How Thalamus Grew Revenue from $1M in 2020 to $3M in 2021 Across 200+ Hospital Systems (Interview with CEO Jason Reminick)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Jason Reminick. He's an MD, MBA, MS, and is the CEO and founder of Thalamus, the premier cloud based recruitment platform for hospitals and physicians. He began his residency interview season stuck in New York City during hurricane Sandy, if you guys remember that. And after three canceled interviews and spending weeks trying to reschedule, he and his co founder brainstormed a better way to manage medical residency recruitment. Since then, it's what he's

00:22been committed to, innovating around physician recruitment to ensure the right doctor is recruited to the right hospitals to treat the right patients. Jason, you ready to take us to the top?

Jason Reminick

00:31>> Absolutely. Good

00:32>> to Thanks be for having me.

Business Model: SaaS Platform vs. Recruiting Agency

Nathan Latka

00:34You bet. So what's the model here? So does this act like more like a recruiting agency where you take a percent of first year salary or is it more like a SaaS platform?

Jason Reminick

00:41>> It's a SaaS platform. So we manage a very Byzantine, very complicated, frustrating process of students applying from graduating medical school to their residency training positions around the country. And previously, this was all done manually by email and phone call and our platform works in that hospitals use it either single programs being internal medicine, pediatrics, OBGYN, etcetera, or entire hospital enterprises. It integrates with the common application system, central clearinghouse everyone's using to accept applications. They pull

01:14>> their data in, they invite the candidates to interview, applicant gets an email to create a profile, and then they're brought to a calendar within seconds to schedule their interviews in real time, kind of like OpenTable, but instead of booking a restaurant, they're booking a residency interview. Back on the hospital side, it's a process specific applicant tracking system. It allows them to manage the process, score candidates, build face sheets, and eventually decide who's Who's gonna the The

01:36>> hospital's paying.

Pricing and Average Contract Value

Nathan Latka

01:37Yeah. And so what are what's the average hospital paying you right now per month to use the technology?

Jason Reminick

01:42>> So it's an annual license. It ranges depending on the size of the program anywhere from a few $100 to a few thousand dollars. Hospital system wise, that can be tens of thousands up to hundreds of thousands depending on what hospital and how large it is.

Nathan Latka

01:58Well, just simplify that for me, right? If you take your average hospital, what are they paying you per year?

Jason Reminick

02:02>> Probably around $50,000 to $75,000.

Nathan Latka

02:05Okay. And how many people are they placing for $50,000 a year, probably?

Jason Reminick

02:10>> They're interviewing probably, depending on the size, about 40 or 50,000 people. And from that, they'll place around between a thousand and 2,000.

Nathan Latka

02:24Okay. Got it. So it's almost if they're paying 50 k a year, it's almost a dollar per interview, and then they're placing a thousand to 2,000 of those interviews.

Jason Reminick

02:34>> You wanna do the math that way? Sure.

Nathan Latka

02:36Yeah. Well, yeah, I mean, that because that's your key value metric, right, is number of interviews done, right, or something like that.

Jason Reminick

02:42>> Yeah. We're actually trying to decrease the number of interviews given that this this kind of niche market, but that's an interesting discussion in itself. That's a

Nathan Latka

02:48ton of people, by the way. I mean, 40 to 50,000 interviews by one hospital in a year?

Jason Reminick

02:54>> That's the challenge. And so hospitals may have a hundred, hundred and fifty programs in various specialties of various sizes. And right now, over the last five to ten years, the number of applications a single candidate is sending out has increased by 5x. It was around 15 when I applied in 2012. It's now jumped to 70. And so applicants are spending thousands of dollars to have their data sent to different hospitals. And then hospitals will interview, depending

03:21>> on the size of the program, anywhere from 50 to 1,000 candidates per program. Sometimes they fill as few as one to, let's say, 10 spots. And so we've done a lot of research that's showing that about, depending on the specialty, between 15 to 35% of interviews could be eliminated overnight, and everyone could end up in the same place anyway. And that's the amount of over interviewing that's going on right now as well.

Nathan Latka

03:42I see. When did you launch the business? What year?

Jason Reminick

03:45>> 2012 2013.

Nathan Latka

03:46Was just starting my my my medical residency started Very it back

03:51cool. So you get your first customer signed up, obviously. And then how many customers are you serving now today?

Customer Count: Programs and Hospital Systems

Jason Reminick

03:56>> We're serving over 2,000 residency and fellowship programs across 200 over 200 hospital systems.

