Revolutionizing Medical Spa Ownership: Unveiling CloudMedspas’ Profit-Boosting Solution

CloudMedspas, a groundbreaking brand in the Aesthetic industry, is transforming the landscape of medical spa ownership with its innovative solution. In an enlightening podcast episode, industry visionary Iggy Fanlo, the founder of CloudMedspas, joins forces with renowned entrepreneur Grant Stevens to discuss this game-changing business model. From mitigating risks to unlocking untapped revenue potential, this article delves into their insightful conversation and reveals how CloudMedspas is revolutionizing the way medical spa owners thrive in an ever-evolving market.

Check out some excerpts from their conversation or go ahead and watch the full webinar down below.

Excerpt #1: In the conversation, Ignacio Fanlo, the founder and CEO of CloudMedspas, shares the backstory and explains what exactly led him to come up with the idea of CloudMedspas.

Ignacio Fanlo:

In the past, the hair salon owners would pay for the marketing cost, but the customers were with the stylist, and when the stylists moved. They went with them. So I was like, this is really weird. And this is what’s happened. It’s moved more and more to rental. And I said, this is the exact same dynamic in medical aesthetics. The exact same dynamic where the Med spas, and I’ve talked to some of the large mid-sized chains or groups, they’ve said to me, their biggest problem is HR. It’s not necessarily getting patients, it’s keeping the top injectors the top providers. So I was like, this is a perfect model. The rental model will move to medical aesthetics. It’s inevitable. 

 The margins are amazing. So this is an amazing financial opportunity. My marketing vocab. CAC LTV, maybe, you know, customer acquisition costs versus lifetime value. Every marketing person will say, what’s your customer acquisition cost and what’s the lifetime value of the customer?

Grant Stevens:

Right?

Ignacio Fanlo:

And there’s this really weird thing that I saw in the hair care industry, and it applied here, too, in medical aesthetics. And that is that 20% of the hair care business is now a rental model where people rent the chair, rent. 

Grant Stevens:
The booth, the cutters.

Ignacio Fanlo:
Yeah. Stylist.

Grant Stevens:
I’m sure it’s over 20% here, man.

Ignacio Fanlo:
Okay.

Grant Stevens:
Everybody has their own chair, right? They rent it.

Ignacio Fanlo: 
And the reason they do it is this. CAC LTV. In the past, the hair salon would pay for the marketing cost, but the customers were with the stylist, and stylists moved. They went with them.

Grant Stevens:
Yes.

Ignacio Fanlo:
So I was like, this is really weird. And this is what’s happened. It’s moved more and more to rental. And I said, this is the exact same dynamic in medical aesthetics. The exact same dynamic where the MedSpas and I’ve talked to some of the large mid-size chains or groups. They’ve said to me, their biggest problem is HR. It’s not necessarily getting patients. It’s keeping the top injectors the top providers. So I was like, this is a perfect model. The rental model will move to medical aesthetics. It’s inevitable. I hope it’s Vansanity. I think it’s Vansanity that’s going to make it happen, but it will happen with or without us.

Excerpt # 2: In the following excerpt, Ignacio Fanlo is introducing an innovative approach to running a profitable medical spa business. He also addresses the problems associated with medical spa ownership and explains how this new approach eliminates them, while ensuring predictable and exponentially growing revenue flow for both Medspa owners and providers.

Grant Stevens:
Now tell us what you do.

Ignacio Fanlo:

Yeah. So the first thing we started with, I’ve always wanted to make across the country, across the globe with this idea, but it didn’t exist. I kept looking around, there must be somebody who’s done this. And the reason I don’t think they had done it yet, not that somebody hadn’t thought of the idea, it’s just about Critical Mass, because unless there’s enough providers and enough demand for this kind of rental model and aggregating, it doesn’t really make economic sense. It’s kind of like Uber. There’s not a lot of drivers and not a lot of riders. You need density. Vansanity right now is a location in Boston and Dallas where a provider, nurse practitioner, doctor, or esthetician, can come in, rent rooms, rent machines, get prescription products at wholesale, and do it by the hour. 

Grant Stevens:

So it’s kind of WeWork . Kind of  WeWork a little bit. 

Ignacio Fanlo:

Yeah. 

Grant Stevens:

As a physician, I could come and rent space from you. 

Ignacio Fanlo:

Yeah, you can come and rent or. 

Grant Stevens:

If I were an aesthetician, yeah, if. 

