How to attract customers quickly with Tegan Bukowski, Co-Founder of WellSet. Tegan is a tech-architect who taught herself to code at the age of eight and has been driven to create something powerful ever since. WellSet's mission is to increase access to preventative healthcare and wellness, for everyone. Facilitating the relationship between the practitioner and patient, WellSet is a discovery platform and powering practitioners' businesses. They attract their customers not by advertising a tech platform, but by getting in front of them in the right ways and being mission-driven.
Table of Contents
- An Entrepreneur From a Very Young Age
- Combining Arts with Engineering
- Personal Set-backs As Sources of Innovation
- Co-creating and Bootstrapping the Business
- Unique in the On-line Wellness Industry
- Challenges and Opportunities
- Current Status and Projections
Mimi: Hi, welcome back to The Badass CEO. Today we have Tegan Bukowski. She's an architectural designer, a technical entrepreneur and the co-founder and CEO of a preventive healthcare booking platform called WellSet. Tegan tell us exactly what WellSet is.
Tegan: WellSet is the first centralized platform to find and book wellness providers in over 35 different modalities. We have thousands of practitioners available nationwide for both virtual and in-person sessions, COVID permitting. It's a really great place for people who have a chronic condition and are trying to solve it, to find the right practitioner to help them on their journey.
An Entrepreneur From a Very Young Age
Mimi: Did you always know you wanted to be an entrepreneur?
Tegan: I've really been starting things since I was a little kid. I've been coding actually, since I was about eight years old. It's actually a ridiculous story, because I was on, there's this website, maybe you've heard of it, maybe you haven't, called Neopets. It's basically like Tamagotchis on the internet, and I think it's still exists actually, so you can go to neopets.com and check out what it is.
Mimi: I think I know what you're talking about, but not completely. Can you tell us a little bit what it is?
Tegan: It's a game where you take care of these little creatures.
Mimi: Yes, yes, yes.
Tegan: It was just one of the first things on the internet that really caught my attention at a really young age. I ended up getting really into that game and I started a club on Neopets, they're called guilds. I was, literally this is like, I don't even know, 25 years ago at this point. This was very web 1.0 in 1995 or something like that. Anyway, I created a guild called Angels and Avengers that had a bunch of people who were members. I can't remember exactly what Neopets did to make me go down a coding rabbit hole, but I have heard multiple other women who are about my age, who also started coding because of Neopets. I think that they required us to code either a template on the guild website or to create a website. Anyway, I went down a whole rabbit hole of making websites when I was literally eight years old.
Creating on-line communities
It really scared me because that was the era of people telling you that if anybody learned your real name online, you were going to get killed by a serial killer or something. I was like, oh my God, I'm internet famous, I need to shut this whole thing down or I'm going to die. I ended up shutting the website down. Anyway, all of that is to say that I have been starting things from a very young age and I continued to do that all throughout college. I started a nonprofit that operated in nine different countries while I was going to school for architecture and environmental philosophy. I've started a whole bunch of things since. I guess the answer is, I've always been an entrepreneur.
Mimi: What was your nonprofit?
Tegan: I had a nonprofit that did arts therapy with kids in different countries, kids that have been affected by warfare or natural disaster, election violence, that sort of thing.
Mimi: What was it called?
Tegan: It was called Artists Activists. We never really scaled it up to being a nationally recognized nonprofit brand or anything, but we did do a lot of really fun projects. We did everything ranging from photo journalism classes with kids in the Kibera slum in Kenya, arts classes combined with English classes with kids in Metagene, who had been affected by the guerrilla warfare in Colombia. We started a radio school in Ghana, where kids would learn how to run a radio station and then teach the farmers agricultural best practice over the radio.
Air Force Academy offered longed-for structure
Mimi: That's amazing. What was your major in college? Was it computer science?
Tegan: Okay. Taking one step back. I grew up actually living on a boat in Puget Sound, in Washington. And so that whole time that I was coding, I was literally coding on a boat and I really had very carefree parents who let me do whatever I wanted to do. I think I just really, really wanted structure after I graduated from high school. I went to the Air Force Academy first, actually.
