00:24  Hey, welcome back to another episode of the Growth and Scaling Podcast. Today, we are so excited to have James Bates with us, and you'll find out why in just a minute. James, tell us who you are and what do you do?

00:36 Yeah, my name is James Bates. I'm the founder and CEO of AdviNow Medical. AdviNow Medical uses artificial intelligence to completely automate the medical visit and free physicians to see more patients, focus on the things that matter, and get their head out of all of the paperwork and electronic medical records nightmare that they live in today. Doctors that use AdviNow actually get to see two times more patients and spend less time working. So that's what we do.

01:05 That doesn't sound like a very big need because doctors are so good at everything. I mean, you know that I'm just kidding. You know my,.

01:14 Unfortunately, they're so good at clerical work, they get told to do it a lot.

01:19 Seriously, now my daughter is an MA and she works with a lot of a lot of physicians in this same. I know the demand is real because paperwork is such a hassle for them. How do you help them? What what is the what does the product do for them?

01:35 So, AdviNow uses generative AI. Now, the interesting thing is we were generative AI before the world became familiar with generative AI with chatGPT. What we do is the AI engages with the patient and we actually will do a differential diagnosis. So, we're gonna ask the patient every single question a doctor's gonna ask. Then we'll place the orders for images, labs, whatever it may be the patient needs in order to be diagnosed we will do all of that. And then we prepare a one page summary for the doctor. The doctor just has to review that, they'd have all of the questions answered, all of the results in order to make that final diagnosis and then add the human element back into the patient. So the AI tells the doctor what illness is it probably is, justifies it with data, and the physician then makes the final decision, communicates it to the patient, does a procedure if required, and then they just have to click on I agree, the AI does all of the documentation, coding, and billing for the backend.

02:37 Stop it! That's crazy. 

02:40 It's the future.

02:42 That is the fUture. I just didn't think that was legal. This sounds amazing. So as you take the, so as you take the human element out of that, I mean, obviously for all of us, like, I mean, I don't know who loves sitting in a doctor's office waiting for a doctor to come and get through all the clerical stuff. I mean, this sounds amazing actually showing up and having all that preliminary stuff done and you're not wondering if they know what you're dealing with. I mean, this is amazing.

03:15  They know it all and the physician now just has to confirm with the patient the most important aspects and then explain what it means to them. I mean, normally what you would do is you arrive, the medical assistant will take you into the triage room. They will take your blood pressure, pulse ox, things like that. But then the medical assistant will ask you 10 questions and the medical assistant will put them into the notes. The physician then they'll take you to the exam room. At that time, the physician will then ask you all the same questions all over again so that they can put it into the notes. What AdviNow does is we do a couple of things for the medical assistant. AdviNow  asks all of the questions so the medical assistant is just confirming with the patient that it's actually what they meant. But then we have an augmented reality system that actually enables a medical assistant to do a heart exam, a lung exam, an ear exam, an eye exam, a throat exam, everything that the physician would normally do from a physical exam standpoint, the medical assistant can now do. So any layman can actually do a heart exam or a lung exam. We collect that specimen. The doctor then will listen to the sounds, look at the images and they can do a complete diagnosis without ever taking those measurements.

04:35 Wow. So is this adding to the, I guess, telehealth type applications as well? This sounds like a perfect combination hand and glove here.

04:45 Absolutely. So we were used very prolifically during the pandemic for telehealth because we offer different levels of telehealth than what they can get before. If it's just basically a video call like we're doing now, a doctor can't really determine what's going on. They can guess, you know, a lot of people like to call it teleguess, but when you add labs and physical measurements into it, the doctor can actually diagnose you as if you were sitting right.

05:13 Now from a patient perspective though, tell me what this looks like, because there's a lot of people who are self-employed, self-pay, that don't really have awesome insurance, that I immediately think, awesome, am I not paying for that first part of the visit and then paying every time I go back to have a look or think or question about my case? How does it look like from a billing perspective? I guess it was just up to the doctor or are you handling a lot of that as well?

