UP071: BackpackEMR // electronic medical records for mobile clinics in remote locations

Lori Most 0:00
So I am so confident in our solution and our stability and reliability of the software. My cell phone numbers in every contract. And so I want to make sure everybody can call me if they have any problem, and we’ve got crazy time zones going on. So like I said, that’s the confidence level I have.

Jay Clouse 0:18
The startup investment landscape is changing, and world class companies are being built outside of Silicon Valley. We find them, talk with them, and discuss the upside of investing in them. Welcome to upside.

Eric Hornung 0:46
Hello, hello, BackpackEMRhello, and welcome to the upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co-host, Mr Hound Dog Dates himself, Jay Clouse. Jay, what’s going on man? Just thinking back to a good old time we had.

Jay Clouse 1:04
Mmm, love Hound Dogs dates, love having you around as a little bit of a third wheel.

Eric Hornung 1:10
Oh, I am a aggressive third wheel. Yeah.

Jay Clouse 1:13
Hound dogs, dear listener is probably my favorite pizza place in Columbus. That’s, that’s a bold statement. But it’s definitely my favorite pizza place when I’m looking to have something that’s a little bit more involved from an ingredient standpoint and eat a lot of it. They have this fantastic happy hour, which we may have even have talked about on the show before, $20 large three topping pizza and a pitcher of domestic beer. Can’t beat that, Eric.

Eric Hornung 1:39
Sometimes I don’t listen to you as much as I should. And I think you were telling me about this deal. And for some reason, I thought both you and Mal, friend of the podcast, Mal, had said that it was two pizzas. So when the guy brought out the pizza from the back, he brought out two pizzas to the table next to us first and, listener, listen to this, Jay and Mal were talking a big game about how they would go out just the two of them and split these pizzas. These things are like 24 inches. They’re huge. So I’m sitting there thinking, you guys might need to pump the brakes. It might, we might need to find a different special for you, like, I don’t know, a salad place. But no turns out single pizza very reasonable.

Jay Clouse 2:22
Don’t put it past us. We like to eat.

Eric Hornung 2:24
Okay.

Jay Clouse 2:25
Mallory has a different style of eating than I do, where, for me, I’ll just eat a ton. And for her, she’ll eat a little bit, and then stop, and then be really hungry again, like 30 minutes later. Like she’s, she’s constantly very hungry. And then when she eats, she doesn’t eat all that much. And then she’s really hungry again. So in aggregate, she eats close to as much as I do just over a longer period of time.

Eric Hornung 2:52
Do you put a lot of effort into eating?

Jay Clouse 2:54
I don’t know. I’d say effort. The thing is, the thing that I do is I approach eating sometimes like I approach the rest of my tasks, as like something to get done right now. So I’ve really become a quick eater because I recognize the end of the plate or the bottom of the bowl as complete. And so I’ll eat whatever is in front of me until it’s gone because I just kind of approach it like something to be done.

Eric Hornung 3:21
It’s legitimately like you’re eating a Trello board.

Jay Clouse 3:23
Yes.

Eric Hornung 3:24
So I’m a little different. I like to explore for food. So give me like, give me on a flight to Peru. Get me on a flight to Italy. Let me go check out something new or interesting, you know. I want to go see and taste it all, not like a Trello board at all.

Jay Clouse 3:40
Well, speaking of domestic beers, we are leaving the domestic United States and going internationally for today’s guests. Lori Most the founder and CEO of BackpackEMR. BackpackEMR is a portable medical record for remote locations. They target medical teams working in rural areas and is supported by Binary Bridge, a public benefit company.

Eric Hornung 4:04
All right, I set you up with gold. They’re a remote services…oh my god, emerging world. I set up Peru, I got Italy, I’m throwing countries out there, and you go with domestic beer for the segue? Domestic beer?

Jay Clouse 4:19
I didn’t get your segue at all. I thought this was poorly planned and there was no segue, and I was like, wait until I create a segue out of thin air.

Eric Hornung 4:26
I started this intro off with how I don’t listen to you, and Jay, maybe you should listen to me more.

Jay Clouse 4:31
Hey, we can’t hit them all. BackpackEMR was founded in 2016. It’s based in Bloomington, Minnesota. Bloomington, Minnesota is new to me, Eric. I thought at first it might have been a typo. It is not Bloomington, Indiana. Come to find out Bloomington Minnesota is just outside of Minneapolis, about 15 minutes.

Eric Hornung 4:47
The Midwest is not known for their creative town names.

Jay Clouse 4:51
BackpackEMR has raised about $370,000 to date, first from a loan from the Ven Foundation and then from the Southwest Angel Network. Eric, we’re gonna learn a lot today about how remote clinics work. We’re going to talk about electronic medical records, which I have a little bit of PTSD thinking about from my time at Cross Checks building an electronic medical record for independent physician offices, but I’ll try to keep that under control as we go through the interview.

Eric Hornung 5:23
And if you have any thoughts, dear listener, on this episode, tweet at us @upsidefm, or send us an email at hello@upside.fm. And we’ll get into that interview right after this.

Jay Clouse 5:38
Eric, what do SAS companies, autonomous vehicle companies, cybersecurity companies, blockchain companies, and consumer marketplaces all have in common?

Eric Hornung 5:47
They’re all companies.

Jay Clouse 5:48
They’re all companies, and they’re all companies who have hired our friends at Integrity Power Search to help them fill their talent needs. Integrity Power Search is the number one, full stack, high growth startup recruiting firm between the coasts. They partner with venture capitalists, private equity groups, and CEOs to build amazing teams for the world’s most disrupting companies that may be SAS, autonomous vehicles, blockchain, consumer marketplaces, insure tech, robotic process automation. Eric, they can do it all.

Eric Hornung 6:14
They can do it all. And we’ve seen them do it all. They are impressive.

Jay Clouse 6:18
Over 600 searches since 2012, more than 200 happening just this year in 2019. Their clients have collectively raised over $2.5 billion in venture funding. If you want to hear how Integrity Power Search can help your team for your talent needs, go to upside.fm/integrity. Get Started.

Eric Hornung 6:36
Integrity Power Search. Who you gonna call? That’s their slogan, right?

Jay Clouse 6:40
I don’t think it is. But maybe it is now.

Eric Hornung 6:41
All right. You’re welcome. for that one. Caleb.

Jay Clouse 6:44
Startups everywhere struggle raising capital, especially outside of Silicon Valley. It’s even harder to raise the really early risk capital that is critical to taking your startup to the next level. Oftentimes, there are just not a lot of options.

Eric Hornung 6:56
But luckily, our friends at Render Capital in Louisville, Kentucky, are working to build enduring entrepreneurial ecosystems right here in the Midwest. One of the ways they are doing this is through the $100,00 Render Competition.

Jay Clouse 7:09
The Render Competition is investing $100,000 into eight startups, and they want your startup to be one of them. Early stage startups with a scalable model are encouraged to apply today. Startups from any location can apply.

