Episode Transcript
Speaker 0 00:00 <inaudible>
Speaker 1 00:03 <inaudible>
Speaker 2 00:08 come to the breakout growth podcast where Sean Ellis interviews leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here's your host, Sean Ellis.
Speaker 3 00:23 So in this episode of the breakout growth podcast, I'm speaking with Mark Frank and Scott Orn from Sonder mine, a company growing 20% month over month. The foundings team of Sandra mine recognize that mental health services are way too hard to get for many of the patients who need them. So they built a platform that makes it easier for patients to find excellent mental health care professionals and navigate the challenges of paying for these services. Saundra mind is actually needed now really more than than ever before. And due to their strong mission, they were able to quickly introduce a remote care option. So before we get started, you may have noticed that this is the first episode that I've done in recent weeks. So like the Saundra mine team, I found another company called terrazzo that has quickly adjusted to helping during the covert 19 crisis. I liked their mission so much that I jumped in to join them with a project to help college students whose career planning efforts and internships were disrupted by the virus.
Speaker 3 01:21 We quickly launched something called the online career fair.org. So online career fair.org as the address for it. And the platform connects professionals like you and me with college students for 20 minute video career coaching sessions. So basically you add yourself to the site and college students are able to book sessions with whichever professionals they're interested in. You can specify how many sessions you want to do, how much time you're available for it. But it's something that's been really helpful for coaching these college students through the disruption, whether it's lost internships or career conversations that they were having with companies that have been disrupted. It's a really stressful time for them and it's a way to help them. But we've also found that the coaches get a lot of value out of it. So, um, one coach from Amazon, for example, actually wrote a full article, she's a VP at Amazon web services.
Speaker 3 02:14 She wrote a full article on how much value that she was getting out of these conversations. I've heard it time and again, so I want to invite all of you to come in and offer some of your time, whether it's for a few sessions or or many more sessions, 20 minutes at a time. You can specify exactly how many sessions you'll be available and then students can come in and book some time with you to really get your advice on how they should get started with their career. So again, that's online career fair.org and hopefully all of you can come in and help. So let's get started with my interview with Sandra mine, CEO Mark Frank and external CFO investor Scott.
Speaker 4 03:00 Hi Mark. It's Scott. Welcome to the breakout growth podcast. Hey Sean, thanks for having us,
Speaker 5 03:05 Sean. Good. It's good to be here.
Speaker 3 03:07 Yeah, so super excited. I could get you guys on, I know everybody is scrambling right now and it's hard to make time for this, but I'm really appreciate that I could, could get you guys on and learn what Sondra mine is doing. And, uh, and just generally how you're approaching growth, um, not just overall approach to growth, but particularly right now as, as so much of the world is changing with, uh, coven 19 coronavirus. So, um, why don't, before we really dig into the business and, and how you guys are approaching growth, why don't we start with what actually undermined is and what problem it solves.
Speaker 5 03:43 Yeah, thanks. Um, so this is Mark. Uh, maybe a quick personal background. So I started my career in the army and then, uh, went to business school, which is where Scott and I met and became friends. And then after business school, uh, did some additional time and service, uh, in investment banking and finance, uh, focusing on healthcare, mergers and acquisitions. And then I left and I started my first company, uh, of a few in healthcare. So one was specifically in healthcare services, so treating patients with brain tumors, lung cancer, prostate cancer, things like that. And then the second was, uh, you know, I actually, I, I used to knowing that you went to, that you were responsible for a lot of the growth of Dropbox. Uh, I use Dropbox as sort of the, the corollary. So we were, we basically built a company called save image MD, which was kind of like Dropbox for medical imaging data. Um,
Speaker 3 04:39 privacy requirements. There
Speaker 5 04:40 all the privacy requirements would also, more importantly maybe from the, from the physician standpoint, the patients they have, we have built in some viewers that allow you to do that data because it's not like images that you would normally, that a browser can normally render. Um, so one, one kind of experience, very much health care services in a patient care setting. And then the other, uh, both of which I sold successfully. Uh, the other very much a health care technology and assess product. Um, and so the idea of her, Sondra mine really came about from my own personal experience and trying to access and find a high quality paper L provider. And more importantly, I was pretty stubborn around wanting to use my insurance benefits. Uh, it was paying a lot for premiums and things like that. And the challenge of finding that provider, um, first and foremost was extremely difficult.
Speaker 5 05:29 And then second, you know, really trying to, uh, continue to engage and have a good customer experience with a clinical care was really good, what I found. But the kind of client experience and client, I'll use the term client and patient interchangeably. Uh, but the client experience was, was pretty challenging. Uh, the other side of the coin is my younger sister is herself a therapist, a licensed professional counselor. And besides her, my cousin who I'm relatively close with, this is a clinical and her husband is a psychiatrist. And so I had seen, uh, with a front row seat, a lot of family members who are in this space as providers and mental health really struggle with all the aspects of, of starting and growing and maintaining and running a private practice, um, and really not liking a lot of the parts of the, of the business, uh, that are entailed in that, in that venture, uh, but still wanting to focus on providing great care.
Speaker 5 06:28 So Sondra, mine is really about, uh, democratizing access to mental healthcare. And our vision is to truly redesign behavioral health to be more accessible, approachable, and utilized. And you know, we, we look at it from the viewpoint of, you know, roughly 80% of the population. So generally speaking, people, you know, household income under a a hundred thousand a year and uh, and yet above the poverty line or above kind of an in a Medicaid or a social services situation, generally speaking, can't afford care without using their health insurance or their employee benefits. And so that's what really, really focused on is providing better access to connect people with therapists, therapists with people and helps therapists manage their practices.
Speaker 3 07:12 Just recently, obviously a lot of people are locked into their homes. Now. Are you doing anything to help highlight therapists that are, are able to do this remotely?
