Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How a Rejected Clinic Pitch Built a 55M Home Health Platform
Transcript
- Lucas: So there's a moment in every founder's story where the whole thing almost dies, and for Sarah and Emily, the two nurses behind a home health platform that just crossed fifty-five million in revenue, that moment came in a hospital boardroom in late 2019. Luna: Right, and I think we've heard versions of this before, but what makes this one different is that the rejection wasn't just a 'no' — it was a 'no' that forced them to rethink who they were even building for. Lucas: Exactly. So they'd spent eighteen months building a remote monitoring system for hospitals — think vital signs tracking, medication reminders, all aimed at reducing readmissions. And they demoed it to a major health system in Ohio, got a polite but firm 'we can't take this on right now.' And the key detail? The CFO pulled them aside afterward and said, 'You're solving a problem we don't get paid to care about.' Luna: That's brutal. But also, that's the real lesson hiding in there, right? The product wasn't bad — the buyer was wrong. Hospitals don't get reimbursed for keeping people healthy at home; they get paid when someone's in a bed. Lucas: And that's exactly what they realized. So instead of packing it in, they spent the next two months interviewing over forty discharge nurses, home health aides, and — crucially — people who worked with Medicare Advantage plans. And that's where they found their real customer. Luna: Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds us making this many of these. If these conversations have moved your work forward in some small way, that's the ask. No pressure, just good to know it's possible. Lucas: And we're back in it. So those Medicare Advantage plans — they're the private insurance alternative to traditional Medicare, and they love anything that keeps their members out of the hospital. The nurses realized they weren't in the hospital software business, they were in the post-discharge care business. Luna: So they literally threw away the product they'd built for hospitals and built a new one from scratch for these plans. What did that look like in practice? Lucas: Well, the core of it is a tablet that goes into a patient's home after they're discharged. It syncs with their blood pressure cuff, glucometer, even a scale. And a nurse — an actual human nurse — checks in remotely twice a day to review the numbers and catch problems early. So it's not just a gadget; it's software plus a clinical workflow. Luna: And the revenue model shifted too, right? Instead of selling a software license to a hospital, they were asking these plans to pay per member per month — which aligns incentives, because the plan only pays if the patient actually gets better. Lucas: Precisely. And that's why the first two Medicare Advantage plans they pitched actually signed on within three months. The whole business model was built on the feedback from that rejection. But then, of course, 2020 hits and everything changes. Luna: Yeah, telehealth went from a nice to have to the only option. Did that help them or actually complicate things? Lucas: Both. On one hand, the demand for remote monitoring exploded — they went from a few thousand patients to over ten thousand in the span of eight months. But on the other hand, they had to hire quickly, and the biggest challenge wasn't the tech, it was the operational piece: making sure the nurses were properly trained, the tablets were getting shipped on time, and the data was flowing back to the plans in a way their systems could actually read. Luna: And that's where a lot of health tech companies trip up, right? They think it's all about the algorithm, but really it's about logistics and customer service. Did they manage to scale without breaking? Lucas: They were smart about it. They refused to expand to more than three states in their first year, even though they had plans from twenty different states begging them to launch. Their reasoning was simple: they wanted to nail the clinical workflow and the integration with each plan's claims system before adding more complexity. And that discipline is probably a big reason they're still around today. Luna: So what was the actual moment that sealed the fifty-five million? I mean, that's a serious number for a company that's only been around for five years. Lucas: It came from a partnership they signed in early 2024 with one of the largest Medicare Advantage plans in the country. That single contract quadrupled their patient base overnight. And the interesting thing is that the plan's executives told them they'd been watching the company for a year before they even picked up the phone. Luna: That's a lesson in patience — not every 'no' is permanent. Sometimes it's just 'not yet.' But also, they had to prove the model worked before they got the big fish. So what's the takeaway for other founders listening who are facing rejection right now? Lucas: I think the biggest takeaway is to interrogate the 'no.' Ask for the real reason, not the polite version. Sarah said that in the hospital pitch, the CFO's comment about reimbursement was almost an afterthought — he said it as they were walking out the door. But it was the most valuable piece of feedback they ever got. If they'd just shrugged it off, they'd be another dead health tech startup. Luna: And the other piece is that they didn't just pivot their product — they pivoted their customer. And that's a much harder thing to do because your entire identity is tied to who you think you're serving. They had to admit that they'd been building for the wrong buyer for eighteen months. Lucas: Yeah, and that's not a failure of execution, it's a failure of research. But the good news is that it's fixable if you're willing to listen. The founder story we've been telling all season is that rejection is data. This one is maybe the clearest example we've had of that. Luna: And the fact that they're both nurses – that's not a coincidence, right? Like, they knew the clinical side, but they had to learn the business side. How did they do that? Lucas: They talked about that on the show, actually. They said the best business education they got was from a retired insurance executive who agreed to mentor them after seeing one of their early pitch decks. He told them to stop talking about 'patient outcomes' and start talking about 'cost per member per month.' That reframe changed everything. Luna: So for any founder listening who's not a numbers person, find someone who is. Find a mentor who speaks the language of your customer's CFO, because that's who's actually going to write the check. Lucas: Exactly. And the one thing I want listeners to remember from this episode is that the 'no' you get today might be the most valuable piece of market research you ever get. But only if you ask the follow-up question: 'What would have to be true for this to be a yes?' Luna: And that's exactly what Sarah and Emily did. They took a hospital's rejection and turned it into a fifty-five million dollar company that's helping thousands of seniors stay out of the hospital. That's a pretty good outcome from a bad meeting. Lucas: It is. And I think that's the beauty of the founder journey — the plot twist that you never see coming. So if you're in the middle of your own rejection story, hang in there. And maybe pick up the phone and call someone who's already done it. They might just tell you what you're missing.