Healthcare innovators are used to challenges when it comes to securing the funding necessary to bringing their solutions to market — but in today’s COVID-economy, those challenges have grown exponentially.
Innovators have questions: What are their options for funding? Should they pivot their messaging? How can they stay relevant? Can going lean carry them through the crisis? In an economy full of unknowns, Kelli Murray brings her expertise and voice of reason to the table in a candid talk about today’s outlook and the future of healthcare innovation in the country.
In this episode, Kelli touches on her experience on the funding side of healthcare innovation and offers our listeners her tips, insights and expertise.
Here are the show highlights:
- How the pandemic reveals if you actually have a product-market fit or not (5:14)
- The “G-word” that you need to practice during the crisis to ensure your business thrives after the crisis ends (7:21)
- Developing this during the pandemic is way more valuable to the long-term health of your business than making sales (7:52)
- Does your business rely on face-to-face communication? Here’s how to “mimic” that interaction during quarantine… (13:15)
- The trick to build a loyal and rabid following while helping people without blowing through your entire budget (16:08)
- The easy way to create a massive impact in people’s lives doing nothing more than pressing “dial” on your phone (18:56)
- How to continue to raise money when the economy crashes and the future is uncertain (22:11)
- Tough questions you must ask yourself about your business in the midst of the pandemic (37:26)
I've spoken with dozens of health innovators, and nearly everyone is trying to figure out their best pivot strategy. But they don't know what to change, how to pivot, or if their new pivot strategy is the right move.
So I went into overdrive putting together a clear, actionable 5-step worksheet that will help you quickly define your most viable and profitable pivot path through the COVID crisis. And I’m giving it to you for FREE — no strings attached at legacy-dna.com/pivot
Kelli Murray is the Founder and CEO of MedSpeaks.com, Co-Founder and Executive Director of Health Innovators, and Managing Partner of Other Streets Advisors.
Kelli has dedicated her career to helping those in the healthcare community improve performance and strengthen their bottom lines. Kelli has leveraged her expertise in the healthcare field to assist startups and health innovators with understanding how to navigate the complex and high-touch industry and provide a bridge to private investment and collaboration in public and private sectors.
Welcome to COIQ where you learn how health innovators maximize their success. I'm your host, Dr. Roxie, founder of Legacy-DNA and international bestselling author of ‘How Health Innovators Maximize Market Success.’ Through candid conversations with health innovators, early adopters and influencers. You'll learn how to bring your innovation from idea to startups to market domination. And now let's jump into the latest episode of COIQ. [00:36.1]
Roxie: Welcome back COIQ listeners, on today's episode I am speaking with Kelli Murray who is the CEO of Medspeaks. Welcome to the show, Kelli.
Kelli: Hi Roxie, thank you.
Roxie: I’m really excited about this conversation.
Kelli: Me too.
Roxie: Yeah, we haven't had a chance to connect in a while and it's quite different than our regular days at infusion tea.
Kelli: It is. I know these days more and more as the days go by.
Roxie: I'm still drinking some tea.
Kelli: Oh, I have water this time, so.
Roxie: So for our listeners who don't know who you are, give them a little bit of background about what you do and what you're up to these days. [01:18]
Kelli: Sure. So I have a community called ‘The Health Innovators Community’ and that's where we bring together, it's a localized community of health leaders and entrepreneurs and investors and we engage them in conversations for knowledge sharing and business connections. And then I am also the founder of my own company called Medspeaks, and that is a services organization for entrepreneurs to help them with their commercialization, with connections, business development and that type of thing. And then most recently I launched Other Street Ventures, which is a venture arm for really unconventional types of investments. And we're bringing in people that are somewhat maybe foreign to health tech. So I'm referring to people that are in say real estate and banking industries and getting them introduced to technologies and asset classes that are, you know, a little bit unusual for their portfolios.
Roxie: Hmm…hmm. [02:18]
Kelli: As the most recent thing that I've been working on.
Roxie: You've always got your hands in a lot of different things,
Kelli: I do, maybe too many. But it's always fun and interesting.
