Season 1, Episode 4

Talk to your users before building anything with Charles Armitage (Florence)

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About this episode

Before starting Florence, Charles Armitage was a doctor and training to go into emergency medicine. He then decided to radically change his career to start a marketplace for independent nurses and elderly care. Charles tells us all about that, shows us the importance of talking to your customers before building a huge product, (spoiler: their first version failed hard), and how to build relationships and trust in such a delicate market.

Resources mentioned in this episode

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Transcript

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Sjoerd Handgraaf: [00:00:15] Welcome to two-sided, the marketplace podcast brought to you by Sharetribe.

Sjoerd Handgraaf: [00:00:23] Hi, I'm Sjoerd CMO with Sharetribe and I'm your host. I'm actually very excited today because this is the first time that I can say to at least some of you welcome back because we dropped the first few episodes last week and the response has been absolutely amazing. And if you're one of the people who heard those and came back, thank you so much.And also thank you for the fantastic response we've gotten so far. Now let's dive into the episode. So in this episode, I'm talking to Charles Armatage. Charles was actually a doctor and training to go into emergency medicine, but then decided to radically change his career to start a marketplace for independent nurses and elderly care. Well, Charles will tell us all about that. And it's a very interesting story, but he'll also show us the importance of talking to your customers before actually building your huge product. You know, spoiler alert, their first version failed hard and how to build relationship and have trust in such a delicate Margaret. Again, I've only had fantastic episodes so far, and this one is no exception. So sit tight and listen to Charles story

Sjoerd Handgraaf: [00:01:36] Hi Charles. Welcome to the show.

Charles Armitage: [00:01:38] Thanks very much for having me.

Sjoerd Handgraaf: [00:01:39] Hey, I checked out a little bit of your background. I saw that you're trained as a doctor and well, I think we'd like to know a little bit more about you. So can you tell us a little bit about what you did before you ended up at Florence?

Charles Armitage: [00:01:51] Sure. So, uh, absolutely. So it was a, a doctor in the UK and a number of different specialties, but it kind of was settling in on emergency medicine and then laterally surgery. So was pursuing a career in trauma surgery, but still relatively, kind of early on in that journey. It takes quite a long time to get to. You know, the end of being a trauma surgeon, but yeah, so worked in a lot of places, worked in London a lot on the South coast and up in Scotland and then some other funny places around the world, like South America and Africa and places like that.

Sjoerd Handgraaf: [00:02:21] That was too boring for you or what was the reason why were like, Hey,

Charles Armitage: [00:02:25] sure. I'm sorry. Is that something that was a bit boring actually. So I could talk about this forever, but the thing about medicine is that, um, you know, you get moments of absolute, huge adrenaline rushes and amazing thrills. Also punctuated by quite a lot of time, grinding your head against quite a challenging system. And you can spend a lot of your time doing paperwork and filling out. You're not necessarily having a massive impact. And certainly that the impact you're having isn't exactly scalable. You were kind of an equals wide and there's only so much you can do really to make a change. And so

Sjoerd Handgraaf: [00:02:54] were you always into tech that you're like, I'm going to start a startup for like, maybe you can tell us a little bit into the origin of Florence.

Charles Armitage: [00:03:02] Yeah, for sure. I mean, I've always been kind of interested in tech and I was like new shiny things, but essentially, you know, learn more and more about myself. And my drivers is kind of my goal and the journey, but essentially I just like new things and maybe I've got a slightly short attention span. So always kind of looking for something new on the horizon. And I was working in. London at the time in emergency medicine and was really enjoying their job. But at the same time, it was kind of investigating things on the size. And one of the things I noticed and it's kind of a pervasive problem throughout healthcare in the UK and actually most of the world is, you know, the biggest challenge is staffing. And how do you create a solution to some of the biggest challenges we face as a society, which is, you know, looking after an aging population and providing the staff to do that in like a safe and high quality way. So I was messing around with some ideas in this, any department, trying to kind of build an app for me and my colleagues to swap shifts and, you know, work more effectively between us. And obviously like couldn't build it because I'm not technical. And it started kind of the idea going and didn't really come to much. And then I met my cofounder, Dan, who is from the military, but I guess comes from the other side of the fence as well. He manages a care home group. Well manage the cat and group in London. So it was having challenges, finding staff to look after their residents. And we met, we were introduced by a mutual friend and kind of started bouncing some ideas around. We both had ideas in the kind of space of how can we use technology to bring together this supply and demand in a more intelligent way and, you know, high quality cost effective, all these kinds of great things. And then we just started like, thinking about it and it's right. Single map. And you know, the rest is history.

Sjoerd Handgraaf: [00:04:40] Yeah for the people at home. So could you tell us a little bit about what is Florence exactly.

Charles Armitage: [00:04:45] Sure. So Florence is the online marketplace for flexible staffing on demand staffing in the cat section UK. So what we do is we have a platform that connects care homes to nurses and carers looking for extra shifts. And I guess, traditionally the problem in the UK cast actor is a massively understaffed industry. So. It was around about 120,000 vacancies in UK care sector. So what ends up happening is a huge proportion of shifts. About 10% of all shifts in calc care in the UK have felt both. Temporary workers, flexible workers.

Sjoerd Handgraaf: [00:05:18] Is that elderly care only or health care.

