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Business Observer Friday, Oct. 15, 2010 10 years ago

A Bolt of Lightning

A Gulf Coast startup that aims to bring high-tech communications to a somewhat staid industry believes it's on the cusp of a breakout moment. 'We are on the verge of exploding,' its co-founder says.
by: Mark Gordon Managing Editor

Company. Voalte, Sarasota
Industry. Health care, technology
Key. Company seeks to double its employee and customer base in 2011.

Trey Lauderdale and Rob Campbell queried a dozen chief information officers at hospitals nationwide two years ago, when their health care information-technology company was in the early startup phase.

The entrepreneurs asked the executives: What are the qualities you see in a good health care IT vendor? Lauderdale and Campbell, the top two executives at Sarasota-based Voalte, wanted to emulate the best.

But the duo got blank stares instead of an enthusiastic response. There really wasn't a great company to look up to, they heard. Lauderdale and Campbell also heard something else, in what the hospital executives didn't say: This could be their big break.

“It's a huge opportunity,” says Campbell, Voalte's CEO. “There isn't a Starbucks or a Harley-Davidson or a Disney of health care IT.”

The opportunity begins with Voalte's systems, which use a network of software applications on smartphones to turn a hospital floor's central desk into a high-tech switchboard for incoming and outgoing messages. Nurses can text info and data to each other or update a shift supervisor on a patient care issue, tasks that can take hours through traditional communication methods. The company's name, pronounced like “volt,” is derived from the communications word-trio of voice, alarm and texting.

In the fourth quarter of 2010 and into 2011, after at least 18 months of startup-style tinkering and research, Lauderdale and Campbell believe they are ready to pounce on Voalte's potential.

“We are on the verge of exploding,” says Lauderdale, the company's co-founder and vice president of innovation. “We are focused on transforming this company.”

Indeed, Voalte says it's on target to more than triple its hospital customer base by the end of the year, from three to 10. One of the newest clients is Wahiawa General Hospital on the island of Oahu in Hawaii.

Campbell adds that Voalte should be in at least 20 hospitals by the end of 2011. Voalte executives declined to release revenue figures or projections.

The company's employee count is expanding, too. The company has 25 employees today, including a dozen it has brought on in the past six months. That number is also projected to double next year.

“We have to expand this business rapidly,” says Campbell. “That's going to take talent and it will take cash resources.”

The capital raise effort is already underway. Campbell says the company seeks at least $5 million in fresh capital, but it will likely need significantly more. “We have to grow faster than we can grow organically,” says Campbell.

Voalte executives have pitched their story to a variety of investors, including a group assembled by the Florida Venture Forum. Quips Campbell: “Entrepreneurs are always looking for money.”

Three rules

Campbell is essentially Voalte's Yoda, with a specialty in guiding others in how to build a business. Campbell, 59, comes to the title through a business career that includes this rare distinction: He worked for Steve Jobs at Apple and Bill Gates at Microsoft, when both companies were in the early stages. Campbell also ran a company that created the Power Point program.

Lauderdale, meanwhile, is Campbell's prized pupil. Lauderdale, 28, met Campbell at the University of Florida, where the former was a student and the latter was a guest lecturer at UF's business school.

“I'm an old dog here, having done a lot of startups,” says Campbell. “But I'm amazed at how little things have changed.”

For example, says Campbell, there are still three can't-break rules to turn a startup into a profitable and sustainable enterprise. These hold for just about any company, not just a health care IT firm.

The first rule, simply: Can the product be built? With Voalte, Lauderdale knew early on there was a need for communication upgrades in hospitals, but the technology would have to catch up to the demand.

A key to succeeding in the first rule, says Campbell, is to have development partners early on. That way, kinks and quirks can be worked out before the product hits the mass market.

“The landscape is littered with failed products where customers didn't get involved early in the process,” Campbell says.

In Voalte's case, it purposely sought a diverse collection of guinea pigs, starting with Sarasota Memorial Hospital and Huntington Memorial Hospital in Southern California. That provided a range of perspectives for the company to work with.

SMH officials specifically cite Voalte's ability to merge the technology with customer service in the company's early success. So much so that SMH Chief Information Officer Denis Baker says “word got out” among nurses in the hospital about how useful the product is and it's now used in several departments.

The hospital began using Voalte's system in the spring of 2009. “We had tried some other forms of technology as far as clinical collaboration that just didn't work,” says Baker. “Voalte had a different approach.”

