Welcome to episode twenty-seven of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned.
You can listen to the full episode directly below via Spotify, or visit SaaS Backwards on Buzzsprout or wherever you listen to podcasts.
Building a SaaS Success in Healthcare; AKASA uses AI to Solve an Intractable Revenue Problem
With Ben Beadle-Ryby, co-founder and SVP of Commercial at AKASA
Edited for clarity and readability
Host, Ken Lempit:
Welcome to SaaS backwards, a podcast that helps SaaS, CMOs and CEOs to accelerate growth and enhance profitability. Our guest today is Ben Beadle-Ryby, co-founder and SVP of commercial at AKASA, a SaaS that helps hospitals and health systems with revenue cycle management. Before we dig in, could you just tell us a little bit about yourself and about your company?
Yeah, I'd be happy to. As you mentioned in your intro, I am a co-founder at AKASA and I oversee our commercial operations. I have spent my career in the healthcare space in both consulting and sales roles. And I spent the better part of my career at a publicly traded company called The Advisory Board Company that specialized in healthcare research, consulting and technology for predominant hospitals and health systems. While I was there, I was focused on revenue cycle and financial operations transformation for those organizations. I spent a lot of that time in consulting, but eventually was charged with helping to grow the business. I became a partner in our consulting organization, had the privilege of working with well over 200 hospitals and health systems across the country in my time there. Our company was acquired by Optum, which is a subsidiary of UnitedHealthcare several years ago.
I had the honor of working at Optum for a while, and Optum also played in a similar space. What was really exciting for me is it was about that time that I got connected with my eventual co-founders and we saw that there was a huge opportunity to disrupt the healthcare revenue cycle and finance operations space and more broadly healthcare operations back-office operations by introducing modern machine learning and artificial intelligence in order to automate many workflows that have been performed manually today.
That’s a perfect segue into telling a little bit about AKASA. We’re a healthcare AI company based out of Silicon Valley, Stanford, AI PhDs, Google engineers, Facebook engineers, and combine that with deep domain experts in the healthcare space, to address an enormous problem to improve efficiency in healthcare and improve healthcare outcomes for everyone. It's been an incredibly exciting journey and I'm thrilled to tell you about it today.
I think it's really interesting as a consumer of healthcare and hospital services, you would think they would have their act together on getting the revenue done. But I guess you had plenty of opportunity to see into the actual back office ops of these enterprises and realize that there was room for improvement?
Yeah, without a doubt. I think for those people that access healthcare as patients, there is a lot that happens behind the scenes that we are completely unaware of and oblivious to. And much of that stems from the very Byzantine nature of our healthcare payer ecosystem.
We have many insurance companies; we have government payers that cover the cost of care. We have providers, predominantly hospitals and health systems, but medical groups, physician practices, they provide the care. And they're just the natural complexities that go along with everyone's individual needs as they're going through their care experience and what that ultimately results in is complexity that organizations have solved by putting in place certain technologies at certain human experts, certain processes.
Much of that takes place in the background in assigning codes and whatnot. But it is not an uncommon set of awarenesses that the healthcare patient financial experience is lacking. There are a lot of individuals that go through their experience and they have a confusion about their medical bills, their surprise medical bills. These are all issues that the industry of healthcare has been grappling with for many years and trying to solve in many ways. And there's so many different areas. We have really focused on how we should streamline back office administrative functions to ensure that a greater proportion of every dollar spent in healthcare is dedicated to delivering high quality care.
That’s an awesome mission. The company is about four or five years old, is that right?
That's right. We're entering our fourth year as a company and it has been a tremendous journey. We’ve accomplished many milestones along the way as we have grown our team, as we have gone out into the market. We’ve also been able to secure some of the largest health systems as customers and delivered some just amazing value.
One of the things we talked about before our call was that it's really hard to sell to hospitals and health systems. They have been most elaborate defenses to sales outreach. And I'm just wondering how, as a young company, you gained that initial trust. How much of your solution was built and ready to go before you did that sale? And how did you crack that market? Because that's no easy feat.
