow the company has held on to its underdog spirit. This is what I really love about it, and we're really gonna get into is a story about dragging an industry into the future, one nursing home at a time. And in this episode, we're gonna unpack the wild origin story behind Point Click Care and why Mike was told over and over again that it wouldn't work, how they turned hand-to-hand sales and startup scrappiness into uh a quiet market takeover, and what happened when the team hit hypergrowth when you started to scale, why Mike had to hit a bit of a reset button on the culture, and how point click care kept its soul while becoming one of Canada's most valuable tech companies. So if you're building something hard, especially an industry built to resist you, this episode is here for you. And I get the pleasure of interviewing Mike for this. Mike, welcome to the show.

SPEAKER_03 2:54

Great. Thank you for uh thank you for having me. Uh thank you for the kind words, and uh I'm excited to share my story.

SPEAKER_00 3:00

Yeah. So, Mike, let's let's let's take us back. Let's take us back to the original moments. Uh what was the moment you first realized there's something broken in this industry? What was your experience in the industry, nursing homes? What was your relation to it? What what gets you into this?

SPEAKER_03 3:16

Yeah, you know what's interesting. Yeah, I remember hearing uh, I can't remember who said it one time, they said, you know, don't tell people to chase their their passions. You know, tell people to chase the thing they're good at, right? And it turned out for me, you know, the thing I was pretty good at was uh sales. And it wasn't that I had a particular passion around uh the long-term and post-ecute care or nursing homes. I just happened to have a family member. My mother was a CPA and was in the business, and because of that, three of my my three software engineer brothers and I all sort of got connected in that space. And then once getting into the space, started to realize that, hey, you know, there's uh there's an opportunity here. Um and I think I think there's you know uh a way that we can start to make an impact on this industry. Now it started off fairly uh nascent. You know, we were you know selling somebody else's basic, you know, care planning, medical billing tools. You know, we'd find a nursing home, probably the first tech they were putting in somewhere in rural Ontario. My brother would put it in at the time of Novell Network after I'd sold the software and we'd get it up and running. But after a handful of years of doing that, we started to recognize that you know the impact of this technology just really wasn't it wasn't delivering on the promise. And you know, when you gotta buy, install and maintain servers and traditional software. You know, it's challenging for an or for uh for an industry that has incredibly low technical savvy, that has incredibly small margins, yet is more heavily regulated than nuclear power. So call it late. It's a true statement, incredibly regulated. And I could go into all the details of what's crazy.

SPEAKER_00 4:57

More regulated than than nuclear power. That's such a good way of putting it. Uh low margins and high regulations, that that's it. Why do you even like why do you even get into this? Why like right?

SPEAKER_03 5:09

Like is a Venn diagram of the worst place to build a business, unless you could figure out how to serve that market. So we said, well, if we built our own solution, yeah, how would we do it? How do we solve for these problems? And uh it wasn't obvious in you know in '99 that people were going to start building on the cloud and delivering in SaaS. We just we're trying to solve for a market problem. We said, what if we put it on one set of servers and we deliver this software over the internet and we charged on a, I don't know, subscription cost per patient day basis. Maybe that would work. And then we would take all the complexity out of their hands. They wouldn't have to come up with the capital to get this stuff done, and we think we can make it work for this market. And um, we had no idea. We we're talking about SaaS. People couldn't spell SaaS back in '99. No one was calling it the cloud. We were just solving for a market problem. But what we had stumbled onto ultimately was the way that the world ultimately decided they wanted to consume software, which was, you know, as a service. Um and we we stumbled into that market. So at the time we had you know 100 contemporaries in the space across the US. The reality is they weren't, you know, there's a couple of national players, mostly regional players, but these were not healthy companies that were making large margins. They were generally regional players, and you know, they were delivering traditional software and their margins were small. They were struggling, or they're dead or dying companies there, or you know, being bought by the consolidator of the day. And we said, we think we can come in and we can uh change the game and disrupt the market.

SPEAKER_00 6:45

And and what kind of software, like when you say traditional software, explain, give give me, let's let's give the audience a little bit more to kind of think about that. So were they were they enterprise software, were they building custom to the nursing homes, or were they selling it on CDs for people to like, okay, take make use of it? Was it high cost to like set up and implement in the first place? Give me a little bit of what the that that that market looked like.

SPEAKER_03 7:06

Yeah, it was purpose-built software. So it would have been medical record software or medical billing software at the core. So you need the basic electronic health record, and which is also connected to your basic billing software. And so they needed that, and it would be traditional client server software, whether it's for a small rural skill nursing facility in in rural Indiana or you know, a hundred, you know, hundred community, they needed something to run the core of their business to manage all the patient records. And that meant many servers and you know, CDs and installations and configurations and all the things that went along with uh traditional software implementations.

SPEAKER_00 7:43

Yeah. Yeah. And so there's a there's there's a moment here that there's a brilliant insight that you sort of wash over pretty quickly, but it's you you you get to the insight here is that you needed something that was lower risk for them to take on.

SPEAKER_01 7:57

Yeah.

SPEAKER_00 7:58

Right? Like i that that that's what makes that software as a service. It's like, okay, we're just gonna lower the risk of you implementing something, make it easier for you, and that's what gives you a bit of that adoption. Is that is that the core insight? Because you're trying to solve for this low margin, highly regulated, and so selling traditional software was just too bulky or too expensive, or they weren't adopting fast enough on that. Is that is that what I'm hearing?

SPEAKER_03 8:21

Yeah, well, I think if you look at it this way, um if you're a provider and somebody asks you to commit to you know a large upfront payment to buy the software, a five-year contract where you're gonna pay maintenance fees, and you've got to go buy a bunch of equipment, a bunch of servers in order to get all of that to work, um, that's a major commit. And then you have uh you know a couple of uh call them Yahoos out of Mississauga, Ontario, who have no who should have no understanding of Medicare, Medicaid, managed care, entirely different than the Canadian system. And they go, My alternative is I take a risk on this small company that's gonna ask me for a thousand, two thousand dollars a month, and if I don't like it, I um I just stop paying them. So it entirely changed the risk profile. Like, why wouldn't I do that? It's fundamentally different if they're not delivering for me uh in the first 60 days, I just stop using them. And so removing all of the friction to do business with us was a massive disruptor in the early days. I could do a five-year commit over here and separate from a lot of capital from my small margin business, or I could have you know zero risk, you know, implementation, no friction, and try this scrappy little company on a Mississauga.

SPEAKER_00 9:41

Yeah, yeah. You know, it's interesting because in these in these David vs. Goliath stories that we keep looking at, it it's so clear. You're able to do that because you you guys are this scrappy little company that doesn't need the capital. Like you're right, you don't need the initial injection of capital that some of these bigger software uh companies need, right, to sell traditional software, which is how they had that traditional model. You sort of go, we're smaller, we're nimble, we'll take on the risk for you just to get you get you onboarded.

SPEAKER_03 10:09

Well, I think the challenge for the incumbents is they had a model where they got all their money up front. That's how they comp their sales reps, that's how they funded the business to make that transformation to, by the way, investors, you we're gonna lower our revenue dramatically next year. But I I I promise you over five years that you'll be very happy with it. That's a very difficult thing to do. And even retraining your sales force saying you're not gonna get paid these big enterprise deals like you used to, you're gonna get money over time. Uh, I mean, we just watched many of our competitors who not only could they not make the technical transformation, the business model transformation choke them out as much, if not more, than the technical transformation to being able to deliver over the cloud.

SPEAKER_00 10:52

Yeah, yeah. I think that's a such a brilliant insight with which is what gives these these Davids such an opportunity. Sometimes you think you're smaller, you're less resourced, you don't have as much, but it's you're willing to bet on a new business model that the others are entrenched in, you know, that they can't they can't change as quickly, or they don't want to. Like there's no incentive to change for their salespeople and investors. I think you've put it really well. Now, before that, before that moment of that insight, um uh any any moments where you're thinking this is a mistake, like what we're doing, what we're building, what we're trying, or or do you get to that insight pretty quickly with with with your brothers?

