Original Interview: The SharkPreneur Podcast #555: Disrupting Healthcare
Seth Greene: Welcome to the Sharkpreneur Podcast. This is your co‑host, Seth Green. Today, I’ve got the good fortune to be joined by Maceo Jourdan, the founder of Canexxia Healthcare. Maceo, thanks so much for joining us.
Maceo Jourdan: Glad to be here.
Seth: Now, you got a fascinating business that we’re going to dive into in just a minute, but you’ve also got an equally fascinating background. You were chairman of Retire3 Publishing before this along with a number of other companies. Correct?
Maceo: That’s right.
Seth: Let’s dive into the history a little bit. How did you get started?
Maceo: We’ve got to go back to when I was about eight years old to truly answer that question, although we’ll spend a minimal amount of time on the couch. When I was a kid, I delivered newspapers. Obviously, by the gray of my beard, I’m not the youngest guy in the room anymore.
As I was delivering papers, I noticed a bird feeder. Being a kid, I didn’t know what it was. I asked about it. I figured out that some of the ladies in the townhouse complex wanted to have birds come around their place. I’ve made a little device with clothespins and a baby food jar, rolled it in peanut butter and birdseed. I guess I can now claim to have one of the earliest recurring revenue businesses.
Seth: Oh, my God. That’s awesome.
Maceo: Like all eight‑year‑olds, it became work because they wanted refills, and they didn’t want to roll it into peanut butter themselves.
Seth: You had to service the accounts.
Maceo: Exactly right, which for an eight‑year‑old is a tall order. I was already delivering a massive mound of newspapers. Anyway, what I discovered as a kid ‑‑ and I don’t know why it hit me at that young ‑‑ is that if I could find the buyer, then everything else would pretty much take care of itself.
My career has been really punctuated by looking at markets first by, who’s going to buy something, and can I go source that product or create that product for them.
Seth: Awesome. Talk a little bit about Retire3 Publishing.
Maceo: Yeah. That started…
Seth: You started that with a $25,000 loan and grew it to an insane amount three years later.
Maceo: 25,000 loan. After September 11th, I was a hedge fund trader working in some proprietary trading rooms. All those rooms shut down outside of the main money centers. Of course, that means I was going to go be a street preacher.
I went to the ministry for about five years. Fast forward to 2005, a mentor of mine in trading said, ”Yeah, my boy, you should start a newsletter.” I was like, ”Well, what the heck is that, Larry?” And he explained it to me. That was really the rise of digital publishing.
I’d been involved in direct‑response marketing for a really long time. I married those two up in the early days of digital marketing. I went to my stepdad and said, ”Hey, I need 25,000 to start this enterprise.”
Ironically enough, the guy in the background there, Dan Kennedy, was his partner. Bill Glazer, I know all those guys intimately. Bill Glazer is the one who actually suggested starting with that amount.
Seth: That’s awesome.
Maceo: I later found out he totally pulled it out of the air, which is neither here nor there was an adequate answer. I ran that down to $5,000. I started a publishing business in the financial services industry, hit the trend in the forex. I was able to scale that business crazy fast. Three years, we were doing a little bit over $26 million in top‑line revenue.
Seth: That is an online newsletter subscription. That is absolutely incredible. You then exited R3, and you’ve now launched products in consumer products, publishing, healthcare. I mean, you created over $80 million market cap in the last five years for those companies. Talk a little bit about that journey.
Maceo: I need to update that. It’s up to north of $200 million at this point. Really, that was me trying to prove that it wasn’t luck. One of the things that happen when you step on the moon, it’s like, “What’s next?” It’s actually Dan Kennedy that gave me that little quote.
I created a huge business. I scaled outside of the Internet marketing world, left a lot of my peers in the dust, and I wanted to know that I could do it again. I started in what’s called a fractional CEO or a fractional CMO. Companies would bring me in if they were in trouble, or they were trying to scale, and they were running into some difficulties.
The reason why I dropped off the radar though is that part of my positioning was…Look, I’m never going to be on social media highlighting your company. Everything is held in the strictest of confidence because a lot of companies just don’t want it public that they’re having revenue problems, understandably.
Really, those experiences were designed for me partially to prove to myself that I knew what I was doing, but it was also me attempting to build up equity and some enterprise value outside of going to Silicon Valley and venture capital.
Seth: I love the “I did it once. I want to prove I can do it again.”