Different, but not cheap. It costs about $200,000 for a two-year contract, which includes retrofitting each smartphone to only be able to work with the Voalte apps.

Still, the issue at stake — communication between frontline health care providers — is one hospitals have struggled with for years. The standard way, an overhead paging system, is loud, unreliable and inefficient, many hospital officials say.

The Voalte system, on the other hand, say company executives, is quiet, quick and efficient.

Urban hip

With feedback from people like Baker, Campbell says by last December the company was confident it could build the system, at first using an iPhone app. It has since incorporated BlackBerry's into the product line.

Voalte next went to work on step two: Would hospitals buy the product and service, and, most importantly, could Voalte sell it for a profit?

Lauderdale took to the road to confirm that point, visiting hospitals nationwide. His pitch normally includes a passionate plea to hospital administrators.

“Nurses walk an average of four to five miles during a 12-hour shift, which has raised questions around fatigue, efficiency and the impact on the quality of care,” Lauderdale says in a press release touting his appearance at a recent conference in Boston for clinical collaboration in the health care IT industry. “Studies suggest up to 30% of hospital staff time could be recaptured with unified communication solutions at the point of care.”

The answers to step two, selling the product, is also partially built around the team of employees Voalte recently hired. The crew now includes another former Microsoft employee and a University of Florida MBA. Another new hire is taking nursing classes and flew helicopters with the National Guard.

The employees come together to form a contrast in economic realties. That is, the foundation of the office, on Bee Ridge Road in Sarasota, is a recession relic, with desks, chairs and cubicle walls left over from a shuttered bank branch. The office itself was most recently home to a mortgage brokerage.

But the core of the office screams urban-style Internet hip, with large and fluffy pink beanbags and bright green walls.

The diverse staff gives Lauderdale and Campbell confidence that Voalte will accomplish the second step, which brings it to number three: Scalability. The challenge there, Voalte executives say, is to find 100, 200 or even 500 hospitals that could become customers.

“There are 7,500 hospitals in the United States,” Campbell told the Business Review last year. “And we think everyone of them would like to have a Voalte system.”

Pink pants

There are several distinct challenges Voalte faces to accomplish step three.

First, there is the issue of educating prospective customers on the hows and whys of the system. Nurses don't traditionally embrace radical technology changes.

And when it comes to hospitals, another challenge will be how the company handles the federal health care overhaul. On that front, in classic entrepreneurial style, Campbell and Lauderdale say health care reform is an opportunity, not a hurdle.

In fact, Campbell says the $19 billion earmarked for health-care record keeping in the bill could be a boon for Voalte. “We don't play in that area,” says Campbell, “but if fresh money is being pumped into the system that could be very good us.”

Lauderdale, meanwhile, spends part of his time focused on how to improve the customer service side of the company, so the technology isn't lost because clients don't understand how to use it. One of his favorite moves, for instance, was making the company uniform include pink scrubs for pants. Now, says Lauderdale, Voalte employees are instantly recognized when they show up on site.

Voalte also recently sent two managers to the Disney Institute in Orlando, where they learned tips about how to improve the customer's interaction and experience with the company.

The customer service focus already paid off in at least one respect. Baker, the Sarasota Memorial official, says he's been impressed with the amount of times he's seen a Voalte employee in the hospital just to check in with the frontline nurses.

“That's pretty rare for a vendor to be able to do that,” says Baker. “I'm trying to promote that idea with our other vendors.”

Baker's flattery, however, while nice to hear, crystallizes Lauderdale's looming worry: Will the company maintain its focus and replicate that success as it grows? And more pointedly, will another IT company with both health-care clients and much deeper pockets - Cisco for one — look to bully Voalte and take away business?

“The more success we get, the more attention we get,” Lauderdale says. “It will be up to us to continue to own the market we created.”

Bill vs. Steve

There aren't too many people who can say they worked for Steve Jobs at Apple and Bill Gates at Microsoft — before both men became the business and technology icons they are today.

Rob Campbell, CEO of Sarasota-based health care IT firm Voalte, is on that short list. He worked for Jobs first, in the early 1980s, then later, for Gates. Campbell says the public images for each business leader come pretty close to reality.

“They are two totally different personalities with two totally different approaches,” says Campbell. “Steve is like Thomas Edison. Bill is like Henry Ford.”

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