Bootstrapping A Healthcare IT Startup To 50 Million: Eliza Corporation President Alexandra Drane (Part 7)

Sramana: You said that Eliza achieved profitability in two years with a lean, bootstrapped operation. What year was that, and what is the story from that point until today?

Alexandra Drane: That was in 2001, once we had the platform we started receiving information from people in real time. We had a speech recognition system that could understand what you said. In the beginning we would call a woman and ask if she wanted help with her diabetes, and she would reply that she did not have diabetes, or that it was none of our business.

That is not what we were expecting. We learned that if you don’t apply technology to the human condition with grace, people will not interact with it.

At that point we hired interaction design experts. Then we learned that when you had someone on the phone, you really needed to leverage that time. We started getting incredible data and we have more than 500 million interactions. Then we brought in email and texting. We never defined ourselves as a speech recognition company. We want to surround you with messaging and help you sustain your health over time. We embraced email and texting. We are a communications company.

Sramana: Did you continue to remain in the reminder business?

Alexandra Drane: That is a big part of it, but it is more focused on engagement. As the problems that healthcare was responsible for solving evolved, issues such as retention began to matter. How do health plans establish relationships with people who are not sick? We helped them do value-added reach outs.

Sramana: Was your business focused on selling to health plans?

Alexandra Drane: Health plans, disease management plans, big PDMs, some of the drug companies for drug adherence, and increasingly big employers. The last problem we evolved to were that the biggest diseases were not diabetes or coronary disease, but things like ‘I have a bad boss,’ or ‘I have an aging parent,’ or ‘my finances are in disarray.’ When we do research, we find that people are not ignoring their diabetes because they don’t know how to manage it, they just don’t have the capacity to do it all. When we go out and talk to people now, we challenge them to take responsibility for someone’s entire life. If you are trying to support a woman who is taking care of an aging parent, she has twice the rate of depression [as in the general population]. Those are diseases. If we don’t help that woman with her depression, then how do we expect her to go get her mammogram?

Sramana: How did the revenue story evolve?

Alexandra Drane: We have had a tremendous run rate, and our growth has been consistent. About a year ago we had a big debate about whether or not to do more. We had folks coming at us to buy us. As an executive team you have to realize that you may be gone. None of us felt that we were done. The second thing that we found interesting was that we never thought of the value of Eliza. Once the number comes in front of you, it is interesting how your behavior changes.

One we realized we had created value, we then realized we did not want to screw it up. That is the kiss of death for an entrepreneur as well. About a month and a half ago we decided to take on a financial partner. First, it allowed us to capitalize on some of the value so nobody felt as though they were betting the farm anymore. Second, if you believe you are in the second-hottest market in the healthcare space, which we do, and if you believe that you have a platform that allows you to go out and solve huge problems, which we do, then you want to double down and you need a financial partner on which to let you base on your future. Our growth had been organic, but we think the moment is now and we want to grow faster.

The healthcare reform has created huge opportunities. Companies feel as though they have to go out and try nontraditional approaches like ours, which we have been able to show are much more likely to be successful. The time for us to grow faster is now, so we have brought on a financial equity partner. We took a long time to decide and pick this partner. We are happy with that choice.

Sramana: What revenue level are you at now?

Alexandra Drane: Our current floor for revenue numbers is $50 million.

Sramana: How does the relationship work between you and co-founders?

Alexandra Drane: It is like having a spouse. We are very lucky at Eliza in that we are a flat organization, transparent, raw, and honest with each other. We end up with people who have expertise in specific areas, and we respect each other’s strengths.

Sramana: It has been wonderful hearing your story, I look forward to following your continued success.

This segment is part 7 in the series : Bootstrapping A Healthcare IT Startup To 50 Million: Eliza Corporation President Alexandra Drane
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