The difference between a successful startup and a failed one often comes down to a single pivotal decision. For Yuvo Health, that moment arrived when they completely inverted their revenue model to better serve community health centers.
In a recent episode of Category Visionaries, Yuvo Health CEO Cesar Herrera revealed how reimagining their business model transformed their growth trajectory. The decision wasn’t just about tweaking their offering—it required fundamentally rethinking how money would flow through their business.
The Original Model: A Traditional Services Approach
“When we first started and we first went to market, it was as what is called a management services organization,” Cesar explains. Under this model, Yuvo Health provided services and earned revenue through administrative fees paid by health centers.
But they quickly discovered a fundamental flaw in this approach.
The Reality Check: Understanding Resource Constraints
The wake-up call came during early customer conversations. As Cesar notes, “What we realized very quickly was that wasn’t going to be possible because our health centers are woefully under resource and they need access to the capital today.”
This insight forced the team to confront a crucial question: How could they serve organizations that desperately needed their solution but couldn’t afford to pay for it?
The Strategic Pivot: From Charging Fees to Bearing Risk
Rather than abandoning their market, Yuvo Health made a bold move. “That’s when we made this very significant pivot to be the risk-bearing entity to actually take on risk under value-based care, to contract directly with health plans and use those contracts with health plans to actually directly funnel value-based care revenue to our health center partners,” Cesar shares.
In simpler terms, they flipped their model: instead of asking health centers to pay them, they found a way to pay the health centers.
The Impact: A Win-Win-Win Scenario
The results validated their decision. “We’re driving cost savings to the health plan, we’re driving new revenue directly to our health center partners, and we’re creating sustainability to drive the infrastructure that we at Yuvo are building,” Cesar explains. “And at the end of the day, too, the other win is communities are healthier and our health center partners are able to then provide more access to care to people that need it the most.”
This new approach has fueled remarkable growth. From an initial pilot of 3,000 patients, Yuvo Health has expanded to serve nearly 40,000 patients in just two and a half years. “I don’t think that we would have been able to scale as quickly if we didn’t pivot to this model,” Cesar reflects.
The Lesson for Founders
Yuvo Health’s pivot offers valuable insights for B2B founders:
- Listen to early market feedback, especially when it reveals fundamental barriers to adoption
- Be willing to completely reimagine your revenue model rather than just tweaking your offering
- Look for ways to align your business model with your customers’ financial constraints
- Focus on creating sustainable win-win scenarios that benefit all stakeholders
Sometimes the most important strategic decisions aren’t about what new features to build or which markets to enter—they’re about fundamentally rethinking how value flows through your business model. For Yuvo Health, the willingness to make this shift has positioned them to achieve both their business goals and their mission of expanding healthcare access.
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