05:44  Well, so we will help the doctor do all the coding and make sure it gets billed at the most appropriate level. But to the patient, it's actually transparent. They're billed and everything to them as if AdviNow didn't exist. What we do is just automate that whole process for the physician. So any bill the physician is going to submit to the insurance company, it gets rejected less because the notes are more complete, all the right codes are chosen. A lot of back and forth, the physician's basically paying themselves with insurance companies goes away. So to the patients, they don't notice any difference. To the doctors, they notice actually profitability going from on average 3% EBITDA in primary care to over 30%. So when your profitability bounces at that level, it's dramatic to their medical practice.06:40  This sounds like a nice secret weapon for a health business advisor in the medical industry. I mean, this secret weapon could automatically, I mean, think of the overhead that you're cutting out. It's crazy.

06:56  It's huge. What's amazing is it's not just overhead, it's new revenue. So let's say you run an urgent care and you walk into the urgent care, but your waiting room is full. What is that patient gonna do? Chances are they're gonna go somewhere else. But when your waiting room is empty because you're seeing two times more patients per hour than you could see previously, at the same time, you're spending more time with the patient face to face because you've just eliminated all of that clerical waste. Patients want to see you, they wanna come back. So on average, revenue increases about 30% for our clients. So not only does revenue go up, but their costs go down.

07:38 So is this an interface through a kiosk, through an app, through, how are you getting the information from the patient?

07:47 It's on their phone. So they just get text message to link. So they can scan a QR code or they gets text message to link. They click on it and the AI just starts that engagement.

07:58 You're amazing. All right, thank you first of all for solving this problem because this is amazing. I love it. Second of all, tell us how the growth has been. I mean, you couldn't have timed this any better to kind of engage with this problem during COVID. I mean, seriously, was this inspiration? How did you do this?

08:19 Well, we were lucky and then we were not so lucky. So there's definitely some ups and downs. 

08:25 Okay. Well, tell us about the lucky first.

08:26 The lucky is that hospitals, clinics, physicians, everybody knows that they must adopt artificial intelligence or else they can't survive. So we are definitely at a perfect time in the industry and ChatGPT just basically is our marketing art. I mean, they go, oh, we need a strategy. 

08:47 Just validated everything for you.

08:49 Advinow is the strategy. Great, so four of the top 10 health systems in the United States have chosen AdviNow as their AI strategy. And that all happened since ChatGPT came out. 

09:03 Oh my gosh, you're kidding. Congrats on 2023 then.

09:06 Exactly, it's a fantastic year. 

09:12 Wow, good for you.

09:13 The unlucky part of it is we actually partnered with Safeway grocery stores. They're at Albertson Safeway. It's the second largest grocer in the nation, actually in the middle of maybe being acquired by the largest grocery in the nation, we'll see. And we partnered with them to put a thousand clinics in their grocery stores. And so there were 20 clinics open pre-COVID. 

09:34 Holy cow.

09:36 And they were all using AdviNow software and we were gonna be a hundred million dollar business in 2020, world was great. 

09:50 Wow.

09:51 Well, that was February, 2020. in March 2020, COVID hit. Do you think grocery stores want sick people in their stores? No. So my paying client, my large paying client went away and they didn't want anything to do with COVID being near that grocery store. No sick people, sorry, not a strategic need for a grocery store during the pandemic. So it was, It's pretty disappointing that all that happened, but at the same time that forced us to pivot into larger clients that 100% focus on healthcare because that is what they're doing. And although health systems take forever to ramp, they're slow. The pandemic was that initiative for us to get that initial traction and help us get to where we are today.

12:24 Very cool, very cool. Now this isn't your first rodeo. I know that you have been involved in growth and scaling at a lot of different levels, some of them very significant. What are some of the highlights of that journey that kind of led you into the confidence to take something into an industry that is as mature as what you're getting into and feel like you can effectively make change there?