Charles Armitage: [00:05:21] Yeah. So when I talk about care I’m talking about elderly care in the community. So in town homes, nursing homes, not necessarily the health care sites, which is more the NHS, and there's a bit of a differentiation of the UK. What ends up happening is about 10% of this workforce is temporary, is flexible and it's managed. Pre Florence was managed by traditional recruitment agencies who were really fragmented offline processes. You know, one man and his phone kind of with relationships with individual workers or homes and bring these two people together. And, you know, whilst. That's a model as well. For very long time, it was hugely expensive for the care sector. So billion spent every year just on the kind of the agency models in the middle. And there's just so much that could be done with technology to improve those engagements.

Sjoerd Handgraaf: [00:06:02] Yeah. And so Dan had experienced that problem himself.

Charles Armitage: [00:06:05] Yeah. So he was the chairman of this nursing home that couldn't find nurses. And on the other side was a doctor who would occasionally work these flexible shifts in the NHS and, you know, weekends or holidays. I, you know, want to get an extra share for a bit more pocket money. And whilst I knew there was a shift down the road, I'd have to call up my recruitment agency and get sent to Birmingham and, you know, turn up and get thrown the keys and told, you know, that they'd be back in 12 hours. So it was January, a really poor experience and I needed a better way of doing it. Yeah.

Sjoerd Handgraaf: [00:06:33] And so you said, Dan is your co founder, is he a more technical person, even though he ran the

Charles Armitage: [00:06:38] care home? No. No. You've even less technical than me, which is quite fascinating. So,

Sjoerd Handgraaf: [00:06:42] so how did you get to your first one? Was Florence

Charles Armitage: [00:06:45] 1.0. Yeah. It was a bit of a disaster really

Sjoerd Handgraaf: [00:06:48] tell us that sounds super interesting.

Charles Armitage: [00:06:50] Well, I mean, it's always, I think it's ever not a disaster, so we. I remember we had a little bit of cash to start off with. Don't very much at all. And neither of us really knew anything about, you know, how to build a product, how to talk to users, anything like that. So we kind of thought, well, this, this problem, and we need this platform to do a hundred things. You know, we needed to manage the whole life cycle and all these different things, and we need it done in the next two weeks. So we only want to spend this amount of money on it. And so, you know, you go to the internet and ask the internet if. Someone can do that for you and someone somewhere puts up their hand and says they can. And, you know, we ended up spending few months, quite a lot of money to get, not even anything approaching an MVP that worked, and that was a bit stressful, but it was a really good learning point because what we then did is in that process, obviously you start speaking to users and, you know, I went and sat on a cow for a few months and drove some nurses to shifts and things like that. And you know, you speak to people and you. Kind of comes through realization yourself that actually what I need to do here really to solve 80% of the problem is a very, very simple product. And actually we ended up kind of rolling back to just a Google sheet where the nursing homes would go into a Google sheets and put in that shifts. And then 10 nurses that we'd found five such originate. I would say, yeah, interested in that one, that one, that one. And then that was it. There you go. You got a platformer. So

Sjoerd Handgraaf: [00:08:04] you got a platform that didn't work at all, and then you thought, Hey, what's actually the basic feature that I need. And that was just purely show availability and a way to express the interest or something like that.

Charles Armitage: [00:08:16] Yeah, exactly. So you've got a platform and I remember taking it to this nursing home because I'd find out list of loads of nursing homes in London and told them this is kind of mad cap idea. One of them was that they were interested in giving a shot. So I went out and I was showing all the staff around this and I was going okay, cool. So this is how you post your shifts. It was just like completely dysfunctional, like non-functioning product. Yeah. And then we just realized that. Actually, what is it they need to do. They need a place where they can put their availability or what they need. And then on the other side, you need somewhere for the workers to be able to go in and say, claim that I'd like that one. Thank you very much. Then everything else, you just do things that don't scale and manage it offline. So whilst day one, we were like, we need to have a payment infrastructure in there. That was like a day, one requirement. You very quickly realize that actually you've done, you know, and we just sat there hammering, you know, internet banking, paying people, and that was fine for quite a long time. Okay.

Sjoerd Handgraaf: [00:09:05] So would you say that that's one of your sort of biggest learning? So I guess that's something, the reason why I come back to this, because this is something that we also see a

Charles Armitage: [00:09:11] charity

Sjoerd Handgraaf: [00:09:11] type all the time. Of course there's always feature missing, but we often see people have indeed long list of features and then. We really try to engage in the conversation as, but okay. But the point is it's, what's the thing that you really need. Like if you would have to strip everything down.

Charles Armitage: [00:09:27] Totally. I mean, I still made that mistake all the time is you're like, right, we need to do this new thing. We need this new feature because without this new feature, this isn't going to provide value. And you know, you're always looking to that next new feature, but then realize that actually you just speak to people and find out really, what is it they're trying to achieve? What is the job they're trying to do? You arrive at a much more elegant solution? Yeah.

Sjoerd Handgraaf: [00:09:47] Fantastic. And that was obviously playing very well into our product, but I want to go too deep into that, but yeah. Okay, cool. So first version, Google sheet, how did you get, even with the Google suite version, how did you get supply and demand? Like how did you get the first people on board?

