Hint: Building Customer Trust as an Early-Stage SaaS Startup
Zak Holdsworth is the co-founder and CEO of Hint Health, a membership management, billing, and payment software for primary care, urgent care, and specialty practices.
In 2014, Zak and his co-founder Graham set out to transform the US healthcare system. They were both frustrated with the cost of healthcare and believed they could make a difference.
They decided to build software to help direct primary care practices. Despite both of them lacking experience in healthcare, they jumped right in and hit the ground running.
Within 30 days, they attended an industry event, talked to potential customers, started building a product, and got their first paying customer.
And a few months later, they closed their first 10 paying customers.
Today, Hint Health has around 1,000 customers, is close to hitting 8-figures in annual recurring revenue (ARR), and has raised $64 million in funding.
But looking back now, Zak says that if he could go back, he would spend more time researching customers and their problems instead of moving as fast as they did.
We talk about the lessons he's learned over the last 8 years and how he'd do things differently.
We also talk about how they overcame challenges and objections their prospective customers had about relying on a startup to manage billing and payments for their healthcare practices.
It's a great conversation and I hope you enjoy it.
Click to view transcriptClick to hide transcriptIn this episode, I talked to Zak Holdsworth, the co-founder and CEO of Hint Health, a membership management, billing and payment software for primary care, urgent care, and specialty practices.
In 2014, Zak and his co-founder Graham set out to transform the US healthcare system. They were both frustrated with the cost of healthcare and believed they could make a difference. They decided to build software to help direct primary care practices.
Despite both of them lacking experience in health care they jumped right in and hit the ground running within 30 days. They had attended an industry event, talked to potential customers, started building a product, and got their first paying customer, and a few months later, they closed their first 10 paying customers.
Today, Hint Health has around a thousand customers. Is close to hitting 8 figures in annual recurring revenue and has raised $64M in funding. But looking back now, Zak says that if he could go back, he would spend more time researching customers and their problems instead of moving as fast as they did. We talk about the lessons he's learned over the last eight years. And how he'd do things differently.
We also talk about how they overcame challenges and objections their prospective customers had about relying on a startup to manage billing and payments for their healthcare practices. It's a great conversation and I hope you enjoy it.
Zak, welcome to the show.
[00:01:49] Zak: Thanks for having me. [00:01:50] Omer: Do you have a quote, something that inspires or motivates you that you can share with us? [00:01:54] Zak: Yeah, I'll say one of my favorite quotes is Luck is, I think it's Seneca, it's “Luck is what happens when preparation meets opportunity”. And I, and I sort of believe that to be quite, quite true. I think a lot of in life, a lot of people's success comes down to luck, but, the important thing is you've gotta realize that and pounce, right? You've gotta be prepared and like take advantage of it when it happens. [00:02:16] Omer: Tell us about Hint Health. What does the product do? Who's it for, and what's the main problem you are helping to solve? [00:02:22] Zak: Yeah, so we, we serve a rural healthcare company. We serve a community of doctors that are basically stepping outside the insurance fee for service infrastructure in the US healthcare system and going direct to either patients directly or actually direct contracting with employers. So, you know, we, we can talk about why we do that, but the high level is this is how we think we can transform the healthcare system and make it better.And what we do for these customers, we did their billing system, so their membership management and billing and payments. So we are handling, you know, half a billion plus of payments through. Across, you know, close to a thousand customers.
[00:02:58] Omer: Great. And can you give us a sense of the size of the business? Where are you in terms of revenue, size of the team, customers? [00:03:04] Zak: Yeah, so I was mentioned around about a, just slightly side of a thousand customers. That's representing, you know, three-quarters of million lives across a few thousand doctors. Processing on, in terms of payments, you know, half a billion more plus through the platform. We're about 35 people. About 40 people actually now. And we are close to eight figures in revenue. [00:03:24] Omer: And I think in, in terms of funding. You, you guys have raised, what about six? Is it 64 million so far? [00:03:30] Zak: It's about 60, yeah, about 60 total across. Four rounds. So let's start with the idea for this business.Where did it come from? Do you have a background in healthcare? I didn't have a background in healthcare until the company before this, where I was at about three years. I'd always been interested in healthcare. But more from a kinda personal human performance or personal health perspective. But my experience at this last company really opened my eyes to how broken the system was.
And my favorite quote is, it's like we're wasting about NASA, about a trillion dollars a year. And healthcare in US, which is NASA's budget since its inception. And it's NASA's done a lot of cool stuff. That's a lot of money. And, and that's every year it's wasted. And we are not getting a good deal either, right?
It's 20% of GDP and it's half as good as a lot of other modern economies in terms of what you'd consider like quality or whatever. And so when me and my co-founder, we met at the last company and we thought, Okay, let's go off and do something that we think could fundamentally transform this problem. And so we spent a bunch of time, like two or three months looking at, you know, half a dozen or more ideas, trying to figure out like what are things that in theory at scale could fundamentally transform the US healthcare system?
And the rubric we were using was there was a few kind of intersecting Venn diagrams. One of the Venn diagrams was, okay if everything, if everyone in America had access to this innovation, would it address that trillion-dollar problem? Right. Would it actually change the system versus would it just be incremental innovation? Doesn't really change anything. It just shifts money around. So that was the first kind of circle in the ven diagram. The second circle was we wanna build technology cuz we were kind of technologists and wanna do a tech startup. And so that was kind of a part of that rubric. And the third one was, we want to be able to do something that we could move pretty quickly on and get into market fast, right? We didn't want to have a business where it was like, Hey, we're gonna do a bunch of stuff and then in the future we'll make some money. We wanted to make money day one or maybe not necessarily day one, but like pretty fast. And that was kind of the, how we were thinking about things.
