The Roman philosopher Seneca said, “Luck is what happens when preparation meets opportunity.” But Zig Ziglar, one of the world’s most popular motivational speakers, replaced luck with success. Why? Because drafting an action plan for reaching your goals helps you take advantage of opportunities as they appear.
The founders of Evolutis Health, Sri Kalapala and Dr. Sheel Patel, experienced that intersection of preparation and opportunity when they built their virtual healthcare platform before Covid made telehealth the new norm. With their combined knowledge of healthcare and technology, the founders were able to capitalize on the digital shift with virtual psychological evaluations by licensed psychologists.
Since launch, Evolutis Health has seen just shy of 5,000 patients and established a strong product-market fit. But even though they’ve revolutionized psychological evaluations, their biggest challenge remains scaling a business still mired in inefficient systems.
Each Failure Is a Lesson Learned
Sri Kalapala studied medicine at university but was never truly passionate about it. During his senior year, he saw how much time and energy his older med-school friends committed to their studies. “They told me that if I didn’t love medicine, it wouldn’t be worth dedicating the next ten years of my life to it. Then came the awkward phone call to my parents, letting them know I wasn’t going to be a doctor,” Sri says laughing.
Instead, Sri was passionate about entrepreneurship. “Something about turning an idea into reality with just the internet and a computer that can somehow impact the whole world made me so excited,” Sri says. Ever since college, he’s been figuring out how to solve real-world problems.
Sri tried – and failed – at many different things. But every endeavor taught him what not to do for the next one. Sri believes he wouldn’t be where he is today if he didn’t go through a decade of failures in all sorts of industries.
His first failure was in baked goods. Sri grew up in West Virginia, a place famous for pepperoni rolls. When he moved to Atlanta, he realized that you couldn’t buy pepperoni rolls outside of West Virginia. So he decided to bring pepperoni rolls to Atlanta, despite having no baking experience.
Sri says, “I did well in chemistry class in school, so I figured, How hard can baking be? I looked up everything online, including how to bake bread, form an LLC, find suppliers, and so on. I started baking batches and handing them out by the pool of my apartment complex. But I was, of course, totally naive. I didn’t realize that you can’t just go out and sell people food without proper licensing. I also didn’t know everything that could go wrong with a startup and just assumed things would all fall into place once I started. But it didn’t.”
After that, Sri embarked on a variety of projects and ventures. Along the way, he learned that a clear direction is crucial when starting a business. “If you’re putting all this effort into something without a solid plan, it will go to waste. You’re just shooting in the dark and hoping that money will magically appear. I could’ve probably avoided a few failures if I had just sat down for a week and thought through what I was trying to achieve. But there’s nothing wrong with failing fast. It helps you build your next business in the right way,” Sri says.
Alleviating Pain for Doctors and Patients
Before Evolutis, Sri and Sheel cofounded a different business: Insita, an on-demand, at-home healthcare service platform. Sheel is a doctor and the CEO of the Chicago Spine and Vascular Institute. From 2014 to 2017, they tried to bring the “house call” back. Patients would visit the Insita website, pick a doctor in their neighborhood, and then get a home visit.
“This is another one of those failures that taught us many valuable lessons, which eventually catapulted us into Evolutis Health. The biggest lesson was that this type of business is hard to scale and very resource intensive. Insita needed several doctors in each neighborhood to make house calls timely and effectively. We realized that there was an opportunity to pivot to virtual care, the exact opposite of home calls, where one psychologist could see patients for the entire state,” Sri says.
Evolutis Health now solves a specific problem in healthcare: helping pre-surgical patients get a psychological clearance. For example, if your doctor deems you are a good candidate to receive weight loss surgery, you must pass a psychological evaluation to proceed with the surgery.
Traditionally, the doctor will either refer you to someone or leave you to find your own psychologist, and you might wait months for an appointment.
Sheel noticed that whenever he sent patients to get a psychological evaluation, they would take months to come back to him – and sometimes wouldn’t return at all. He dug into the problem and found that access to that type of care was very limited. Could the founders expand access to pre-surgical evaluations by virtualizing the process? This was pre-pandemic, and although telemedicine had existed for almost a decade, it wasn’t widely used.
Building and Selling a Trusted Team of Psychologists
In May 2019, Sri and Sheel started bringing their new idea to life. It took them several months to build the foundation of Evolutis Health, figuring out the patient pipeline process, which software worked best, what insurance to credential their providers with, and so on. But one of the most challenging tasks was building a network of licensed clinical psychologists to conduct the psych evaluations.
Sri explains, “It’s a chicken-and-egg scenario, where you can’t get patient referrals until you have a psychologist. But psychologists don’t want to join until you can provide them with work. So when we were trying to recruit our first batch of psychologists, we were honest with them that it was a brand new company and we didn’t know how long it would take to grow our patient base. Those first psychologists truly believed in us and were willing to take the risk.”
The founders also raised a small friends-and-family round of $50,000 to help get the business off the ground. But they continued to run Evolutis Health with a bootstrapped mindset: “We didn’t pay for anything that wasn’t necessary. We even used a free Gmail account for the first seven months because we didn’t want to spend six dollars a month for a custom email address,” Sri says.