Ignacio Fanlo:

You’re legal, you have a medical director, you have your malpractice insurance, you could come in and say, I’m going to rent 4 hours today. I’m going to bring eight clients through. You can buy Botox from us or Dysport or others do. 

Grant Stevens:

I pay you by the time by the hour. So it’s by the hour. So it’s not a percent of my revenue? 

Ignacio Fanlo:

No.

Grant Stevens:

So if I make a lot or a little, I just pay you by the time. 

Ignacio Fanlo:

We have many nurses, I’m not kidding, who make $300 an hour. And you could do the math. Right. A botox treatment, $500. 

Grant Stevens:

No, I get it. 

Ignacio Fanlo:

Yeah. 

Grant Stevens:

And you’ll sell the product. Or if they bring their own product. 

Ignacio Fanlo:

In, they can bring their own product in. We have a group called Vansanity Medical Services. It’s owned by physicians. It’s a sister company of ours. 

Grant Stevens:

Okay. 

Grant Stevens:

Do you have devices there, like lasers and so forth? Do you then rent them in addition to the yeah. Okay, so walk me through that. 

Ignacio Fanlo:

Sure. 

Grant Stevens:

Let’s say I want to do a BBL halo Sciton. 

Ignacio Fanlo:

Yeah, we have one. 

Grant Stevens:

Okay. 

Ignacio Fanlo:

We have the jewel X. 

Grant Stevens:

Perfect. 

Ignacio Fanlo:

And if they want to do a halo, they buy the halo tip from us, and they rent the machine for the hour. They rent the room, they go in, they do their treatment, probably charge $1,500. And between the room and the tip, maybe they pay us 400, 500. And so they pocket $1,000. 

Grant Stevens:

And off they go. 

Ignacio Fanlo:

Off they go. And it’s their own business. They even charge their client, whether it’s Venmo or Square or they have a card they use or whatever. But people go in and essentially, what I think of this model, I know it sounds a little too I call it a CloudMedSpa. 

Grant Stevens:

Okay. 

Ignacio Fanlo:

And the reason is this is my theory as a finance guy, is that cloud everybody thinks it means tech. It isn’t. The first cloud was electricity. All cloud is rentable scalable and on demand. So before you used to have your own fire, your own whale oil, and lanterns. Now you can just turn it on and off when you want. You rent it by the kilowatt, and I can do 1 kw, or I can do 1000. That model. Then Jeff Bezos and Amazon took it to computing. They took it to storage. Now, there’s even I think it’s Travis Kalanicki from Uber. He’s the CEO. They did it with kitchens. Now, I don’t know if you’ve heard of cloud kitchens. 

Grant Stevens:

I have. 

Ignacio Fanlo:

All these things are whether it’s electricity or kitchens or its capital expenditure fintech. It’s about taking someone’s capital expenditure needs to start a kitchen, start a restaurant to start to create their own server rooms, and saying, no, just rent it by the hour. In fact, at the company we sold shopping.com for $675,000,000 of our 350 employees, we had close to 120 doing network operations, meaning they were in three different locations around the world, putting in servers and racks. You could do it with five people now with AWS or Google Cloud or Azure, Microsoft, you could just turn it on and off. So you’ve taken all that expense out, buying your own Compute, buying your own servers, buying renting your own space. That’s what they did. We’re trying to do the same thing for Medspas because it’s such a great business. 

And these providers and it’s 95% of providers are now their own boss, and I will send it to them. They’ll be so excited. They’re working one day a week and making $4,000 in one day. I mean, making a quarter of a million dollars a year, net. They probably have some marketing costs working, I don’t know, probably 30 hours a month. And I love it. I love it. 

Grant Stevens:

So you’re not responsible for any of the marketing or patient acquisition or any of the metrics or analytics. You rent the space and or the supplies. The consumables, be it capital or injectable exactly. And where’s the liability lie, the liability. 

Ignacio Fanlo:

Lies with them because we don’t even know the patient’s name. 

Grant Stevens:

Do you share any liability? 

Ignacio Fanlo:

We have some. 

Grant Stevens:

Are you, like, a renter? Are you a landlord? 

Ignacio Fanlo:

Yeah, we’re more like a hotel. 

Grant Stevens:

Hotel? 

Ignacio Fanlo:

More like a hotel. But the interesting part I wanted to talk about, too. Okay, I’ll go back to it, I’m sure, is we really want to become a management services organization. 

Grant Stevens:

I know a little bit about MSO. 

