Call9 was a telemedicine startup that aimed to reduce unnecessary emergency room visits by providing medical care to nursing home residents through a video platform. Founded in 2015, it initially thrived with significant investments but ultimately shut down in 2019 due to slow adoption of value-based care and funding challenges.
What was Call9?
Call9's main product was an emergency medical service that connected on-site clinical care specialists in nursing homes to remote physicians via telemedicine. Its unique value proposition was reducing unnecessary hospitalizations by replacing 911 calls. Notably, Call9 raised $34.12M and was featured in expert collections for Digital Health and Telehealth.
Reasons behind Call9's Failure
Slow Adoption of Value-Based Care Call9 struggled with the slow adoption of value-based care, where payments are based on patient outcomes rather than services rendered. This nascent stage of value-based contracts made it difficult for Call9 to generate sufficient revenue, ultimately leading to financial instability and the inability to sustain operations.
Inability to Secure Additional Funding Despite raising $34 million, Call9 could not secure further funding to continue scaling its business. The pressure from investors for quick returns conflicted with the company's long-term mission, forcing it to wind down operations and lay off approximately 100 employees.
Misalignment with Existing Payment Models Call9 faced significant challenges aligning its innovative telemedicine solution with the prevalent fee-for-service model in the healthcare industry. This disconnect hindered its ability to achieve financial sustainability, as the existing payment structures did not support the company's value-based care approach.
Impact on Investors and Market
Call9's failure, despite raising $34 million, significantly impacted its investors, including Index Ventures and Y Combinator. The shutdown underscored the challenges healthcare startups face in securing sustained funding and managing high operational costs, serving as a cautionary tale for the market about the importance of sustainable business models.
Lessons Learned from Call9's Failure
Understand Market Readiness: Ensure the market is ready for your innovative solution to avoid slow adoption and financial instability.
Secure Sustainable Funding: Prioritize long-term funding strategies to support growth and avoid reliance on short-term investor returns.
Align with Payment Models: Adapt your business model to fit existing industry payment structures to achieve financial sustainability.
Manage Operational Costs: Keep operational costs in check to maintain financial health and avoid premature shutdowns.
Focus on Value Proposition: Clearly communicate the unique value your product offers to attract and retain customers and investors.
Frequently Asked Questions about Call9
When was Call9 founded?
Call9 was founded in early 2016.
What were the key features of Call9's service?
Call9 provided medical equipment and a video platform to connect nursing home residents with remote doctors, aiming to reduce unnecessary emergency room visits.
Why did Call9 fail?
Call9 struggled with the slow adoption of value-based care and failed to secure additional funding, leading to its shutdown.
Looking Ahead
As startup founders navigate the challenging landscape of innovation, it's crucial to have a plan for every stage of the journey. If you find yourself needing to wind down operations, consider how Sunset can help you avoid similar pitfalls. Sunset handles all the legal, tax, and operational burdens, allowing you to move on to your next venture quickly and efficiently.