And I potentially in hindsight maybe changed some of that thinking, but we, that's where we landed and okay, let's build this billing infrastructure. There's a community of doctors that are stepping outside the broken system and redesigning it from first principles. Let's build software that they're currently using spreadsheets to handle their payments and things. So that's where we started.
[00:05:59] Omer: I mean, any, anybody who's an entrepreneur, certainly in the US knows from, you know, how, how difficult healthcare becomes when once you leave a full-time job and, and have to go and get it yourself. And the same thing happened for me when I, when I was you know, working at Microsoft, I didn't care about the healthcare thing.It was all taken care of. And then once I'm on my own, it was like, okay, well one option is like paying like, you know, $20,000 a year and a huge deductible and then you can get some healthcare. Or the other option was like, well, what if you didn't have anything? And you just pay out of pocket. And then, you know, in the last few years I've sort of discovered this in between where, oh, there are these, you know, these doctors and these primary care providers who are going direct to patients and build this different model.
But it's still a very niche market. And you know, as you, you, you and I were talking earlier, it's, it's one that's growing. But why did you pick this in terms of, so you found a problem that you could solve? But it's, it's, I'm, I'm sure you know, seven, eight years ago it was even, you know, much more smaller.
[00:07:09] Zak: More niche. With this business, we truly, both my co-founder and I, which we truly were like, we're not, we're either gonna do something that could transform the entire system from first principles and like fix the problem. Or we are gonna not go do healthcare like, let's go do something else. You know, I agree with lots of other interests, but the, the, and the way I tend to think about it is that I think the healthcare system is so broken that you can't, you simply not possible to fix it by just adding stuff to the current system, like innovative, that kind of incremental innovation on top of the current system.And so we knew it was gonna be hard, but we also saw a clear path. It's like it's about eight years in now and the path is still the same. I still see the same path. It's just like, Oh, this is gonna take a bit long than I thought it would. Which honestly, like if you're gonna try to redesign the system from first principles, you probably should have realized you're standing up for a multi-decade thing.
And if you're not down for that, don't do that. Right. Like, that's, that's a long time to be grinding. And so it really just came down to, I couldn't see. Still to this day, can't see another path that fundamentally transforms with healthcare. And that doesn't involve redesigning from first principles, fixing primary care, stepping outside of the status quo, kind of chassis fee service infrastructure, and like all of the legacy things that don't work and we know don't work.
And so we're still on the same path and still passionate about it, but it's just a long journey. You know, it's, it's not, it's not, we're not necessarily in the, in a, in a market where hyper-growth, right, is possible. At least right now. I think it is possible at some point, but it's not a typical like venture-backed path. And we kind of knew that a little bit going into it, honestly.
[00:08:59] Omer: So how did you get, get started? So you've, you've identified a market, you think that there's a, a good problem and an opportunity for you guys. , what did you do? Did you, did you spend a bunch of time going deeper into that and, and trying to validate the idea? Did you start building a product? [00:09:20] Zak: It was interesting once we kind of identified this community of doctors that we thought, Okay, this could be almost like, the way I tend to think about it is the, the sand with which the pearl will form around with which we could then start to transform the broader healthcare system.And we are still on the forming the pearl phase, by the way. . But once we had identified that and we thought this actually could be it, right? And everyone's gonna think we're crazy and it's totally non-consensus and whatever else. Once we had like committed, Hey, let's do something here. We actually moved like lightning, right?
We went first conference in this movement. We, we pretty quickly identified within a matter of weeks, like cold, hardcore, cold calling, networking, flying around the country, you know, some early prospects. And then we started identifying a problem. My co-founder actually started coding stuff. Like, he was like, I'm gonna start building something cuz we roughly know what, which direction we're gonna hit in.
And I started trying to close people on the promise of, hey, a product in the next few weeks. Right? So we actually generate within about 30 days. We had, we, our first revenue after we decided this is the thing, right? You can do a lot in 30 days with a solid engineer and a solid salesperson that knows how to get stuff done.
So we generated our first revenue and had our first paying customer and our first user. And and. If anything, like the learning, one of the learnings I would have is if anything basically went too fast. In hindsight, I probably would in hindsight's always 2020, and maybe it wouldn't have worked out for the better, but if I had to go back and do things differently, I would probably have spent more time researching the customer and the problem, than we did.
I probably maybe even gone in and worked in the, off the, the doctor's office and for free. Right? Hey, I'll be your admin for three weeks. Right? I'm, I'm gonna go and like, sit, really sit down and study the problem, versus just like striking, like night striking, like lightning on day one and just starting to build and sell and get something in market.
[00:11:20] Omer: I wanna dig into that a little bit more because most founders would be super happy if in 30 days they've got their first paying customer. And so people might look at your story and say, Yeah, Zak's saying that, but it worked out okay for him not going deeper and taking his time. So can, can you, can you just help us understand why you, you say that now, what problems did you have to deal with because you didn't spend more time going deeper? [00:11:49] Zak: This is. 60/ 40 thing. I'm not a hundred percent sure this would've, it would've been better to spend more time. It's more like I think it would've if I was given another shot. But I'd say the reason, the fundamental reason why is because generally speaking, when you are early in building software and technology, it's real, everything's like relatively easy. It's like relatively easy to stand up a product if it's a simple surf. Not a large surface area. And it's real, you know, if you don't have any constraints, right? Like, it's like we can come do anything and build anything for anyone, right? If you, if you keep the surface area low because you're able to move so quickly, you can also move quickly, kind of, if slightly in the wrong direction.Versus later once you have customers and revenue and, and momentum and infrastructure and whatever else you put in place, the cost of changes actually goes up more and more and more over time. So if that, that initial path you're on is like a little bit off, you end up spending quite a bit of time later on fixing the things that would've been relatively easy to figure out if you just spent a little bit more time thinking about it.
