Girish Navani, eClinicalWorks: Staying Private at ~$320M in Revenue

1Mby1M Research · 1Mby1M Case Study

Interviewer: Sramana Mitra

This interview is part of the case study-based research and entrepreneurship education work of 1Mby1M, the global virtual accelerator founded by Sramana Mitra.

Abstract

Girish Navani, eClinicalWorks CEO and Co-Founder, revisits the company’s evolution four years after an earlier interview, describing a shift from a purely physician-centered electronic health records business toward a dual focus that places patients on equal footing through a new business unit called Healow (Health and Online Wellness), backed by a $75 million R&D commitment. With the physician EHR market now roughly 80% penetrated and increasingly defined by customers switching providers rather than adopting EHRs for the first time, eClinicalWorks has grown to approximately $320 million in revenue and 4,000 employees while remaining entirely privately held and self-funded, deliberately avoiding a public offering or acquisition exit.

Navani discusses expanding into adjacent business units – population health analytics, revenue cycle management, and patient engagement – through an internal “intrapreneurship” model called LEAPs (Leadership Acceleration Programs) rather than acquisitions, and reflects on his philosophy that sustainable, self-financed growth funded by customer revenue rather than investor capital allows founders to prioritize long-term value creation, R&D investment, and mission over short-term profit pressure.

This case illustrates how a large, mature company can continue operating on bootstrapped, founder-controlled principles at significant scale, reflecting the 1Mby1M emphasis on building durable businesses on customer revenue rather than pursuing financing or exit as an end goal.

Transcript of the Interview

Sramana Mitra: Let’s pick up from where we left off about four years ago. Of course, you’re one of the key players in the healthcare IT ecosystem and started way before most of the players in the current landscape. Catch me up on what’s going on and how you’ve progressed. I want to set the context of what I love about your philosophy of building the company. You’ve kept it private. When we talked in 2010, you already had thousands and thousands of customers and had substantial revenue.

Girish Navani: People think the first five years of starting the company are probably the most hectic. I think I’m probably running faster today than I ever did. There’s a lot of exciting things. If you follow eClinicalWorks’ journey, we put the physician in the middle and we try to put everything else around it. I still think that’s the core to the company to a big extent. Everything is streamlined from a physician’s workflow. What has complemented that is that we’ve put the patient also on the same footing.

I’ll talk about how I manage growth now while not making it bigger and bigger and slower and slower. I try to keep that culture agile. Over the four plus years, we have focused on the patient being an equal centerpiece. It’s like the MasterCard commercial. You’ve got two circles and they intersect. We’ve had success on one side of that circle with physicians and we’ll continue to. The exciting part is to make a similar impact on the consumer/patient.

Sramana Mitra: Let’s take those two circles and double-click down. The physician side is relatively straightforward. You probably, metrics-wise, have made a lot of progress there.

Girish Navani: Very true. It’s a hard industry but nonetheless, I think it’s consolidating. The business today is not the same business from 15 years ago. 15 years ago there were a lot of green fields where physicians did not have electronic records. Today, the landscape’s different because many times, companies come up from different parts of the country. We’ve had customers adopt lots of different systems. As markets mature, you’ll find consolidation because of many reasons. We’re in that phase. Most of our growth now is coming from a customer base that are already a first-generation user. I see that market continuing to evolve for the next five years.

Sramana Mitra: What is the penetration of EHRs into the physician marketplace right now?

Girish Navani: I’d speculate it’s across 80%. But I’d also say that 30% to 40% of them are going to pick us. That happens in every industry. We love to talk about how healthcare has got challenges. If you look at every industry with a microscope, you’ll find that it went through that same trend. As the market continues to evolve, you need to invest heavily in R&D and in services. Having a customer has its own responsibilities and not everyone comes through with it. I still think the market is going to continue to grow for the ones that want to innovate.

Sramana Mitra: When we talked sometime back, you were basically going into virgin territory. Now, you’re seeing customer-switching.

Girish Navani: 8 out of 10 customers are switching. We actually have a program called Make the Switch. It’s pretty popular. It’s not only moving from one software to another, but also moving to the cloud. Those are the two trends that I see. Even the customers who used to do it in their own infrastructure, tend to build an intranet system.