Ignacio Fanlo:

Okay, there you go. So we can start one in Boston, we’ll start one in Dallas, like we did LA. Chicago, Florida, Atlanta, but we could scale this 1020 times faster. And we now have had, like, three or four people have contacted us saying, Can I franchise you? And I was like, no, I’d rather do an MSO. I don’t want to get into the brand stuff. I don’t want to get into the geography stuff. What I’d love to do is, here’s all the tools. We have a proprietary software app, this large buying group that’s getting lower and lower prices. We have these relationships with a couple of the machine manufacturers who have, I have convinced them we’re so small. I think it’s a small risk. 

I can’t say who they are under NDA, but a couple of the top manufacturers have, I’ve told them, just like software moved to SaaS your machines, you should move to mass machines as a service. You should be renting these things by the use not $100,000 machine or whatever the price is, you rent it for 100, $200 a use. The amount of people that can use it will explode. It is the story of technology. It’s lower the price, explodes the application. And so that’s my goal, is if we do an MSO, a management services organization for Vansanity, instead of having five or ten locations, in a few years, we can hopefully have hundreds of others with their brands, their businesses, and they create little, if you want to call it We Works, but they create their little rental groups. They can make great money. 

They empower their providers, their provider clients, like we do. They’re making great money. And we’re just like a Marriott taking a little bit for providing software in the platform. 

Grant Stevens:

Right. This is unbelievable. So you now exist in two locations, correct? 

Ignacio Fanlo:

Boston and Dallas. And we just opened Dallas not even five weeks ago. 

Grant Stevens:

And where’s your funding coming from? 

Ignacio Fanlo:

It’s friends, family, and myself and a couple of partners. 

Grant Stevens:

Are you going to do a raise or you have a series? 

Ignacio Fanlo:

We’re looking at doing one now because. 

Grant Stevens:

You’re talking about going to many other cities. It’s going to be all friends and family or angels or how are you. 

Ignacio Fanlo:

Going to do well, the beauty is when you do an MSO, it’s super Capital light because we’re not doing the leasing, we’re not buying the machine. We’ll put the machines in that do per use. So there’s no capital to us. We’re not renting the space. This is a software service. 

Grant Stevens:

Wait, you’re renting the buildings, aren’t you? 

Ignacio Fanlo:

No. 

Grant Stevens:

Who’s renting the buildings? 

Ignacio Fanlo:

So I can’t mention the name, but we have a medical director in Arizona, we have one in Massachusetts. Another person here actually in Manhattan Beach that used to be in Boston, is looking at opening one. She works with us now in Boston, and she’s like, I’m moving back in the next six to twelve months. They’re basically people that either have a group of injectors that they know, but what’s even better is either an existing MedSpa or a medical director who has 20, 30, 50, 70 injectors in their group. And we’ll say, Listen, you just have to open a space, outfit it, and we’ll provide all the rest of the infrastructure, all the other infrastructure. It’s kind of like Marriott, right? You do the hotel and we’ll make it happen. The key is bringing the providers. That’s another thing I realized. 

Unless you are world-class at something or it’s incredibly strategic, you shouldn’t do it. And we’re not world class attracting providers. We’ll do it if we have to, like we had to in Boston, Dallas to prove the concept right. But I’m sure there are people in Manhattan Beach here, either a group of injectors or a Med spa. I’m sure there’s people at the top, at the bottom that go, hey, this is a better model. I’ll never have to worry about people leaving me again. Because it’s like Amazon Marketplace. People don’t know this Amazon Marketplace. I’m going to get the number slightly wrong, but it’s more than 90 and less than ten. So something like 7% of the merchants do 90% to 95% of the sales on Amazon Marketplace.

Grant Stevens:

Is that right? 

Ignacio Fanlo:

It’s a complete power law. And it’s because the cream rises and we see it not 97, but 80 20 for sure, maybe 90 ten. The best providers that do the best marketing, that provide the best service, the Hustle get the lion share of the business. And so you don’t have to be the HR filter. It sorts itself out. The best ones are killing it, renting rooms, and they’re psyched. And the more we grow, the lower our prices get. And so the more and more money. 

Grant Stevens:

They make and the more affordable it is for everybody. 

Ignacio Fanlo:

Exactly. It’s just a win. 

Grant Stevens:

So you have two locations now, right. And you’ve talked about many more. Where are you going to go next? What’s the future look like? 

Ignacio Fanlo:

We would consider I guess I’ve heard it described as the smile of the country. 