Speaker 5 07:21 Yeah, so we, we, uh, we have over 500 therapists and we're currently operating in Colorado, Texas and Arizona. And we had on our roadmap, um, actually in Q two for launch, uh, our telehealth products, so video as well as secure messaging. And the plan was the launch video sometime in mid to late may of this year. And basically two weeks ago, a little over two weeks. So two and a half weeks ago, we decided to drastically move up the timeline and it was all hands on deck kind of effort across the entire company, um, to launch our telehealth product. And we were able to successfully launch it a week ago. We do it today. So, um, um, on March, March 18th, so a lot of really hard work from the company and the team and getting this out there and, and we've had pretty amazing response from our therapists first and foremost, which is who we were trying to make sure we protected their business as well as for our clients, uh, so that they can continue accessing high quality care. And so we, you know, we had just some, the first four days of launch, about 30% of our therapists use the platform you use, use our telehealth product, um, as part of their, as part of their shift in their practice.
Speaker 3 08:33 And so as a, is it relatively soft launched on that part of the business is, cause I didn't, I didn't see it mentioned on the website at this point, but I, I didn't dig that deeply, but I, it it didn't seem to be at least on the homepage.
Speaker 5 08:45 Yeah. So we actually, uh, we were like, let's get this first. I mean, right now, you know, on average we treat in our, our therapists treat, you know, in any given month between four and 5,000 clients. Um, and so we wanted to first and foremost take care of the people who we were already connected with and who are already, uh, you know, seeing. So that was kind of the first thing. And now actually we're, we're in process of, uh, of, you know, really kind of like formalizing and getting the marketing and the messaging out, uh, to sort of providers and to clients who are coming to us new and say, here's there's other options for you to engage in care all while still remaining to be able to use your, your commercial insurance benefits and not being to pay out of pocket for this.
Speaker 3 09:30 Fantastic. And then, so I, one of the things that really attracted me to you guys was I pulled up the growth of the team on LinkedIn and it seems like you've been growing like crazy. So can you comment at all on what the growth rates looked like?
Speaker 5 09:45 Sure. So we, I mean, we've had really strong growth over the last year. Um, I mean, I would say on average we're growing between 10 and 20% month over month and have been for, um, for well over a year and a half. And, uh, and you know what a lot of that's driven by, you know, I think first and foremost is just this, there's just, there's a ton of pent up demand. I mean, there's just a lot of people out there who are seeking behavioral care, right? If you look at some of the statistics that are released by the government, you know, roughly, um, you know, roughly one in five adults in the country is, uh, has a mental health issue. And so I, I won't say like a serious mental health issue necessarily, but you know, they, they have some level of clinical diagnosis for mental health and more than half of them received no care ever.
Speaker 5 10:33 Um, so it's like 57% of, of, of adults who, who have a mental health issue don't receive any care. And, you know, that's, that from our standpoint is we're really aiming to treat that. And what we found in, in research and in practice is that a lot of the, you know, a lot of the 57% who are not receiving care, a big driver of not receiving care is the fact that they can't afford it and they can't afford it in the face of, uh, you know, premiums going up more and more every year from insurance companies. Uh, and you know, and, and often the, uh, you know, wage wage increases are not keeping track with your, with your insurance costs and your other costs increases.
Speaker 3 11:13 Right. Now, Scott, you have been involved as an investor and uh, and you continue to have a, an ongoing working relationship with the business as well. What, what originally attracted you to the business?
Speaker 6 11:26 Mark touched on it like he had a real problem that he was trying to solve. He lived his sister's problem and I, you know, I've had mental health issues in my family and I've even, you know, need to check in with couples therapy and things like that. Cause my wife and I work together, so I'm a huge believer in therapy. And so I just felt like it was, it was such a home run. And I remember Mark, you actually pitched it to me as well as um, uh, gosh I forget a massage therapy business massage envy. It was like therapy, but massage like for like a massage envy for therapy. And I, and I got it right away. And then Mark maybe you know, Sean, one of the cool things about Mark is he really spent a lot of time figuring out the concept. And John wouldn't used to have a quote, you know, be quick but don't hurry and Mark really execute on that. Like he really worked through what is the office requirements, what are the technology requirements for therapists? And then he spent a lot of time getting accredited with insurance providers in Colorado so that when they turned the switch they could really grow quickly. It made Mark, I think the audience probably really find that fascinating with the early years of Saundra mind.
Speaker 5 12:42 Like Scott mentioned, you know, one of the things that was really important for me was, you know, getting in the mind and really solving the problem first and foremost for the therapist, for the providers, um, not just because of, you know, needing to go home, uh, to see my sister over Thanksgiving and the holidays and things like that and, and sort of having to face, you know, face, uh, you know, a prospective customer. Um, but more importantly because I just having grown up in a, in a healthcare services environment and I mean from a, from a business standpoint, from an entrepreneurial standpoint, my first company being, uh, you know, a company that was employing, you know, British oncologists and radiation therapists and medical physicists and nurses and being on the front line of patient care for patients with cancer, um, and being married to a family nurse practitioner as well.
Speaker 5 13:32 Uh, I'm just a big believer that in healthcare, if you really want to make change, you have to, you just, you must, you just, it's totally imperative that you solve problems for the provider. You have to work through the provider through, through the therapist in this case. And so that was a big part of the learning. And that was one of the, you know, one of the biggest, the best, the best things that, uh, I did. And it was in it previous to formally founding the company was I went out and I searched really for a strong clinical partner, cofounder. And so my co founder, Sean Boyd, uh, is himself a therapist. Uh, I didn't want to take the leap of trying to start a business with a family member like, like Scott has done with his wife and had been running a business. So, uh, credit to Scott on that.
Speaker 5 14:17 And I'll talk about some of the help that Scott's been, uh, hugely instrumental in providing both, both Scott as well as Cruz consulting in general, um, sort of around me to come back to that. But on the story of the early days, you know, Sean and I, so Sean, being a therapist himself, and more than that, he was really kind of a, a social leader within the space. He was actually the president of the Colorado counseling association and ended up becoming the Western region chair for the American counseling association, which includes 13 States, uh, in the Western part of, of, uh, of the United States, including California. So he really had a huge network. And so we spent a lot of time trying to really understand the pain points that the providers face. And one of the biggest pain points was, I can't find enough clients. And when you really dig deeper, right, you have to peel the onion, maybe a couple of layers.
