Interview with Mike Wessinger, Staircase Ventures Advisor and Founder of one of Canada’s most valuable tech companies.

The Advisor Series – Featuring Mike Wessinger

Staircase Ventures has an outstanding team of advisors supporting our portfolio companies. In this blog series, we introduce you to each of our advisors, share their stories, and highlight some of their insights and advice on building startups. Introducing Mike Wessinger!

Mike is the co-founder, former CEO, and current executive chairman of the Board of Directors of PointClickCare, a leading healthcare technology platform enabling meaningful care collaboration and real‐time patient insights and one of Canada’s most valuable private technology companies. He led the company to become one of the largest healthcare collaboration networks in North America with over 2,000 employees and 27,000 customers. Mike is also the Co-Chair of C100 and is passionate about mentoring the next generation of Canadian tech entrepreneurs.

Mike recently sat down for an interview with our Associate, Robbie Marks, to chat about his experience building PointClickCare, some of the challenges he faced, and what he thinks are the most important lessons for founders today.

What led you to start PointClickCare? Was there an “aha” moment?

I mean, the reality is nobody finishes university and says, “Oh, you know what? I want to build software for nursing homes.” It’s not really a thing. But it was really a combination of factors that led me to start PointClickCare. First, I had exposure to the industry since my mom was a CPA in the nursing home business. And then, the second, was that I figured out I was pretty good at sales. So, I followed my skills, not my passion, but I developed a passion for the industry later on. I convinced one of my younger brothers, Dave, to come join me, and we spent the late 90s installing the first set of technology these nursing homes really had ever seen in their operating history.

What’s funny is that we were going after such a difficult market. If you were to draw a Venn diagram of, (i) low profit margin, (ii) lack of technology, and (iii) a more heavily regulated market than nuclear power, that would be the Venn diagram of the nursing home market. Basically, the worst place to build a business.But we developed a passion for it. I’d been to hundreds of nursing homes across Canada, and I could see there was a need for something new. I thought there’s got to be a better way. So, in the late 90s, we said “What if we could solve a lot of problems by just putting everything on one set of servers, delivering the solution over the Internet, and then charging the nursing homes a cost per patient per day, like a subscription.” We had no idea we were talking about the Cloud or Software-as-a-Service (SaaS) at the time.

Did you bootstrap or raise capital from VCs?

At first, it was hard for people to get their heads around. “Wait a second. You’re going to put health care records on the Internet? And people are going to pay you forever?” And so anytime we tried to go raise capital, folks would say something along the lines of, “Get out. Beat it. No chance.” So, the only thing we could do was to raise money from friends and family. You know — the aunt, uncle, parents, a coach from a childhood hockey team. The lessons we learned from bootstrapping lived with us for a long time, which is how to take limited resources and be innovative. When posed with a new challenge, you can’t just throw money at the problem and hire consultants or throw a team at it. You actually have to sit down and think.

I find that when you get over-resourced, you stop thinking through problems. I came to this lesson much later when I realized that we’d sort of lost our way. Every time we had a problem, we’d throw a team at it or get a consultant. We had to reframe our thinking. Unless you constrain people, they’re not going to be innovative. And once we reintroduced constraints on people, we started innovating again, having to think, “Oh, wait a minute. Maybe there’s just a better way to do this.” That helped us a lot as we scaled.

When did you know you were on to something massive?

I think a big transitional moment was around 2005 or 2006. We launched in the US and caught the attention of two of the largest chains. They had more nursing homes than all of Ontario combined. We knew it was going to be high profile whether we failed or if we were successful. So, we put our heads down, and we did everything we could to make it a success. We blew our brains out a little bit, but this really put us on the map. The partnership walked us into 37 states and helped get our product localized for each of those markets.

What were some of the biggest challenges in scaling PointClickCare?

The two biggest things that we struggled with were:

1. Understanding our target market and that the target is not your market; and

2. Understanding true product-market fit.

What do you mean by “your target is not your market”?

When we first launched in the US, our mistake was that we naively thought it was just another market. Turns out, as you know, it’s 50 smaller markets and you need to localize for each state because Medicare and Medicaid are different in every state. Even though Medicare is federal, it’s administered differently in every state. And in the case of California, New York, Texas, and Florida – the big states — they were each a massive market of their own.

We figured out the hard way — that getting the first 10% market share in any one of those localized markets was like crawling through a ditch with a knife in your teeth, taking them (customers) down one at a time.

And I think a lot of companies get in their heads, especially when they go to raise money, that everyone wants to talk about TAM (“Total Addressable Market’), TAM, TAM, TAM, TAM, TAM. So, founders feel like they have to go after the whole TAM. The reality is your target is not your market. You need to figure out where your beachhead target is and use the bowling pin strategy.

Knock down that head and then knock the rest of them down. I mean, it seems counterintuitive,

but you have to go smaller to get bigger fast. Once we knocked down our core ICP (“Ideal Customer Profile”) and started hitting 10% to 25% of the market, we started winning our share often, and once we hit 25% market share, we were the default winner. But getting that first 10% was like true hand-to-hand combat. We decided that we’d get to the point where we’re sort of on autopilot before we take our resources and divert them somewhere else. That model served us incredibly well.

I also think this model serves almost any startup well. Even if you’ve raised capital, you’ve got limited resources, and not just with cash, but in executive attention. And the more you can start small and focus on really winning and owning something before you move on to the next, the more successful you will be.

What’s your definition of product-market fit?

