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Aug 4, 2017 · 24m · top-founders

741: Exited for $15m, Now Tackling Healthcare Patient Doctor Relationships

Todd Johnson · 13m spoken Nathan Latka · 8m spoken
0:00 / 0:00

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In this episode of The Top, host Nathan Latka interviews serial healthcare IT entrepreneur Todd Johnson to discuss his transition from a 15 million dollar bootstrapped exit with Salar to scaling HealthLoop into a venture-backed SaaS platform generating 4 million dollars in ARR.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.3% of the talking time here. How this is scored →

Nathan as informed peer 3.2 Guest teaching 2.5 Guest disagreement 1.0 Nathan pushing back 2.2
05100:0010:0020:001:12–4:24 · Nathan as informed peer 3/10 Todd Johnson's Background and $15M Bootstrapped Exit with Salar Latka inquires into Johnson's previous bootstrapped company Salar and his personal finances following the $15M exit. The dynamic is friendly and conversational, with light probing on why Johnson rents instead of buys in Silicon Valley.4:24–8:42 · Nathan as informed peer 4/10 The Genesis and Core Mechanism of HealthLoop Johnson details the founding story of HealthLoop and the shift from transactional fee-for-service care to value-based healthcare. Latka interjects to drill down on the exact business model and perverse incentives in medical care.8:42–12:13 · Nathan as informed peer 5/10 Enterprise Pricing, Revenue Scale, and Venture Capital Strategy Latka pushes on enterprise contract mechanics, pricing, and attempts back-of-the-envelope math estimating $8.4M in ARR. Johnson politely clarifies the contract mix and corrects the actual ARR to approximately $4M.12:13–18:37 · Nathan as informed peer 5/10 Unit Economics, Sales Cycles, and Policy Dynamics Latka challenges Johnson on why he does not increase CAC spending to accelerate sales given the favorable payback period. Johnson counters that hospital sales cycles cannot simply be solved by deploying capital due to lack of immediate buyer urgency.18:38–22:54 · Nathan as informed peer 2/10 Sponsor Break: Latka SaaS Database and Course Software Promotion Segment includes sponsor promotions followed by the standard Famous Five rapid-fire questions covering favorite business books, CEOs, sleep habits, and advice to younger self.22:54–24:01 · Nathan as informed peer 0/10 Episode Recap and Previous Show Recommendation Solo host outro summarizing Todd Johnson's metrics and plugging the next episode.1:12–4:24 · Guest teaching 2/10 Todd Johnson's Background and $15M Bootstrapped Exit with Salar Latka inquires into Johnson's previous bootstrapped company Salar and his personal finances following the $15M exit. The dynamic is friendly and conversational, with light probing on why Johnson rents instead of buys in Silicon Valley.4:24–8:42 · Guest teaching 4/10 The Genesis and Core Mechanism of HealthLoop Johnson details the founding story of HealthLoop and the shift from transactional fee-for-service care to value-based healthcare. Latka interjects to drill down on the exact business model and perverse incentives in medical care.8:42–12:13 · Guest teaching 4/10 Enterprise Pricing, Revenue Scale, and Venture Capital Strategy Latka pushes on enterprise contract mechanics, pricing, and attempts back-of-the-envelope math estimating $8.4M in ARR. Johnson politely clarifies the contract mix and corrects the actual ARR to approximately $4M.12:13–18:37 · Guest teaching 4/10 Unit Economics, Sales Cycles, and Policy Dynamics Latka challenges Johnson on why he does not increase CAC spending to accelerate sales given the favorable payback period. Johnson counters that hospital sales cycles cannot simply be solved by deploying capital due to lack of immediate buyer urgency.18:38–22:54 · Guest teaching 1/10 Sponsor Break: Latka SaaS Database and Course Software Promotion Segment includes sponsor promotions followed by the standard Famous Five rapid-fire questions covering favorite business books, CEOs, sleep habits, and advice to younger self.22:54–24:01 · Guest teaching 0/10 Episode Recap and Previous Show Recommendation Solo host outro summarizing Todd Johnson's metrics and plugging the next episode.1:12–4:24 · Guest disagreement 1/10 Todd Johnson's Background and $15M Bootstrapped Exit with Salar Latka inquires into Johnson's previous bootstrapped