Grant Stevens:

The smile states the Bay Area up. 

Ignacio Fanlo:

To DC or whatever. So that’s where I think you’ll end up going. But like I said, we really want to go. MSO. Hard, could we open a couple more? Sure. I mean, I wouldn’t be averse to it and I like having one or two because I like to say, you want to eat your own dog food? I got my own two dogs. Because when you eat it, you feel all the pain. 

Grant Stevens:

Yes. 

Ignacio Fanlo:

So it’s good to keep your toe in the water, but at the end, I’m old enough. You want to help people, right? Like I said, get back to helping people. We can help 5, 100, 200 providers in a location, maybe a little more, but if we do it with an MSO, we can help thousands. We won’t make as much money, but that’s okay. We’ll make it with a lot more money, a lot more people. So it’s good for us. But they’ll be completely empowered. Completely empowered. And I think that’s a trend. We’re kind of going back to the future with this whole gig economy. It reminds me of like the old butcher, baker, candlestick maker, the heart what’s, the guy, the blacksmith. This was the way of 200 years ago. That’s what we’re going back to. 

Grant Stevens:

This is going to be very disruptive for the physicians that have their own meds bus. 

Ignacio Fanlo:

No, they can be part of our MSO. 

Grant Stevens:

Sure. But if they’re existing right now in the workplace and they have their employees, this is going to pull their employees away from them, isn’t it? Independent entrepreneurial employees. 

Ignacio Fanlo:

I hope the smart ones will say, you know what, let me join the MSO. I’ll have less headaches because I won’t have to and I’ve heard this from several I don’t have to spend all my time, energy incentives chasing those top 10, 20 percent injectors. And then the bottom ones, I’m trying to figure out transition plans and that’s a headache. And then I got the folks in the middle that are just kind of getting by. I’m like, let it sort itself out. Why do you want to? It’s kind of like  America. It’s. Bottoms up versus Russia. It’s top-down doesn’t work. Top-down doesn’t work. 

Grant Stevens:

Right. 

Ignacio Fanlo:

Let it be bottoms up. And this is a bottoms up model for Med spa. So I hope that the smart ones will say, hey, HR is a big problem for me. Let me do it this way. They won’t have to spend as much on HR. They won’t have salaries, they won’t have the fixed cost. They could have like one person there at like a front desk, 20 rooms, a few people cleaning up, and that’s it. They probably make as much or more money. 

Grant Stevens:

Who the owner of the Med Spa? The Med Spa. 

Ignacio Fanlo:

Net. Not gross? Yeah, but the net, I think you’re right. They might make about the same with a fraction of the headaches and the world sorts. Itself out. The best ones keep being the best ones. 

Grant Stevens:

So how will people like myself get a hold of you and get involved in this? Let’s say I wanted to switch my Med Spa over to your model. 

Ignacio Fanlo:

Yeah. 

Grant Stevens:

How would I get a hold of you? 

Ignacio Fanlo:

iggy@vansanity.com  I-G-G-Y. We’re a small company. We’re less than ten employees right now because we’re just proving the concept. And the MSO, we hadn’t even marketed it. People just came to us. I got one on the plane right over here from a gal in Atlanta. 

Grant Stevens:

Do I get my commission? 

Ignacio Fanlo:

Absolutely. Seriously? 

Grant Stevens:

You were flying out here from Washington, picked up another client. 

Ignacio Fanlo:

I didn’t even know it when I looked at my email, I got a message on LinkedIn from someone from Atlanta, said, hey, I want to talk to you about that  brilliant franchise. And I’m like, well, they don’t even know I was going to do the reveal here on the MSO because it’s not our website. Our website looks like it’s just the locations. 

Grant Stevens:

Okay. 

Ignacio Fanlo:

So the MSO is literally it’s percolated. We’ve been building our own proprietary software stack for about 15 months. 

Grant Stevens:

Okay. 

Ignacio Fanlo:

We burned it in Boston and now Dallas. It works. We’ve got, I think, 95% of the kinks out, and now it’s time to take it on the road. And we thought we were going to have to market some of it, and people are coming to us. In fact, I would say that sale has been easier. And my suspicion, and it’s only a suspicion, is that the MedSpa owners, the entrepreneurial medical directors, the entrepreneurial docs, they’re business people already. 

Grant Stevens:

Right. 

