David Fetterolf, the President of Stratus Video, grew his company’s revenue from $4.4m in 2014 to $47.4m in 2017, a 973% increase, and now they’re on track to grow double digits in 2018.
Stratus Video is the world’s largest and fastest growing video remote interpreting company with over 1,600 hospitals and thousands of clinics using their solutions.
In this interview with Eversprint‘s Malcolm Lui, David shares how he and his team accelerated their high value sales by:
- Having a significant first movers advantage via their video remote interpretation that is still years ahead of the competition.
- Adding two complementary products: over the phone interpretation, and an Uber-like in person solution that connects hospitals directly with local interpreters.
- Having a very focused sales team that initially targeted very large health systems and grew their market share rapidly.
- Laying the foundation to potentially enter new markets in the future, such as schools for parent-teacher conferences, courts for depositions and hearings, and large employers for their employees who do not speak English well, or who are deaf.
Malcolm Lui: Welcome to the high value sales show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with David Fetterolf, the President of Stratus Video, the world's largest and fastest growing video remote interpreting company with over 1600 hospitals and thousands of clinics using their solutions. Welcome to the call David.
David Fetterolf: Thanks Malcolm.
Malcolm Lui: David you grew your company's revenue from $4.4 million in 2014 to $47.4 million in 2017, a 973% increase and you're on track to grow double digits this year as well. Can you share with us what Stratus Video does and then after that share what the three biggest drivers were of your sales growth over the past four years?
David Fetterolf: Sure absolutely. So Stratus operates in the interpreting market segment in the United States and the interpreting market segment is about a two point to two point three billion dollar market in the US and what we do is we we target the health care market within the interpreting segment. And basically what we do is we interpret for patients when they walk into a hospital if they don't speak English they're OK. And traditionally there were two modes of interpreting what if a patient walked into the emergency room and spoke say Arabic. Obviously the physician could not talk to the patient and the two ways that that problem has been solved for the last 30 years is the physician would either get an onsite interpreter and interpret that was standing next to the provider and the patient. And that onsite impersonal interpreter would then do the interpreting for the provider and that mode of interpretation is is obviously the best interpreting session we can have. But it's also very expensive and most times those onsite Interpreters need to be scheduled you know a couple days in advance so you can't solve a need in lots of languages very quickly. The other way interpreting is done in the United States is over the phone interpreter. Right and that's where the provider would dial interpretation phone number right and they would get that Arabic interpreter on the phone. The physician would hold one headset that the patient would hold the other headset and the interpreter would be on the phone doing the interpretation or the provider and the patient.
David Fetterolf: That type of interpreting is obviously not nearly as good from a quality standpoint as having an interpreter standing next to the provider and patient. But the cost structure is much lower. All right. You only pay per minute. And and you can service you know a couple of hundred languages over the phone and usually you can get an interpreter on the phone within 60 seconds. Right. So there are absolutely some great advantages over the phone interpreting. So Stratos was founded six years ago and we entered the market as the first company that had video remote interpreting all right in multiple languages. All right. And what video remote interpreting is we have an app that works on an iPad an Android device or a P.C. and on an iPod say you just have buttons that are languages and and what you need. That same Arabic interpreter right. You would put the iPod in front of the patient. You just select that Arabic button. And typically within 30 seconds we would have an interpreter that was qualified to do or certify to do health care interpreting that interpreter would be a live person looking at the patient right and interpreting for the provider and the patient interpreter can see each other through this video session. So it's almost as good as having an interpreter standing next to the patient and provider doing the interpreting.
Becoming a full fledged interpreting company
David Fetterolf: But at the same cost structure as over the phone interpreting right. And at the same speed of answer. Right. So Stratus basically was the pioneer in video remote interpreting. We entered the market. Like I said about six years ago. And because we really had a three to four year lead from a technology standpoint in this market segment of video remote interpreting and because of that technology lead we were able to very quickly capture market share. So large health systems and get our devices out in front of providers and patients. And our goal is to really help improve the lives of limited English proficiency patients to around the country. And we're doing that. So that's what we are known for and that's how we made a name for ourselves and got most of our growth right now at the same time. All right. We we were looking at both the over the phone market and the in-person market and decided to really be a full fledged interpreting company we had to solve those problems as well. So in the over the phone market we made a small acquisition of a company that had been doing over the phone interpreting and we fully integrated those interpreters and the over the phone technology in to our video technology. So at this point in time you can get any interpreter on video or over the phone on that same iPod. We service up to 200 languages over the phone. You can obviously use a phone to contact those interpreters as well.