Mimi: I'm so jealous, that's what I want to do too.
Tegan: Oh, really? That's so funny. It's like-
Mimi: I was in pilot. I became a pilot during college.
Tegan: Oh wow, that's so cool.
Mimi: I always wanted to do that, but I was in an accident when I was going into my freshman year in college. I lost movement of my left arm, which then disqualifies you for the Air Force. Cool. For you, did you actually go and graduate from there?
Tegan: I didn't graduate from there, but I went there for the whole, I'm sure probably a lot about this, because you were interested in doing it, but I went to bootcamp for the first summer, it was 10 weeks of bootcamp. I went through the whole freshman year of running to class at 90 degree angles and eating at the position of attention. I didn't have civilian clothes for nine months. I really liked it actually, it was a lot of fun. At the end I was going to be a systems engineer or a security op, I don't know, we didn't really know. In your freshman year, you're still figuring stuff out, even if you're in the Air Force. I think I just really decided that the academics weren't for me, I was feeling very put inside of a box. I'm a person that likes to think outside of the box and rethink systems and how can this be done better instead of just learning the rote memorization of something.
Combining Arts with Engineering
Tegan: That really bugged me and I also, I'm a really artistic person, all I wanted to do was take an art class and I wasn't allowed to take the art class because only juniors and seniors could take it and they could only take it once. There's just wasn't a lot of creativity there and that's really important to me. I stayed for the whole year. I got recognized, recognition is towards the end of the year. You basically go through a hell week with all of your classmates, and the upperclassmen, just haze you. They've been hazing you for a year and some change at this point, but they really haze you for that whole week. I even went to my own funeral during that week, it was really strange.
Tegan: I was technically an upperclassmen for a couple of months and was finally able to have some civilian clothes and could walk to class and could wear my backpack on my back, which you're not allowed to do as a freshman. I still was like, you know what, I don't care about all of the hazing, that was fine. The academics are just never going to change. I ended up transferring to Wash U in St. Louis for architecture.
Mimi: [crosstalk 00:08:18] there now and he loves it.
Tegan: It is amazing. It's such a great school. I would highly recommend Wash U to anybody who-
Mimi: I see you're using your architecture degree with what you're doing now, which was why you're on today, because I would love for you to talk about how you started WellSet and how that came about.
Various projects lead to current business
Tegan: All throughout that period of time when I was working, well, I went through undergrad and also grad school in architecture. I went to Yale for my master's degree in architecture. I was starting all of those different projects. In addition to the nonprofit that we already discussed, I also started East Africa's first utility scale photovoltaic field, which powers 10% of the Rwandan energy grid and about 25,000 village homes, I think. That was really a great project.
I also worked with astronaut Ron Garan while he was on the space station, starting a project called Fragile Oasis, which was all about the orbital perspective and really bringing attention to the fact that we're on this little marble, hurdling through space. We did a lot of humanitarian mapping from the space station. I was actually on the can call list from space. I had the space station phone number in my phone for a while.
I started all these projects, I was in school, I was in really difficult programs and I kept on being hospitalized over and over and over again, for what was basically a mystery illness. I would have extremely bad stomach pain and I would be taken into the hospital and they'd put me on morphine for a couple of days and then send me home with zero answers. This happened to me more than 10 times in those seven or eight years. It was horrible. I didn't have something that was operable. I didn't have appendicitis or something like that.
Personal Set-backs As Sources of Innovation
The Western medical system, which I completely support, I'm very pro doctor and pro medicine, I think just the amount of time that they're able to spend with each patient just doesn't lend itself to figuring out chronic conditions like the one that I have. I have, even to this day, it's an unnamed chronic inflammatory condition that still lands me in the hospital. Sometimes last time I was in the hospital, I was bleeding for 10 days in the hospital.