Now, the, so it's really just, maybe I'll try to summarize this. It's, it's sort of a trade-off thing, right? You're trading off speed right now for, kind of think of it as like product debt later. And that might be the right trade-off in, in the early days, that speed equated to, okay, we know there's a problem cuz people are paying us, right?
And they're using it. So we've got some insights there and there's value there. But I think if you are thinking about that trade-off, I think just know that it's not free. Going fast does have some downsides and they may be the right trade-off, but, but that downside is, is that your cost of fixing the stuff you got wrong cause you went too hard, fast is can be quite high later and if we had known all the things we knew, even six months for a year. I would say we'd maybe be potentially two years further along from a product perspective. Right? Cause you have to take all that baggage with you through the journey.
[00:13:55] Omer: Yeah, because if you, if you don't understand the problem deeply enough, then you may make decisions in, in terms of the way you build the product, as you said, it's gonna cause, you know, product debt later on.And then also when you have a smaller set of customers, you're gonna get requirements, which might sound like a good idea until you realized, you just built a custom product for one customer.
[00:14:16] Zak: And customers never know what they want. Right? They think they know what they want, but you know, the classic, you know, if you ask someone what want, you'll be a bit of horse riding a carriage. Right? And honestly, like, I actually think we could have learned a lot by just, Hey, I'll be a free admin working in you for your thing. Let us, like, we'll work for you for. And you know, for a month like that, that would've been so much more versus like, Hey, what's the problem?Oh, yeah. Right now, like, I'm using a spreadsheet, it's been, bit of manual. So if heard, look at their spreadsheet and then we're like, Oh, we can automate that. And so you automate the broken process they had versus like, what is the fundamental problem that you're trying to solve? And like, I'm gonna solve it for you so I can really understand it authentically and really truly understand the underlying problems that surface into the broken spreadsheet you have.
And that would be, I think just, But there's a trade-off. Like you can't do that for two years, right? Cause you're not gonna build a business. Doing, you know, more than one day where it's like, let's just start coding something is probably also the, the other extreme where it's like, you know what, maybe, maybe, maybe you go a bit slower. Right?
[00:15:25] Omer: Yeah. How long did first Customer in 30 days, how long did it take you to get to the, the mythical first 10 customers? [00:15:33] Zak: I'd say it was, you know, first 10 customers. You know, paying us something is probably, probably like three months or something. 3, 3, 4 months. It's a little bit too far away for me to remember, but, but I'd say we, we, we, we, yeah. I'd say it's probably a few months, right? A quarter or something. But again, like they weren't paying us tons of, they weren't paying us tons of money either. Our first customers, we actually had them on a percentage of transactions through the platform products, so they didn't even have to pay us any money out of pocket up front.Which we changed at some point, but, but yeah, it was, can be somewhat a little bit hard to define what your first customer is cuz then maybe they're just kicking the tires cuz didn't have to actually sign a contract or anything. It was all clickwrap.
[00:16:20] Omer: Got it. So, so basically you were giving the product for free to start using it. And then there were kind of, there was a commission transactional, whatever money they made. Then you made some money. So that, I guess that reduces some of the friction in terms of getting people onboarded. [00:16:37] Zak: Yeah. But that was sort of the, this kind of the business model that we put in place on day one. But the first, first customers, there was a couple, we actually went into their offices and they were like, Oh yeah, I'm about to spend $20,000 customizing the Salesforce implementation so they don't use a spreadsheet or whatever. And those customers, I actually said, Hey, pay me the, pay me 15,000 and I'll custom build it for you from scratch.But so you actually, the first month I had $20,000, you know, contract, but it wasn't like recurring or anything. It was just like, will you pay me 20,000 to do this for you? And like another one was like 15,000 or something. They were in like SaaS recurring. It was more thinking as almost like consulting projects.
And with a view that, hey, and we'll put eventually we'll put you on our recurring revenue thing later, or if you're happy with a product. And, and that, and, but then once we started going down a path, then we, we started with, Hey, put all your payments through Hint, and then we'll just take 1% of all that and there's no upfront fee.
And so yeah, there's a little bit less friction, but typically what we'd do is we'd try to sell them on, Hey, but part of this deal is we're gonna move all your patients to right onto a platform. So we'd kind of, we tried to validate that there was intention around that, so it wasn't just a bunch of tie-kickers, which is not a great thing for a sales company.
[00:17:57] Omer: What was the hardest thing about getting those first 10 customers to say yes? So you, you took away kind of like the pricing objection. I'm sure there were, you know, I, I imagine that these kinds of practices, there's a whole bunch of issues around privacy and HIPAA compliance that they. , you know, have to, to worry about and, and then potentially working with a startup where they don't really know, there isn't a kind of a track record.Maybe not as hard as selling to an enterprise customer, but I'm sure there was still some element of that. So was it mainly those kinds of issues or, or were there any other problems that you had in terms of convincing these people to say yes.
[00:18:43] Zak: Yeah. All the stuff you mentioned was all true. You know, new people, like who are you? You're not even like, never heard of you before. What do you know about our problems and all that stuff, right? And actually one of the ways I would, the, the, the way around most of that was we are committed selling. What? Why you do it, not what you do. Right? I can't remember who it was, it said that I'm quoting but it was very much, and this is still the case today, vision. Like we believe that you are the, you are the solution to this problem. We want to help support you. We, we are very much aligned with you in terms of your mission, and we want to work alongside you in achieving this mission, right? And so that is was the sales process.And then like, Oh yeah, we do some building stuff, right? So that was how around lot of the objection and none of that was through cold calling. It's like, Hey, we're entrepreneurs and we're looking to support this community. Right? And they're like, Oh, wow, that's weird. Like there's 80 of us. And we're like, Yeah, we know, but we still exaggerating a little bit, but like, you know, that, that, so that was it.
