How Fertility Cloud Reached 700 Patients and 100 New Patients Per Month With No Outside Funding (Interview with CEO Jake Diner)

Introduction and Jake's Background

Nathan Latka

00:00Hey folks, my guest today is Jake Diner. He's the former Big Ten track and field champion, graduated from Michigan State University with a degree in computer science in 2001, spent the first ten years of his business in product management roles, and then since has founded his first startup in 2011, raising tens of millions in 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

00:23where 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?

Why a Man Is Leading a Fertility Business

Jake Diner

00:31>> Oh yeah, absolutely. My first question

Nathan Latka

00:33here 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?

Jake Diner

00:42>> Well, my family went through this. So I've been supporting my wife in our infertility journey. It took us many, many years to get pregnant and start raising a kid. So when I exited from my last startup, I started exploring what am I gonna do next. So I got in touch with my college buddy, Doctor. Gary Levy and we discussed his work. And being entrepreneur myself, I identified some problems in the way fertility care is delivered because

01:10>> 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 tenths or maybe one, you know, maybe twentieth 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

01:36>> idea of Fertility Cloud formed. We thought, well, we have specialists who know how to help women and couples to get pregnant. We just need to bring technology in to remove the headaches. So we decided to build, for the lack of better word, Amazon for fertility treatment.

Jake's Previous Startup and Why It Failed

Nathan Latka

01:51So Jake, before we dive into that, let's close-up with starting our last business. Name it again for us. What was the name of that company and how do you spell it?

Jake Diner

01:58>> It was a Laphris. We're building virtual insurance agents.

Nathan Latka

02:02Virtual insurance agents. And now how much did you raise there?

Jake Diner

02:06>> So we raised about a million and a half.

Nathan Latka

02:08Okay. And when did you sell that business?

Jake Diner

02:12>> In 2019.

Nathan Latka

02:13Okay. And why was it the right time to sell?

Jake Diner

02:16>> Well, actually it was the only time to sell and that from my perspective, it was a failure. The business failed. What failed there is not the technology and the product that we build, the failure is my understanding of the demand. So we build a product and insurance company said that, thank you but no thank you. We don't really need it, we don't really want it. So we was like, well, what are gonna do with this? Let's

02:41>> find somebody who can take it off our hands so we can return some small amount of money to investors and call it quits.

Nathan Latka

02:49I respect that so much. How much money were you able to return back to investors?

Jake Diner

02:53>> Oh, we barely broke even, barely broke even. Was a failure.

Nathan Latka

02:58The product market fit You were

03:02able to give back the 1,500,000 or no, there was no money left?

Jake Diner

03:05>> No money left. I see. We were able to pay off the debts and that's it.

Nathan Latka

03:11Got it. And what year was that?

Jake Diner

03:13>> '19, 2019.

Jake's Personal Fertility Journey

Nathan Latka

03:142019, got it. Okay, 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?

Jake Diner

03:23>> Oh, no.

03:24>> We were trying to get pregnant from 2007.

Nathan Latka

03:31Oh, wow. Okay. 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?

Jake Diner

03:39>> Okay, so 2007 when we first said, all right, we wanna start a family, you know, and we thought it was gonna be fun and easy, right? Like back in the college days. Then it turns out, no, it's hard. So we went through the entire IVF treatment cycle. It took us about seven years to go through multiple procedures. We ended up spending about $45,000 and nothing worked. Everything that we've done just resulted in miscarriages. So after seven

04:06>> years going to the doctors, spending lots of money, seeing the Western specialist, Eastern medicine went to the Chinese doctors who were practicing that type of medicine and nobody could identify what's wrong. We're just spending money on surgeries, on drugs, on medication, on herbs, nothing would help until I start talking back to my college friend Doctor. Gedi said, look, it's just not working, what's happening? And he said, you can do things differently and it's gonna cost you

04:37>> 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 the parent, you know, throughout my previous startups but I always remembered how hard it was and I remember how much money we spent and I remember the emotional toll on my wife and on myself going through all those treatments. So I had the pain first, it's a firsthand knowledge of the

05:02>> pain we've gone through.

Nathan Latka

05:03And so what did that cog professor recommend and what did it cost?

Jake Diner

05:07>> So essentially he said, look, 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 he said, look, you 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 you're having miscarriages instead of trying to implant the embryo

05:37>> 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 a longer period of time. So what he ended up suggesting is that, Look, start taking certain medication. My wife,

05:58>> actually it was for my wife. So she will start taking certain medication which was not as intrusive and as painful as previously when you're getting ready for the IVF itself.

Nathan Latka

06:07And what did that cost? What did that process cost?

Jake Diner

06:12>> I think over the six months, we spent maybe $2,000

Nathan Latka

06:17Oh, wow. Way cheaper than $45K. You had a beautiful 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 SaaS play?

What Is Fertility Cloud and How It Works

Jake Diner

06:28>> So Fertility Cloud is an online fertility treatments platform. It connects the doctors, REI doctors, reproductive endocrinology and fertility specialists 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

07:00>> the idea here is really to make 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.

Revenue and Patient Growth

Nathan Latka

07:25Yeah, so how successful has been? How much revenue did you do last month?

Jake Diner

07:30>> Oh man, 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 100 new patients every month. The last month's revenue I think was about $45K and it's all organic.