Mimi: It's interesting that you bring this up, because I don't even know if you noticed I have another podcast called Heal, because I have chronic Lyme. I totally know what you're talking about, because there's people that go for years, generations, their entire life, where they can't figure out what's wrong with them.
Mimi: And they find out, they get diagnosed with Lyme, because it mimics a lot of illnesses and it's not recognized by the Western medical community. If you go to the doctor's, it's repeated all the time by all the chronic warriors. They go to the hospital, for the ER, they don't feel well, they feel like they're having a heart attack or whatever, and then the doctor tells them there's nothing wrong with you. Go see your psychiatrist, there's something wrong with you. They don't even recognize it. It sounds like it's in the same vein of this chronic illness. You would never diagnosed?
Tegan: No, and still to this day I've never been diagnosed. Like I said, this definitely not in my head, this is like, I was internally-
Mimi: Have you ever been tested for Lyme?
Tegan: I haven't actually. Maybe I should be tested for Lyme?
Mimi: You definitely should be. Let's talk afterwards.
Tegan: Okay. Let's talk about it afterwards. At this point, what I've been told is, that my options are really steroids or they'll say something like you said, go see a psychiatrist or something, and they'll say it's stress related. It's like you know what, okay, I do a lot of stressful things, as you've heard, I like to do a lot of things at the same time, but it's not being caused by stress. I'm not having panic attacks that result in a stomach issue.
This is something that has plagued me for years. Anyway, this is something that I've heard time and again from all sorts of different people that you would never expect to have a chronic condition. I think it really comes down to the fact that we really do have a sick care system in this country and preventative health care and figuring out all of these chronic conditions is just not something that our system is ready to do.
The holistic wellness journey
Hopefully it's getting there, but traditionally it's not ready. They just don't have the tools or the time to really do the deep dives to figure out what's going on with people. Anyway, I ended up trying to figure out how to manage this condition with preventative health care. This was in the time period before the wellness industry had been googlified, it definitely existed.
Mimi: But not accepted.
Tegan: Yeah. In order to find the practitioner, you'd have to walk into a co-op and look on the co-op board or something. It's really, really difficult to navigate the holistic wellness journey. I ended up becoming a yoga instructor and a mindfulness guide just because I ended up having to really do a deep dive. At the time I was working for the architect, Zaha Hadid in London, she was one of my professors at Yale and then hired me after I graduated.
I ended up starting a rooftop yoga class with a friend of mine, and we ended up really just turning that into a membership community and an editorial platform and started doing really a big wellness activations for companies like, IMG-WME for fashion week. The first corporate wellness activations for companies like Samsung, Polaroid and Lululemon.
I accidentally took a sidestep into the wellness industry because of my own journey. What I realized is that everybody was having the exact same experience that I had, but they were also having a really hard time figuring out how to navigate their different chronic conditions or even acute conditions like pain management or acute mental health issues. I just saw the need for a company to help people navigate the discovery process of figuring out how to address chronic concerns, how to navigate the preventative health care system.
And so WellSet was born.
Co-creating and Bootstrapping the Business
I met my co-founder Sky Meltzer, who was the CEO of Manduka for, I think eight or nine years. He bought the company out of the founder's garage and built it into the company that it is today. He's an incredible businessman in the wellness industry. We joined forces, we're a couple of years in now from the inception of WellSet, but we just launched a couple of months ago.
Mimi: That's awesome. Did you step away from your other job at that point and do this full time?
Tegan: From the very beginning of starting WellSet that I was working on WellSet full, I did have to quit my main architecture job, but I still had to support myself financially. I ended up actually doing a lot of industrial design and product design and even web design on the side for different clients. I actually ended up designing a whole bunch of really funny things and really fun things.
While I was bootstrapping WellSet, I designed a couple of lines of sex toys for different companies. I designed a hydrofoil surfboard that has an engine, it's not launched yet, but it's really cool. They just actually did the launch video for that product. I designed a kitchen robot that cooks your food for you with a company that's based in San Francisco.
Mimi: King of all, like you know everything.