But I'd say that the more hard objections beyond that stuff was really, I'd say two things. First was, Gosh, that seems like a lot of work to migrate all my things into your product, right? Like, I don't even know where to start with that. It's like payment information. So membership information, it's stored in multiple different places, blah, blah, blah.
Right? So that one's one piece. And the other piece was I'm, if I, if I don't get my payments next month, cause you fail, I will go out of business. Right? So yes, your software helps automate all these different things. My current process is broken, but it's not so broken that I'm gonna not, I'm gonna go to business next one.
So you guys, this new company, if this doesn't work and I miss a payroll, I'm done. And these are, those are two big fundamental problems. So the way we got through the first objection was we'll do it for free. We all data might get everything for free for you. And actually, we still do that today. We've just got very good at it.
But in the beginning, it was a nightmare. I was like, Oh my gosh, this isn't scalable. But we started to see, okay, well there are some patterns here. And actually you get pretty good at it and like once you've done it 10 times and it gets easy kind of thing. So that was how we got through that objection.
People were like, Oh, okay. Cool. The second piece was, hard honestly. And literally in the early days. I remember one of our first customers, a guy called Dr. Rob, he told me this story and I said, Doctor Rob, if you miss payroll, I will personally guarantee that I'll pay your bills. Oh, I will pay you whatever money out of my personal pocket that if we screw up.
And he went, Oh, okay, cool. Let's get started then . And, and then I was like, Oh, shit, he said, yes really like Graham, let's not screw this up. So I was probably putting about 20k on the, on the, on the line, which is like a lot to a founder, but also I'm like, You know what? I'm 99% sure that we're gonna get this done, especially if there's 20 count on the line.
And so it was just a risk I was willing to take. And then that problem over time went away, right? If you've done it enough times, you got enough use cases, enough case studies, and enough trust that you've built in the community, that second problem went away and we still continue to solve the first problem.
[00:22:06] Omer: Great. So that gets you to the first 10 customers. Did you raise any money at that point or were you bootstrapping up to the first 10. [00:22:18] Zak: Yeah, we, we raised money pretty quickly. Once we kind of started onboarding customers, we started realizing, gosh, we probably should, you know, get another engineer and, you know, maybe hire someone and customer support cause Zak's gonna be doing lots of product and sales work. And so we were like, Yeah, we, we don't want to put our own personal finances on the line. Cause we're definitely way off from having the revenue needed, especially with our sort of premium model, right? Where it's, you scale with these clinics that they grow.So we, yeah, we went down the path of fundraising and what was really interesting is that I found the first round of financing was and I'd say generally the first year of our company I found relatively easy. Like everything seemed to be easy. It was like, okay, got our first revenue pretty easy. We got a product in the market. It seemed pretty easy.
Fundraising you know, bunch of people that we'd worked with before or that really loved the vision or whatever. And we were able to get a round done quite quickly. And it was a, you know, initially, I did 250k and then we went, ended up expanding that to like 1.3 million. And there's a few tricks I played along the way, but, but the high level was, I found that first money was the easiest money, which was actually a little bit of a trap for me later because I thought it would always be easy, which obviously was probably just not a smart thing to think. But but, but yeah, we, so, and then we started hiring people. You know, scale the team out.
[00:23:50] Omer: Yeah. So you've gone through like four funding rounds and I think a lot of people think, God, if I can just raise that first round or my angel round, I'm gonna be good. And you were saying like, Yeah, I've got to like raising like over 60 million and it keeps getting harder and harder. [00:24:04] Zak: Yeah, it's not easier. The running of the business is not easier. Like, you know, some stuff gets easier obviously, but as a general rule, Gets, I found it harder and harder to fundraise. Like the bar goes up, right? The, when you have no metrics, that's actually an advantage. Cause it's just like, Hey, we're smart, smart team and we've got a big vision and whatever.And like, look at our other investors, like clearly they know what they're doing and so you get, build momentum and you can actually play some tricks. Like one of the tricks, I, it was not a trick it was generating momentum is like, we got an interview to YC. And so I was talking to a bunch of investors like, Hey, if we get into YC, the price is doubling.
And they're like, Okay, we'll just do it now before you get into YC and then we actually didn't get into YC, but we got the money and the price didn't go up, but I wasn't lying. It was all true. And they all, they knew what they were signing up for, but risk-adjusted. Yeah, like probably if they're getting an interview, they'll get in and so risk adjustment's the right move.
So small things like that. , you're sort of simulating momentum leaning on the, the moment, you know, the other smart angels and getting intros from them and just building that pipeline and just closing it really quickly. But what I found over time is, is that, you know, things started to get harder, right?
And I think for us, the fact that we were early in this nascent market caught up to us pretty quickly, right? We're, we're now it's like. You know, what's your growth rate? Yeah, it's still solid. We were in the early days, we're growing, you know, 80% a year or whatever, like, just like any other startup. Right?
Like really fast, but it's on a small banks. And so yeah, I just generally found like running the company got harder. You know, and fundraising got harder. I, I think, yeah. So maybe I'll pause there. But I think part of the thing I, Yeah, maybe before I pause, I think the trap I fell into is I assumed things would get easier, and it was easier at the beginning and I was like, I'm just gonna fly through this.