Eric Hornung 7:21
Winning companies not only receive $100,000 in investment, but also an awesome package of pro bono services and support, including access to an expanded network of investors.

Jay Clouse 7:32
Stop wondering where you’re going to find the capital you need to grow andvisit Render.capital/competition to learn more and apply by May 15. Again, that’s a render.capital/competition. And you can find that in the show notes. Lori, welcome to the show.

Lori Most 7:52
Thank you. Thanks for having me. I’m very excited to be here.

Eric Hornung 7:55
Glad to have you. On upside, we like to start with a background of the guests. So can you tell them about the history of Lori?

Lori Most 8:01
Sure, yeah. My history I guess would start, probably in Rochester. So Rochester, Minnesota is where I grew up, home of Mayo Clinic. Of course, healthcare is kind of my background. I absolutely love school. I feel like that’s a very entrepreneurial sort of common thread. Just love to learn, right. So I doubled up on sciences and tried to get as much math and all that kind of stuff as I could in high school, went on to do aerospace engineering in college, and I went to the U of M. And of course, being kind of entrepreneurial learning spirit, I got sidetracked because then I wanted to go pre-med. So had an engineering job for a while then switched to pre-med, got my physiology degree, switched again, decided I want to go math. Then I switched again, went and got my master’s degree in education. I just could not decide what the heck I want to do with my life. I wanted to do it all, right. So then I went into software, which is exactly where you can do it all. So I got a two month bootcamp, went to go get some coding classes. After that, I got a first job at SPS Commerce. So sort of coding out there. Then I moved on to other corporate gigs, so CH Robinson, Target, worked at United Health Group, kind of did the whole corporate rounds, which was really exciting. I moved from coding to sort of design work. I love the design implications of building something that someone can actually use. And that’s kind of an up and coming field now as well. But then I moved over into product ownership. And at that point, I was working at United Health Group and, yeah, that’s when I was kind of wondering what, do I really want to keep doing this for the rest of my life? So that’s kind of where the journey into BackpackEMR starts.

Jay Clouse 9:37
Wow, that’s, that’s a lot of things learned and tried and pivoted. So I want to go back real quick and talk about this two month coding boot camp that you went to. Which boot camp did you attend?

Lori Most 9:48
It was at the University of Minnesota and it was for C and C++, which is kind of showing my age, along with Unix administration.

Jay Clouse 9:56
How long ago was that?

Lori Most 9:57
Oh, man. Twenty years ago.

Jay Clouse 10:01
Oh, wow. Okay. And so how long did you spend in coding before your first move over to more design related work?

Lori Most 10:08
I was probably coding for a little over 10 years. So I did that for quite a while. Really exciting. I love digging in and actually building something and seeing something at the end. It’s just fantastic. And it was really similar to math, right. I think my ideal job would have been just to sit and do math problems all day long. I just love math. Very odd, I know. But that’s what coding is, right? So seemed like a great fit.

Eric Hornung 10:31
Jay also loves math. He’s a big math guy.

Lori Most 10:34
Awesome.

Jay Clouse 10:35
Not true. That’s a, that’s a little bit of an insider joke for listeners of the show. I’m bad at math and don’t like math.

Lori Most 10:40
It’s so exciting.

Eric Hornung 10:43
So 20 years ago, coding boot camps weren’t like a big thing. How did you even get, you, you have sciences, you have so much going on. How did you even get like aware that that was an option?

Lori Most 10:54
I think I was probably working pretty closely with the Career Centers there at the University of Minnesota, and I think I was just kicking it around with them. I’m just trying to think back. That was a long time ago. I’m pretty sure that they alerted me to that, or I found that somehow in just kind of extra, like, postgraduate kind of work. So, yeah, they were not, there were not a lot of those around at the time, no.

Jay Clouse 11:18
And what did the opportunity to move into design look like? What was the push that said, Okay, let me try my hand at this now?

Lori Most 11:24
So back when I was coding, again, since it was so long ago, that’s when as a coder, you did everything. So you are not only gathering the requirements from the user, but then you are coding it, you’re testing it yourself. You were basically doing all the project management. And that we all felt had to end, right. So as a lot of coders, typically coders aren’t really great at talking to people. I know it’s a stereotype, but it really was the case back then. And so, I fortunately could. And so I started to talk more and more with the users on design and realized that I really needed to be more front facing and figuring out what could happen along with understanding the back end of what’s possible. And so it was a really good fit for me to kind of be at that in between design stage of figuring out really what they needed and how we could accomplish it.

Jay Clouse 12:11
So you moved into United Health, sometime around there got into product ownership, you’re back into the world of health care. How did the idea of starting a company become something that entered your realm of interest?

Lori Most 12:25
Yeah, that was nothing like what I was planning on doing when I started this. So I started thinking, I need to do something a little bit more meaningful in the world. And so I started to look into the nonprofit space, what are charitable things that I could maybe get into, and I did start volunteering for a while at different organizations. But ultimately, I went on a medical trip with my sister. So she’s a physician assistant with Regions Hospital in orthopedic trauma surgical units, and she would do surgeries down in Peru. And so I went with her on a trip just to see if I could maybe help with some efficiency gains or something. And so I watched their process, they were tracking everything on paper, which sometimes paper is a very fine choice. Sometimes it is the best solution. And so I didn’t go in with a preconceived notion of, we need to solve this with software. So I watched their process flow, they were up until about one o’clock in the morning shuffling papers, and trying to really, you know, write duplicate, triplicate forms. It was a little too much, I thought, for what we could have accomplished with some software. So I looked, especially for follow ups, too, that is another piece of the pie. It’s really hard to follow up with someone when you don’t have your paper in front of you, right, when you’d come back the next time. So those were kind of the impetus for me to find something for them. So I did look off the shelf. So I know very in depth how hard it is to write software, to maintain software, to keep it running. It’s very expensive. It’s very time consuming. So I looked for something else, and there was nothing. I downloaded dozens of different EMRs that were out there, and those electronic medical records were clunky and hard to maintain themselves, hard to use. They needed the internet, which is not the case in a lot of these rural areas, or electricity, which again, is not always the case, you need some sort of server. So that’s when I set out to figure out a solution.

Eric Hornung 14:18
Walk me through the paper process. Like you said, they’re up until 1am. But what exactly did that look like?

Lori Most 14:23
Yeah, so this group was pretty ingenious, where they would take photos of the patient and the injury as well as writing on a piece of paper. So they would log things on a piece of paper, then they would take a photo of that paper. That’s kind of the start of a file. And then the next picture would be of the patient’s face. The next picture was a picture of the injury. The next picture was the X-ray. And then at the end, it would be another picture of the completed form of the exam. Now that was kind of like their paper, or their electronic record, but that was on several different iPad minis that they had been donated to them. And so it was very interesting for them to take the paper forms and try to find the iPad where the patient could have been entered on, look through all the photos to find the information. So that’s what kept them up till one o’clock in the morning, was shuffling papers along with searching for the photos that went along with it, and then trying to track who was going to get surgeries the next day.