SPEAKER_03 11:27

You know, I think when we were delivering a different model, we were asking people, you think about this, the timing, 2000. We want you to put your healthcare records on the internet and pay us forever. That's not exactly how we pitched it, but you know um when we tried to go raise VC money, they're like, come again, you're gonna do what? Put healthcare records on the internet, people are gonna pay you forever. First of all, no one's gonna put healthcare records on the internet, and secondly, no one's gonna pay you forever. And so um, we just had the belief that we are we are we know we're gonna fundamentally transform the way that our customers consume software that suits them better, that shifts all the risk onto us, so they don't have to buy, install, or maintain any hardware software, yet they get all of the benefits of uh of this this medical record system. And so we had um maybe uh delusional belief that it was gonna work. Uh we got lucky, it turns out uh we we nailed it. But you know, removing the friction up front making it a whole lot easier. And and it's just interesting because I've mentioned to you before that I coach a lot of founders and they're trying to get their new product off the ground. Nobody knows who they are, they've got a new product or disruptive technology, and they want to get out there and they're asking people for three-year contracts or you know, enormous uh investments up front. And my coaching to them is you are an un yeah, I know you've been an un for a long time, and I know you've put a lot of money into this, but if you create friction for somebody to to to be your early anchor customer, your early charter customer, you're just not gonna get them. You need to take on the risk because you're an unknown commodity. And I've seen on a number of occasions fundamentally transform the the pace or the angle of growth they have. I'm saying, uh and my comment is do not give free because people value uh that at what it what they paid for it. And so when they're pushing off their implementation three, four, or five months, is because there's no reason why they wouldn't. Yeah, they're gonna do when it's convenient, they have to have some skin in the game. However, you need to remove the friction from them doing business with you if you're an unknown entity with a new business model entering into a new market.

SPEAKER_00 13:31

Yeah. Yeah. So who were your true early believers? Like uh, you know, your brothers, your mom, like you had you, you get you had some of those, and then and then were there some key investors or some key customers that were kind of the early believers that helped move things along?

SPEAKER_03 13:49

Yeah. Well, we were lucky because we had been in the space for a number of years putting early technology that wasn't our technology into uh a lot of these communities. And so we had uh great relationships, so we were lucky enough to get those early visionary customers that saw such an order of magnitude improvement in the way this would work for them that they were willing to take a risk and go through the bumps while we were really trying to get product market fit. So we were very lucky that way. Now, very different on the investment side, you know, trying to convince after the dot-com bubble that putting healthcare records on the internet and having customers pay us forever was a good idea was impossible. I mean, I spent a lot of time trying to go raise some early capital. I had no luck. So we did a friends and family around the type of people who are willing to write checks was like aunt and coach from hockey team and you know, friends and family, you know, neighbors. They would that's the only people that were willing to take the gamble. And they were just betting on the jocks, like, I don't even know what this cloud stuff is you're talking about. I don't, but we're gonna basically bet on you and your brother, and uh hope it works out. And uh I mean it could have gone the other way. We could have gone wrong, and they could have taken their you know, money that was probably more money than they were prepared to lose. Um, but it you know, they we wound up you know 100xing most of their most of their checks. So I'm glad it worked out the other way. But yeah, we didn't take our first institutional check until wrong way into the journey, until 2011.

SPEAKER_00 15:16

Really? So you so you bootstrapped, you know, and and and how did how do you think your early decisions and bootstrapping affected your strategy, your team, the talent you could recruit? But just the the overall, I mean, there's there's benefits to a David bootstrapping, because it forces a certain amount of focus, and there's disadvantages to it. But let's talk about what were the advantages to the fact that you had to bootstrap?

SPEAKER_03 15:40

Well, I think ruthless priorization. You know, you can there's you can only do so many things with your limited capital, and so you've got to ruthlessly priorize. But also when there's a I think for us, it created a a customer-focused DNA because there was such a high correlation between delivering value for your customer and making sure you could pay your mortgage that you were very, very connected to delivering value for the customer. It wasn't, well, we'll get it right on the next iteration. It was it was that close. So I think it it really helps you with ruthless prioritization, being incredibly capitally efficient, and building a customer-focused DNA. I think those are all benefits of having a company that is underfunded versus overfunded. Because I can I can speak to the other side of it when we had lots of capital and we were sorry, generating lots of lots of revenue, and we had the opposite problem, and we had to fix it.

SPEAKER_00 16:37

Yeah, isn't that interesting, right? When you have all the money, your discipline to be able to prioritize and ruthlessly prioritize, you end up going just a little bit all over the place. So, so uh walk me through some of those early days. You you start getting some traction, you start building some of this software. What are some of these are there any key markers that that that starts to shift? You you you you you de-risk the software, you sort of introduce SaaS into this industry. Um walk me through those first few years. What does it look like? What's the what's the organized chaos? What's the team? What's the what's the uh adoption rate?

SPEAKER_03 17:22

Yeah, I think you know, the you know we figured it out in the Canadian market fairly quickly. Um and it's a very it's a small market, and so we figured out how to get product market fit. You know we were only doing it in your five provinces, we could figure out product market fit for those provinces. Canadian healthcare is far more straightforward with a you know the single payer system than it is south of the border. But uh we figured out fairly quickly, it started to get adoption fairly quickly. Um, but we were really focused on customer delight. Now we measured it by NPS, but however you measured it, we wanted to make sure, because we had very, very limited budget for marketing, that uh we we could have word of mouth and could count on our customers taking our messages. Also knowing that staff hop around within the industry all the time. And if uh we treated not just the people who signed the contracts for our software, but the people who were on the floor every day dispensing meds, caring for patients, sending out bills, and we could delight them, we knew that they would carry our message along. So we really focused on NPS. The big lesson we learned when we headed south of the border was the importance, you know, marketing one-on-one of target market and product market fit. So we left Canada heading south of the border. I think, first of all, underestimating just how much more complex the market was, but also understanding that it wasn't one market. Medicare and Medicaid are different in every state. It it's more like 50 markets. And in the case of New York, California, Texas, Ohio, Pennsylvania, Florida, large markets. We made the mistake of treating it as one market. And had we not discovered, and you had to figure out product market fit for each market because you know the software had to figure out the regs and the rules for each state one at a time. And when we first entered in, we got customers who started to fall in love with the value proposition. Wow, we don't have to buy, install, or maintain any hardware software, and if I don't like you after a month, I can leave. That sounds pretty good to me. So it wasn't that difficult after having gone through refining our pitch in the Canadian market to find customers. The next thing you know, we're fighting on 14 different rights. Frights 14 different states with you know trying to localize the product and get a product market fit in those states. And how do we continue along that path? We probably wouldn't be here today. Then we said, wait a second, we need to figure out what's our target market, our polling pin strategy. And we need to stop the nonsense. There are states we're going in with our limited budget, trying to market to and sell to. No, no. Let's now just focus on only Minnesota. And until we get Minnesota, let's start with the visionaries and then the uh early adopters, until we get that on autopilot, we're not going to the next state. And so once we started doing that, we were starting to delight all customers. Everyone got laser focused on just that market, that it wasn't just getting the product. It's not just about getting the product functionally work. We needed partnerships with accounting firms, with you know, with consultants, they could help us bring on new business, they could help us do implementations that had all the relationships. So it's building density in any one market. And so what we learned fairly, you know, that we go one until we get enough scale that we could do two at a time or three at a time. But this is sort of how it went. The first 10% market share in every market was like hand-to-hand combat. Crawling through a ditch with a knife in your teeth, taking them down one at a time, as hard, as hard gets.

SPEAKER_00 20:53

And that's because and that's because not that there was a ton of competition, but just like the inertia of pen and paper, like it's like just like it's easier the default to not do anything. Is that what it was? Or what was what was the what made that first 10% a knife fight? Well, we always had competition, right?

