The following interview is a conversation we had with Justin Dearborn, Founder & CEO of Praia Health, on our podcast Category Visionaries. You can view the full episode here: $20 Million Raised to Build the Future of Consumer Experience in Healthcare
Brett
Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the front lines. Building it. In each episode, we’ll speak with a visionary Founder who’s building a new category or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right into today’s episode. Hey everyone, and welcome back to Category Visionaries. Today we’re speaking with Justin Dearborn, Founder and CEO of Praia Health, a healthcare technology platform that’s raised 20 million in funding. Justin, welcome to the show.
Justin Dearborn
Great to be here. Thank you.
Brett
Yeah, no problem. Let’s go ahead and jump right in, talk to us about what you’re building today.
Justin Dearborn
Yeah, great. So we’re really building a consumer experience platform. And I’ll try not to get into much word salad, but it’s a platform that we are marketing and selling into health systems. And it really allows a health system to provide a consumer or a patient with a digital journey that it starts to mirror what everyone outside of healthcare is accustomed to as a consumer. So the overused Amazon analogy. But really that’s kind of what we’re building within the healthcare environment.
Brett
And it looks like you’ve spent your entire career in healthcare, a big chunk of your career in healthcare. What is it about healthcare that excites you so much to stay in it for so long?
Justin Dearborn
Yeah, I think it’s the opportunity to make a difference, a small difference being a technology vendor, but I’ve spanned all the way from clinical imaging, which do you see a tangible result when a cardiologist is using your platform to save lives? In some cases. So you feel like other than being a clinician or it’s as close to feel like you’re contributing something positive to society. So I really like that. And there’s of course, a lot of opportunities. Healthcare is changing, but always changes at a little bit of a slower pace, typically for good reason. Patient safety is always top of mind for everybody, but I think its making a small difference with patient outcomes is really what keeps me excited.
Brett
And what are some of those hot trends right now in healthcare tech that you’re really paying attention to and excited about?
Justin Dearborn
Yeah, so I think post Covid and its been talked about a lot, but really the adoption of telehealth has really taken off and its reversed a little bit from the peak of COVID for obvious reasons. But I think what we see from COVID the positive side of least is really adoption of telehealth and digital solutions. So a willingness, and I think it might have always been there, but health systems maybe weren’t sure of it, so they were reluctant to really invest in it. But now I think evidence is there and the proof is there that serve up a compelling digital solution and consumers and patients will come. And conversely, if you don’t, there’s some great new studies out there. Some patients slash consumers are picking their providers based on the digital experience. 80 plus percent is kind of an astonishing number. They want convenience.
Justin Dearborn
And of course, if it’s a chronic condition, something, you know, the oncology space, maybe that’s not where you drive your decisions from, but for everything else, it’s ease of use. Do you know me? Are you serving up something to my benefit as a patient or consumer? Not to your benefit as a health system. Then you’ll see the loyalty. So I think that’s really taken off post Covid, along with dripping a little AI on everything. But really it’s consumer experience, I think is kind of starting in earnest. It’s been talked about for decades, but it’s really the tools are there and the adoption is happening. Now.
Brett
Let’s talk a little bit about the founding story behind the company. I understand it’s not your typical Silicon Valley story of Stanford dropouts going and building a tech company. It’s a little bit different. So can you tell us a bit more about the founding story?
Justin Dearborn
Sure. Yeah. So Ryan was incubated at Providence Health System, and Providence has an incredible group called the Digital Innovation Group, led by Saravazi, Nina Chu. And basically their mandate at the system is to identify technology gaps so areas that the markets are not already serving efficiently. So the market being technology vendors. So they’ll identify, they’ll build a solution, they’ll deploy it internally at Providence. They’ll measure ROI, they’ll commission voice, a customer work. So they’ll try to determine, was this a provenance unique problem, or does this have commercial applicability outside? If they determine the latter, they’ll bring in somebody to kind of finish the commercialization process, which ends in obtaining investment from the outside world. Up until April 1, when we spun out, Providence paid the entire development cost. So this is the fourth company spun out of Providence.
Justin Dearborn
So it’s fairly unique that the platform is very mature and the go to market side is really what were heavily focused on now.
Brett
Well, lets talk about that go to market. So whats the go to market look like right now?
Justin Dearborn
Yeah, so we are still in early adopter land. We brought on a team after April 1 with five people on the go to market team now up from nobody really as were incubating and really combination of a direct and indirect or channel strategy, really targeting those health systems that are kind of known in the market as early adopters and innovative thinkers, as well as we’re partnering with companies that already have a decent established footprint in the market, like clear within the ID space. We joined press release them last weekend. We have a go to market offering with them as well as self, which has a really nice 30 plus customer install base that we fit in. And basically I can keep going with partners that will go to market with then have an established footprint and really with a better together story.
Justin Dearborn
So how can we enhance what’s already been invested in, deployed in a health system? And we think we have a great platform and story for that.