Roxie: Well, and they're interconnected in some form or fashion. They're not completely disparate things to, to work in. So let's kind of start off by, I think it's good for us to talk about like what was going on pre COVID and then then we can kind of roll into what's happening now. What were, what was some, some of the things that were happening around healthcare tech and the event space and what were some of the challenges that health innovators were prior to COVID? [03:00]
Kelli: Well, I definitely, prior to COVID, the market was doing really well. You know, we're based in Florida and Florida's not necessarily recognized for having a lot of capital and fusion, especially in the healthcare space. But we started to see an uptick of angel investors and more dollar amounts coming into the Florida market to help support some of the, the innovators in our communities around the state. And as far as events go, I mean, Orlando in particular is a massive hub, you know, for, for events. So the HIMS conference was coming up, people were really excited about that. And then, you know, just locally at the community level, I mean, I can't even begin to tell you how many events, face-to-face events, you know, whether they were socials or networking events, educations, conferences, there was just a lot of, there was just a lot of diversity. That's, I think that was the thing that I recognized the most. There was a lot of diversity and there was a lot of quantity, high volume of activity that was happening here. And, and now we take a look at what's happening during COVID. [04:04]
Kelli: Everything has, as everybody knows, everything is just, you know, it kind of felt like, oh we hit pause and now it doesn't feel like it's like we're just on pause anymore. I mean these, these every day that goes by, I think everyone's anxiety starts to grow because those connections, that activity volume of dollars that are, that's active right now is, has really just come to a halt. The ability for us to meet face to face has come to a halt. People's ability to sustain their employees and to be able to scale their businesses has come to a halt. So times have definitely and dramatically changed. [04:45]
Roxie: Yeah. Yep. So what are some of the challenges that you're hearing specifically? Right. So I think previously we talked before, you know, a lot of people trying to figure out like product market fit and trying to raise money. Are those some of the same, you know, challenges that folks are facing today or is it really different? And how there may be needing to pivot their businesses. [05:11]
Kelli: I think that it's you know, product market fit as you are an expert at, that's always a challenge no matter really kind of what industry you're in. But especially in the healthcare space, I think a lot of the people that I engage with now doing check-ins, it's a matter of being able to stay relevant.
Kelli: Which again falls into that, that market fit challenge. It's like how does my business fit into today's environment? If you're a services company that relies on, you know, that face to face, like you're, you actually need to go into a place to deliver a service. Well how, how can you do that now? If you're a telemed company, will life is probably pretty good if you have a product.
Roxie: But in a good way. [05:59]
Kelli: Yeah. If you can source a product and have it shipped and delivered to a consumer, you're probably doing okay. But I feel like those service industry specific companies are really struggling now to find ways to stay relevant and it's probably going across the board right now. It does, definitely doesn't feel like there's, there's a lot of like business to business activity happening. And so I think the relevance factor is a really important one because I think the messaging around like the content that's being produced, how you're going to stay relevant when we do kind of buoy back up into, you know, the America is open for business again, like how do you sustain yourself in your message in a relevant way that's meaningful, that isn't asking for something from somebody else. I think that you're still finding people doing sales calls and there's going to be a place for that, I think. But people, you have to meet people where they're at right now. And I think that's where a lot of young companies, early stage companies are really struggling to find some agility and relevance in the market right now. [07:09]
Roxie: Yeah. I'm, I'm definitely seeing that too. Some of the advice that I'm giving clients is communicating or creating value and, and kind of thinking, you know, a lot of times Gary Vaynerchuk has this, I forget what he calls it. Give, give, jab, jab, jab, punch. I call it, give, give, give, ask, right?
Roxie: So it’s like give value like three times before you're asking for something in return. And that's, you know, before COVID, I think now for a lot of businesses, from a sales strategy standpoint, it's just give, give, give, give, what kind of value can you give advice, guidance, so that way you're contributing, you're not increasing the burden right now. And then at the end of the season, like you said, you're memorable that I, I, you're still forming that trust in that deepening that connection that you have and you're not trying to sell something to someone. [08:04]
Kelli: Right. Yeah. I saw an example recently and it was because the real estate industry is another good example of an industry that's kind of come to a kind of a slow halt.
Kelli: And there was an example was given of this real estate agent, she was very successful in her field. And when housing, you know you can't have an open house anymore.
Kelli: So what are the things that you can do to sustain yourself in that? Well, there's like the 360 videos, you know, where you can at least do the virtual tours that's going to become part of mainstream and almost everything that we do.
Kelli: But then she decided I have this really vast network of people. What if, and I believe it was a local, I think she was local, but she decided, let me open up my network, get some fabric and let's start sewing masks. And so she got 600 people.
Roxie: Wow. [08:57]
Kelli: Together to start sewing masks. So although she's not top of mind right now for real estate, she is top of mind because she's doing something really amazing and she leveraged the power of her network to do something impactful for other people
Kelli: You know, there is no ask, she's not saying, you know, let me, let me sell. Let me sell your home or are you in the market to buy? It's how do I give back to my community? How do I help save lives and protect, you know, protect people. [09:26]
Roxie: Yeah. Just being human.
Kelli: Right, exactly.
Roxie: I mean, cause at the end of the day we're all just people.
Kelli: Right. And people were worried about paying their rent, their or paying their mortgage or feeding their kids or filing for unemployment and not being able to get on the unemployment system. I mean these are the, you have to meet people where they're at, whether it's in a good economy or a bad economy. And this is a really unknown economy right now.
Kelli: So, you know, I think this is the time, I truly believe when people get really innovative, you know, you gotta get creative. How do you stay relevant? How do you make an impact on people? And I think we're starting to see some more examples happening around the country. [10:04]
Roxie: Yeah. That thing that's been going around I don't know who put it together, but the toilet paper, the toilet paper roll that talks and it's like I'm really popular right now. I mean like you're just seeing some really incredible creative things coming out.