Jay Clouse 15:21
You mentioned that the EMRs you’re looking at needed internet or electricity to work with. I have the benefit here that Eric doesn’t have of, I worked with EMRs for about a year and have some level of knowledge. Was the internet connectivity the biggest barrier to these remote teams using what was existing off the shelf?

Lori Most 15:40
Yeah, that was a major one. They just did not have access to the internet. Sometimes in these hospital scenarios, you would be able to get some sort of cell coverage, but it wasn’t always the case. And we couldn’t rely on it. And so that was a really big barrier. But the second barrier was definitely the usability. So when you’re out on these sort of trips, you’re not capturing all of the data that you’d need in the US. So most of the EMRs were built in the US or in Europe, and you have insurances and different malpractice suits, and there’s a ton of information that’s just not needed when you’re going in just to, you know, do as much help as you can, and have enough information just to follow up on that patient.

Eric Hornung 16:19
What are some of those like differences? What’s that middle ground, that’s what’s included in the US that you don’t need back here, or down on there?

Lori Most 16:26
Yeah, so as far as what we’ve done is we’ve just taken the things that are pertinent to the health of that person. And so we’ll capture demographics and some of that information, but we just capture very minimal other data, only data that you need to then follow up with that patient later. So you know, different, maybe medical history pieces, just high level sort of, like other, we call them alerts. So HIV status, you know, pregnancy, those kinds of things, then just that, just documenting that physical exam, and it doesn’t have to be as intensive as what we do in the US. It just needs to be enough that you knew, you know, you did this exam, this is what is needed for next time that you’re going to come back and look at, and then follow up with your medications, what you’ve told them as a treatment plan. So it’s more about the patient care, and less about all the extra stuff that we’ve got in the US.

Jay Clouse 17:17
What was the process like you saying, Okay, I think software could play a role here to getting a remote team actually using it and trying it in the field?

Lori Most 17:27
So we ended up getting a really small grant from an organization in Switzerland. So it was the AO Alliance Foundation, and it was in conjunction with the group that my sister went with. And so we were working together to build this to make sure, again, being in software, I know you have to talk to the users, there’s no way to build this without them. And so I was on a on a trip, so I kind of knew and understood, but I also needed that user feedback as well. What’s important, what are you going to do, why are you doing these steps? How can we help that? And so we built that together with that original team, and they were very helpful in figuring out how that was going function.

Jay Clouse 18:04
Were they interested in it from the start and, like, starved for an innovation here? And the reason I asked being, when we were trying to innovate in this space here stateside, it was really hard to get anyone’s attention. People didn’t want to change systems, they already had electronic systems, they had too many systems. So is that different in this use case?

Lori Most 18:22
This case was different. I will say with our initial goal around. They were definitely very interested in innovating, especially for patient outcomes. So they wanted to improve their follow up process. And with having that entire patient record in one place, it was so much easier to follow up and figure out how to do better on their patient outcomes. Now, I will say, to your point, future and other potential customers are a little bit harder to convince. So they have used in many cases EMRs in the US. And so they’ve seen how clunky it is, how obstructive it is as far as their care goes. A lot of little hiccups that happen that really wreck your, wreck your exam, right, and your communication with that patient. And so, we do struggle a little bit with telling people, No, no, this is gonna actually help you ,it’s simplified. We promise it is going to work. So it is a little bit of a struggle. Change management is definitely a thing in this industry.

Eric Hornung 19:16
So I think maybe we could step back for a second. And what is BackpackEMR in your words today?

Lori Most 19:23
BackpackEMR is essentially portable electronic medical records. And they are primarily used in mobile clinics. So remote locations, sort of pop up clinics that happen in the really, really rural areas. And they’re primarily, it’s primarily used in those locations because of that custom built peer to peer networking offline system that we built. So you don’t need the internet in order for all the devices to talk to each other and to really facilitate a full clinic. And you don’t need a server, so it’s a serverless offline network, where all of the devices are talking to each other and you don’t have this extra point of failure to have a server that needs to be plugged To the wall or to some sort of generator. So that’s why it’s really a solid solution for those mobile clinics.

Jay Clouse 20:06
How much of a technological hurdle was it for you to build this serverless offline network where the devices connect to each other? Was just good timing of what technology is available now?

Lori Most 20:15
It has been a struggle since we started. Absolutely. It is not something that’s really well, or it’s not a well oiled machine, like a lot of other technologies, like our client server models or cloud services. It’s still sort of up and coming. There are other groups who are doing some of this kind of technology work, but not very many. So we’re a little bit pioneering in that regards, which does make it a bit of a struggle as we move forward just as far as volume and scaling and, you know, making that really stable and reliable solution. So yeah, it’s been a little bit of a struggle.

Eric Hornung 20:49
What’s the largest technical hurdle?

Lori Most 20:51
The largest technical hurdle is definitely that peer to peer synching. So when, I’m a terrible user, so if something is not working refreshing immediately, I get very antsy. I worked for a trucking company, CH Robinson, they’re essentially logistics, and those, you know, milliseconds, we would time to the milliseconds on refreshes on screens. And that’s kind of ingrained in my brain. So, man, this has to be fast. And so that’s one of the technical hurdles is just making this quick, that thinking needs to be right away, it has to happen immediately. If it doesn’t happen immediately, from a user perspective, you lose confidence that it’s ever going to get to you. And so I, I’m a strong believer in it just has to work and it has to work fast. And so that’s been one of the biggest hurdles is, as we get more and more volume, just making sure that we can continue to do that major sinking offline, while still being solid, reliable and fast.

Eric Hornung 21:45
Are you working on BackpackEMR full time today?

Lori Most 21:48
I am. Yeah, I quit my day job about three and a half years ago. So full time on BackpackEMR.

Eric Hornung 21:54
What was the process and like thought pattern behind that?

Lori Most 21:57
So after we rolled out our initial prototype with our initial group doing orthopedic surgeries, we went and did a few grand rounds. And that’s essentially a bunch of surgeons getting together and talking about kind of new topics, what’s going on in the day. And we talked about this program, and essentially BackpackEMR. And we had multiple surgeons who said, hey, how much is it? I want to buy it, I need it for what I’m doing. And so that’s when we knew Okay, there’s, there’s something here. We can actually try to work on this thing full time and sell it and actually make it go.

Jay Clouse 22:29
You said it’s this for remote clinics, and you just mentioned some surgeons that wanted to buy it. Who are the customers here in this world?

