Timothy Zercher 0:00

All right. Well, good morning, Mike. Thank you so much for joining us. Thank you for taking time out of a busy morning and meeting us first thing in the morning. We're recording this as like our very first thing of the day. Thanks for having me. I appreciate it, Tim. Absolutely. So I want to jump right into our questions. First one is tell us how you got involved in behavioral health compliance, especially, and also in the operation side. How did you get how did you get into this field?

Mike Lifshotz 0:20

So I guess as it comes to behavioral health, we all have a personal reason for being in this field. Most people don't get into behavioral health care because that's what they wanted to do when they were in high school and middle school, right? So I got into the field just through a passion for human the mind and why we do what we do. I've always been passionate about it. And in 2018, my wife had the idea to start up a compliance software that she needed when she was running operations in compliance for behavioral health care facilities, more specific in substance use. And I saw what she was building. This had never been done before. And I have also a passion for building businesses. So I saw what she was doing and I saw what her skills were and what they weren't. And that's what drew me to the field. It's just an amazing space with some awesome people. Unfortunately, there's a lot of really passionate people who don't have the business background. And that's where we can really help and kind of bring more of that to the field.

Timothy Zercher 1:30

I love that. It's very similar to why I got involved, right? I love the people, I love the space, I love the work, and I see all the needs, and that's why I'm here too. So that makes perfect sense. So you've worked through acquisitions and integrations, like when Hatch Compliance was joining Keepu, and of course that's where you are now. What is some of, or even just one, of the biggest lessons you've learned about merging teams and processes successfully?

Mike Lifshotz 1:53

I would say, as a founder, going in and recognizing that you're not the going to be the sole decision maker anymore. Going in and saying, hey, I am part of a much bigger picture at this point. And you need to be able to hand over those controls. And the vision of the acquiring company may not be the exact same vision that you had, but it doesn't mean they're wrong. It just is how the company is going to grow once it reaches that point. I would say that's like the biggest. The other thing is seeing your staff flourish in other roles. The people that you had in certain roles, they're going to move into different roles and they're going to have different experiences. And the people that you talked with on a daily basis, you're not going to talk to as often. So you have to kind of learn to keep those relationships however you can. But I would say those were two really big things. And then, of course, just learning new things and picking up new skills has been another big piece of that for sure.

Timothy Zercher 3:00

Absolutely. It could not have been easy. I can't imagine that process. I've been through one merger, but I was in charge of it. So it was a little easier. I didn't have to let go of reigns as much.

Mike Lifshotz 3:09

Yes. Yeah, there's some challenge to it for sure. But at the same time, it's a lesson in life. We can't control the outcome all the time. We could just control what we put in and the energy we put into it. And sometimes it doesn't look the way we want it to look. Sometimes it does. And it's just the kind of the beauty of growth. Growth isn't always comfortable, but it's always beneficial. So you have to learn from a lot of different parts of that experience.

Timothy Zercher 3:40

So with kind of shifting into the work you guys do these days, with compliance often seen as a hurdle, how do you and your team turn that into an asset? Turn the compliance obstacles into assets that really empower your staff and kind of improve actual patient care.

Mike Lifshotz 3:57

I think to pull back and people viewing compliance as a hurdle, I think there needs to be a major shift. And that's what I try to do. When we first started our company on with Hatch Compliance, the number of people I talked to that told me that nobody cares about compliance, it blew my mind. And I started talking to a lot of people about this. And what I found was nobody cared about compliance because the processes and everything involved in staying on top of compliance were so cumbersome. And the administrative burden was so high on the staff that what was happening was they would just kick the can down the road, wait till a survey was getting ready to happen, then scramble and deal with all of the repercussions of kicking that can down the road. And then they would get a couple of findings in the survey, and everything would be okay. And that is why it was so cumbersome and such a pain. The reframe for compliance really, and what we brought to the table was that automation to make sure things were done when they needed to be done. And it was divided and automated to the right people. So they had what they needed to when they needed it. The value that came from that was accurate data that you could do things with. Because compliance should not be this meaningless task just to keep our license. And if we're looking at it just through that lens of I'm keeping my license, I'm keeping my accreditation, we're missing the point. If you create accurate data while things are being done along the way, you have the ability to use compliance to increase your length of stay, reduce people leaving before they complete their full length of stay or their full prescribed program. You reduce incidents, you reduce grievances, you increase your overall satisfaction score. And we've even seen organizations going to their liability insurance companies and getting reduced rates for liability insurance by managing compliance in a more forward-thinking manner. So, compliance, if you're just looking at it as a way to keep your license and accreditation, you're missing the boat on the value, and you're missing the boat on a lot of ability to protect revenue or potentially save money or just reduce your risk and stress overall.

Timothy Zercher 6:34

Yeah, I can totally see how that would work. I mean, I think that's the point of almost every compliance step is there's supposed to be a point behind it, right? There's supposed to be a value on that helps either the patient or the organization.

Mike Lifshotz 6:45

One other thing with as it relates to compliance, because we're talking about acquisition, right? And we're talking about merger and acquisition here. Most people don't start up a facility or an operation because they want a job. People are starting up these organizations and opening up these clinics because they want to build a business that they could eventually sell. Compliance is such a huge factor in you being able to get the multiple that you want out of your business. Because compliance equals risk, right? If you're trying to sell your business, what is the quickest way to reduce your multiple? Introduce risk into the deal, right? So compliance and a standardized practice that's not based on just one person being able to do the job, but standardizing that process so it's not reliant on only one person is a very important way to keep that multiple and to keep your business valuable.