Speaker 5 15:09 What it really was was I can't find enough clients to not necessarily to meet my demand on any given day. Right? But rather just sort of give me comfort that I know that we'll have this backfill. And in context of the fact that I as a therapist don't like doing marketing. I don't like doing, uh, you know, growth hacking, right? Those are not the activities that most therapists really, uh, really jive on. You know, Scott dye kind of like that, or I worked on like, this is, there's a lot of fun. Um, but with regard to therapist, that's not, that's not their core competency and nor is it something that they really strive to get better at. And so that was a big thing and that sorta hit me in the face cause I was like, well that's weird because it's really, really difficult to find a therapist, you know, and you're like, this doesn't make sense.
Speaker 5 15:55 It'd be akin to a bunch of, you know, me standing outside of a concert and you're like, why can't I get an Uber right now or a Lyft? And at the same time you've got a thousand Uber and Lyft drivers riding around the stadium going, why aren't there any writers? And you're like, this doesn't make any sense. Why is this why there's an efficiency? And then you peel back the onion a little more. And what it really boils down to is there actually a lot of people out there looking for care. But most can't afford that. A hundred dollars $150 a session every week, every other week. Right. The cash pay rate straight out of pocket and so spent then a lot of time to Shawn to just discuss point around working with the insurance companies. And I fortunately knew this space pretty well from my previous company. And so started talking to a lot of the insurance companies and you know, it took a while because the insurance company is a, are slow moving and B, uh, uh, really structurally set up in a way that re that separates the behavioral health provider network and, and, and the sort of mental health side of the fence very distinctly from the physical health side of the fence.
Speaker 5 17:02 Like they just generally speaking, keep those as just, I mean they're different contracting arms or different credentialing parts of the business. And that was something I wasn't aware of you kind of at the outset. And so, you know, I just, I was like, we have to crack that nut. And there were, there were a lot of times where we were tempted to say, well, let's just, let's just launch this and let's just do this in a way that doesn't account for the fact that a lot of clients are looking to use their insurance and it's difficult for therapists. But instead we said, let's just hold that as a really a really key tenant of what we're trying to do because we believe that that's where actually there's the biggest gap and the greatest need in the market.
Speaker 3 17:44 <inaudible> so are you only offering the service right now in Colorado or it, is it outside of Colorado as well?
Speaker 5 17:51 No, we're outside of Colorado. So we launched, uh, last year when we did a soft launch in our first two out of state markets. So, uh, the specific markets were Austin, Texas and Phoenix, Arizona. We actually, today, uh, we moved up our launch for, uh, our, our two newest markets still remaining in Texas. So Dallas, uh, Dallas, Fort worth area and San Antonio. And we're exploring launches, uh, in Q2 in four new States. Uh, and that all comes outside of and separate from our efforts on the telehealth side. So as I mentioned earlier, we just launched telehealth right away, literally a week, a week old, and it's in a real MVP mode. Um, but it's functional. We've had, we had almost zero, we had no tier two support tickets within the first 48 hours. And, uh, and only one just regular support question. So the team dish did an amazing job getting that out and really getting it baked from a support standpoint.
Speaker 3 18:48 Yeah. That's why really fast to be able to get that quick.
Speaker 5 18:51 It has. And, and uh, and the, the, the growth aspect of what we're trying to focus on. And you know, there's, there's obviously a unique situation we're in now and we believe it's part of our mission to, to deliver on that. So it's not sort of <inaudible> to try and be, you know, opportunistic in a negative way. It's rather saying, Hey, let's, let's be awkwardness to address this huge need that is in place for mental health, for better access to mental healthcare. And how can we do that in a way that reaches the greatest number of people. And so we are, uh, right now exploring, you know, more of a national tele-health launch. Um, knowing that at the end of the day, one of another, one of our core tenants is that we believe it's better care can be enabled when your therapist, you can, you can use the tool in the toolbox that is telehealth, but that you can also see them face to face. And again, in the environment that we're in today, I mean like this week, right? During coven 19. Um, that's not as likely to happen obviously, but this is, this is a, this is not a permanent state of affairs that we're in and the ability to have, build a relationship in person with your therapist or to engage with them in their office when you need you, when maybe things are a little bit more dire. And couple that with HIPAA compliant messaging and HIPAA compliant video is a very powerful combination.
Speaker 3 20:09 Yeah. And I've definitely seen the power of, of you know, normal face to face therapy that also has a um, remote capability built into it, sort of pre coven 19. Now you suddenly have, now you suddenly have everybody being disrupted. I mean, some States may be not completely yet but, but States are moving in the direction where, where the stay at home orders are, are happening more and more and um, probably at the same time as that disruption, the number of people who are, um, having a hard time with this, um, the mental health needs are probably increasing as that disruption increases. And so, um, you know, definitely kudos to you on quickly being able to try to fill the gap with, with uh, uh, something that, that helps do it virtually.
Speaker 5 20:56 Yeah, they absolutely are. One of the things that's really been helpful from our standpoint, uh, to support our growth, not just in this time but, but in this time too, but just across the last, you know, two years is we've been able to really work with, be able to rely upon Kruze consulting to say, Hey, now we don't have to worry about sort of that somebody minding the fence on our growth initiatives. Uh, internally, we, we had that, you know, that relationship really well built out. Uh, and that's where it's been awesome having Scott as a partner, you know, in, in a lot of our growth at perks. Um, because we, we can turn to them, you know, as an expert and say, how can we, how can we manage this and how can we manage our capital needs in the face of varying environments. It's really important to have people who understand that can look broadly across the, across the sort of landscape and say, here's what we're seeing. Here's where you're well positioned and maybe where you could use a little more support.
