July 20, 2023

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The Pineway Chapter

Tim and I spent August thru December of 2022 validating the concept of a healthcare staffing marketplace. We spoke with dozens of healthcare professionals – the picture they almost universally painted was that healthcare staffing was in a dire place.

We then spent January through May of 2023 building the marketplace platform, think Uber for nurses. We raised a pre-seed in April, and quickly hired a small team consisting of a nurse recruiter, an engineer, and a salesman. The salesman had previously run our largest competitor’s second largest territory (Dallas / Fort Worth), growing it from 7k to 14k hours worked weekly. We were excited to let loose.

In May, we started going through the sales motions up and down the I-35 corridor. We made 500+ cold calls and recorded notes from ~60 conversations with facility administrators, directors of nursing, and scheduling coordinators. The picture those conversations painted was equally clear — something had changed.

Many facilities we reached in the DFW area were fully staffed as of the past few months for the first time in years.

• “…fully staffed for ~2 months. Not using any agency or contract.”
• “Don’t use agency, have been fully staffed for a couple months.”
• “We don’t use agency, haven’t for ~3 months. Mandated from corporate.”
• “Agency staff cannot get staffed in Houston or Dallas markets right now. I have seen people in Houston come to to us [in Lockhart] for one shift.”

And corporate had begun passing no-agency mandates…

• “Not using agency since May 1 – not allowed to.”
• “I wish I could use agency, but we’re not allowed to.” (Director of Nursing)
• “We are fully staffed and we’re not allowed to use agency.”

We confirmed that our direct competitors were experiencing their first flat months or down months in years. One acquaintance who runs a nurse staffing agency in Ohio and Maine shared the following over text:

• “We’re down 70-75% monthly revenue from this time last year.”
• “It’s been very hard and slow the past few months to be honest with you. I can’t speak for everywhere but at least in areas that I am in. If anything we are going back trying to renegotiate contracts to temporarily lower rates to push facilities to use us more.”

Through interviews with salespeople that used to work for our competitors, we had a pretty good idea that the sales cycle for these contracts was short when you found a facility in need. One week, max — often times customers would sign same-day. When our first contract went out, the prospect took 3 weeks to review it. In that time, she was able to hire 3 full-time CNAs, whereas she had been unable to hire a single full-time CNA in 2.5 years prior. This was the straw that broke the camel’s back; we knew we had to pull the plug.

So, what changed?