Nathan Latka

04:03Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:26your Stripe account, you see your valuation real time, you can see what it it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're

04:50gonna get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this

05:12is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe

05:38you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're gonna go back to the YouTube video here in a second,

06:00but if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back

06:26into the interview. Okay. So 200 hospital systems. Got it. So, I mean, can I take 200 hospitals times $50,000 a year? You're doing, like, 10,000,000 a year in revenue?

Jason Reminick

06:36>> Not not that much. We're we're in the in the kind of the 4 to 5 range we're talking still yeah.

First Million Dollar Year and Pandemic Pivot

Nathan Latka

06:42That's still that's still nice traction. What what was your first which year was your first million dollar year? Do you remember?

Jason Reminick

06:48>> The first million dollar year was the first pandemic year.

Nathan Latka

06:51We Was that 2021

Virtual Interview Platform and Growth Acceleration

Jason Reminick

06:53>> 2020? 2020. So it was the entire process shifted to virtual, and we extended our platform to include a virtual interview platform that not only builds the schedules for everyone and handles that volume of interview, but also then creates all the video links, builds the schedules and everyone can just interview and not have to move people in and out of breakout rooms. We built our own video platform, and that really accelerated the growth of the business.

Nathan Latka

07:21So just to confirm, if you're doing between 4 and 5,000,000 revenue right now, let's call it a run rate of 4,500,000, you're doing something like $375,000 a month in revenue? Yes. Right around there. Cool. Yeah. And how many across all 2,000 programs and all 200 hospitals, how many total interviews were done over the past twelve months?

Jason Reminick

07:40>> Total hospitals that were done in over the last twelve months Interviews.

Nathan Latka

07:44Interviews.

Interview Volume and Video Minutes

Jason Reminick

07:45>> Interviews. We sent out about 200,000 invitations to interviews, probably completed about a 150,000 of those.

Nathan Latka

07:54Okay. A 150 k interviews. Interesting.

Jason Reminick

07:57>> Over 20 over twenty million minutes of video interviews as well.

Nathan Latka

08:02Okay. Got it. I guess the reason I asked, you said it earlier that someone paying you $50,000 a year is doing 50,000 interviews. But if you have 200 customers times 50,000 interviews, that should be a number of interviews in 10,000,000 interviews. You just told me the last twelve months you did a total of 150,000 interviews. It's a big difference.

Jason Reminick

08:25>> Not all of the hospitals are necessarily using us for all of their interviews, but that's how many people they're interviewing.

Nathan Latka

08:32Oh, I see. I see. I see. So so of the 40 to 50,000, that one hospital might do in a in a year, how many might they use you for?

Jason Reminick

08:40>> I'd say our largest hospital is just doing about 10 or 20,000 interviews with us.

Nathan Latka

08:44I see. I see. Why don't they use you for all of them?

Jason Reminick

08:46>> It varies depending on size and just the number of people that they're interviewing overall. So

Nathan Latka

08:54I mean, but if you're if you're providing a lot of value, then people are happy. Why wouldn't they wanna get the whole system on you as fast as possible?

Jason Reminick

09:00>> It's it's technology adoption and just changing practices that that have existed from prior.

Nathan Latka

09:06Who are you replacing?

Jason Reminick

09:08>> We are replacing emails and phone calls predominantly and some older software systems that don't integrate with the other other platforms.

Nathan Latka

09:16Mhmm. Mhmm. Interesting. Okay. So, again, you get going back in 2013. You're scaling nicely. It took you, I guess, what is that seven years to break a million in revenue, but now scaling rapidly. Can this growth keep up even when the pandemic slows down?

Jason Reminick

09:29>> I think so. Sort of the longer term play for us is we really think we can help in terms of improving recruitment process, making it more diverse and equitable for hospital systems, which has been a major challenge, helping to drive more strategic decision making rather than inviting so many candidates to interview and and doing a much more targeted interview. Also for the candidate, allowing them to end up in a hospital that works better for them as

09:51>> well.

Fundraising History and Series A

Nathan Latka

09:52Mhmm. Now, Jason, have you bootstrapped the business or did you decide to raise capital?

Jason Reminick

09:55>> We've raised capital.

Nathan Latka

09:56Okay. When did you decide to raise and how much?

Jason Reminick

09:59>> We've decided to raise

10:02>> we've had a seed round in 2019 where we raised $1,500,000. We did prior to that about $1,500,000 in friends and family kind of pre seed funding and a little bit of bridge funding. And then we're just completing an $8,000,000 series a raise.