SPEAKER_03 21:11

Okay, yeah, everybody is was pushing to automate, so we had competition in every state, and we're an unknown commodity coming with a new model. So getting that first 10% when nobody knows who you are, they can't look around, go to their trade association, and find other people who are using it, hire staff who have used your product before. First 10% is just incredibly difficult. But then the 10 to 25%, we were in the mix. We didn't win every deal, but uh we were winning our, I would say, our share. After 25% market share, we were the default winner. And after we hit 50% market share, we were taking orders. So we got so disciplined in that at this uh that we you know, one of my competitors called Ohio No Fly Zone, they wouldn't even respond to an RFP. They're like, That's point click here, they own it. Like we we we can't win. It's impossible. And they called it an old fly zone when before anyone in California knew who we were. So we get very disciplined. And they knew that when we decided to go into a market, we put everything we had behind that market to get perfect product market fit, have absolute customer delight, get all the accounting firms, consulting firms uh incented and working with our product. And um, and once once we made the decision to do it, we were going to go and dominate uh dominate that market. So that early lesson of you need to follow that bowling pin strategy, what's your head pin, then what are the next few pins, was incredibly important for us. And had we not learned that early enough, we would have exhausted our resources and would unlikely be here today, or certainly not at the scale we're at today.

SPEAKER_00 22:41

Yeah, I think that's that's such a such a brilliant focus. Uh, you know, I again we use the the David Rosglei analogy, but it's like this the single slingshot of we're just gonna, you know, one state at a time, we're gonna win this one versus this. Oh, but others over here, and especially uh especially early on, because you're just trying to get anything, right? When you're first going, you're like, oh, let's just get there, could be a win here, there could be a win there, let's try there. That that's uh that's that's tough. It's honestly tough from a discipline perspective, but it's also tough because money, money talks. Investors, right? If you've got investors, they want you to go get after all the revenue. I think that's some of the challenge that some of the startups that take VC money, they actually struggle with that laser focus there because they're also getting this earful of go get more, go get more.

SPEAKER_03 23:28

I I see it all the time. Um, what happens is they will have an early stage company that commits to a forecast, and the forecast is honestly bullshit because they don't have enough experience to know what so they put a number on there. And the problem is they could get that number, right? And the VC is like, yeah, go get that number, get the bookings number, get the revenue number. But then they, you know, instead of the discipline of target targeting their going after their target market and then branching out from there, they think all business is good business because it's gonna help them hit their number. And then they wind up fighting on 14 fronts and they're not delighting any of those customers, they're barely, barely getting the basics in, and then they start to get high turns. So, year one, they may hit their forecast or their VC because that's what they said they were gonna do based on a bullshit forecast that they came up with that that was based on absolutely nothing but fantasy. And then they broke from the discipline of going after a targeted market bowling alley strategy and or bowling pin strategy, and then all of a sudden they have they're not gonna meet their number the next year because they can't fight the 20% churn because they've delighted nobody, and uh, and then they're gonna go raise it a down round, and I've seen it spiral out of control. They need to have the discipline, even if they've already committed to that forecast, to go back to their VCs and say, listen, the most important thing is that we have a target market, we have absolute customer delight in that market, and then when we feel comfortable that we're ready for the next market, we go after that. So I think early stage companies getting a uh understanding your target is not your market, because you know, uh think about all the noise, like you need a $10 billion TAM, you have $2 million of revenue. You know what you need? I don't care about your $10 billion TAM, I care about your $40 million target market. That's way more important to me. And are you winning all the deals in that market and are you delighting your customers? And if you're not, the idea that you've got a pile of customers in many, many segments and none of them are very happy, but you made your number, um, you know, it would would not make me happy as an investor.

SPEAKER_00 25:23

Yeah, yeah. I think what's what's brilliant here that I'm I'm picking up on as you're saying it is are you winning most deals within that target market? Like, are you actually the best in it? Right? Like there's this we owned Minnesota, like we owned um and that gave you a ranking. That when you move to the next state, you have reputation. We've won here. We we are effective here, we can point to it, versus we're kind of good in all these different areas, right? Like there, there's a there's a real um Yeah, there's there's there's just there's just a real strength that you're walking into the next market with.

SPEAKER_03 26:00

Yeah. Exactly right.

SPEAKER_00 26:04

So there's a moment where you sign two national chains. That that what when does that happen in that in this phase? So you you're sort of you're you're you're you're winning these target markets, you're sort of focused, discipline, bowling pin strategy, and then when does the national deals come in? Where did where did that where did that occur in your timeline?

SPEAKER_03 26:26

It's pretty early on. Yeah, we had probably um entered into uh four or five states where we were following the discipline, go in, figure it out, but then we had you know initially those two top five chains. And so to put in perspective, the con the combined number of um communities they had between them would have been more than all of Ontario. Call that 700, 800. Very large. And uh so they were they were they were giants, they were the 800-pround gorillas. And so we had started working with one of them, and uh because we knew that they we tested it, made sure they were visionary. We came, we were up front, well, we're not ready for you yet. They're like, but nobody else is, but we're willing to work with you if you can understand that we can only go state at a time, and we'll help you priorize the states. And so they were an incredible partner for us. Had they been the wrong partner, uh, they could have crushed us. But then when the second one came, you know, they issued us a large RFP, like call it a binder that probably had 300 pages, and we just said, no, thank you. And uh so they went through the entire RFP process, met with all our competitors, and eight months later called us and said, How come we didn't respond to RFP? And we said, Well, first of all, it would have taken our entire staff just to respond to your RFP. We gave it a glance, we can't do that, we're not ready for you yet. And and they're like, Well, I'm like, honestly, nobody neither is anyone else. And like, well, listen, we're already dealing with another chain, we'll figure it out, we'll talk to you later. And they said, Well, if we reissued the RFP was a little slimmer, would you would you respond to it? We said, no, we won't, we're not ready for you yet. And they said, Will you come and do a demo? And we did, and they said, Look, we want to do business with you. Um, and I'm like, like, what? Why like why choose us? We we didn't even want to respond to your RP. Said, you're you have the tech that is closest to it to what it is we need. You're not full of shit like all your competitors. And would you work with us? I'm like, look, you could be one of our anchor customers, but you know, we have to deal with another gorilla of your size, and we know this thing for sure. Whether you know, whether it's successful or unsuccessful is going to be very high profile. So we need you to work with us as an early adopter visionary customers, knowing not everything is perfect, and we need to align with this other large contemporary of yours and choose our priorities. Because over the fullness of you know of time, you want exactly the same things. It's all about what you need in the next eight months or the next 16 months. And so long as we can do that together, um, then we think we can work together. And even with all of that, with you know, no, you know, confirming they were both visionaries, setting the expectations up front, there was a couple of near-death experiences where just the sheer weight and demands of these organizations almost crushed us because we're trying to keep other customers happy while we're dealing with these two gorillas. And there came a point where that you know we weren't able to move fast enough because you know we didn't have any outside funding. And uh, I actually went to one of you know one of the uh CIOs and said, listen, um, if you are willing to pay me two years' advanced subscription, I will put every single penny of that into RD and not into anywhere else, and I could accelerate a lot of the things that we need to do for both of you. And uh, we had built enough trust by that time that they came back and said, We'll do that. So I actually got advanced subscription payment and it allowed us to go out and hire a bunch of engineers so that we could really accelerate our roadmap, which again, we never worked on roadmap, it was just for them, but we validated the things that they were asking us for that we needed to build out next were good for the for the broader market. And so uh that really helped us get through that that difficult, the uh difficult situation where we had these two 800-pound gorillas sitting on us.

SPEAKER_00 30:08

Yeah, yeah. You know, there's again this is a theme that we sort of see across some of these David vs. Glyde stories, because I love how you put it, is that often a customer needs to take skin in the game with you, right? They they sort of become a partner, they go, they're invested in your success, and they need your success just as much as you need the success, and it becomes this non-negotiable, we're gonna find a way to help you succeed because we need it. Um, and that's sort of how David finds a way through, how how you how you get through you. And that's that's that's phenomenal. They give you, we've had we've had some other stories where the customer becomes an investor, right? Invests in the company. Well, in this case, they give you a two-year advance on subscription fees, or have have uh there's a few other stories where it's like, yeah, they've they pay an advance in full just just to get you across that finish line to help you uh uh uh resource the right project. Um I think I mean the discipline, I reflect on the discipline, you had to also say no initially to probably what was a lot of money in that initial in that second RFP, right? Like that that sort of like here's an opportunity, but we know we're not ready for it, and this could kill us otherwise. And it it still almost did, as you said. That's I think that that that sort of leadership discipline and foresight, I want to say, is is is not as common in in what's happened with VC trends, what's happened with the last 10 years or 15 years of startups. And and is there a ref do you have a reflection on that? Does that come from having built boot been more bootstrapped? Like that gave you the discipline to think that way. And again, you coach a lot of founders today. Again, I don't see too many who would be willing to perhaps walk away. There's this attitude of growth at all costs. I think it's tempered in the last few years, obviously, as the market's cooled, but this growth at all costs that came out of the Silicon Valley kind of world really doesn't match up with the playbook that you just sort of outlined.

