How VideaHealth CEO Florian Hillen grew to $6.8M revenue and 300 customers in 2024.

hey folks my guest today is florian hill and he's the founder and ceo of vidya health a dental ai company prior to video health a fluorine conducted a research at the intersection of engineering and social science at mit's institute for data systems and society as well as at harvard business school he also worked with mckinsey and company and founded ninu a digital health tech startup he holds two master's degrees from mit in computer science and technology policy and a bachelor's degree in management technology he completed the first german state exam in medicine as well florian you ready to take us to the top yeah are you also are you also a dentist i'm not i'm not uh but the first two years of med school were with dentists in germany so so i had to learn all of that as well i see okay so that's where like the dentist part of this comes in huh that's right that's right exactly okay so what is video health what are when customers pay for is there are these dentists that are paying you directly and if so what do they get when they pay yeah so our yes dentists could be our customer they are but the major customer really are dental chains they're called dsos dentist service organizations and so you can imagine that they have actually up to thousand practices or even more right and then they employ the dentist and so those are really our primary customers so more enterprise level actually um but what do they get so we are the leading provider of a diagnostic ai platform we call it video assist and that means every time you nathan go to the dentist and you get your general cleanup and you get x-rays our software takes these x-rays in and then diagnosis and treatment plans them for you and so we ensure that the dentist hygienist entire team you know doesn't miss any treatments has a higher accuracy and diagnosis as well as increases what we call the case acceptance rate so it means that you as a patient get a second attack opinion right there from the ai right um and so with that we can increase the case acceptance rate for treatments which on the one side helps you as a patient to get the right treatment earlier and you know down downstream you don't have cost uh costly procedures like crowns or implants or root canals and for the patient it's great for the dentist it's great as well because he can you know do the lucrative treatment now and not maybe in two years right obviously every dso is going to want to upsell me the patient in that dentist chair right and if they use video and video helps them upsell better every dso is going to fall in love with you in fact they love you more if you help them upsell more so aren't you very incentivized to make sure the dentist can upsell something to the client in the seat and if so isn't that not a great experience for the patient um so i i get your point but that actually is not what we are seeing in the market really the the problem is more that um that dentists especially younger dentists which are primarily going to the dso so they have they just got off dentists who will have a lot of debt so they go to these dental chains right because they cannot afford their own practice and they are actually very insecure at this point to really do the right diagnosis so what they are doing is actually over diagnosing and what i mean by this is they are you urinate and maybe have five cavities that say and you need like five fillings um they maybe show you just two and three are skipped that's literally what we have in the statistics right and so those three cavities they come back and hunt you down the line but then they are not any more cost effective fillings and small procedures but then they may become crowns so what we really try to do is not to we don't give a treatment recommendation for this over treatment of more classified as like for this diagnosis the cavity you can do a crown or filling that is in the hands of the dentist but we want to make sure that they don't miss anything where you could do earlier on a less invasive procedure oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're gonna see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private 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gonna cost five grand and i'm like screw you i'm not that's ridiculous and by the way you just lost all my trust i'm never coming back because you tried to upsell me five grand and i know for a fact i asked my aunt because i had the pictures i asked my own if this was accurate or not she's like you don't need all this so then i lost total trust yeah hey no but nathan that's exactly what we're experiencing a lot as well and so funny enough everyone in my team and our company we actually we have a company internal link where you know we analyze for fun like our x-rays before we get any treatment and we actually have a lot of our engineers with exactly your experience and our ai then out of the seven he might actually he had the same experience than you they i identified three as being legit and the other four as being just way too early stage that you would do anything about it and so for us actually you bring up a really great point because we we just recently announced that we obtained fda clearance for our cavity detection algorithm and so there there was a regulator body a third body right fda which doesn't care about revenue or anything they care about clinical evoxy right and so um