Speaker 3 21:54 Absolutely. And I, I've definitely found that, um, not being able to scale all parts of the business is one of the fastest ways to slow down growth. So Scott, it would be great if you could, if you could bring a little more context into what you're doing to, to help support that scaling.
Speaker 6 22:08 Yeah, thanks. And thanks for the kind words Mark. Um, so yeah, so we do all the accounting, finance and taxes for, we actually, we're very fortunate. We have 225 venture backed startups now. Our clients have raised three and a half billion dollars and we're, we're national, you know, we actually have tons of clients in Europe too, but we basically free folks like Mark up from, from grinding through QuickBooks and, and bank reconciliation and stuff like that all the way up to the financial models and doing budget to actuals. And so Mark, when, you know, when he's Mark's super financially savvy, but a lot of CEOs, you know, they need help building that model and then looking at their budget actual see where they're actually spending money. And one of the things that Mark did, I think, I think your audience would really benefit from this, just hearing this is that he didn't hit, you know, Mark has had access to capital the whole time he started the company and he's had a lot of VC interest but he actually showed a lot of self-restraint early on.
Speaker 6 23:05 And I think, you know, we, we advise a ton of startups and not everyone has that discipline and maybe it's marks, you know, military training. They actually has had that this a little bit Mark, it might be interesting for you, cause I mean you, you were a small team probably for, you know, two or three years while you worked out all the Kings and really figured it out. And then you said yes to, you know, a lot of VC capital. I, I've always admired that and I've always thought that was the way to build a startup. And you know, Sean, your experience at Dropbox, I know there is, I've heard the legend of Dropbox and there's been a lot of times, you know, I think Dropbox, you know, took a little while to get going too. And then once you guys figured it out you had unlimited as well.
Speaker 6 23:45 But I think sometimes startup founders don't know that when things really click that's when the money, you know, you will have unlimited capital. It's, it's taking time and really figuring it out and building that kind of ironclad solution or ironclad product or service that makes your, your champion successful. And I think Mark just did that so well and it might be interesting just to spend like one minute on marks how, you know, how he thought about fundraising and when he decided to hit the gas pedal. Yeah, that would, that would be great. Mark, do you have comments on that?
Speaker 5 24:18 Definitely. I would actually, I appreciate the, I appreciate the sentiment, Scott. Um, I would actually say I probably, I maybe was a little too much on, on the side of like not raising, I think it was like there's a balance and everything's balanced and you don't know exactly how off balance you are until you, I think until you sort of can look historically and look backwards on it. Um, but definitely, you know, the, I, when I talk to companies that I work with, uh, peers and other companies that I'm mentoring or things like that, the first thing is like, why do you want it? Like, what are you going to do with this capital? And it's one of these not what's on your, what's not, what's in your investor deck of what your, what your uses of capital art. Cause everyone's gonna say the same thing.
Speaker 5 24:59 We're gonna hire people, we're going to focus on growth. We're gonna, you know, uh, build out product. We're gonna do this. We're gonna like, yes, of course. But specifically what would you do with this capital in the next 12 months? Like, show me what your plan is. If you can't come up with what you know, even if it's half of it, right. I actually do agree with it. Like, you know, figure out what you need and then maybe double that from a race standpoint. But the figuring out what you need is people just put a lot of fluff into that. And the reason is because you're trying to balance your risk as a, as a founder and as a team and you're, and there's also ego. I mean, there's just a lot of ego that goes into it right where you want to be. Like, yeah, of course we're like this valuable.
Speaker 5 25:39 I just always viewed it from the standpoint of until I knew definitively how we could deploy the capital. It was, it made sense to, to sort of keep things constrained. The other reason is I don't, I don't think any credit for the discipline around this is actually one of our, uh, one of my early investors, a a very successful entrepreneur. Um, he said he, he kinda really pushed me and I, this resonated well because it's my mindset anyway, so it didn't take a lot of convincing and pushing, but he made it a point that I continued to hold onto, which is, you know, the, the constraints that you can put around yourself, you know, actually make things better as a company. Uh, whether it be because of a product saying what, because of like, you know, figuring out ways to hack growth, uh, even just from a cultural standpoint.
Speaker 5 26:25 And that really resonated, which is, you know, when you're in a pressure cooker, right? And when you're, you know, having, having been, you know, like West point could be deemed as a pressure cooker to a certain degree. Um, so having like gone to college in somewhat of a pressure cooker, I do believe that, you know, putting in constraints and putting it and putting pressure around people and processes really does, and product really does create a better, a better outcome. And having more access to capital and having truly just having more money in the bank releases some of that pressure. You've got some valves, right. And it could be little things, right, that are like, well maybe you are able to hire that slightly more senior person, which ended up itself sounds like a great thing, but maybe you're actually not ready for that senior person. Maybe that person, your person is going to put in place more process than you're ready for. Maybe they're not as scrappy as you really need to. Can you control the culture as well when you have a lot more capital? So for me it was a lot of like I wanted to keep somewhat artificial constraints, although Scott's maybe giving me a little too much credit. It fundraising wasn't as easy as maybe it looks like
Speaker 6 27:35 you just convinced me. So I thought it would be, uh, you know, there's one other thing you do incredibly Wellmark and it in, in Sean. I think, again, your listenership could benefit from this. Mark writes incredibly thorough and clear investor letters. And so as a both, you know, as a CFO and the accounting team, I, I've admired it cause he's so metrics oriented in those investor letters. But as an investor it gives, gave me tons of comfort along the way cause I could essentially see him figuring out the problem and solution over, you know, many quarters. But without fail he sends an, it's, it's like a 10 page letter. It's something that you would expect like a public company to produce. And I think there's a lot of, as an investor you see the clarity of thought, the market his team has. And you also can see the progress.