Charles Armitage: [00:10:02] Well, by this time we were lucky enough to have, are now. Uni, who is kind of first guy in the door who really kind of, you know, taught us everything and kind of put us in the right direction. So, you know, he's fairly weathered guy. Wouldn't mind me saying it, but he's done this a few times, so he kind of knew what was going on. Yeah. So how did we get the first customers? Well, on the demand side, on the care home side, I found a list of all the care homes in London, and I sat down with a phone and just called them all up. One by one and just called school three to one, you know, had 20 shifts a week. They needed to fill. So, you know, promise them that we would kind of bend over backwards, trying to make it work. And ultimately ended up having to put a huge amount of elbow grease into the relationship early doors because the product didn't work. But, you know, in that relationship, building that unscalable relationship building, you learn a huge amount about your customers. You can make a great sort of place for developing your product. And you could also get a lot of get out of jail free cards just by building that relationship. And then on the other side, for the demand side for the nurses, we did a similar thing. So we, you know, went around Facebook and called in some favors and found some core nurses too. And I got, I still, you know, some of them today, unlike some of them are still with us, at least in the first five nurses are still using Florence, but there was one or two. I definitely didn't have the best user experience to start off with.

Sjoerd Handgraaf: [00:11:19] Okay. Was that the product or was that just because the shift didn't work out for them?

Charles Armitage: [00:11:23] Well, I remember the first shift. On Florence. It was, you know, weeks and months in the making. And there's this girl called Maeve who is obviously delightful person. And she was just so patient. So we carved a week through these full starts, where we were like, okay, cool. This shit is going to work. They do get canceled last minute. And. No, you'd have to disappoint nave. And then finally it was a Saturday night and they needed a shift and then to post it and now you've got it and she wants to shift. And I was like, I had over heels, so excited. I think I was out for dinner or something. It was kind of basically on the phone side all the way there. She was really excited, went in to do the shift and then at the end of it comes out and go, you know, I found out the next morning, so how was it? She was like, Oh, it was really, really difficult, but you know, really hard, but I'm happy to go back yet and have to do it again. And I was like, that's fantastic. And then I found out the cow. Oh, it was, you know, it didn't go very well. You know, it was challenging. I remember being very challenging and I went full, but they were like, Oh, we, you know, they're getting all these cold feet, all this kind of stuff. So that's a, you know, explained the needs. You can get back. I remember it being very challenging thing, but anyway, you leave. If you're out loud, I need to send you some flowers. Cause you, uh, you got off the ground.

Sjoerd Handgraaf: [00:12:27] Yeah. I can imagine that in this business, like being able to trust what's coming from both sides actually like super important. Right. I mean, if the nurse would know that, okay, Hey, this place is not really great at working with temp nurses, for

Charles Armitage: [00:12:40] example, because it could be,

Sjoerd Handgraaf: [00:12:41] you know, not pointing blame on either side. Yeah, sure. If the other way is like, Hey, well, this is just not a great nurse for this particular environment. How do you solve for that now? Like, do you get more of these situations

Charles Armitage: [00:12:52] still? Totally all the time. And I think, you know, we're dealing with a really precious commodity, which is people, and you're bringing people together, which can be both very magical and high value thing and can lead to like really great relationships going forward. It's super satisfying at the same time can also lead to, you know, very challenging situations and moments, quite a lot of risk, especially in healthcare where. You know, you're dealing with vulnerable people. So if bad things happen, things go badly quickly. So controlling that quality piece is really important. And especially when you're doing things at scale, it's very hard to do that on like a one-to-one basis. And, you know, you can't operate a tech platform if you don't have those systems and processes in. So, you know, basic things like. Putting in reviews and feedback within the platform was really useful for us. And, you know, being able to surface user behavior very easily to the other side of the marketplace. So, you know, we have a challenge with let's say, care homes, canceling shifts, right? That's a terrible experience for the worker because, you know, they've cleared their diary for 24 hours to go and do a shift at a cow, and then the cow cancels it. Now that can happen. And you know, you don't want to punish people for that, but if it's kind of repeat behavior and sometimes it is, you need to find a way of making sure that platform is self policing and stopping that happening.

Sjoerd Handgraaf: [00:14:01] Yeah. Have you, for example, have you kicked off a nursing home? Like, Hey, the notice is a fourth time you're canceling.

Charles Armitage: [00:14:07] Oh, for sure. Yeah. And the other side as well, I guess, and again, that can be a really emotional thing because you know, you get close to your users and the team know the users pretty well. So, you know, there's always, you have to put quite rigorous processes in place to say, right? Well, these are the rules, you know, this is the governance, the platform that if you do this behavior, you know, You say, if you cancel a shift within 24 hours for the start time three times in a month, then that's it. I'm afraid that you've had your chance. And you've just got to be really clear communicating that. And educating the users about how to behave well in the ecosystem.

Sjoerd Handgraaf: [00:14:36] Yeah. Hey, actually, one thing early on that I fixed probably the most interesting question, actually that most people aren't insistent is like, we did the Google sheets. You call people on the way to the shift, but then once you start growing or once you sort of move to the next step, The did you in any way sort of constrain your Margaret place? Because usually that's what they say. You know, you should either go in one location or I guess you are already sort of vertically constrained, like you were in

Charles Armitage: [00:15:00] the

Sjoerd Handgraaf: [00:15:00] elderly care category, I guess we could say. So did you do it as well? Like did you start in London or.