Lori Most 22:36
Yeah, that’s a very good question. So I should probably explain one pivot that we did. So surgery was the very first go around, and we do still sell to surgeons. We’ve got orthopedic, an orthopedic module and now a new cleft lip and palate module. However, as I was getting into this, I really saw some more statistics about primary care. And so a lot of things like half the world’s population has no access to basic health care. Now that is primary care that people are needing, and that’s not going to be solved anytime soon. So the real reason is the shortage of medical professionals. There are so many people in the emerging economies who live in rural areas, 75% of the population lives in a rural area. Now medical staff are just, we don’t have enough, and we’re not going to have enough for many, many, many years. So the solution to that is community health workers. A lot of people are working as community health workers. Telemedicine is another big one. And then the third one really is sending medical professionals out to those villages to perform mobile clinics. And so our pivot came then to working with that group a little more primarily. So we did put together a primary care module, then that’s really primarily what we’re selling to. So we’ve got a lot of physicians that we’re selling to when you talk about customer, they’re medical organizations, NGOs, universities do a lot of this, especially med students go out and do a lot of these sort of trips. We also sell locally. So we have local clinics in these areas who have just paper and are looking and just kind of starved for this EMR. And so they’re using it as well. Even though it’s really for mobile clinics, we’ve got some permanent clinics starting, which, again, is we’ll start building up more services for them. And then we’re also selling to ministries of health now as well. So we’re working with the Ministry of Health in Kenya.

Eric Hornung 24:19
How big is that kind of third group that you just kind of outline the subsets of?

Lori Most 24:24
Yeah, the Ministry of Health?

Eric Hornung 24:25
So the traveling professionals that, who you’re targeting right now, like how many clinics are there in the world? I just have no concept of that at all.

Lori Most 24:34
Yeah, there are…So I can take one that I know, I think it might have been a Tanzania report that had like 4000, small dispensary’s or small clinics, or 4500. So there’s, there’s thousands and thousands in every country of those really small remote clinics. So that’s just a start,right? That doesn’t even include the ones who are traveling as well.

Jay Clouse 24:56
So you outlined physicians, local clinics, universities, NGOs, this ministry. Very segmented customer set. How does that affect your pricing?

Lori Most 25:08
Yes, that is a very good question. We are working hard to really fix out our pricing. So right now we do multiple tiers based on the number of patient visits you have per year. So we’ve got three tiers so far. And that’s primarily for US based groups going overseas. We also use that tiered pricing right now for the local clinicians. And that has worked out okay. Now when we’re talking to Ministries of Health, that’s where we have to adjust our pricing, where they’re talking about massive rollouts across counties and across countries. And that’s where we just need to try to fix that price where we still want to be a sustainable solution to them. We’re not trying to, you know, get millions of dollars out of them and be some overpriced solution that they can’t sustain over time. And so we are adjusting our prices to make that happen. We are Software as a Service, so it’s an annual fee, and we’re doing the same thing for ministries of health. It’s just primarily based on the number of patient visits that they plan to see per year as well.

Eric Hornung 26:04
Are they buying or renting the equipment? Or is their equipment included?

Lori Most 26:09
We have both models. So a lot of the US based groups going pretty consistently buy their equipment. We do have a couple that go one, once or twice a year, and they rent equipment as well. From a ministry of health perspective, we started to work with local and country partners that will buy the equipment themselves, and we’ll rent it out to other groups. So it’s kind of another business model that we’re starting to kind of spin up.

Eric Hornung 26:32
Is this like an iPhone where the hardware needs to get upgraded every year, two, three years max, or is the hardware kind of where it’s going to be and where it needs to be, and it’s just the software that needs to be updated?

Lori Most 26:45
Yeah, so far, it’s mostly the software and we do all free upgrades on that. It’s just like an app download. And you mentioned an iPhone, we actually are iOS. So it is like an iPhone, but we’ve seen, we’ve got some out in the, several out in the field right now. And iPads and iPhones last for a very long time, and they retain their value, which is nice. And that’s why we selected to go iOS initially. So they’ve got a lot of encryption, they’ve got a lot of good data security, which is what’s really important to these groups with that healthcare information. And on top of that, there’s just a longevity. So we’ve seen them go at least a few years without having to be replaced. We actually have these amazing keyboard cases. I don’t know if you guys have heard of Zig, I got to give them a shout out. They’re like military grade. You could drop those things from like a five story window and they’d be fine. We have yet to have a crack screen in the field. So pretty, pretty cool stuff there.

Jay Clouse 27:37
So let’s make this super, super explicit. When, when I purchase BackpackEMR, what is, what do I receive?

Lori Most 27:46
Yep. So you will receive an annual subscription, and you get 24/7support. So I am so confident in our solution and our stability and reliability of the software, my cell phone number’s in every contract So I want to make sure everybody can call me if they have any problem. And we’ve got crazy time zones going on. So like I said, that’s the confidence level I have. So that’s what you get. And then on top of that, you’ll get consistent upgrades. So we try to upgrade quarterly, sometimes we’ve legs, we’re a startup. So sometimes there’s a little bit of leg, sometimes we do it more often. On top of that, we can also help you with the hardware. So we can purchase the hardware, and you can get it through us, or you can purchase your own hardware, and we’ll just help you configure it remotely. So either way.

Jay Clouse 28:32
I think you might have just said this a second ago. What is the typical hardware that someone is using to run BackpackEMR?

Lori Most 28:37
Typically we use iPads. And so the latest iPads that are out now, version 5s and 6s, are great. They’ve got 32gand 128g. And honestly, the prices have come down and there’s such a great deal for like Black Friday. We’ll go and grab a few of those every year. You can get them for 250. I mean, that’s cheaper than you can get any sort of Android tablet and way better quality. So we’re still sticking strong with Apple so far. But that’s the typical equipment. And then we do have a router. So we use cradle point routers, they’re usually used in cop cars or ambulances. And those are able to be run off of a solar panel or a battery pack. So again, no need for having that electricity. But those are really the only things you need.

Eric Hornung 29:19
How much training needs to be done if I were to put this in my clinic in whichever country?

Lori Most 29:24
Yeah, that’s one of our key points is, we usually do about an hour’s worth of training max, and then you’re fine. We did a two day camp in Nairobi, and we trained about 40 local users. And we did about 30 minutes worth of just, you know, presentation on how to use the system, and then gave them another 20 to 30 minutes just to play around, and they were perfectly fine. So it’s a really quick training. We really pride ourselves on usability and all those different sort of–I hate this word–human, doesn’t, like human centered design. That’s really what we’ve done. So trying to just make it as easy as possible.

Jay Clouse 30:00
What’s the transition look like? If I’ve been doing paper for forever and now I’m saying Nope, we’re making the switch over to BackpackEMR, is that hard or painful? Or is there any migration? Are we moving? Are we like taking photos and putting them into the software? How do we, how do we transition from physical to digital?

Lori Most 30:17
We’ve had a couple different options. So some people do want to backfill and put in their old records. So they will go in and key those in. And that is perfectly fine. You can go and do past records. We’ve had others who just, okay, from now when we’re, we’ve got Backpac EMR, we’re just going to move forward. We’ve had some groups do that as well. We have just most recently done a migration. And so this is one thing I’ve learned through. I know we’re not talking sports, but through sports I’ve learned today’s competitor is definitely tomorrow’s partner. And that is very true with a group called Timmy Global Health that we, they had built their own EMR maybe 10 years ago, and it seemed like maybe a competitor in the space. Turns out they were going to rewrite it as their software was getting older. And so, they kind of joined our team. And so rather than us both rewriting something that’s very similar, we, you know, joined forces, and now they’re coming over to BackpackEMR. And that’s where we’ve got a data migration happening. So we just went through our first data migration and pretty excited about getting that rolled out.

