Heidi and her co-founder have bootstrapped WebPT to significant traction, then raised a small angel round. 2016 revenue was $40 million. The company has sold 51% stake to private equity and the founders have already experienced significant liquidity. Excellent story of a female entrepreneur who doesn’t make excuses. She just executes.
Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?
Heidi Jannenga: I was born in Texas to two immigrant parents. My dad immigrated from Austria and my mom is a first-generation American born in Hawaii. She’s Japanese. We moved to Winter Park, Florida when I was six years old. I was a multi-sport athlete in high school. I ended up playing basketball in college at UC Davis in Northern California. I injured my knee in my junior year.
I was a premedical in UC Davis. I had to go through physical therapy for my knee injury. I had an amazing therapist who helped me get back to playing. They thought that I had torn my anterior cruciate ligament (ACL). I was on the verge of having surgery, but went down the conservative route of therapy first. I was able to finish out my junior year and played again in my senior year without a brace. I fell in love with the thought of being a physical therapist. I was intrigued by what they were able to accomplish.
I really wanted to stay in the sports medicine realm. I went on to get my Master’s in Physical Therapy at the Institute of Physical Therapy in Florida. I continued to earn certification in athletic and strength training. Four years ago, I obtained my Doctorate in Physical Therapy through Evidence in Motion. After graduating from the physical therapy school, I ended up in Arizona where I worked in a sports medicine clinic that worked with all kinds of athletes. I worked on the LPGA tour for four years. I also worked all the way down to adolescent and even those weekend warriors. I focus on the lower extremities – hips and knees as well as shoulders.
I worked my way up through the ranks and became a clinic director after 10 years in practice. I became a clinic director of three large multi sites here in Arizona. That’s where my next transition happens into the WebPT story, which is what I’ve been doing now for the past 10 years. I had entrepreneurial tendencies in terms of breaking out of just being in a normal style private practice and starting a practice inside a junior college. This was a new concept where we employ the athletic trainers and work directly with the team physicians to refer patients to our practice as well as servicing all of the employees and club athletes that were associated with the college.
It took off and did so well. It was partly why I got recruited into the larger sports medicine facility because we actually took that template and did the same thing at a larger university. It was about taking an idea and being able to execute on it. That has been in me for a long time. I don’t know if I would have defined myself truly as an entrepreneur prior to the WebPT story.
Sramana Mitra: What specifically happened there that turned you into an entrepreneur?
Heidi Jannenga: It’s the classic problem solving story. As a clinic director in this multi-site practice, I had P&L responsibilities. Specifically in physical therapy, our payments and reimbursements have been steadily declining over the years. With P&L, I’m trying to maintain the bottom line. If your top line is going down, you have to look at your expenses. One of our largest expenses was transcription and dictation.
A lot of our referring physicians had started to transition into using some sort of digital documentation or electronic medical record. I thought there had to be something out there for physical therapists as well. I had just started to date a software engineer. I said, “Why don’t you go out there? Technology is your world. Can you check out the applications that are available?” When he came back, he was scratching his head saying, “I’m not sure what’s going on in healthcare but there’s nothing web-based. There’s nothing that you can afford. There’s nothing specific to you as a physical therapist. You’re going to have to fit into a physician’s workflow.”
We decided to put our heads together and create something that was supposed to be for my practice. We did a little bit of market research. This was back in 2006. We found that 80% of physical therapists were still using pen and paper. They were all suffering the same problems that I was actually having. My pain points were their pain points. As we continued to build this platform for us, I started to get some attention from some of my colleagues who were going through the same thing. They asked if they could try it.
We got it up and running. We continued to iterate and take their feedback in. We iterated on a platform that now works in multiple facilities. Within a year, we had 12 practices up and running using our platform and giving us positive feedback. After we did that market research, we decided that we might have stumbled onto something here. We launched the company in February of 2008, literally, at the back of the coffee shop. We hired one employee. We sold to five clinics that first month. We are now servicing close to 10,000 clinics across the nation. We have 65,000 plus users and have 300 employees in downtown Phoenix.