Kelli: I have not seen that. But I need you to send it to me.
Roxie: I’ll have to send it to you. It is absolutely hilarious. [10:28]
Roxie: And putting low by the way.
Kelli: Yeah, me too.
Roxie: Not panicking yet, but.
Kelli: There's an artist and his wife, his name is Jim Hobart and his wife Beth, they collaborated with, with somebody also in the Orlando community and they simply didn’t ask. They said, why don't we, you know, this is what we want to do. We want to put together a thank you message for all of the healthcare workers, the service delivery folks, people that are maintaining our grocery supplies, picking up our trash and recycling, you know, how do we, how can we convey a message out that shows that we're Orlando strong? And they, all they did was ask for volunteers and literally within a couple of days they had over 150 submissions from people that were giving thanks.
Roxie: Yeah, yeah.
Kelli: You know, and recognizing and, and you know, again, this is an artist and somebody that's in the real estate business that, you know, leverage the power of the network to make an impact on people. And it's not, they're not asking anything other than for us to show appreciation. And to me that, that just goes a long way towards showing value and where people's hearts are at right now. [11:36]
Roxie: Yeah. I think we're seeing so much creativity, unity, solidarity and just real compassion. You know, we're, we're, I'm in a lot of ways, I'm really proud of, you know, who we are as a community. We're really advising. Yeah. Yeah. It's to see. So what, you know, you touched on something that I think is really interesting and I feel like other industries maybe don't have this issue as much because it's just more common. But what about those businesses that don't have a network that, you know, haven't been building a list, they've just been really relying on those face-to-face counters, you know, especially in healthcare, right? Where there's, you know, has a tendency to be more laggards in, you know, adoption of some of these marketing and business practices and, and so what do you have to save to those folks? [12:31]
Kelli: Well, they also need to get pretty clever and step outside of the traditional ways of thinking. I've seen companies that do rely on that face to face now starting to create online video content.
Kelli: That really helps demonstrate what they're doing in the midst of this crisis to be able to fit in to being able to support businesses and people. So one example is like World Housing Solution. It's a company out of the Sanford Lake Mary area, and they have clinics on wheels for example, and they can stand up these, these shelters that can be air conditioned, they can be literally stood up in an hour. And, and so one of the things that when I spoke with Ron Ben-Zeev, who's the CEO there, he was like; we're going to be launching something new. And I'm like, okay, what is it? And he said, well, we're going to put together this video and it's going to show us standing up an ICU, an independent ICU room in 45 minutes. [13:33]
Kelli: Wow, this is really cool. But one of the challenges that he has is just getting up to the right people. You know, he's, he's definitely a face to face type of guy, but I can tell that that he's starting to shift things a little bit and going more towards that video content and getting it pushed out. So he, they were recently featured on the news. So I think that there are ways that you can, you know, you have to find a way to stay relevant until this economy boons again and whether that's, you know, doing helpful tips.
Kelli: You know, another example I can give you is just what we're doing. So on the other street advisors side, which is a brokerage company that I'm a managing partner in the, we broker manufactured housing communities and we also own manufactured housing communities. And so one of the things that came up when we were faced with this pending crisis is that we have several 55 and older communities. Well, the last thing that you want is a 55 and older community becoming a hot spot.
Roxie: Hmm…hmm. Yeah. [14:36]
Kelli: You know, then immediately our mind started shifting into, well, how do we help educate community owners on how to thwart and protect their residents? How do we help them navigate through uncertain times when they, these owners of these, you know, these large parts may not be able to collect rent. How do we help them manage if there is a health outbreak within their community, how do we help those residents get access to care? How do we educate them by hand hygiene? So these are not things that are typical, you know, you would not think that you would provide this type of education, but this is the stuff that we're now promoting, which is a very, it's an unorthodox approach, but it's again about being able to provide that value and not having an ask back. [15:22]
Roxie: Yeah. So I think Kelli, what you've been talking about is just some really incredible examples of ways that folks need to pivot in their marketing, pivot in their messaging, pivot how they approach folks pre , pivoting and the content that the developing how they're helping, serving, educating, informing in all those little nuances. Not every company is going to need to pivot in the same way, but making sure that you're looking at that, taking inventory. And then, like you said, getting creative and coming up with some unorthodox because the rest of the world is also going digital. And so there's more noise in those digital channels than ever before. [16:05]
Kelli: Yes, totally agree with you. But you did bring up a good point though about those organizations that maybe don't have a following. And I think being able to leverage places like Twitter and Facebook and Instagram and sharing those, you know, the stories like the real estate agent who's got, you know, people cutting fabric, she knows she's there, they're capturing video vignettes of people doing the work.
Roxie: Yeah. Yeah.
Kelli: You know, will be really powerful things and they don't cost a lot of money and they're high impact.
