Part of being an entrepreneur is knowing when to shift tactics.
When you’re building something new like Sherpaa, you have no real precedent to see how other companies sold the product/service. You can’t learn from others. So you have to build something, get it out there, see how people react, and experiment with what works best. Once you get a hunch that something is more effective, you build that and run with it.
We created Sherpaa to increase access to healthcare and make healthcare affordable for companies. When we launched with tumblr in February 2012, I made an assumption that companies would pay for access to a doctor for their employees. We were right. We’re now up to about 40 companies. However, when Cheryl joined Sherpaa in May 2012, she brought a whole new level of expertise to the company. I knew the medical side of things. She knew the HR/health insurance side. So we combined our expertise and continued to sell Sherpaa as 24/7 email and phone access to our group of doctors, paid for by companies looking to offer their employees an amazing perk and save money.
Although some companies were willing to pay for perks for their employees, not every company wants to or can. However, every company has a mandated, yearly, big, hairy problem— they have to purchase health insurance. It’s such a pain in the ass and it’s confusing as all hell. I don’t want to bore you, but they essentially have two very old-school and boring options— a health insurance broker (picture a sleazy insurance salesman incentivized to get you to spend as much as possible) or a Professional Employer Organization (a creepy company that “hires” your employees, groups them all together with all the other companies they’ve “hired” and goes to health insurance companies as a large group to secure lower cost health insurance). This means you may work for “super cool internet startup company” but get paid by this creepy thing called Trinet or Ambrose, or ADP. PEOs also offer payroll. But payroll is easy with plenty of super affordable options. However, PEOs charge about $150-$180 an employee per month for all of this stuff they say they can do. So any cost they save by lumping you together for health insurance is offset by their monthly fees. There are a ton of problems with PEOs which is beyond the scope of this post. But for the most part, they’re designed to put out fires when you’re small. But once you grow bigger than 20 employees are so, it’s time to be a big boy company and get off the PEO or you have a financial albatross around your company’s neck.
The other option companies have are brokers. For the most part, you reach out to them once a year, they get your company the most expensive insurance they can get you to buy, and then they go away and say your employees are on their own. They did the job they were hired to do. However, they don’t help individual employees use their health insurance wisely and they are incentivized to maximize your spending.
I think there’s a massive hole in the market between a creepy, bloated, expensive PEO and a once a year conversation with a broker who’s not financially on your side. There needs to be an entity that can procure health insurance for you and also help you and your employees use that health insurance wisely on a daily basis so you don’t waste time or money.
But for the past year we’ve been selling Sherpaa as a perk (24/7 access to doctors!), not part of the mandated equation (purchase health insurance and get this super amazing benefit, 24/7 access to doctors!). So, all of that is changing. We’re focusing equally on procuring insurance for you and giving you access to our group of doctors. We procure the most logical health insurance for your company and then we partner our doctors with you and your employees so you use that health insurance effectively so you don’t waste time or money.
And, year after year, we get better and better. In fact, the companies we’re renewing for year two saw health insurance premiums increase half as much as what they would have increased without Sherpaa. We also discovered that employees covered by Sherpaa spent half as much on healthcare expenses this past year than we expected. Why? Because when you have a doctor available to you within a few minutes to speak with you and create a plan with you, you never waste time or money. We’re doing something wonderful here. Making healthcare accessible and more affordable. It’s my dream come true.