Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com, and it's featured guest time on the show. And this morning we have a unique entrepreneur who after several successes, became a venture capitalist with two professional firms, and who then came back to the startup world as an operator. Now the CEO of WhiteGlove House Call Health, Bob Fabbio. Bob, welcome to the BusinessMakers Show.

Bob: Thank you Russ.

Russ: Let's start by you telling us about WhiteGlove House Call Health.

Bob: Well, what WhiteGlove does is it brings affordable, high quality, routine care to your home or work, 365 days a year, from 8:00 a.m. to 8:00 p.m., and our healthcare experience is all-inclusive. It's the medical care, the prescription meds, the foods, the beverages, and the over-the-counter remedies.

Russ: My goodness. That sounds almost too good to be true.

Bob: That's the biggest piece of feedback we get.

Russ: You said, "Affordable." It seems to me that professionals coming to my house and helping me with all that has to be fairly expensive.

Bob: It's actually one of the novelties of our business and why we're getting so much attention nationally. The entire healthcare system in America is essentially run on what's called, "a fee-for-service, reimbursement model." Meaning, every service we request, there's a charge for it. Either your insurance plan or you as a consumer pay for that, or both. With WhiteGlove, you join as a member and that ranges from $300 to $400 a year, and then every visit we go on, it's $35, all-inclusive. That includes your medical care, your prescription meds, your foods, your beverages, and your over-the-counter remedies. So we don't make our money on visits or services, we make our money on our memberships.

Russ: Okay. Can anybody become a member?

Bob: Anybody can join WhiteGlove. We have consumers everyday coming to our website and joining or calling to use the service. And of course, we also provide our service directly to employers and that is where our largest growth is coming from today.

Russ: Okay, meaning companies sign up with WhiteGlove as part of their healthcare benefit program.

Bob: Yes, we work with CFOs and CEOs of organizations, and talk to them about the business value that WhiteGlove brings to their business in increasing productivity and lowering their healthcare costs, and then of course, the other positive side effect is it's a great new benefit for the employees and dependants that are associated with that company. We've signed up over 200 companies in the last three quarters.

Russ: What might be the largest number of employees in one of these companies?

Bob: It ranges everywhere from four employees all the way up to tens of thousands of employees.

Russ: Okay, let's roll back again. What all are the services that these people that come to your home provide?

Bob: Sure, we send nurse practitioners to your home or work within hours of being contacted and our focus is routine care, so it's the kind of care you seek when you go to a primary care doc, a minor emergency clinic, an urgent care center. The scope is generally ears, nose, throat, skin, hair, nails, respiratory, and digestive; and so they provide the medical care in your home or work. Your mom's home, your girlfriend's home, wherever you are in our service areas, and with that visit they bring the generic meds you'll need if you need meds and a goodie bag, we call it a Well Kit, that has things like ginger ale and chicken soup and crackers and tea and jell-o and cough drops and Advil and Tylenol, and that's all part of the $35 visit fee.

Russ: My goodness, okay. So where does the line get drawn though. I mean could they stitch up a cut even?

Bob: Yes, our nurse practitioners. That means their mid-level providers that are capable of providing routine care, they're capable of prescribing meds, they're capable of suturing, and immobilizing.

Russ: Wow, okay. I've had several nurse practitioner experiences myself that were very positive, but it seems to really make sense to be using a nurse practitioner.

Bob: In the area of routine care, a nurse practitioner can do everything a doctor can do, with the exception of prescribed narcotics. They're a mid-level provider, they have a master's degree, and all of our providers have both family med backgrounds as well as urgent care or emergency room backgrounds. So frankly we're sending way over-qualified clinical people into the home and work to deal with often sinus infections and skins rashes and ear aches and stomach aches and those kinds of things.

Russ: Okay, well do your nurse practitioners, do they only work for WhiteGlove House Call Health or do they perhaps have other practices that they work in?