SPEAKER_03 32:05

Yeah. Well, I think you had the advantage of uh have having not been VC funded. Because had we been VC funded, we would have been uh gun to the head, give me your forecast, and we would have, you know, come hell or high water, made that forecast because we would have wanted to raise on probably an oversized valuation that may not have been realistic. In order to do that, we would have had to commit to a forecast. And then we would have felt that the pressure to make that forecast. And once you feel that pressure, all business is good business, even though you know in your heart of hearts it's not good business. So we didn't have that same pressure. And we knew if we had brought them on and we didn't bring them on in the right context, if we had said, yeah, yes, maybe, okay, but you know, can you kindly you know be gentle on us and work with this other provider, they would have said, you know, basically, no. Like you said, you're gonna do our business and you're just gonna do what we want, and we're gonna beat you up all the way. And I think we said in the right context, said, no, we are not ready for you unless we can do it under our terms and and anything but our terms, is a death sentence for us. So the answer is just no. And I do see this with founders, they they get to the point where they feel the pressure so strong that all good, all business is good business because I'm gonna make my forecast. And so I I the coaching that I often give them is like you need to go reset the expectations of your founder and go own up that your forecast was bullshit because it was based on nothing, it wasn't based on reality, and that the most important thing is you're getting product market fit is customer delight, and that you're getting and winning the majority of the business in your target market. And that's the only metric that matters, and that's far more important than where your bookings or your revenue number is because you can make those numbers and bring on bad business, and then you just set yourself up, you know, chasing chasing uh you know you know, fighting on too many fronts and setting yourself up for failure. So I approach on that often.

SPEAKER_00 33:56

Yeah, yeah. So uh Mike, tell me about uh the moments of difficulty with this second client. You know, you're maxed out. Obviously, at one point you go for the lifeline, but before that, your team is maxed out. You're you you're pushing. What do you what do you do to keep what do you do to keep the team from burning out? What do you do from what do you what do you what's the what's the team dynamics like? What's the culture like? What are you as a leader thinking through when you when you've decided to take on this this second 800-pound gorilla? You you're trying to align it, you've yet to go for a bit more funding from them. What's uh what's the culture, what's the team like? How are you surviving through it?

SPEAKER_03 34:38

Yeah, I mean, it's the early days, so the people you've hired are not necessarily the people that you know you got from other companies who have seen this movie before. It's a bunch of true believers that are absolutely committed to the mission, and you've got to keep reminding them of the bigger picture where it is we're trying to go. And you gotta be at the calm of the center of the storm when the chaos is everywhere. You've got to be the calm at the center of the storm, you know, talking people off the ledges, reminding them of what the broader vision is, right? Making sure you keep the pulse on when somebody's about to break, you might like, all right, you need you need a few days off. Like, do we need to, but then recharge and come back in? Well, yeah, we had a lot of people that the early people we brought on were the true believers that you overwork and underpay, but never ever uh give up on the dream of where it is you're gonna go. And you got to continue to talk about that longer term vision. Um, that's the only way you're gonna, you're only the way you're gonna get through it.

SPEAKER_00 35:28

Yeah, anchoring them the vision, anchoring them to purpose. Yeah.

SPEAKER_03 35:32

But there's a lot of noise that you're gonna hear a lot of times, and people will go, you know, hey, can we just stop and get it fixed, everything, and then move forward? And the answer is always no. We're gonna build a plane while it's flying. I'll accommodate any other requests. You need more resources, you need more time, you need whatever. That that that's all negotiable. You know what's not negotiable is is growth and moving forward. That's non-negotiable. Everything else is you need more resources, you need different people, whatever, whatever it is you need, that's all negotiable. What's non-negotiable is we are driving forward and we're gonna grow. And you need to be the one because there's always to go, can't we just stop and fix everything? That you lose that your momentum and you're done. So the answer is just no. And you just got you know, you gotta be able to you know manage the personalities and you know help them understand what the big picture is and you know, and let them know that there's there's only one non-negotiable, you know. It and the the idea that we stop and stop growing and fix everything, yeah, that's that's non-negotiable. We are moving forward, we're gonna grow, and we're gonna make it happen.

SPEAKER_00 36:28

Yeah, yeah. Now, uh was there uh was there was there a moment where competitors started to catch up? So you sort of shifted towards the SaaS model, this de-risking model. Initially, competitors were doing sort of the old school software, but I'm sure they see what you're doing. They start to kind of see the opportunity here, and some people start to maybe catch up on that. Was there a moment where the competition started to change in the US?

SPEAKER_03 36:56

Yeah, it took them surprisingly uh a lot longer than you would think to recognize that this new model of SaaS was a thing that was gonna stick. I think, you know, it was a bit of denial, fear, anger, resentment, acceptance, right? Like they went through all the stages of loss, like there's no way this is happening, and this model's gonna break. And then they realized that they were losing, you know, not only all new deals, they were starting to lose their customers. And so all of them made uh that made the transition to basically try and knock off what it is we did, follow our model. Challenger us, most of them didn't have the technology. They weren't, they weren't web native. So they would take their traditional product and run Citrix or something else on there, find a third-party data center. Their input costs were so much higher than ours. The software that they ran was clunky. And you can imagine this conversation. Hey, uh, Mr. or Mrs. Customer that just spent hundreds of thousands of dollars on hardware and software. Could you please kindly abandon all of those investments and mothball all of your servers and start paying me five times as much on a monthly basis and we'll host it for you? Those conversations don't go very well. So they they had a very, very difficult transition to get there. So only a handful of them ever made the transition where they actually got some web native software. They had enough financial backing they could start to change the business model, but they struggled. And so while they were struggling to get just the basics of what we were doing, we could have sat back and said this is this is time where we could throw a little more margin in. And we said, no, we're gonna follow, I call it a cold war strategy. Let's just out while they're just trying to figure out the basics of how do I deliver this stuff over you know in a SA over the web in a SaaS model and chasing my business model. We plowed a ton of money into RD. So that by the time they got through, we would get into a head-to-head demo situation, and it was a no-contest situation. They go, This works functionally, this product is so far superior because we just kept it was Cold War just to keep pouring more and more and more money into RD until we broke the backs of uh of our competitors. I mean, that's why you know we had a hundred competitors that we started, we have one today in uh in the skilled nursing space.

SPEAKER_00 39:15

That's wild. So at the end of the day, your moat became your RD. Your moat became the actual product.

SPEAKER_03 39:23

It was and this was at a time it wasn't obvious because you know they think it's not about you know, not about best products, it's about best marketing. And uh I used to have this debate with with another brother of mine, the you know, one that uh you know the one I co-founded with, I said, no, the best company wins, which is a common in people can't forget that you know product is the most important uh you know, that it's not just product or not just the go-to-market organization, it's the best company. And you can't forget the you know, product still matters. And there are a world of you know very mediocre products out there. You know, why don't we build great things? And if we build great things and uh and and delight our customers, we think that's gonna create some durability in this business.

SPEAKER_00 40:02

Yeah, yeah, yeah, yeah. That's uh I love that. I love the way you thought about it. Now that's interesting. Let's take let's take the uh the lesson for the opposite side. So often we're looking at lessons for David. But like, what's the lesson for the Goliaths here? They were unable to change fast enough. And then they were even when they started to change, they're they're they were just not web native, as you said. So we're sort of going through perhaps a next wave of this with this idea of AI native or not, right? It's software AI native. I think there's a debate as to whether that's truly a shift or not between you know legacy software to cloud, but it's it's there, it's in the conversations, we're seeing it, you're seeing certain software built at a much cheaper cost than previous legacy software with a lot more AI enablement that's more native than kind of adding it as a as a module. Um, what's the lesson here for some of the software companies that have been building over the last 10, 15 years that are now facing against little Davids that are AI native?