I appreciate the kind of recognition of the challenges that this market presents. I’ve have had many conversations with sales leaders and when they hear that we are working with hospitals and health systems, many of them shake their head and say, “Oh my gosh, I feel for you all. That is so challenging. It's a difficult space.”
I will share anecdotally that one of the good fortunes I have being at the earliest stages of the company, being surrounded by kind of venture backed companies that are supported by the same venture capital firms that support us.
We have a few things that we benefit from. Number one, we invested heavily in healthcare expertise at the company from the get go--people who knew the space who had sold into the space, I have a lot of experience there.
Number two, many of these organizations are large. They are bureaucratic, they are risk averse, they have a lot of data that they need to protect, patient health data. They take their security very seriously as they should. And so we have to invest heavily in every single one of those steps along the way. Getting different certifications, ensuring that we have certain measures in place to give them that confidence, to be able to work with us and trust us with their data. Those are very important factors.
I think the other elements that we really try to leverage early on is we have been fortunately backed by very prestigious venture capital firms like Andrews and Horowitz. And that organization brings a strong brand name to the table. They have relationships across the industry, and that has supported us as a company that's establishing our brand, in getting out there, in forming relationships. And ultimately navigating long complex sales cycles with these organizations to ultimately get to a stage where, we're doing our job and we're automating workflows for them.
Those are some of the tactics that we have used in our earliest stages. We are now, as we mature, thinking about how do we invest more in marketing? How do we ensure that our brand really carries some weight, so that we are the foremost expert when it comes to healthcare automation that organizations are turning to?
Interesting. And was there an essential problem that you were solving with the first release or releases of the software that just compelled these executives to pay some attention?
Yeah, there was. I'll talk both at an organizational kind of a micro level, but I'll also pull up from a macro perspective. In the industry, the average cost to collect for hospitals and health systems is 3% of an organization's net patient revenue. So year in, year out they are spending 3% of their overall revenue, just on revenue cycle resources. (Technology, staff and for years, etc.)
Our gains plateaued, 10 to 15 years ago. We were able to benefit from economies of scale as we saw hospitals merge and consolidate. But if you think about it for organizations that their net patient revenue is a billion dollars a year or $10 billion a year, it is a significant amount of spend that they have every year.
And a vast majority of that is on resources that are performing manual tasks that are very repetitive in nature. Ultimately there's an opportunity there to lower that cost and be more efficient especially by upskilling the staff that you have so that they're not doing those routine mundane, repetitive monotonous tasks.
There's a deep hunger in the market to deliver those efficiencies and help organizations, in healthcare in particular, that are very razor thin margins to do more with less.
Automation really enables that. If you think the macro level, the healthcare industry is a $3 trillion industry, but studies have found that there's $500 billion in waste associated with medical billing and insurance.
To us, that's unacceptable. We have to do better as a country. And so that's where we said there's a massive opportunity to improve healthcare, to deliver value and to drive down the spend that's occurring in US healthcare today.
That’s great because it truly paints the picture of the problem you're solving and what would compel a risk-averse organization to take a look at a new entry into the market, and I think that's really awesome. Let's talk a little bit about things that have developed in the company in the last year since your recent funding. That's a transformative opportunity in the life of a young company, and it'd be great to understand about the fundraising and how you've put that money to work.
Yeah, I appreciate you asking. And we are first very humbled and feel a deep sense of gratitude for the good fortune that we've had as a company, thanks to our hard work and the way we've been received in the market. One of the testaments to that has been the confidence that investors have had in backing us and going through different fundraisers. In our short tenure, we had gone through our series C fundraise. That’s enabled us to pour gas on the fire and invest in doing more of what we're doing.
We had demonstrated successfully that we have product market fit a deep level of interest in the market, people that are seeing this as a problem. We had demonstrated that we can achieve real ROI and we can deliver value to these customers. So much so that we had several of our early customers were organically coming to us and saying, we want more of this. Can you do this in other tangential spaces?