company Salar and his personal finances following the $15M exit. The dynamic is friendly and conversational, with light probing on why Johnson rents instead of buys in Silicon Valley.4:24–8:42 · Guest disagreement 1/10 The Genesis and Core Mechanism of HealthLoop Johnson details the founding story of HealthLoop and the shift from transactional fee-for-service care to value-based healthcare. Latka interjects to drill down on the exact business model and perverse incentives in medical care.8:42–12:13 · Guest disagreement 2/10 Enterprise Pricing, Revenue Scale, and Venture Capital Strategy Latka pushes on enterprise contract mechanics, pricing, and attempts back-of-the-envelope math estimating $8.4M in ARR. Johnson politely clarifies the contract mix and corrects the actual ARR to approximately $4M.12:13–18:37 · Guest disagreement 2/10 Unit Economics, Sales Cycles, and Policy Dynamics Latka challenges Johnson on why he does not increase CAC spending to accelerate sales given the favorable payback period. Johnson counters that hospital sales cycles cannot simply be solved by deploying capital due to lack of immediate buyer urgency.18:38–22:54 · Guest disagreement 0/10 Sponsor Break: Latka SaaS Database and Course Software Promotion Segment includes sponsor promotions followed by the standard Famous Five rapid-fire questions covering favorite business books, CEOs, sleep habits, and advice to younger self.22:54–24:01 · Guest disagreement 0/10 Episode Recap and Previous Show Recommendation Solo host outro summarizing Todd Johnson's metrics and plugging the next episode.1:12–4:24 · Nathan pushing back 2/10 Todd Johnson's Background and $15M Bootstrapped Exit with Salar Latka inquires into Johnson's previous bootstrapped company Salar and his personal finances following the $15M exit. The dynamic is friendly and conversational, with light probing on why Johnson rents instead of buys in Silicon Valley.4:24–8:42 · Nathan pushing back 3/10 The Genesis and Core Mechanism of HealthLoop Johnson details the founding story of HealthLoop and the shift from transactional fee-for-service care to value-based healthcare. Latka interjects to drill down on the exact business model and perverse incentives in medical care.8:42–12:13 · Nathan pushing back 3/10 Enterprise Pricing, Revenue Scale, and Venture Capital Strategy Latka pushes on enterprise contract mechanics, pricing, and attempts back-of-the-envelope math estimating $8.4M in ARR. Johnson politely clarifies the contract mix and corrects the actual ARR to approximately $4M.12:13–18:37 · Nathan pushing back 4/10 Unit Economics, Sales Cycles, and Policy Dynamics Latka challenges Johnson on why he does not increase CAC spending to accelerate sales given the favorable payback period. Johnson counters that hospital sales cycles cannot simply be solved by deploying capital due to lack of immediate buyer urgency.18:38–22:54 · Nathan pushing back 1/10 Sponsor Break: Latka SaaS Database and Course Software Promotion Segment includes sponsor promotions followed by the standard Famous Five rapid-fire questions covering favorite business books, CEOs, sleep habits, and advice to younger self.22:54–24:01 · Nathan pushing back 0/10 Episode Recap and Previous Show Recommendation Solo host outro summarizing Todd Johnson's metrics and plugging the next episode.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 63.5% · guest 36.5%0:00 · Nathan 63.5% · guest 36.5%3:00 · Nathan 14% · guest 86%3:00 · Nathan 14% · guest 86%6:00 · Nathan 6.8% · guest 93.2%6:00 · Nathan 6.8% · guest 93.2%9:00 · Nathan 34.6% · guest 65.4%9:00 · Nathan 34.6% · guest 65.4%12:00 · Nathan 28.6% · guest 71.4%12:00 · Nathan 28.6% · guest 71.4%15:00 · Nathan 22.4% · guest 77.6%15:00 · Nathan 22.4% · guest 77.6%18:00 · Nathan 78.3% · guest 21.7%18:00 · Nathan 78.3% · guest 21.7%21:00 · Nathan 48.9% · guest 51.1%21:00 · Nathan 48.9% · guest 51.1%24:00 · Nathan 100% · guest 0%24:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 14:52 Johnson rejects Latka's CAC scaling assumption

Johnson firmly rejects Latka's premise that spending more marketing capital could shorten complex enterprise sales cycles in healthcare.

 Hardest push from Nathan ▶ 14:36 Latka presses on spending more CAC to grow faster

Latka challenges Johnson's low CAC target, arguing that with $120k ACVs upfront, spending tenfold more should logically unlock faster growth.