SPEAKER_03 41:05

Yep. All right, and I think that's the reality. I mean, we're we're living that today. And I think the thing that kills the incumbents, you know, the uh the Goliaths is uh hubris. They get to the point where they feel like they're untouchable and nothing's gonna change. You know, and I, you know, when I came in and delivered SaaS, there was a you know a few, a few of my contemporaries in this space thought they were untouchable, and they don't exist any longer. And I think for companies like ours, if we deny that there is a whole shift and change, uh a sea change of the way software gets developed and these AI companies that are entering our space, and we get arrogant and think no, no, we already have the customer relationships, we have all the customers, we got all the data, and we you know, we can we could just sit around and we'll be fine. I think that would be a mistake. So I think for the Goldeliath, you can't ignore uh the challenges that are coming in this space. And there's a ton uh you can learn from those challengers. And so often that means you need to try and figure out to, you know, when you're when you're small, try to look big, when you're big, try to be small. I think it means you got to carve off and hive off teams that if you were to go disrupt yourself, go figure out how you do it. Take a small team to go and do that and have them behave. And two things you have to do to make those uh organizations function like startups. One is you have to um uh you have to sometimes capitally starve them. So sometimes you when you have too many resources, you get sloppy and you throw money at problems versus thinking through innovative ways to solve problems. But the second one is when they're successful, you have to give them an outsized reward as though they were a startup. So having small teams to focus on problems and operate as close as you possibly can to what a startup would operate, which is capitally constrained, innovation rules the day, and there's a big reward at the end of the day, is uh at least what we believe is the best way to, you know, in it, when there's a change in the paradigm of how Pesophagus developed and how people consume software, I think uh that you have to do that.

SPEAKER_00 43:07

And have you seen have you seen companies do that well? Like, I mean, you know, we can talk about the Googles who have their X labs and you know, kind of the sort of big tech that have found ways to maybe do that well with a lot of waste, because there's also a lot of waste in those big tech around those small things. But have you seen, you know, not a Google, not an Apple, not a Meta do that well where they create these small teams and innovation pods where they're close, you know, mimicking that sort of startup feel in order to create real innovation?

SPEAKER_03 43:36

Yeah, I think companies like uh Workday and ServiceNow have done that. And you start to look at it and go, how you know, how much you know, how how much of their bookings or how much of the revenues now coming from AI native products? Because the idea is if you're gonna truly embrace the AI age, it's not sprinkling a little bit of AI around your core offering. It's you need to go with you know four deployed software engineers to start developing. Agents that are from the core up built for uh for your market. Now, there is a real advantage to being an incumbent if you can truly embrace AI. The advantage is you do have the customer relationships. They don't last forever if you can't innovate, but you've got access to data and understanding of workflow that nobody else has access to. If you can combine that with people who are your best engineers and maybe not the 48-year-old distinguished engineer, it could be the 27-year-old AI native and recognize those are the people who can move the needle and combine that with the assets you already have. You don't always have to be the leader. You can always be a fast follower. It's like somebody found a category, the categories are really interesting, but they will never have access, they don't have access to, first of all, the distribution channel and the customer relationships, and secondly, they don't have access to the data and the workflow in the same way, yet they will never have it the way the incumbent does. So I think there's if if you can really embrace the AI, the incumbent, there could be some real advantages to for the incumbents. Not everyone's gonna get it, though. There will be some uh incumbents that sit on their laurels, and hubris will you know have them you know think that they could sit around forever and nothing's gonna change, and the only thing they can focus on are margins instead of making the big investments in the AI, they should, in order to uh you know to defend the remote.

SPEAKER_00 45:19

Yeah. Okay, so you win your two 800-pound gorillas, you start to go state by state with them. They fund you a two, you know, two years in advance. What does that look like? What does what is that what does the finish line look like for them? What does those next two years look like? Again, sort of Cold War strategy you're mentioning, you're building features out, your RD team is growing. What is the is there is there a is there a moment um where because you know you're hitting your lows here and so you're sort of going for asking for a little extra uh funds. Is is there a moment where you feel you you get out of the water, you you're you're no longer drowning or treading? There's a there's a moment of, okay, wait, this is working, we're making it, there's there's momentum here.

SPEAKER_03 46:09

Yeah, I think you know, we were well on our way through implementing uh most of the you know the their communities, and you know, it was a couple years into the journey. It took time, but we felt like we had a formula, every new state we go into, we've got it figured out, we get the checklist of everything we need to do, we know how to measure success, and we can move on. And it helped us with the broader market because when you go walk into a new market and say one of the logos or two of the logos they know, they know as the gold standard in the space, are are the you know they're using you and they're doing it successfully, and they can pick up the phone, they're going, yeah, love of love, you know, love the crew, point click care. Then that really, really helped us. And they were they operated in 36 states and you know, all of the largest ones. Uh, so that really helped us go. You know, we had access to 90 plus percent of the market after that. So that was that was that was transformational. And then yeah, you we got through that, and the days of you know, we have got an existential threat every day, we didn't feel that anymore. We're like, okay, now now the idea is how do we win, how do we become the gorilla in the space? And it's not about you know, can we just exist? Are we gonna make it through the next month? It's like how do we how do we you know scale this bad boy and see what it's you know really made of?

SPEAKER_00 47:21

Yeah, yeah. And and so as you start to get into that space, there's a moment you've described in previous interviews, a moment in Vegas with a suite with a piano. So on the other side of sort of that that things are working, there's an there's a moment of wait, am I building what we want? Am I building the culture we want? What's what's what's happening to the team here as we are no longer in existential threats? Are we making bloated decisions? So so so walk me through that moment in in sort of this life cycle.

SPEAKER_03 47:55

Yeah. I mean that would be the opposite of uh being capitally constrained without, you know, and and boost strapping. And it um and it makes you do stupid things, and uh we fall into that category. So what if I think about the early days of culture, we have really, really strong culture. You know, in the in the early we could be out of business next week phase. Everyone's got everyone's back, you're laser focused on the customer, everybody works hard, they are incredibly efficient with resources, and uh and it builds this camaraderie almost like a war, you know, uh water buddy culture. Like you know, no one's leaving the office, everyone's looking out after each other. It's fantastic. And then we get to the point where you've signed, call it two 800-pound gorillas. It's not about just getting through the next payroll, it's now wow, we've written more checks than we can cash. Like we've committed to all this stuff, we gotta figure out how to do it. And again, everybody's committed to the cause, committed to the mission, the early believers, true believers that you brought on. Uh, they're overworked and underpaid, but they you know, they believe in the vision so strong they are gonna be there. We didn't have to think a ton about culture and performance culture. But then we got to that wake-up moment that I had you talked about in Vegas. You know, we were hiring sales development reps in classes of 10 or 12. Their very first day on the job, they were at our sales marketing, you know, customer success conference in Vegas. And it was uh the Venetian, some fancy hotel like that. And uh they checked in, it was not a busy time of year, and you know, one of the SDRs called a 23-year-old SDR, first job out of school, checks into the room. And I see him at the uh the mixer later that day and said, Wow, I just checked in my room. I got a pool table and a grand piano. Is that how we roll up point click here? And I went, holy shit. I get what's going on here. I started to notice that you know, the expectation wasn't the days we couldn't afford coffee and we'd send our best engineer out to go and get a bunch of Starbucks at lunch and realized that's a really expensive resource to be sending out for coffee. We should probably get a coffee meet. They never saw those days or you know, eight people in an Astro van going shift sharing a hotel room in Baltimore. Like they didn't know those days. All they ever saw was customers falling trees, there's lots of money, and look where we're staying. And I went, no, get used to the Hampton. And I realized we were, you know, because we were successful, we were victims of our own success, we had lots of resources, we were winning most of our deals by default. And every time there's a problem, they're like, oh, throw a team at that. Every time, you know, or throw a new consultant at that. People just throw money at problems, they stopped using their head and thinking through problems. And I realized that at that time, I think it was two-thirds or three-quarters of the staff that were there had never seen the early bootstrapping, scrappy days of, you know, not you know, they were they they knew pool tables and free lunches and all that stuff. And I went, we need to do a full cultural reset. Uh, because we're at a fat and happy stage. And if and we if you stay fat and happy for long enough, you're gonna be vulnerable. And that's what we did, a full cultural reset for uh for everybody on staff.