David Fetterolf: So we are in the over the phone interpreting market segment. And the third leg of the stool was in person interpreting. And when we looked at that market segment that was also something that wasn't going to go completely go away with video. There are certain times when you need and want an in-person interpreter. And so when we analyze that market it was it was really a market that was very regional. There were hundreds of local agencies around the country. And the way the agencies work is they would sign up and do deals with hospitals and or health systems. And when a hospital needed an interpreter they would send an email to the agency or give them a call and they'd say Hey I need a Mandarin interpreter tomorrow at 2:00 p.m.. Right. And then the agency would call their contracted Mandarin interpreters get somebody that was going to show up and hopefully that Mandarin interpreter would show up tomorrow at 2:00 p.m. in the hospital pretty much was in the dark. From the time they made that phone call for the time the interpreter showed up. And then at the end of the month the agency would send us an Excel spreadsheet or a bill for the hospital that would just sort of show all of the sessions that were performed on site and how much they owe. That was sort of like the honor system. So we attacked that problem very differently which has given us a big lead in over the phone or in person interpreting and what we did is we developed software that we call Stratus in person and the software works very similar to the way the uber software works in the in the ride card market service.
David Fetterolf: Right. So when someone in the hospital needs an interpreter they can pull out their phone and go to an iPod or a P.C. and request an interpreter. That request goes out the other software. All right. And it pings all of the interpreters in the area. All right. And so if it was a Mandarin request it would go out and ping all the Mandarin healthcare qualified or certified interpreters within that 10 or 20 mile geography. Right. And then the interpreter would accept the job the person at the hospital can hear the interpreter driving to the hospital. And so interpreting sessions could be undermanned they could be scheduled and it gave the hospital complete visibility through software. Where are those interpreters were and did automatic audits because we knew where they were how long they were at the hospital how long they were doing the interpreting session so that software has really changed the way in-person interpreting is being delivered. And we've got at least a two year technology lead in that segment in the market. And you know that's definitely one of our growth areas moving forward in the years to come.
Malcolm Lui: So would you say looking back at what you've done the what you were able to grow your business so rapidly over the past four years but and from what you share may to like one. You have a talk about technology lead over competitors that as you build market share very quickly and at the same time you've also added two new segments to new product lines. Right you started with the video interpretation service then you added over the phone and then you added in person. So would you say those are the big drivers of a tech lead and then adding new services and solving your problems. Or is there another part
David Fetterolf: Yeah
Malcolm Lui: Of the equation.
Focused selling by their sales team a key driver
David Fetterolf: Yeah absolutely. And I would say there's one other one other piece of the puzzle as well. You know it was critical to have the technology because you know we were very different and pretty much alone in the video market segment for a number of years. And it was initially it was that video product that gave us the initial momentum and it was also our sales team and the way we attacked the market segment and we were very focused on selling to large health systems and really targeted those health systems you know through a telemarketing program email campaigns social media and a sales game that was you know around the country calling on these large health systems so companies of that technology lead with pretty aggressive sales and marketing campaign that's how we got that initial market share. And then you're right adding those to other product lines has helped propel us in the last couple of years. And I you know like I said the in-person products like the video product has made us very different in the market and has given us another couple of year technology lead that keep us in front of our competitors
Malcolm Lui: Can you share how many health organizations you started with way back in say 2014 and how many you're working with today or projected to work with today by the end of 2018. Roughly speaking you don't
David Fetterolf: You
Malcolm Lui: Have the
David Fetterolf: Know I don't have I don't have those numbers off the top of my head but I you know I you know we we were selling you know a couple hundred hospitals every single year even back in 2013 2014 and we would do that by targeting health system. You know if you targeted our health system you sold a system that owns 20 or 30 hospitals when you when you closed that deal you would roll out to all 20 or 30 hospitals and then you know one of the reasons health systems are so important to us is that if you sell the right health systems then the larger health systems those health systems have been growing every year. So they've been out doing their own acquisition find other hospitals and frankly they're buying hundreds of clinics as well. And ambulatory surgery centers so those large health systems are growing. And as they grow they roll out our product. So we don't have to go sell them again. They just continue to roll out our video over the phone and in person product lines.
Malcolm Lui: Right now. One of the key drivers of your growth was your acquisition of the over the phone competitor supplier. Is that you know outside of your current health organization's growing you see acquisitions as as a big part of your future growth.
David Fetterolf: You know I that that was a very important acquisition but it was not a key driver to our growth. It was it was important because we needed that over the phone service. But it is not a product line that is where we're differentiated. There are a number of competitors that all I've done over the phone interpreting service and you know one one company is not that much different than the next. And so that's not really what drove our growth what drove our growth was our sales team selling are our value proposition which was our video product and now is our in-person product. And then the over the phone product we're just sort of be a drag along. And people would want to buy from one vendor but that that didn't make our growth explode really what made our growth explode was the sales team selling our video product and now selling both our video and in-person product and dragging that over the phone interpreting product along because we're the leader in video and person
Malcolm Lui: Right.
