Even with one market nearly cornered, and explosive revenue growth, Stratus Video has no intentions to slow down. How will it win over new customers?
A big honor: In August, Inc. magazine ranked Stratus Video No. 201 on its list of the 500 fastest-growing private companies nationwide, measured by revenue growth over three years. The ranking marked the company's fifth consecutive appearance on the annual list — a rare feat for a business.
Founded in 2011, Stratus Video has long been on a mission to disrupt the health care industry. Its way there is through an on-demand video language interpretation service, a popular option given the United States has increasingly become a polyglot nation, with institutions that look to accommodate non-English speakers. That service is also the main reason why the company's revenues have jumped 658% in the last three years, from $4.42 million in 2014 to $33.5 million in 2016. The company has about 680 employees — for now — and is owned by a private equity firm.
David Fetterolf, president of Stratus Video's language services division, says the market for the company's services is “growing and expanding, and we're obviously having great success capturing market share.” He adds that the number of competitors is shrinking, estimating that in the next year, it will reduce from about five companies to four.
Fetterolf, 56, says because potential clients are hospitals, medical clinics and other health care providers that have to meet rigorous standards, the industry's barrier to entry is fairly high. That helps deter additional competitors from popping up in the wake of Stratus Video success.
“You can't get into that business easily,” he says. “It's not just about developing a piece of software and you're in the business. It's a volume-based business. So you need the clients. You need the interpreting sessions to be able to enter the business.”
But because health care institutions tend to be patient when evaluating potential vendors, Stratus Video's still has more potential growth to realize, Fetterolf explains. Even so, Stratus Video already counts more than one-third of all U.S. hospitals as customers of its language services division. “More than half of all hospitals have not made decisions on video interpreting at this point in time,” he says, “so it's still a green-field market that we can go after.”
Stratus Video isn't waiting around for the competition to catch up, either.
Its core services include not only its foundational video remote interpretation product, but also Stratus Audio, an over-the-phone product; Stratus InPerson, an onsite interpreter solution; and Stratus Word, a solution for document translation.
But what happens after a patient leaves the hospital and continues to require language services as he or she interacts remotely with specialists and other outpatient care providers? That's a niche that Stratus Video's new telehealth division, led by Lee Horner, hopes to fill.
Horner, 47, joined Stratus Video about a year and a half ago, after spending the bulk of his career with companies specializing in electronic medical records and patient engagement. He says he began to study the telehealth market, and its needs a few years ago.
“When a patient leaves the hospital, if they speak English, they obviously can go home and access a caregiver or someone that can help them communicate with the health system or hospital, including themselves,” he says. “But when a patient leaves the hospital and their native language isn't English, it's a much more challenging engagement model both for the health system and the patient themselves.”
Horner says Stratus Videos' ability to leverage technology allows the company to communicate with the patient in his or her native language through texting and email notifications. The company also can bring the patient into a virtual consultation via video.
Horner and Fetterolf knew each other for a few years before Horner joined Stratus Video. Horner was impressed with what Stratus Video had accomplished in just five years. And he saw an even greater opportunity to position the company within the burgeoning, and lucrative, government reimbursement market, which was just beginning to open up to telehealth providers.
“But instead of trying to do a lot of different things in the telehealth world, our common goal is to start with our core nucleus,” Horner says. “And that is engaging with patients who unfortunately don't speak the English language ... but how do we engage with them while leveraging the platform around telehealth?
That's where this marriage has really come together,” adds Horner. “What drove me to join the organization was the opportunity to bridge that gap with some unique type of technology in the marketplace.”
Big growth, big challenges
Stratus Video's growth run has not come without its share of difficulties, Fetterolf and Horner say.
Over the past year, for example, Stratus Video has added some 500 employees to help it meet demand. Such a leap can adversely affect organizational culture if not handled with careful attention to customs and processes, they say.
“When you're growing quickly, the key to success — and this is by far more important than anything else — is finding and recruiting the right people and keeping the culture,” Fetterolf says.
For companies like Stratus Video that have to make many hiring decisions in a short amount of time, talent is the factor that wins out more often than not, Fetterolf adds.
Branding and marketing is another area that's going to require work, the Stratus Video executives say, while the company evolves into two distinct business personas centered around language services and telehealth, respectively. Stratus Video has existed only six years, so Fetterolf and Lee are taking a cautious approach when it comes to tinkering with the brand identity.
“Stratus Video has a good brand recognition in the marketplace,” Horner says. “So we continue to capitalize on that for both organizations.”
At the same time, the company treads a fine line, which Horner seems to acknowledge.
“We made the decision early on that we were going to separate and rebrand both organizations, or rebrand telehealth as a separate entity, but also that we were going to keep [them] tightly coupled,” Horner explains. “We'll continue to build out marketing efforts in both 'personas,' one for language services and one for telehealth, that drive different behavior and different results. But overall, our goal is to continue to drive brand recognition in the marketplace via two solution sets.”
Stratus Video's growth spurt has also led to an expansion of the leadership team. Horner brought in a vice president of product innovation and two vice presidents for sales — one for the East Coast and one for the West Coast. “They both have specific, unique backgrounds,” he says, “one in the health plan market around the payer space, and one with the understanding of the health system and hospital space.”
One thing not likely to change, however, is Stratus Video's status as a privately held company. Fetterolf says there are no plans to take the company public, or make any other significant ownership or management changes.
“Right now Lee and I are both very focused, heads down, growing the business,” Fetterolf says. “So right now, there are no plans to change anything. And it's a nice setup. We're owned by one private equity firm and the management team and there's no reason to change it. We just need to keep working and chopping wood and growing the business.”
(This story was updated to reflect the correct ages of executives and the full name of Stratus Video.)
AT A GLANCE
Year revenue % growth
2014 $4.42 million
2015 $11.56 million 161%
2016 $33.5 million 190%
Source: Stratus Video