SPEAKER_00 50:59

Walk me through that. What does that look like? What is that like how does one do a full cultural reset? What was the tactical leadership and team dynamics kind of playbook here that that allowed you to do that? And and from moment one, like what does a reset look like?

SPEAKER_03 51:16

Yeah, interesting. So it first of all starts off, you know, recognizing you have a problem. And then uh we did I wasn't sure how to go about it. So we started off with uh kumbaya sessions, people from different departments sitting down, talking about the culture. And we had a we had a defined culture, but it wasn't serving us anymore because it didn't have performance in there, and it didn't, we and we didn't have a good method to tell the early stories where we came from. So but after you four or five kumbaya sessions, I said, this is not, we're not gonna crowdsource this. This is not a democracy. I sat down with my brother. I go, what is the culture that we want to have here? What do we love that we have today, and what do we aspire towards? Because it's gonna we're gonna set it from the top down. And once we got very clear about what the culture to be, then we said, all right, now what's the next step? We need to roll it out through the organization. So a lot of that was storytelling, you know, where we came from, how hard it was to get the customer, why we need to be capitally efficient, what it means for the future. But we brought every single staff member in for a two-day culture orientation and said, this is point, and this is the culture, you know, this is where we came from, these are the stories, and this is the cultural expectation. And yeah, there's no doubt after those two days how you were expected to behave at point click care. And there's a few people said, Hey, this like high performance, this, like that's not really for me. I'm like, well, great, I'll give you a letter of recommendation to go work for my competitor. And there's a few people who said, Yeah, I didn't, I didn't sign up for that. I'm like, fair enough. Now we set the expectation, you can you can move on. So we all orientation systems now have that. We tell the early story, set the expectation. There's no doubt after those two days how you're expected to perform at Poinklare. Um, but so we also had to work, so we ran every one of the I think 1,300 staff through that. Every new hire now goes through that. But we also uh built it into all our recruiting, reward, and recognition systems. So you have to build it into the system. So you're gonna recognize people that you know that that demonstrate that you're acting in a way that's consistent with your culture, you know. And you know, we get oh I've been caught doing it too. You let somebody come in, they're not consistent with the culture, and you're like, you keep talking about this, yet you let this guy over here stick around, and you gotta be consistent with it. Like, yeah, for you can't just talk it, you gotta live it. And if you don't, then I'd be guilty of this. Um you you you gotta pay the price. It takes a while to build the trust back with the staff. So, yeah, you know, set the expectation early and often, and then build into your reward, your reward recruiting and recognition systems.

SPEAKER_00 53:44

Yeah, yeah. And so that's that's you know one of the phenomenal things you did as a leader with your executive team and resetting. Walk me through some of the earlier leadership decisions. So that's kind of like growth. In growth, you have to do a big leadership decision to to reset the culture. Early on, you said you had a good culture because everyone's in it. Um, what were some of the good leadership decisions you made early on? Maybe some of the mistakes, you know, kind of leadership mistakes you made early on, also. Let's let's just do a reflection on you and your brother's kind of leadership of the of the organization of the team.

SPEAKER_03 54:17

Yeah, I think in the early days, you um because you're gonna overwork and underpay people, you need to find the true believers. I think the mistake uh that that you know, and we made it a couple times, caught it pretty early, but I seen before is like, oh, yeah, we just hire the so-and-so who was a regional VP at Salesforce or whatever. I'm like, you're doing five million of revenue, they have no idea what it is you need, they don't roll up their sleeves, they work a bigger system, and so you've uh you've you've hired the wrong person for that job. You need a very, very different profile. So overhiring in the early days when you're really trying to be scrappy and gritty, and because you can't hire on the resume, what I is far more important in the early days is you get the true believers and the true believers that have grit, who actually do the work, right? Who will they see a wall, they don't even see it. They go over, under, through it, they'll just figure it out. So having gritty people who are true believers, who just buy into the vision, who are just never gonna leave till they solve the problem is really important. But there comes a transition later where you get the people who have done this before, and I always find this sort of the sweet spot is you find that executive that has done it for yeah, maybe two or three companies before, but the size of those companies wasn't 100x the size of your company. They were four, eight, sixteen quarters larger than you. So it's fresh in them and they understand the scale, they know all the corners you're just about to go around. And those people could come in with a playbook and they shortcut everything. I remember the the first one I had was uh the first CFO we had that you know, we didn't just call CFO that was a bookkeeper, but was actually a CFO. I couldn't believe when the amount of things that got taken off my plate and how I'm like, oh, I just thought, you know, CFOs you guys just count the beans after. But actually sitting down thinking about strategy and bringing the financial discipline to bear on that was enormous, enormous. And even what when I brought in a COO with somebody who had done it for five other companies before at very similar scale, because it used to be me and my head of sales who I'd hired from the beer store, but you know, kept scaling up and kept growing. But we're I mean, we're smart. We'd sit around and go, yeah, like when do you subdivide territories? How do you think about compensation? How do you how do you get you know early stage? How do you build a farm team where like, well, we eventually figure it out, but but it would take iterations and cycles, and time is your enemy. And you bring in somebody who goes, This is exactly how you do it. Here's how you recruit them, here's when you divide them, here's how you train them, and it shortcuts everything. So there comes a time where you need to start to hire those people who have done it before, but don't hire from you know something that is, you know, yeah, uh you know, 10 orders of magnitude larger. Find the ones that are, you know, call it you know, four to sixteen quarters ahead and can come in, then they can be transformational in your business. Shortcut everything.

SPEAKER_04 57:05

Yeah.

SPEAKER_00 57:06

Yeah.

SPEAKER_03 57:07

And the other thing I learned is I had this challenge where I figured everybody was king was going to come forever and they should stay forever. And if they and if they left, I you know that that I I took it personally, but I had you know one exec that uh had we thought weird they were gonna could eventually become the president of the company, but he sort of hit his limit. And it was so sad the day that yeah, he'd spent seven years with us, but he you know, he sort we sort of hit he would get the 200 million you know mark going on 500, and he's yeah, he hadn't hadn't seen had not only had not done before, hadn't even seen it done well before. And he left and it made me sad, but then he joined another company that was you know 50 going on 150, made more money in seven months through the uh equity package than they he did with seven years or less. So I got over it and then went on to become a COO and a CEO of another Canadian tech uh startup. So I got over that. The other persona that I, you know, that was odd was I call them uh like mercenaries. So they come in and they bring their playbook and they're great. But there's a weird thing that happens with some of them, not all of them, where after three years they unload their playbook, they they they just get weird. They get political. And so they don't have the playbook that they could teach you anymore, and then they start doing you know weird things. And it's okay, those people can come and they can add a lot of value, but but the trick is to figure out once they've done that and they start to be do things that are inconsistent with your culture and get politically weird, you just gotta get them out before they burn the place down. You can still use them, and they're not gonna be there forever, but they were good for a two or three year period. And that's okay. I mean, great companies are like SURAs, good people will flow on, good people will flow out.

SPEAKER_00 58:45

Yeah. Yeah. That's a good way of putting it. There's an expiry date on some of those key people. And yeah, I think as a founder, similarly, I I I share that res, you know, that sentiment of like, I used to think everyone would just be with us forever when we hired them, right? We're building them up. And then when they're leaving off for something else, you're like, Why are you leaving for something better? Right? You know, like there's this first of all, yeah.

SPEAKER_03 59:05

I don't think we want a lot of people.

SPEAKER_00 59:06

Yeah, yeah, yeah, definitely. Now, now let's go back to the cultural reset for a moment. Like, what does it take today to keep the team humble when you're winning? And and you are the number one in the market. You are now the Goliath in your market. So what does it keep you know to keep new hires connected to these war stories? Like you did a big cultural reset, but what is today? It's in the performance, it's in the interviews, it's in the recognition. But like, what do what do we do to keep the team humble and scrappy and hungry?