12:50 Yeah, so my first startup experience was actually with a company named Silicon Laboratories. And before Silicon Laboratories, I worked for Bell Laboratories, and we had the opportunity to work on things like the world's first digital cell phone chipset. Well, some of the people I worked with at that time founded Silicon Labs. And when they were looking for somebody to run their Asian or actually all of their international operations initially, I got the call. And I'm like, I have no idea how to run sales and marketing, but I'm sure I can figure it out. And I got the job. And it was very interesting for me because I was very naive. I was an engineer. I loved the tech. The technology at Silicon Labs was absolutely amazing. We could take radio frequency signals, very high frequency signals, and use the lowest cost semiconductor manufacturing techniques. And we could change the world. Obviously, you always want to change the world. That's a wonderful thing to do. But that's all I knew. And so I joined them. And I'm like, we're going to do this. And so I lived in Japan at the time. And I had to find a way to stay in Japan. Well, I lose my visa with Bell Laboratories. And then I go to my startup. And I'm like, hey, I need to get a visa. So we need an entity. And they're like, OK, go ahead and create one. And I'm like, uh... Is there like a lawyer I can talk with, a consultant, somebody that actually knows what they're doing? They're like, no, this is 2001, we just had 9-11. We can't afford any of this. So sorry, figure it out. So, it started with my first day on the job of really going to the Tokyo office and figuring out how to create a stockholding entity. I formed it all in my name and then sold it back to the entity in the United States. And so if you go to Silicon Labs Kabushiki Geisha, which is a stockholding entity in Japan, you'll find the founder and loan stockholder in the very beginning is James Bates. It was a wonderful time. But as we started there, you know, as a company that was losing a lot of money and trying to do it, I was forced to create some fantastic partnerships with some distributors in different regions because our client, we wanted to sell in Korea to Samsung and LG. We wanted to sell in Taiwan to companies like BenQ or Acer, all of these other guys. We wanted to sell in China to guys like Wallway, which is a much hated name today, but back then it was a wonderful client and we wanted to sell to everybody. And so I basically just did the same thing, found people that I could trust created nice relationships. And then over the space of the next three years, hired over 200 people, founded entities in every single country, negotiated with the Singaporean government for lower tax structures. We did the whole process and it was just an amazing experience. Ultimately, we grew the revenue from zero to half a billion dollars in four years. And it was the driving force for the whole company. Our market share, 80 to 90% of all cell phones manufactured in Asia have RF technology inside.

16:20 That's amazing. Congratulations. I mean, honestly, like at half a billion in 2004 is several billion in today's terms.

16:27 It is. And after next year, it'll probably double again.

16:30 Right, now that is fantastic. You know, honestly, stories like that are so inspiring and they seem so out of reach for a lot of people. You know, our listening audience are people who, many of them are just trying to get through that first growth cycle. It's like, I've launched a business, I don't know what to do next. Help me out, what's my next move? Because everyone on the internet, everybody on the internet talks about launching. Nobody talks about those next stages, So as you kind of work through this, because you've done this before, taking Advinow to where it's at now and having that huge fallout at the beginning of COVID and then learning what to do next, how did that affect your ability to just kind of transition through these challenges and move on to your next steps?

17:22 Yeah, I mean, the startup pain is a well-known phrase and a lot of people that I know. AdviNow was over 100 employees in February of 2020. By June of 2020, we were 15. And so nobody wants to go through that. It was, It was just an extremely brutal experience. And so what I did is I looked at that and I said, what do we absolutely need and what don't we need? And making that decision really allowed us to trim down our expenses and get us to a point where we could survive, but making sure that we maintain the expertise such that these large health systems, which are, you know, hundreds of billions of dollars of revenue type people, they're gonna look at us and think that, you know, we're worth the risk, you know, we're not a risk. And so, that transition was something that I wouldn't wish on anyone, but I am thankful that we had to go through. 

18:39  Well, and to that point, I think just so that the people listening can understand this, what you're saying is sometimes as you start to launch, you get a little bloated in areas where you don't need that growth, and you don't know what to do with the extra overhead because you're making money, it's okay, right? But when you really take a step back and you look at what you've built and your bloatedness, you kind of think, okay, where can we trim the fat? Where can we make things work a little more efficient? And you made it happen. That’s exciting.19:10 Yeah, and it's as we're going through, you know, another growth phase right now, um, you know, the, the goal is to make sure that we don't, we grow the right people leading the right teams. And it's not about who is here first. It's about, are they, you know, the right passengers in the bus, in the right seats and, and all. All startups have to go through that. Um, it's just a matter of how painful it is when you do.

19:46 Well, that's awesome. I mean, you obviously, in the type of work that you're doing, you're seeing a lot of startups hitting medical field, you're hitting a lot of startups that are hitting other technology, AI-based fields. What do you suggest people do when they're really trying to determine, am I at growth phase or am I still launching? How do you interpret that difference, I guess? Because they're two different mindsets. 

20:15 Totally.

20:16 Now what are your thoughts there?

