Stepful Makes Healthcare Training 10X Cheaper

1. 0:00 – 3:40

   Tackling the Healthcare Worker Shortage

   1. DHDiana Hu0:00

      [upbeat music] I'm excited today to welcome the founders of Stepful. This is Carl and Tressia, who just closed a Series C for $55 million, led by Oak HC/FT. So Carl and Tressia, tell us what does Stepful do?

   2. CMCarl Madi0:21

      Stepful, uh, trains people to get healthcare jobs and, uh, we invest heavily to create practice-ready graduates at scale.

   3. DHDiana Hu0:30

      Who are some of your customers?

   4. CMCarl Madi0:33

      So Stepful actually has two types of customers. We have, uh, students who wanna pay for their own education and get trained with us, and so someone comes in, they get trained to become a medical assistant, and then we help them find a job. The other model is a B2B model, an enterprise model. So we work with healthcare systems to help them fill their a- fill their vacancies. So for example, one of our customers is Mount Sinai, where they hire people from their own communities with no clinical skills, and they use Stepful's technology and model to be able to train them to become patient care technicians.

   5. DHDiana Hu1:09

      I know Stepful has been mostly going direct with students, and now you started doing relationships and contracts with healthcare systems. And you've been able to directly close contracts with a lot of large hospital systems. How many of those, and any examples you can share?

   6. CMCarl Madi1:24

      Yeah, for sure. So healthcare systems have been burning a lot of money to try to fix the worker shortage. They spend around $100 billion every year on staffing agencies, on, uh, recruiting efforts, so it's a huge problem for them. And so in the last couple of years, we've been able to close around 39 healthcare systems.

   7. DHDiana Hu1:44

      Wow.

   8. CMCarl Madi1:44

      And now we work with 7 of the 10 largest healthcare systems in the country. Some names I can share is Providence, which is the seventh-largest healthcare system in the country; Mount Sinai, a huge academic medical center in New York; um, and they're, they love working with us, and that's why we're able to close so many.

   9. DHDiana Hu2:02

      I think I read one of your investor updates that one of them started with 150,000 contract and quickly grew to seven figures in matter less than a year.

   10. CMCarl Madi2:15

       Yeah, yeah. Um, we're seeing a lot of traction because, uh, with, with this contract, they were looking for nurses, so we had them train around 10 nurses first, and then they were so impressed with the quality of our work, uh, that they decided to expand into, uh, an, um, a contract that's above a million, and now we have a roadmap as well to three X that contract next year.

   11. DHDiana Hu2:36

       Why is this such a big problem to find health workers? And there's not a lot of, uh, companies trying to solve this either.

   12. THTressia Hobeika2:44

       Yes, it's a big problem, and the way you can look at it is we see that supply is not talking to demand. Right now in the U.S., one in four Americans earn less than $17, and at the same time, healthcare systems have over one million openings every year. And when you look at the current market, you have two types of, um, player. You have the players that have, um, high quality but low scale. Think of trade schools, community colleges. They operate locally. They produce great talent, but it's local, and it's nowhere near enough to help close the gap that we're seeing. And on the other hand, you have more online providers that have the scale but don't have the quality and the outcomes. What we do at Stepful is we're able to provide high quality and scale so that supply can meet demand efficiently, and we're really able to do that thanks to AI and technology.

2. 3:40 – 6:57

   Building a Faster, Cheaper Path to Healthcare Jobs

   1. DHDiana Hu3:40

      Let's go back to a little bit the origin story of, uh, Stepful. I mean, you two knew each other for a long time. You met at a university in Beirut, right?

   2. CMCarl Madi3:51

      Yes, yes.

   3. DHDiana Hu3:51

      And you had worked in adjacent spaces but not quite healthcare. I mean, Tressia, you were at Triplebyte. You did a lot of work in recruiting. You were also at Udacity, so did a lot of education. And Carl, you were working at Uber and Handy and did a lot of things with marketplaces. So how is it that all of this kinda came together and you decided to work on this particular idea, which seems a bit esoteric based on your background?