Brett
And who’s the ICP that you’re trying to reach and really speak to right now?
Justin Dearborn
So we typically two paths. So chief strategy officer, chief digital officer, depending on the system, that’s going to be our champion and kind of our path in. But being a platform, will you touch a number of departments and we’ll have a number of different stakeholders. The chief information officer, our chief technology officer is always a key stakeholder. We do handle identity. Whenever you talk about identity and security, the chief information officer can be a key stakeholder. But our most likely and obvious champion is the chief strategy of chief digital office.
Brett
What’s it like right now for those folks? Can you paint a picture for what it may be like?
Justin Dearborn
Yeah, I would say it differs wildly based on the system and where they’re at with some other initiatives. We were kind of past Covid, which took all the attention for good reason. We’re past that. And now I think systems are really focused on growing their patient base. So we help with that in a number of different areas. So I think growth is back to being a focal point and really growth can take a number of paths. You know, one, the obvious is attracting new patients to the system, and they all start as consumers. So we do differentiate consumers and patients, but attracting new. But one of the reasons that Providence built this was they were attracting, but they maybe it could have been more successful retention. And so what PriA does is retaining patients that you brought into the system.
Justin Dearborn
So by providing something more compelling. So a lot of patients, once they enter a health system, a big hospital system, they might only engage, run a clinical transaction. But what Providence wants to do, they have a ton of, and they’re not unique, they have a ton of incredible content, and it’s just hard to get it in front of patients in a systematic way at scale. So what they’re finding is if they can serve up relevant content in a format a patient wants, they can keep patients or consumers within the system. And so I think that’s an area of priority, not just for Providence, but for a number of systems now that they need to focus on continuing to grow their market share.
Brett
What about the market category? What’s the market category that they’re buying into? And is that an existing category, or is this the category that you’re creating?
Justin Dearborn
Great question. So definitely a new spin on patient engagement or digital front door. So let’s say we’re putting a little spin on that. We’re a platform that’s going to make all those investments that have happened in patient engagement, digital front doors, and make those more beneficial to the health system and the patients consumers using them. So it is a new space consumer experience, really orchestrating that consumer experience at scale, which really hasn’t been done, but broadly speaking, from a Gartner or forester, it’s really broadly patient engagement, but drilling down, creating a new quadrant there.
Brett
And are you currently engaged with analyst firms like Gartner? And if not today, do you plan to be in the future?
Justin Dearborn
We are. So we brief Gartner Forrester class with a k is a health system and payer only firm, but they do incredible work, and they’ve kind of been to go to for health systems. As far as when a health system is looking for a new solution in this space, class is typically an early call. So we’re absolutely working with the firms to continue to build awareness.
Brett
I’ve had a lot of healthcare technology founders on it. All of them tell me that selling into healthcare systems or health systems is very hard, and it’s a long process. What is that process like? Can you shed some light on that from your perspective? You know, how many people are involved in buying decisions. How long does it take? Any information like that, I think would be interesting to our audience.
Justin Dearborn
Yeah, so you’re getting accurate information. It is long and then we’ve made it even longer by you’re selling a platform, it’s going touch a lot of different stakeholders in departments. I would say on the low end it’s six to ten people, it can go a lot bigger based on the size of the health system. So it is long, typically decent reason. Anything touching patient outcomes, you want to be very careful. And then as I mentioned earlier, we do handle identification, which of course there’s been some very public issues there lately. So nobody wants to be front page news that had an id reached out to their watch and nor do you want to be the vendor responsible for that.
Justin Dearborn
So a lot of security assessments, they take time and then just slotting in, even if you get a green light early, it’s slotting in with the existing resources there and which that’s one of our value props is once we are in, we do make it easier for the IT group to implement new solutions because we kind of become the platform they plug into. So we make that much more efficient one. A quick example and a health system might take six months to enable a use case under traditional methods that you’re integrating with the EMR and for good reason, there’s a lot of checks and balances that go into play there. Once PRIA is implemented that can be down to a couple days because we’ve already done that heavy lifting, integration and synchronization with the electronic medical record or the CRM.
Justin Dearborn
So we’re taking those integrations away. But yeah, it’s a twelve day team month sales cycle. You hope to get lucky a few times with some innovators who were looking for you and that’s what happened with our second client. But overall, yeah, it’s a long sales process and you know, you’re constantly kind of thinking at the end of the day, you know, do we have the right messaging, do we have the right and appropriate ROI story and in data points? So there’s a lot of, you know, questioning your resolve in the startup world, especially sogging the health system with the long sales cycle.
Brett
Co. And how of the past it’s been three or four months now since you officially spun out. How things been going, any numbers or metrics that you can share?