what we paid attention to is that actually we are reducing the errors as well so in our clinical study we have shown that we reduce the missed cavities by 43 which is huge right but at the same time we reduce the errors by 15 so that means actually if your dentist would have used so ai you wouldn't have seen these seven cavities where you need all of this so we actually elevate really and that's pretty important maybe that's my clinical background but that's actually pretty important to to our mission mm-hmm no that makes a lot of sense and and so and i think the use case is clear my audience understands the product clearly help me understand pricing so what are one of these dsos pay you per month or per year on average um so that the price ranges really it you know goes from 400 to 800 so to say um per month per practice yeah exactly but but it is like um it's it's just all pricing so uh it's uh is it's per month but usually it's longer term contracts right we usually have minimum of one year contract or something and how many practices are on the platform today well so we don't disclose complete numbers because we're literally on boarding every day so i actually wouldn't even know but like we have we have right now dozens of dsos which together accumulate over 3 000 offices so okay and an office is a practice right that's right i use those interchangeably or you can use location okay okay so so just to be clear you said each practice you charge between 400 and 800 depending on what software level they want etc and then you said across a couple dozen dsos you've got about 3 000 practices right now and you're on boarding fast yeah and then we have also uh we also have other aspects like we also have partnerships like some of this is not yet public etc where we are trying to get to to also practices which maybe are not part of a dso but they are more like seeing a mom and pop shop right right i'm trying to get what i'm trying right now is success you've had already so far so you've already you're already installed across 3 000 practices and you're expanding rapidly that's right yeah exactly we are not right now installed in three thousand we are getting there right now we're rolling it out to three thousand that's that's where we're doing it and that should be in the next our goal is to do that in the next 12 months okay but so that's that's why i asked these questions very specifically right so how many are you already in [Music] or you're pretty by the by the way it's fine if you're early yeah that's fine you don't have to like hide that it's cool so you just got clearance are you guys pre-installed you don't have any install installations yet no we have like about i don't know three digits or so right now oh okay got it so call between a couple hundred and a thousand and you're scanning exactly and now we're trying to get two to three thousand in the next 12 to 14 months that's really and you've already signed those contracts it's just about getting it installed right that's right it's all rolling out exactly right it's like a lot our focus right now nathan is you know customer success and uh you know support really yup yup no okay that makes sense all right put this on a timeline for me when did you write the first line of code for this wow the first line of code was really research just to some extent when when i was at mit in harvard which is 2016 um and then 2018 i published a paper about it and i started the company then at the end of 2018. so now yeah end of 2018 i founded the company um and yeah that's actually really when we started because in the beginning it was like to be honest when we went to the fda for instance right to get this cleared like they never had any they had no experience with dentists or dentistry whatsoever they were familiar with like chest x-rays and mammography right you maybe have heard these these algorithms flying around but they had no clue about dentistry so there was really a time when you needed to educate them now have you bootstrapped the company or you decide to raise we decide to raise just uh if you if you build ai products as well as in a regulatory environment it's just really really hard to bootstrap right um so so that's why we raised um in total like over 26 million right now by by spark capital that adventures in pelosi phenomenal when was when was the last race the last race was a 20 million race best part capital uh and that was two months ago okay got it so 20 million just down what was that your a yeah that was our series yeah exactly interesting and then just fill out that history for us so when and how much was the the precede or the seed so the first check was actually from from mit directly so it was like when i found the company and then and then and then we had a precede of a million what was that size from mit and that was fifty thousand that was like okay you know that was like when you were you just right away from mit you had like all these ideas you know and you were like let's go for it um and so on but then then the precede was a million then the seed was 5.4 by pill and zetta and and then recently the series a for 20 million sorry when was this million seed that was in uh well that was also run also in 2018 and then the the the seed round the 5.4 million was in um in september 2019. got it five formula okay and so where did most that 5.4 go was it really towards getting the approval of fda approval the most of the uh the seat round the 5.4 was a product