I'm a great founder. I'm gonna just keep dominating forever. But that was really a trap, like in a way, I wish the first round was brutally hard. It would've trained me and got me ready for the, It's always gonna be like that. I've pitched one of a thousand investors in this company, you know, to get that money. 1000.
[00:26:29] Omer: You pitched to a thousand investors to get which money? Like through the process? [00:26:34] Zak: Yeah. Over the lifetime of the company, I've pitched a thousand investors. [00:26:38] Omer: Wow. [00:26:38] Zak: Some pitch might be a 15-minute thing, elevator pitch. Some might be a full partner meeting, the whole shebang. But I've had that many meetings. One with unique individual funds. ] [00:26:49] Omer: Because you would, you would think once you've started to raise that angel round or the first round, you don't even have to have a few conversations cuz you're building a track record or in credibility and whatever. So what, what was going on? Why, why did that happen? [00:27:01] Zak: Yeah. I'd say that at a fundamental level, you know, this is saying like, doesn't matter. If you are right on, if you're right, but your timing is wrong. That's the same as being wrong, right? At least right now. Like you could still be right later, but right now you're wrong cuz your timing's wrong. And so, . And so what, what I think the thing we were that made it really hard for us is total address for market is not big enough.And venture investors, even though if you look at most of the big iconic, you know, a hundred plus billion dollar companies, they all started with no markets that they created, blah, blah, blah. Like even with all of that you know, if, if the, the total addressable market that you're targeting is not big enough, then investors that it's hard to convince them to give you money.
Now, the way that's manifested itself in this business is I've got the money, but I've just had to get more dilution. But now what's interesting is we're coming around the corner. We sort of survived. Like one of the, one of the things I think is a, almost like an axiom, but they found the axiomatic truth is like the, the founders that will succeed on average.
Obviously, there's outliers where there's people that just dominate and create a hundred billion company in four years or whatever. That's like, most companies aren't that. But if you take the rest of that sort of bell curve outcomes, the ones that end up in the upper quadrant are the ones that don't give up.
Don't die. Right? Don't be a zero if you can stick around long enough. Now, there, there are counter-arguments, this like, well, if you're doing the wrong thing, maybe you should kill what you're doing. Purposefully, but if you want to, if you believe in what you're doing and you want to get there, don't give up at any cost and just keep grinding.
And that's what we've done at Hint. And I'd say the, the way that that sort of market size problem has manifested itself. Because I believe we are right, Right. We were just very early. But the words manifest itself is we have less ownership in the business. But I'm okay with that cuz we are not about making money.
Like, yes, I wanna make money, but it's not the primary thing that drives me. Right. Oh, if we have a. Outcome of the size that I think is possible given the transformation that we think we can be part of driving. I'll be fine for money. Right. Probably won't have a billion dollars, but I don't need a billion dollars.
And, but if that's your goal, then I, I probably wouldn't do mission first. Right. And the thing you're doing, like if your goal is to make a billion dollars, don't follow my path. It's probably not the best way to do that.
[00:29:31] Omer: Yeah. Yeah. I have spoken to a serial entrepreneur who's, who's had several successful exits and, and I think he said something once, like, you know, like 5% of a billion dollar company is better than a hundred percent of a company making no money. Right. So that's, that's kind of also one piece to look at it, but it, it, it strikes me that what you said there, the thousand pitches to investors, the, the kind of drive to keep going, a lot of.Boils down to the mission. Now, a lot of the times when we talk about missions and vision statements and all that stuff, it's just a bunch of, you know, hand way wavy kind of stuff. That doesn't really mean that much. Yeah. But if you really are like, say, you know, you're kind of this business where you're like, Hey, I'm driven by really making a difference here.
That's going to give you a lot more endurance and stamina to keep going than I'm driven by building a, a SaaS business that makes money. Right? You probably go move on and do something else, right? Cause it's like, yeah, I can find a bigger market and, and the investors will love me.
[00:30:51] Zak: No, I'd say that's, that's, that's completely true. And, and that's, I'd say it's permeated throughout the organization, right? Like people join a big part of the reason people join us and is because of the vision and mission and it, we've actually got, we've even had to coin a term for people that have left Hint and come back. We call them the Hint boomerangs.Cause they're like, they'll, they'll leave, they'll see more shiny objects somewhere else, you know, leave. And then they'll realize shit like, Hint actually had meant something, It meant something to work at Hint. Right? We, we actually were changing the world, right. In our small way. And it was, and you know, we had a strong culture and it really built great community within our customer base and so on and so forth.
And so, yeah, if, if we didn't have mission, if we was like, I would've given up, you know, I can't remember how long I've been doing this, but it's like eight or nine years or whatever. I would've given up seven or eight years ago because it. Once it started getting hard, I would've said, You know what this is, this is maybe not the right thing.
The other, maybe you'd made a point earlier just in terms of, you know, the one that the gentleman had said, Hey, I'd rather have 5% of a billion dollars than a hundred percent of zero. Right. And I agree with that, obviously, but there's also a counter to it where some of the most successful entrepreneurs I know financially held 80 or 90% of a $30M business or $20M business. Yeah. 80% of 20 million is 16 million. I don't know what everyone's number is, but that's like, I don't need more than that personally. Right? And I, I personally don't have a desire to be able to say, Oh, I have a billion, I'm a founder that created a billion.
So the, I think that the, you know, maybe the point I make is, don't be trapped in as an entrepreneur. I think it's really important not to be trapped in like the, the Instagram post or the equivalent of, you know, social media where it's like everything looks perfect. Don't let that be the thing that drives you because you are not gonna be happy if that's what drives you.