SPEAKER_03 59:40

Yeah. You know, I mean, it's difficult. Yeah, uh, you can't always do it, but you you try as hard as you can. Part of it is you got need to tie them to a larger goal than you know, then than just hey, like we're gonna be better than our contemporaries in this space. Like, that wasn't very difficult for us. You tie them to like the larger, this is the vision we need to get to. We're making an enormous impact on healthcare. We've got some urgency around that. That's why we need to do it. But the other thing, you know, because uh we didn't have a lot of high-performing uh contemporaries in our space that were competing with us, we had to say, look, let's look at the metrics of what the best in the business. Like, yeah, let's take the sales force or maybe Shopifier, and let's look at our metrics compared to these other category leaders. We look pretty good against our local contemporaries here, big fish in a small pond. But when you look at these other high-performing companies, we're shit. And why you know we could do better. And then and and people they look at that and they go, you know what? Like, I want to be the best at our craft, not the the averagest at our craft, we're the best in a small pond, you know, of contemporaries. I want to I want to be the best. And so you have to, you know, set the goals and higher aspirations based on things that may be out, yeah, they may not be your competitors, but they certainly argue your competitors for talent and competitors for capital. So, you know, let's let's be as high performing as the best in one other and other verticals.

SPEAKER_00 1:01:06

Yeah. Yeah. I think that's the the that competitive nature, that like desire to be the best, the desire to continue to want to improve things, that's gonna, you know, that's a big part of your ethos. And I guess a big part of how you fight off being the Goliath. But but to take us back to that question I asked you earlier of what you're seeing, you know, being AI native, what's what's next for like, you know, what's next for this industry? What's next for point-click care? Are you seeing new competitors emerge? How is your team, you know? I know today you're the executive chairman, you're still involved quite a lot, you know, uh uh uh day to day, uh, but what is the strategy today to to fend off kind of being that Goliath that's sitting on its laurels? And and are you are you guys uh you know putting together these start internal startup teams that are chasing after innovative solutions or trying to solve bigger problems of what's next in the healthcare and and uh industry?

SPEAKER_03 1:02:04

Yeah, I mean, you know, a few years ago we uh we we could sort of expand beyond just serving the post-acute care market, so nursing homeless assisted living, we also do care coordination. So we've got a lot of opportunities of closing all the gaps in healthcare. So anywhere you go, the whole idea is you show up in healthcare, instead of not knowing anything about might when I show up, pull my records from any system, whether it's ambulatory care from the health system or post-acute care, and pull it on, deliver the right information at the right time to the right person uh in the paint of glass that they're working in every day. So that that business is is is great and it's a growth business. There are tons of opportunities for AI. In the core business, though, we think that um AI may have taken our what could as much as the 4XR total addressable market. The reason why is the early agentic AI we've been delivering to our customers creates so much value for those customers that they're very price insensitive and it displaces a ton of their costs. But we think the ability for us to deliver, we've already got the 10 key agents lined up that we're able to deliver to our customers. We think that one or two of those agents are worth more to our customers than our whole SaaS platform that has 40 different applications on it.

SPEAKER_00 1:03:20

So we think Could you explain what one of these agents do? Give us a little example of that?

SPEAKER_03 1:03:24

Yeah, so I'll give you um we had one customer is getting um settling uh lawsuits to the tune of $10 billion a month. So there were private equity firm or private equity-backed law firms that do only one thing, they sued this one logo. That's it. They wake up every day suing this logo. And the reason that you know that they settle is lawsuits are expensive and they take a long time. But the reason they do is there's usually inconsistencies in documentation. So I've got something documented in here, but I didn't fill out an instant report. And so when you get a litigator gets in there and they look at it and they confuse a judge and a jury, this could drag on for years. So every month they're just like half a million million dollar check, just make it go away. So we can deliver an A an AI agent that says we will make sure that there's never ever ever a gap in your documentation, ever. So if you've documented something here and it's not here, we'll just write it for you. Or very, very few times you'd need a human in a loop, but there will never be a gap in documentation. And so we spoke to this customer and go, we think we can get your settlements from 10 million a month down to a million or less, maybe half a million, maybe zero. Would that be worth you know 20% of you know what what uh what you're getting settling for today? They're like, absolutely. Well, that uh number wound up being twice as much as they pay for 40 other applications for us for a single agent because of the value that it brought to them. So I think uh yeah, we've got uh you know the first 10 or 12 already identified that are equal in that the impact on value, and we just need to take a small percentage of the of the value, and just by taking it's called a tenth or less of a percentage of the value we deliver to that customer, we could easily, you know, two to four X our addressable market within our within our core customer base.

SPEAKER_00 1:05:12

That's huge. That's uh and and how is uh how like so so when we when you get to the size of a company uh because you've got existing business, we tend to use the model explore versus exploit. So Alex Osterwald's model um uh who created the business model canvas, but he sort of looks at okay, you've got the exploit, which is the existing businesses that are returning pretty efficient, capitally efficient for you. They're good, they're they're doing well, they're low risk, but you know, you you've got your core needs. And then explore is all these kind of new innovative uh kind of tests and experiments and products that you're playing with. Um, how are you have you restructured parts of the team? Have you how have you governed this or or you know, as a leader, led the team through this now next phase of exploring new ideas and and new markets for existing. Customers or new product for existing customers.

SPEAKER_03 1:06:03

Yeah, I think a lot of times when companies get larger, then you anything that becomes new into the organization, it's almost like the antibodies come out and they kill it. So what we found is if you you know you're trying to launch a new product, you go, Oh, can you give me, you know, this sales rep over here? You know, she's a great sales rep. They're like, what numbers on that business for this year? It's a million dollars? Like, no, you will not take my best rep for that. Like, no, it's not gonna be small forever. So we've realized we need to do is you need to carve it off as an independent operating unit with its own independent operating unit leader that can be incented like a uh like a startup leader, and you give them the ability to do, you know, uh make the decisions on if you if you're not getting the resources you need fast enough from the mothership, like maybe from marketing or from somewhere in tech, or you can't follow the tech standard because you don't can't get enough time from the core team, you have the autonomy to break the rules. Because we don't build a business, there's nothing to fix later. You need to go as fast as as as though you were a new independent startup. That that means uh you can break some of the rules, you can go get your own resources. So we run it off like a separate independent operating unit that has got its own staff and its own leader, and only once it gets to the point where it hits scale do we go. Now it's ready to be rolled back into the mothership. Uh, because before that, anytime we would build something within the mothership, the number wouldn't be big enough, it wasn't getting the resources, it would be choked off before it could even get its feet off the ground. It's uh it's it's really Jeffrey Moore's zone-to-win model that we think uh uh made made more sense for us to be able to continue to not only grow and stabilize the core business, but take those resources that that gives us the the luxury of uh being able to put it into new things and make them successful.

SPEAKER_00 1:07:52

Sorry, uh one more time, Jeffrey Morris's what is it called? Zone to win. Jeffrey Morris. Zone to win. Okay. I like that. I've I actually don't know that one uh well, so maybe that's something for me to look into. That's uh that's that's interesting. So so so this is the next stage, this is the future here. So we've gone through kind of the early days, we went through the difficult moments, um uh the the hardships with the team culture, the hardships with uh the 200, you know, 800-pound gorillas that were veering you know could veer you off course, and and you've made it to the other side, and now you've you've scaled, and now you're building these kind of smaller, you know, innovative squads, operators that can you know build the next uh next piece. So let's do some reflections, reflections on this all. If you you know you go back and you sit across yourself, you get to go back in time, you sit across yourself at a coffee shop, you know, number of years when you're first getting started. What's the conversation you're having with Mike? What's the what's the what's the stuff you want to tell him? What's the stuff you're gonna hold off on telling him because you know what, it's worth him going through it himself?

SPEAKER_03 1:08:56

Yeah. Uh tell him to uh give it up and go get a job. Um it's a lot easier. Um no, I I think you know, there's I probably I've thought this oftentimes, I probably would not tell myself how difficult it was to break into the US market. Um I think if we had known how difficult it was before we got there, we may not have done it. And it'd be a fully the whole different world today. Uh it it was a it was a massive undertaking that we honestly, from looking from the outset, we had no right to win. But through three, you know, I think the combination of a disruptive business model and sheer determination and grit, uh, we made it happen. So I wouldn't I wouldn't tell myself that. What I would have told myself earlier a few things. I would have um taught my reminded myself of the lesson of having a target market and following a bowling pen strategy where go one market and then move on to adjacent markets. I would have uh I would I would I would I would have told myself that before I made the mistake of wasting a lot of resources, a lot of time, and a lot of brain damage. That would have been important. I think I would tell would have told myself earlier that uh the value of executives that are the the first group of people beyond the true believers that you need, I I would have told myself to do that a little bit earlier. Maybe not a lot earlier, but a little bit earlier. And I likely um you know we didn't raise capital till late in the game. And uh and we are basically reinvesting the point of break-even. We could have raised capital a bit earlier. I think um uh I'm glad we did when we did, but had we, you know, had we done it a couple years earlier, I think we would be further ahead now. We waited a little too long in the cycle to raise capital because we we got a little arrogant saying, look, you know, you weren't what you weren't around when we needed the money, and now that we don't need it, we can afford to do it. But then the recognition that we are building a lifestyle company versus capitalizing to become a um a category leader, I think that recognition took a little longer. So that those are the things I would have would have would have would teach myself with the wisdom I have now.

