The Virtual Care Insider

Q&A: Zipnosis CEO Jon Pearce on why telemedicine is dead, how he wins big customers

in Zipnosis In the News

Zipnosis Team

Zipnosis Team
April 5, 2018

Jon Pearce is CEO and co-founder of digital health company Zipnosis Inc., which makes software that drives the online-care programs offered by many large health systems around the country. Pearce launched the business a decade ago and it now counts most of the Twin Cities’ major care providers among its customers.

Minneapolis-based Zipnosis closed on $17 million in venture capital about three years ago and has grown to 45 employees. Pearce sat down with the Business Journal to talk about the changing telemedicine market, how he wins customers and his biggest business mistake. The conversation was edited for length and clarity.

You majored in Russian back in college. What drew you to the language? I did Russian and computer science and I like to joke that I don’t speak Russian well or code well. I started college in 1997 and that was around the time when both China and Russia were looking like the next global power. I thought Russia would have been an interesting place to do business and fell in love with the language and the music. I have no desire to do business in Russia now.

How did you get into health care? I got to health care through technology. I had an internship at medical-software startup Provation Medical and fell in love with that. After I graduated, they had me launch a product for the orthopedics market. I was fresh out of college, knowing nothing about health care, and standing in an operating room with orthopedic surgeons thinking, “I don’t belong here.” They’d have their rock music on, sawing away at bone. I almost passed out. Provation ultimately got bought and it was really interesting, as a startup guy, to see the transition and all the expectations that come around a startup being sold.

You started out pitching Zipnosis as an online-diagnosis service to consumers. Now health care providers use your software to offer their own services. What drove the business model change? We’ve lived and died a lot of different times. We started out as MinuteClinic on the iPhone. Two things were fundamentally flawed: We were ahead of the adoption curve and we were trying to make money on every $25 visit. The patient uptake wasn’t there and the margins weren’t there. When Fairview Health Services came to us and said, “We’re looking for a platform,” we said, “Let’s go explore that.”

What went into your decision to raise venture capital? We were profitable in 2014 and had good metrics. We could have just continued to get by. But some of this is, are you going to be a Greyhound bus or a rocket ship? The market was really starting to take off. We were seeing this massive shift from the old-school telemedicine, where it’s hardware-based and outsourced — like a Teladoc — to health care providers taking this on themselves, and it becoming more software-based. That’s really where we’ve planted our flag, and the market is just racing after us.

Is the telemedicine market today over-hyped? Read more.

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