I believe true product-market fit is when, “With a predictable amount of inputs, we can deliver on our value proposition every time, and at scale.” And it isn’t just the product, it is the entire package – having the product and all the services around that product be able to deliver value predictably, in a concentrated way.For us, we realized early on that in getting to true product-market fit, the most important metric wasn’t revenue or revenue growth, it was customer delight measured by NPS (Net Promoter Score) or some other metric. This was because it gave us the word-of-mouth and credibility to really move through that market quickly. And I think for years some early investors would ask “Why do you guys overinvest in NPS?” and to this day, it serves us extremely well. Once we won a customer, we had a 5x growth opportunity to sell them more solutions. Investing highly in NPS gives us the right to solve more problems for that same customer. Focusing on customer satisfaction was also the best way to acquire new customers. The amount of business we were getting in through word-of-mouth and referrals were massive.

What metrics did you use to measure customer satisfaction?

I think we used NPS or a variation of NPS. All I know is that we were incredibly focused on surveying and understanding the customer from the point of view of employees who lived in our software, not necessarily the decision-makers. Of course, the person who decides to purchase your product is going to be happy with their decision. We wanted to get feedback and ensure we were satisfying the folks who lived with the product each day.

What did you think about culture in the early days?

If I were to look at the early days, it was just “startup scramble”, right? We never left the office. We were hustling all the time. We were doing everything we could to get as much traction as possible. It was organized chaos. In that mode, we honestly didn’t think a ton about culture because everyone on the team was a true believer – working hard to make things happen for our customers. Organically, we developed this culture of “we’ve got everybody’s back” and we were laser-focused on our customers because there was a direct connection between paying your mortgage and making your customer happy.

This became built into our DNA — how to do things, working with limited resources, how to think through problems, how to look after each other on the team, and how to make sure your customers are happy. But then you catch that early success, when you start growing 100% year over year, and suddenly you’re in the tornado. Again, we didn’t think a lot about culture becauseall you can think about is delivering to your customers.

At what point did you focus on culture?

We got to a point where we knew we had to reinvent our culture. We used to hire our Sales Development reps in classes of 12 and I remember this one day when we were hosting our Sales and Marketing event in Las Vegas, it was their first day on the job. They checked into the hotel, maybe the Venetian or something. Later that evening, we were at the social mixer and this 20-something-year-old showed up and said, “Wow. I just checked in my room, and I got a pool table and a grand piano. They’re upgrading everybody.”

I thought to myself, “Is that how we roll up? No. That’s not how we roll. Like, Hampton Inn. Get used to that.” I realized then that we had folks who had never seen the early scrappy startup days and very few who had seen the hyper-growth tornado days. All they ever knew was the established systems and growth days.

So, we went through a culture reset. I realized it was up to my co-founder (and brother), Dave, and me. We thought a lot about “What’s the culture and tone we want to set here?” And we ran the entire staff, probably 1,300 or so employees at the time, through two days of culture re-orientation. During various working sessions and rebuilding our reward and recognition systems, we told everyone the story about the early days and clearly set the tone and culture of what we wanted to build at PointClickCare.

What motivates you to mentor founders and startups?

I love spending time with founders, sharing some of my experiences, and hoping that they’re able to avoid the mistakes that we made, and maybe change their angle of growth or just change their overall trajectory. That is incredibly rewarding to me. I’m a sucker for founders. If I can share my experiences and that can be helpful to them, that just brings me enormous joy.

What are some of the most common pieces of advice you give to founders?

First and foremost, I mentor founders on the two biggest challenges that we faced as a start-up: (i) understanding that the target is not the market and (ii) understanding true product- market fit.

After that, I probably spend the most time advising founders on:

1. Working on the business, not in the business; and

2. Investing in the culture.

Working on the business, not in the business

I tell a lot of founders that they need to recognize that their job is to work on the business, not in the business. Most find that it’s really easy to fall back on their technical skill. Maybe they’re engineers. Maybe it’s sales. And the sh*t hits the fan and stuff gets tough, they go back to home base where they’re comfortable. For example, I would find myself deep in a spreadsheet or deep in some PowerPoint. But then I’d have to remind myself “Wait a minute. Is this the best use of my time”?

I like to say, as the founder or CEO, imagine you’re on the Titanic and you’re the captain of the ship. When you’re focused in the business it’s like you’re shoveling coal in the boiler room. But then who’s up at the top yelling “Iceberg dead ahead”? You need to focus on the business and steer the ship. So, that’s one of the biggest lessons for founders/CEOs as the company scales. You need to remember to stay focused on, not in, the business.

Investing in Culture

The second thing I advise founders on is making an effort to invest in culture. In the early days, you have true believers and so you think a bit about culture, but you don’t have to be pointed about it. As you scale, you must focus on culture and carve out time to think about what it is and what reward and recognition systems you are going to build around that. You have to carve out time because it doesn’t automatically appear in your calendar. Things like monthly reviews, weekly stand-ups, or quarterly business reviews, don’t just happen. Culture and process go together. You have to live your culture daily.

What are some qualities that you see in the most successful founders?

Well, I love smart people, with high IQs, and high EQs, that’s great. But, of the founders that I see, the highest correlation with success is with their grit quotient. They’re not necessarily the smartest people in the world, but their grit and determination are unbelievable. They never give up and always find a way to blast through any obstacle they face. It’s the mentality of “succeed or die” – it’s that kind of determination that wins.