Speaker 6 28:25 And I think one way that people don't even, you know, maybe think about how, what benefit that is is it made it really easy for me. And I'm, I'm a S I'm a small guy, I'm not a big, big hitter. But even I was able to introduce some of my friends at the early stages to invest in the company because I had just such a clear vision of what he was doing and, and the traction. And so sometimes, you know, startup founders, they get busy and they don't think about the importance of communicating with their investors and not just kind of sending out an email but putting something super thorough together. It actually has these second order benefits that you don't think of. And it just gives, it gives your investors so much confidence that they're willing to bring their friends into a deal.
Speaker 3 29:07 I agree. And I think having that rhythm of communication that you start early and you keep going makes it a lot easier to carry it on. Because if you, if you stop communicating then then you start looking for, Oh it's gotta be there, be really good news or bad news that then triggers that communication and then people are going to be probably your less credible if you're only doing good news and it's Oh crap if it's only bad news. And so I think it is really critical to have that like a communication going on a regular basis.
Speaker 6 29:36 That's a really good point. And you know what the funny, you know, Sean, I'm sure you know this, you've worked with so many help them grow. Like there's never just a pure good news. There's always like, you know, 60% good news and 40% bad news. So there's always stuff going wrong in a startup like, and the faster you get used to that, and even like a cruise, you know, like we always have stuff we're improving and that we need to fix. It's not like, not like our ship is running 100% you know, so every and, and the thing is everyone kind of quietly knows that who's invested in the startup. No one expects it to go perfectly. So just being honest about your challenges too can really help. Because Mark, I'm sure there's some examples of times where you've been honest about what you're battling and you're an Indian investor letter and then one of your investors step forward and says, let me help you with that.
Speaker 5 30:23 Oh a hundred percent. I mean, I, I, I've tried to look at, I'm thinking of specifically as a company that I invested in a few years ago and I were giving this advice to it was to the CEO and the founder and he was one of these like a perennial sales guy and uh, and somebody who just was always trying to paint a very rosy picture. And I was like, I know it's BS. I know that that's not the case. And everybody else knows it too. And like stop pretending because you're actually just, you're just killing credibility. You think that you're, you're like, you're just keeping your armor really intact. And the reality is you're actually showing that you have tons of holes in it. And when he started doing this, um, and he used, he, you know, he doesn't do as frequent and it's sort of as consistent of communications as I would like him to.
Speaker 5 31:07 But, um, when he started doing this, he actually called me like the very first update. I said, just please just send an update and just say, just tell everything that you just told me. That was going wrong cause he would, he would tell me what's going wrong, you know, in this sort of non public kind of fashion that would go out to all investors. I'd just put all that down and send that out. And then a week later tell me what, what happened? And he came back and he was discussed. So he's like, Oh yeah, people were trying to help and everything for us. You know, I've always viewed communication as just completely integral in really building a strong any organization. I mean it's not just a startup, it's any company. And so these ties to our core value. We, one of our core values is transparency.
Speaker 5 31:53 And we really do three that, I mean we've, I've had company team members, so you know, I've never been to the startup that shares on a monthly basis during the all hands and during the advanced packet, what our cash balance is and what our burn is to the entire company, fully public. Right. And, and talks about all the things and does, you know, open, you know, three up three down, that'd be calm, you know, 10 down and two up kind of thing, you know, but like let's work together to find the things that are wrong and to approve upon it. And then from a communication standpoint, you know, I, I send out without fail every single Sunday night, a weekly email to the entire company. Um, and then immediately after I send that, I hit control F and I send that to my board. So my board gets a weekly update from me, which is exactly the same one that I to the company.
Speaker 5 32:40 And sometimes I'll add some additional content for the board or whatever. So I bought it, always knows what's going on. And then we do, as I mentioned, we do a company all hands that's monthly. And in that we do an advanced packet that's prepared by myself and the executive team that goes out three days in advance of the all hands, which has all kinds of statistics information and how we're tracking our OKR, ours across the company, across the different departments. And that goes to the entire company. And so they can digest that, you know, with, with 48 to 72 hours before the all hands and come with questions. And I send that to the board as well. And then what happens is actually when we do our quarterly investor letter, those advanced packets, which are also between, you know, seven to 10 pages in length, it gets really easy for myself and the executive team to put together our quarterly investor letter because we're just saying, well let's look back on the last three months of the all hands package we put together. Let's see if there's anything we want to, you know, maybe condense, which there obviously is, um, and what are the highlights over the quarter and what are we thinking about? And let's put that out. And it just, it does create a riddle.
Speaker 3 33:43 Yeah. And then the benefit with that too is that, I'm not sure if you have a board, but if you, if you have a board of directors, then when you actually get into your board meeting, it's not a bunch of updates because people are already on sync. So you can actually really dig into the areas of the business that need some work.
Speaker 5 33:58 Well, that's exactly right. I mean, I have a, so we have a three person board right now. We've had, uh, so it's myself, one of the partners from, uh, the, from that list that led our seed round, uh, kickstart seed fund out of salt Lake and Utah. Uh, and then the third board member is Jonathan Bush who was the co founder and CEO of Athena health and grew that and took the public and ultimately exited. Um, and that we're, and now as we were raising our series B round, uh, and closing on that within the next two to three business days, uh, and we'll go from a three person board to a five person board. And so actually two new board members joining, both of whom are our former CEOs of of billion dollar plus companies. Um, and so, you know, what's really good is that even the partner from kickstart seed fund, he used to be a CEO himself.
Speaker 5 34:49 So he was CEO of a hospital system in Oregon. Uh, and he was like, had a strategy at Nike and has a great operational background, but it's great to have a board that is made up of predominant of, of, you know, previous operators or sometimes current operators, um, because they appreciate that. But then it's like, so I want them to have more information because they're going to bring, I don't have to worry as much about, well are they gonna maybe, maybe I do, but I at least I haven't had to worry as much about, uh, them kind of stepping on toes and, and you know, I think it's part of my job is to manage the board and to make sure that, you know, I'm getting as much in the company is getting as much out of the board as possible. And one of the ways to do that is just to keep them in the loop.