Kelli: And so you can build a following if you don't have one already, simply by providing really relevant, valuable content tips, you know, things of value, things that touch the emotional heartstrings of people will help you inherently get that following. [16:49]
Roxie: Yeah. Yeah. The other thing that I think you touched on is the rawness or the authenticity of like cutting it out, right?
Roxie: So we're thinking a lot of times we naturally want to, you know, show the beautiful, perfect, finished product and that's really not going to be nearly as effective and powerful at connecting at the heart. Right.
Roxie: As if we actually show in the thick of cutting the fabric out. And so, you know, just encouraging our listeners and just to be real. [17:18]
Roxie: Yeah. Be, be, be, be authentic, be principled
Kelli: And think, think about like, I think people, you might be surprised at who they have in their network, you know, who they can reach out to because, so I serve as the entrepreneur in residence for UF ventures out of Gainesville and one of their licensing experts, you know, she reached out and said, you know, this is something that we're doing to create, we've got this design for masks and we have a relationship with Ford motor company, do you have anybody that can source in N95 fabric? And I'm like, Hm. I don't know. Maybe, you know, let me see. And so I, I picked up the phone and I made a few phone calls and turns out I did have somebody in my network that has access to suppliers within N95 fabric. [18:09]
Roxie: Oh really.
Kelli: She had, she happened to know the CEO of Cardinal health. She, and you know, the person at UF ventures get on a phone call. They have now introduced Cardinal health and Ford together, you know, to start seeing where they might have some synergies. And so, you know, there's nothing in that for me except, Oh wow, you know, I put some Goodwill out into the world. I was able to leverage my network and you know, if it produces even a thousand N95 masks, I will be, you know, glad to have done my part. And so when somebody asks me the question, I'm like, I don't know fabric suppliers.
Roxie: Right. Right.
Kelli: I, but then I'm like, but I do know now I know, I know people who do know people.
Kelli: And so it's kind of that, it's that trickle out effect. And and I think you don't have to necessarily be creating massive content or inventing something brand new and profound to to make an impact. You can simply just pick up the phone and have those conversations with people you already know and just inquire about how you might be able to help them. I think that can go a really long way. [19:15]
Roxie: Yeah. Yeah. So let's switch gears a little bit and talk about the financial landscape for health innovators, right. There's going to be so many people that were, you know, lined up for pitch competitions and you know, all those events that they were ready to, you know, meet network and you know, kind of that pipeline of trying to raise capital. What's happening now, what do, what do investors need to know and what do they need to do as next steps? [19:46]
Kelli: Well, I think there's a couple of interesting things going on. So I recently I did a fundraise for a company I'm really passionate about and you, I think you know this company pretty well.
Kelli: And so I started, it was kind of an odd situation with how it even started. I've been advising the company for the last couple of years, wanted to make a personal investment in the company and then told a few of my investor friends about it and they wanted to hear about the company too. And this was six months ago when the process started. So you could never have anticipated six months ago that we would be facing a respiratory disease. This happens to be a respiratory product.
Kelli: And you know, it was, it was a very interesting experience going through. You know, it's already hard enough to raise money. I mean, you really have to have something with a very clear message, purpose and return. [20:43]
Kelli: You know, there has to be that, that vision and people that can execute, you know, there's all these different components that go into making something successful and all those things really need to almost lock and step in order for an investor to get their checkbook out and write any dollar amount.
Kelli: So as we started kind of going down the six month adventure of trying to syndicate for Aire Health, the conversations definitely started to change over time, especially once in January the COVID thing started to out rear its ugly head in the US. And then as the months ticked by, it started to get even more interesting because people that were very firm on their investment two weeks prior, we're now starting to flake. [21:32]
Kelli: And I am trying to keep this thing together because I have a minimum that I have to hit in order to get lead investor terms. And so I'm like, well I believe in this product. And either they just had to either believe in it or they had to step off.
Kelli: So I was trying to piece things together and I even allowed people to go beneath the minimum simply to keep them in the deal.
Kelli: And I had to remind them, this is how the company is responding to COVID. This is how it has a market fit, here's how it's going to have a long-term need in the space. And so there was a lot of work that had to be done just to reassure investors that despite what was happening in the stock market and that they were losing money, that they still needed to write me a cash check and everything. So we're going through like what could potentially be the worst economic crisis in history.
Kelli: And I still close my round. [22:29]
Kelli: I still close my round. I didn't think I was going to get it done.
Roxie: Awesome Kelli. That is so awesome.
Kelli: With 17 angel investors..
Kelli: ..willing to cut checks, you know, of all different types of sizes. But I did it just to me, it just showed me that even in an unknown time, you can still raise money as long as your product and your message and the fit is, is spot on. And so I didn't have any attrition.
Kelli: As a result of, I had one, I take that back. I had one that said, came back and said, my accountant said I would be crazy to invest right now. And I said, well, any accountant would say that right now. Do they know what you're investing in?
Roxie: Right, right, right.