Sramana Mitra: If you were to look at the physician market, what percentage of the physician market has made that shift to the second-generation system?

Girish Navani: That’s actually an intriguing question. I think it’s still in the early phases, early in the sense that we are 18 months into that cycle.

Sramana Mitra: So probably less than 10%?

Girish Navani: Yes, I think so. I’m actually looking at next year with a lot of optimism. It will be the first year in five years that we won’t have a government mandate. The market will then try to take its own shape. That’s something that entrepreneurs find very exciting. I’m looking forward to it.

Sramana Mitra: Then let’s switch to the other side of the circle, the patient side. Tell us what those are.

Girish Navani: Two things are happening, which are I think the stimuli for this becoming a reality. One is, employers have started moving to deductible plans. So patients are picking up part of this expense through their own pockets, which was not the case 20 years ago when we all had insurance cards and assumed there was no patient pay other than the co-pay. Today, co-pays are not the only reimbursement that many employers are putting on their clients. Sometimes, it’s $1,000. Sometimes, it’s $2,000. The consumers are asking the question, “Is this the best care I can get for the cost I’m spending?” That I think is a trend.

The other one is, we’re moving reimbursements on the care delivery side from fee-for-service to outcomes. A ACO report says bonuses were paid to practices and groups that had achieved good outcomes while not spending the same amount of money as their peers. Both these trends now put the patient into focus. One, allow them to manage their care. Make them aware of what care is costing. Engage them in such a way that they get preventive care or avoid unnecessary care. Either of those two can result in positive outcomes.

That tells us that you need to have technology for consumers now. You can hail a taxi using Uber. I think you should be able to, at least, look up online what your MRI is going to cost.

These are basic things you should be able to do. We are investing heavily. We’ve committed $75 million in R&D in this business unit. It’s called Healow (Health and Online Wellness.)

Sramana Mitra: For that business, what is the business model?

Girish Navani: It’s an intriguing question. If you go back to our original article, you asked me that question. I’ve always thought about making a difference first and then figuring out how to make money from it. eClinicalWorks wasn’t that different. People didn’t think you could get an MRI for $250 a month. We said we could. I think the long-term business model for patients is saving costs.

Sramana Mitra: For the physicians?

Girish Navani: For both sides – patients or providers. Saving costs, yet obtaining outcomes. Don’t compromise the outcome. In fact, the outcome should get better, not worse. The business model might translate into reminders to patients. There might be a monthly model because rather than having to sit there and make manual phone calls and come up with archaic ways of communicating, technology could do it through text messages, voice reminders, or app notifications. There could be a model on just matching supply and demand. If I found a doctor a new patient, would he pay for that new appointment? We do that in all e-commerce settings.

Sramana Mitra: It’s a marketing vehicle for doctors.

Girish Navani: Yes, and we’re doing that. We’ve launched it nationwide.

Sramana Mitra: Are they willing to pay for it?

Girish Navani: For an appointment, yes. If you have an unused, open slot, you now get to fill it.

Sramana Mitra: What are the numbers of the business? You can give me ranges. In 2010, you were already at $100 million.

Girish Navani: We forecast this year that we will reach $320 plus million in revenues.

Sramana Mitra: You still don’t have the desire to exit this company and take it public? You want to run a private company, right?

Girish Navani: Yes.

Sramana Mitra: That’s great. I’m actually working on a book on Unicorn Companies right now. I would love to include you in that. The definition of this Unicorn Company is a billion-dollar exit. The truth is if you were to exit in the market today, you would be over a billion dollars in valuation easily.

Girish Navani: Easily. Maybe, multi-billion.

Sramana Mitra: It’s probably more like $3 billion plus valuation. You’ve probably seen my work in the last four years that we’ve launched One Million by One Million. Our philosophy is entrepreneurship equals customers, revenues, and profits. Financing and exit are optional. That’s a very simple and powerful change in the way entrepreneurship is viewed.

Girish Navani: I wish more would do it.

Sramana Mitra: Over 99% of the companies out there who seek financing actually get rejected. To have role models like you and, another of my favorite entrepreneurs who was following the same philosophy, Sridhar Vembu. I don’t know if you’ve met him?

