How Fertility Cloud CEO Jake Diner grew Fertility Cloud to $784.1K revenue and 700 customers in 2024.

hey folks my guest today is jake diner he's the former big ten track and field champion graduated from michigan state university with degree in computer science in 2001 spent the first 10 years of his business in product management roles and then since has founded his first startup in 2011 raising tens of millions of venture financing he's been entrenched in his entrepreneurial journey building companies and solving global tech problems affecting millions today he's building fertility cloud where jake serves as ceo he's on a mission to bring affordable and accessible fertility treatment to all in need jake are you ready to take us to the top oh yeah absolutely here is why is a guy leading a fertility business it feels like a female that maybe went through these problems would be a better ceo how's that work well my family went through this so i've been supporting my wife in our infertility journey it's been took us many many years to get pregnant and start raising a kid so when i uh uh exited from my last startup i started exploring what am i going to do next so i got in touch with my college buddy dr gary levy and we discussed his work and being an entrepreneur myself i identified some problems in the way fertility care is delivered because i've gone through this and i essentially said hey you know if i help you find patients if i help streamline all the back office operations if i remove the headaches of insurance can you essentially help people for the 10th or maybe one you know maybe 20th fraction of the price which i ended up paying and he said yes we as doctors we hate all the things which is not related to the medical and so that's the idea of fertility cloud form we thought well we have specialists who know how to build how to help women and couples to get pregnant we just need to bring technology in to remove the headaches so we decided to deal you know for the lack of better word amazon for fertility treatment so jake before we dive into that let's close up the straw in our last business name it again for us what was the name of that company how do you spell it uh it was a la fris we're building virtual insurance agents virtual insurance agents and now how much did you raise there so we raised about a million and a half okay and when did you sell that business uh in 2019 okay and why was that the right time to sell well actually it was the only time to sell and that from my perspective it was a failure the business failed uh what failed there is not the technology and the product that we built the failure is my understanding of the demand so we built the product and insurance companies said thank you but no thank you we don't really we don't really need it we really want it so we was like well what are we going to do with this let's find somebody who can take it off our hands so we can return some small amount of money to our investors and call it call it quits i respect that so much how much money were able to return back to investors oh we barely broke even barely broke even it's it was again it was a failure the product market fee were able to give back the 1.5 million or no and there was no money left no money left we're just we were able to pay off the debts and that's it got it and what year was that 19 2019 2019 got it okay so so when without getting like too personal too quickly here when did you and your wife start trying to have a child was that in 2019 oh no we were trying to get pregnant in uh 20 from 2007. oh wow okay so so there was an issue you looked at like solutions what was like the sticker cost you were gonna have to pay for some of these solutions okay so 2007 when we first said all right we want to start a family you know and uh we thought it's gonna be fun and easy right like back in the college days um then it turns out no it's hard so we went through the entire ivf treatment cycle uh it took us about seven years to go through multiple procedures we ended up spending about forty five thousand dollars and nothing worked uh everything that we've done just resulted in miscarriages so after seven years going to the doctors spending lots of money seeing western western specialist eastern madison went to the chinese doctors who were practicing that type of medicine enough nobody could identify what's wrong there was we're just spending money on on surgeries and drugs on medication and herbs nothing would help until i started talking back to my college friend dr gary i said look it's it's just not working what's happening and he said you can do things differently and it's going to cost you way less money and he advised us what we should do and we became pregnant so essentially my daughter was born in 2014 and that's i've been apparent you know throughout my previous startups but i always remember how hard it was and i remember how much money we spend and i remember the emotional toll on my wife and then myself going through all those treatments so i had the pain first it's a first-hand knowledge of the pain we've gone through and so what did that professor recommend and what did it cost so essentially he said look you know you guys don't have to go through such invasive procedures all the time because there's a big stress factor involved into going through the egg extraction insemination then implantation of the embryo back into the uterus so um he said look we already spent all this money you know that you can get pregnant but you cannot carry so let's start looking into the reasons why why you having miscarriages instead of trying to implant the embryo over and over again right you know if you repeat the same thing and expect different outcome there's something wrong with you so at that time i said you know what i'm not doing any more ivf i just don't have any more money left for this and he said no you can do it much much cheaper and over longer period of time so what he ended up suggesting is that look start taking certain medication my wife actually was for my wife so she would start taking certain medication which was not as intrusive and as painful as previously when you're getting ready for the idea of itself and what net cost what that process cost i think uh over the six months we spent maybe two thousand dollars oh wow way cheaper than than 45k you had it that's right beautiful daughter so let's fast forward now to how you're helping others do this what is my fertility cloud is it a sas play so fertility cloud is the online fertility treatments platform it connects the doctors rei doctors a reproductive endocrinology and infertility specialist with the patients using video calls after a conversation between the patient and the doctor the doctor then come up is they need missing tests so if something is missing we would order those tests again to deliver to the patient's home after that the doctor would prescribe a medication which would also get delivered to the patient's home so the idea here is really to make uh infertility treatment as easy as possible without the need to go to the clinic without the need to do those expensive surgeries and by removing all this overhead we made it really really cheap so now a woman doesn't have a couple doesn't have to you know kind of go for the second mortgage just to afford it yeah so how successful has been how much revenue did you do last month oh man um so we've been organically we haven't raised any money we've done everything from our pocket and we so far treated about 700 women in six months we on average see hundred new patients uh every month uh the last month's revenue i think was about 45k uh and it's all organic so um and what are they is it a one-time fee to talk to a doctor or is it subscription so it's a one-time fee to actually see the doctor after that it is a recurring payment for the duration of the treatment they stop the treatment once they get pregnant or we jointly understand that we cannot help them and then we triage them to a more intrusive form of treatment which be a surgery if they can afford or agree to this so you sort of are interesting in that you don't have traditional sas economics because if you work they stop paying you because it was successful so how do you add on product lines after you deliver that first success so that you can build a long-term customer relationship and increase ltv of these moms and dads so uh this is the second phase of our company first we want to acquire patients first we want to see that we help them and we build the trust because now we are the doctors who help them get pregnant the next piece is support them through the pregnancy and there are there is a whole bunch of products that uh women and couples need while they still caring but more importantly you have even longer tail is the baby business right it's uh and i'm a parent so i know how much money i spend on my kid someone with justifiable some of it not um how much did you spend in the first year of a newborn oh yeah right maybe between five to ten thousand dollars okay so we just in just another couple like anyone else right you're trying to get as much as as much as you can for your kid and end up spending too much money on crap they don't use but that's life out of that revenue by the way do you pay how many doctors like on your platform and do the doctors get paid do you pay them of course of course so right now we have four doctors on our platform uh doctors get get paid hourly...