Eric Hornung 31:19
How many other competitors are there in the space?

Lori Most 31:21
There are, so the landscape is interesting. I don’t know how much you know about global health. But in general, most global, most global tech help comes through grants and big funding through USAID or the CDC are really big funders like that. And they will invest millions of dollars in a tech solution for a very specific need. And that has been working fine. That’s great. But unfortunately, a lot of these solutions then become unsustainable. When you spend millions of dollars to create it, and like we talked about earlier, it’s hard to maintain software, keep it up to date, keep adding features, and it’s expensive. And so if you’ve got a million, you know, multiple, multi million dollar products kind of run by maybe non-software professionals, it’s a little tough for that to keep going. And so that is the primary landscape that we’re in, which is a lot of those large funded, older tech that’s maybe done a little bit more on the cheaply, which, which I don’t want to, like characterize all of these solutions that way, but a lot of them, because they’re grant funded, they look for as cheap of a way to get that done as possible. And so some of that technology is older or maybe a little bit clunky, and it’s just not maintained like you normally would in the tech world. So that’s the majority of the landscape as far as competitors go. We do have a few that have cropped up lately who are similar. So far, no one who’s really serving those mobile clinics. Most of them are looking more towards the urban centers first; they want to solve that problem. And so those, again, instead of competitors, are more partners. So we want to be that satellite clinic. We’ll take care of the really hard, underserved areas, and then we’ll send our data into those urban centers. And so we want to collaborate and get inner upability there.

Jay Clouse 33:01
I want to talk a little bit more about this, you said Timoney health is…?

Lori Most 33:04
Timmy health. Timmy Global Health, yep.

Jay Clouse 33:06
Timmy Global Health. How did that look? Is that a merger? Is that an acquisition? How did you guys combine forces?

Lori Most 33:14
We didn’t necessarily acquire Timmy Care. We ended up, the lead developer on that project is now at Snapchat. And so he has come over to start helping us with our coding as well. And so rather than it being really an acquisition, it’s more of a transition. So now they’re gonna kind of put Timmy Care to bed, and they’ll just start using BackpackEMR instead.

Jay Clouse 33:35
That’s awesome. How did that happen? Did you reach out to them? Did they reach out to you?

Lori Most 33:39
They found me through my website. So that was a very, one of the very first things I did as soon as I incorporated in 2016 was throw up a website. And I just sat in one of those co-working spaces for three days and just said, I’m doing nothing but putting this website together. So I threw that out there, and apparently I must have had at least some good SEO words because they found us, and then just started collaborating through that. So that was three years ago we started talking. So it’s been a long ride, and we’ve gotten along great. So it’s a great connection.

Jay Clouse 34:11
So for you guys to continue to grow and be sustainable yourselves, you are a for-profit company. Correct?

Lori Most 34:17
We are. Yep.

Jay Clouse 34:18
A public benefit corporation, though.

Lori Most 34:20
Exactly.

Jay Clouse 34:21
So how do you think about the line between what is sustainable, what can make the company sustainable versus being a for-profit company that could drive totally towards profit and maybe that’s what investors would want? How do you straddle that line? How do you think about it?

Lori Most 34:36
Yeah, I am pretty strategic about the investors that we bring in and who we are presenting to. We want to make sure that we’ve got investors that understand this landscape. I’s very hard to find investors who understand the global market and especially emerging economies. So it’s very, very narrow scoped. However, once you get that investor, they understand the need and where the need is, and that is and these emerging economies and the rural environments, and they understand that we can make it sustainable, we can make money doing it, and do a really good thing. I have presented to investors who want to immediately pivot to the US and rural markets in the US. And well, it’s a great need, we certainly need some of that here, we just aren’t geared towards that. It’s, it’s a whole different ball of wax. There’s plenty of EMR solutions here in the US, I don’t think we need to play in that market. And it’s not really where my passion is or where I’m going. So we just need to be really explicit with the investors on what exactly we’re doing and why we’re doing it. And in fact, that’s why we incorporated as a public benefit corporation. It says right in our bylaws that we’re going to make decisions both on profit and on the impact we’re having. So every dollar that gets invested, we make $6 worth of impact in the industry. And that’s $6 just of social return on investment. It’s not even the financial return that will come back. And so we’re pretty adamant about continuing that sort of benchmark.

Eric Hornung 36:03
So let’s rule out the United States and rule out Europe. You still have like over 150 countries that probably qualify in your emerging market type space.

Lori Most 36:14
Absolutely.

Eric Hornung 36:14
How do you–that’s a lot. How do you think about sales? And like, how do you get leads? Talk to me about your sales funnel, I guess, is really what I’m interested in?

Lori Most 36:25
Yeah, we have a couple different models. Our go to market strategy was always to start working on the US based groups going overseas. And so that’s where we started. So we started to go to a lot of the conferences where those medical professionals are, where there are specific groups who do go overseas. So we’ve done conferences for the last three years, and we’ve gotten a good following that way. Now, the go-to-market strategy was to get to those US based groups who have that relationship with the in-country partners. And those in country partners care a lot about continuity of care, and they want to keep everybody together, and they have relationships with the Ministry of Health. And so that was always our plan, was to really work with those US based groups, start working with their in country partners, and start talking to the ministries of health to make a long term investment in that health care with those rural areas. And that’s, that’s kind of the sales cycle that we go through. So we do a lot of the US based, we’ve got someone kind of focused on that area. And then I’ve been tracking a little bit more with ministries of health connections that we’ve been getting. We’ve also got, we’re piloting a distribution model, where we have a distributor who is a physician in Sri Lanka. And so I think that we can really build out that model where he and a small team can start to grow within that country,and we can build out that model. We’ve got in country distributors and partners who are looking to help sell within the country. So we’re starting that in Sri Lanka, and then we’ve got another one working in Senegal. So we’re kind of piloting a couple different models without trying to get ourselves to thin. But like I said, we’re still, we’re still holding strong on the US based groups and then kind of working our way into Ministries of Health.

Eric Hornung 38:04
How long does that sales cycle take to get to ministries of health if you’re starting with the US company and then you have to find the in-country partner and the in-country partner has to refer you to the Ministry of Health?

