Launched a year ago, Andrew McGinley has seen rapid growth, traction, engagement with the NHS for his care matching service, Caresourcer. In this week’s podcast Andrew talks to us about the challenges of running a venture capital funded fast growth tech startup
What is Caresourcer?
It is the first comparison and matching service for care seekers. Andrew used his experience as a care at home provider in Edinburgh. Sometimes people can call up to 20+ providers to find provision. Andrew recognised this was very inefficient and created Caresourcer as a solution.
When care-seekers search, it is normally a point of crisis. They need something soon. They may be the sandwich generation – looking after their own kids and well as their parents.
Caresourcer determine what really matters, quality of care, location, available time they have to visit your house, price. Caresourcer provide consistent metrics for these.
Care is a late adopter of operation and delivery of care technology. Caresourcer is a dating site. The timing is now right. The market factors are: delayed discharge pressures on the NHS, more people wanting care, ageing population, pinching budgets from local authorities putting pressure on providers.
It is both care at home and care home provision. Care needs fluctuate and grow. The advantage of Caresourcer is both provisions are offered. Additionally, they are starting to offer advice on how financially to approach care provision. Understandably for many, there is a fear that assets will degrade very substantially to pay for care.
A typical care-seeker – what is their customer journey like?
- A very interesting journey
- Waves of the same emotions coming through
- Realisation stage – parent doesn’t make the bed anymore. Simple things are noticed.
- Research mode – start asking people they know what they experienced. Also, more regular visits to the GP. They go on Google to search out information.
- People go to Local Auths, hospital admissions.
- The typical age of a seeker and client – Care Seeker 50-60 years, Female; Service User/Client +25 years older or so.
Caresourcer has concluded investment. So, they are raising their presence throughout the UK. The English market has more focus on self-funded care seekers. They have agreements with St Marys, London and NHS Gloucestershire.
This is providing both an urban and rural settings. There is a lot of similarities where the pinch points are. These trusts are acute hospital trusts, their priority is to empty beds (in an appropriate care setting).
There is a physical cost of staying longer in NHS beds. Not being as mobile.
A Startup Story
June 2016 they launched! Within a few weeks, BUPA signed up their homes. They have a very good relationship with BUPA. It helps that both directors Andrews – McGinley and Parfery, had experience in care. McGinley approached Parfery in December 2015, and presented a proof of concept. Parfery sold his business to the largest care home business in the UK. They make a good team. McGinley is creative and Parfery is the commercial head. They are both Celtic supporters.
The UK care market
The UK care market is £22bn.
They are more focused in the self-funded sector. 40% of the market. About 600,000 annually fall into that bracket. Scotland offers free personal care in Scotland. Only for Care at Home.
It is not just an old person product. Disability sufferers are also catered for.
How do clients search for care?
There is a natural search for Care Homes initially. Meals on Wheels, Nursing Home comes up.
What they have found is these searchers NEED TO SPEAK to someone.
By 2020 every school leaver must become care providers. Andrew says we need to embrace other ways to perform care. It has been a time and task solution hitherto. Medication dispensers, alarms, wearable technology etc.
Social care is under-funded, Andrew says. Care homes do not make fortunes. 1 in 4 care homes will go out of business this year. The sector is under strain. Retention is the biggest problem. Training is a massive part of care provision.
It is a people lead business. Is this a pinch point for you?
Economies of scale doesn’t really work in care. More volume doesn’t mean your costs remain similar.
Caresourcer say there is a 50% capacity problem. So CareSourcer can fix that quickly. Care homes run at 83% capacity. They need the perfect client for their service.
One of Caresourcer’s goals is to bring the market dynamics into every care business – 40% private pay and 60% NHS. This will be a more sustainable model for most businesses.
Respite care is a very good trust factor. A trust precursor. Andrew focuses on the prevention side of the business. A pain point for the care-seeker – how do they tell their parents they need care. Care at Home can start a low-level support to facilitate their entry. It may also elongate their time out of care.
Local Authorities: How do they flip service and care to prevention?
Volunteering. Creates a body of people who may be ready to step into fulltime care roles.
Thinking ahead – 25 years’ time.
Private, insurance based. Like pensions. But much earlier. Residential villages. Similar demographics. Tried and tested in the US. It would yield good quality – so nice things to do, central events, dance classes, cinema classes etc.
Caresourcer is disrupting the care market.
In growing a business that fast what is the biggest challenge in the last year?
- They have expanded to 9 employees within the last year.
- They have had to learn loads about tech.
- Speaking to people of knowledge
- Taking it away and auctioning.
- 3 of their advisers are now employees.
Lesson 1 – surround yourself with the right experts and don’t assume you can do everything yourself.
Dealing with Venture Capitalists
Caresourcer are part of a Tech Incubator. They are well polished at presenting. They spoke to 3 VCs and 2 of them invested. Their tech is silent.
Biggest pulls for VCs was their domain knowledge. Alternatives are non-sector tech founders.
They looked for investment before they needed the investment, this gave a better bargaining position.
The VCs you want will leave you with most shares in the business to give you the incentive to grow.
What is in store for Caresourcer in the Next 100 Days?
A big milestone – they set one. 30 matches a week. What they needed to do to get to 30 matches per week.
Find out more
Contact: Andrew McGinley