Russ: Hi, I’m Russ Capper and this is BusinessMakers USA, brought to you by Insperity, inspiring business performance. Coming to you today from Seattle, Washington, I’m very pleased to have as my guest, Kim Mackay, Founder and CEO of Lucidoc. Kim, welcome to the show.

Kim: Thank you. Thank you for having me.

Russ: You bet. Tell us about Lucidoc.

Kim: Lucidoc started out in May of 2000, and we were a spinoff from NASA. We were technology that was developed by NASA and it was gifted to us on the idea that we would commercialize the software. And so, we took that software into healthcare, and today that software is being used by many healthcare institutions across North America to control and manage their documentation and to prepare themselves for any announced or unannounced inspection by any regulatory authority.

Russ: Ok, and from what I know, there’s quite a bit of regulation these days in healthcare. Do I have that right?

Kim: You have that right.  There is layer upon layer of regulations that our customers have to adhere to, and so our application helps them bring all that data together and provide all the evidence that they need to demonstrate corporate, compliant behavior.

Russ: Ok. And I think it’s very complicated regulations too, is that right?

Kim: It is. It’s very complicated and it’s very difficult for anyone to have a handle on everything across their organization. And there’s some thousands of policies and procedures that are required in any healthcare institution to demonstrate compliance.

Russ: Ok. And so, you mentioned this product came out of NASA but we’re talking about a software product, right?

Kim: It’s a software product. It was developed by NASA initially to help them manage their own policies and procedures, and because it was developed with taxpayer dollars, they gift those products out to industry on the idea that they will get commercialized. And Lucidoc was followed up by NASA in their spinoff magazine in 2006 and we were able to demonstrate success in both healthcare and in finance.

Russ: Oh, interesting. In healthcare, in addition to the regulations, you have the privacy aspect, the HIPAA regulations, too. And so, are some people actually operating without a system like yours?

Kim: Many try to operate them based on paper based manuals, and in silos. What our application does is bring it all together so that we can avoid duplication across an organization. It also ensures that we’re sharing best practices across the organization. And for some of the clients we work with, they have multiple hospitals, and so they will use the Lucidoc application to push standards of practice to over 22 hospitals that are required to demonstrate compliance.

Russ: Ok, so I’m sure that your service is a lot more than your computer program. I mean, it’s not like you just said, they engage and you say, here’s the program, good luck.

Kim: Oh no. Normally when we get involved we help them find the documentation. And so that’s the first part of a new customer deployment is let’s go find every policy, every procedure, every form, every contract that exists within an organization. And when you’re talking about a standalone hospital, that could be 800 contracts, that could be 3,000 policies. So, the magnitude of what they’re managing is huge.  And then when the regulatory bodies come through, they’re asking for evidence of compliance, so the ability to find the policies and procedures that they’re being asked to show can be burdensome if they don’t have them all centrally located and available to their employees.

Russ: Ok, and you already mentioned some of them have paper bound documents and so forth. When they took on Lucidoc I’m sure that you turn those into digitized documents?

Kim: We do, we upload those documents, we convert them if required, to a format they can easily maintain and manage over time. Because documents get revised or reviewed periodically, and you have to do that to demonstrate compliance. You revise them when the regulations change or the standards of practice change. And in addition to that, they have to push those documents to the employees so the employees attest that they’ve read them. And that’s additional evidence that they’re required to provide during a regulatory audit.

Russ: My understanding of the complexity continues to increase. So, I would assume, therefore, if you’re a customer of Lucidoc that you’re really kind of engaging with you on a monthly retainer basis as opposed to just one upfront payment.

Kim: That’s correct.  So, we charge a monthly fee and we take care of all of their documentation for them in our secure data centers.  We push copies of their documents to them once or twice monthly in the event of a downtime, and so that in an emergency they can still get to their governing documentation.  And so that happens twice monthly. For the most part, Lucidoc team is managing their data on their behalf so that they can focus on providing patient care.

Russ: Ok, so if an unannounced auditor were to show up, do they call you and say can you come to our offices and help us with the audit, or is it in their hands completely?