David Fetterolf: Makes
Malcolm Lui: Yes it does. I mean you're offering a full suite of services but the primary draw really is the video interpretation service and the in-person on demand service. And over the phone is a
David Fetterolf: About
Malcolm Lui: Nice one to have. That's the only other option available
David Fetterolf: That's right. Exactly. So we we sell that in every deal. But the reason health systems buy from us is because of our technology differentiation on video and in-person
Malcolm Lui: So out of the two services in person interpretation and video interpretation which one is the ones that your health organization organizations the hospitals really want more than anything else
David Fetterolf: Video
Malcolm Lui: In
David Fetterolf: Video is definitely sort of a hot. It is the hot area and health systems and for the reasons I outlined earlier it's from a quality standpoint. It's almost as good as in person but from a cost standpoint it's roughly the same as over the phone interpreting. So what hospitals are able to do is they're able to put in video devices right and lower their overall costs because they can they can eliminate a lot of their in-person interpreting. And just to give you an idea video interpreting is about 70 percent less expensive than in-person interpreting. So the overall interpreting budget for the hospital can go down when you put it in video because both over the phone and in person interpreting will gravitate towards video which will drive the overall interpreting costs down for the hospital and provide actually a better overall quality service because video is much better than over the phone in terms of from a quality patient satisfaction standpoint. And literally it's almost as good as in-person. So you know quality patient satisfaction go up costs go down. And that's why hospitals and health systems are very interested in video
Malcolm Lui: Yeah. And at the same time you can have interpret or they will in 30 seconds or so. Right. Using your video over the
David Fetterolf: God
Malcolm Lui: Phone
David Fetterolf: Great
Malcolm Lui: Options and in person you still need to wait
David Fetterolf: Totally
Malcolm Lui: 15 20 minutes or however far away that person is.
David Fetterolf: You love that. That's right. Or even in many cases it needs to be scheduled. You know a day or two at.
Malcolm Lui: So looking forward what are your plans. What are your objectives. What numbers can you share with us in terms of sales targets a number of hospitals you want to add onto that path form number of clinics
Future objectives and plans for Stratus
David Fetterolf: Well you know it's interesting you know. You know we've had really explosive and dramatic growth over the last four to five years. And when I look at the next three to four to five years we should be expanding you know at at the same rate. And the reason for that is video interpreting is still in its infancy. OK. We've we've sold about sixteen hundred hospitals but in total only about 21 maybe 22 hundred hospitals have even made video decisions. And they're roughly 50 800 hospitals in the country and close to 6000 hospitals in the country and only 22 hundred of them have made video decisions. And sixteen hundred of those twenty two hundred are Stratos clients. So number one we're doing Stratasys doing 60 to 65 percent of every video interpreting session in the country is done by Strava. So we have we have really dominant market share in video and probably more importantly less than half of the hospitals have made video decisions. So it's still a great deal. There's still just a tremendous opportunity to continue to sell into these large health systems and penetrate the market. It will be five years before this becomes a replacement sale. And as everybody knows it's it's a lot easier to to sell some someone you know acquired something the first time. But try and bump out a competitor.
Malcolm Lui: Yeah.
David Fetterolf: Right. So you know our goal is to continue to you know if we can just keep that percent market share and continue to penetrate these sound systems you know we're going to see our revenue growth continue to you know go up at quite a good pace over the next three to five years.
Malcolm Lui: Right now practically speaking of the six thousand half those out there twenty two hundred of them are working now with stratus of the six thousand. What's a reasonable number. That that they can that that these hospitals actually work with Stratos
David Fetterolf: Well first of all let me just correct you. So about fifteen hundred are working with Stratus
Malcolm Lui: Right. Right right right. Sorry
David Fetterolf: Now.
Malcolm Lui: About that
David Fetterolf: And my my my my estimate is about twenty two hundred have made decisions and fully rolled video out. Meaning they're using it for four for all languages. All right. And you know we know that the other you know thirty five hundred hospitals are gonna make video decisions in the next three to five years in this 2 billion dollar market is going to shift a little bit away from over the phone interpreting and in-person interpreting and it's going to shift toward video. And the reason for that is you know better patient satisfaction quality at lower cost
Malcolm Lui: Right.
New market segments in the coming years
David Fetterolf: Because you know video is a lot less than in-person and roughly the same as over the phone. So. So you know as those 30 500 hospitals make their decisions in the next four to five years you know Stratos is very well positioned to get a lot of that market. I will say in addition there are other market segments that we will probably go after in the coming years. You know health care is not the only market that needs and wants video interpreting and does interpreting. So you've got school systems all right and school districts you know patient teacher conferences you know there are lots of things lots of reasons why you need video interpreting in schools you need video interpreting in courts. The entire legal system for depositions for court hearings you name it video will be a big driver in the court system. And we've got a couple of clients in that market segment that sort of it at its infancy right now and less than 1 percent penetrated with video. And then we've got clients in the big enterprise area where you know employers you know and they've got employees that do not speak English or or are deaf and and doing you know H.R. meetings and other meetings with those employees and providing a video interpreters is crucial to making those employees productive
Malcolm Lui: Right
David Fetterolf: Within the company. So there are other market segments that we're probably going to begin looking at a little more seriously in 2019 and beyond.