Speaker 5 35:28 To your point, Sean, is to say, Hey, you know, let's not spend, we actually, as a rule, we don't, I don't do board presentations. So like, my team, uh, was all shocked when I was like, no, we're not doing, you know, just cause Jonathan's joining. We're not doing a board deck. Um, we do it all. We do a read ahead packet and then the four hours we do for a board meeting is meant to be discussion and we bring in the executive team for a part of it. But we're not going to go through slides and I'm not going to have a three week process to create a really pretty presentation for the board. At least at this stage. I want a working board that's going to help us solve problems.
Speaker 3 36:02 Right. And I think you again can do that because you're so consistent in the rhythm of updates. But let's, let's dig back into a, a bit about the growth that you're, you're actually driving because I think that's, that's really impressive, uh, from, from what you talked about so far, I mean to be able to have 10 to 20% month over month growth, um, that those, those are numbers that are hard to maintain in the long run. But I mean that's, that's, that's the seed of a, of a great business. And so when, when you mentioned that you think a lot of that is being driven by the just pent up demand and um, with 57% of people who, who probably have a need for mental health help and they're not getting it, then that that not only is a, is an important problem to solve, but it's something that's probably a really good mission for the team to rally around. So that's one of the first things that, um, want to dig into is just how much time or how much do you feel like the team is really driven by the mission versus, you know, just, just trying to move a number up into the right,
Speaker 5 37:07 very much driven by the mission. I mean, you know what our, we have a, I guess for me as a, again, that the best organizations are the ones that truly, truly believe in the vision of the company. Right? And are there to see that. And our vision again is it's a redesigned behavioral health, right? Like that's, that's kind of the first action and that is to be more accessible, approachable, and utilized. But it isn't, Hey, we, it's, you know, I, I make this point a lot with our company. The vision is not to build a great customer service, uh, product. You know, that for our therapists, that's part of it. Um, it's not to have the best matching algorithm to get clients, the very best therapist for them. That's part of it. Uh, it's not to enable people to use their insurance benefits. That's part of it, right?
Speaker 5 37:58 What it really is, is to truly change how we in this country engage in behavioral health care. Because I just, it's, it's so far behind the curb, uh, that we have to take big steps and we have to really think much longer term and say, how are we going to do this? So people are extremely motivated by the vision of the company and how we can achieve that. However, maybe not. However, in addition to that, it makes it easier to go, well, here's how we're going to do that. Right? And that's incumbent upon myself and the leadership team to step that, you know, say, here's the longterm strategy and the vision of the company. Here's how we're going to get there, right? Like in three years we want to be here, right? And here may as defined by maybe these metrics, right? So it's, you know, we can use a general PR construct, but we can come back to that and go, what does that mean?
Speaker 5 38:46 What do we need to do over the next, you know, 24 months over the next 12 months, over the next six, over the next quarter. And really boil that down from a growth standpoint. You know what, what for me was really important was making sure that we had the model very well baked and that we had really strong customer satisfaction scores before we started trying to grow, uh, exponentially, right? And really focusing on like, just stepping on the growth pedal because it's, it was, I was just a very, maybe even overly concerned and fearful of deliver, of not being, to deliver on a brand promise to both sides. The customers, and we're unique because we have at minimum two customers, right? We have therapists and clients, but you know, our, our insurance and the insurance comes, we partnered with our, to a certain degree, our customers are certainly partners.
Speaker 5 39:37 We also partner with primary care practices and medical offices and health systems. We partner with nonprofits, companies like responder strong, uh, and a couple of organizations that are focused on specific niche populations. So we have a lot of, we have a fairly diverse ecosystem that we are, that we are creating. And we wanted to make sure that we were, we were delivering on brand promise and on win-win. And that's where it's been really strong because we've had, before we really stepped on the growth pedal, we're like, let's get to the point where we can have, you know, therapists NPS, that's an excess of 70 or 75 or 80 right now our therapists, MTS is 84, uh, and client MPS, you know, that's greater than greater than 50 or 60. Right. And so right now our client MTS is 68. And so now we're like, okay, we've figured this out, particularly in Colorado.
Speaker 5 40:24 How can we do this in new markets? And brought on an amazing VP of marketing. She started a little over a year ago, actually started consulting for us and she's now, uh, built up both a marketing function as one team and another function, our growth team, the growth team is kind of a vertical who's focused on predominantly growing our provider network and recruiting therapists, but she's now VP of growth, STP of growth and marketing. Uh, Katie Flannery is her name. And so we have this sort of, the marketing aspect is, you know, is a, uh, you know, what I call horizontal or is like in above to the platform piece to the company and various parts of the company work with marketing and communication. One of the biggest sort of internal clients, if you will, is her growth team. And our growth team has continued to build out with, you know, now on a, a, an SDR structure, um, and, and now a community liaison in these new markets. So we actually have in-person, uh, team members in, uh, in Austin, in Phoenix, in Dallas, Fort worth, and in San Antonio. And obviously of course in Colorado.
Speaker 3 41:32 So you talked about, uh, how strategy and kind of planning ahead was, was pretty important as you've, as you've transitioned into that growth mode, how, how iterative has that approach been? Because as, uh, you know, I've, I found an ad most most people find that, um, things don't always work out exactly how you think they're gonna work out in terms of how you can capture new markets.
Speaker 5 41:55 Yeah, well, especially, I mean, for us it was, a lot of it was around the new market growth. I always say like, we, you know, it's a, it's a dual edged sword. Like we had a lot of our growth in Colorado. When I talk about growth in this context, I'm talking about it from a therapist growth standpoint. A lot of our therapists growth came from word of mouth, right? There's a reason NPS is, is called net promoter score. There's a reason that that's like, the terminology is, it's that kind of like, generally it means that there's a proxy for people actually making referrals and promoting you to their peers and to other prospective customers. Right? So, uh, so we were generating a huge amount of, uh, of growth was coming from our existing therapists who were happy with the product and were telling their friends and colleagues and people that they went to school with and they were like, Hey, you should check this out.