Girish Navani: No.

Sramana Mitra: Sridhar Vembu is doing Zoho. Zoho is probably about close to $300 million in revenue. He has no desire to exit – 100% self-financed company and has no interest in exiting.

Girish Navani: I’d like to someday meet him.

Sramana Mitra: I’ll be happy to introduce you. It’s a different way of doing business. It’s a different way of thinking about business. You guys are building gigantic cloud companies that can stand on their own two feet.

Girish Navani: I think you’re right with cloud computing and business models that have recurring revenue. You don’t need to go public and you don’t need to exit. Exits are for professional careers. At 47, I have no desire to do that.

Sramana Mitra: That’s the other thing. I’m glad that you brought it up. I actually have nothing against venture capital. I’ve done venture-funded companies. This one, I’m not doing as a venture-funded company, at least not at this point.

I think it’s important to put more of your style of role models out there where you can build self-sustaining companies with customer money as opposed to investor money. I think it’s an important thought process that needs to come into the industry.

Girish Navani: You, at least, have a different decision making in this business. Profit margins are important but they’re not the primary. You need to run a profitable business but you tend to look at customers and employees in much different ways than you would if you were a stock market price.

Sramana Mitra: You also don’t look at growths the same way. You don’t have to grow at all costs all the time at the fastest pace.

Girish Navani: That’s true. We have got four business units right now – Big Data analytics, the patient that we just talked about, revenue cycle management, and then obviously the core business of EHR. I do it because I like to do it, not because I have to do it.

Sramana Mitra: You are investing sizeable amounts of money in R&D.

Girish Navani: Big time.

Sramana Mitra: That is eating into your profit margins.

Girish Navani: That’s fine to me.

Sramana Mitra: I’ve only seen one public company making the case for not making profits and still convince shareholders to stay with them. That’s Amazon.

Girish Navani: Amazon.

Sramana Mitra: Most companies can’t get away with that but they do. These are very interesting differences in how you make decisions and how you build companies.

Girish Navani: It is no different than sky diving. It’s no different than taking adventures that when you watch them on GoPro cameras, you’d go, “I can’t even watch it.” Wanting to stay private is no less adventurous than what I just discussed.

Sramana Mitra: I like it very much. The other thing that you said that, personally philosophy-wise, I’m also very much on that track is – I’m not interested in retiring. I love work. I love to do what I do. That’s my primary focus.

Girish Navani: You wouldn’t know what to do. I’d get bored. If I had to stop working for more than two weeks, I’d be in some form of withdrawal syndrome. Work is addictive.

Sramana Mitra: I think for people like us, work is how we add value to the world.

Girish Navani: True.

Sramana Mitra: Relatively speaking, we are very young. Having an exit and getting a chunk of money and then what? You can’t eat money.

Girish Navani: Very true. Then what? People ask the question, “Girish, why don’t you do this?” Then I ask the same question you asked, “Then what?” None of those answers have been exciting. I have found a cause at healthcare. In healthcare, there’s a purpose behind – we can help somebody live a better life, live a healthier life, or get diagnosed sooner because technology created that platform. Beyond profitability, we’ve done something for society even though it’s a for-profit and not a non-profit.

Sramana Mitra: If you can add value to society in a for-profit mode, I think it’s a much more sustainable model.

Girish Navani: Very true.

Sramana Mitra: I don’t particularly like the idea of having to go raise foundation money and all that.

Girish Navani: I think you’re right. Innovation creates value. Use that to generate both growth in the company and growth in the principle. You have mentioned Amazon. I have a fascination for their business model, which is doing everything between consumers and supply.

Sramana Mitra: Vertical integration.

Girish Navani: Yes. I expect to see eClinicalWorks as a vertically integrated company for healthcare and even wellness. That’d be exciting. It’s short of owning the delivery standpoint itself or owning the practice of medicine, which we won’t get into. I think we’ll close into that practice and connect it all the way to the consumer.

Sramana Mitra: Let’s take the thought process a bit further. How do you view the industry right now? When you look at the different players who are trying to serve the same purpose of making the healthcare world better using technology, who stands out as making interesting progress and contribution?

