How Vidscrip Built Itself Through Sales Instead Of Investment

The company has thus far eschewed venture capital.

Minneapolis-based healthcare information technology start-up Vidscrip has so far been growing the old-fashioned way: funding itself through revenues derived from actual sales, the quaint method used in the pre-Internet age.
 
Vidscrip co-founder and CEO John Brownlee has taken that traditional approach even though his company’s product – a computer and smartphone app that allows patients to view individualized short videos recorded by their own doctors – is definitely the kind of thing that has “digital health venture play” written all over it. And with the landing of a big-fish customer in Harvard Medical School last month, that could be in its not-so-distant future.
 
Since co-founding Vidscrip in 2011, Brownlee says he has been successful in landing enough customers to grow modestly but organically. Two years ago, he nabbed his first major account: Partners HealthCare, the Boston-based hospital and physicians network that includes Brigham and Women’s Hospital and Massachusetts General Hospital. It prompted the start-up to open a Boston office.
 
Then just before Memorial Day, the North Loop-based company announced it had landed another big customer in the Boston area. Harvard Health Publications, the media and publishing division of the Harvard Medical School, said it will use Vidscrip’s platform to produce an extensive library of videos of Harvard physicians discussing such things as health conditions, diagnostic tests and surgical procedures, self-care and prevention, as well as public health topics.
 
The latest news has added growth momentum to Vidscrip, which still only has a handful of full-time employees, including cofounder and chief technology officer Brian Kuyath.
 
“The arrangement we have with Harvard is not exclusive, so it’s possible we could be working with other institutions as well,” Brownlee told TCB. “That could include just about any high-profile healthcare organization.”
 
The Harvard deal has broadened the scope of what’s available via Vidscrip.
 
Its main function remains to serve as a virtual extension of a patient’s relationship with their own doctor.  The platform allows patients to access a series of short, single-topic videos, recorded by their doctor. They’re used to remind patients of what was discussed at an appointment or to prepare them for an upcoming encounter.
 
Physicians use the tool in a variety of ways — to provide discharge instructions, to educate patients on what to expect from a procedure, and to help patients with chronic conditions manage their symptoms, in a more personal way. For providers, it addresses two big concerns – making healthcare delivery more cost-efficient by cutting down on time wasted in repeating instructions and in improving outcomes, all without reinventing the doctor-patient relationship. 
 
Now, a new layer has been added. In addition to posting their own videos to a patient’s account, physicians can also choose to include some from Harvard Medical School professionals on a broad range of topics that can be chosen for relevancy. Harvard Health Publications receives a royalty each time one of its videos is used on the Vidscrip platform.
 
Someday those options could be expanded to include videos from doctors at the Mayo Clinic, Cleveland Clinic or other prominent providers.
 
Brownlee says that other than an initial friends-and-family financing round shortly after its launch, Vidscrip has eschewed financing, instead operating off revenues, and showing a profit, as well. It is mainly using contractors to build out its tech platform. But with its increasing levels of interest, that modest scale may be changing.
 
“Unlike a lot of start-ups, we haven’t done a lot of revenue-negative things, and have found customers who are willing to pay for the service, so we’re profitable,” he said. “Over the last six months we’ve developed an entirely new web platform and iOS (Apple) platform, and we’re shortly going to release our first Android OS platform, as well… all that development has been paid for by our cash flow.
 
“But,” he added, “we’re at a point now where it’s getting closer to the time where we can scale up significantly. We’ve worked out the business in many respects, I think, and so we may be going out and raising money in the not-too-distant future. Those funds wouldn’t be used for development or operations, but solely for top-end growth. No final decisions have been made on that, however.”
 
The market for digital health is one that’s seeing a lot of investment, with much of it catering to patient/consumers, such as apps that encourage users to exercise more or change unhealthy behaviors. But there may be a shakeout coming because it’s unproven whether they can really improve health outcomes or cut healthcare costs, and this is where Vidscrip seems to have an edge, according to Shaye Mandle, president and CEO of Medical Alley Association.
 
“What (Brownlee) has done that is critically important is produce a technology platform that allows true, traditional healthcare providers who have actual relationships with patients to see real, measurable outcomes,” he said. “One of the big challenges for companies in the digital health space is how to utilize the technology to change behaviors and improve health – at the end of the day the users are really on their own.
 
“What Vidscrip is able to do is really bring a combination of traditional medicine that patients trust merged with technology to improve the experience for patients and improve outcomes.”
 
Patients typically forget many of the instructions doctors give them during visits, and thus lose motivation to follow through. The Vidscrip platform, Mandle says, allows them to virtually re-engage with their physician even as the amount of face-to-face time with doctors is generally diminishing.
   
“It gives both doctors and patients the ability to strengthen their relationship,” he added. “Patients clearly prefer getting information from their own doctors over going online to a generic website like WebMd.”