SPEAKER_00 1:11:07

Yeah, yeah. I like that. It's a good reflection. Now you've seen a lot of these David versus Goliath stories. You coach a lot of founders. I've given you a few themes that have popped up for us. One that you've mentioned here, sort of uh intuitively, is the the Davids are often naive enough to think they can take on a Goliath. The naiveity is uh is actually a secret power. The the constraints is a secret power. The fact that you don't have enough forces you to focus. Uh I find the the Davids, because they have a lot less to lose, they take bigger swings. I don't know, I don't got a huge business to lose, so I'm gonna take a bigger swing. Uh the Davids, because they're smaller, they're able to run up the stairs instead of down the stairs. And so they choose the harder path, which is we'll take on all the risk, right? Like and and you guys take on another. So there's these themes that have emerged for us as we've kind of done this research and done this work, as you reflect on and as I give you this analogy. Are there any other themes for you that you've seen with other founders that why certain Davids managed to win against Goliath? What other key advantages?

SPEAKER_03 1:12:16

Yeah, I think that's a great question. Um one of the things I think that has has gotten a bit lost. And I don't know if it's because of bullshit storytelling that comes out of Silicon Valley about these overnight billion dollar companies and the unicorn and daisy stuff that comes out. Um it's hard. It's really hard. I mean, when I sit down with the founders and they're like, tell me about like work-life balance in the early days. I'm like, I don't know what the fuck you're talking about. It is work, work, work, work, work, work, work, work, work, work, work, work, work, work. There is no balance. It is you there's not weekends, there's not vacations, there's not, you know, having you know time with your you know your friends and family. If you want to if you want to build a lifestyle company, of course, if you want to build a unicorn, it you can't underestimate just how hard it is. And that's no guarantee for success if you've got that combined with you know great strategy, great business model. But um, I have I'm yet to have seen anybody build something of you know category leaders where the the founders were incredibly gritty and not for just a couple of years. We're talking like 20 years of heads down, 10 years of hands down, in order to make it happen. And I think sometimes that gets lost on uh on early stage founders because of some of the ridiculous stories they've heard, which I I think probably had a lot of grit and a lot of you know blood, sweat, and tears and brain damage that went along with it, but that's just not what came out in the story. I think people need to remember it's built building a startup into a scale-up and then a scale up into something, you know, category-leading. It's it's rare and it's really, really hard, and you're not gonna do it without a ton of hard work.

SPEAKER_00 1:13:57

Yeah, yeah. And it's funny, you know, I think one of the comments I got from one of the founders, he said, If I had you're gonna be telling all these David versus Goliath stories, and ultimately the stories you end up telling are all the Davids that win. But like nobody knows all the Davids that died. You know, like you don't tell you don't often tell the stories of all the ones that, right? There's there's a million here that have passed in their fight against Goliath versus uh versus this one David here that that manages. And even as we tell the f you know the story, the biblical story of David versus Goliath, right? Like it's like, how many did Goliath kill before this this one story that we now hold on to, right?

SPEAKER_03 1:14:36

Like There's great guards full of Davids. But I think the other thing is, you know, when I see uh like smaller companies trying to go after they got great tech. Sometimes some of these small companies that have early success, the hubris and the founder is is a problem. They get, you know, because they went from you know zero to you know 10 million in ARR, let's call it, and they're like, we're the best, nobody can touch us, or whatever. And then they start thinking they can go head to head against the Goliath, who has has, you know, it's all Sun Tzu, right? Unless you have a three to one advantage over your adversary, you should never go head to head. And they try to go head to head with somebody who's far better resourced, who could basically go hire their uh entire team or a team that is four times the size of their team and then outspend them on everything, and they get crushed. If you're gonna go up against a Goliath, don't go head to head. Figure out how to flank them. Find this thing over here that they can't focus on and just be that annoying thing, and they'll never be able to focus on it. And that's how you crack into them and then expand from there. But do not go head to head. You gotta flank it when you're going after Goliath. Don't let your ego get the best of you because you had some very early success. You're not smarter than I mean the assumption from some of the Davids that all the Goliaths are dumb, they're not dumb. They didn't get to become Goliath because they're dumb. There's just certain things they can't do and respond to as quickly as you. But yeah, I promise you, they're not they're not um not doing it because they're dumb. They're not doing it because they can't do it. So, you know, don't underestimate the Goliath.

SPEAKER_00 1:16:04

Yeah, yeah, I I think that's actually a really good one. I think you're right. A lot of folks think that the Goliath, oh, is dumb, is blind, doesn't see it. But it's it's if you try to go head to head, you will, you will lose. You will you you know, one of the other one of the other pieces I'm reflecting on here as we're talking about it, one of the other advantages of the Davids is early on, you don't have to really work on culture. Like you you do, you have to choose the right people, you have to you have to protect it, but not in the same way and the same intensity that you probably had to put in resource when you had to reset it. Like when once it's a thousand people, the intentionality behind culture has to be that much more versus 20, 30 people, and you're all there every day, you know each other, you you the culture forms through the day-to-day behaviors versus this intentional design of culture that once it gets bigger. And and that sort of gap allows these Davids to be more nimble without spending so much time on internal management or internal alignment, right? Like that's the there's there's there's a cost to that.

SPEAKER_03 1:17:07

Yeah. Maintaining culture is exponentially uh more effort as you it as you scale.

SPEAKER_00 1:17:14

Yeah. Yeah, yeah. Well, Mike, this has been interesting for me. I've I've I've learned a lot from our conversation. I feel like uh we've been able to tell your story and tell different parts. Is there is there anything else that you think uh we haven't we haven't we touched on the early days of of finding product market fit, we touched on the difficult days of of scaling and winning uh you know some some customers and uh kind of getting those those national ones and and the the the challenges of of capital capital uh initially and and then the the the scale-up days of the of the cultural resets and and now the innovation days of what's next. So we've I feel like we've touched on the different stages. Is there anything that you think we we we should cover? Anything you think we should know um about this journey that you would leave our listeners with?

SPEAKER_03 1:18:01

Yeah, um I don't know if there's anything to add. I mean, we covered uh covered a lot of ground. I mean, hey, you know, it's hard work, but it's rewarding work, and uh, you know, I I think there's you know opportunities for for Davids all the time. Um I think you know, if you just get hubris out of the way, uh focused on you know the theme of that. Whatever the thing is that you try to do, which should not be all things, you start off you know installing some use case for somebody, and just be the best in the world at it. Like, you know, don't forget that the you know that the quality of your offering still matters today. It's not just about how you market it and how you message it and how you get it out on social media. The the quality of how it is you solve the problem for your customers still really matters at the end of the day.

SPEAKER_00 1:18:46

Yeah, yeah, fundamentally. Well, Mike, this has been a pleasure. I think we're we've got some hope for all the Davids out there. Get ready for the battles and they learn a lot from what you've had to share. Thank you so much for being on our show. Um and uh people can follow you on LinkedIn. Is that a good place to hear and learn from you? Do you do you post do you do you write a blog? Do you write anywhere? Is there where can we continue to learn from your ideas?

SPEAKER_03 1:19:13

Yeah, LinkedIn periodically.

SPEAKER_00 1:19:14

Fantastic. Well, people can check out Mike Wessinger on LinkedIn, they can follow us more on the Unicorn uh Leaders podcast. And uh, once our book is out, our David vs. Goliath book, also learn more about Mike's story in the book. Thank you folks for listening. And if you've got any questions, please send them in. That's all for now. Thank you. Thank you.