How did “what’s next” become the healthcare industry?
Seth: You’ve done it in a diverse area of the field. How did that lead you to healthcare?
Maceo: Just like you would expect, I experienced massive problems in the industry. Both my stepfather and mother wound up in the home healthcare system. My mom, unfortunately, recently passed.
Seth: I’m sorry.
Maceo: Not as a result of the home healthcare. Unfortunately, it was a result of the hospital care. The Canexxia tagline is bringing hospital‑quality healthcare into the home.
As a result of those two intimate experiences with this whole continuum of going into a hospital, then maybe getting into assisted living or getting into the home, as an entrepreneur, I could view healthcare from a business mindset, from a marketing mindset.
I love the fact you’ve got Jay Abraham on here. He’s obviously a hero of mine. I’ve studied him for years. I think in terms of how do I reduce the risk? How do I reverse the risk? In healthcare, the big problem is people are viewed in relationship to money.
Especially in Medicare, the government dumps a bunch of money onto a set of doctors once a patient comes in and says, ”OK, fix them.” They do a horrible job. If a bunch of money gets dumped on you, you’re probably going to find, we’ll say, creative things to do with that other than what you should be doing.
It’s not like there’s massive fraud, like it’s some huge problem, but there are some big problems. I saw that it’s a gap that can be exploited. It can be exploited by delivering the highest‑quality customer service ‑‑ that’s something that Jay would love ‑‑ falling in love with your customer first, and then building the business around that relationship to support it.
The rest of it, of course, is just hardcore capitalist stuff. It’s a three‑trillion‑dollar industry. I’m going with an LBO model, so I’m buying up businesses and bolting them together, which is really the only way to grow insanely, insanely fast outside of a Facebook or a WhatsApp. In a boring industry, you’ve got to find the stuff you can bolt together and grow.
It is simply what I see as the next wave of trillionaires, probably. Healthcare is not only consolidating into the home. It’s consolidating around technology, which makes it cheaper, easier, and more efficient. It’s all of this was coming into focus at once.
The last of it, the capstone is, and this is a clarion call to everyone, in 2030, 61 million baby boomers are going to need part‑time or full‑time care. We’ve all been talking about the pandemic…
Seth: Where are you getting that number? Where are you defining it from?
Maceo: You can get it from CDC, the Census Bureau. If you look at the baby boomers as a population, after 2030, 100 percent of them will be over 70 years old. At 70 years old is when you’re going to need additional care. Usually, it’s part-time first.
Seth: That’s the average.
Maceo: Because we’re talking about such a massive population, obviously it’s this moving parade. Since Dan’s in the background, I’m not going to shower you with Dan Kennedy phrases. It’s this moving parade of people. There will be people that are dropping off. They are passing away and then people are joining up.
In 2030 is when 100 percent are going to be in that category, and we don’t have the beds for them. We can’t even build the beds for them. Home healthcare is the only solution. There’s a mad dash going on right now to try and solve that.
Unfortunately, Silicon Valley is doing the usual thing. They want to build an app to do it. It is like, ”Hey, guys. It’s healthcare. You need a human being to come in there and do healthcare.” We’re taking the human approach first, building the massive scale with the patients rather than tech first.
Seth: Talk a little bit about how you’re…You’ve been on the forefront. I would say you’re amazing at spotting the convergence of trends that are coming to fruition in the future and then identifying the pain, the problem, whether it’s from your own personal life or something else, and then figuring out how to solve that problem on a massive scale.
I get the convergence of the gray wave going through the small pipe, and you mentioned the LBO model. What does Canexxia do, and how are you scaling like that?
Maceo: What we do is we bring this outside perspective, number one. I have Jay Abraham to thank for this. He communicated to me a long time ago that it’s rare to find a truly strategic and tactical thinker. This is 2003, 2004‑ish with his PEQ back then.
I took that to heart. I trained myself. I got a guy named Scott Hallman there to hammer a lot of things home for me…
Seth: That’s been a plan of ours as well. That’s awesome.
Maceo: I spent a lot of money with Scott. He loves me, maybe not so much. It’s been a few years since I’ve written big checks to him. Anyway, I look at this from a strategic standpoint, so all of these big issues. Is there a lot of money? Are there going to be a lot of customers? It comes down to how are you going to actually deliver care?