20:17 Well, it really is, do you have product market fit or not? And so you can grow a company and get customers because the founder is a total believer and he could convince an Eskimo to buy ice cream, right? I mean, and those companies exist. They will never become growth phase, because it's not a scalable, it's not, you can't hire 10 people and rinse and repeat what that founder's doing because that founder is just a fantastic salesman. The product isn't fantastic. What you know when you reach scale is when you can give it to anyone and the product can sell. Then it's all about how are you scaling and supporting that growth such that the MPS score of your customers is always positive. They're always introducing somebody. So you're not wasting your money doing marketing. You're spending your money getting the referrals and growing the business in a natural way.

21:17 Wow, yeah, I love that. I love that description, you just nailed it. I really feel like that is the time when you know that the product is working, and it's also the time you know that you can kind of as a founder or as an operator really trust the product into the hands of your delivery people, because I think that that's a huge problem with most people is that they have such a hard time pulling their fingers out of all the parts of the businesses they don't need to be in and letting the real pros come in and say, look, product market fit is here, people actually want it, we know what problem we solve, let us take it from here, boss, right? 

22:02 Yep, absolutely.

22:03 That's the time. So as you, you know, moving forward, I got to imagine, did you raise some outside capital for this venture, is it all bootstrapped? How have you made those choices in that growth journey?

22:17 I've raised a lot of money and I've put in a lot of money. So we've raised a total of 18 million so far and I've put 7 million of my own into it. So it's a total of 25 million into the venture so far. We probably need another 10 quite frankly, before we're done, you know, but our goal is to be raising money at valuations that are so large, the dilution is very small. And so as next year, as we're continuing our scale up to levels where we can raise money in the hundreds of millions of dollars range, then I'm much more comfortable raising that money and making it happen. Initially, as a founder, it's my first time being a sole founder for Advinow. You know, it was interesting when I went out and made my pitches to the VCs before I really put any money of my own into it. And I wanted to raise $10 million to go build, you know, build the technology. And I took it up and down Sand Hill Road in Northern California. And I'd lived in Palo Alto before, and then I moved to Arizona. So, I know the scene rather well. And I was amazed at what people were offering. Oh yeah, 50% of your company for 10 million James. And I'm like, what are we talking about here? And so it was really eye-opening to me what a lot of these founders end up giving away to get off the ground. So I did bootstrap it originally until we actually had a product before I raised money. And that allowed me to raise at a higher valuation. So, you know, I still own roughly 50% after all this time. And, you know, it's never enough as a founder, but at the same time, I feel pretty proud of where we're at.

24:17 You know, to have a controlling interest with that much revenue raised is pretty, pretty amazing. And, uh, congrats on everything you've done so far. I know, I know it's far from where you know, it can get to, but, but boy, what a great journey. What, what a fun experience you've had so far. You know, it's fitting now, don't you?

24:38 Oh yeah, product market fit is not the problem at all right now. Yeah, it's all about scalability. Yep, keeping up is the challenge.

24:43 It's just the tech keeping up with the needs. I love it. Well, you know, you'd like to think that most of your clients are pretty smart people. They've been to a lot of schooling. So hopefully you're able to pitch that the way that it needs to be presented to them and in a way that they see the value of what you're giving them. You're really gifting them a lot of their life back, in my opinion.

25:09  Exactly. You know, if you talk to any physician and you ask him, what do you hate most about your job? Usually they will say pillow time and they're like pillow time. Is that like when you talk to your wife? It's like, no, that's why I'm sitting on my bed finishing out the charts for the day. So they go home, they have dinner, they sit on their bed and then they complete the charts. Well, there is no pillow time with people who use Advinow. They get to actually have real time with their spouse.

25:39 What a great solution. Great solution, great product, great story. For those of you listening to this episode, I hope you realize what you just listened to because this is not the advice you're getting from a first time founder. This is the advice you're getting from someone who has grown and scaled regularly throughout his life. And I hope you relisten to this because there are some really awesome tidbits of info here that you're going to find. And when you do, put them in the notes below. I know that James or I, would love to comment back and give you additional feedback on what you're wondering about might have happened with this business. James, thank you so much for taking the time to be on the show with us today. It's a great blessing and what an awesome, awesome journey you shared with us.

26:23  Well, thank you for having me, Todd. I appreciate it.

26:27 All right, and we'll catch the rest of you on the next episode. Thanks so much.