Kim: It’s in their hands completely. When an auditor shows up, you don’t necessarily know what that auditor is going to be looking for. Although, we get a pattern, we can see a pattern through our clients. They will share with us openly, you know, this order came through, this is what we were looking for this time, and so we’ll see that pattern go through the audits. And so then we know how to advise our customers, and focusing in on different areas of their organization and making sure that their documentation is relevant, complaint and up to date.

Russ: Ok, so I would assume that sometimes you get new clients, people that went through an audit and were not prepared well enough. Does that happen?

Kim: That does happen and we oftentimes get brought in if an organization got cited, and we will help them bring their documentation into compliance and we will help them map their documentation to the different regulatory standards that they uploaded to our application.

Russ: Ok, so the name Lucidoc, how did that come around?

Kim: It came around because policies and procedures, and contracts and forms, or any form of documentation is forever changing. As the regulations change, we revise those policies and procedures. As standards of practice change, we revise those policies and procedures. So, they’re very lucid, and that’s where the term Lucidoc came from, a living repository of documents.

Russ: Wow. So, you shared the start of the company from this software program that NASA had. Were you already in the business of helping people with unannounced audits?

Kim: I was not. I was actually moving from Seattle to London to go spearhead a spinout from a bank, a technology spinout, and I was tapped and shown this technology. And because I worked in healthcare in the UK, I immediately saw the benefit of what that product could bring to healthcare. And knowing the regulations are so hefty, I just really wanted to be a part of this.

Russ: Wow, so you changed your plans to (Kim: I changed my plans, yes.) not go back to London and started a company. That’s impressive. So, we have lots of entrepreneurs on our shows and stuff, and some of them have real challenges, most of them do along the way.  Did you maybe escape those challenges because you got to start with the basis of a program that was pretty solid?

Kim: I think we had the start with the basis of a concept. The program was ok, it was very rough, but the concept was very clear and we knew that if we sat down with healthcare customers and worked closely with them we could bring a product to market. And so, we chose three customers to begin with, and they helped us bring that product up a level. And since then, our customers have really driven the development of that product. All of the ideas and suggestions and how that product has evolved have come from our customers. And many of them are still with us from the early startup phase, and have become friends and partners and we just love working with them.

Russ: Very impressive. So, does that mean it’s kind of been an upward, smooth sail pretty much the whole way?

Kim: Nothing is ever an upward, smooth sail. So, no we’ve had some bumps along the way. The biggest challenge for us was financing, and we hit the market when the market was plummeting, and so (Russ: That’s a challenge.), that’s a challenge. We strapped in for that and it ended up that we self-funded. And so, we never went out for financing. We have a very good banker that works with us. In fact, recently they helped us buy our office building. So, we’ve never struggled financially on that side of it, and we’ve always returned a profit, but we’ve kept our expenses low.

Russ: Ok, and so how many employees do you have today?

Kim: We have 20 employees today. They’re made up primarily of software developers because we are developing an application here. And so, we focused on quarterly released cycles because the regulations changed, the requirements that the customers must meet change, and so we’re constantly working very closely with customers to keep that product moving forward and building out.

Russ: Ok, in the beginning you mentioned the healthcare and finance. Are you doing regulation business also in the finance industry?

Kim: Not so much as healthcare. The pain is really in healthcare and they keep us very busy. We don’t have a sales team; everything comes to us as referrals. We’ve kind of got a reputation now, and our goal is to help any organization that really needs to shine or focus on their compliance.

Russ: Wow, and are you regionally focused or nationally?

Kim: We are nationally focused and we even have a hospital in Hawaii that use the application.

Russ: I bet you have to go over there sometimes to make sure everything is going ok.

Kim: Everything is online, unfortunately, but I’d love one day to, definitely to go to Hawaii and meet with them. But, everything we do is online and everything we do is from here in the state of Washington. And it’s very rare that we have to travel. In this day and age we all have online technologies, and we do online meetings, and so we stay connected with our customers that way.

Russ: Great, well Kim it’s a very impressive business, and thank you very much for sharing it with us.

Kim: Thank you.

Russ: You bet. And that wraps up my discussion with Kim Mackay, Founder and CEO of Lucidoc, and this is BusinessMakers USA.