Kelli: Right on. Okay. Well, I moved on, I closed my round anyway. But I do think, you know, and I have other investments that I've literally just pushed the pause button on and it's simply because I don't know, and this is what investors are wondering. They don't know what's going to happen with the economy. Is this going to be six months economic hit? Is it going to be a 12 month? Is going to take years for us to recover? [23:38]
Kelli: And when you're looking at investing in a company, you have to look at how much runway do they have. And if they're relying solely on investor dollars, meaning that they're not going to have the revenues to supplement.
Roxie: That’s true, yeah.
Kelli: I mean you could be dropping money into a black hole that you know you're never going to see a return out of it. I mean, in all likelihood you could lose your money. So for those organizations that don't have relevance right now and they are in the midst of trying to fundraise, they're going to have to get really lean.
Kelli: In order to to get rolling, real creative and figure out how they can stretch that runway so that they can sustain themselves through however long this is going to be. And I am seeing people that are still investing and like telemed platforms and things like that, but you know supplements, wearables, even certain pharma, you're in there, you know, those things are drying up really quick. Everything just, you know, people have just hit stop. [24:39]
Hey, it's Dr. Roxie here with a quick break from the conversations. Are you trying to figure out what moves you need to make to survive and thrive in the new COVID economy? I want every health innovator to find their most viable and profitable pivot strategy, which is why I created the COVID proof your business pivot kit. The pivot kit is a step by step framework that helps you find your best pivot strategy. It walks you through six categories you need to examine for a 360 degree view of your business. I call them the six critical pivot lenses. As you make your way through this comprehensive kit, you'll be armed with the tools, tips, and strategies you need to make sure you can pivot with speed, without missing out on critical details and opportunities. Learn more at Legacy-DNA.com/kit [25:28]
Roxie: Yeah, yeah.
Kelli: That's so right.
Roxie: So back to what you were saying about the message and the purpose and the return. So a lot of the conversations I've been having these last few weeks have been around like whatever deck you were using to pitch your company.
Roxie: That needs to be revamped.
Roxie: Like your whole messaging and business model. Even if it doesn't necessarily change, it needs to be reframed, right? Because their origin, their concerns are very different. But I call it COVID proofing your business.
Kelli: I like that
Roxie: And presenting your business as COVID proof. Right? And these are all the things that we're doing. So exactly what to be able to accomplish exactly what you said, like whatever confidence we needed to give those investors previously, the language that we're using in in the, the, the amount of confidence that they need has certainly increased. Right? [26:27]
Kelli: Totally. Absolutely. 100% couldn't agree with you more. I like the COVID proofing.
Kelli: I mean I'm gonna say a lot. We're going to learn a lot because of this crisis. We're going to learn you know we're going to see some new innovations surface.
Kelli: Which is really exciting and you'll probably investor dollars flood into that direction and you're going to see those that, you know, had such great potential in a, in a great market, have literally no potential in a down market.
Kelli: I'm curious, and I'm also slightly alarmed at what we're going to see because you know, this was an entrepreneurial market.
Kelli: It was also a seller’s market. You know, if you want to look at the say the real estate industry and now it's, I mean, I don't know. I'll be real curious to see. [27:12]
Roxie: Well that's just it right. We just don't know.
Roxie: It's really hard to describe what this market is,
Kelli: Exactly right. That’s true, right.
Roxie: How long it's going to be that thing.
Roxie: Because the thing is so dynamic, right? [27:24]
Kelli: Well and there, you know, and if you're looking aside from, you know, investing in startups, just investing in the real estate and I'm sorry you're not real estate in the stock market.
Kelli: I followed and I'm not stock savvy, right. Let me just make that clear.
Roxie: Don’t worry about it.
Kelli: I'm much more comfortable to a startup company than I am, you know, playing the stock market. So I have a certain percentage of my portfolio and stocks and I mean like literally within four days my, I lost 35% of my portfolio.
Roxie: Hmm…hmm, oops!
Kelli: And I just, I watched the numbers and I went, Oh my gosh, you know, do I just yank all of it out and put it in cash or do a self-directed IRA and started busting up myself and I decided to leave it and it did pop back up thankfully. But there are certainly, there's a huge opportunity in the stock market for those companies that have sustained themselves over the last hundred years and their stocks have just tanked right now. To potentially invest in that, knowing that over the next 20 years you're going to see, hopefully you'll see that kind of resurface like in the American way, you know.
Roxie: Right, right, right.
Kelli: And then we peak and then we dip again and we peak. So you know, I think the same can be said even when you're talking about young companies and investing in them, it's, but you, you have to pay attention to the viability of that business. And is it COVID proof? Like we've been able to see, you know, tried and true with other companies over a long period of time. [28:56]
Roxie: It's funny that you said that because my husband and I were just talking last night about Carnival stock that's dropped 70%.
Kelli: Oh yes!
Roxie: He gets like 20 something dollars a share. And we were like, should we? Should we? I mean the cruise business is probably pretty darn COVID proof. This might be a really good opportunity. [29:16]
Kelli: Never know.
