How Appointmed Reached $50K MRR and 1,200 Customers Bootstrapped in Healthcare SaaS (Interview with CEO Patrik Inzinger)

Introduction: Patrik Inzinger and Appointmed

Nathan Latka

00:00Hey, folks. My guest today is Patrik Inzinger. He's an independent designer entrepreneur and startup advisor with a passion for product and interface design. In addition to more than seventeen years of working with brands like the Ritz Carlton, Porsche, Red Bull, and others, and multiple successful startups all over the world, he's also the founder of a healthcare company called Appointmed. It's a practice management software for healthcare professionals. Patrik, you're ready to take us to the top?

Patrik Inzinger

00:21>> Yes, let's go.

Why Enter the Healthcare Industry

Nathan Latka

00:22All right. Why is a forward thinking product led guy like you going into healthcare a very slow, stodgy industry?

Patrik Inzinger

00:29>> Yeah. Funny that you ask. I'm doing a lot of those industry design thingies, basically. So I did a lot of work in the online banking industry. I did a lot of work in the insurance industry, and all of that is very complex and slow and and old, basically. And actually, the team that I have with Appointmed now is the same team that we tried to build a sort of in the financial sector back in 2000 I

00:54>> don't know. 2011 or something like that. How many people are

Nathan Latka

00:57on the team?

Team Size and Structure

Patrik Inzinger

00:58>> We're only five people. So it's it's very small and it's and it's small by design. I I really like to keep things tight and and don't want to have too much management stuff in there.

Nathan Latka

01:09How many of the five write code? Two. Two. Okay. And then what are the other three?

Patrik Inzinger

01:17>> I do the design of all the business stuff. We do have one marketing person, and we have another one doing mostly marketing and customer support and stuff like that.

Founding Story and Early Years with No Revenue

Nathan Latka

01:28So. And when did you guys get off the ground? When did you launch?

Patrik Inzinger

01:32>> We started with with Appointmed or the initial ideas in 2013 and basically treated it as a side project. So all of my co founders are self employed. They used to have their own business, and then we figured out, yeah, let's let's not trade ours for money, build something that basically provides an income passively. So that was basically the idea.

01:54>> And, yeah, that's that's pretty much.

Nathan Latka

01:57Do you remember back in 2013 what total revenue was that year?

Patrik Inzinger

02:01>> Yeah, 2013 until 2016 is pretty much zero. It took us a long time to get the prototype ready. It took us a long time to have all the security stuff in place. If you deal with patient records, it's very, very, very important to secure all of the data. We do have almost half a million patients now in our system. It's

Nathan Latka

02:25Across critical to have how many customers?

Patrik Inzinger

02:29>> I'd say about 1,200 or something like that.

Nathan Latka

02:331,200. Okay, so 500. Okay, and who are some of these customers? Are they hospitals?

Customer Count and Target Market

Patrik Inzinger

02:38>> No. We started off with doctors, like independent practices, but we quickly realized that those people, they do have the money, but they don't like to spend money. So it was very hard to get those people on board, especially with a with a completely new solution. They're used to having like Windows applications and Windows 2,000 server running somewhere in their office and stuff like that. So they are not used to software as a service. So it was

03:05>> really hard. We had sales cycles up to three months per customer in the early days. And through referrals and connections, we started going more into the therapist sector. So we do a lot of physical therapy and stuff like that, where it became easier to sell products. So this is our main target group now.

Nathan Latka

03:27And Patrik, what do these customers pay you per month on average?

Pricing Model: Per Seat for Healthcare Practices

Patrik Inzinger

03:30>> On average, I'd say it's about 50 to €60 per user. So if a practice grows, we grow with them. So if they onboard new people or they increase their team or whatever, they basically have to purchase another seat for their own.

Nathan Latka

03:44What is a user? Is it a user a patient or someone that works at the doctor's That

Patrik Inzinger

03:49>> works at the doctor's office.

Nathan Latka

03:51Okay. Got it. So how many so round that out, I mean, what's the average team size when they join you?

Patrik Inzinger

03:58>> It depends. I think the largest practice that we have now is like close to 50 people working there, but the average is about six to 10, I'd say.

Nathan Latka

04:07Okay. So would you say that if we can take six times 80 United States dollars per month, so each customer pays you about $500 per month on average? Yeah, that's about it. Okay, interesting. Very cool. Why did you decide to price against number of workers at the doctor's office versus number of patients the doctor serves?

Patrik Inzinger

04:24>> Because the patients is very hard to judge. I mean, do have the numbers in the system, but if you have like 20,000 patients in your practice, it's not really

04:36>> a good KPI to measure the price of our product because not all of those 20,000 will be showing up at your practice every single day. So we figured it would be easier to do like the CRM way. For example, Zendesk Sell or something like that. They do the pricing per seat working with the software. So that's one of the reasons why we went there.

Nathan Latka

04:56So then can I multiply 1,200 doctor's offices times $500 a month on average? That would put your MRR at about $600,000 a month? No, that's way off.