Ignacio Fanlo:

And having this conversation, a B to B sale with them is a straightforward conversation, and they get it. Whereas trying to get someone who’s an employee and  dissatisfied and moving to this model, from being an employee to entrepreneur, they want it, but it’s a leap. It is a leap for them. And so that’s been they want to do it, but you got to handhold them along the way. A lot of it. And it’s super satisfying when it works, but it is a lot of work. Not so much for me, but for my colleagues. But with the business people that own the Med Spas, that are the medical directors, that’s an uphill slope. Okay. So I think my suspicion is that will move much more quickly and we’ll reach more and more people. 

Ignacio Fanlo:

And probably because of this and because of you, I hope we get a big swing. 

Grant Stevens:

How long have you been doing this? 

Ignacio Fanlo:

The kernel of the idea was at that Oscars night in 2018. 

Grant Stevens:

Okay. So about four years total. Three to four years? 

Ignacio Fanlo:

Yeah. We incorporated in 2019, and we opened our first place, and our timing was impeccably bad. Again, we opened the Boston location in Q4 of 2020. 

Grant Stevens:

Well, if nothing else yeah, exactly. 

Ignacio Fanlo:

It’s hard. 2019 so we got COVID. We were hit by COVID. Within almost weeks of opening. We muddled through and we’ve grown very quickly. Last year versus 2020 was like, five X and wow approaching a million dollars. So it’s working even in the face of that. And so this MSO thing, I’m just super excited about it because it’s super exciting to see that ride. I mean, that’s a drug I love. Now I’m on that entrepreneurial drug. And yes, boy, it’s up and down and up and down. People come and they want to be entrepreneurs. I go, you better strap in, baby. One day you’re going to be on top of the world, and the next Saturday, you’re going to feel the things going in the toilet. 

Excerpt # 3: Ignacio delves into the mechanics behind this groundbreaking approach, uncovering the hidden realm of transaction costs. He also explains why this business model is viable in this day and age.

Grant Stevens:

So transaction costs are nil, right? 

Ignacio Fanlo:

They are approaching nil. They’re getting lower and lower. So you don’t need to have people in one corporation. They’re going to atomize. And that’s what’s happening with the gig economy. That’s where I come back to it. That’s why I believe this trend, when you reduce transactions costs, you reduce the need for the firm. In fact, going back to Jeff Bezos, a man I’ve met once or twice but doesn’t know who I am, but I met remarkably. I just admire him greatly with his thinking process. What he did with the cloud, I believe it was 2006 or seven, he created essentially internally, separate companies. So they were all under the Amazon umbrella. But he said, act as if they’re a customer. The only way you guys can connect was through an API, an application program interface. 

Grant Stevens:

Right? 

Ignacio Fanlo:

He goes, you don’t have a captive customer, because if you have a captive customer, you’re going to get lazy and fat and stupid. And so he’s atomized. Within Amazon, they are customers of each other, but arm’s length. And that’s just a first step, I think that’s going to keep happening and happening. And you call it consulting. I believe it’s because people will have the tools. You’ll be able to do marketing, you’ll be able to do communications at the individual solopreneur level. 

Grant Stevens:

Okay, what period of time do you think that’s going to take? 

Ignacio Fanlo:

Oh, it’s going to take generations to happen. 

Grant Stevens:

Oh, generations. 

Ignacio Fanlo:

Generations. But I will tell you, COVID has accelerated. Sorry, I didn’t mean to point at you. No, that’s fine. COVID has accelerated. You’ve heard the great resignation, and the number of applications for LLCs has exploded. Right. What COVID did, and it was funny, when you’re an entrepreneur, when you go do a slide deck, one of the required slides is competition. 

Grant Stevens:

Right? Of course. 

Ignacio Fanlo:

As an entrepreneur, I will tell you the number one competition I’ve always had for a disruptive company is status quo. 

Grant Stevens:

Yes. 

Ignacio Fanlo:

It’s always the number one competitor. 

Grant Stevens:

On his own schedule. 

Ignacio Fanlo:

A generation is like, I don’t want to be nine to five. I mean, there’s something to be said about the social aspect of work. I think there’s something that we need to rethink. I don’t know how we bring that in, but you don’t need to be there 40 hours a week at the office. There’s going to be some change there. And I think all these things are kind of ground-shifting on all this stuff. 

Grant Stevens:

No question about it. And COVID certainly brought it to the forefront, right? 

Ignacio Fanlo:

Yeah. 

Grant Stevens:

Because working remote and all the zooms. 

Ignacio Fanlo:

Yeah, exactly. Zoom.