Lori Most 38:15
Yeah, the process to get to each of those individuals isn’t too hard until you get to the Ministry of Health piece. So the difficult piece is really getting hold of the right person in the Ministry of Health. You know, how do you find exactly who will be interested in this, who has the authority to make any decisions or get you to the right people? So that’s where I’ve had the biggest struggle to really get in there. So we’re trying a few different ways to really get to that Ministry of Health Official. So the sales cycle gets a little bit longer as far as that’s concerned. Nobody in the nonprofit world makes a quick decision, right? So they’ve got Board of Directors they need to go through for budgeting, so that cycles a little bit longer. And then by the time you close that deal, then you want to start talking to the in-country partner, so that’s another short period of time. And then you need to really build a strong relationship with that in-country partner so that they feel confident in sort of not giving up their context, but you know, with with putting themselves out and, and sharing your information with the Ministry of Health. So it is a bit of, bit of a longer cycle, I’d say at least about six months to really get to that, the right person.

Jay Clouse 39:18
If someone talks to you and chooses not to go with BackpackEMR, assuming that happens, what, what is their pushback? Why do they say no?

Lori Most 39:27
I’d say we’ve got a couple of a couple of reasons. So one would be the initial shock of there being a cost. And so with a lot of nonprofits, they will do more with less, like a lot less. So they will have 10 year old technology just to save, you know, a handful of dollars, but they’ll spend, you know, 10 extra hours and staff hours or volunteer hours, trying to work around the fact that they have old technology. And so it’s a bit of a mindset change of, you can actually save money–it sounds like a big chunk of money in one fell swoop, but in the end, you’re gonna save money because you’re saving time, you’re making this more efficient, you can reallocate people. And so I would say, as far as the pushback that we’ve had initially is that initial shock of there being a cost, and then just having to readjust with like, figuring out what the value is, and that there’s a value add and that you can actually save money. So that’s been our biggest struggle. We’re still working that out right now on how to really sell that a little better.

Jay Clouse 40:28
When somebody does get through that hurdle, and they say, yes, how often do they churn out for the same reason?

Lori Most 40:35
And once they get past the cost, then it’s usually not that. If they’ve, if they’ve decided that it’s worth the money, then I think really, the next reason would be if there’s some other piece of the software that doesn’t fit exactly with what they’re doing in their clinics today. And so, this is a common thing with software, software platforms in general, that if someone can’t visualize exactly what you have in your software working in their scenario, it’s just not gonna work. And so you can either make a decision from a software perspective of being customizable. So you can either customize it, or you can start making multiple versions so that it’s more and more, you know, usable by different people. You know, or you can just, you know, decide you’re going to take one path, and everyone just uses your best practices. So, I’ve been on a lot of different kinds of teams with different methodologies, and I’ve really never seen the highly customizable solution actually work because it gets so complicated, it gets so crazy, the code gets funky, and it will fail nearly every time. And so we’ve gone the route of we’re going to try to do best practices, we’re gonna explain how those will work really well for you. And if there are things that aren’t going to work, then we want to talk to a little bit more of a kind of community or advisory board and make decisions for everyone on what will be best for everyone. So there are minor customizations you can make with lists of values and things like that to really make it your own, but we want to stick to a best practices.

Jay Clouse 42:02
You’re hitting some scar tissue for me, because when we worked on our EMR domestically here, everyone’s like, Yeah, I would love that if this was electronic and not paper, and then we’d show in the product, they say, well, this part of our workflow is missing. , a so I’m not gonna use it at all. Like the worst thing they could do is try to keep both workflows going because then we’ve, then we’ve lost.

Lori Most 42:20
Absolutely.

Eric Hornung 42:21
What’s the average annual contract value for one of these?

Lori Most 42:25
Yeah, for annual, the average would be about $7,500. The small groups pay about $3,000 a year, so it’s about $250 per month, and then we’ve got a lifetime value of around you know, $20,000 to $150,000, depending on the size. So the lifetime value is pretty high, which is great. We’ve got really sticky customers. As we kind of touched on earlier, change management is not easy, especially with electronic medical records. There’s so much going on in a clinic flow and with the medical practice, and to change your your tracking is just really cost prohibitive, and emotionally prohibitive as well. So we do have sticky customers, which is great.

Eric Hornung 43:05
What percentage of like the nonprofit mobile clinic, rural clinic, like budget is $3,000? Like I don’t even know how big these things are.

Lori Most 43:17
It varies so, so much. So we’ve seen some where there’s nearly no budget, where it’s just groups who, every individual going on a trip will pay their own way. And in that case, there really is zero budget for anything. So this would be their entire budget or nearly all of their budget. There are a lot of other groups who spend multi-million dollars a year. They’ve just got so many, so much medical equipment they purchase, they’ve got a lot of implants, and you know, a lot of process flow, a lot of staff to monitor that. And so this could be a very, very small piece of their overall budget as well. And so a lot of ways that we try to sell this is to try to get a donor. These are all medical groups, there are medical professionals interested, they’re physicians, they’re surgeons. This little $3,000 is really a drop in the bucket for the value that you can get and the reportabilitty you get out of it and the patient outcomes that you can have and see with continuity of care. And so it’s, it’s pretty minor. It’s just getting people over that hump of thinking, you know, they’re trying to do everything for as little money as possible. But this really is not that much in the grand scheme of things.

Eric Hornung 44:28
This is kind of a weird question, but is there like an international language protocol that makes it really easy to like add a new language to this?

Lori Most 44:36
So we have tied into Apple’s region and language. So if you just change your iPad to French or Spanish or whatever language, it will change our app automatically. And so we’ve just used right now straight up Google Translate to get all of our labels and lists of values and everything switched over. So as we get more and more customers using those languages, we’ll have them refine it, but it is just a switch of the iPad on languages.

Jay Clouse 45:01
At this point, what do you feel like, is the biggest hurdle for you guys being the de facto EMR for remote clinics?

Lori Most 45:11
Yeah, the biggest hurdle is really changing the mindset of waiting for a big funder to come in and pay for everything and give you a little money on the side. So in talking with different government organizations, or even NGOs, the way that has been really paved, I would say is, you write a grant–you see a problem, you write a grant for a lot of money, it’ll pay for everything, equipment and travel and lots of research and, and the build out and maintenance for a year or two. And that’s what people expect. When you come to them and approach them with a solution, they expect that you’re going to pay for everything, that, you know, you’re, you’ve come to give them even money for the medical services that they’re going to produce. And that’s been a struggle since we’re on kind of that front end. Things are definitely changing in the industry. The funders have agreed and signed petitions that they will no longer fund non-sustainable solutions. And so they’re on board as well. But we’re kind of, we’re the messenger, unfortunately. So we’re on the front lines trying to explain this to the recipients as well. And things are changing. And I think over time, it’s going to be a lot easier. But that’s the biggest hurdle right now, is really just trying to get that across, that this is going to be, you’re gonna have to pay for it, but it’s not that much. It’s a sustainable solution, we’re not gouging you, we’re in this with you, right? We’re trying to make this sustainable. So I think that’s the biggest hurdle so far.

Eric Hornung 46:38
How big is your team?

Lori Most 46:39
It is very small. Right now we have three of us that are on full time. We’ve got then a few others as advisors or a few interns, but that that’s our team, essentially.