Charles Armitage: [00:15:06] Yeah. So we started festivity in West London, hyperlocal marketplace. So you know, that people don't want to travel more than, you know, half an hour to a shift. So that limits your geographical constraint and, you know, day one. Now let's say you're trying to pick up an Uber in London and there's one driver and one rider in the whole of London. Well, marketplace doesn't work. Does it. So achieving that point of liquidity as quickly as possible is essential. And it's ultimately the main task we kind of know, anecdotally is coming more and more evidence based as we grow, but. The platform works organically when you've got about a hundred shifts per week and about 60 workers to do those within a one hour sort of travel time radius. Okay. And it's just kind of what we've arrived at as I kind of success metric. And at that point, you know, shifts gets posted by care home and it gets filled in a suitable amount of time, but the right work with the right skill set now, Day one again, not know what we know now, you know, we went into, if I'm a nursing home, I might need to blows different staff types. I might need a nurse. I might need a care worker. I might need a cleaner, a chef, whatever it is. And we kind of went in expecting to provide all of those staff types day one, and certainly both nurses and care workers. And we realized quickly that by spreading ourselves thinly across both nurses and care workers, we were really, really impacted user experience the platform because. All our efforts, you know, are those early stages, your time and efforts are really, really valuable. So spreading them too thin. He was really deleterious. So we actually fairly soon into the process probably three months had we actually decided to stop doing care workers. And we said, well, actually, we're just gonna concentrate on, do one thing. Well, which is matching nurses to nursing shifts in care homes. And dominate that in one small chosen market. And then we gradually went to London and then took us months and months to go to Southeast and then a year to go to our second city. And then by that time, we kind of started to work out how to make the machine work. We went across the country and we've only recently re-installed care workers on the platform because we wanted to reach that liquidity point for nurses in nursing shifts across the country. Before we went on to the next thing.

Sjoerd Handgraaf: [00:17:03] Coming back to the like expanding my geo from

Charles Armitage: [00:17:06] like my location. Like, did you have a

Sjoerd Handgraaf: [00:17:07] kind of playbook that like, okay, how do we, you mentioned that, Hey, we need, you know, a hundred shifts, just a magical number. Did you have some playbook? Like how to get there?

Charles Armitage: [00:17:15] You know, again, we're kind of constantly iterating on that one and to say, we've got a solution. I wouldn't say we got the solution. I remember. We went to our second market, which was Manchester. And by that time we were a team of maybe eight people still very scrappy startup. We like, okay, cool. So how do we launch a new market? Like how do we do this? So we all went and gone, Airbnb Manchester and, you know, printed off. Made some tee-shirts and printed off some flyers and went around the hospitals, trying to like fly nurses out again. It was just like a, really the Airbnb we had was in like just the roughest part of town. And so, you know, you go to sleep at night, it'd be like, you know, gunshots, whoever. And, uh, it was quite fun. It was a pretty good team building moment. But I remember we, we spent a week up there as a whole team. Like going around nursing was knocking on doors, following nurses, have we set these really ambitious targets that by the end of the week, we'd have this many workers on the platform and it's many care homes and we, you know, Might've had like one worker or something like that. So we realized, well, that doesn't actually work. So we kind of went back to London and we kind of debriefed to build it and kinda went from multiple of a digital strategy out. She then, you know, using the channels will be kind of new that we're working. So, you know, paid social media marketing. So Facebook is really big channel for us, for, for nurse acquisition. And then just kind of grew organically from that. We do have a bit more of a playbook now, you know, we have a sort of like timeline, right? If we're gonna launch in this area, we want to put marketing on here and then team might assist many days. We want to put the sales team in there and then team on assists, many days, we want to have this many workers, all this kind of stuff, but there's always improving on that.

Sjoerd Handgraaf: [00:18:42] Yeah. So, because that's interesting because. If I wouldn't have known as I would think that like, Oh yeah, in person it's gonna work really well for this, because this is so much trust based. You need to understand that like, yeah, these people are really true to word. They respect me as an employee, et cetera, et cetera. And so you are saying actually that X person wasn't as successful as social media marketing. So Facebook for you is

Charles Armitage: [00:19:04] more efficient. Well, the in person relationship is super important. And to this day we have a big team of people out on the road, seeing cat homes all the time, you know, just going in and having a cup of tea and building relationships really, really important.

Sjoerd Handgraaf: [00:19:17] Yeah. But that's for the supply side, right? Or sorry, at the mine side

Charles Armitage: [00:19:21] on the supply side. Um, it is also important when, you know, bringing the community into the office and, you know, building those eventually it's really important. But what we noticed was that Sunday in this Manchester trip, right. Firstly, how do you find nurses? You're like, okay, where do I find nurses? Okay, well, I'll go to a hospital, you go to a hospital and you realize that all the nurses in the hospital actually really busy doing important stuff and don't want you giving them a flyer, telling them to sign up to an app. So. There's absolutely no intent of that user at that point to be looking for work or joining the platform. So whilst you can maybe speak to them and try and sell to them,

Sjoerd Handgraaf: [00:19:53] you have other probably either like late for their shift or they just had a 12 hour shifts. I just want to go home.