MRR and Revenue Reality Check

Patrik Inzinger

05:07>> That's- that's the pricing we do have now, but we do have a lot of legacy customers. So if we're talking about numbers, we're about like 40 to 50 ks MRR now. So it's not that big, but since we are a small team, we're only five people.

Nathan Latka

05:23No, Patrik, this is great. The that we track is revenue per employee, right? You get a lot with a little, which we love. If you're at $50,000 a month today, where were you a year ago?

Growth History and Marketing Evolution

Patrik Inzinger

05:33>> A year ago, we were like close to 30, I'd say.

Nathan Latka

05:38And where did the growth come from? How are you finding these new doctor's offices?

Patrik Inzinger

05:42>> We did everything. We did like snail mail campaigns. We did cold calling. We tried email campaigns, and and we basically revamped our entire marketing strategy in 2017 and and focused on on search engine optimization and revamped our website and stuff like that. And ever since we did that, it's mostly inbound. So people find us via Google or via some ads we we ran. But How much did how

Nathan Latka

06:16much did you spend last month on ads? Nothing.

Patrik Inzinger

06:19>> We we don't do ads anymore. That was back in 2017 to 2018, '19, maybe.

Nathan Latka

06:24That's early to know. Maybe SEO.

Referral Program and Word of Mouth Growth

Patrik Inzinger

06:27>> Most of our growth now is referrals from existing customers. So last month, we had 70% of our growth was referrals from existing customers because they are so happy with the software that we provide for them.

Nathan Latka

06:38How do you track that? You pay them a kickback or something?

Patrik Inzinger

06:40>> Yeah. Yeah. They get a little bonus basically on the next invoice. It's €50 or something like that. So it's not a huge amount. But still dollars.

Nathan Latka

06:50No.

Patrik Inzinger

06:51>> €50. So about $60, $65 dollars something.

Nathan Latka

06:54They get $65 for every new customer they refer to you?

Patrik Inzinger

06:57>> Yeah. Right.

Nathan Latka

06:58That's pretty cheap for a referral program. That's nice work there.

Patrik Inzinger

07:02>> Yeah, it works out for us. And the rest of the growth is basically word-of-mouth. So we don't do any sales or key account management or whatever. It's basically we implemented intercom on our website to easily reach the entire team. So if have any questions about our software, you can just type a question in and we will respond in like less than five minutes. That's it. What about SEO? So when someone searches terms organically on Google, what

Nathan Latka

07:27>> are some of the

07:27terms you rank really high for that drive you a lot of new trials?

Patrik Inzinger

07:32>> Yeah. Well, that's hard. It's it's mostly like German terms, so it's hard to translate off the top of my head, but it's basically like doctor's practice scheduling

Nathan Latka

07:41or patient records or something like that. Interesting. Okay. And are you only focused on the German market right now?

Patrik Inzinger

07:47>> Yes. It was easier to start that way, but the entire company is of a company language is English. So in case we wanna branch out and reach out to other countries, we can easily do that. All of our internal documentation is English. The communication is in English. So if we take on new workers, we have one where we had one working from Kazakhstan for for a couple of months. It's very easy to onboard those people. So

08:10>> the goal is to roll out an English version of of our software by the end

Nathan Latka

08:15of the year or beginning of next year. And Patrik, you've done this all bootstrapped, correct?

Bootstrapping and Founder Investment

Patrik Inzinger

08:20>> Yes. We invested about, I'd say, 150 to 170 k in the early days. Again, we we have been all self employed. We have a very high skill level in our team, so everybody was making a good amount of money before appointment, basically. And that gave us the luxury to invest in our own company so that we didn't have to go to investors. We did go to investors, but most of them turned us down. The Austrian investment

08:49>> scene wasn't really that great.

Equity Split Among Co-Founders

Nathan Latka

08:52Yeah. How many so so how many co founders are there that own equity?

Patrik Inzinger

08:57>> We we have four.

Nathan Latka

08:59Okay. Did you split 25, 25, 25?

Patrik Inzinger

09:01>> No. It's more like we started out with two and then added another one and then added another one. So it's more like how long you are in the company basically. It's not How the sense do you own today? I own 34%.

Nathan Latka

09:16Okay, got it. And then I guess whoever you co founded with in the beginning probably owns around the same amount, right? Yeah, right. And then the other two own a little bit less? Yes, right. I see. Very cool. So what will it take? What skill do you guys have to reach for everyone to quit their cushy full time gigs to do this full time?

Patrik Inzinger

09:33>> Oh, that's a good question. I mean, depends on the fixed expenses that those people have. So a few on our team, they're like driving Teslas and do have their expenses, basically, so they they needed to be covered. For me personally, I started out full time in 2017 or 2018. I took a pretty big pay cut, but I have everything that I need, basically. So it it's not really about the money. I like the flexibility of of

10:02>> doing my own thing.

Nathan Latka

10:03No. I love the flexibility too. Can I ask you sort of what you pay yourself now at the company being one of only full time ones?

Patrik Inzinger

10:12>> Right now, we're about €4,000 a month.

Nathan Latka

10:15You kind of whisper that. Does that make you nervous?

