Interview with a Successful Startup Founder

Building a Multi-Million Dollar Company with Zero Industry Experience

Gareth Mahon
Gareth Mahon
March 3, 2021
Category of startup
Health
Country of startup
Australia
Revenue of startups
+$500k/mo
Interview with a Failed Startup Founder

Building a Multi-Million Dollar Company with Zero Industry Experience

Gareth Mahon
Gareth Mahon
March 3, 2021
Category of startup
Health
Country of startup
Australia
Cause of failure of the startup

Gareth worked in management consulting and data analysis. Prior to The CareSide, he helped organizations develop enterprise software solutions. After seeing the opportunity, he started a home care service. 4 years later, he hopes to be turning over $10M in revenue.

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Hi Gareth! Who are you and what are you currently working on?

I am the CEO and co-founder of The CareSide. We provide home care and nursing services to seniors. We’re headquartered in Perth, Australia. That’s where I live. 

Our clients are typically individuals who are responsible for taking care of an elderly family member or friend. They need help with the demands of caregiving, which can be a huge burden. That’s where we come in. We offer a variety of healthcare services such as live-in, companion, and respite care. Our goal is to provide the best value care. As a lean startup, we are able to keep our costs low and pass those savings onto our customers.

My responsibilities have changed. Initially, I was involved in all areas of the business. However, as the company has grown, that has changed and I’ve had to get better at delegating work. The advantage of being involved in the different aspects of the company early on is I learned what skills were required for different jobs. This has made hiring much easier because I know what to look for when interviewing vendors or employees.


What's your backstory and how did you come up with the idea?

Oddly enough, my background is in management consulting and data analysis. Prior to launching The CareSide, I helped organizations develop enterprise software solutions. I worked for multinational companies in Australia such as ANZ, KPMG, and Western Power. However, I’ve always wanted to start my own business. My wife and business partner is a registered nurse and also has an MBA. Her background as a healthcare worker is one of the reasons we decided to start our own company. We wanted to combine my business background with her industry expertise. 

We saw the Australian home care industry was going through large regulatory changes a few years ago. Opportunities were opening up and we wanted to start our own venture. Since we have children, the challenge was giving up the stability of our full-time jobs. It was a risk. But one we’re glad we took.

the-careside-1


How did you go from idea to product?

The advantage of starting a service company is we didn’t have to invest a lot upfront or raise money from investors in order to develop a software or hardware product. Our product is our human capital. 

Our pricing strategy is simple: we want to provide the best value. All of our competitors charge as much as we do. That’s because the Australian government sets the pricing of the healthcare program we provide, which are called home care packages. In other words, each home care package level includes a set amount of government funding. However, the services that are included by each home care provider can vary greatly. We offer more hours of service for the same care. So while the cost is technically the same on paper, the value we provide is much greater. 

the-careside-logo


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Which were your marketing strategies to grow your business?

We tried different strategies to get the word out. Most of the things we did initially weren’t successful. For example, we ran ads in newspapers. But eventually, we learned that people aren’t looking for home care when they read the news. Then we tried direct sales by leaving business cards on the doorsteps of seniors. But our messaging was off. 

Eventually, we shifted our marketing efforts to our web presence and digital marketing. And it’s worked. We realized that our business isn’t something that you buy while browsing around or because you happen to land on an advertisement by chance. Instead, it’s like a plumber’s. You need it when you need it. Outside of that time period, you’re not looking for it. 

Our primary drivers of growth now are PPC, content marketing, and social media. We got traction right away with Google Ads. It took about 6 months to start to see some results from SEO and inbound marketing.


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How are you doing today and what are your goals for the future?

We’re fortunate that the coronavirus pandemic has been so well controlled in Australia. The economy here has not been impacted as much as it has in other countries. 

We are currently growing revenue by 16% per month and profit by 9% per month. Our profit margins are over 20%.  By the end of this year, we hope to be turning over $10M in revenue. We will need to hire another 2 managers and another 30 employees to support this growth. Currently, the team consists of three managers, two administrative assistants, two accountants, one bookkeeper, and over one hundred carers. 

We’re growing the company two ways. One, we’re expanding geographically by opening offices in new states. For example, we just opened our first office outside of Perth in Adelaide. It’s a coastal city in the southern part of the country. We hope to expand into additional two more states this year as well. The second way we’re growing is by offering new services. We recently qualified to offer disability services. From an operational perspective, it’s very similar to home care. However, it’s completely different from a legal perspective. It’s regulated by a different government body. We’re excited to roll out disability services soon. 

We have spent the past couple of years reinvesting some of our profits back into the business. We’ve used this money to develop our own CRM software. There are very few software solutions for our industry. Our software helps with sales, payroll, and HR. In the future, we would like to sell this to other companies.


Since starting The CareSide, what have been your main lessons?

I have learned that you get what you focus on. Whatever area of the business you invest your time and energy in will tend to do well. If you put energy into marketing, you get more leads. If you put your energy into process improvement, you get more efficient operations.

Whatever you do not focus on will slowly fall apart. Each area of the business is like a garden. It needs constant attention. Without it, problems grow and become more urgent until you are overwhelmed by them.

We are big believers in building our own software. This gives you complete control over your operations. You can make the software reflect how you want to do things, and this can be a huge differentiator from your competitors. Your operations are largely determined by your software systems, and those businesses that use standard software are doomed to all have the same operating processes which will lead to the same cost model. 


the-careside-3

What were the biggest obstacles you overcame? What were your worst mistakes?

The main hurdle we faced in the early days was ensuring we had the proper paperwork. Our industry is heavily regulated. We were audited seven different times by different government agencies. That’s probably a good thing for consumers, but can be frustrating for business owners. It was a very bureaucratic process. We overcame this challenge by hiring a consultant who helped us apply for the required licenses. 

We believe in value. People love great value for money. Better services are hard to quantify and hard to justify. People always expect a good result from your services. Our experience is that people expect to pay for baseline acceptability. Anything above this they do not want to pay for. They would rather spend their money on something else. So I always design service delivery to execute with optimum value. Charging extra money for a premium service is quite hard to justify. It took us a while to realize this. I think that has been one of our biggest mistakes so far. But now we have our pricing strategy and USPs optimized.


What tools & resources do you recommend?

Although we have developed our own software suite, we still utilize other tools. There are three that I recommend. For internal and external communications, we use the Google Suite (e.g. Gmail, Google Docs, Google Sheets, etc.). We also use Xero for our accounting. It helps make sure that we have a single source of truth if we get audited. Finally, we’ve had success with CanIRank’s SEO tool to manage our inbound marketing. The nice thing about CanIRank is it provides marketing recommendations, not just data. 

The books that have had the biggest impact on my career are the Four Hour Work Week by Tim Ferriss and E-Myth Mastery by Michael Gerber. The former gave me the courage to leave my full-time job. The latter helped me hone my skills in leadership and management.

I also listen to the Y Combinator lecture series by Sam Altman. It’s great for startup advice. It covers topics such as operations, culture, and hiring. 


Where can we go to learn more?

We frequently publish content on our blog about different aspects of caregiving. One of our most popular articles is a post we wrote about home care package programs, which help seniors in Australia afford home care services. I’m also on LinkedIn.

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