HealthYes! is a preventive medical screening company for asymptomatic life-threatening medical conditions and diseases including heart disease, stroke, abdominal aortic aneurysm, peripheral artery disease, diabetes, liver disease, and osteoporosis.
The company’s mobile clinical teams are formally trained to conduct screenings, and all results are reviewed by locally based, board-certified cardiologists, radiologists, and vascular specialists. But the company aims to do more than a quality screening and provides clients with detailed, clinically relevant analysis, and ultrasound images in a turnaround time of four days. This is 17 days faster than the competition but at the same price. Readouts are available from any computer.
HealthYes! was founded by Dale W. Wood and Craig S. Lindley in April 2007 in Cleveland, Ohio. Wood previously managed a sales group for Romac International and was a marketing coordinator for Texas Industries, among other positions. A native Texan, Dale happily returned to the Lone Star State when he and Lindley moved HealthYes! from Ohio to Austin. Prior to founding HealthYes!, Lindley held various positions, including area development manager with First Magnus Financial Corp and account executive with Romac International. He has additional experience in project management and Web-based marketing strategies.
Lindley, who had founded companies before, was looking for the “next opportunity.” After watching a major competitor in Cleveland for more than a year, he approached Wood with the opportunity to start their own preventive screening company. In the beginning ultrasound screening appeared to be an opportunity that the pair would pass on. However, divine intervention stepped in.
Two events that occurred within months of one another caused Lindley and Wood to re-evaluate their goals and life in general. First, Lindley was diagnosed with melanoma skin cancer. Second, Wood’s father had a fatal heart attack while driving to work at 4 a.m. After these major events, Lindley and Wood re-grouped and decided that while ultrasound screening had obstacles, the goal was worth pursuing. They hope to make affordable life-saving screenings available to everyone.
HealthYes!’s top segment is health-conscious individuals over the age of 40. Historically, the market has skewed toward females 55%/45%. Higher household incomes are also prevalent in the HealthYes! database because disposable income is a necessity (health insurance does not cover ultrasound screenings). However, when net worth gets into the millions, the client will typically get an executive physical over an ultrasound screening.
The TAM has yet to be defined by HealthYes! or any competitor. Outside of the United States and the United Kingdom, the product offering has not been defined as a standalone business (it is normally left to hospitals). One competitors entered the UK market as an experiment, and with socialized medicine, it was expected to fail. But the United Kingdom has proven to be a rich market for the offering; this realization has redefined what the TAM could be.
HealthYes! is 100% financed by its three equity partners. The amount of funding required was sorely underestimated from the beginning. HealthYes! considered taking on a partner via private equity investment, but that partner lost financing and HealthYes! moved forward on its own. Considerable financing will be required to achieve the size and scope necessary to properly leverage the technological back end. HealthYes! would again consider bringing in the right equity partner if the opportunity presented itself.
HealthYes! currently has six mobile medical units in Texas, Arizona, Oklahoma, and Colorado. It will also conduct screenings in Louisiana and Kansas in the next six months. Each unit is expected to see 10,000 clients per year on an ongoing basis. The goal is to gain clients at a cost per acquisition of $75/client; however, less than $100/client would also be satisfactory. HealthYes! also works with local hospital partners to increase awareness and employs people to spearhead efforts in grassroots marketing. The company advertises weekly in every major newspaper in each of its markets.
HealthYes!’s first break-even month was February 2010 on revenues of $500,000, and the company expects March revenues to hit $525,000. The company expects revenues to continue to increase for two reasons: HealthYes! is starting to see its first significant group of repeat clients, and they have recently implemented a Corporate Wellness offering that is beginning to gain traction.
Achieving breakeven was stage two in the growth strategy. Stage three will include expansion via acquisition of mom-and-pop ultrasound screening businesses that have carved out significant niches in their regions. The company plans to plug these businesses into its back-end, which will allow them to be completely efficient: many of these small businesses have done an excellent job carving out their niche. However, they are run by sonographers, not businesspeople. While they provide an excellent customer experience, providing timely and accurate result processing is a challenge. The HealthYes! CRM would take care of this back-end and allow the organization to benefit from having a complete offering.
Since day one, the goal was to build a company that could be sold in an industry sale or taken public. The ideal exit would be to sell to an industry competitor, be involved in a consolidation effort headed by a PE or VC group, or taken public. In all cases, Wood and Lindley are looking to sell to the right acquirer in the next five years.
This segment is a part in the series : Deal Radar 2010