Tegan: As an architect, I was a very techie architect. I was working in a program called Maya and also Grasshopper. Basically you program buildings in the way that you program a website or something. It's all interrelated. But Maya is a soft body, modeling program that allows you to take a box or a box connected to a box or a box that's extruded in a certain way and soften it, so that it's an organic shape.
It's a really weird skillset that no architects have. It's really more of a skill set that somebody who works at Pixar or Lucas film or something, would have. It makes me a weird candidate to be able to design things like sex toys, which are very organic shapes or this hydrofoil surfboard, which was all about being really hydrodynamic. Right?
Mimi: I think so, I don't know. You dove into this, you were doing a side work so that you could make money, because you weren't getting paid obviously right off the bat. Were you and your partner financing this all yourself, or had you already done around friends and family? Where was your financing coming or would you guys just doing it all on your own funds and resources?
Tegan: We boot strapped it for about the first eight to 12 months. Then we took our first round of angel investment. We took about a 500K round from some really great investors who are strategic investors in the wellness industry. One of them was Kelly Gores, who's the writer, director producer of the Heal documentary on Netflix. She's actually our third board member. She's amazing. She really believed that this is an incredible tool for essentially making the Heal.
All of the ideas that she brought forth in the Heal documentary and book to the masses, not just introducing the ideas and introducing the players, but actually giving people the tool to connect to the right practitioner to help you. What we're doing is really connecting people to the right practitioner and facilitating that relationship over the lifetime of care.
Unique in the On-line Wellness Industry
Mimi: Who are your competitors? Because I feel there was another site a while ago that I used, five or six years ago, that I used to book massages and other treatments. I don't even know if it still exists or not.
Tegan: There hasn't never been a direct competitor in the wellness space. My previous company was in this space. I've been in this space since 2012 or 2013. Definitely no one has cracked the nut, I guess, yet. There have been a couple of companies that have been out there in different modalities, specifically, particularly massage, Soothe and Zeel are the on demand massage companies. Mindbody has a few practitioners listed here and there, but really they focus on fitness and group fitness, not individual fitness. They're not really a competitor.
There've been a few directory companies that have come out in the past few years, but no one has created a booking platform for wellness, which is so interesting to me. We're really kind of the first.
Mimi: I didn't realize that, because I really thought, I don't know, I wish I could remember what it was, but I think it was just for massages. Now, how many practitioners are you working with that are willing to come to people's houses or most of them want them to come to their office?
Tegan: We've had about 20,000 practitioners apply to be on WellSet, about 10,000 of them have created profiles and we've approved about 3,300 at this point, nationwide. The reason that we've approved those particular practitioners, is in part because of COVID, all of those practitioners are virtually available. I would say it's about split 50, 50 for practitioners who are willing to come to you, and practitioners who you need to actually go to their office, but we have that all in the search.
One of the really cool things about WellSet, is that we have a really robust data driven search, that allows you to not just search by practitioner type, location, price point, but you can also search by the different health concerns. You can type in, back pain or fertility or gut health and actually see practitioners who are experts in those different things. One of the other things that you can also search by is, whether they're virtually available, whether they're available in person and whether they can come to you or not.
Mimi: So you're a tech play pretty much? Right?
Tegan: We're definitely a tech platform. I would say we're a little bit more open table, in terms of our business model, because we are both a discovery platform, but also powering practitioners businesses. A lot of people call this type of company, a business in a box company, which basically means that we're a vertical SAS company. We're tackling essentially running the businesses for an entire vertical within an industry, or I guess in this case the entire industry.
Both a booking and scheduling platform
We're building all of the technical tools behind the marketplace. It's not just a place to find practitioners, it's actually a really robust search engine, a really robust booking platform and scheduling platform. Then we're building in tools like labs and supplements management.
Mimi: It could become their backend for the practitioners too. It's not just for you to just connect, like you were saying with open table, you're also providing an entire platform where they can pay you to then help them manage their business.