Timothy Zercher 7:44

Absolutely. I mean, besides the fact if you have an incident because you were not compliant, that also tanks your value. Oh, I have a whole bunch of stories. A lot of stories.

Mike Lifshotz 7:53

Because you know, the funny thing, Tim, is compliance for most people, compliance isn't a thing until it becomes a thing. And then it's big and very problematic and expensive and a big headache.

Timothy Zercher 8:06

So for sure. Absolutely. I make that makes complete sense. So before you emerged, you grew your team a lot. What have you found is the hardest part about growing your team and your organization?

Mike Lifshotz 8:17

I think the hardest part for me, and I think for somebody who's innovative, is taking something that never existed before and having all of those conversations of nobody gives a shit about compliance. Nobody cares. Like I've got a friend that has a company that is basically doing like a Myers Briggs assessment for staff to see if before hire, if these people are going to be a good fit for your organization or a good fit for therapeutic alliance. And he's dealing with the same thing. There's a lot of people that are stuck in the way things are and don't have that forward-thinking mentality. And they're dealing with a lot of the people not seeing it. So I think the hardest part of building the business and building everything was being able to shift the mentality from I've never seen this before to, oh man, I really need this. And we saw it with everything from satellite radio or podcasts or emails or cars. You know what I mean? It's just part of being an original. By the way, it's something kind of fun to mention is we've got a patent on our software, and we just got approved for three additional patents. So those are some of the things that are fun about being able to build something that's never been done.

Timothy Zercher 9:47

Absolutely. There's always challenges to anything new, right? Whether either if it's a new software, a new product, a new service, or even just it's a new industry and you're delivering an old service like compliance to an exploding industry.

Mike Lifshotz 10:01

Well, and behavioral health, look, and if you take healthcare as in general, we're kind of the mastodon of behavior of healthcare, right? We're still fighting for parity and we're still fighting to be treated like any other area of healthcare. So behavioral health is definitely one that is behind when it comes to healthcare. And because of that, people are just struggling to keep their head above water and don't always have the time to think about well, what's going to be the next thing, or how do I solve this problem? They just gotta be in the muck with their day-to-day.

Timothy Zercher 10:38

Absolutely. So we always ask a couple of more marketing questions because we are a behavioral health specialist marketing agency. What have you found is the best way right now to gain new clients for your team? Because I know you're in a fairly competitive space.

Mike Lifshotz 10:52

I think the best way to bring in new clients is there was a question, and I believe it was Zig Ziggler, and they asked him, if you could get new clients or retain the old ones, what would you do? And he said, yes. And I think the best way to get new clients is by treating your old clients and your current clients very well, doing what you say you're going to do, under promise over deliver. I think communication is really good, but not BS communication. If there's an issue with the system, if something isn't working right, if whatever, communicate it honestly with your customers and your clients and make sure that they don't feel like you don't have their back, right? I think the best way to bring in new clients really is utilizing your reputation, building a good reputation, maintaining your reputation, because your clients speak very loud. They speak very loud if you're not living up to your end of the bargain, and they speak really loud if you treat them well. And I don't just mean like it could be something like a friendly communication as opposed to a robo email or a call or something along those lines. That is going to be really key, I think, to growing is to treating the people that you're already working with well. The other thing, and this is it seems intuitive, but it's not. Who is your biggest customer? Your employees. You treat your employees well. The employees that I had that came with me, they would follow me to the end of the earth. And the reason for that is because we treat them well. And if you treat your employees well, who is the face of your company to the outside world? And they're just, they'll sing your praises. And I don't mean like me personally, they may say nice things about me. I hope they do, but they say nice things about the company, the organization, the way they support their customers. And it's got to be grassroots. This industry is not the kind of thing where you can just go out and blast a bunch of stuff. There, you really have to have relationships. That's what I would say on that.

Timothy Zercher 13:11

No, it makes simply sense. I think it's Costco, actually, that pays their employees double or triple the average Walmart employee, specifically because they say better paid employees are better to customers. And they are every time, and it works out no matter what. And so, last question on the marketing side: what is one marketing tactic that you're either considering right now for your team or that you're just watching really carefully in the marketplace?

Mike Lifshotz 13:35

Look, the topic everybody's talking about is AI, right? Everybody's talking about AI for marketing and how that works. I think there's many ways to use AI for marketing, and you still have to have, no matter what, human interaction there. Lazy AI, forget it. You're not going to get very far. But I'm watching AI. I'm seeing what people are doing and as far as list generation, lead generation, follow-up with your pipeline, with your sales pipeline. There's a lot of things. I am more and more impressed with Gong all the time, the different things that we see in Gong for marketing and for follow-up. And I think those are the big things that everybody's looking out for. And of course, again, it's just around, it's also for marketing, is always fine-tuning that follow-up process. Yeah. You know, it can't just be an automated, hey, I saw you were on my website today, so and so. It's got to be more personal, more connected. We need more connection. There's so much disconnect and automation out there that people really crave the ability to talk to a real person.

Timothy Zercher 14:51

Yeah. And it needs to feel real, even if what I found is like even if people know it probably is automated, it needs to feel genuine. Because if it doesn't, there's an immediate distaste that people find.

Mike Lifshotz 15:03

Yeah. I mean, look, people do business with people they like. There's a lot of competition out there. And if you come off as cold or robotic or disconnected, especially in behavioral healthcare where everybody is super connected to that, they can smell it out and you get pushed right out.

Timothy Zercher 15:23

Come on. Absolutely. Yep. Well, perfect. Thank you so much for joining us, Mike. Thank you for sharing some of your insights. We really appreciate it. Thanks so much for having me. I appreciate it.