Use of Series A Capital

Nathan Latka

10:20And so where do you plan to spend that 8,000,000 and why do you need it? Why does this company require capital?

Jason Reminick

10:26>> We're looking to scale in the hospitals that we work with. As I mentioned, we're growing across the enterprise of many of them and we have many other hospitals still to hit. But we also think that the data piece is kind of key here. And so helping hospitals recruit smarter and then from there, as broken as the recruitment cycle is in the residency side, when you get to the attending physician space,

Attending Physician Recruitment Opportunity

Jason Reminick

10:53>> it's even more broken. So hospitals are spending upwards of $250,000 per single physician hire. It usually takes six to twelve months to fill the position and they lose about $2,500,000 in revenue, billable revenue for every position they don't fill every six months. And so coming out of training as a physician, you usually approach with close to 100 different job opportunities. They're usually non targeted. I don't practice right now, but I still get offers to go practice

11:22>> surgery in rural Kansas and I'm not a board certified surgeon and I have not ties to Kansas, but someone's paying for our data. And so we think there's a way from medical school all the way beyond to help doctors and hospitals make that connection better.

Nathan Latka

11:35Vision's interesting. We'll see sort of see what happens. How many hospitals are there that you think are in your addressable market?

Jason Reminick

11:42>> Depending on how you measure a hospital, between 600 and a thousand.

Nathan Latka

11:45Okay. So you're at 200 now. That's that's a high amount of penetration. So I assume the story to validate a series a valuation is once we get the hospitals, we'll sell them more and increase ACV?

Jason Reminick

11:55>> Yeah, I think the hospitals, but there's a whole recruitment problem we're trying to solve as well. And this goes a lot of different directions because to become a physician in The US, you have to go down this very particular regulated pipeline. And so we're we're excited about the possibilities for the future.

Series A Equity and Dilution

Nathan Latka

12:12Mhmm. Now most folks in their series a are sell selling between 10 to 15% of their business. Are you sort of in that average range, or did you do something super unique?

Jason Reminick

12:20>> No. We were we were kind of a little bit in that average range, a little bit to the higher side of the range. But yeah.

Nathan Latka

12:25Okay. But it felt the process felt fair to you?

Jason Reminick

12:28>> Absolutely.

Nathan Latka

12:29Okay. Got it.

Jason Reminick

12:29>> I think we have I think we have the right investors who are really aligned with our mission and really excited to be working with them.

Nathan Latka

12:35Mhmm. Okay. Cool. So maybe call you sell 15% of the business, something like that, which would put sort of valuation maybe around $50,000,000 to $55,000,000, something like that after you're all said and done.

Jason Reminick

12:45>> Sure.

Nathan Latka

12:47Well, not sure. Is is I mean, I'm asking a question.

Jason Reminick

12:50>> I I I'm I prefer not to disclose our valuation.

Nathan Latka

12:54Well well so I'm just going up on numbers you just gave me. Right? So you I said 10 to 15. You said 15%. I'm just multiplying what's 8,000,000 15%. Right? What does 8,000,000 make up? That's 15% of it. It would be about a 50,000,000 valuation.

Jason Reminick

13:05>> Right. I understand. We're we're a little bit below that.

Nathan Latka

13:09Okay. Okay. Fair enough. Fair enough. Yeah. But the reason I asked this is because if you have a big vision, you wanna go get all these hospitals, right, Solve a lot of problems besides just recruitment for them. Wanna obviously hold on to as much equity as possible. So how are you thinking about dilution and managing it?

Jason Reminick

13:22>> I think with every deal and every time we raise capital, we've looked at where we feel the business is gonna be, who the partner is, what value they provide to the business, what seller rent that allows in terms of the capital coming in, and how much runway that gives us and how much firepower it gives us to grow and and meet sort of our KPIs and OKRs to grow the business on the trajectory we think it's

13:41>> gonna work. And so that's that's kind of how we weigh that, and and I think we've been well aligned with our investors along the way.

Nathan Latka

13:47Why is the multiple though so low? Mean, I'm gonna give you credit here. You've gone from a million dollar run rate, right, nineteen months ago to like a $4,500,000 run right now. That's incredible growth, over 400%. I mean, I interview thousands of founders. Right? Most founders of that kind of growth right now are raising at multiples in the 35 to 45 x range. You raised at a multiple of 10 x. Right? 4,500,000 run rate, 45,000,000 valuation.

14:09Why why why did investors not like this business more?

