Improving Healthcare Communication: Kryptiq CEO Luis Machuca (Part 6)

SM: Who is your competition? Why can we assume that NextGen, Allscripts, and others are sitting around without a messaging system?

LM: Kryptiq is the only truly open messaging system that can work with any EMR or practice management system. Some of the vendors you mentioned have messaging systems that they developed internally. Those are not open messaging systems, and while they tend to be well integrated into their workflow, they do not comprehend the workflow of anyone outside of their system.

We love the fact that everybody is now putting messaging on their platform, even if it is not Kryptiq. That is just a great sign of the market. A few years ago, a lot of these vendors did not have messaging. It is a very different dynamic in the marketplace today. Now we have to prove that an open system is the best practice. I am not telling you that we will be the only messaging system in the market. We will be the leader, but not the only one.

SM: Your expectation is that awareness among those players is very high and that you have a system which offers interoperability which nobody else has. That gives you a unique value proposition.

LM: Exactly. If you look at Component W, a part of the stimulus certification regarding transitions of care, you will see that it pertains to the percentage of transitions of care accomplished electronically. That is why everybody is running to messaging. We like that. We think we have the best manifestation of Component W that is truly open and integrated into the workflow, and because it is a requirement of the stimulus we no longer have to justify messaging. Today, without it you do not get certified.

SM: From what you have said, I understand that two things have happened because of the stimulus: one is an increase of OEM deals as companies look to achieve compliance based on the stimulus, and the second is that your current OEM vendors will get deeper penetration because messaging is a requirement of the stimulus.

LM: Exactly. I would add a third. I also expect utilization to grow. The bigger the network gets, the more data moves. The grow rate of the network is accelerated due to increased payload and number of network participants. That is one of the best catalysts for Kryptiq because we have very elegant and practical workflows that ride on top of the messaging. This will result in the service culture becoming established in the medical community. The issues then revolve around who enables the provider to give better service to their patients.

SM: In 2001, financing was very difficult. I would imagine that financing must have been extremely difficult for Krytpiq based on what you told me earlier about your lack of a medical systems background.

LM: Extraordinarily so. It really was funded by me, and friends and family. We raised almost $3 million. We had almost 50 individual shareholders in those days. As a reality of the time, we gave a very attractive valuation to those people. It was win-win at that level. The smallest level we took was $25,000 and we did not take much of that. We were doing a lot of $100,000 to $200,000 deals, with the median somewhere between $50,000 and $100,000. These were all people with whom I had a previous record, and they all believed that healthcare was ripe for innovation. As much as they liked us, they studied the business plan and it made sense to them.

This segment is part 6 in the series : Improving Healthcare Communication: Kryptiq CEO Luis Machuca
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