Kelli: I mean I think we'll need to, investors are going to keep their eyes and ears open for whether it's, you know, a new type of chemical that has been proven to, you know, word off COVID, you know, the Corona virus itself.
Kelli: With 30 days, you know, there, there are things that I'm hearing about that I'm like, Ooh, you know that, that sounds interesting.
Kelli: Because know we're never going to get rid of more than likely we're not, we have never gotten rid of the measles.
Roxie: Right, right
Kelli: It never goes away.
Kelli: It's just, how do you contain it? And so I feel the same about Corona virus. Like this is just going to be part of our, this is part of our future. It's not going to be eradicated more than likely. But you know, hopefully the vaccines and things that we'll, we'll start creeping in and, and get widespread use and we can regain some sense of normalcy. And I think in that, in that sense it will become an investors playground.
Kelli: And get those things in place. And I think you'll start to see investor dollars starting to funnel back in over time.
Kelli: But certainly right now everybody's really gun shy and they're just holding onto cash. [30:24]
Roxie: Yeah. Yeah. So for those early stage companies who don't have cash flow coming in, whether they were just not there yet, maybe they didn't even launch or maybe they did, but they, but they, you know, we're still kind of feeling, feeling the pain of that longer sales cycle. Or maybe it's just, it's something that stopped, right?
Roxie: Like maybe they did have some sales on the books, but they just don't for a while. What advice do you have? You know, if this was a company that's in your portfolio and you're sitting down with them and you're like, okay, we got to get lean, what are some of the best practices that you're, you know, and it could be something elementary, because I think right now we're so stressed one may not even thinking about the basics, but what is some of the things that they can do to get lean and stretch their runway? [31:09]
Kelli: Oh, that's a really good question. So some of the things that I've heard companies talk about that they've done and then we've also taken these steps in my companies as well as, you know, really canceling off nonessential professional service contracts. I mean that's a, it's, it's kind of a painful thing to have to do, but you know, we, you know, I had even brought on some expertise and it was to help us with marketing strategy and you know, the things that, that you want to be able to separate yourself from the rest of the game, but when those are high dollar contracts and they're not critical, like mission critical.
Roxie: Hmm…hmm. [31:49]
Kelli: You've got to cut them or hit pause. Like you don't need to cancel the contract, you don't need to get yourself into a legal liability with it, but you should have the ability to push pause.
Kelli: I mean, this part, like all of ours have been really understanding that they've been paid through the month of April, but until we know more, you know, in May, June, July, that we're going to postpone until the fall.
Kelli: So I think for small businesses, whether you're a startup company or you know, a mid stage company, that's an easy thing for you, for you to be able to do. [32:21]
Roxie: Timing of that is really important. So I think a lot of times as entrepreneurs we are really passionate about the mission that we have before us, right? And being able to make our impact in the world. And there's definitely a lot of feel-good around being able to employ other people. So it's really, really hard when you think about that. Right? Especially when you know, like, Oh my gosh, like you're, you're, you're just as desperate as I am. Like this is just as important for you as it is for me to, to not pay it. It is for you to get it. One of the things that I think is, is, is really important is for people to take a hard look at that as soon as possible.
Roxie: Dragging it out doesn't do good for them. For the company or for the other person. [33:05]
Kelli: Yes. I know another thing too is if you're in a lease, you know with your, with your landlord, I mean this is affecting landlords and mortgage holders too is you know, being able to sit down and talk with them about getting a discount on rent. It's not that you're going to get a pass, it just means that you can defer that payment maybe over, you could spread that payment increase like over the latter six months of the year so that you're paying more for your rent. You need to go completely remote and everybody starts working from maybe, I think what we're going to see is a lot of businesses that thought they could never work remote find that they are very effective working remote and that might actually have a really interesting impact on office space and retail space moving forward. You know, I think we're going to start to see some shifts, but you know, if you're a young company and you have, and you're trying to extend that runway, you need to get, you know, really think about your high dollar expenses and a lot of that, a lot of times professional services and your rent are going to be expensive. So if you can defer those I know in, in our case we got a 70% reduction in our rent. [34:09]
Kelli: It doesn't mean it's wiped clean, it just means we've, we've now we're going to tack it on to the end of the year.
Kelli: You know, in the hopes that things will start to normalize by then and our revenues will boost back up and then they still get their money and we get to still remain in business, you know, and maintain our office space.
Roxie: That's great advice.
Kelli: So, but I definitely do agree with you. I think people need to go through line by line and, and really the, I think about who's able to work right now. It's essential employees, right? Those are the people that are allowed to go to the frontline. They're essential to like our survival, to receive health care, to receive food.
Kelli: To go get medications, things like that. And I think you have to look at your own business in that same context. What are the essentials? And it's painful for all of us. Another business that I'm a partner in, I mean we had to literally tell 25 employees that they needed to go ahead and file for unemployment. [35:06]
Roxie: That's a difficult day.