Tegan: Yeah. This is the thing that people as consumers don't realize about open table, is that, they actually are doing that for all the restaurants. That's why it's open table. They run all of their seating management and things. That's a little bit of a confusing thing to say, I think to consumers. I think the better comparison is-
Mimi: Is it Postmates?
Tegan: No, because that's people getting things delivered to, and we're not delivering anything to anyone.
Mimi: No, no, no, I meant you as a tech play. Postmates is not delivering the food, it's just literally a technology that, connecting the two, the buyer and the person supplying the food.
Tegan: Without the drivers, but yes, kind of. I would say maybe, as we build out what we're building next, we're a lot more one medical, I would say. It's a place for you to find and manage care with different providers.
It's really important to us that we're not just a transaction platform, that we actually are a relationship management platform, because that's probably what the wellness industry and people who are dealing with chronic conditions need. They need something that's not just a transaction, they need a relationship with a practitioner to solve these issues.
Clarity of business roles and growing relationships
Mimi: Right. Okay. You launched, you found your partner. How did you divide up, who was doing what?
Tegan: Sky, he has a finance background and he's been a CEO for years, but never of a tech company. I'm a designer. I have been working in different tech industries for my whole life. I'm the CEO/CPO, Chief Product Officer, and then he's our Executive Chairman and CFO. It's pretty divided.
Mimi: Right. Okay. That's cool. Then from here, okay, you built your technology that you need. Your first step is finding obviously the practitioners, because you can't get clients without practitioners, and so you just emailed everybody and found some directory. How did you go about getting 20,000 people to apply?
Tegan: Well, if I told you our secret sauce, then-
Mimi: You have to shoot me.
Tegan: Exactly. We've actually never done any crazy mass spamming of people ever. We've never done anything like that. I think that the mission of WellSet really resonates with the wellness community at large. We are creating something that feels a little bit more a movement to them, than it does. We don't come across as advertising a tech platform to them. They feel they're joining something that is bigger and mission driven.
I think we've just been really good at getting in front of them in the right ways. I was on the board of the New York Open Center for a number of years, which is one of the largest learning institutions for holistic health in New York. We just understand where the practitioners are and what they're looking for. We've been really good at finding them.
Mimi: The reason why I asked you that, because so many times entrepreneurs spend so much time getting their ducks in a row and all their money and getting everything perfect. They build this perfect website and then they turn the switch on and it works, and there's nobody there, right?
It's a lot harder to get customers and people engaged into your community or platform than people think. [crosstalk 00:24:25]. Time and time again, where people put in the money and the time and the energy and then they like, wait, where are the clients? That's where I was getting at. It's like, okay, now you have the practitioners, has it been harder for you to get the customers to come and find you and start using the practitioners, or is it right where you thought it was going to be and how did you do that?
Avoiding the “building a ghost town” phenomenon
Tegan: We're just getting started on the consumer side of things. You're totally right. What you're talking about is called building a ghost town, is definitely something that happens to people all the time, because they do think, oh no, this is going to be a revolutionary idea. It's nothing else that's ever been built before. Everyone's going to love it. It's going to be in every living room in the country or something.
It's a lot more difficult than that. It's not even just about marketing spend or about having the right ads or anything like that, you really have to hit a nerve in a good way, and get people to share what you're doing, and have it go a little bit viral or else it just, you do have a ghost town for sure.
Or you ended up dumping millions of dollars into marketing and having a really high customer acquisition cost.
We have been really, really good at the practitioner side of things, I would say it's our secret sauce in a way, as a company. We're just getting started on the consumer side. We're just building out discovery tools and ways for clients to be recommended practitioners in more specific ways.
We're doing a lot of partnerships with brands and different community groups that are dealing specifically with chronic conditions and having those partnerships really bolster the relationship building within the platform. Honestly, we're just getting started on the consumer side. You have to check back with me in six months from now.
Mimi: I will, definitely.
Challenges and Opportunities
Mimi: Now, what has been at this part, the hardest part?