Charles Armitage: [00:19:58] Exactly, exactly. Exactly. Exactly. Actually, we found that you can much more easily access people with that intent to potentially get both new products when they're more comfortable at home, rather than the neck covenant in blood. Well, whatever that makes sense.

Sjoerd Handgraaf: [00:20:11] You already mentioned. So, okay. Nurses easier to reach that side through Facebook, social media marketing, and you refer to Eddie now that, yeah, on the other side, like where the care homes are, the personal relationship is really important. Are you still, if you go now to a new city, how would you go about getting new care homes on board?

Charles Armitage: [00:20:30] Well, there were fewer of them than the workers. So we kind of have a bit more of a salesy process to that. So, you know, you get a list of all the columns in the area and you maybe do some email marketing to them that works a bit, you know, you pick up the phone and speak to them. That works a bit, what marks most and what's best is, you know, referrals. So if you can get a care home manager to speak to another cat who manager and let them know that for once the good guys, then that's pretty helpful. What's the story you tell them then, like,

Sjoerd Handgraaf: [00:20:55] what is the benefit like for the nurses? We've sort of established already that, okay, this is, this is a great pocket money. Or maybe even we can go into it a little bit later and what's on the plan for 40 nurses, but what's the story that you tell the care homes, like what's the benefits that they get from using Florence?

Charles Armitage: [00:21:10] Yeah. I mean, it depends who you're speaking to. So the care home market is such that you have kind of very small individual providers who owner-operator run all the way out to quite big corporate chains. Identifying your, the needs and desires of the person you're speaking to is super important. So am I speak to a care home manager? The thing they design most is that if they're getting a nurse in for a shift and night shift at 8:00 PM, that key thing is they want to make sure that when they're at home at 8:00 PM, the evening that nurse turns up and is safe and effective to run the cat home for the night. That's it. So reliability and quality, two most important things. Now, if you go to maybe the nursing home owner or the finance team, then it's much more potentially about the bottom line or insights or, you know, operational efficiency. So you maybe have to adapt your message a little bit more to that audience and that if you go to the HR team, then it becomes much more around training and compliance and quality. So different people have different drivers there.

Sjoerd Handgraaf: [00:22:03] So, do you offer that training and compliance? Is that part of your platform?

Charles Armitage: [00:22:07] Yeah, I mean, I don't know how much, um, maybe you'll talk about this basic cause it's quite pay well, it's the sort of Sharetribe, narrative hit, but you know, one of the key things is, you know, you're building a marketplace, avoiding disintermediation is pretty key and keeping people on platform is super important now for us. The cost of acquiring a care home or a nurse, the CAC is pretty high. If he needs to get a pretty decent LTV out of them for it to be worthwhile. Now, what is it that keeps people in the platform now we're super averse to punishing people for off path from transactions. So if a care home to nurse want to work together, Full time off platform, then we're like fantastic. You know, a happy customer is much more important than any sort of referral bonus or fee or whatever it will tend to put on fee or whatever now, but you still kind of want to keep people in your ecosystem as much as possible. And to do that, you need to ask the question, not what's stopping them leaving, but what's keeping them locked in. So that's when you start to have to bring in value outs, like, okay, well, as soon as payments are in the platform, then that keeps people sticky to some degree. One thing it's really important in healthcare is. Compliance and the regulator. So knowing that the nurse who's turning up for the shift is safe to do so. So they're trained, they have the right experience. They have the right background checks, the right word, checks, insurance, all that kind of stuff. So massive part of our job at Florence is to take these pool of nurses and CareWorks register, put them through that onboarding process to curate their profiles and make sure that they are. Compliant and trained and then kind of to the cap flight would be like, look, he is a worker so long as your question is, do we manage the training and compliance a hundred percent?

Sjoerd Handgraaf: [00:23:37] Yeah. Okay. That's super interesting because that's what we need. Like I had that question line up as well. Like, do you have this intimidation? Well, obviously you do. And then what do you do to keep them on a platform? So that's what you do to keep the nurses on the platform and as well as the care arms, of course, because that guarantees the quantities. But is there anything else that you add on top of just the transaction that you're like.

Charles Armitage: [00:23:56] This is a sticky feature. Yeah, totally. So, I mean, that's something that we started to think about recently and it, you know, as you grow and scale, it becomes less about acquisition and more about retention, right? So, you know, when you've got 10 users and if you turned 10% of them a month where you just need to find one more user, it's not too much of a problem, but if you've got 10,000 users, each on 10% of them every month, That's a thousand users. So as you scale, that retention number becomes massive. So a lot of what we're thinking about at the moment is how can we provide value to both of those parties, supply and demand out with that core transaction that keeps them locked into that engagement. So, one thing we've released a release tomorrow sheet. Is a tool for the care providers to manage their own staff in that. So we say to them, Hey look, and you see lots of marketplaces kind of have taken this move quite successfully and said, look, you use Florence maybe four times a week to get a nurse in, but you have tens of your own staff that you struggle to kind of manage flexibly or put into shifts like. How can we give you the tools to manage that yourself? And that means they're interacting with the platform all the time. It's not just the one manager is it's everyone in the care home. And then suddenly you're locked in. That's on the demand side. And then on the supply side, you know, one thing pain point we've really noticed for our workers, our nurses and care workers is that training and professional development is really poorly done. In that flexible nursing workforce. And they have a regulatory requirement to professionally develop and demonstrate that, but not really any kind of good platforms that help them do that. So we've built Florence Academy, which the outset is an eLearning platform for them to upscale the professional develop. But ultimately it's going to become a lot more as we build the community in that, to enable them to interact together with each other, learn and develop from each other. Support each other, gather feedback, the core clinical skills. And ultimately we want a nurse or care workers to have their Florence profile is, you know, their validity, their badge, and their professionalism. And it's got that kind of work history in there.