Girish Navani: What is fascinating to me, and I encourage this, is for the first time in a long time, I am seeing a significant excitement for healthcare and technology innovation. Technology in healthcare was not considered to be so cool 15 years ago. It was dull. It was for the geeks. It wasn’t for hardcore entrepreneurs.

Sramana Mitra: Healthcare IT has seen a renaissance.

Girish Navani: Big time. That renaissance will really merge companies that you and I don’t necessarily talk about today, but their business models are appealing – find me physicians wherever I can, find the cost of care, transmit my medical records to my provider of care, allow the doctor to do telemedicine versus trying to do traditional medicine, allow providers to communicate with other providers but not through traditional health information exchange models, which I think are primarily there to hide the duplicacy. This is in contrast with patients carrying their information on a smartphone to another provider of care. These business models are going to take shape.

I think we’ve finished the first or second innings of a baseball game of digitizing healthcare. About 80% to 90% now have an EMR in the hospital or in the doctor’s office. We just think that’s the first leg of doing anything substantial. It’s too early to say which five companies are going to have a big impact. Companies that are focusing on using cloud and this idea of tying consumers to suppliers and suppliers to other suppliers and break the mold of this traditional payer-based system of healthcare will create a big dynamic difference. We expect to be one of them, but we do fully expect many, many more.

Sramana Mitra: athenahealth is doing good work.

Girish Navani: They’re doing well. But many others are not. You should not just look at these five to six companies including us as people that can make a difference.

Sramana Mitra: There are small companies.

Girish Navani: 15 years ago, we were nobody. I remember this day when we went on stage in 2002. Siemens presented before us and GE presented after us. There were five of us at that show, and that was 95% of our industry. We were the nobodies of this industry. Today, those two companies in healthcare don’t have the same presence, if you’re being very polite.

Sramana Mitra: They have other roles to play in medical imaging. In the equipment sector, they’re big.

Girish Navani: Yes, not in healthcare IT. This is the fun part and also the nerve-wracking part. As an entrepreneur, you have no fear because you have nothing to lose.

Sramana Mitra: Given your structure, what are your thoughts about acquisitions? One way that people deal with that threat is to bring in people from the bottom.

Girish Navani: I agree with the idea of having individuals whose focus is exclusively in that particular objective. You can do that through acquisition of teams and bringing them in. I have always enjoyed building a team or building a company that goes ahead and excels in R&D and service. We have started becoming, in a way, our own investors. We invest in ideas and then give these ideas a lot of freedom and a lot of entrepreneurship. We give them lessons learned. I participate on Thursdays and Fridays in these discussions called LEAPs – Leadership Acceleration Programs. Many from eClinicalWorks have moved into those teams. Many have come from the outside. It doesn’t really matter.

Sramana Mitra: There’s an intrapreneurship model.

Girish Navani: I like that word actually. I’ve never used it – intrapreneurship. These business units that I just mentioned are directly done that way. Rather than looking at other companies to see if we can acquire, we try to build on cool ideas.

Sramana Mitra: Intrapreneurship is very hot right now. We’re doing a lot of intrapreneurship work in partnership with major corporations where we set up a formal 1M/1M inside corporations to encourage intrapreneurship and teach them how to bring the product to market.

Girish Navani: It’s hard, but I think we have figured it out. It took a year of my almost constant staying on top of it all. All of these business units are starting to become successful. They have significant customer base. They are starting to generate revenues, but we also think that they’re now competing with the “individual entrepreneurship companies” head on. In population health analytics, we were nobodies 18 months ago. We were non-existent. Today, we think we’re among the top two companies in analytics for healthcare. This was an internally funded initiative.

Sramana Mitra: What does the R&D operation look like? What does your operation team look like? Is it still primarily Boston-based?

Girish Navani: Yes, because I am there. I’m still the software engineer that has learned how to run the company. The biggest difference I bring to eClinicalWorks is the ability to take customer needs and put technology and engineering together, and come up with products that have an appeal. We have an office in Atlanta, Chicago, New York, Boston, and India. R&D will still stay in Boston. It doesn’t mean that it can’t be done outside of Boston. It’s just that I find it to be that much faster with me being able to work with them hands-on.