Right now, most home healthcare companies are run by nurses. They’ve been in the trenches for 15, 20, 25 years. Frankly, they’re great caregivers, but they’re crappy business people. They have no real way to capitalize on the value that they built because it’s in hidden form.
When you look at healthcare in particular, what everybody is exploiting ‑‑ and I’m using that term deliberately ‑‑ is this patient, so I’ll give you a quick example. My mom went into hospice care. The guy shows up with five bottles of oxygen, and so I asked him, “Well, how long is one of those bottles last?” I’m thinking a couple of hours.
He was like, “Oh, probably, it lasts a day or so,” and I’m like, “Well, wait a minute. Why do we need five bottles? What if the power goes out?” I’m like, “Hold on, so you’re saying I need a week. The power is going to be out for a week. If the power is out for like, a couple of days, can I call you? Can you show up the same day?” He said, “Well, yeah.”
The reality is those businesses are exploiting people like my mom who were on their deathbed in those little ways. Those are some efficiencies that can be immediately cut out in terms of making healthcare more profitable and better for people and better for the tax‑based…
Seth: You got to find a place to solve all those tanks and to store them all, and I’m sure Medicare, whatever is paying for it. It’s the Medicare equivalent of the $600 toilet seat or something.
Maceo: You got it. Again, they get dumped a bunch of money, and they’re going to go spend it. It’s like, “Well, hey. If we can deliver three, why not deliver five?” There are all these little inefficiencies in the delivery of the products.
From a practical standpoint, like an outcome standpoint, there are ways to utilize the system through telemedicine. We’re on Zoom right now. You can do face‑to‑face meetings with patients to help them with diet and some of these lifestyle issues that are leading to the absolute explosion in chronic conditions.
Really, it’s about understanding who you’re serving from a business standpoint, instead of thinking about it like healthcare does in terms of a code or a patient, thinking about it as a business. How do I cross‑sell? How do I upsell?
Now granted, it’s an upsell in the same way, like, “I can sell them a camera or a mouse, or something like that.” It’s upselling the standpoint of how can I look at this patient, what’s going on with them, and manage their care inside of the constraints of Medicare and insurance to provide them better service, whether it’s telemedicine or a technology solution otherwise.
Seth: Talk a little bit about the acquisition strategy.
Maceo: That’s probably the most straightforward part of the whole deal, although the sellers that I talked to would think otherwise. Basically, we find somebody that’s looking to either exit immediately due to health concerns, or they’re just burned out.
Seth: What are they exiting like, what types of businesses, are you looking to acquire in the space?
Maceo: Thank you. Right now, we’re buying Medicare home health companies. You have home care which is usually private pay, and you have home health which is typically skilled nursing, so Medicaid/Medicare. Right now, we’re focusing on Medicare agencies only because there are, frankly, far more of them, and it’s a better structure to deal with.
Now, I will say this. Most of the activity in-home healthcare is with private pay because you can crank the revenue dials, whereas when you’re billing Medicare or Medicaid, they’ve got it set. You’re billing into a government system.
Seth: I’ll have to make an introduction because we have a client who owns one of those. Maybe, you can acquire them and keep us around, of course. Talk a little bit about…Now, that’s the business acquisition strategy. Are you serving the end‑user patient? If so, who’s your ideal patient for this? How are you acquiring that?
Maceo: There’s a little secret sauce in there, so I won’t go into a lot of details to let my competition know. Skilled nursing home health ‑‑ its bread and butter ‑‑ are typically a joint replacement. Somebody gets a hip and knee. Once they get done in their hospital stay, they get discharged to the home for physical therapy.
The reason for that is infection rates are on the rise. Frankly, they don’t need to just lay there in a hospital bed. It is better if they get up and going. That’s the bread and butter in-home healthcare from my perspective.
It runs the gamut. Anything where the hospital either can’t keep them in due to the Medicare regulations, it’s mandated that they go to home health, or in some of the more forward‑thinking healthcare systems, they discharged them to home more purposefully because they know it’s a better environment.
Our perspective is we need to move everything but the most acute care out of the hospital. If you look at outcomes, like how do people get healthy, they get healthy by being at home in their own environment and out of the hospital setting unless they need somebody who can be there in 30 seconds.
Anything heart‑related, strokes, are the complex care situations you need to have probably in a facility, but everything else, you can maintain without much problem in the home setting.
Seth: Because your direct‑response marketing guy, what is the marketing? Is this regional, local, national? What are some of the marketing strategies without giving away secret sauces?