Once everything was in place, the founders used Sheel’s practice to pilot Evolutis Health. Their first referral patient came through the (virtual) doors in September 2019. Then the founders measured how quickly they could get patients through the pipeline once they were referred, which included insurance checks, virtual assessments, the evaluation with a psychologist, and a written report sent back to the doctor. They could trim the process down to two weeks.
The founders knew they were onto something, so they started cold-calling doctors’ practices and medical reps in their network. Starting in Chicago and Indiana (where Sheel practices), they called doctors and told them how Evolutis could help streamline the psych evaluation process without any extra effort on their part.
“In health care, a lot of systems are antiquated. People don’t want to mess up what’s already in place, however inefficient it may be. So that’s the mindset we always face in this industry. But Evolutis doesn’t change anything internally for doctors’ practices. Instead of referring a patient to Doctor X, they refer them to us. We can easily integrate Evolutis into their existing workflow. They don’t have to implement any new software or training and there’s no cost to the doctors, as we bill the patient’s insurance directly,” Sri says.
Building trust is critical in health care. Doctors didn’t know Evolutis Health, so the founders had to demonstrate they understood and could solve health professionals’ problems. The credibility of their psychologists helped with that. They put a lot of effort into ensuring the evaluation reports exceeded expectations of quality and detail.
Evolutis Health was slowly growing through cold calling and relationship building, but telehealth still wasn’t something that most patients were comfortable with. For several months, the founders worried their service wouldn’t catch on. But in March 2020, the world changed. Soon, all those people that may not have wanted to use virtual care had to adapt. Doctors had to get on board with telehealth if they wanted to see their patients and vice versa.
“We were fortunate to have a completely-built product that solved this one specific problem. I know it’s a cliche, but luck happens when preparation meets opportunity. We were prepared for an opportunity we didn’t know was coming, and we were able to take advantage of it to the fullest. I think that’s where all my previous failures came into play. I got to skip a few steps because I knew which mistakes to avoid,” Sri says.
Finding the Right Partner Goes Beyond Convenience
Sri’s previous business ventures also taught him the importance of building a strong (founding) team. He says, “Don’t pick somebody you know just because it’s convenient. You should have a rapport with them and understand how you complement each other. Learn the other person’s nuances and how to maximize your time together. It took a few failures before I understood how crucial that was.”
To run Evolutis, each founder has clearly defined strengths and roles. Sheel is the subject matter expert, a physician by trade, who faces the problem Evolutis solves daily. According to Sri, he’s the person who tells their story best because he can empathize with other doctors facing the same challenges. Sri’s background is in operations, so he focuses on ensuring Evolutis Health runs efficiently day-to-day and delivers on its promises.
Sri advises having as many transparent and awkward conversations as possible ahead of time if you’re considering starting a business with someone. Your cofounder is the person you spend almost all of your time with, especially in the beginning, so you need to know what you’re both getting into.
To turn Evolutis Health into a reality, Sri and Sheel spent every day together for months. “I love working with him because we’re similar as much as we need to be but have complementary mindsets. We have good discussions instead of conflicts and know how to agree to disagree. I trust Sheel to make calls that he feels strongly about and vice versa. That’s partly why Evolutis Health is where it is today because we found the right business partner in each other,” Sri shares.
And it goes beyond finding the right cofounder. When you’re building your team, grouping talented people together isn’t enough. You need to consider each person’s skill set and how it contributes to the team’s goals. Evolutis now has five full-time employees and 15 contracted psychologists who form a strong and trusted team pulling in the same direction.
The objective is to help people, which Evolutis has done for almost 5,000 patients to date. Sri says, “There are patients who are in pain all the time, and neither medication nor therapy has helped. As a last resort, there’s this device called a spinal stimulator. The stimulator delivers tiny pulses of current to specific nerves on the spinal cord that mask pain signals traveling to the brain. Before patients can have this surgery, they need a psych eval. Imagine being in pain for three more months while you wait for an evaluation. We can help those patients much faster and ensure they find relief.”
Scaling Despite the Chicken-and-Egg Challenge
Evolutis Health turned cash flow positive six months ago, and the founders aim to double its revenue in 2023. “We’ve barely even touched the surface of the total addressable market. If we can figure out how to scale properly, 2023 and 2024 will be huge years for Evolutis Health. But scaling the business isn’t straightforward. We need to add more psychologists in more markets, which is again the chicken-and-egg scenario I talked about,” Sri says.
Evolutis Health must wait up to six months to add new psychologists as they undergo a credentialing process with the insurance providers. In the early days, the founders tried to plan ahead, but then they had too many psychologists and very few referrals. When the pandemic happened, it was the other way around. Keeping that balance is challenging and makes it hard for Evolutis to scale quickly and effectively.
Sri says, “We’re trying to predict how many psychologists we need fully credentialed by this time next year and have already started recruiting them. This will allow us to expand into new markets, including Florida, New York, and Texas. But I think our biggest challenge with scaling is yet to come – and it’s going to happen this year.”
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