That’s an exciting measure of what the opportunity is for us to grow and scale into, and the capital from our series B enabled us to say, let's continue hiring top notch resources, world class talents across all domains in the company.
I reflect back on the last year, it has been an amazing and massive year for us in terms of growth on all levels.
From an employee basis, we quadrupled in size. We went from 50 employees to over 200 employees and that is incredibly exciting. It's also, in an honest moment, it's challenging.
The vast majority of that has been all remote. We've embraced a fully distributed model. We have people from across the country that we're bringing on board. And so we've been able to invest in how do we make positive onboarding experiences, how do we ensure that we have a good pulse on employee satisfaction, what they find value from
Just a week and a half ago, we achieved a very exciting milestone of being selected as one of the top employers for startups in the country by Forbes. Of course, we were thrilled. That is something we take a lot of pride in and as your audience knows, growing so quickly is not an easy task. And we're really proud of what we have been able to accomplish in the last year.
Yeah. Especially in the wake of the great resignation. People are reevaluating what's important to them in their work and work life balance and how they want to move through life. I think that is a great testimony to what you're doing.
And I'll just build on that. I think one of the things that is special about this space we're in is, as difficult as it can be to sell into this space, to market into this space, so many of our employees, 100% of them, attach to the mission of healthcare. And that is a big part of why we built this company. Can we make healthcare better?
I think it's no secret around the country that there's room for improvement. And when you have that deep alignment in the mission of healthcare and improving healthcare, along with solving very challenging problems, you attract a really phenomenal talent pool. We have been very fortunate that people continue to lean into our mission and support us in delivering on that vision.
Yeah. I can say that in the agency business, when my clients are improving lives of real people, it seems to be a lot more interesting and compelling to work on. Our healthcare clients are among the most compelling that we have, so I can certainly understand that.
I also understand that with this funding, some things have changed. One of them was you have a new marketing leader, new CMO. What's the mandate for a new CMO at AKASA? What is his job really about?
Yeah. As a part of our growth over the last year, I mentioned some of the total employee numbers, but a part of that has been being very thoughtful and strategic in hiring in really talented executives that can help us raise the bar.
Our chief marketing officer is a significant investment that we've made. I think we collectively recognize that marketing is such a critical element to establishing a brand externally, establishing a meaningful brand with our employees internally, generating a top of funnel at interests and activities that ultimately supports our growth as a company, and then helping us to translate the impact we're having on organizations and showcase that externally.
We felt that this is a very important thing to over rotate into marketing, and our CMO is coming in charged with helping to up-level us as a company--to give us a brand feeling that feels aligned with how we've grown as a company that can showcase the important work that we're doing.
I'll say one of the natural challenges that exist in this space we're in is, there are a lot of organizations, companies, that talk about AI or automation in many ways. Those are buzzwords.
We are very fortunate to have real experts in the space that are out of Silicon Valley, that have been doing this with the most prestigious engineering companies for the last 10, 20 years. And so we take real pride in having very resilient automation that handles and navigates complex scenarios like healthcare operations.
A big part of what we need to do is help to educate the market, help them to understand what the different forms of automation are and how they evaluate it.
Our marketing department is supporting that effort significantly.
How do we think about our messaging? How do we think about our approach, our digital presence, our presence at in-person events?
So we're thrilled to have him on board. And I partner very closely with him to think about that tight connection between marketing and sales and how do we grow together.
Is it fair to say that a lot of the early sales success was what you call founder-led sales?
I think that there was a lot of early momentum that we got from the founders being there, delivering the message, really thinking about where it went, leveraging our own networks, leveraging our investor and advisor networks. And if I'm taking a moment to give us a pat on the back, I think we did a very good job of that.
But that only scales to a certain degree. And now we have the challenge that any enterprise SaaS company (any company, quite frankly) that reaches certain milestones has, which is how do we scale this? How do we become predictable, repeatable, scalable?