Right. It's not, doesn't work. Right? Because you get to a billion and then there's a guy that's got 10 billion and you feel like a, a failure and epic failure cause it's an order of magnitude. You get the 10 billion and there's a guy with a hundred. And you're never gonna be happy if the, the number is what is driving you.
And, and so yeah, it's like what's the right path for you? It's like, it's financial independence is important. Great. Well you don't need to raise a lot of money necessarily to do that. But that could be the path as well. But with money comes from risks, you know, like there's some downside to money.
[00:33:30] Omer: Yeah. It reminds me of this episode of Frazier I saw years ago. Like, you know, Frazier and his brother Nile's there, that they get into this health club, it's this exclusive thing and they keep seeing this door that other people are going into and they're like, What is that? And like, Oh, that's the VIP thing.And then they just like, I just obsessed. Like all they want to do is figure out how they can get through that door. And that's what the whole episode is about. And you know, eventually, like, you know, they do a whole bunch of kind of shady things. They get through. And they think they're, you know, they're over the moon because they made it into the VIP area, and then they realize there's another door for another VIP section that they, it's kind of obsessive waste time about. So it's, it's the same thing, right? You're never gonna be happy if you're always chasing something like that.
[00:34:17] Zak: And once you get into the VIP section, it's not that, it's sometimes it's not as good cuz there's not that many people and you can't dance on the floor or whatever. It's like, you know, she, let's leave here and go back to the normal. We're actually, in hindsight, we're actually pretty content with. [00:34:33] Omer: Yeah, totally. So we talked about getting to the first 10 customers. Let's talk about the first hundred. Yeah. What did you do? Was it, was it still just a lot of hustle, cold calling meeting people? Or once you had the first 10 20, did you start to take a different approach to growing the business? [00:34:53] Zak: Yeah. I'd say the first hustle first hundred was, you know, still a lot of hustle, right? Like, and it was cold calling, networking and things like that. And, you know, you know, we did some content stuff. We, we were hosted webinars. We, you know, this is probably to post a hundred customers, but we launched our own conference, which was a, which we could talk about if his interest there.But I'd say, yeah, it was, it was, but it was leaning on. The nuance was that we're leaning on the success of and the word of mouth that we're staying to generate. Right. And some of the successes we were, we were building there.
[00:35:31] Omer: Yeah. Cuz every time you're, you're getting a customer on board, you, you're getting more and more social proof. Now, okay. So let's, so a hundred is a hustle. Let's talk about the first thousand. So the next kind of like level, I know one of the things. Focused a lot on was, was thought leadership. What does that mean? Was that, was that around content marketing? Was that around the event? Was it around something else? [00:36:00] Zak: I'm not even sure if we've cost a thousand yet. Right. I think we're close to it. Right? Cause one of the things that happened is our clients got bigger. So we started small, but as they grew, we grew with them and we started building cadence around larger and larger deals and built more features to support more sophisticated networks, things like that.So there was an element of, you know, our customer got larger, which is I think is important in SaaS. But in terms of kind of getting from that a hundred to a thousand auto magnitude for us it was primarily around increasing, ensuring we create a really amazing experience for our customers.
Really great customer support, really supporting them as many ways as we can. Really listening to like kind of what their core needs are and continue to support them. And and I'd say a lot of our business started pivoting to word of mouth and kind of inbound marketing, inbound referrals from either customers or partners.
And so I'll break, I'll break that down a little bit. One of the strategies we deployed is we started partnering with other tech vendors that were serving the same community. There weren't too many of them, but we built integrations with them and we'd go to market with them. So we all make, refer some business to you. You're a first in business to us. We're gonna do better together. You're an electronic medical record, we're a billing system. Let's you know, we'll refer leads to you and vice versa. So we got business from that, but we also got business because our customers had such a profound experience with the, with us, and they saw out this sort of authenticity we had with this market that they would start referring customers.
And so a lot, even today, a lot of our small to medium-size deals come inbound. So what we started to do is, okay, are there ways we can kind of amplify that, right? That sort of brand halo and trust and fierce loyalty? What are the things we can do to lean into that growth strategy? Cuz it's the main thing that's working.
And so we launched our first summit, which is an annual conference, and I invited you know about 120 people and about 120 people showed up, right? I probably maybe invited 50 people, but I personally reached out. I organized the speakers, I organized the venue. We got great food. We tried to do something unique and different.
I made it about the, I made it about the, this community and people, you know, signed up and they came and we actually sold out and had the fire code, reached the fire code. It was about a hundred people in the space for we, we breached it, essentially. We did stuff like that. We experimented with content marketing.
We would do like, we'd interview doctors and do blogs with them. We try, do you know the occasional webinar we would bring someone in that's got interesting insights? Eventually, we turn that into actually our DPC direct primary care accelerator program where it's actually a free service we give to our customers, where if you're part of our community, then you'll get free education and free content and free webinars.
And so that, that actually people talk about that and that becomes a way that people. Would come to us. And the other thing we did is we started experimenting with clients who would start to sustain to build networks. So we built features that labeled them to manage those networks on Hint. So there's actually an element of, kind of a network effect that happens with our product, where one doctor will actually invite another doctor.
I'd say that's not the main growth driver. What difference does it's a form of that referral pathway of an inbound lead that comes to us, develops that relationship with us, and then eventually converts to a customer. A lot of those strategies are still in play today. They're just bigger scale. So it's, it's, it's a lot the same stuff that was working. We just scaled it.
