See Jane Run: How a BC startup ignored the tech bubble hype – and is thriving through the crash

It was August, 2021, and the technology sector was overheating. Companies were going public at a torrid clip. Each week another Canadian startup became a “unicorn” valued at US$1-billion. Investors fired money bombs at young enterprises seemingly with abandon and scant diligence. Revenue mattered more than profit, which didn’t matter at all.

Alison Taylor was unimpressed by the unicorn mania. She had another way of describing her North Vancouver, BC, company, Jane Software Inc., whose online platform is used by health professionals such as massage therapists and psychologists to run their practices. The co-chief executive called Jane a camel – “a company that can sustain itself through the market’s ups and downs,” she explained in an interview at the time. “Camels can walk through the desert with ample storage of what they need to make it through drought.”

It was an ungainly moniker, but the company, known as Jane App, was a bit awkward for the era: a software company that was growing fast but also profitable and happily under the radar.

To some tech-sector observers, Jane wasn’t spending enough, hiring enough or marketing itself enough to crank up revenue and customer counts. Some financiers saw its focus on profit as a needless throttle. “They have an incredible opportunity many would give their eye teeth for. I hope they’re not satisfied with good enough, that they build something iconic,” Vancouver tech entrepreneur Jason Smith, a Jane mentor, said in a November, 2021, interview.

Financiers “are always going, ‘Can you move the needle faster?'” Ms. Taylor said then. “We’ve spent so long trying to operate a business in a reality that looked so different that we started to question our own sanity.”

Now after a hellish 2022 in technology, investors are asking tech companies a different question: Can you be more like Jane? Valuations crashed last year, layoffs spiked upward and growth prospects dimmed. Most of the 20 tech companies that went public on the Toronto Stock Exchange in 2020 and 2021 traded below their issue price. The S&P/TSX Capped Information Technology Index had its worst year since 2008’s credit crisis. Previously financed startups struggled to fundraise and are preserving cash; many could fail or be bought out in 2023.

Meanwhile, those that avoided the growth-at-all-costs bug and stayed profitable, like Waterloo, Ont.’s Magnet Forensics MAGT-T, Prophix Software of Mississauga and Jane, began this year poised to capitalize as their peers struggle.

“Jane is leaning in,” says director Maria Pacella, managing partner with Pender Ventures, an investor. Annual revenue has roughly doubled since mid-2021 to $60-million. Cloud-software companies that deliver a revenue growth rate plus profit margin of 40 are considered top performers. Jane, which has been profitable since its start, is at 60.

As others cut, Jane hired 100 people in 2022 (it now has about 350) and gave out raises. It made its first acquisition, invested to prepare for more US expansion and hired a chief marketing officer. It plans to launch a marketplace by 2024 to connect clinics and patients. “We’re interested in playing with spending while everyone else pulls back,” Ms. Taylor said recently.

On employee sentiment-tracking site Glassdoor, Ms. Taylor and co-chief executive Trevor Johnston have a 99-percent approval rating. Jane employee engagement survey responses are in the mid-to-high-90s to such statements as, “My manager genuinely cares about my well-being.”

Jane’s 113,000 practitioner clients are also content: Eighty percent of new business comes from referrals and Jane signs three accounts for every demo. Most software firms spend heavily on sales and marketing but Jane’s word-of-mouth is so strong it doesn’t have a sales force and spends little on marketing.

Many software vendors offer free versions to some users, but every Jane client pays for its online product, which handles scheduling, billing, insurance submissions, patient messaging and hosting of video appointments. Jane doesn’t lock in users for a year or more like other subscription software; it charges by the month. “That means we’ll quickly see if people are unhappy,” Ms. Taylor said.

“It’s rare to find practice-management software that people fanatically rave about,” says Matt Emery, general partner with Baltimore’s JMI Equity, another investor. “That’s what jumped out the most to us in due diligence talking to customers.”

Many startups raise $100-million-plus in venture funding to get to Jane’s size. By contrast, it has been mostly self-funded, raising less than $10-million in 2019 from Charlotte, NC-based Frontier Growth to gird its balance sheet for a recession. Jane has other investors, including Pender and JMI. But they bought shares from founders and employees, not Jane, which didn’t need the capital nor wanted the dilution.

When outsiders invested, Jane didn’t push for inflated valuations. In 2021, JMI bought $100-million-plus of stock from shareholders in a deal valuing Jane above $600-million, or 10 times projected 12-month revenue. At the time, many tech companies were commanding several multiples of that and Jane passed on higher bids. “Everyone kept telling us we weren’t aggressive enough on valuation,” Ms. Taylor said. “We weren’t interested in pushing it up to the highest bidder. We wanted to find a good partner and be confident we could scale the business responsibly without a ton of pressure to get a return that meant we had to sacrifice the business, the team or the customers.” Rather than trumpet the nine-figure deal like other startups, Jane just moved on.

