Bootstrapping Using Services: Evariant CEO Bill Moschella (Part 4)

Sramana Mitra: When you went to raise from this Manhattan firm with healthcare industry folks out there, what stage were you in? Did you already have a product? Did you have customers?

Bill Moschella: We actually did. By the time the raise goes down at the end of 2011, we had a decent customer base. We got a good handful of customers who were using it, love it and are giving great feedback. We actually had started to build modules and additional products. We were already in the process of cross-selling them. From an investor perspective, they’re like, “It seems like this could be a hot market. It’s starting to take off. These guys are selling quickly and as they build new products, their customers are buying.”

Sramana Mitra: What was the pricing model of your product?

Bill Moschella: It’s a combination of PaaS and SaaS. We sell a platform fee to a hospital. They pay a flat recurring fee per year for the software, which gives them the base software and the analytics and data that power it. Then, they buy seats to access the applications that run off the data on top of it. Let’s just say, if I had 100 people in a marketing or contact centre, I’m going to buy 100 seats at $100 per user a month. Then my organization is going to pay $100,000 a year just for the usage of all the data and the analytics service that run underneath it. This was also a different model. No one was selling like this in the healthcare space. Not only did we come in with a disruptive technology, but we came in with a disruptive pricing model. It worked.

Sramana Mitra: Can you give me a use case of the kind of analytics-based value that you provide?

Bill Moschella: The bread and butter is around moving more towards a retail health consumer model in terms of driving ROI. I have a particular business unit or what they call, service line at a healthcare institution. It’s an orthopaedics practice. They have high margins on hip and joint replacement or knee replacement. They want to drive more volume to that particular area because there are three other hospitals in the metropolitan area within driving distance, and people have a choice. They typically invest in billboard, but that’s doesn’t work. You have to engage people in different ways.

They need to know who the potential customers are in their existing health system who haven’t had that procedure but who have a likelihood of having that procedure based on clinical information or other information that we can provide from our analytics. They might own only 20% of the market. Out of the other 80% of the market that they don’t know, what’s the likelihood of some of those people to have had the surgery in the past or who need it right now. We like to target them if they have private insurance because the premiums are going to be higher and their margins are going to be higher. They’re trying to identify a target market.

This segment is part 4 in the series : Bootstrapping Using Services: Evariant CEO Bill Moschella
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