Sramana Mitra: How many people do you have in Boston?

Girish Navani: Boston’s about 800 plus people today.

Sramana Mitra: The whole company?

Girish Navani: 4,000. In our business, I think I’ve learned that customer service and customer implementations take up a big part of our company.

Sramana Mitra: Do you have a professional services unit then?

Girish Navani: Very big. In healthcare, I can’t sell technology and not go on-site to help them implement it. Even though it’s a SaaS model with recurring revenues, we still give services. Not necessarily charged on a per-day basis. In our recurring revenue fees, we will bundle in X number of days of on-site presence to implement it. I think we also provide a lot of free online.

Sramana Mitra: Implementing well prevents burn.

Girish Navani: Yes. Either I do that or I immerse myself in sales. We chose to invest in service because it will result in a customer telling another. Our sales team is still very small, while our service and implementation team have grown significantly. R&D has grown as well.

Sramana Mitra: Is there anything else that you want to discuss?

Girish Navani: I think we will see a different healthcare system where the payer is not necessarily the one clearing a bill without telling you someday what it costs. I’ll tell you something new that we’re doing next year. We just went live with it inside our company. I think there’s a business model for it outside of eClinicalWorks. We mandated that our insurance company give us our claim files, which was a tough one to get. It got to a point where it was frustratingly being ignored. They would say, “I don’t have it today. I’ll give it to you day after tomorrow.” It went on for about four months until it came to a point where I said, “Either I get it or I’m going to another company.” We got our files then.

We built technology to allow each one of our employees to look at that data and see what it costs when they go and get a lab, a flu shot, or an MRI done. We have an employee who went for a brand name prescription. The doctor recently switched it to a generic. Her son didn’t react well to the generic, so she had to go back to the branded one. She asked the doctor if she could do anything to manage the co-pay because co-pays are different for branded and generics. One of the employees in the company who had watched this data point in claim files then told her that Walmart is cheaper than CBS. It turned out to be true. She now saves $20 on every prescription she fills.

Employers helping employees create wellness and visibility along with technology companies providing consumers tools at home can change healthcare. It’ll take time because it’s regulated. There’s a lot of bureaucracy.

Sramana Mitra: Some of this stuff does not really need a lot of regulation change like optimizing the cost structure of a patient, which you just talked about.

Girish Navani: It does not. What needs to change is price. The initiatives coming out next year, because of government mandate, are still not going to give you the exact price for care. It’s going to be a reference range. But I still think that’ll go a long way. Getting price visibility and preventing sudden changes where the status quo gets challenged and people start getting into network contracts are good signs of a big tidal wave coming in. It’ll happen a little bit slower than it happened in the cab industry because there were lesser regulations, but I think it’ll happen in two or three years.

Sramana Mitra: I think what’s very encouraging about healthcare IT right now is that we are well within striking distance of the whole system digitizing.

Girish Navani: Yes.

Sramana Mitra: We are also well within striking distance of the healthcare administration costs becoming optimized significantly. There has been a lot of wastage in that area. All those add to the healthcare system becoming more efficient and being able to deliver care at a lower cost.

Girish Navani: And then we have population health analytics. New York City is doing something interesting. New York City has technology that is allowing them to understand outbreaks every 24 hours. They’re able to push medication recalls into provider and patient inboxes. They’re also able to understand chronic care management matched up against social, economic, and ethnicity breakdowns. This was not doable before. We take credit for the technology side because we put it in. But when you combine whatever we just discussed – consumerism in care with population health – I do think we might actually live healthier and at a lesser price point than what it is today. That will be a fun experience in life.

Sramana Mitra: What is your perspective on end-of-life care because one of the big chunks of the cost structure problem is in end-of-life care?

Girish Navani: Personal experience tells me that I can say whatever I want today but if your relative or family member ever had to go through that, you would try everything to see if it can work.

Sramana Mitra: I experienced this with my grandmother about five years ago. This was in India. She was in a coma essentially and she was not responding. It was about 18 days. We would have been happy to let her go but no one would let us do that. She was 87 years old.

