How Emedicalfusion CEO Andre Etherly grew to $318.8K revenue and 100 customers in 2024.

hello everybody my guest today is andre etherly he is the founder of emedical fusion llc he holds a masters of science information systems technology from george washington university seeing the unmet needs of direct pay medical practices he founded the company to design and build solutions that enable direct pay practices to succeed and excel both clinically and financially andre are you ready to take us to the top absolutely sir thank you all right e-medical fusion so first thing what's the revenue model here is it is it a sas company it is a sas company yes we have a couple of other revenue streams as well but principally we're a sas company okay that's great to understand and then take us back to the product so give me an example of a customer that's using you guys and how they use you so a customer that's using us would typically be some form of a direct pay practice it might be a concierge practice or it might be an integrative medical practice or functional medical practices these are all sort of synonymous but they all exist out there in the industry um to the tune of some about 12 of the medical practices are direct pay meaning that they do not accept insurance so that's our first criteria if you want to use the medical fusion we don't support an insurance type practice at all all of our practices are purely direct pay meaning that the customer the patient is paying them directly for services we don't have the interference of insurance okay interesting and who's actually paying you the consumer or the hospital or the or the service person the consumer well in terms of who's providing who's paying medical fusion no it's of course the service provider the physician so our clients are either mostly smaller physician practices sometimes larger physician practices or physician group practices even that have you know locations around the country so okay but it's always basically a medical professional typically physicians but also other allied providers in other words other non-physician medical service providers as well i see and what do they pay on average per month would you say um average if it's just a single practitioner they're going to pay somewhere around you know 500 a month 475 is the actual starting point and is that like per location that well that that's for a single practitioner if we add additional locations it's another 150 per location okay interesting and and how many locations practitioners and additional practitioners are also 150 per additional practitioner okay so if you look at the average kind of company that joins you how many locations and practitioners on average like what's what's the company pay you per month on average all together yeah two to two to three so you know maybe 700 or so two to three practitioners is fairly typical for us i see so each kind of we don't get the really large ones um we do have a few of the large group practices where they might have multiple locations things like men's clinics that have multiple locations around the country or women's clinics so we do have some of those that have multiple locations around the country they might have 20 25 30 locations in different places around the country and we have some of those as clients as well i got it okay and when did you launch company what year uh 2011 2011 and then fast forward today have you raised capital or bootstrapped mostly bootstrap we had one small investor back uh in 2012 and 13 uh but since then it's mostly been bootstrapped okay and how much did you raise in 2013 about a million bucks okay a million and uh do you still work closely with that investor or no they they're kind of a silent partner not actually no they they kind of we divested with them about 2013. uh okay okay very good and then um again over the past what is that i guess it's been seven years over the past seven years how many customers have you grown to yeah we've grown to i mean we don't exactly talk about the exact number of customers but i mean we've got uh because it depends on how you're counting if you're counting the one customer with 30 locations there's 30 customers or one customer but i just call it around you know a couple hundred customers okay and no no i i yes so sorry i don't want to know the number of locations i just want to know like parent kind of companies right so so you're working it sounds like about a hundred kind of groups of physicians and locations right right it might be some of them might be just single docs some of them might have two or three docs some of them might have like i said we have a couple that have you know 25 30 locations yeah some one physician one location some three physicians four locations it just depends right okay very very good and then look i mean i can kind of multiply that 100 number times that 700 price point earlier you guys are doing about a million bucks per year right now on run rate uh we can call it that okay well just correct me if i'm wrong though i'm just multiplying those two numbers you're doing about 70 grand a month right now that's close enough okay and then in terms of growth so if you go back a year ago today how much were you doing then uh about three-fourths of that we've grown quite a bit in the last year oh wow that's incredible so teach us i mean how'd you grow that fast um we just you know for one hitting the big groups really helps you know as opposed to hitting one by ones if we you know when we get a hit uh where we get a client with 25 30 locations that typically really pushes the revenue up otherwise you know it's just word of mouth and difficult things we don't have a big staff so we don't have a big sales presence how many folks uh about ten all together ten and where's everyone based um they're based around the country and we have a few employees out of the country that on the development side okay both on show and offshore mostly remote that is correct yeah that's great i love that okay it's a remote uh all around and what's the breakdown so you have engineers you said offshore what are the rest of the employees what are they doing uh support i mean basically we do two things really right we develop software and uh test it and promote it into production and we gotta support it so really everybody else is doing support if you're not developing you're pretty much doing support sales marketing or sales sales marketing support okay how many folks sales marketing uh sales and marketing is just two okay including you including me i just say you gotta be the rainmaker you're the man you're the founder right that's right you'll get it you gotta go get it man i hear you very good and then look in any kind of sas company churn is really critical uh what is your churn today and how do you make sure to keep it low well i mean that's you know that's tough um i think in terms when you talk about charlie you talking about employees are you talking about customers what are you talking about i'm talking about customers churning yeah i mean what what tends to keep the customers from churning too much is that you know we have um in our in our model we give them a pretty steep discount if they sign into a three-year contract as opposed to a month-to-month so that's kind of what that's what kind of keeps the customer base pretty steady so they get a pretty significant pretty material discount to do a month to do a three-year contract okay so what do you know what your churn is annually right now it's less than five percent okay less than five percent revenue return per year yep okay that's look that's pretty healthy and then help us understand why it's so sticky