Bob: No, they solely work for WhiteGlove, and again, you hear a lot about the shortage of providers out there, and in particular, nurse practitioners. We've actually had no problem attracting talent because A, we pay 'em a competitive wage to anything that they could make elsewhere. One of the big differences though is if they work for a primary care physician, they'd see up to about 25 patients in a day. Urgent Care Center - 40, an emergency room - 55, and with WhiteGlove they'll see at most 11 in a day.

And then in addition, they're all employees of WhiteGlove and so they all get stock or stock options. And so that's very appealing to 'em because this is the only time that they've ever had a chance to get equity in a thriving, growing business.

And the last thing is, the average time that is spent in routine care today in America is about six minutes and our providers get to spend up to 20 minutes of time with each of our members, and so they love the fact they get to spend additional time with folks.

Russ: Real cool. I'm talking with Bob Fabbio, CEO of WhiteGlove House Call Health. And we'll be back with more with Bob after this. You're listening to the BusinessMakers Show, heard here and online at the businessmakers.com.

[Aflac Commercial]

Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com, and continuing on with Bob Fabbio, CEO of WhiteGlove House Call Health. Well it sounds to me so cool Bob, I would think that maybe the rest of the healthcare industry is gonna follow or actually copy WhiteGlove.

Bob: Actually there are lots of folks paying attention to what we're doing, both on state level as well as on a national level. But the truth is, is that we've built a business that's pretty difficult to replicate. To the lay person or the consumer, yes, the description of WhiteGlove is they bring care to my home or work 365 days a year, and their includes the meds, the foods, the beverages, and the over-the-counter remedies. But the truth is, is there is a number of things that we've done with the business that when you know, healthcare pundits or healthcare analysts look at our business, they go, "Wow, this could change healthcare on a national level."

Bob: It starts out with the experience. Within a couple of hours of being called, we have providers all over the state of Texas today arriving at peoples home and work, and bringing the care and all the other stuff I've mentioned. That's like running a mini FedEx, on the hour, without skipping a beat, every day we're providing this kind of experience, and we're beginning to expand outside of Texas, that's number one.

Number two, is our business model. Again, the entire healthcare industry today is reimbursed or centers around this business model of, "a fee-for-service." We're the first to apply a health club business model to healthcare. We don't worry about how many visits we do, we don't even make our money on our visits, we make our money on signing up more and more members, and that's a fundamental departure from how the rest of healthcare works. And so there's a great deal of novelty there.

The third thing is, is that while we certainly appeal to consumers - I mean if we were to set up a traditional urgent care center today, we'd find a building or a location, we'd hang our shingle, we'd hire some providers, and bring in supplies and equipment, and then we'd wait for people to show up in the lobby and ask for care, and that's how it traditionally works, right. That's not what we do. What we do is we call on CEOs and CFOs everyday and appeal to them about why they should consider using WhiteGlove as a service inside their business. And so our expertise is building distribution channels and selling into the enterprise and that's not typical. And one of the great appeals is that we're showing organizations everyday how they can drive their healthcare costs down. Why?

When an employee has access to WhiteGlove and we show up at their home and provide care, that employee pays us $35 for the visit. There is no claim that hits that employer's health plan for our visit or our prescription meds. Again, we're not fee-for-service, we make our money having that company pay for the membership for that employee. So it's a fundamental shift, but the employer knows then that we've capped their costs at the membership fee, so that's the third novelty, and the last is technology.

We've made a very sizeable investment in automating the entire lifecycle of deliver and care, and linking together all the constituents - the member, the provider, our member support team, our back office finance folks, our marketing and sales people, all our corporate members, and myself, all in a single integrated web-based platform.

Russ: I'm curious what triggered the idea.