And the investments we've made in building out our sales functions. So not only the number of account executives that we have or sales development representatives we have, but sales operations, sales training. Some of those softer side pieces of sales. Similarly in the marketing side, making sure we have great product marketing, events marketing, our communications team being exceptional. All of those are very much acknowledgements of what it takes to go to the next level.
I think one of the things that's incredibly exciting that we've been working on over the last six months is trying to perfect what our sales playbook looks like, what our growth playbook looks like. How do we define the customer journey along the way, and how do we really engage them at points where they are ready to take action.
That's very exciting. And you explained it in a really concise and useful way, that when you get to a certain point, you can't just tap your network anymore. And if you want to scale, you've made promises in order to get the financing. That's part of the deal. So now you have to make good on the commitments. And so you're a year out, how are you tracking on the commitments that you made to get the money?
We've been really doing exceptionally well—we’ve grown every quarter. Our third and fourth quarters were, when you combine them, larger than what we have achieved in total previously.
So, the wind is behind our sails. We feel really good about the efforts that we've been making, and yet we are diagnosing how we can get better.
When it comes to sales, it’s about creating repeatable and scalable processes. It is about drilling down into each and every element of that buyer's journey and determining where we can be more effective, where we can streamline things, where we can leverage data to do a better job of that.
I would give us a high grade on what we've accomplished thus far. I'd also say that we have very high standards on where we need to go to continue with that momentum.
That's awesome. I want to dig down a little bit on the role of marketing in the company. You talked about top of funnel. Is this really a demand generation and account based marketing approach? Because when we look at the website, it's not huge on what we would call traditional lead generation, although there's some of that in there. So if you were looking at the three or four main functions of marketing building brand and demand lead generation, where would you say the balance is on?
Yeah, you're talking to someone with a revenue target over their head. So I'm almost always going to be aligned with how we can drive more leads. But we have been really thoughtful and deliberate as a company and recognizing the importance for establishing and evolving our brand over time.
One of the things that I know having come from organizations that had well established brands. When I go around healthcare and I talk about The Advisory Board Company, there is a kind of a gravitas to that. People have respected that name for years, and we aspired AKASA to have that same type of reaction--where folks know that they can turn to us and we are the go-to expert for delivering value in this space, that we are trusted advisors. And a big part of that is based on our brand, our content, our thought leadership.
It is also supported by the tremendous results that we're delivering, the references that we have, the industry presence that we have. And so those are all investments that we're making. When it comes to the top of funnel and demand generation, we are layering in lots of sophisticated investments into that space too, to help us.
Where do we allocate our dollars? How are we doing AB testing?
We’re also experimenting with account based marketing that is trying to support organizations in recognizing when they have a need, and that AKASA is one of the go to resources they should be thinking about for addressing that automation need.
I'm not sure that I would be able to give you an exact kind of percentage as to how we allocate them. But I think in today's environment, most enterprise growth organization, enterprise sales, SaaS organizations need to count on investing in each and every one of those areas in order to maximize what your outcomes are going to be.
So, revenue target over your head, you have to help me with lead generation, revenue target, long term. I need to build my brand. And I've got a few thousand organizations that might be able to buy from me. So you need to do account based marketing and really understand my top opportunities and make sure we're in front of those people at the right time.
You've nailed it, 100%. Every single one of those is so important. And it is part of the reason that we made sure to invest in a chief marketing officer with a ton of experience in the industry and other industries. I think there's historically been a misconception that marketing's job is to provide air cover. There are elements of that, but each and every one of those facets that we just discussed is so critically important for us and any company that aspires to grow.
That's great. I'd love to switch gears a little bit, if that's okay. I think we really covered that well. But one of the things we talked about before starting the podcast today was, so the idea of offering advice to people who might have an idea, and they want to go to market--go from one role to another.
In your case, you were in a consulting or advisory role (if I understand it correctly) with your clients. And you made the leap to becoming a software entrepreneur, which is no small leap. And I'm wondering how you and your co-founders made that leap?
Do you have any advice for people that are on the corporate side, looking at that possibility? Because I think it's having deep expertise and being respected as an advisor in a corporate role and then moving to a software entrepreneur space. That's something of a jump and I’d love your feedback on that.