Patrik Inzinger

10:19>> Yeah. I mean, it's a lot of money, right? So it's Yeah.

Nathan Latka

10:21Well, money's relative. I mean, your living expenses are $4, then you're living paycheck to paycheck. Sure. Yeah. Low, then you're living like a king.

Patrik Inzinger

10:29>> That's that's the point that I was trying to make earlier. We have people who have a lot of expenses every month, so it's it's harder for them to get by with that amount of money. But I'm very frugal, basically, and and 4,000 is a lot of cash.

Nathan Latka

10:42Yeah. Are you guys profitable or do you sort of reinvest everything back into the company?

Patrik Inzinger

10:47>> We reinvest most of it, but there's there's a good amount of profit in there as well.

Nathan Latka

10:53Do you keep just just so that you feel good about life in general? Do you keep a cushion in the bank? And if so, how many months of runway cushion do you like to keep?

Patrik Inzinger

11:01>> Yeah. We we do have about two years left. We have enough money to basically do our thing and don't have to worry about anything.

Nathan Latka

11:08How much can I ask how much cushion that is in the bank? He's, like, refreshing his bank account right now.

Patrik Inzinger

11:15>> I should have checked on the numbers before the call.

Nathan Latka

11:19A range. A range is fine. It sounds like it's gonna be, like, a 150 or $200, something like that. Something that. Yeah. Yeah. Yeah. Because what total expenses are what? Like, $30, $40 grand a month, something like that?

Patrik Inzinger

11:29>> Yeah. Not even that. I think with all the salaries and we we are very, very tight on infrastructure, so the whole operation basically or or the the system is is costing us, like, 25 to 30 k a year. It's very lean, very small. So I'm I'm a big fan of every dollar that you don't spend, you actually have in your bank account. So this is the philosophy behind this.

Nathan Latka

11:53And, Patrik, are people sticking? What does churn look like?

Churn: Essentially Zero

Patrik Inzinger

11:56>> It's basically nonexistent. We're we're in a good spot where people if they switch, and that's the challenge, getting people to switch to software in in in that environment and in that industry, once they switch, we basically don't have any churn that is due to people being unhappy with the software. It's more like external circumstances. For example, we have one customer that outgrew our feature set, basically, so they they they basically turned into a little clinic, and

12:25>> and they, of course, had to cancel their contract. But most of them are sticking with us for years. We we still, I would say, January is like single digits.

Famous Five: Books, Tools, and Life

Nathan Latka

12:37Yeah. Very cool. Let's wrap up here with the famous five. Number one, favorite book.

Patrik Inzinger

12:41>> Favorite book.

12:44>> Dune, actually. I started writing reading sci fi books again. Sci fi. What was it called?

Nathan Latka

12:51Dune. Dune. Okay. Number two, is there a CEO you're following or studying?

Patrik Inzinger

12:56>> Yeah. A lot. I mean, Elon Musk, obviously. He was a big fan of of Tesla and SpaceX and stuff like that. I'm also a big fan of Dan Mall. Not everything he does, but most of the stuff. Great.

Nathan Latka

13:10And our dream, what's your favorite online tool for building a business?

Patrik Inzinger

13:14>> Oh, that changes, like, every other month. I was a big fan of Notion, a big fan of Slack, although I'm not a big fan of Slack anymore. I think they're going in the wrong direction. And and quite recently, we switched our internal communication to around.co, which which is a great video communication tool.

Nathan Latka

13:33Why do you like them?

Patrik Inzinger

13:34>> They have a great UI. As as a designer, that's that's basically one of the main criteria to choosing software. And they also have this little overlay thingy. I don't know what call it. It's basically like a non distracting video call. So you can get work done. You can go into your ID and and do code or go into Figma and basically see your team in the right hand corner of the screen. Alright. Cool. Number four,

Nathan Latka

13:57how many hours of sleep do get every night?

Patrik Inzinger

13:59>> Oh, eight, easily.

Nathan Latka

14:02Okay. And what's your situation? Married, single, kids?

Patrik Inzinger

14:05>> I do have a partner. We have two cats. Two cats. Okay. And how old are you? Sorry? How old are you? I'm 35. I'm turning thirty

Nathan Latka

14:14five Thirty in '5. Me? Yeah. I turned 32 in October. October 3. When's your birthday?

Patrik Inzinger

14:20>> Twenty ninth.

Nathan Latka

14:21Okay. Alright. Last question. Something you wish you knew when you were 20.

Patrik Inzinger

14:25>> How to invest money.

Nathan Latka

14:29Guys, there you have it. Appointmed launched in 2013. Basically no revenue for three years till 2016. Now in 2020, they broke, call it, oh, how much? About $30,000 a month in revenue. Now they're doing over $50,000 a month in revenue, all bootstrapped. Patrik still owns, call it, 34% of the business. They've raised no money, only $170,000 of the Founder's money they put in at the start to get it going, now serving over 1,200 doctors'offices and

14:52500,000 patients as they look to continue to scale. Patrik, thanks for taking

Patrik Inzinger

14:56>> us to the top. Thank you very much.

Nathan Latka

15:01One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one

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