Bob: Well I'd taken some time off. I've spent a long career in starting and running high-tech ventures. I was bored with it and so I had been on the sidelines for about 15 months, decided I probably needed to go back to work. Was having a little discussion with myself over lunch, "What should I do?" I thought, "Well, maybe I'll focus on service. We're in that baby boomer time, people are paying dearly for services." Then I thought, "Oh, I'm not so sure about service businesses. They're hard to erect barriers to entry, lots of people can copy it." And I thought, "Well, if it's complex subject matter, if it's a large, messy market and I could use my technology background in an unfair way, maybe I'd go do that."

Finished my lunch, went on with my day, didn't think about it again for about 30 days, and then one morning I got up to go to the doctor's office. I left the house at 9:00 a.m., didn't get home until 2:15, and I went, "Oh my word, it's healthcare." And the rest is history.

Russ: Okay.

Bob: That night I met some folks for dinner serendipitously. One happened to be a dear friend who was a former emergency room doc that had ran the largest outsource clinic of emergency room centers to get public. He asked me how my day went and I said, "Horrible." And he said, "Why?" And I told him and I said, "but I have an idea. What if we brought everything, and I mean everything - the care, the meds, the foods, the beverages, and the over-the-counter remedies to the consumer and we do it in an affordable way." So Dr. Rice and I met a few days later and began to vet this business, but the intent from the very beginning was to change healthcare on a national level by providing consumers with a new choice that was focused on driving the cost of care down while improving the healthcare experience. And the vision has been to be a national footprint service such that, anywhere in the U.S. within our service area, that if you call WhiteGlove as a WhiteGlove member, you will get the same experience. Now we're in five major metropolitan markets after two years.

Russ: My goodness. So did this idea call for any actual funding as well or have you been able to just take it off bootstrapping from the beginning?

Bob: The business was bootstrapped for about the first 18 months. We launched the service in Austin and began to build a groundswell of activity and interest, and then after that we actually went out and raised outside capital. We've been fortunate in a very difficult economy to raise multiple rounds of just under $14 million dollars. And in both occasions we raised the money in under three weeks.

Russ: Wow, impressive. But it's a model that requires rolling out to new markets, and hiring people, but there's still some heavy lifting involved in this thing, right?

Bob: Actually not. Again, much of the business centers around the use of our technology and we've centralized a whole lot of that that goes on when we open up a new market. So we opened up Houston four or five months ago. Literally had the market up and running in a few weeks, and all we do when we go into new market is put the team on the ground that provides the WhiteGlove experience. The rest of the service and what members experience is all technology enabled and all centralized in Austin, Texas.

Russ: How many total nurse practitioners work for the company today?

Bob: Today we have over 45 nurse practitioners serving the markets in Texas. We're adding a few a week at this point. We grew over 500 percent last year and our plans are calling for much greater growth this year. And again, we'll be expanding to between four and six markets outside of Texas this year.

Russ: How many employees are there that are not nurse practitioners in the company?

Bob: We have about 65 employees in the business today.

Russ: Okay. Talking with Bob Fabbio, CEO of WhiteGlove House Call Health, and we'll be back with more with Bob after this. You're listening to the BusinessMakers Show, heard here and online at thebusinessmakers.com.

[Aflac Commercial]

Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com, and boy we have a unique model today. We're talking about WhiteGlove House Call Health and I'm with the CEO, Bob Fabbio. Let's say Bob, somebody's heard this and they're saying, "I wanna sign up." How do they do it?

Bob: Well there's a variety of ways to become a member. They can go to www.whiteglove.com and sign up online and immediately become a member and have access to our service. Or you can call 1-877-329-8081 and speak to one of our member support people who will sign you up as well. And then of course, depending on who you work for or what kind of insurance you have, you may have access to our service depending what health plan you're on or who you work for.

Russ: Okay. Does that mean that even some of the insurance carriers sign up all of their participants under your plan?

Bob: We have established relationships with Humana, Aetna, and UnitedHealthcare where their insured are automatically WhiteGlove members when they call the first time for service.

Russ: Interesting.