Maceo: The good news is it’s all the bread‑and‑butter stuff. If you could see on my shelf, I’ve got Dan Kennedy sales letters that I’m testing, a lot of concepts that Jay Abraham has used for years. It is understanding what your customer wants, and people assume in the healthcare setting that they don’t care.
The reality is people just don’t understand, number one, that they have a choice, and number two, that they can select among different ‑‑ we’ll call it ‑‑ outcomes. Do you want to go into assisted living? Do you want to go into skilled nursing, or do you want to go into the home?
For us, it’s partially educational, all local. We are very much centered around the agency. We’re not acquiring to build a parent brand. We’re a brand of brands. We keep the individual agency name. All the people stay in place.
I’ll talk about this a little bit from the business owner’s perspective. Selling home health agency, if you’re less than about $20 million in top‑line revenue, and about five million in what’s called EBITDA ‑‑ that’s not profit, but its earnings before interest, depreciation taxes ‑‑ it’s difficult to sell.
The bottom line is this. A private equity firm that’s got $500 million in the bank is going to burn about a million dollars a month. There’s no way they’re going to burn a million dollars a month if your business generates a million dollars a year because you’re in the due diligence process. They’ve burned three years of your profits. They have to scale up in order to make it work.
Our deliberate focus is on businesses that are about 3 million in total reimbursements to about 15 million in total reimbursements. We definitely need to have all of the management in place.
What we’re doing for that home healthcare owner is plugging them into a much larger enterprise. If you’re going to sell your company, you’re going to get three to maybe five times earnings. Now, it’s actually going down because of COVID. It’s rare to get these 10, 20.
Seth: More acquires, yep.
Maceo: What you see in the papers that’s for the newspapers. That’s technology companies. Everybody dreams that that’s what they’re going to get, but the reality is far different. What we come in and say is, “Look, we will definitely give you more value for your business. You’re going to have to wait, and you’re going to have to do some work.”
Once we bundle all of them together, we not only increase their individual agencies’ value. They get a piece of the parent company. As the whole thing grows, everybody gets to participate.
Seth: Are you doing that as a national roll‑up where they’re all under one overarching brand umbrella that you’re marketing nationwide?
Maceo: Probably not. There are a lot of inefficiencies with that. The reason being is when you get into home healthcare, the most successful agencies are very much local. If you look at the LHC which is a publicly traded company, and MediSys, another publicly traded company, they’re definitely more national.
If you look at the way they run their businesses ‑‑ and this is something, again, going right back to Jay Abraham ‑‑ it’s a monolithic, huge corporation. Anytime you get that mindset, my dearly departed mentor Gary Halbert would say, “Carbonized crap in somebody’s brain.” It’s run like a big business.
My point is nobody wants some faceless corporate thing coming into their home and caring for them when they’re sick. They want somebody nice. They want somebody friendly, somebody who smells good. You know what I mean?
It’s just like the normals. They want another human to connect with them and help them through a trying time. Like I said, I don’t want to throw it out completely, but certainly, it’s not even on the table right now. Everything is local, very small, very intimate, customer‑focused.
There’s enough money to go around
Seth: Awesome. Your passion is obvious. What do you like best about what you’re doing now?
Maceo: It’s a combination of legacy and really the prospect of millions of people like my mom going through what my mom went through. Knowing that I’ve got a hand in changing that for the better, huh, you’re almost going to make me cry. What’s better than that?
Seth: That’s an awesome ripple effect.
Maceo: You can only wear one watch at a time. You can only drive one car at a time. Look, there’s enough money to go around. Yes, we’re going to get filthy, stinking rich, but at the same time, we’ve got to do something different. It just has to be different.
Seth: Awesome. Anything else you want to share that I didn’t think to ask you?
Maceo: How much time do you have?
Seth: Fair enough.
Maceo: I think we’re good.
Seth: This’s been Seth Greene for Sharkpreneur with Maceo Jourdan from Canexxia. Maceo, for folks who want to learn more about what you’re doing, where is the best place for them to go?
Maceo: Best place, canexxia.com, if you want to check out what we’re doing in healthcare. If somebody wants to get in touch with me directly, maceojourdan.com.
Seth: Again, I’m Seth Greene for Sharkpreneur with Maceo of Canexxia. Thanks so much, everybody for watching and listening. We’ll see you next time.
Maceo: Thanks, Seth.