Nathan Latka

07:54And what do they pay? Is it a one time fee to talk to a doctor or is it subscription?

Business Model: Consultation Fee and Recurring Payments

Jake Diner

07:59>> 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 would be a surgery if they can afford or agree to this.

Nathan Latka

08:22So you sort of are interesting in that you don't have traditional SaaS economics because if you work, they stop paying you because it was successful. 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?

Expanding LTV Beyond Fertility Treatment

Jake Diner

08:38>> So 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's a whole bunch of products that women and couples need while they still carry. But more importantly, you have even longer tail is the baby business. Right?

09:03>> It's and I'm a parent, so I know how much money I spend on my kid. Some of it justifiable, some of it not. How much did

Nathan Latka

09:11you spend in the first year of a newborn?

Jake Diner

09:14>> Oh, yeah. I don't know. Maybe between 5 to $10,000.

Nathan Latka

09:18Wow. Okay.

Jake Diner

09:20>> So we're just another couple like anyone else, right? You're trying to get as much as you can for a kid and end up spending too much money on crap they don't use, but that's life.

Doctors on the Platform and Pay Structure

Nathan Latka

09:30Many out of that revenue by the way, do you pay, how many doctors like on your platform and do the doctors get paid?

Jake Diner

09:35>> Do you pay them? Of course, of course. So right now we have four doctors on our platform. Doctors get paid hourly, they get paid for each consultation that they do.

09:48>> And so the doctors get paid about $200 an hour.

Nathan Latka

09:54And what are they full time though with you? Like what if you have a whole day where there's no consultations? Do they still get paid 200 hourly or no, nothing?

Jake Diner

10:02>> So it's a really good question. With the doctors, you don't really want the doctor to be 100% on staff and do nothing because they still have to practice. So our doctors, they're mostly working as contractors for us, So they still have time to go through the surgeries, go through other type of medical training and work at the hospitals because we want them to be active surgeon, active doctors who treat patients right now in your typical clinical

10:27>> setting.

Team Size and Outsourced Development

Nathan Latka

10:29I see, and help me understand the team today, how many folks?

Jake Diner

10:32>> So we have, as I said, we have four doctors, we have two nurses, we have three office staff, three have office staff supporting and we outsource our development. So this time we decided not to bring any developers in house because we haven't kicked in our AI component of the solution. And this is our secret sauce because as we scale, we see in a huge bottleneck in operations is the actually patient relationship, is how do you answer

11:02>> those endless questions that patients ask. And you cannot just send them to an FAQ. Like, here we go, look up your answer here. How did

Nathan Latka

11:09you find those outsourced engineers? Did you use a firm like Cody Toss or Symform or Toptal or how'd you find them?

Jake Diner

11:15>> Well, those are the same people who I've used for my previous companies. So those are the developers who once we shut down our old company, they say we have to let go our developers. So they were essentially became freelancers. So now when I have another project, just come to them and said, hey, here's the project I want you to do but I'm not gonna hire you, I'm gonna pay as a freelancer. So they

Nathan Latka

11:38have Jake, free we're wrapping up, we're out of time. How much revenue do you guys think you'll do this year?

Revenue Target for 2021

Jake Diner

11:43>> My hope is to get to about 800,000 this year.

Nathan Latka

11:48And how much have you done so far?

Jake Diner

11:49>> We've done about 400, $404,150, something like that.

Famous Five Rapid-Fire Questions

Nathan Latka

11:54We're rooting for you, man. Let's wrap up here with the famous five. Number one, favorite business book.

Jake Diner

11:59>> Oh, again, you asked questions.

12:04>> From Good to Great.

Nathan Latka

12:06Guys, you guys don't know this, but Jake was an OG on the show. He came back He came on four years ago when we had just launched, and now I've done over 3,000 episodes. So Jake, I love having you back on.

Jake Diner

12:17>> Good to Great is number one.

Nathan Latka

12:18Number two, is there a CEO you're following or studying?

Jake Diner

12:22>> You know, honestly, nobody. Okay. I just don't call anyone.

Nathan Latka

12:26Number three, what's your favorite online tool for building My Fertility Cloud?

Jake Diner

12:30>> Zapier.

Nathan Latka

12:31Number four, how many hours of

12:33sleep do get every night?

Jake Diner

12:35>> Five.

Nathan Latka

12:36And what's your situation? Married, single kids?

Jake Diner

12:38>> Well, we know we have married with at least one kid.

Nathan Latka

12:40How many kids?

Jake Diner

12:41>> That's one.

Nathan Latka

12:42Oh, one. Okay, great. And how old are you?

Jake Diner

12:45>> I am 47.

Nathan Latka

12:4647. Last question,

12:48something you wish you when you were 20.

Jake Diner

12:50>> Not afraid to take risks.

Nathan Latka

12:54Guys, you heard it here first. This first company failed, was super transparent about it, launched directly into My Fertility Cloud called a year and a half, two years ago. Now it's helped over 700 couples get treatment from the four doctors they have on their payroll. It's a marketplace model. They're doing $45,000 a month in revenue, almost 400 to 500 thousand dollars so far this year in revenue. Hoping to hit 800,000 by the end of the year. We are

13:15rooting for you, Jake. Thanks for taking us to the top.

Jake Diner

13:18>> Thank you, Nathan.

Nathan Latka

13:21One 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 1PM

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