Bob: And those insurance companies pay for the membership on behalf of the insured, and then all the consumer or the insured pays for is the visit fee.

Russ: I do find it fascinating that you transitioned out of the world of technology. You have a lot of success in that area and you've already mentioned what triggered the idea to get in to this service business. Do you miss technology?

Bob: You know, I don't miss technology at all from a pure technology perspective. In fact, I couldn't imagine today calling on a senior executive in a Fortune 500 company and trying to sell 'em a new light-bending widget. What I can tell you is, we are using technology in a significant way in this business, and so I'm constantly applying my technology know how to solving problems that here to for, haven't been solved by most other provider systems.

Russ: Okay, so you still get that thirst quenched on there.

Bob: Oh constantly. In fact, one of the uniqueness' I've been the "translator" if you will, between our IT organization, our clinical team, and the folks that know about insurance, and so I'm sort of the conduit for saying, "Here's what I think we need to go build and how," and it's been great fun.

Russ: Okay. Well now I said this in the very beginning in the introduction, you are unique in that you had these startup experiences and then you became a venture capitalist. Most people that I know that do that never come back, but you've come back, and do you miss now being an investor and seeing all those business plans or are you more comfortable in this position?

Bob: I've been blessed to be able to do both, start and run companies and come up with the germs of ideas that have ultimately flourished into billion-dollar organizations. I've also been blessed to spot ideas and fund them, and have them turn into billion-dollar ideas, but I think my true passion lies in creating things myself and running them. I'm having a ball. I work as hard as I ever have, probably a lot smarter. In fact I know a lot smarter, but no, I don't miss being an investor at all.

Russ: I'm curious, you're so committed to this area that the BusinessMakers Show is all focused on. When did the entrepreneurial spirit kind of show up in Bob Fabbio?

Bob: I've been asked this a thousand times, "When did you decide to become an entrepreneur?" And I think there are people that do decide through for whatever reason in life to say, "Oh, I'm gonna go try to start something." And then there's people of which I consider myself one, where it's just part of your DNA. My mother will tell you that at age four, I took all the tires off my little car-trucks and cars and put 'em in a brown paper bag and actually walked around the neighborhood trying to sell the tires to my neighbors for a penny a piece.

Russ: (Laughter) Yeah.

Bob: And she didn't even know I had left the house. She got a call from one of the neighbors saying you know, "Do you know what you son's doing right now?" And so I think it's just been part of me to be resourceful and creative and push the edge and do things different, and also sell.

Russ: Yeah, okay. Well what were you like in high school?

Bob: I would characterize myself in both high school and college as someone who never fit in anywhere.

Russ: Okay. (Laughter)

Bob: Meaning I played sports, I was the captain of this and that, and yet I was also fairly academically strong, and so I didn't fit with the nerdy people and I didn't fit with the athletes, and so I was always kind of in suspended animation, but always had an interest in being well-rounded.

Russ: Well before I let you go, let's imagine that there's an aspiring entrepreneur out there in the audience and they're real curious about what advice you might give to an aspiring entrepreneur.

Bob: For young companies and entrepreneurs, to me, the single biggest thing that's missed is clarity around what I call "the what's" and it's the biggest reason for young businesses failing. It's what's the problem you're solving, what's the target audience, what's the solution they need, what's the pricing and packaging, what's the competitive landscape like, what's business model to make money, etcetera, etcetera, etcetera; so it's what I call, "the what's." They're very easy to sort of spout off. They're very hard to gain clarity around, but to the extent that those folks spent as much time as humanly possible, getting clear about the what's, their likelihood for success increases immensely.

Russ: Bob, I really appreciate you giving us some of your time and sharing your story.

Bob: Thank you very much.

Russ: You bet. That's Bob Fabbio, CEO of WhiteGlove House Call Health, and you've been listening to the BusinessMakers Show, heard here and online at thebusinessmakers.com.