   4. CMCarl Madi4:16

      Yeah. [laughs]

   5. THTressia Hobeika4:17

      [laughs]

   6. DHDiana Hu4:17

      [laughs]

   7. CMCarl Madi4:17

      100%. I was at Handy, um, during the pandemic, and Handy is essentially is a marketplace that connects cleaners to households. And when the pandemic hit, a lot of the cleaners lost their jobs. So I started to think, like, "What's a good pathway for these cleaners to get q- to get access to quality jobs that are recession proof, where there is career progression?" Um, and healthcare needed a lot of people. So the big question I wanted to solve is, how can I get, uh, cleaners to become medical assistants, which is an entry-level healthcare job? And I started to think about ways, and then when I looked into it, I realized most pathways are traditional community colleges or trade schools, which meant to become a medical assistant, you need to pay $20,000, up to $20,000. It would take you two years, and it's very disconnected from the employer, which means that if you're a cleaner, there's no way you can overcome these barriers to become a medical assistant. So we wanted to build, um, Stepful, uh, to make that much more s- much better and much smoother, so we created a better way, and we used AI and technology to make the education not $20,000, but 10X cheaper. Not two years, but five months. And not disconnected from the employer, but completely connected. So that's how the idea started, but I had no experience in education technology. But I had met Tressia in college, and I knew she was working at Udacity and Triplebyte, so I reached out to get advice on how to build this business.

   8. DHDiana Hu5:46

      The thing that's been very special about your product, how it has grown so much for... in the acquisition of students has been that your product is very loved.

   9. CMCarl Madi5:56

      Mm-hmm.

   10. DHDiana Hu5:56

       Because the students that go through this are very grateful. They go from- Having a minimum wage to getting, like, 25, 30% or even more percent increase in their income within just few months of training.

   11. CMCarl Madi6:09

       There's around 1.3 million jobs that need to be filled in the U.S. today where we, last year we, we trained 30,000, so we're just starting. And, uh, really our vision is to kind of grow that, uh, base to four X the number of students, um, to grow the number of programs we have. So today, we were mostly focused last year on, like, entry-level healthcare jobs, now we're expanding into more developed, longer program, more expensive programs. So we can become, uh, if we, like, train 100,000 people and charge people around $10,000 per training, that's easily $1 billion in revenue, and that's less than 7% of the U.S. market. So we have ways to go. The market is huge, um, and we're well-positioned

3. 6:57 – 9:47

   AI Tutors and Local Hands-On Training

   1. CMCarl Madi6:57

      to get there.

   2. DHDiana Hu6:57

      And one of the things that was cool about your company is while your company got started in 2021, this was before the ChatGPT era, you actually have been able to take the swing up with AI because now your programs are very much tailored with AI, and you've done pretty cool work in the product with tailored AI education. Tell us more about, about that.

   3. THTressia Hobeika7:22

      Absolutely. I think AI has been a game changer for healthcare education, especially how we do it at Stepful. And really the way we see it is how can we truly personalize that learning experience for the students so that they're learning the exact skill they need to be ready for the job and pass their certification exam? And so we built tons of AI-based learning modalities that make that experience engaging and personalized. Um, students can come on the platform and learn how to draw blood with an AI preceptors that can see and hear what they do. Student have access to an AI tutor that can come in and, and break down difficult concepts for them, and they're getting that feedback on a daily basis so they can be truly practice-ready by the time they join the workforce.

   4. CMCarl Madi8:12

      The other innovation we have is we are now partnering with healthcare systems and using their spaces for hands-on experiences. So in the past, if you lived in a rural area, you had to, if you want to become a nurse, you had to stop working where you were working, go to a city at a campus, learn in that campus, and then probably stay in that city and work there, which means that that community lost someone that could have potentially been a nurse, uh, which is very bad for rural communities. Now, in our new model, we actually ask that the person stays where they are, and we s- help the healthcare system set up the school where they're working. So instead of that person having to commute to a city, to a campus, they just learn where they are, and that helps us build supply across the country in both urban and rural communities. So these are parts of the things we're doing to help unlock this practice readiness at scale.

   5. DHDiana Hu9:08

      So obviously you're growing very quickly, so you're hiring across many roles. Tell us more about those.

   6. THTressia Hobeika9:14

      Yes, we're growing quickly. We're hiring across roles, especially on the product, uh, engineering, and data side. So if you're excited about shaping the future of healthcare education, come j... And you live in New York City or willing to move to New York City, come join us.

   7. DHDiana Hu9:31

      Well, thank you so much, and it was awesome hearing your story. And congrats again.

   8. CMCarl Madi9:35

      Thank you.

   9. THTressia Hobeika9:35

      Thank you for having us.

   10. CMCarl Madi9:37

       Thank you for hosting us.

   11. THTressia Hobeika9:37

       It's always great to be back here.

   12. CMCarl Madi9:39

       Thank you. [outro music]

Episode duration: 9:47