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Building a Healthcare IT Company to $100 Million: Dr. Rob Langdon, Co-Founder of T-System (Part 5)

Posted on Sunday, May 25th 2014

Sramana Mitra: Do you have a sales channel that was selling the paper product into the hospitals and physician groups then switched over to selling this software product?

Rob Langdon: We tried different configurations with the sales group. For a while, paper and electronics were separate. Then they were combined. Then we tried regions. Since the company has grown, we have other services – billing and consulting. That sales force, they’re tasked with opening up more opportunities and grow our customer base, which is close to 35% of the hospitals in United States.

Sramana Mitra: What was the ramp out of revenue when you launched the software product? What were the strategic moves that you made to grow the business?

Rob Langdon: We were building largely on a base of our own paper customers. The brand had been very well established. In fact, the product had been featured on an ER show for many years because it was an iconoclastic product. Doctors loved it but purists sometimes objected to it. They thought it might be cheating to use a template.

The sale into hospital information systems is a much costlier endeavor and there are more competitors, even enterprise systems. There’s a little bit of the David and Goliath story. You’re trying to do what’s right for the emergency department doctors but you’re fighting a sales battle with these juggernauts. A lot it had to do with which systems are weaker or stronger. A lot of the marketing had turned out to be the proper selection of the size of the hospital, and which information system that hospital has.

Sramana Mitra: Was there a particular sweet spot that you discovered where your software was more welcome and compatible?

Rob Langdon: It’s not so much as being compatible because the problem is not compatibility but often, the contracts and the size of the project, and implementation that the existing enterprise system has in place. These CTO for hospitals may have a three to four year schedule of implementation and it’s hard to break into that. They suffer from that. There is a problem attracting technology-qualified skilled workers because there’s tremendous expansion. Their plates are full. They are often understaffed to implement the software they purchased. Even though the doctors love it, sometimes it’s hard to get to their implementation schedule. Sweet spot would be those who don’t complex projects going on and the doctors have a lot of influence politically. A lot of times, these tend to be the smaller hospitals where the annual visits to the emergency department are under 30,000.

Sramana Mitra: How did the revenue ramp from paper to software?

Rob Langdon: Compared to our paper product, the ramp is more at a struggle. Ramping up for the paper, we saw 400% to 500% a year. We were able to find agreement with some of the major healthcare chains and systems, and we were able to implement pretty widely. I couldn’t tell you exactly what the ramp would be, but I would say that over the last ten years, revenue has grown over 50%.

This segment is part 5 in the series : Building a Healthcare IT Company to $100 Million: Dr. Rob Langdon, Co-Founder of T-System
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