10 Questions With John Machacek: Peter Chamberlain, WalkWise, Inc.

3. With the insurance reimbursement ability, that must really make the ROI good for your customers to provide WalkWise to their clients. Is that a correct assumption?

While the path of reimbursement for remote therapeutic monitoring, or RTM, was in the works before COVID-19, the pandemic really changed the tactics in the market. Medicare came out with reimbursement codes to specifically encourage therapists to monitor their patients outside of the therapy gym, and the market is still wrapping their minds around that. Many RTM solutions on the market rely on smartphones and apps, which require the patient to log in, manually enter information, or respond to messages every day. That doesn’t work well for the demographics that our customers serve, especially as some are dealing with cognitive impairment. The WalkWise system has always been a remote monitoring solution and is ideal in that it automatically captures data for the therapists while having unmatched ease of use for the patients. The provider gets reimbursed for the device, time spent reviewing the data, and time spent communicating the results to the patient. First and foremost the WalkWise product is about improving patient outcomes, but the reimbursement allows it to fit into the fee-for-service healthcare business model.

4. Once the organizations or contract therapists, for example, sign up with WalkWise, do you have some type of onboarding or training?

Yes, and we’ve gotten it down to a bit of a science over the years. After we ship the first batch of equipment, our amazing head of customer success will hold a virtual training session for 45-90 minutes, depending on the type of customer and the scale of the deployment. Then, we typically meet every two weeks for the first couple of months to make sure there is progress on the device setup, but also to train the clinical teams on how to interpret the data they’re getting from the system. After all, this is data that no one has ever had before, so there’s a little bit of a learning curve. But it’s always fun in those first couple of meetings when there’s a “surprise” in the data that leads to an adjustment in the plan of care, or even just an awareness that patients are more active than they had realized! Once the team gets the hang of the system and has operationalized the use of the data, we back off on meeting frequency.

5. With that ROI and the personal nature of your product helping health outcomes, it must be rewarding to be doing what you do. Do you have any particular examples of feel-good or warm fuzzies you encounter?

There are so many. There have been some instances where the mobility aids have tipped over in an unsupervised setting, so if the caregiver wasn’t notified on their phone by the WalkWise app, those people may have remained on the floor overnight or all weekend.

More commonly, we’ll hear of instances when the provider gets notified about a change in the data, and they uncover issues or learn of things faster before it becomes a larger problem. For example, one home health customer had a high-risk patient who had numerous hospitalizations due to recurring urinary tract infections. As they started using WalkWise, the system notified the provider one morning that her nighttime activity had suddenly had a significant increase. Knowing of her UTI history, the provider got the patient to the clinic and treated the issue early, thus keeping her out of the hospital. This scenario has happened several times with this patient and has essentially eliminated her trips to the hospital.

This shows that WalkWise isn’t a “one trick pony” of just being a fitness tracker, as some may think of it on a surface level. It’s so much more when you learn to interpret the data, such as for patients with a history of hospitalizations, those experiencing cognitive changes, or even those experiencing a mental health crisis.

6. I want to ask a question or two about raising private equity funds, since you have experience in that, and you’ve also been a good ear to bend for other entrepreneurs looking to raise funds. For some fundraising lessons learned, what are some of the things you’ve learned and/ or have shared with other entrepreneurs?

There aren’t too many startups here that have raised in the millions, so with relatively few of us in this community, it can be a little tougher to learn. But when you read stories or talk to other founders about their fundraising journeys, you should realize that these are not truths but simply data points. Every company and founder are different… some have an easy time raising capital because they’re in a hot sector, but then of course they might have more competition in the market. Some may have a tough time raising, but perhaps they then end up with a more streamlined and efficient company that can weather market fluctuations a bit better. And of course, some founders have an amazing pedigree or know many high-net-worth individuals, and thus a founder just out of college may not have much to learn from that experience.

However, there are some absolute truths that I try to point people toward when they are considering a startup or starting a raise. For example, if you ever want to raise from VCs or professional funds, you’ve got to be a Delaware C-corp. It’s a no-brainer. Yet, if you aren’t getting good advice or just haven’t had a chance to talk to founders who have raised, you might be tempted to go for a cheap LLC. This will really come back to bite you, but more than that, it will show serious investors that you don’t know what you’re doing and perhaps don’t understand startups. Investors have a ton of options for where to put their cash, including just holding onto it, and so giving them an easy, quick way to say “no” is really shooting yourself in the foot.