[00:39:40] Omer: Did you charge people to attend the event? [00:39:44] Zak: Yeah, we did. We charged our goal was, let's just break even. So I think in the first event shows like $150 or something to come and then if you didn't get a ticket early, it would be $250 or something like that. And I've always tried to keep that event affordable and we've never, the intentions never been a money maker.It's just been, let's break even on this. And our last event, we had, you know, 450 people or something post covid are actually hoping for. And people were paying anywhere from $350 – $550. And I anticipate that trend continuing, right? The costs will go up a little bit cuz we'll maybe go a little bit bigger, bring more people in, bring bigger keynotes. Cause I always try to bring some unique keynote and get more people to attend.
[00:40:28] Omer: And then is this mostly customers attending or are you trying to get this as a way to reach out to new potential customers as well? [00:40:36] Zak: I see this event as actually an industry event versus a user conference. And so it's more about what do we need to do as an industry to succeed. Right?It's more about the mission. Turns out that half the people at that conference, were our Hint customers. And it also turns out that about half the people in this industry are Hint customers, right? Maybe not exactly that, but it's roughly so in a sense it's an industry conference, but we have a lot of the industry and so, but we definitely use it as a way to, I found it very powerful from a sales perspective if you are in a conversation with someone, you invite them to the event and they have a good time, you meet them in person. Definitely helps close the deal.
It reinforces we are here to support this community. Right. My keynote is a big part of that site. It's like, this is why we exist. I always talk about our mission and why we exist and what we do and why we do it.
And that, that people, that resonates right with people. And then we also have prospects and we also have partners. So it's a way of making sponsoring. So if you wanna be part of our annual conference, you need to be a partner and you wanna be a partner. We need to figure out how to create value for this community together and what does that look like?
And so it's, it's a, it's a little bit of leverage as well around, Hey, If you wanna be part of this community, this conference, we need to figure out a way to work together in a way that creates value for people. So it becomes a BD driver as well. It actually turn away more sponsors from that conference than we accept, right?
As sponsorship, so we're turning away money because people want to be part of that community. So that, and so that's the mix, I guess.
[00:42:14] Omer: So one more thing I, I wanna talk about before we wrap up here. We, we talked about the, some of the challenges you had with investors and the total addressable market, and on the one hand, you've stayed true to that mission and you know, not kind of compromised or gone down a direction which maybe would have you know, giving you a faster growing business or a bigger, bigger total addressable market. But you have also tried to move horizontally into different areas, and that is something that you haven't been able to kind of figure out or crack. So can, can you just gimme an example of what you've tried there and, and what were some of the challenges that you faced? [00:43:03] Zak: Yeah, I'd say that the, you know where. We've got our core kind of direct primary care segment, and we've spoken, spoken a bunch about that, but there has been points in time where we've said, Okay, can we succeed in other segments but with a similar software? Like are there, you know, other verticals in healthcare that need like a membership management system?And that and could use our software cuz we built that. And there are, and we actually have a number of clients that have come to us saying, Hey, I'm not DPC but you know, I'm a membership-based thing. Can we work with you? And absolutely sure you can. Here's the software, we'll support you. What I've found is, is that, or if you employee direct contracting, you know, there's some other non-kind primary care segments that we support.
What I've found is in we thought, okay, well if there's some, if there's a few that are coming to us, maybe like, why don't we spend a bit of resource to scale that? Cuz you know, that could help fund our mission, right? If we get these other segments to pay us money. That what I've found is that the sort of, that, that sort of transition to new segments is you, you in a way, you almost, I think underestimate all the things you've done to have success in the segment that you're successful in.
And what I mean by that is it's like, okay, well if you're gonna go and so on to this other segment you either gotta build an outbound engine, which we have a semblance of, but it's not where most of our business comes from in our core segment. So we gotta either build out an outbound engine and all the sales enablement channels and collateral and everything that would speak to those personas and all that work.
That kind of sounds easy, but it's actually like real work. Or we have to go build the authentic, mission-driven community kind of inbound marketing referral engine that we've built in the community that we're successful in. And that's also hard and takes time. And so it's not to say we haven't had some success in other verticals in healthcare, it's just that, that they don't scale as easily as you would anticipate without all of the foundational work that goes into scaling them.
And if it's. The core focus of your business, the cost of dabbling there, maybe not necessarily with the, the, the juice that you squeeze from it. So that, that, that would probably be the learning there for us.
[00:45:25] Omer: And, and so is that something that you're still trying or testing in different areas or have you kind of just moved on from that? [00:45:34] Zak: I'd say we still are testing. I'd say that the testing though, more, you know, what we try to figure out is, okay, what is critical path long term? And are these segments part of that? Right? And if they are, what's the sequencing here? Or can we bring that sequencing forward a little bit or not? And you know, and is that, And so we're, and one example of this would be, we have you know, the small independent DPC clinics. We also have larger independent, direct primary care clinics and networks, and they primarily work with employers and there's a lot of similarity from a cultural perspective there. And so it's like, okay, we can serve both those communities or that. But then there's like this sort of next segment up, which is like, I don't really self-associate with direct primary care, but I am direct content with employers.I'm on like a near-site onsite clinic. So maybe I don't necessarily self-associate with, with this community, but I'm, I have at the end of the day the same long-term objective. And so we're, we're, we are paying more attention to that segment and trying to, cause we've got a bunch of features and capabilities that can serve that segment.
So we are, we are doing so with within the context of. This, this is, needs to be part of the solution long term cuz this is versus random segment that seems interesting is a way to make money. We try to put it on critical path so that we don't end up kind of stray too far from our from our sweet spot.