Kelli: That was a really hard day because, you know, everybody's just been kind of sitting in limbo for the last couple of weeks. And then we're like, well, we can't pay you anymore because we are a service industry. We rely on foot track, traffic and cash flow in order to pay.
Kelli: And when, when that stops, when you see you still have that, you know, those money's coming in, you have to take advantage of the programs that are available out there. And so even for for startups that, or your own companies that maybe are not revenue producing, they should still consider applying for the disaster grant. [35:45]
Kelli: There's a grant and there's a grant and a loan program specifically around disaster relief. And even if they, you know, for the independent contractors, independent contractors can also file for that relief. And you know, that's, that's another thing even with our independent contractors that we've hired for, for one of the businesses, we've had to go back and say to these independent contractors, we'll continue to pay your salary, but it will be on loan.
Kelli: It's amazing. It's going to be an IOU to the company, but it's because they're essential employees. But because we're not producing revenue, we're still going to continue to work our business. We're still gonna be doing underlying functions that will, when we do start to bubble out of this, it will pay forward. But those independent contractors are going to be on a loan back to the company and they may never be able to pay. We recognize that, but you know, we are being eternal optimists here in saying that we're in an industry that we think has been able to rebalance successfully year over year and we're willing to go ahead and put these loans out there in order for people to be able to pay their rent and pay for food and medical costs for them and their four kids. [36:55]
Kelli: I mean, that's the hardest part for me is that we have people that we have worked with for years that have been loyal to us and I know that that's, you know, it doesn't matter how old your company is, you've, you've got people that your loyal to and that are loyal back and so you want to be able to do everything that you can, you don't want to turn your business in. There have been conversations about that too, like being able to really recognize that you're not going to be able to stretch that runway and knowing when to just go ahead and shut her up.
Kelli: Oh, that's a, and that's been a hard conversation to have too. But my team and I have had to have those conversations. Do we close our doors? [37:31]
Roxie: So I think that is really mission critical too, right? Like taking a inventory and being really realistic. Do I have a viable business still? If I do, what do I need to do to stabilize? Right? But, but, but I think that first question that we're talking about now is do I even have a business? And that's a really, and I think you kind of need a thinking partner to make that decision because
Kelli: Yeah. [38:01]
Roxie: Because it's going to be hard to decide that for yourself.
Kelli: It's a gut punch. But when we have our zoom call with me and several partners and, and I was the one that brought it up, unfortunately, I don't think that's where everybody's headspace was. Everybody's headspace was like, how do we sustain ourselves? And I'm like, but have we asked the question, if we cannot open our doors for the next six months, is it worth it in the long-term because of the type of business that we're in? You know, is it, is it worth it to take out a loan, the paycheck protection program? Do we want to actually put $200,000 in debt. That was the amount that we were looking at taking a loan for. Is it worth it? Are we going to be able to repay this back? Is our business, you know, is our business which is in one of the businesses I'm in. It's a, it's a disposable income. It's a disposable income dependent business. [38:56]
Kelli: So if people don't have disposable income, then where does that leave our business?
Roxie: Right, right.
Kelli: And if it, you know, if it takes us three years to, to normalize, I mean is it worth the, the challenge and the headache and the debt. You have to have those really tough; you have to ask those questions even if you have it. Even if you have a good business in a good economy which we did. We had one of the top businesses in the country in this particular domain. We still had to ask that question and it was, Oh, you know your right.. [39:27]
Roxie: Right, right, right.Yeah
Kelli: For 15 years and we're talking about like
Roxie: What. How is that possible? Yeah.
Roxie: It reminds me of that clip that I saw on the news a few weeks ago where, Oh my gosh, it was just heartbreaking. This pizza business owner was talking about how he made a loan for $50,000 to be able to continue to pay his employees even though they couldn't work, and that is such so noble, so noble.
Roxie: But I thought to myself, okay, that's no roll. All right. Now pause. How many pizzas are you going to have to sell?
Roxie: To be able to recoup that $50,000
Kelli: Exactly. [40:05]
Roxie: Wow. Ooohhh.
Roxie: I don’t know.
Kelli: That is the question that people really have to ask because depending on which program you go through, if you go through the paycheck protection, you can have four to 10 years to pay it back. If you go using the disaster program, you can only borrow less like up to 200,000 but you, you might be able to get up to 30 years to repay it. So over 30 years to repay $50,000 you could probably serve enough pizzas to cover that, right?
Roxie: Yeah, yeah.
Kelli: But then how much would it be to just start over when the economy is better.