development exactly building up a team right that's like that's really where you build like the early stage team um the product the fda approval also that was all the time where we did like a lot of paid pilots testing the product and so on and now the serious a money at 20 million is really about like sure continuously to to fast product development and we have like an entire product roadmap um and execute on that so we absolutely focus on hiring more engineering product design all across that but then also you know now sustaining we just talked about the rollout right sustaining our current clients and explaining to other clients setting up customer success commercial marketing um et cetera so it's kind of like very classic stages to some extent and yeah speaking of classic i mean most folks closing a series a pre this most recent downturn right we're selling between sort of 10 and 15 percent of the business in that raise were you guys sort of in that same standard range yeah overall like we were in a stand-up range right we didn't had evaluation just close but it was very healthy yeah yeah i mean again if you're selling 10 to 15 which is pretty standard at series and you raise 20 million you're flirting with call 100 north of 150 million valuation yeah i mean i don't comment on it but like you you probably know the things it's interesting though you just commented on this right there are lots of lots of companies right now which uh i i think like we have a very we have a very bright future so we we raced at the right time and and also we have a really great um pipeline so to say we have really high growth right now so that's awesome but it is interesting how the vc market crashed just in the last four months so i'm i'm very curious how this will yeah i know what those things closed you certainly closed at the right time now obviously didn't know the market was going to crash those you can consider it luck but hey it pays to be lucky sometimes right right i mean you saw a little bit six months ago right with the public markets but overall oh come on yeah but no but i mean nothing wasn't yeah until really like a month ago it's really i mean anyone around more than a month you know um i agree with that i mean unless you think you're like super special and saw this coming before everyone else you'd be a very rich hedge fund manager right now if you did yeah exactly no no i'm i'm also not that's not my expertise my expertise is building teams and companies and not so much yeah that's that's just one part of the job right that's not all our job tell me more about the team today how many folks are full-time and we have 30 people um and now are growing this just hired an amazing director of talent actually was awesome um so yeah so we want to to to get to a healthy 60 70 people end of this year so that's our goal um and honestly this is a little bit equally we just talked about this a little bit equally split honestly between engineering product and and then commercial right very cool and then you just mentioned fast growth i mean we were talking earlier about number of practices you said you're in several hundred now but caught less than a thousand but you've got contracts up to like three thousand you're doing the rollout over the next 12 months but if we take that 300 you know a couple hundred right now that you're already installed in times your smallest per practice price of 400 bucks right you have bigger ones at 800 per practice but at your smallest that would mean you're doing north of 120 grand of mrr today is that accurate yeah you're really fast uh it might be i mean i i i wouldn't just close right now revenue but like we are in a healthy we are in a healthy serious a range let me put it this way you know and and the fast growth is exactly to that right because for us we absolutely incentivize right now to roll this out to as many practices as we can as fast as we can right yeah sorry i don't uh i'm not asking you to share what your actual revenue is right now i'm just multiplying numbers you already gave me so you said 300 practice hundreds of practices but not a thousand yet and at least 400 bucks per practice 400 times 300 is 120 grand in mrr at least so you're about that's around that's around and then and then when you say again i haven't raised recently right so when you say healthy growth for series a i mean what are folks looking for right now are you talking 300 year over year growth the past 12 months um yeah i mean that is difficult because like our uri deck there for instance you know in the last last year to eleven months ago like we were not able to sell so aggressively as we can now because we didn't have the fda approval that like is very technical now but in the end we have a medical device so there are limitations of how quickly you can sell oh there's a physical component to this no but it's a medical software as a medical device it's actually now a new category so it's an absolute it's a software only product but now actually since a couple of years there's actually category at the fda which is software as a medicare device okay but you don't just speak you don't sell a piece of hardware no no yeah but when i say i i know what you mean because like medical device is a little bit misleading right but here i really mean just the algorithm is a medical device i see i see yeah that makes sense um okay that's quite interesting it's very new no well i mean so were you basically exactly i mean just to