Jon Lensing, founder of OpenLoop, shares his journey of building a telehealth company, including pivoting during COVID-19, nearly missing payroll,.
Jon Lensing, founder of OpenLoop, shares his journey of building a telehealth company, including pivoting during COVID-19, nearly missing payroll, and the importance of choosing investors who align with the company's values. He also discusses navigating difficult decisions like layoffs and his vision for the future of healthcare.
If I regret something in the past, then part of me wonders like if I hadn't done that or if I hadn't gone that direction, would I still be in the same spot that I am today? And so that's why I don't like having any regrets. The things that I did, the steps that I took are, you know, led me down this pathway to this point. [Music] All righty. Hello everyone and welcome to the Dealmaker Show. So today we have an amazing story, you know, an amazing story where we're going to be covering all of the good stuff that we like to hear, you know, the building, the racing, the scaling. I mean, in their in their on their end, you know, that they did this crazy pivot, you know, that really propelled them to an absolute rocket ship. We're going to be talking about perhaps, you know, those times, you know, the ups, the downs, you know, not almost not making payroll, you know, last minute, you know,
craziness, term sheets being pulled. Again, a lot of adrenaline and a lot of uh inspiring conversation that we have here in front of us. So, without further ado, let's welcome our guest today, John Lensing. Welcome to the show. >> Thank you, Alejandro. Appreciate you having me on. >> So, originally born and raised in Iowa, give us a walk through memory lane. How was life growing up for you? >> Yeah, you probably don't hear many tech founders from from Iowa. Uh but grew up on uh grew up out in the country on a gravel road. Um you know, grew up on a small little farm with some livestock, corn, soybeans growing around us at all times. Small town about 400 people. Had to drive about 20 minutes away to to go to school. um you know that city where my where my school was about 10,000 people my graduating class is about 65 so you know small town America got to love it >>
and how how do you get this um I I would say like this spirit you know this this ambition you know that you have because I mean when you are like in a small town not a lot of people perhaps you know like you don't get to think as big you know because of the people that you're surrounded by so what do you think has fueled that ambition for for, you know, that spirit that you have and that mindset. >> I I I think the ambition comes from everything you said. It's it's small town. The the pond is smaller. You know, there might not be as much ambition around and I wanted to change that. I wanted to put Iowa on the map. I wanted to give back to my home state. I wanted to figure out a way that we could build the next, you know, publicly traded company right here in the Midwest and show that it can be done anywhere. It doesn't have to be done just in San Francisco or just in New York, but
you know, there's a lot of great opportunities and companies that could be built right in the heartland. >> So then, so then how do you get to, you know, obviously your dad was a a physician, you know, OBGYn, uh, and you decided to to to go into medicine, you know, I guess following the footsteps. So walk us through how that evolves into all of a sudden, you know, becoming an entrepreneur. It's quite the quite the sequence of events there. >> Yeah. You know, it's interesting. My uh like you mentioned, my father's a physician, was a physician. He's retired now. But he strongly urged us kids, I have three other siblings, uh to not go into medicine. So far, two of us have not listened to that advice and gone into medicine. Me being one of them. I just enjoyed science. I enjoyed working with my hands. I enjoyed physics and math and uh becoming a physician was, you know, sort of
the logical step to combine that with the other side of just helping better humanity. I liked that aspect, too. So, uh it was a very clear path for me. ended up going to school up in Michigan, studied sciences up there at a small school called Calvin in uh Grand Rapids, Michigan. Uh came back then to the University of Iowa for uh medical school, progressed throughout my studies there, you know, fell in love with surgery, planned on going into plastic and reconstructive surgery uh right after medical school. and uh postgraduation I actually yanked and dropped out of uh going to residency. So graduated medical school but then but then discontinued further clinical training and that's really because of because of openloop. Uh openloop had started off in the last like few months before graduation as a passion project. You know really trying to think about how do we help rural America get
better access to health care. You know, during my time in medical school, I was seeing patients drive three, four, five hours one way to come in and get the care they needed. And they would just delay that care for so long. Uh, and so they would come in so much sicker because it was such a hassle to make it there, right? They were from towns of 100 people, 200 people, no stop lightss in their in their in their towns. And so open loop started off as like how do we help get these small communities better access to doctors, to nurses, to therapists, these healthcare providers they desperately need. And my plan was just keep it as a passion project, keep running it on the side of the rest of my clinical training. But what it morphed into over the span of a very uh short few months was we started generating revenue in the business. you know, we started doing close to 50 to $100,000 within the
first few months uh per month and we started putting doctors in these rural areas, putting nurses in these rural areas and really making a difference and helping. And so I said, "Okay, hey, I think there is an opportunity here. Um, let's jump into this full-time. I think I could have a much bigger impact on healthcare by building this business than I could just by being a solo practitioner in medicine." So, you know, after graduation, jumped into this full-time and it's been four and a half years since then. >> So, I guess for the people that are listening to really get it, what ended up being the business model of Openl Loop? How do you guys make money? >> Yeah. So, the original model was just staffing, staffing in-person clinics and hospitals. And we took a cost plus type of approach, cost of the clinical labor, market up by, you know, 25 30%. And that was our our take.
What was interesting and I, you know, you alluded to it at the beginning is because of COVID in mid 2020, our original business pretty much went to zero. Uh, we couldn't sign any new contracts. I couldn't get in touch with hospitals. Our previous sales cycle before that was averaging 45 to 50 days. It was really quick. But, you know, once COVID was really mainstream, like hospitals didn't want to have any of those conversations anymore. We just could not sign anybody new and so we had a hard pivot 180 degrees into the digital health space and you know we did that because because of COVID tellahalth was just booming and skyrocketing. All of these companies that were doing tellahalth needed clinical labor and so we applied the same sort of business logic match the supply to the demand except now do within the digital healthcare ecosystem and that pivot you know was trajectory changing for
the business. Uh but with that we sort of you know shifted oursel molded ourselves to become more and more vertically integrated in the space and so you know now our business model is sort of on a uh per patient per month sort of uh uh structure. >> I mean that the pivot is saying quite nerve-wracking because as you mentioned you know you guys already were generating really good revenue. I mean, as you said, obviously co impacted things, but you guys were able to see, hey, you know, we're able to create something meaningful here. You know, doing 50 to $100,000 a month is impressive. So, when you guys did the transition of the pivot, at what point do you realize I think we may have gotten this right? That's a really good question. I would say, you know, we knew within the first two months of making the pivot that we got it right. And that was because every single sales conversation
we got into, there was immediate feedback of like, when can I sign this contract? How quickly can you guys get up and running for us? And I mean, we were talking, you know, we were getting some of those early contracts signed within like 48 to 72 hours. And so we were revenue generating from some of those contracts within, you know, 10 to 12 days of signing a contract. And I think we we went from um, you know, zero contracts in the digital health space to getting like 15 to 20 new clients in the span of like 60 days. And that's sort of when we knew like, wow, like this, you know, there is a market here. We need to be putting more and more of our efforts and just relinquish any of the the hospital and in-person stuff. So obviously uh there's not such thing as a straight line and there's been ups, there's been downs, but I remember one of those stories um took place on a Thursday evening
and it…