Girish Navani: I won’t say it’s easier, but some of them are more rational. I don’t know about this one because I have actually struggled with it internally. I like to tout the idea of health and wellness and I have somehow tried to avoid such situations. Maybe the person inside me doesn’t know how to react when faced with a decision like this myself. I would always say that if it’s better for the patient in terms of pain and outcomes, then it’s an easier one. If it is not, then which way do you go?

Sramana Mitra: It’s a tricky one.

Girish Navani: If you look at why we get two X-rays done for the same tooth when we visit two different dentists, one for our initial and one for the oral surgery, you’re costing the system twice and you’re getting no better outcomes.

Sramana Mitra: Those are unnecessary.

Girish Navani: Those are unnecessary. Those should go.

Sramana Mitra: There’s a tremendous amount of optimization to be done just in the system that would dramatically cut down cost just by moving things properly, quickly, and efficiently.

Girish Navani: With better drug trials leveraging this health technology to try and see which meds have better appeal, I think technology can create that big change that it needs. You and I can still come back to end-of-life and deal with it.

Sramana Mitra: Take the low-hanging fruit.

Girish Navani: Let’s take the person who’s living healthy and try and have them live healthier.

Sramana Mitra: The trend lines are all very good. This is encouraging. There are all sorts of bad things happening in the world – ISIS and nonsense like that, but this is a very good trend line that there is actually technology adoption and cost reduction. All these things that need to happen in the healthcare system are all happening.

Girish Navani: Since you brought up international, we have an interesting customer that has signed up with us. They’re based in Israel, but they are healthcare providers in the US. They allow international patients to seek second opinions online and they’re going to use eClinicalWorks technology for it. This is amazing. You get a specialist in US who is probably the thought leader in that space and knows a lot about that domain being able to provide an online second consult to somebody else in the world. It’s fascinating.

Sramana Mitra: What is the business model?

Girish Navani: The patient pays for getting their second consult.

Sramana Mitra: It’s a private consult.

Girish Navani: Yes, but nonetheless it is something that creates value. There are intriguing models coming up like this and will be fascinating to have someday. I hope we can cross state lines in terms of healthcare delivery regulation. I don’t understand. If you can be a doctor in Connecticut, why can’t you be a doctor in Massachusetts?

Sramana Mitra: Yes, then there are other possibilities of course because if everything is possible digitally then you can train your software to be able to take that data, analyze that data, and come up with diagnoses and all kinds of things. The doctor can do it, then the software can do it.

Girish Navani: I’d get into trouble for saying that. I’ll say this, technology can definitely assist healthcare.

Sramana Mitra: Come on! We’re computer scientists. Doctors memorize and learn what the algorithm and the heuristics are.

Girish Navani: So technology is helping physicians with better decision-making. We start giving them some understanding of outcomes based on prior historical data, which can be computed a lot more quickly.

Sramana Mitra: This is not in the 5 to 10 year-timeframe but it’s definitely in the 50-year time frame. There is a much bigger role that software plays in the diagnosis process.

Girish Navani: According to Harvard Business Review, robots are going to be helping in surgeries a lot faster. Actually, my neighbor sells into this space. He believes that robotic surgery is evolving very fast.

Sramana Mitra: That was a great discussion. Thank you very much for your time.

Key Takeaways

• eClinicalWorks has grown to approximately $320 million in revenue and 4,000 employees (roughly 800 in Boston) while remaining entirely privately held, self-funded through customer revenue, and explicitly uninterested in a public offering or exit, even though the company could likely command a multi-billion dollar valuation today.
• The company invested $75 million in R&D to build Healow, a patient-facing business unit addressing rising consumer healthcare costs and outcomes-based reimbursement trends, alongside other internally developed units in population health analytics and revenue cycle management.
• Rather than pursuing acquisitions, Navani built new business lines through an internal “intrapreneurship” model (Leadership Acceleration Programs, or LEAPs), which allowed eClinicalWorks to become a top-two player in healthcare population health analytics within about 18 months of starting from scratch.
• Navani frames staying private and self-financed as a deliberate philosophy – prioritizing customers, employees, and long-term R&D investment over quarterly profit pressure or shareholder returns – citing Amazon as a rare public-market example of a similar approach, and explicitly contrasts this model with the venture-funded, exit-driven norm in tech entrepreneurship.