Tegan: I would say the hardest part is that we look like we're a way bigger company than we are. We're a pre seed company still, we're about to raise our seed. We look like a series A or series B company, when you're accessing the site as a practitioner or a client, we look like a huge company. I think everyone assumes that we're about 50 or 60 or 70 people, and maybe we have a customer service team that's based in India or something.
The reality is we're a six person team, who is sitting, especially in COVID, in our living rooms in Los Angeles. Actually I have a funny story about that. I at some point was having so much customer service coming in a few months ago, that I had to create a couple of customer service aliases, because I couldn't be answering all of the customer service as the CEO.
It actually inhibits people and makes them say things differently. I want the real deal, I want to know what's going on. I want them to complain to me if something is wrong. I created a couple of fake customer service people. It's Nicole and Poloma, so if anybody out there is listening, if you've ever messaged with Nicola or Poloma, that's me.
So much to consider for the future entrepreneurs
Mimi: Oh my God, that's so funny. I love that. Wow. Okay. That's good. It's interesting. Okay. What else was I going to say? I'm just in awe, of how much you're doing in such a short time. What advice would you give to anybody right now that is thinking about starting their own company as far as, especially COVID? Right? I feel right now everyone's like, all bets are off, right? Do I continue in college next year? Do I not? Do I, whatever? How much of is that that's really important?
If you want to start your own business and you're a sophomore in college, do you need to have that job to then launch your company, or can you just take the idea and run with it? Just would love to know your perspective of what's important to be successful.
Tegan: Well, I think the number one thing that I would say, is that, you don't have to be an expert in being an entrepreneur or being a techie person, but you should be a category expert before you try to start something right now. Investors are looking for category experts when they're deciding to fund different companies.
But I think the more important thing is actually that, everyone has this idea that starting a company is going to be this meteoric rise to success in six months or a year or even two years. The reality is that it takes seven years to 10 years to actually get an idea off the ground. Actually, if you go and look at the different companies that are out there, that look like they're an overnight success and you go and talk to those founders, 99 times out of 100, it's actually been, five to seven years before that overnight success happened.
Impact of COVID-19
Being a category expert and being very interested in the category that your business is in, is just super necessary right now. In terms of timing, with COVID, I would say it's a really tough one, because I think a lot of things are taking off, because it's a new world of everything moving online. That being said, there is a scramble for all of the really big companies to solve their COVID issues by taking things online or by moving things virtual.
So the competition is really fierce and that also extends to who's getting funded. Early stage companies, I've heard anecdotally are having a really hard time getting funded right now, because investors are doubling down on their current investments and they are also investing less. It's a tough time.
I would say, if I were a sophomore in college, I would definitely stay in school for the next couple of years. I think that I'd let COVID settle down a little bit, but if you have an idea, it's always great to start with an MVP, minimum viable product of some kind, even if that's just a survey of potential clients or coronavirus. Just anything that gets your idea out in the world and starts to validate it, and you can do that with no money, no funding. I would say, that's the kind of thing to start during this period of uncertainty.
Mimi: They could be moonlighting on the side. Stay in school and do it on the side, like you were doing. You still had your other job. You still needed to make money. You can't be unrealistic. Right?
Tegan: Totally. I think also there's this unrealistic, so you asked me earlier whether I was moonlighting, starting my company. I definitely always was moonlighting. I was always doing something that was going to pay the bills. I think a lot of people think that they're just going to have a startup idea, go out, fundraise and be paying themselves a salary right away. That's just not how it works. You have to really prove that you have something of value.
Your Minimal Viable Product matters
Nobody's funding ideas right now, especially with first time founders. You have to prove out your MVP. You have to prove that you have an interested base of clients or users, and also maybe even have a product at this point, in order to get funding. That all has to happen while you're still covering your finances. Maybe you're a person who can just not work, but that's definitely not the normal person. If you are a normal person, you still have to work [crosstalk 00:31:43] your bills.