Kelli: I don't know. I mean everybody's got to decide that for themselves, but these are really tough questions. You have to get real with yourself about your business. [40:47]
Roxie: Absolutely. Okay, so let's end on a positive note. So obviously COVID is catastrophic and it's wreaking havoc on all of our lives in a really deep and profound way and it's just terrible. At the same time there are these silver linings. So what are some of the good things, and you touched on some of them, but what are, what are some of the exciting and good things that you think could possibly come out of this, this chaos that we're living in? [41:16]
Kelli: Oh gosh, I could go a few directions with this I think. I mean from a personal standpoint, I can't help but think that maybe this downtime is going to help people acknowledge the things that really matter. You know, and where our nation is known for not taking paid time off and sick leave, we're known for not getting enough sleep. We're known for not getting enough quality time and with our families for eating out a whole lot. Convenience, convenience, convenience. And now, you know, we're kind of, we're home together, we're cooking together, we're going for walks together, we're exercising. These are all good things. These are all silver linings in my opinion, and it's not the case for everyone. I know because it depends on how isolated and lonely you are.
Roxie: I know. [42:04]
Kelli: You know, if you have family if you have a roommate, if you have a partner, those things can certainly help. But, you know, do some of the things that we talked about from a business standpoint, I think we're going to be able to learn, what we are learning is how are we able to work differently and in novel. Notice how I put that in there. Pardon the pun, novel, unique way, like using zoom for example, like you and I would normally be at infusion tea having this conversation, but you know, for people to be able to do business in a different way, a creative way to understand how they can maybe homeschool their children. How they are, maybe they never knew that they had a passion for creating content.
Kelli: But now they have a, you know, people that I know that are getting educated, they're taking this time to learn new skills, new trades. And I think that that's like a, these aren't silver linings. [42:55]
Kelli: You know, these are the real linings about us taking control of our lives right now when we feel like we have no sense of control over a lot of things that are happening outside the four walls of our home. And I think I, I'll be curious to see what this world looks like. You know, my friends, my, my business colleagues will be very curious to see this time next year.
Kelli: Like, if you and I want to have this conversation, we schedule it for this time next year.
Roxie: We will schedule it when we are done here.
Kelli: We will have this conversation back in, you know, fast forward 12 months. Where are we at? How, how have things, how have things changed? I mean I know me personally, like I've always been an active gardner but I've been so busy busy with businesses that I really set that stuff aside. And my daughter and I have planted like 30 different types of seeds where we've got a kitchen scrapped gardening going on in the kitchen. [43:50]
If you could take a look at it, you would see like all these containers full of different like celery and carrots and onions, all stuff that we're growing from scratch pineapples and being able to, and they've said too that items around sustain sustainability and permaculture.
Kelli: Like sales for those things have gone through the roof and it's us getting back to like more simpler times. And I think we've all probably deep down we've all kind of craved to get back to some of that, the basics.
Roxie: Absolutely. I had done more weed pulling in the last week than I have in a really long time. And it's, believe it or not, it's therapeutic.
Kelli: It is therapeutic. I have vitamin D and fresh, you know, I think that's, I've seen more people out in my neighborhood and we, we abide by social distancing. If we're walking towards each other, we, somebody will step off into the road we bought. We say hello, we bypass and we get back on. But I mean, it has just been a wonderful thing seeing all these people out on their bicycles, their skateboards, walking their dogs. [44:52]
Roxie: It needs to know our neighbors for the first time, feet away. That's what we're doing.
Kelli: You know, and I think regardless of, of what happens with the economy, one thing I've learned definitely from my neighbors and from watching my friends and their neighbors on like Facebook for example, is because they're forging these six foot distance relationships from their neighbors. I think that there's an interdependency that we've all recognized from each other. So if, if you need something, I'm here. Even if you need to roll a toilet paper. I'll set it outside for you. I had up, I had a good friend of mine. She, she showed up in a Spiderman mask.
Kelli: High heels on a beautiful fancy dress picking a paper bag with fresh bread that she made.
Roxie: Awwwww. [45:41]
Kelli: Because I didn’t really have to go to the store to go buy bread for my daughter's PBJS. And so she just showed up and, and delivered. And you know, it's just, it's, those types of things.
Roxie: That’s beautiful.
Kelli: You know what I mean? Like we've got, I feel like in the, in this day in time, like it's so important to have each other's backs and I, whether it's in business or it's just neighborly or if it's, you know, family and friends that those are, to me that's probably the most beautiful silver lining out of all of this. [46:06]
Roxie: Yeah, yeah, absolutely. Wonderfully said. So how can folks get a hold of you if anyone has any questions or want to connect with you later.
Kelli: They can email me at Kelli, firstname.lastname@example.org. I think that's probably the best way to reach me. And it's just by email or LinkedIn.
Kelli: It's, you know, medspeaks like my LinkedIn handle is medspeaks.
Roxie: Awesome. Thank you so much for sharing your wisdom today.
Kelli: Thank you for having me. It was so fun. [46:36]
Thank you so much for listening. I know you're busy working to bring your life changing innovation to market, and I value your time and your attention. To save time and get the latest episodes on your mobile device automatically subscribe to the show on your favorite podcast app like Apple podcasts, Spotify and Stitcher. Thank you for listening and I appreciate everyone who's been sharing the show with friends and colleagues. See you on the next episode of COIQ.