Speaker 5 42:41 You should, you think about joining Zonderman like this. This has been a pretty awesome experience for me. Um, and, and, and what it actually did was it, we got kind of lazy, right? We didn't actually really try to dig in and say, Hey, maybe we don't need to turn the dials now we, we want to be a little more capital efficient and we don't want to invest in our, in our therapist's marketing and growth efforts, um, yet, because that's sort of happening fine. And you know, it's all about triage and prioritizing your priorities as a startup. But when we then launched it in the new market, I think we took for granted a little bit that there was going to be new struggles we hadn't thought of. Right. One of the first, first ones we identified when we launched at the end of Q three early Q4 in Austin and in Phoenix was when we were talking to providers there when we were talking to therapists, a lot of the response was, this sounds amazing.
Speaker 5 43:31 This sounds great. Like I love it. And we're like, Oh great, we love hearing that. And then they said, well, actually it sounds so good that it's probably too good to be true. You know, I, I've never heard of you. Uh, I know you're in Colorado. I don't know. I, maybe I'll just wait and see. And we're like, no, no, no. Like we actually, we actually do when we say we're going to do, but it was, you know, you have to build a brand, you have to build a market presence. And so that's been, you know, that was a huge learning, right? We're like, okay, we have to, we actually have to start with some market brand awareness and penetration. And again, in retrospect, you're like, well, of course dummy. Like, what'd you think? You just can walk into the market and is gonna flock to you.
Speaker 5 44:12 I'm like, no, but we were, again, to your point, yes. Iterative and you know, the thing about where are you going to, where are you going to deploy your resources, whether that be capital, more importantly your people resources. And we've iterated on a number of things, right? We iterated in our structure of how we went from a pure, like a single BDR structure to now, you know, having a sales development representatives work, you know, one SDR kind of basically supplies if you will, two account executives. And I expect that six months from now we'll shift it again and we'll kind of create a different process and different structure as we learn more and more things.
Speaker 3 44:45 Yeah. So, but it sounds like it's pretty supply led when you go into a new market. Is that right? Before you can bring in the clients
Speaker 5 44:56 that, but w we, we are, you know, it's a balancing act, right? I mean, again, I, if you think about, so if you think about this as a marketplace, which is certainly an inappropriate way, one of the appropriate ways to think about us, um, and then you look at other marketplaces and you go, okay, well if I think about Uber in the early days, right? Uh, when Uber first came to Colorado for example, uh, which wasn't one of the first two or three markets outside of California, but I think it was one of the first 10, uh, you know, they were insanely focused on the supply side on drivers. Right. Um, as an aside, I actually signed up to become an Uber driver just to understand how they were, uh, like back in 2016, 2017 just to see how they were building up their supply sides. I think they were doing for onboarding, but, uh, you know, th they did it.
Speaker 5 45:43 But then as you think, I, I, I think as you look at their history and go, you know, maybe two years after that, like 2018 2019 when they were entering a new market, they weren't going after as much like the supply side, as acutely as it was like, Hey, we have to, we have to think about both supply and demand because we had the drivers already maybe know of us or prospective drivers. And what we can't have is that they sign up and they expect to sort of have enough rides to meet their, their own personal requirements or what they're looking for and not deliver on that. So it's a balancing act for us. And that's one of the other things we're learning. We, we started with this insane focus on the supply side and the new markets. So now we're realizing we need to be a little more balanced with it. And then that comes in context as well with we need to continue to balance that with our partnerships, both with the insurance companies of course, as well as with health systems and medical practitioners and things like that. In the new markets.
Speaker 3 46:39 And so how do most clients discover Sondra mine?
Speaker 5 46:43 So you know, a lot, a lot of times it's word of mouth. Um, we have a pretty strong, uh, online search and advertising program. And, uh, and then in addition to that, you know, there are, there are like provider, you know, therapists, directories and things like that. So they often find therapists that way. And then on the insurance directories. And so it's actually pretty, um, it's pretty heterogeneous. Like we don't have, like, there's not like, Oh, one channel or one tactic drives 90% of demand. It's sort of like there's, you know, 15% that comes from here and 20% of them comes from here. And what we're trying to learn now is how do we, how can we control those dials and then get a lot more fidelity around what's the customer acquisition costs between these? And you know, if there's something that has a really low CAC, that's great, but it might be something that you can't actually dial up in the early days because potential, let's say it's word of mouth, right?
Speaker 5 47:40 So like refer, you know, word of mouth referrals has, you know, almost zero or zero customer acquisition cost. So you're like, I want all of my volume to come from that. Well, yeah, of course. But you know, if you have certain growth targets, can you rely on that, uh, to meet growth targets within a defined time period or not? And generally speaking, it's not. So how can you go, how can we, you know, shorten the curve to get to that being, you know, a 15 to 20%, uh, you know, kind of part of the demand channel.
Speaker 3 48:09 Right. So, so as we're, as we're coming up to the end here, I w I wanted to ask you and then we'll, we'll, Scott, we'll, we'll hit you with the same question, but, um, what do you feel like you understand about growth now that, that maybe you didn't understand a year or two ago?
Speaker 5 48:28 I think one of the biggest areas from, from my own learning was just particularly going into the new markets. I think that that was our big change, you know, over the last year, right. Was entering, going out of state. And entering these new markets. Um, the biggest thing for me was that you have to, you have to recognize that you're entirely new. Right? And I think, and we can, I can think about it from a market standpoint, but really if you, if you bring it down to the individual customer level, for us it's, you know, down to the individual therapist level or the individual client level. Um, and for any other business as it applies to other listeners, it's who is your customer? And if they knew nothing about you, how would you get them to buy? Right? Like, how would you, how would you dress? Just, just don't take for granted that you have any equity whatsoever.