Sjoerd Handgraaf: [00:25:46] Yeah. And not even, because I think that's something you can even turn around to acquisition as well. Right? Like, it's nice to keep it as a retention, but like that sounds like potentially also a great tool to be using without even using a transaction. But if you can offer good enough software

Charles Armitage: [00:26:00] totally. And I think that's the thing. So let's take that Academy piece, right. So we actually initially built it to not help with onboarding and compliance requirements. Cause we were spending loads on external training providers. We're like, well, let's just build it ourselves. Do that. And then what we realized is that people that engage with us stickier. So we got a better LTV from them. It's working as an amazing acquisition channel that as your paid social media spend cost per user goes up as it always does. We need to start thinking about more inventive ways of acquiring users and it's kind of working together.

Sjoerd Handgraaf: [00:26:29] Yeah. Because it sounds like a fantastic way, like on the nursing side, if you can be like, is there in the industry paid services to do the schooling, I guess, serious,

Charles Armitage: [00:26:37] right. Because

Sjoerd Handgraaf: [00:26:38] you could become, I imagine you could become some kind of free competitor that service, like, Hey, you get this for free. And then also you can eventually work through the platform.

Charles Armitage: [00:26:47] Is that something you've considered? Yeah, it totally is free. So definitely we believe firmly in the democratization of learning and development. So that professional piece will always be free for work. It's definitely, but actually where, you know, maybe a little bit platform or marketplace Matt, so we're thinking, well, how can we turn that Academy now into a platform? So. How can we bring, yeah. We've already got these ecosystem of workers who want to learn and professionally develop, and we can fulfill some of that with our own content, but then how can we let other people bring their own content or other training providers bring their own thing into that environment? So, yeah. Wow.

Sjoerd Handgraaf: [00:27:20] So you're going to run four businesses.

Charles Armitage: [00:27:22] We haven't, we haven't done that yet. We haven't done that yet.

Sjoerd Handgraaf: [00:27:24] Well, it's funny because we always say I'd like, or at least I regularly referred to Margaret plays. Well, basically, you know, you're building two businesses, but you're going to now build four businesses. I got, I kind of to a secondary marketplace are all, no, maybe three though. One, one side is still the same.

Charles Armitage: [00:27:37] Yeah. That's an interesting point because you know, one hand you go with the question of. Hey, what can we do to provide value to our users that makes them want to stay in our ecosystem? And you've got all these great things you can do to find value. And actually, this is a common dilemma I have with my cofounder, Dan who's like, we need to do everything and we need to just keep providing value to people and to bring them in. Then the corollary to that is then the question of, you know, if you try and do everything almost, you're not going to do, you can do everything badly. So it's then trying to work out where to make those bats and where to invest. When you look at someone like Uber, you know, fairly well known market place to them quite on time to diversify from that core offering as cab rides.

Sjoerd Handgraaf: [00:28:15] Yeah. And it's also taking them quite a long

Charles Armitage: [00:28:17] time to become profitable. So, I mean, I

Sjoerd Handgraaf: [00:28:18] wouldn't necessarily look at them as an example. I mean, what's the situation with foreign, so you don't need to tell me if you're profitable or not, but do you have funding?

Charles Armitage: [00:28:26] Like we're nowhere near profitable. I think we'll wait for your charitable venture forever. No. So we've done a few rounds of funding. We did a. A series a investment almost a year ago now led by some guys called Sikh who are great, fantastic, fantastic guys who do a lot of investment achieved on demand, uh, staffing marketplace across the world. So they bring quite a lot of expertise to say, which is great. And so, you know, quietly burning through that money, trying to grow and scale as quickly as possible and, you know, optimize our unit economics ahead of our, you know, next for it.

Sjoerd Handgraaf: [00:28:56] What's your five year plan, like coming back to what we discussed earlier. So you're now UK, right? Am I correct in that

Charles Armitage: [00:29:02] or a bit still any in like a very small vertical of health. So yeah. That's the next big question for us is do we take the current model, which is. Nurses and care workers to care homes and take it to a new geography and said the U S where I know that market pressures are the same and more or less we could replicate what we do here in the U S or would you take the user base and the team and go into a different vertical in the UK? So the obvious thing for us to attack as the NHS, because it's massive, 1.3 million staff, you know, billions of billions of pounds a month, a year spent on. Temporary workers, but the challenge there and it comes back to that point around liquidity is, you know, you go and provide the solution to a hospital and you need to go and provide them with a solution that matches, you know, in a care home, more or less, any nurse can work. Any nursing home shifts, then you go home shift. Now, if you go into hospital, you need to have pediatric nurses, ICU nurses, surgical nurses, about five and six, about seven. So this whole different taxonomy of specializations of workers, which provides a bit of a product problem, but mostly provides a liquidity challenge. Because you need to have those a hundred intensive care nurses or a hundred pediatric nurses, not just a hundred nurses. So we haven't worked hard. I'm pretty convinced that it would be that from a market that market place dynamics point of view, it would be easier to go to the U S with all its different regulations, different laws, whatever. And replicate our current model lab and it would be to try and expand into that really diversity title in my system is the NHS.

