Eric Edstrom and Devang Patel co-founded ProfitLink Telecom Expense Management in 2003. ProfitLink helps enterprise customers gain visibility into their telecom inventory and reduce expenses by an average of 24% and control telecom payables over the long term.
The business increased to serve more than 300 customers in all 50 states. After 11 consecutive record years of net profits, revenues and customer growth results began to sag in 2015. It became obvious that the evolution to new IP based services was eroding primary demand for ProfitLink’s offerings. The Telecom Expense Management market was in gradual but irreversible decline.
Devang and Eric looked for opportunities in healthcare. They sought out business models that could thrive as America’s Baby Boomer generation grew old.
Devang and Eric looked for opportunities in a growth industry like healthcare. They sought out business models that could thrive as America’s Baby Boomer generation grew old.
Several potential business sectors were evaluated in detail, which was time-consuming.
Through a college friend of Devang’s wife’s contact was made with a nurse named Sam in Chicago who is employed by a number of hospice agencies to do their night and weekend telephone triage. Sam fields patient and family caregiver after hours phone calls and resolves every issue he can over the phone, contacting the hospice only if a nurse needs to visit the patient at home. Staffing nights and weekends this way helps hospice agencies prevent nurse burnout and turnover. Using a triage nurse who is shared with other agencies allows hospices to avoid paying 30% too much to hire underutilized full-time nurses to work nights and weekends.
Next came an understanding of the dimensions of the hospice telephone triage market opportunity. How many hospice agencies were there? How many patients did they serve? What were the demographics of different hospice agencies? What kind of hospice would buy a telephone triage service? Which hospices should we target? What are hospices agencies’ after hours pain points? Were there competitors already offering this service? What was the market position of competitors? Did any competitor have a dominant position? What price could a new business get for a triage service?
A detailed plan followed with a pro forma statement of cash flows: beginning cash balance + revenues – expenses = ending cash balance. How many customers would they need to acquire? How many nurses would they need to hire at what level of compensation?
The decision was made to press ahead using cash flow from the existing Telecom business to finance the new company. The dictum was “Success comes from doing enough of the right things the right way soon enough.”
In June 2016, NurseLine After Hours Telephone Triage opened for business. Devang focused on hiring a team of nurses and building a suite of technology tools to enable service delivery. He did this while continuing to keep the “cash cow” legacy telecom business going with only a skeleton crew. Eric focused on preparing customer service agreements, pricing, marketing communications, developing sales lead generation channels and closing contracts with new clients.
NurseLine started to turn a profit after 15 months, a little slower than planned. The new business now helps 23 hospice agencies in three states take care of more than 1,000 patients. It provides a valuable and economic service allowing Hospice medical staff a break while maintaining the required level of service to patients.
Next steps are expanding first to states surrounding Texas then nationally possibly through Franchising.
Our mentors held us to deadlines and suggested strategies to overcome the hurdles experienced
We could not have achieved the results without their experienced input
Our Mentors Charles Rudnick and later Stan Booth acted as a sounding board and over 20+ sessions became an integral part of the search, then implementation of the new venture.