i mean do you literally become basically their payment processor we are their payment processors so we're everything we're their everything solution everything from lead management all the way through to the ehr so we're documenting the all the charts and all the documentation of the charts all the e-commerce revenue we've got a lot of unique features that you know that that direct-pay practices need that they can't really find another tool set so we've got a few competitors out there but there's still a couple years behind us and we just keep adding new features literally every 45 days we have a new release that brings out new features so i think one of the things that makes it sticky is that we actively listen to our our customers so when they ask us for things we actually do it i know a lot of companies will say that but it might take three years before they ever bring it out we actually a customer might ask us for something and we'll take a look at it it might end up in the software in the next release so we're pretty responsive and i think that's what helps us to uh to be pretty sticky because you know the tool set some people feel like the software was almost built directly for them because it's it you know we've got so many as i call them switches that allows the software to kind of be used in many different ways by many different types of practices um and that's what i think helps to keep it sticky and the fact that we keep bringing out new features and how do you land new customers are you just traveling the country and selling one to one no it's all it's all done i mean sometimes we go to conferences where we know that our customers are aggregated so that's one way otherwise we don't really do much traveling the only time we'll travel is if it's a really large customer otherwise everything is done over the internet we use zoom meeting as our meeting tool and we uh we conduct you know demos and meetings and things of that nature over zoom meeting very good but we don't we don't we don't really travel other than if you know if it's a 25 30 location deal we'll travel but other than that we don't travel yeah under any plans to raise additional capital to fuel growth yeah we are looking at that right now we're working with a couple folks right now and we're hoping to get some to do another capital raise here how much capital are you hoping to raise in an ideal world about 3 million bucks and why is that the right number for you would you say because we've looked at it and that's the number that um gives us the ability to uh really uh grow the organization where it needs to grow to from a service and support perspective um basically lose some money for a while so that we can really build out the organization and then turn it around in about 12 to 14 months to get back into the black um and that that's the that's kind of the magic number i mean you know we've we've done models at 2 million at 3 million at 5 million to even at 10 million so we've done financial modeling at all those numbers but really three million is a pretty good sweet spot for us at this point and what are you hoping to obviously don't disclose specific terms but you personally what are you hoping to raise that in terms of pre-money evaluation i'm sorry i didn't quite understand the question you're saying what what am i hoping to get as a pre-money valuation yeah in other words if you raise three million bucks how much of the company are gonna give up you think let's call it you know probably half oh wow because you're gonna sell a big big chunk of it huh yeah somewhere anywhere it just depends on the the the form of capital anywhere from a third to a half is what we're expecting yeah so if so if you raised three million bucks out of three million pre-money valuation so six million posts that's you basically selling 50 of the company yeah that's great are you sure like are you definitely set on doing equity have you looked at venture debt at all we've looked at that and you know we've got a securities attorney involved that is looking at that as another option we're looking at a couple of routes we're looking at a route of kind of an otc type offering he's got some some clients that are really uh interested in helping make money and small over the over-the-counter type stocks so we're looking at a public uh a possible public scenario area where we go public as a small little otc so we're looking at a number of scenarios uh wait i'm sorry i'm curious why involve a security lawyer at a company at your size that just seems like super super extra and unnecessary well i mean um we've looked at other strategies that didn't involve going that route and what we find is that some investors are less interested the securities lawyers come about with a strategy a a relatively low cost strategy of of making the company a public company in the otc market maybe even getting uh being able to get a shell that already exists on the other side it's already public because there's so much more investor interest in a company that is trading publicly because the investor has a way out and a lot assuming the stock assuming it's a stable stock price and there's liquidity that's the challenge there's not going to be a lot of trading volume yeah but a lot of companies there are companies out there that actually help you to build that liquidity help you to build that liquidity by generating interest amongst other investors and you know when there's a market it's a little bit easier than saying you know hey john give me two hundred thousand dollars for my you know for x percent interest in my company versus buying john years you know buy x number of shares a stock in my company for 200 000. so and like you said if you can you know if folks can help make a market um it's just one strategy we're looking at we're not you know we're not set on any strategy we're looking at multiple strategies and you know we'll continue to do that yeah very good all right let's wrap up here with the famous five number one what's your favorite business book um favorite business book would probably be uh it's an old one but i still love it seven habits highly successful people number two is there a ceo you're following or studying right now i've always admired um bill gates uh for the strategies that he used in the early days of microsoft um so i've always admired him absolutely number three what tool do you use for billing for billing we're just using um we don't really bill i mean we set all of our clients up on an automatic payment plan and so it just it just automatically comes out of their account every month yeah i know but how do you what is your opinion your payment processor authorize.net oh you use authorize okay uh number four number four how many hours of sleep to get every night uh probably about five okay and what's your situation married single kiddos married no kids yeah one kid one kid married one kid but he's grown he's 28. okay and how old are you andre i'm 60. 60. last question what do you wish your 20 year old self knew uh about half of what i know today nonetheless guys there you have it andre again launches company back uh many years ago boots dropped it then raised about a million bucks this was back in 2011. now about 10 people again helping and selling to small physicians uh across maybe one two three locations helping them and really becoming their payment provider and running many many different parts of their business 100 customers today 700 bucks a month we're doing about 700 grand per month in revenue less than 5 revenue churn per year growing 20 to 30 year over year andre thanks for taking us to the top all right buddy thank you have a great day