Sjoerd Handgraaf: [00:30:32] Yeah. That's an interesting question, indeed. Yeah, I have no, because I have zero understanding of like what all the legal parts involved or even just the medical knowledge. And I can see that at least from where I'm standing from is sort of social welfare state that is Finland healthcare in the U S. Seems like there's a lot of money involved. So obviously there's a huge opportunity and it also seems extremely fragmented so I can see really good benefits for the marketplace there.

Charles Armitage: [00:30:56] Yeah. Yeah. Apparently the American state might do business with the breasts though. So that might be a challenge. Okay. That's interesting.

Sjoerd Handgraaf: [00:31:03] Yeah. And do you still have a category in the UK that you want to attack next? I mean like there is of course, like a wide range. Now you just added, you now have care workers and nurses. Is there an Otter category you can feel at, without ruining the techsonomy of the marketplace?

Charles Armitage: [00:31:18] Yeah. Yeah. So I think the next step in the, in the UK is then say, right, we've know about pretty liquid supply of nurses and care workers. I'd rather than going straight to the NHS, which is super complex, there's kind of steps we can take on the way that, so maybe we start to look at, you know, mental health care or. No learning disability care or care at home is not something we're interested in. Why is that? Well, I mean, it's really challenging market for one. So if you just look at it from an economics point of view, the acquisition costs of the consumer. So providing care in someone's home are really high. And their lifetime value is by definition. Probably a bit limited because they need cash and they're either going to get better or pass away or go into a longterm care facility. This is a broad brush, but largely it's applied versus that. So you sell to an institution, B2B sale, where. Okay. You have pretty high CACs, but you'll, you know, you sell to a nursing home that might be there for if you do well, 10, 20 years. So doing, you know, shifts many shifts a week, so the unit can always stack up a bit more cleverly. And then also just from a risk perspective, as well, providing care in someone's own home comes with like big regulatory risk, operational risk. You know, if someone doesn't turn up, it's bad enough nursing home, but at least there are some other people around. It's kind of smooth things over, but if someone doesn't turn up to five care and someone's home, then it really is a bit of a disaster. All right.

Sjoerd Handgraaf: [00:32:32] That makes sense. Now, because I just actually read through the interesting piece. I don't know, have you read marketplace 100 whole like list of articles by

Charles Armitage: [00:32:40] a

Sjoerd Handgraaf: [00:32:40] Andreesen Horowitz

Charles Armitage: [00:32:41] and Andrew Chen?

Sjoerd Handgraaf: [00:32:42] Yeah. Yeah. So they did this whole study and there were a couple of articles around it. And one thing that I just keep

Charles Armitage: [00:32:47] getting back to, because it's

Sjoerd Handgraaf: [00:32:49] still sort of blows my mind, but we often say indeed like, Hey, well, good marketplace ideas have either like high frequency or a high transaction value. And they have both or either one or the Otter. And actually what came out of that is that

Charles Armitage: [00:33:01] I'll say the marketplace

Sjoerd Handgraaf: [00:33:02] top 100, something like 60 or 70% has an either actually they are these really infrequent, like fairly mid to low transactions and it can work if your acquisition model is really good. So referral is a really big one there. And if the market is huge and that's actually what got me thinking now about this puppet again, in my head, when you say the whole camera, cause I would assume that home care is still. A huge market. If you can somehow make the unit economics work there indeed through referral, just being by an extremely known brand that you don't have to actually pay. You don't have to get them through paid acquisition. This

Charles Armitage: [00:33:34] might actually work for you. Yeah, totally. I think that's what draws a lot of moths to the flame. Cause it is a massive market and I tell it the way some people approach that she was on there in the States. Yeah, they have a very clever approach thing. So they started off providing B2C care where they like manage the CAD, you know, when it did the care assessments and care plans and put people in manage that whole process, which is great. And then they realize, wow, this is actually gonna be really challenging scale because we need to actually have a team everywhere. So to be able to go in, because when a customer signs up, they need to have send someone in to go and go like, well actually, what sort of care does this person need? That's gonna be really challenging to do. So they said instead, but well, across the country, There's loads and loads of these fragmented care agencies who, what they do really well is offering very person centric care and those relationships, which are really, really important. Right? So if you're looking for care for your mother, you know, it's all very well being able to manage it through an app, but actually the most important thing is the relationship with the person who comes through the front door. And there were loads of people out there doing that really well. So what they've done is instead of saying, right, we're going to directly provide the care. We're going to take a step back and we're going to say we're actually the marketplace that connects that consumer to the care provider, and we're going to be the ecosystem and the platform of which that relationship runs. So we'll still manage all the transaction bookings, the compliance, the training, and all that kind of stuff. But the actual human capital is managed by individual care providers. And that's pretty good model. I think.