Justin Dearborn
Well, actually we built the pipeline exponentially. Three x what we had at the spin out and different stages of opportunities within a pipeline of first meeting to really discussing a needs analysis or the ROI case. And that’s something we knew would come when we added the resources. The platform has been in production for two years, so it’s very solid. And that’s an inverted startup. Typically you pre sell a little bit and try to get that first customer who will go on the journey with you and co develop or somewhat of a guinea pig. In this case, the platform is pretty mature. We’ll continue to enhance it, of course, but it’s mature. So a lot of focus of my focus in marketing and sales team’s focus is really just adding additional customers to the platform.
Brett
Now let’s talk a little bit about funding. So as I mentioned there in the intro, you’ve raised 20 million to date. What have you learned about fundraising throughout this journey?
Justin Dearborn
Yeah, so I’ve worked in a lot of different stage companies, from startups to publicly traded plus billion dollar revenue companies. So fundraising for startups, probably as hard as it’s been, at least in my career right now, so really hard for early stage pre revenue company. We had revenue, but you can still get lumped into the early stage pretty difficult. I feel like it’s opening up a little more, but I think we’re all paying the price or paid the price for a little bit of the past three to four years of overindulgence and it kind of felt like a.com hangover a little bit. There was thousands of companies, software companies funded in healthcare during the early days of COVID and I think the market’s not big enough for thousands, so there’s a little bit of a washout.
Justin Dearborn
So I think a lot of the venture groups who were really aggressive in the early stage have pulled back a little bit and reassessed their models. And then of course SVB is back, but they had a little bit of a stumble there that froze the market a little bit. We were out in the market at the time and weren’t looking for debt, but it just, it has a ripple effect across because they were a great partner to a lot of firms, both from vendor side as well as the equity check writers. SBB was always there and a great partner, so that did not help matters at all. But I feel like it’s opening up a little bit, but really, all the venture groups we met with, there were quite a few we ended up with of great ones with first class.
Justin Dearborn
You signify an epsilon, really. They all have health system lp’s to some extent. You’re selling into the health system. So they have health systems that are investors in their funds and they’re going to check those. They’re going to bring your story to their advisors within the health systems and say, you know, is this something to be of interest to you? And really, the category we’re in, ROI matters, so you have to show return on investment. We’re not an absolute must have to keep the lights on a health system. We’re not a clinical solution per se. You have to demonstrate a very compelling ROI that comes across pretty quickly with the amount of, I think, diligence that’s being done is probably as high as it’s ever been.
Justin Dearborn
And that’s a result of kind of maybe the past couple of years of quick decisions and maybe expedited diligence processes. So hopefully, we’re kind of the tail end of that and a lot of lessons learned. But it was fairly long. But again, it would, in the end, very successful with some great capital partners.
Brett
And in those conversations, how are you thinking about this opportunity and how are you thinking about the vision? And maybe a better way to ask is, lets Zoom out three to five years from today. What is that big picture vision that you have for the company?
Justin Dearborn
Steven? Yeah, so to the credit of our investors, we didn’t show them a hockey stick, but we showed them aggressive growth. They want to see that the markets big enough and you’re projecting growth. But to their credit, and they all said, lets tap the brakes a little bit and be a little more thoughtful in the investment. In the go to market side, they knew we had to invest because we didn’t have a go to market team, per se. But they do look at this as a three to five year journey on the short end. And what success looks like for us at the end of five years is about 50 health systems. So we don’t need 500 or 5050 health system customers.
Justin Dearborn
And with that, we’ll have a successful business and hopefully we’ll be a valuable partner and be a pretty sticky valuable partner to the health systems and allow the systems to grow efficiently and add new patients without adding necessarily new staff, because that is one of the concerns of health right now is the immense staff shortages coming. So 50 health systems in five years. We’ve got a really successful business in delivering a lot of value to the system as well as contributing to better health and wellness outcomes.
Brett
And final question for you before we wrap. So you’ve obviously spent a lot of your career and you spent a lot of time in healthcare and around healthcare technology. Based on your whole career, all of this experience, what’s the number one piece of advice that you’d have to a Founder who’s building healthcare technology?
Justin Dearborn
I will say we haven’t had to do it yet. We did a lot of pivoting pre launch, and you’ll make decisions on product market fit, but be open to feedback. And you look at some of the great companies and they’ve pivoted dramatically from where they started to where they’re at and where they achieved success. So be open to feedback, listen to the market, and be nimble enough to pivot. Because very rarely, if something gets started in the garage and ten years later, the same go to market strategy, the same product is where the company ends. So we’re open, we’re listening to the market, and we have to have some conviction, of course, what you brought to market, but be nimble enough and open enough to pivot when the market’s signaling it.
Brett
Amazing. I love it. All right, Justin, we’re going to have to wrap here before we do. For founders that are listening in, that want to follow along with your journey, where should they go?
Justin Dearborn
Yeah, so we’re building a lot of great content on praiahealth.com as well as a LinkedIn presence. And given that we are building market awareness, we’re trying to be the thought leaders here in creating a lot of unique and fresh content regular basis.
Brett
Amazing. Love it. Justin, thanks so much.
Justin Dearborn
Thank you for the opportunity. Great to be on this episode of.
Brett
Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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