 Biggest teaching moment ▶ 11:09 Johnson corrects Latka's ARR extrapolation

Johnson corrects Latka's simplistic multiplication of customer count by ACV ($8.4M), explaining that legacy physician practice pricing puts real ARR at $4M.

 Nathan holds their own ▶ 11:00 Latka rapidly calculates revenue from contract metrics

Latka uses reported customer counts and average contract values to quickly model out and interrogate the company's run-rate economics.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Todd Johnson's Background and $15M Bootstrapped Exit with Salar 3212 Latka inquires into Johnson's previous bootstrapped company Salar and his personal finances following the $15M exit. The dynamic is friendly and conversational, with light probing on why Johnson rents instead of buys in Silicon Valley.
The Genesis and Core Mechanism of HealthLoop 4413 Johnson details the founding story of HealthLoop and the shift from transactional fee-for-service care to value-based healthcare. Latka interjects to drill down on the exact business model and perverse incentives in medical care.
Enterprise Pricing, Revenue Scale, and Venture Capital Strategy 5423 Latka pushes on enterprise contract mechanics, pricing, and attempts back-of-the-envelope math estimating $8.4M in ARR. Johnson politely clarifies the contract mix and corrects the actual ARR to approximately $4M.
Unit Economics, Sales Cycles, and Policy Dynamics 5424 Latka challenges Johnson on why he does not increase CAC spending to accelerate sales given the favorable payback period. Johnson counters that hospital sales cycles cannot simply be solved by deploying capital due to lack of immediate buyer urgency.
Sponsor Break: Latka SaaS Database and Course Software Promotion 2101 Segment includes sponsor promotions followed by the standard Famous Five rapid-fire questions covering favorite business books, CEOs, sleep habits, and advice to younger self.
Episode Recap and Previous Show Recommendation 0000 Solo host outro summarizing Todd Johnson's metrics and plugging the next episode.

Statements from this episode (9)

Disclosure
Todd Johnson: Salar had a $15M bootstrapped exit without venture capital
“We sold that company to the nation's second largest medical transcription firm in for how much? Yeah, it was a fifteen million dollar exit. That was a company that had no venture capital.”
Todd Johnson Aug 4, 2017 ▶ 2:58
Disclosure
Johnson: HealthLoop refuses to monetize through patients, targeting physicians instead
“As a business, we've decided that we don't think the right The strategy is to monetize this through patients. While I think there's precedent for it, there's other companies that do, we sort of believe every patient deserves this. Physicians and their teams be…”
Todd Johnson Aug 4, 2017 ▶ 7:45
Insight
Johnson: Meaningful patient participation requires channeling trust through their doctor
“We believe that in order to earn and retain the trust of a patient that's sick and going through one of these episodes, you have to channel their doctor. That's the relationship of trust in healthcare. And if you can tie into that, you actually get the level o…”
Todd Johnson Aug 4, 2017 ▶ 8:25
Disclosure
Johnson: HealthLoop typical first-year ACV is $120K to $150K
“Typical first year contract value is about 120 to 150,000 dollars, and then we hope to escalate those year over year. To anywhere between a quarter of a million to a million dollars in annual revenue per year.”
Todd Johnson Aug 4, 2017 ▶ 9:00
Disclosure
Johnson: HealthLoop serves 70 groups across 20 hospitals and 50 practices
“Between hospitals and physician groups, we have about 70 groups on board, and the mix is about 20 hospitals and health systems and 50 independent practices.”
Todd Johnson Aug 4, 2017 ▶ 10:51
Disclosure
Johnson: HealthLoop ARR is close to $4 million
“The physician practices are on a on an older sort of subscription model, so the ARR is closer to four million dollars a year.”
Todd Johnson Aug 4, 2017 ▶ 11:11
Disclosure
Johnson: HealthLoop has raised $21 million
“We've raised twenty-one million dollars.”
Todd Johnson Aug 4, 2017 ▶ 11:30
Assertion Not checkable as stated
Johnson: HealthLoop maintains roughly 90% annual customer retention
“We're about 90% in annual retention.”
Todd Johnson Aug 4, 2017 ▶ 12:21
Assertion Not checkable as stated
Johnson: HealthLoop enterprise sales cycles average six to seven months
“Our cycle times now are about six to seven months, which is, it still sucks.”
Todd Johnson Aug 4, 2017 ▶ 13:52
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