Jay Clouse 46:50
Is that going to grow? Does it need to be bigger? And if so, what what are those hires look like?

Lori Most 46:55
Yeah, 100%. We definitely need to grow. We are searching for cash right now. So that we can grow the team primarily. So our product is pretty solid as it is. We have a few tweaks that we want to make on the stability front. But otherwise, it’s just adding features now going forward. So primarily, we want the next round of investment to go towards sales and marketing, we’ll build out that team a little bit more. Then we’re going to also build out a little bit more on the product side, we want to hire two more developers. But ultimately, we do need to grow our team in order to really grow this.

Eric Hornung 47:25
You mentioned earlier that you are being, I don’t think you use the word picky but I don’t remember the synonym you used, on which investors you’d work with. Where does that break? Like if someone wrote you a check for $10 million today, but just didn’t really care about the vision, where’s the trade off occur?

Lori Most 47:41
So I think that part of the research, if someone was going to give me $10 million today, it would definitely just be investigating and making sure that they are not going to counter the vision. They may not be full for it and they’re super excited about what we’re doing, but as long as they’re not going to try to, to change our minds on what we’re doing and change our path. I think that might be, yeah, that might be a trade off. I think we’re really looking for investors who are behind us, though, that would be ideal, just finding someone who really knows this space can help us out with other things other than just cash. I’d certainly take cash, but you know, it’s better if we’ve got some extra benefits and connections coming from our investors.

Jay Clouse 48:20
Talk to me about Bloomington, Minnesota, and what being in Bloomington means to your company?

Lori Most 48:27
Yeah, being in Bloomington is great. Minnesota is a fantastic place to have a startup for sure. Our startup ecosystem has grown like crazy in the Twin Cities. You can’t do this stuff alone, and I’m a solo-founder, but at the same time, I’ve done none of this by myself. There have been advisors and mentors and incubators and co-working spaces and all the other people that kind of come together from other founders, and everybody just helps each other, which is fantastic. I think the one piece in the ecosystem that I wish would come alive a little bit more is our, our investors. They’re out therend, a we have a super generous kind of group here in the Midwest, but I wish they would just come out a little bit more full force. We’ve got some great investors and a great investment community. But that’s the piece we need to beef up just a little bit.

Jay Clouse 49:17
Awesome. Well, thanks so much for being on the show, Lori. If people want to learn more about you or BackpackEMR after the show, where should they go?

Lori Most 49:24
You can definitely find us on Twitter or Facebook with @BackpackEMR. We’ve also got our website BackpackEMR.com, and we’re always on LinkedIn as well.

Eric Hornung 49:36
Are you a startup investor seeking to find deals in your own backyard or enter new markets? How do you meet future co-investors, potential leads, or just connect with like minded peers? You need to join Omni Valley, an exclusive online investor network connecting those who invest in startups today. Access and deal flow are geographically concentrated on the coasts, but entrepreneurs and investors exist everywhere. But how do you connect with those different markets? It is a difficult and time consuming task to meet the right individuals, groups, and funds necessary to find your next great investment opportunity. Omni Valley is a platform specifically and exclusively designed for investors. It provides transparency and access into entrepreneurial ecosystems regardless of geography or market size. Omni Valley wants to help you make meaningful connections faster. Today, Omni Valley’s platform connects over 600 investors spanning over 200 global ecosystems, endowments family offices, venture capital firms, accelerators, angel groups and individuals. If this sounds like you, it’s currently free to register as an investor. So claim your profile at OmniValley.co. That’s O-M-N-I Valley.co.

Jay Clouse 51:01
All right, Eric, we just got done speaking with Lori Most the founder and CEO of BackpackEMR. Where do you want to start first?

Eric Hornung 51:10
What an amazing experience that had to have been in Peru with her sister to not only come up with the idea, but come up with an idea so, so compelling that you’re going to quit your job and start a company based on this one trip to Peru. Like, what a crucible moment in her life that…I don’t know. I just, I was just thinking about that. And like, I guess we could start with the founder, to answer your question, but that’s where my head went first.

Jay Clouse 51:38
Really interesting winding professional journey Lori found herself in. Even going back to college and the things that she was studying. I did not realize that she had started coding about 20 years ago. And to your point in the interview, probably not a very in vogue thing to do, go to a coding bootcamp 20 years ago, yet she did it. Then She worked her way into design, and then finally product ownership. All of those things happen to go from coding to UX to product ownership, that’s kind of the same timing and evolution of those roles becoming distinct roles within a product organization. Like, of course, you had engineering from the beginning as soon as software existed. But then, as engineers, to her point, started realizing they were doing a lot and couldn’t do it all, the more nuanced role of design and UX came about and then product ownership. And she was just kind of on a front seat or on the, on the front of the curve trying out all those positions, as she kind of grew in her career.

Eric Hornung 52:41
It’s cool how her career kind of all led to this, though. You know, like every little point she had, whether it was woto sciences degrees, which she casually threw out beginning, or her love of math, or usability and design or whatever it was, it all kind of had a connection into this super usable product that is technically challenging and requires someone with like a technical background who also just kind of understood usability, and her sister was down there. And there’s just like all these like pieces playing together. Reminded me a lot of like the Steve jobs quotes of ‘You can’t connect the dots looking forwards, only looking back.’ Probably a little narrative fallacy in there, but pretty cool, nonetheless.

Jay Clouse 53:22
Returning all the way to healthcare. Let me start and ask you this, Eric. One thought I had as she was going through some these career changes as I was starting to have a shadow creep in of there’s a lot of I wouldn’t call, it shiny object syndrome, but a lot of pivoting and changing, you know, and I wondered, is that a trait I would look for in a founder? But as the interview went on, and as we learned more about where she is and her mission here, I didn’t get a sense that she was getting the same itch to change into something else since starting BackpackEMR. It sounds like she is very much enjoying the puzzle that is building this company.

Eric Hornung 53:57
I think that there is a inherent bias in your assumption that there is a lot of pivoting and changing in her career, because a lot of the people who we talk to on upside are under 30, 32, 33, 34, you know, like, that’s probably the high end of the spectrum. So when you have 20 plus years of a career, there’s just going to be more things in it naturally. So yeah, she didn’t go from one job to the next that was in the same space. But I think, I don’t, I wouldn’t say that there was like an aggressive amount of pivoting. I feel like there was some things that were underlying it. That being said, I don’t see any flight risk here of, this was a cool little project, now we’re Gone. It’sm we’re moving on, we’re pushing this forward, w’re coming up with new strategies and distribution networks. And yeah, I see a commitment to the business for sure.

Jay Clouse 54:46
That’s a good call out. I was, I definitely was biased and how quickly we moved through those things in the interview, but we were covering, like you said, decades of work in a couple of minutes time for us for the purposes of showing a trajectory, so that’s it, that’s a good call out. This is the third public benefit corporation that we’ve had on the podcast here, Eric. And so it’s always a little bit difficult for me to look at it through the same lens, because as we talked about in the interview, this company is not built simply for financial returns. And so we’re ruling out a large segment of venture investors or potential investors in general for this company. And so the way that you look at it has to change a little bit. What stood out to you about either the model or the opportunity?