If it seemed cautious before, Jane now looks prescient. “They did it old-school,” said Mr. Smith, the mentor. “They did everything the way you weren’t supposed to. They’ve proven me wrong and continued to grow” with little outside capital. “But competitors will notice” and move in.

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Jane’s founders didn’t set out to build a tech business, but a business business. Specifically, a small business, always careful to spend within its means, like those they worked for previously.

Mrs. Taylor, now 41, worked in her parents’ physiotherapy practices and started her own multidisciplinary clinic in 2011 in North Vancouver, her hometown, renting rooms to a range of practitioners, including midwives, naturopaths, dieticians and massage therapists. She looked for cloud-based products to handle online booking and charting, seeking “the only software a clinic would need to run its entire practice.” The options were mostly offline or clunky.

She asked Mr. Johnston, 43, a friend whose agency developed her website, to help. His firm had built a ski hill’s ticketing system and a site for bike maker Giant. mr. Johnston had also named many local condo towers. It wasn’t edifying work but gave him a feel for how to design user-friendly digital products. In six weeks, he built the foundation of what would become Jane.

When other practitioners asked to use the software, the pair decided to turn it into a business. A year later, they had an online app any health professional could use to digitize administrative tasks to run their practices – as Shopify does for merchants – drawing on her domain expertise and his product skills.

Other practice-management products had drab, literal names like Practice Fusion and Clinicmaster. Jane’s co-founders wanted a distinctive, personable, easy to handle. With “Jane” they could appeal across disciplines, unlike rival single-profession products such as ChiroTouch. “Our users are competitive so you would never use chiropractic software if you are a physiotherapist,” Ms. Taylor said.

People have asked Ms. Taylor if feminizing an administrative tool was sexist. “I’m proud Jane has a female name,” she said, talking of Jane like it’s human. “Do you know what a powerhouse Jane is, what she does? Jane is beautiful and capable and smart.”

By 2014, Jane was ready for market. First adopters were BC massage therapists who met the pair at a conference that March. Word spread; 21 months later they had 500 clients (Jane now adds 1,000 a month). Jane expanded geographically and across disciplines, adapting as it grew “to address major gaps in our product-market fit, the big category of things Jane didn’t do yet that we knew it needed to do for certain types of users to be able to use it,” mr. Johnston said. This year, Jane made it easier for US practitioners to file for insurance reimbursement and added picture-viewing capabilities for medical aesthetics practitioners who provide such services as Botox injections. It added a video appointment feature during the pandemic; mental-health practitioners flocked to Jane to hold sessions online.

mr. Johnston said at first “it never occurred to us” Jane was a tech company. The frank, low-key pair aren’t prophetic make-the-world-better-through-disruption types. Mrs. Taylor admits Jane has rivals and operates in a commoditized space. “Most of us” in subscription software “are just making something slightly better than what already exists,” she said onstage at Ottawa’s SAAS North conference in November.

They found much about the tech scene odd. That startups pursued venture capital before customers seemed backward; spending all your money from one financing to the next “was the most shocking idea when we heard it,” Ms. Taylor said. While accelerators talked about “filling the funnel” with sales leads, “nobody talked about whether you were keeping your customers,” she said. Jane hired only when she had the income for it.

Jane’s co-chief executives pride themselves on low customer churn. They listen to user feedback and actively monitor their online feature request site and Facebook customer groups, collaborating with clients to develop and test product add-ons. “If an idea gets enough momentum or Jane thinks it’s worth it, they will definitely make that feature happen,” said Jane customer Nick Meier, a Des Moines, Iowa, chiropractor.

They are well aware users are cost-conscious small businesses; that Ms. Taylor is one of them (she kept her clinic until last year) is part of the brand. Mrs. Taylor is sensitive to concerns Jane could become too big or corporate, like other practice-management software providers that have raised money and raised prices. The co-chief executives, who maintain voting control, say that won’t happen, and promise established clients will keep paying the same $74 a month for existing service, although newcomers now pay $5 more.

In 2022, tech companies were reminded that no matter how much they raise, how fast they grow, how much hype they generate, survival ultimately comes down to business fundamentals. Those already growing at a sustainable pace, like Jane, could better control their destiny as others tried to stay afloat.

Still, all the tech-layoff news has made even Jane employees jumpy. “I’ve always been cautious on spending so it’s funny that now when I say things like, ‘How are we going to pay for this?’ our people are like, ‘Are we in trouble?’ Ms. Taylor says. “Now I have to be careful I’m not scaring people.”