Mimi: I think right now, as an angel investor talking about what you were talking about, I think, a couple of things, there were a couple of our businesses that we invested in, that were supposed to have an exit strategy in the past year, and that didn't happen because of what's going on. I think that is attributed to the fact that there's less people investing. And two is, I know, personally we don't like to invest in a company. We don't want our money going to the CEO's salary.
But personally, I would rather know that my money that we're investing is going to a marketing plan or going to inventory, going to something that's going to generate customers or income. Right? Not making the safety net bigger for the CEO, to take longer to be successful. Our outlook is, we want them to hurt just as much as we hurt, if we lose our money, meaning, they have to have skin in the game. If its founder hasn't put money in, well then at least I know that their time is their money.
Tegan: I think that's a really interesting thing to hear from an angel investor. I have a question for you then.
Mimi: Go ahead.
Questions of an angel investor
Tegan: When you look at different early stage companies to potentially fund, what do you look for in the status of the product or the idea? Do you look for an entrepreneur that's been hurting over the past year to get to the point that they're at?
Mimi: The team is super important, because you can have the best idea and if you don't have the right team in place, it's not going to go anywhere until you have to make sure that they're hungry and they know what they're doing. I would say, three is, there's some catch, right? Something that makes them, it makes it more likely that they're going to be successful. I'm just thinking of one off the top of my head that we invested in, even though she was not in that space before, I just knew no matter what, she's just that type of person that was going to make sure it was going to happen.
She was not going to fail just because I just know who she was. Right? That might be personality, or maybe I would invest with somebody because we know that she has, or he has a connection into the field, that's going to open the secret sauce to all the doctors. You know what I mean?
Something that's a secret sauce. It's not just the idea, because anybody can have the idea. It's how it's executed and how, it's so much harder to get in front and so expensive. It's not just harder, it's so expensive to get customers these days. It's not as easy as people think. If you're going to launch a product, do you have the contact at Target? Do you have the contact at Whole Foods? What is it, if it's a product? If you don't have those contacts, that is a hard avenue to go down. I think having that, what distinguishes you, it's not the idea at all actually. [crosstalk 00:34:30].
The trifecta that gets attention
Tegan: It's idea. It's execution and it's secret sauce. Those are the three things that definitely I would look for as an angel investor in different companies. I think the hunger that you're talking about is also really important. I don't think that it necessarily means that the founder needs to be financially indebted to the company somehow.
I think that that can actually lead almost a desperation that you can almost smell on the air. You're like, wait a second, this founder is desperate. But I do think that there is a type of person, like you were just mentioning, this girl that you funded, that is just going to figure it out. You just know that they're not going to quit until they figure it out. That's the parable of the rat in the milk. Do you know that parable?
Mimi: Yeah. The rising to the top? No. Is it that the mouse rising to the top?
Tegan: Whatever it is, it's a rat or a mouse and they're in the milk and they just are trying so hard to get out of it that they end up turning it into butter and then jumping out. That is what a founder has to be and there's no way around it.
There is no easy company to run. It's always difficult. Every single day is a new struggle. You get to the top of what you think was a mountain range that you were climbing conceptually, and then you get up to the top and you realize that it was the first hill [crosstalk 00:35:55], cliff first, and then you get to climb another mountain next. There's never an easy journey.
Current Status and Projections
Mimi: Totally. It's totally true. Now, you have six employees now, is that what you said? Five employees or whatever it is. Your business model can support them at this point, or you're doing that off of what you got in investment so far?
Tegan: We are just a little bit post revenue, so if we were cashflow positive, I would be so happy and I would not be talking to any investors. [crosstalk 00:36:31].
Mimi: If you said to me, yeah, I would be like, what? Because I would not have expected you to be cashflow positive, not this early in the game.
Tegan: No, we're not. We're about to raise a seed round and that will be basically taking our product to a wider audience, building out some features of the product that are really important to that client relationship management ecosystem that we're creating. We're also going to be creating a few partnerships on a big scale that need integrating. Those are going to be really incredible. We've got a few really fun things that we're going to be doing with that money. In addition to obviously spending a bunch of it on marketing and also paying our staff and all the normal things.