Malcolm Lui: Right.
David Fetterolf: All right
Malcolm Lui: So what do you think are the biggest challenges you face in growing the business growing Stratos videos sales and penetration
David Fetterolf: Yeah. You know that the biggest challenge is it's been the challenge since day one and it's probably the challenge that every company has and that is you know the most important thing at Stratus is that the employees and the people. There's nothing more important than no one hiring the right people right and getting the right people on board right. And number two creating the right culture so that everybody at Stratus is feels empowered to make decisions and that everybody you know feel the excitement of growing growing a company and and with a goal of helping people and helping these limited English proficiency people you know improve their lives and get the right healthcare. And so you know people and culture are are by far the most important thing in it. For me it's always been the key to having a successful company. It's you know it's those products didn't get created and thought up on their own. It's it's the people and the entire team that really has come up with those ideas and figured out what to do and how to do it.
Malcolm Lui: Right
David Fetterolf: So people are the key to success
Malcolm Lui: Right. How about on the sales and marketing front out the see some challenges there. Getting the word out making inroads connecting with your ideal hospital. We're gonna say health organizations and hospitals to to show them the value of the Stratus video solutions
David Fetterolf: Yeah I mean listen there's you know they're obviously it's hard to grow the company quickly sales and marketing is is is key. And you know we've had a good aggressive sales and marketing campaign since day one. I would say at this point in time most hospitals and health systems know who Stratus is. But the nice thing about the health care market is it's very focused. There are only six thousand hospitals that we're targeting. We've got a telemarketing organization we call every single hospital every single month and have been doing it for five years. So most of them heard from us many many many times. And they're only about 700 health systems so there are even fewer health systems. And you know we know who our target market is and we know how to go after them and try to reach them. And you know the key is just being in front of them when they're ready to go to our AP or or make a decision. We want to make sure that we hit them at the right time so that we're one of the companies that they consider.
Malcolm Lui: Right. So how do you stay top of mind with these companies
How they stay top of mind with their market
David Fetterolf: There are lots of ways you know where we're where the thought leaders are. We try to be the thought leaders in interpreting. So our marketing team we we hold monthly educational webinars that we send out to our entire prospective client base. And it really is just an educational webinar. We're not promoting any product or service we're just providing education to the interpreting community in the health care environment. We do you know probably biweekly emails that are also sort of education related emails. Again not necessarily marketing any specific product just providing education on interpreting flight. So those are those are two ways we try to stay in front of people and build our name. We go to some of the key trade shows around the country so that we're present. Present You know in the different areas of the country you know getting in front and interpreting managers and interpreters. We've got a telemarketing team. Like I said that that proactively call every single health system and every hospital in the country every month. So that's another way to just sort of keep in front of them. And and we've got a sales team that has been following up on those phone calls and those appointments. But to stay in front of them. And then finally you know all the different social media avenues including LinkedIn and Facebook and Twitter and and the social media to stay in front and share educational posts. And and and keep in front of our party prospects.
Malcolm Lui: Right. You do any degree of online advertising paper click campaigns display advertising
David Fetterolf: We do not. We did a little bit of paper click but we didn't find that hit our target market. You know our target market is very narrow. I mean it's really it's a seven to eight hundred health systems in the country. So there are not many health systems you know our target market not even the hospitals it's the it's the. It's the health system. So the that the paid advertising really is more for the markets that are not as narrow in size.
Malcolm Lui: All right
David Fetterolf: We were getting leads and we we closed deals all the time that are small but they're not they don't move the needle for us. So the key is getting getting into the cages of the world.
Malcolm Lui: Yep. At two last questions for you. Who are your ideal customers your ideal client and what's the best way for them to reach you
Their ideal clients
David Fetterolf: So our ideal client is is a large health system but you know also all health systems are good clients. So you know but a health system that is anywhere from three or four hospitals that they own up to 200 hospitals that they own in and most health systems are also acquiring medical practices ambulatory surgery centers urgent care centers. All right. So so the target is the large health system going down to the smaller health system and the best way to get a hold of Stratus videos just go to our Web site w w dot strategy video dot com and fill out a contact us form and we will be in touch with you.
Malcolm Lui: Thanks so much David for joining us today and sharing how you accelerated your company's high value sales so fast
David Fetterolf: You're welcome. I enjoyed it. Thanks for your time.
Malcolm Lui: We've been speaking with David Fetterolf, the President of Stratus Video, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.
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