Sjoerd Handgraaf: [00:34:54] Yeah. Is that a model that you're looking at? Because I was actually wondering, we haven't even touched on, I'm assuming that Florence is making

Charles Armitage: [00:35:00] money through some

Sjoerd Handgraaf: [00:35:01] kind of fee on the transaction. Am I

Charles Armitage: [00:35:03] right? You mean, have

Sjoerd Handgraaf: [00:35:04] you considered other ways where you could capture more value by capturing more of that

Charles Armitage: [00:35:08] process? Well, totally, totally. So, you know, some of these other things about not so much Academy on the work side, but, well, okay. For example, take Academy on Flora's category on the work side, which we use to professionally develop and train our workers. Well, Doesn't take too much to then go to a care provider care home and say, you've got 200 workers here that all have the same personal professional development and training requirements, Florence Academy to train and professionally develop them. And, you know, you charge a subscription model on that. And so we're investigating some other stuff like that at the moment. And ultimately we would love to get to the point where. We're getting some good recurring subscription revenue from care providers because they're using our products to manage their own staff pool. And then when they have the gap and when they have the requirement, we can pass you in a, a worker. And also last thing, the most important thing, there is the insights of the data out of that. So if you know, More of that human capital life cycle. You're capturing in your users, especially on the demand side, the more insight and data you have into how that market works. And it means it gives you super powerful. You know, it gives you a great ability to then do a load of thing. So plenty of supply, much more detergent need to send people to training in the right way. It's really, really very baffled. Yeah.

Sjoerd Handgraaf: [00:36:16] Was it something that you thought about beforehand? Like,

Charles Armitage: [00:36:18] Hey, what can we do with the data that this will generate? Yeah. We always thinking about that, but we haven't come up with like a super monetizeable solution is so right. So what we can do is we can use our data to drive a lot of decision making. So loads of decision making within the business, but it's not like, for example, the cost of the case would be, if you're collecting actual patient data or resident data, then you do have a pretty powerful, well, that can be used to do a lot of things. Yeah. I'm still waiting on the call from Google to look anyway, but alright.

Sjoerd Handgraaf: [00:36:54] Hey, last question actually, was there anything you would have done? So you've like, you've told us you've come a long way. You, you started as a doctor, you saw this problem. You paid for an app that didn't work, move to Google sheets.

Charles Armitage: [00:37:07] Scale it's

Sjoerd Handgraaf: [00:37:07] London or West London, London, Manchester. Now the whole of the UK, we just went through. What else you can do? Could you name first of all, what you would have done differently? One thing that you're like, Oh, I would never do that again. And then also one like, okay, this was my biggest success. I would recommend any marketplace entrepreneur to

Charles Armitage: [00:37:26] do this first. So I think, you know, there is loads of failures that, or things that we could have done differently that we've recovered from. And so, you know, you can learn and move on and, you know, classic example would be trying to build a product in an echo chamber without speaking to users, classic one. Also, he hasn't given us any longterm damage and there are very few things. I think you can, I might eat my hat on this, but there's not that many things you can do early on that are mistakes that you can make that are, you can't really recover from, with the exception of early decisions you make around things like co-founders cap tables and your founding team members. And in a number of those domains, we've been incredibly lucky and got it right. But in a couple of them, we've got it probably a bit wrong and made some mistakes. So. One bit of advice, there would be, especially when you're thinking about early stage founders, co-founders advisors, especially. Early investors deals, all that kind of stuff. Just be very, very careful and very specific about what it is you're actually looking for because equity seems really, really cheap early doors, but, you know, percentage points, early doors, which seem like not very much, it seemed like a hell of a lot further down the line. Okay. That's really solid advice.

Sjoerd Handgraaf: [00:38:40] And then what is your success story?

Charles Armitage: [00:38:42] They're like, Hey, this worked out so great. Such a good position or such a good tactic or strategy. I don't know. I think maybe slightly that's the kids answer the question, but I think, and maybe it's slightly cheesy, but the thing that I look back and go like, Oh, well that's really good. Is the team around us, the team around me in terms of like, The success story so far, and the pleasure I've got so far, it's definitely like finding and bringing those people together because I just maybe sit here and do the occasional podcasts. They're the ones that actually make stuff happen. So it's that the easy answer.

Sjoerd Handgraaf: [00:39:13] That's all right. That's that sounds really good. I mean, it's actually a very good point about, because I think in this podcast, often we go into so much down the technical rabbit hole and just think about processes and then software stacks and tactics and not exactly around the

Charles Armitage: [00:39:25] people. So I take that.

Sjoerd Handgraaf: [00:39:27] Yeah. Very good. Thanks. Very much. Hey, this was it for us. Thanks for joining any final plugs.

Charles Armitage: [00:39:33] Well, if you're a nurse or care worker or deed a care home in the United Kingdom, and you can get to Florence, keto, UK, and sign up, but you're probably not. If you listen to this podcast.

Sjoerd Handgraaf: [00:39:42] All right,

Charles Armitage: [00:39:42] thanks a lot. Cheers. Thank you for listening to two sided the marketplace podcast. If you enjoyed today's show, don't forget to subscribe. If you listen on iTunes, we'd also love for you to rate and give us a review. If you got inspired to build your own marketplace, go visit www dot dot com. It's the fastest way to build a successful online marketplace business until next time.

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