[00:47:07] Omer: Great. Okay. We should, we should wrap up, move on to the lightning round. I've got seven quick-fire questions for. Are you ready? [00:47:17] Zak: Yes. I think I'm ready. [00:47:22] Omer: What's the best piece of business advice you've ever received? [00:47:25] Zak: Focus, maniacal focus. [00:47:29] Omer: What book would you recommend to our audience and why? [00:47:31] Zak: I, in the early days of Hunt, I found Lean Analytics to be really helpful. And the reason I found it helpful is it really helped me think through how do you define, what, what are the key things we should care about from a metrics perspective.How and how do we measure them? And how do we, and how do we let's go of them when the time is right to let go of them, right? And, and the sort of sequencing of how do you measure, focus your energy in the right parts of your business to kind of get you to the next stage. So I found that book really helpful.
[00:48:04] Omer: What's one attribute or characteristic in your mind of a successful founder? [00:48:09] Zak: Build, build a culture that's authentic to you because it's too hard to fake. So if transparency's not a thing you're good at, naturally don't have it as a value. If it is, have it as a value. And so on and so forth.What's your favorite personal productivity tool or habit?
I, I should have a really good answer to this . But what I was gonna say was like, highly really amazing people. So you can delegate things, but that's cheat, that's cheating. That's not your question. I'd say it's . But I'd say that the, probably the one, the, my, my favorite one is probably like, you know, trait lists, you know, just, and if you, if you feel like you are not sure what the right direction is, sit down and just build a big, long list. And just that process by itself will help you clear your thoughts and, and triage.
[00:48:56] Omer: What's a new or crazy business idea you'd love to pursue if you had the time? [00:48:59] Zak: If I could do something now, I would consider jumping into creating more fuel, efficient transport, like flying transport. Like you have, you know, drones you can sit in and like get from go, you know, line of sight fully autonomously, like Uber basically Quadcopter Uber, right?That would be something I think is definitely gonna happen. So that would be something I would probably look at.
[00:49:27] Omer: I think I heard about something like that happening in, I think they were trying to do that in Dubai somewhere. Like passenger. [00:49:33] Zak: Yeah, that's, I think it's happening. Yeah. It's, it's, it's a, it's just a matter of time. And then you would solve a bunch of pretty interesting problems with that, like, you know, societal problems if that became mainstream. [00:49:46] Omer: What's an interesting or fun fact about you that most people don't know? [00:49:48] Zak: I was Mr. New Zealand. I was the most eligible bachelor in New Zealand in 2002. [00:49:56] Omer: Wow. What was that like? Like is that a, is that an event or a, or some magazine thing? [00:50:01] Zak: Yeah, like a magazine thing, kinda like an event. You know yeah, and, and like, and you, what's interesting about it is I think the reason I won is cuz it was the first year they had email voting and I was at uni and basically some, one of my friends submitted me to it. It went viral through the email list servers and like all of our, everyone at uni voted for me . [00:50:20] Omer: And finally, what's one of your most important passions outside of your work? [00:50:23] Zak: You know, a few years ago I would've said you know, kite surfing, adventure sports, like being out in the outdoors. And that's all still true, but, you know, it's a bit cheesy, but like, I have a lot of joy from my, I've got a young family, so I have two little girls.And just, you know, watching them grow and develop, it's like super fun. And then my, my third answer would be I love playing board games, right? And that like, I, I, I don't do it much. I'm actually looking forward to my girls being older, but I love like sitting down around table and playing like Risk or Katan or Chess or something, or cards or whatever. I just love that and I feel like that's somewhat been lost in today's day and age because everyone's on their machines. And something nice about the, the real world.
[00:51:05] Omer: I've been getting into board games with, with my family over the last few years as well. And it's, it's nice just to do that. So if we have a meet-up, I'll bring some board games with me. [00:51:14] Zak: Sounds good. [00:51:14] Omer: Awesome. If people wanna find out more about Hint, they can go to hint.com. And if people want to get in touch with you, what's the best way for them to do that? [00:51:23] Zak: Yeah, LinkedIn. You can hit me on LinkedIn or you can email me. You can email me z[at]hint[dot]com. If you want, but if you cold, email me though and try, there's a 50/50, I'll answer. You know, best way to get, find someone that knows me and asks for an intro and I pretty much never say no to intros. But I mostly just archive random cold emails. [00:51:45] Omer: Awesome. It's been a good conversation, man. Thank you for, for, for joining me and, and kind of talking about the last eight, nine years.I think there was some really interesting things that you shared that were very thoughtful. It's, it's, you know, it's, it's one of these interviews where I feel like I'm gonna go back and there's a bunch of things that I can kind of link, listen to and, and sort of think more about and kind of, kind of just maybe, maybe even kind of, you know, just write about it or something.
But there's some, some really interesting lessons there that, that you shared. So, so thank you for doing that. I love what you guys are doing. I love the mission. Personally, as a consumer, you know, I've been looking at you know, direct primary care. In the last couple of years and, and kind of wondering if I was kind of brave enough to kind of take the leap and do something different to what 90, you know, percent of people are doing in this country.
And yeah, it's, it's I think it's an exciting area and, and you know, often when we look at sort of healthcare, most people will say, you know, somebody's gotta do something about this. And so it's, it's inspiring to, to see that you guys are actually, you know, walking the talk. So, you know, wish you all the best.
And you know, I hope that what you're doing is a tremendous success for everyone in that community and that a lot of people, you know, get benefit from that. So thanks again and wish you and the team the best of success.
[00:53:05] Zak: Thank you so much. And yeah, and thanks for having me and, and pulling all of, you know, they supposed insights out me, and happy to chat anytime. [00:53:15] Omer: It's my pleasure.Book Recommendation
“Lean Analytics: Use Data to Build a Better Startup Faster” by Alistair Croll and Benjamin Yoskovitz
The Show Notes
Hint Health: Website | LinkedIn | Twitter
Zak Holdsworth: LinkedIn | Twitter
Omer Khan: LinkedIn | Twitter
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