Founder Corrects His Revenue Numbers

Jason Reminick

14:13>> Yeah. No. I am I'm getting caught up in my numbers here, so I apologize. I didn't get much sleep last night, and I'm I I'm I'm I'm not where I should be on this.

Nathan Latka

14:24And Totally cool.

Jason Reminick

14:25>> If we could redo this, like, it's

Nathan Latka

14:28just Jason, we we we don't we don't redo we don't redo interviews. This is all we take this, we edit out any uhs and ums, and we get it out there. But it totally open to correct it, though. Right? So are you saying revenue's lower or valuation's not high enough?

Jason Reminick

14:39>> No. Our revenue was about three last year. We're expecting six this year.

Nathan Latka

14:43Oh, I see. I see. Okay.

Jason Reminick

14:44>> So Yeah.

Nathan Latka

14:44Yeah. So revenue is a little bit lower than four and a half right now. Yeah. Yeah. See. I see. Okay. Cool. So your evaluation model is a little bit higher, but still it's not 40 x. Why didn't they like your story? I mean, I like your story. Why didn't they like your story? What were they hitting you on?

Jason Reminick

14:56>> I don't I think everyone's just hitting us on market and what the market's gonna be, and I think we're building a new kind of business. So it's been interesting from that perspective.

Nathan Latka

15:05Okay. Okay. Interesting. And are you doing this alone, sole founder, or you've got some cofounders?

Co-Founder Background

Jason Reminick

15:09>> Got a cofounder. She's my mentor from medical school named Susie Karen, practicing anesthesiologist, and we kinda live both sides of this problem.

Team Size and Engineering

Nathan Latka

15:18Very cool. And how many folks full time are on the team besides you two?

Jason Reminick

15:23>> 20. 20.

Nathan Latka

15:24Wow. How many engineers?

Jason Reminick

15:26>> Six.

Nathan Latka

15:27Did you decide to keep those sort of stateside or you went to sort of outsourced options?

Jason Reminick

15:31>> We've been both in in many in different times of the business. So

Nathan Latka

15:35Okay. And tell me more about that. When did you switch away from outsource to sort of development work?

Jason Reminick

15:40>> We still use some outsource, but we have we've been growing the core team internally. And so it's it's kind of where we've been pointing.

Nathan Latka

15:46Do you recommend that to others starting out? Start off with outsource labor sort of development wise and then move to internal as you build some revenue?

Jason Reminick

15:53>> I think it depends on the

15:57>> growth of the business and what what kind of product you're building. I think it worked well for us early on, and and we've kind of supplemented it as well over time. And it kind of, you know, it can accelerate development cycles or or sort of supplement the the internal workforce as well.

Famous Five Rapid Fire

Nathan Latka

16:11Makes total sense to me, Jason, on that note. Let's wrap up here with the famous five. Number one, favorite business book?

Jason Reminick

16:17>> Favorite business book is

16:21>> I would say, I'd say Lean Startup. I think it's just a really great philosophy.

Nathan Latka

16:26Number two, is there a CEO you're following or studying?

Jason Reminick

16:29>> Not one in particular, but different parts of different CEOs.

Nathan Latka

16:33Number three, what's your favorite online tool for building Thalamus?

Jason Reminick

16:38>> Twilio.

Nathan Latka

16:39Number four, how many hours of sleep do get every night?

Jason Reminick

16:43>> Usually, between six to eight hours. Last night, closer to four.

Nathan Latka

16:48Okay. Fair enough. And what's your situation? Married, single, kids?

Jason Reminick

16:53>> Married with one two year old.

Nathan Latka

16:54Oh my gosh. You're super busy. How old are you?

Jason Reminick

16:57>> Yep. I am 37.

16:59>> 37.

Nathan Latka

17:00Last question. Something you wish you knew when you were 20.

Jason Reminick

17:02>> How quickly 37 would come.

Nathan Latka

17:05Guys, there we have it. Launched in 2013 after challenges finding his own residency program. Jason is now building a platform to make residency programs at hospitals more efficient. He's working with 200 hospitals that pay on average $50,000 per year. Had his first million dollar a year during COVID, the first year of their pandemic in 2020, has since scaled up above $3,000,000 in AR. Just closed his series a $8,000,000 round. Prior to that, had about 2,500,000 raised

17:28between his seed and pre seed. Team at 20, as they look to scale, Jason, thanks for taking us to the top.

Jason Reminick

17:33>> Thank you.

Nathan Latka

17:36One 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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