calculate growth right were you basically pre-revenue exactly one year ago you were still getting approved right yeah one year ago we had revenue because we actually we didn't talk about another side of a business but we also work with insurance companies to automatically adjudicate their claims um and that doesn't that doesn't require fda approval um so there you can work already and they are also on the practice side there are products you can you can sell without fda approval but it's just not our core business so we did have healthy revenue but really now it goes into into the sas repeatable business motion if you know what i mean right and not like you know high paid pilots and all of this right i mean but if we if we just i love how you arbitraged your initial cash flow with the insurance business which is great while you're waiting for the approval but i mean just talking about the pure sas motion a year ago i mean you're doing under 20 30 000 bucks a month in revenue i mean it's peanuts right yeah a year ago we did we did peanuts and revenue yeah yeah i mean you're bigger than that now obviously we are bigger than that now i mean we had we had certainly healthy numbers nonetheless like uh like absolutely uh you know six seven digits in terms of like revenue from from pilots and all of that but the thing is i'm discounting this a little bit like that helped us a lot in fundraising and all of that and even like that was healthy revenue even which which helped us to substantiate our heat round but for me i what i really want to get to as much and this is really what we've hit um you know uh now now a couple of months ago um is this the sas revenue you know like not uh hey the one time big chunks like you know we had pilots of 700k but um the sas repeatable revenue with this repeatable motion um and that's like that's the golden grail because then you can like double down on that if that makes sense of course everything else is more like almost like service it almost feels like more that you've been doing a service service uh company you know yeah which is by the way there's nothing wrong with that uh to get to get stuff going it helps you preserve equity as a founder it's it's makes a lot of sense um and you you can build a great product by the way because like that's how you how you learn right that's right that's right yep exactly um now in terms of growth obviously you your your your ass is on the line now right series a raised you've got to go there's no like slow growth you can't grow 70 year over year that would be a failure for what you've raised it's got to be way bigger than that so i mean can you get above you know five six million bucks of ar this year or like how aggressive do you think you can be this year yeah i mean we are we are pretty aggressive i mean we also have you know we we were very diligent about like who we choose as a serious a investor so we were in a fortunate position you know to choose a little bit and um and we we took spark capital because they are phenomenal in you know coming in series a uh they have built amazing sas companies carter etc i think are great um and and and that's you know we we aligned there on our expectations but that's exactly the growth we are we are streaming towards all right very cool let's wrap up lauren with the famous five number one last book that you read uh zero to ipo from freddy karis who's actually uh an angel invest in our company all right number two is there a ceo you're following or studying i have freddie actually he's my mentor and i call him a couple of times actually number three what's your favorite online tool for building nvidia uh it's so it's not the most used tool but i really like mirror mural right yeah the visual app white board that's right before how many hours of sleep to eat every night five to six six six all right i actually do i actually try to really always minimum have more than six because i think sleep is actually i think that's like that's the most important component i would cut on everything else except totally and what's your situation married single kids um girlfriend partner but okay not married but also also an entrepreneur so that's that's fun and and florian how old are you i'm 29 29 last question something you wish you when you were 30. or sorry when you were 20. um that honestly you can just do what you really want to do like you have a lot when you're early and young you have like dreams and everyone tells you um that that's like too complex you shouldn't do that you shouldn't study medicine and computer science and start a company here and so on and you can just do it um just because others don't do it doesn't mean you cannot do it guys video dot a i started off as a research project in school uh now scaling nicely he's raised just raised 20 million series a scaling out to what's called dsos these are dentist shops basically right so they're helping dentists understand is that cavity doesn't need treatment now does it not need treatment they're fda approved a lot of ai here 30 folks on the team scaling nicely there across and already installed several hundred practices each practice pays between 400 800 bucks a month they've got a clear path to getting install base up to 3 000 practices here by the end of this year we'll see what happens florian thanks for taking us to the top awesome thank you so much one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 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