Mimi: No, that's awesome. What is the number one booked practitioner? What type?
Tegan: It changes over time. That's an interesting question because it's really equal across all of the different practitioners. I thought that it was going to be, just acupuncturists, or just massage therapy or just chiropractors. I thought there would be a winner, but what we're finding, is that, people are just really interested in a lot of different things and the same client will book with three different types of practitioners.
On the practitioner side, a lot of practitioners are multi-modality practitioners. It's almost even hard to parse the data sometimes, because someone who is a massage therapist is also a functional medicine coach and maybe does Reiki. It's all of the different things combined into one person. That's actually been a really interesting part of building this, that there is no winning modality.
Transactional business model
Mimi: Your business model is, you're taking a cut of the actual cost, I'm just assuming, and then you're charging also the practitioners for the use of the behind the scenes technology ads too?
Tegan: No, we don't do ads. We have a transaction fee. The practitioners can join completely for free if they want. If they're free members, we take a transaction fee off of every transaction. We also take a $40 referral fee for the first time that they get booked with a new client. Then they can choose to pay to be on our first tier of our business tier, our business scheme, and that tier allows them to not have any of those transaction fees or referral fees. They basically can bring their entire practice onto WellSet and not be charged per transaction. We're just launching that actually this week.
Mimi: Because if I feel if you get them into that first tier, I would think there'd be this concern that once they came to someone's house for massage, they wouldn't use you anymore. They would just go direct. Right? They would cut you out. By having that technology then, you getting them to stay.
Tegan: Interestingly, so yes, disintermediation is a huge problem for marketplaces, which is what that's called when somebody goes off platform after being introduced. But the interesting thing for us, is that, these practitioners are using cash, Venmo and PayPal to take payments. The clients are really wanting to pay through a more legitimate service and the practitioners are really wanting to have different payment facilitation tools that allow them to take advantage of things like cancellation protection.
That seems such a no brainer thing, but they don't have that. If you don't show up as a client, to your Zoom meeting that you're having virtually with them, or even to an in-person session, they have no way to collect on that time. There are very few industries these days that don't have different protections like that in place. I think that disintermediation is a problem for every company, but we're really building a tool set that we think will become integral to them running their practices.
Mimi: That's great. Well, thank you so much for your time. I don't know if there's any last minute tips or advice that you would give an entrepreneur who's listening and thinking about either starting a business or they're in it like you are.
Tegan: Just keep being the rat or mouse.
Mimi: Rat or mouse and churn your way, make the butter or cream, whatever it is.
Tegan: It is hard for everyone. I think that the Instagram effect has really taken over in the startup world. A lot of first time founders think that starting a company is just, it's all going to conferences and parties, well, back before, when we could actually go to parties, and being written up in articles and being on podcasts.
But the reality is that every single day is a struggle. It's really fun, it's not bad, it's just that. It's a lot of work and you have to stick with it for years and years. If you're thinking about starting a company, make sure you whatever it is that you're going into a lot, and make sure you're ready for the long haul.
Mimi: I read an interesting fact somewhere that it's only 1% of women businesses ever reach over a million dollars.
Tegan: A million dollars in profit or?
Mimi: A million dollars in sales, I think.
Tegan: Wow, that's crazy.
Mimi: Crazy to think, 1%, that's how hard it is to get over to that hub.
Tegan: I think only 2% of investment dollars go to female founders. The chips are stacked against us, we have to band together.
Mimi: And do it. This has been amazing. Well, so they go to WellSet?
Mimi: Or the app?
Tegan: Well, we don't have an app yet, actually the app will becoming out in a few months, but it's all app optimized and phone optimized. You can still go there on your phone right now.
Mimi: They need to go. That's awesome. Thank you so much. Thank you for joining me on The Badass CEO podcast. If you enjoyed today's episode, please leave a review and see you next time. Thank you.