Thankfully, the addition of gener8tor to our community has been great for teaching and advising founders about the process of raising private equity. They also bring a wide network of startup-specific help, for example, helping to find a lawyer who has done incorporation and funding rounds for actual VC-backed startups, not just local businesses.

Another thing I’ve really internalized is that investing is all about minimizing risk. Sure, you need to show a great upside, but no one wants to be the fool that invests in a company that goes bankrupt in a year or has a founder that leaves immediately after the raise. On the early side, the founders are the greatest risk, so do whatever you can do to show yourself to be someone who is capable, honest, determined, and just a little bit crazy.

7. With WalkWise having both hardware and software components, how does that resonate with your investor pitches?

It’s a tough line to straddle, as many investors don’t want to touch hardware, but our primary value is in the data and software. I understand why investors are skittish about hardware—it does create additional costs, and global supply chains can be tricky at the best of times. However, I try to focus on the positives that the hardware enables us to do on the software side. First, we have a patent on the system, which is difficult to do with only software. Second, the hardware creates stickiness with our contracts, as it is more difficult to remove a physical system than pressing a “cancel subscription” button. And third, it helps demonstrate value to customers because they are receiving something physical and tangible.

I also explain that the hardware is more or less figured out, meaning that there aren’t a huge number of changes or innovations to be made, and thus less risk on that side of the product. On the other hand, we continue to iterate often on the software and analytics based on customer feedback and needs, making us more similar to a traditional SaaS product.

8. From knowing you these past six or seven years, I’m aware of your roots in Oregon to grad school at MIT in Massachusetts to following your wife to North Dakota for her medical education. What perspective can you share about the journey to now living and working in Fargo Moorhead?

I never thought I’d find myself living in North Dakota of all places, but I am super happy with how things have turned out. My wife received a great education at UND, we loved living in downtown Fargo for many years, and now we own one of the oldest homes in the city in a neighborhood we absolutely love. Our first child was born recently and will now be a Fargoan for life!

Founders who want to do ambitious things in North Dakota can absolutely do it here, but you do need to leave town every once in a while and learn from people outside our bubble. For example, the first entrepreneurship course I took was at MIT, and I participated in Techstars in Minneapolis for three months. I jump on calls with other founders from across the country to make sure I’m staying up to date on what’s going on outside our ecosystem. And much of the early-stage capital for WalkWise has come from outside the state, though mostly from South Dakota and Minnesota.

With that said, if you are in North Dakota, you have some first-rate resources that founders in other states would be jealous of. If you aren’t attending startup events, going to the gener8tor and gBETA showcases, StartupBREW, Cultivate, etc., then you are potentially missing out on your next customer, partner, or investor. I met one of our very best customers in the middle of a field at Grand Farm. I met one of our earliest investors at a cocktail party in the Prairie Den. I met our largest investor at a startup event at Drekker. You don’t know what you’re missing if you don’t show up!.

9. If you could go back in time to Peter from the past, what kind of hindsight advice would you give yourself?

That’s a hard question. It sounds super cliché, but every mistake, bad hire, or failed contract has helped me grow as an entrepreneur. I simply try not to make the same mistake twice! But to give you an actual answer, I’d say that I would tell myself to have more confidence. Those who know me likely don’t think I lack in that area, but it’s easy to get self-conscious in your head when you’re asking people for time and money or asking customers for a longer or larger contract. Rejection never feels good, but potentially missing out because you never asked for something is worse.

10. The last question for you Peter is what I often refer to as my StartupBREW question. What can we do as a community to help you and WalkWise succeed?

Continue to support and encourage the organizations and programs that help entrepreneurs. Emerging Prairie, gener8tor, the North Dakota Development Fund, the North Dakota Growth Fund, Innovate ND, the ND Bioscience Innovation Grant Program, the UND Center for Entrepreneurship, and the South Dakota Enterprise Institute, just to name a few. These are the folks that help us to compete nationally, and so supporting them will support us!

WalkWise