Speaker 5 49:22 Would that prospective customer and how do you convince them that you're, you're offering your solution is perfect for their needs. And that for us was something that I didn't spend a lot of time thinking of, uh, for the, you know, kind of a year ago or a little over a year ago. And what the new market launches for us has forced us to do is they, people don't know about us. And you know what, that's not something that's gonna change. You know, it maybe it won't change for at least a few years, you know, sort of nationally speaking. But the reality is it won't change really ever. I mean, I remember talking to a friend of mine, a really smart guy, a West point grad, works for a fortune 100 company, uh, has also worked for a startup that it was like 10 years ago, I went to window a top tier business school and this was like six months ago.
Speaker 5 50:15 And I remember saying, yeah, so I set my, you know, my team a message on Slack and blah, blah, blah, blah. And he was like, what's Slack? I was like, what do you, what do you mean, what's Slack? Right? Like, you don't know what Slack is. And this is not like a guy who's got his head in the sand. He just, he's not in that world. He's in a big fortune 100 company, has never really dealt with, is ever exposed to it. And I was, you know, you take for granted, like everybody knows what Slack is, right? No, no, no. You'll don't know. My, my parents obviously don't put, if we can always sort of write off, you know, an older generation and say, Oh well they're not as into it, but this is the guy, you know, in his late thirties, um, you know, a director, VP level person and he had never heard of this, of Slack and, and that was another trigger Rose. Like you'd have to assume that nobody knows who you are and how are you going to, how are you going to hit your growth goals with that assumption.
Speaker 3 51:04 Yeah. And I think, yeah, just having that, that empathy and, and realistic understanding of where people's heads potentially are. And then, yeah, it's interesting for me, I used to get people asking all the time if they wanted help with growth, they would come to me and they wouldn't say we want help with growth. They would say, we need help with awareness building. And I would look at them and say, you know, the average person sees thousands of advertisements every day and on your little budget of a startup, you're going to be able to build awareness through advertising. It's just, it's just not realistic. And so that's, it's always that, like, you gotta focus on acquiring one customer at a time profitably and you'll build brand awareness and equity through the experiences that you deliver. But it's, uh, it's just going out and building awareness first. It's just not very realistic, at least for startups. Maybe if you're, if you're, you know, Anheuser Busch launching a new beer brand and have very deep pockets, maybe you can pull that off. But, uh, so Scott, do you have anything that you would add in terms of new things you've learned about growth and in recent years,
Speaker 6 52:08 there's a lesson from Mark and he said earlier, which is he really focused on, um, the providers, which effectively is his channel. Right? And you know, Dropbox, you guys had a pretty organic, you know, almost like a consumer led growth curve, but he, Mark, you know, and stuff that I'm familiar with, we're, we're an accounting partner to so many key tools like Gusto and rippling and bill.com and Expensify. And so I can really relate to what Mark did because he made his channel successful. And this channel is spreading Sonder mind. And you know, we've done that for those vendors that we work with. But I think a lot of founders don't, don't always understand the power of that. And if you can harness a channel, like with Mark, Mark dead, it can just, it can take you really, really far. And you know, Mark's only in, you know, I don't know Mark five, 10 States, you know, you've still got 40 States to go. Oh, sorry. Yeah, three that, those, that, those providers are going to be like, it's almost like a giant wave and it's on their minds, the surfboard on top of that wave. And so I, the advice I give to a lot of founders is look for a channel that you can capitalize on and power
Speaker 3 53:18 <inaudible> wow, that makes a ton of sense. And then, you know, one of my big takeaways from this conversation is just by being really focused on the mission, I think that's part of the reason why Sandra <inaudible> has been able to respond so quickly as a sign of my team has been able to respond so quickly to the Corona virus. Yeah. Catastrophe and disruption that's happening and move to bring a tele medicine solution to market quickly is that the, their ability to deliver on the mission is, is being disrupted right now. And so by focusing on the mission, then you're, you're able to move much more quickly of, Oh my God, we need to, we need to fix this. A lot of people need help with their mental health right now. And this is the channel through which it needs to be delivered until, until things change. And so, um, you know, congratulations on all the success up to this and I'm confident with that mission focus that you guys will navigate really well through the, through the current challenges.
Speaker 5 54:14 Well, I appreciate it and I think it's, it's hugely important for every company to really understand what is, you know, you've talked about like the North star metric, right? And then things like that. And so to have that focus as the, as that guiding light as a North star that is at the end of the day, is driving those decisions in the military, in the army in particular, a lot of, you know, a lot of what we talk about is commander's intent because, you know, the idea is that as a commander at whatever level you are, right, whether you're a battalion commander, you know, over a thousand soldiers or a company commander over a hundred or 200 or a platoon leader over 30 to 40 you know, at the end of the day you might get blown up by an IED. You might get shot in the head and the mission must continue and the mission is not what's in Mark's head as a company commander or a platoon leader, it's, Hey, he's laid out with the mission as in overall, it's not just step by step of what's the overall intent, right.
Speaker 5 55:10 Where the commander's intent is to do this thing, we want to do this. And so the rest of the organization can continue on. And that's just hugely, it's usually a helpful for a startup because, well, the, hopefully nobody's getting shot in the head or blown up by an IED, you know, there are effectively like business ideas that get put in place. Like there's a bomb that blows up. You had no idea it was coming. Right. It's call them fires, call them whatever you want, but know the, you know, the individual team and, and departments and the company as a whole, being able to shift around that because there is that North star, the commander's intent, the overall vision and mission is just insanely helpful toward ultimate success.
Speaker 3 55:51 Wow. Yeah, absolutely. And so, um, you know, to both you guys, I thank you very much for coming on and sharing the experience of, of getting to this point. And, uh, um, I'm confident that you're gonna be able to help a lot more people, especially in the short term, but longer term as well. So, um, we wish you continued success with the business and congrats on all the success you've had to date.
Speaker 1 56:13 <inaudible>
Speaker 2 56:18 thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform, and while you're at it, subscribe. So you never miss a show until next week.
Speaker 1 56:30 <inaudible>.