Eric Hornung 55:37
I think one thing that maybe hasn’t been explicit on the podcast lately is that we’ve noticed more and more of a divide in pricing. There’s either people who are coming in at a lower price point with lower margins, or like a luxury price point. I feel like we haven’t talked to a lot of people who are in like this middle price point lately. It’s luxury or it’s cheap. And when you think about from the United States perspective, $3,000 business to business average contract value is cheap. Now, everything’s relative. That’s thinking from the United States, which is where we are domiciled. But if you think about that from Tanzania or Chad or worldwide or whatever, it’s a completely different makeup. So I guess what I’m trying to get at is the idea that there is an inherent sensitivity to excess margins in this space already, because like she said, nonprofit organizations are used to doing this for free. And that is a challenge to charge a healthy, financial margin in what is a b2b SaaS model, which are usually commanding, you know, north of 75% gross margins. So it’s definitely a challenge for the business model. I don’t know that it’s not overcomable. But it’s not your typical b2b SaaS, we’re going to charge this price, get this margin, and build up a sales team and grow. Selling to a very different customer. What do you think?

Jay Clouse 57:14
So do some quick napkin math here, Lori said there’s around 4,000 small dispensaries or clinics in Tanzania, and at an average annual contract value of 70 $500, that’s about $30 million. And that’s one country. So this is not a small market. But when you compare it to, to your point domestically, some of these systems, I’m looking at 2017 data, the Mayo Clinic rolled out a transition over to the Epic EHR, and that was a $1.5 billion project. UMass moved over to Epic and it was $700 million. Like, domestically, these EHR and EMR programs and transitioning them are so expensive. So comparatively, it’s a lot cheaper, to your point, this luxury versus cheaper or lower tier pricing model. But it doesn’t strike me as something that is a stretch to be profitable while also doing a lot of good here. I mean, I see a real market potential of Tanzania has $30 million in market potential, and they’re looking at 150 potential countries.

Eric Hornung 58:21
One of the things I’m really excited about with this model, and we didn’t really talk to it too much on the actual interview, is this idea of setting up distribution agreements for countries. So they’re essentially going to have a decentralized salesforce, which means they’re going to pay higher commissions if, if this model works, right, if this business model works, and they won’t have as many people in in house direct sales. And that makes sense because if you were going to sell just to that Tanzania market we’re talking about, and you are working directly for B BackpackEMR, then you would be traveling from little village to little village kind of, it would be an incredibly high cost for BackpackEMR to hit a very fragmented workforce. So the traditional b2b SaaS model would be, all right, we’re gonna staff a workforce, we’re going to go around all the customers, we’re gonna cold call them, we’re gonna dial them, we’re gonna talk to them, we’re going to do whatever we’re going to do to sell in the way that we’re going to sell. But a lot of these places don’t have internet. So like, there is no sales funnel that works the same way it does in the United States there. It’s just a whole different ballgame. And the cost to do that from the United States is so much higher. So I love the idea that they’re trying to innovate on distribution models and sales funnels. I think that’s really awesome.

Jay Clouse 59:36
If their largest competitor was this Timmy Global Health, which has essentially folded into BackpackEMR, and they’re building out these distribution systems in this fragmented global market, they’re building a pretty good moat for themselves. You know, she mentioned that the biggest barrier is either cost or behavior change. And so if you overcome that and you get into these places, you don’t see systems switching EMRs very often. And maybe that’s, you know, again, biased by my experience with domestic EMR, is they make it very difficult to migrate your data or transition your data over as a way to make switching cost very, very high. It sounds like ethically, Lori probably doesn’t have those same barriers in place. But I doubt, if they get through the objections from their target market, that these places will transition to a competitor that has not yet emerged or is not yet playing at as high of a level to our knowledge. That sounds good to me as a potential investor in this company.

Eric Hornung 1:00:37
I also think that a lot of…I mean, if there’s 4,000 in Tanzania, I don’t know, there’s no good data on what’s available worldwide. But even if it’s 100,000 say, then I would guess a large percentage of those don’t even have an EMR system right now. It’s just paper or it’s just nothing, to be honest. So I think that the competition is not always another EMR system. I think the competition is sometimes just education about why you need an EMR system, or the competition is getting the spend any money at all.

Jay Clouse 1:01:12
She mentioned this kind of offhand at the end of the interview, but she said she likes to help get these organizations a donor lined up, which is a huge opportunity if you have relationships with or can form relationships that other people have relationships with donors in this space. If you can bring the money to install the system, that gets past some of this hesitancy on the cost, obviously, and it sounds like they have a little bit of tailwind from an industry and donor perspective that that’s what people are signing on to say they will fund as more sustainable solutions. So all positive signs. But to Lori’s point, this would take a specific investor who really understands the vision in the space and is value and mission aligned, which, you know, there’s just fewer of those out there.

Eric Hornung 1:02:00
Yeah, I could see this being a ripe area for a financial innovation as well, where you have a world where there were large funders who essentially were giving charity to people or organizations, and now they want to fund things that are not going to be an over market charity payment, but will be something sustainable. It’s almost set up in a way that you could go to any of those clinics with essentially, here’s a first year free of BackpackEMR, and it’s funded by this large organization that you’ve seen funding from before. And after that first year, you have to pay for it.

Jay Clouse 1:02:37
It’s not a bad time, though, economically, macro-economically speaking, to be a company with a little bit harder road to toe to find value alligned investors; capital is cheaper to come by now than it has been in a long time. So Eric, looking 6-18 months from now from Backpack, what are you looking for?

Eric Hornung 1:02:54
I want to see if one of these ministry deals comes through. She said six months just to get in contact with the ministry and their having some really good conversations. But my biggest concern is getting these deals with the ministry are going to take, Ministry of Health, that is, are going to take a long time. And if 18 months from now, we still don’t see one of those deals come through, that gives me a little bit of pause on that as a strategy and as a use of resources and capital.

Jay Clouse 1:03:21
Six to 18 months is a long time for a three person company that has raised $370,000 to date. Time is money, 6 to 18 months can be a fatal amount of time if you don’t have the resources to afford 6 to 18 months. So I’m looking to see, yes, of course, I want to see how many more countries they’re in, how many more teams and organizations they’re in, I like your point about the ministry, but also, have they been able to sell any of these investors on getting behind them and helping fund the runway to get to a point where it sounds like the industry, you know, is heading in this direction, donors want to support sustainable solutions. It sounds like they may be a little bit ahead of the curve and ahead of their time or perfectly timed, but time is not cheap, and they’ll have to afford that runway.

Eric Hornung 1:04:06
If you have thoughts on this episode, or want to talk to us for any reason, you can reach out to us on Twitter @upsidefm, or send us an email at hello@upside.fm. We look forward to talking to you next week.