Yeah, it is. Anytime anyone endeavors to start something from scratch, it's a huge leap. It's a big risk. And, for me, I had the benefit of, while I spent the better part of my career doing consulting in an advisory capacity, part of that was my company and the industry had technologies that supported that.
I interacted very closely with technologies, with implementations, and with SaaS based solutions. So I had a ton of exposure, had a deep understanding of what presence those had in the healthcare market today. And I was able to lean on some of that experience previously.
My co-founders come from backgrounds of having been and developed technologies. So we have some gifted engineers who have been there from the early stages of companies, people who have built and sold companies, and then people with deep healthcare venture capital experience.
The four of us came together and here's a couple things that I would offer. Number one, we spent the better part of a year pressure testing our ideas. We were spending time conceptualizing, visualizing, coming up with what is the market we want to pursue? What is our vision for the product? What problem does it solve?
We then had early-stage conversations to determine if there was an appetite for it. That helped us to tweak, iterate and evolve. Ultimately then we said, we think we have something here. I mentioned the risk and how this is scary. I was in a comfortable, a successful position, and to leave that, we all acknowledge that we had to de-risk this as much as possible. And that starts with making sure you have a deep understanding of the market, developing an early concept of the product, having a customer or two on board. We did.
And then we also had a good fortune of being able to secure venture capital, which helped us to say, we can pursue this. At every stage of growth capital investors are looking and measuring milestones and saying, has risk been removed and has upside been created?
As we went through that series A investors said, they’ve accomplished a lot, and we want to help them to grow more.”
Series B, same thing. It's fun, and it's exciting.
There are personal things associated with it as well that we all thought through amongst myself and my co-founders.
Three of us have gotten engaged in that period since we started, two of us have gotten married, two of us have had children.
And all the while I think we said AKASA, is our baby. And it's been just a really fun, rewarding experience. I would never change it. I am so excited about what we've accomplished. There is so much more and our kind of unwavering philosophy is, treat it like it's day zero. We still have so much more that we need to accomplish.
That's really interesting and exciting. And I think there's one little thing I just want to go back at, because I think it's really important. The team had experiences that were really important toward having a good initial year or two. So the experience building venture backed companies, the reach into the community to attract investment--it wasn't like it was everybody's first time doing all of these things.
Yeah. And we were very complimentary in nature. I have remarked that there are countless references to the concept of founder dating, getting to know your co-founders. No one should enter that process lightly. You really want to not only think through the business model and where you're going to go, but also get a sense for are you all going to work well together? Are you going to complement each other well? Because there's difficult decisions and situations that are ahead and you have to be able to go through them together and grow together.
Founder dating. I think that's the first time I've heard that.
I will share that elements of what we did, it was long distance founder dating. I lived in a different area, but it gave us ultimately the confidence to say, we've got something here and let's pursue it, full heartedly.
Yeah. And I think we've all seen into companies where the founders weren't compatible enough. So that's a bummer.
It's hard and it's very difficult to predict. I feel very fortunate that we have come together and we've really gelled as we've grown.
I think that's a great place to land the podcast. This was really revealing and interesting conversation. If let's want to learn more about your company or be in touch, how can they do those things?
They can visit us on our website where we have a ton of information about what it is that we do. Some of the news and press releases about our growth. All of that is there. Certainly visit our LinkedIn. That is where so much of, I think, the professional world is getting their updates these days. And so we release a lot of our progress along the way, via that stream. Outside of that, if they want to directly ask a question there's opportunities for getting demos at the website, or if they write us at firstname.lastname@example.org, we'd be happy to respond to any inquiries.
Thanks so much, really appreciate it. And to folks listening, if you found this episode of interest please subscribe to us wherever you get your podcasts. And we'll be out with another episode very soon. Thanks so very much, Ben. That was awesome.
Ken, thank you. Pleasure to be here.
Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at www.austinlawrence.com. You can email Ken Lempit at email@example.com about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.