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Shawn Jenkins, CEO of Benefitfocus: Under the Radar, Flying High
To outsiders, Charleston, South Carolina, is mostly known for its historic downtown, horse-drawn carriages and beaches. Its reputation, still mired in history, does not include “hub of innovation.” But try to tell that to Shawn Jenkins, Founder, President & Chief Executive Officer of Charleston-based Benefitfocus. The company, founded in 2000, offers a platform to employers through which employees’ can access and control their healthcare benefits. Currently, it’s being used by an astonishing 89,000 corporate clients, with a total of 40 million users, in 26 countries.
With that client base, it stands to reason that somewhere, almost anytime during daylight hours—like while you are reading this story--someone is using the Benefitfocus platform to enroll in his or her company’s health plan, check on the status of a claim through eClaims, add a dependent, or check to see if braces are covered under dental. Somewhere a company admin is creating invoices via the platform’s eBilling invoice system. Somewhere a bean counter is creating an Excel report to show how much his or her company has saved in administrative and accounting hours by signing up for the Benefitfocus service.
In such, it’s hard to believe Jenkins started his career such a long way from software. A native of Florida, his first love is flying. After high school he went to Geneva College where he earned a degree as a commercial pilot and combined it with a business degree. After school he worked as a flight instructor, but never pursued his avocation as a career. He honed his organizational skills managing overseas mission trips for medical and construction teams. “I sent people into places like Kenya and the Soviet Union,” he said.
Ultimately, Jenkins knew he wanted to own his own business at some point so he set out to learn sales. “I was selling cars for a time and then sold some computers,” he said. Later he formalized his business education, receiving a M.B.A. from Charleston Southern University.
He joined American Pensions, the company of friend, and now business partner, Mason Holland in 1994. Holland had launched the firm in 1989 to consult companies on pension plans. Jenkins role was business development. “I bought part of the company in 1997,” Jenkins said. “We grew it and added technology and services which allowed users to do trade via no-load pension plans.” They created a platform which allowed employers to better manage their 401K plans via the phone, then via the Internet. Eventually, the company was sold to South Financial Group. Holland now serves as Benefitfocus’ Chairman of the Board.
“That is what gave us the idea to start Benefitfocus,” Jenkins said. “We wanted to build a similar software platform which would allow employees to manage their health benefits. We pitched the idea to a couple of our large corporate clients.”
The Color of Money: Blue
Their first client was the grocery chain Piggly-Wiggly. The company offered health insurance through Blue Cross Blue Shield. “Blue Cross had to send us the data,” Jenkins said. “They asked us to come up to Columbia [South Carolina], and talk to them about it. We hadn’t thought about the idea of selling the software to them. But after we sat down and discussed the platform, they said `Why don’t we give you all our clients?’”
Why not, indeed. Where do we sign?
Not too long after they struck a deal with Blue Cross, they turned to friend, Doug Moreland to shore up the technology side of management, bringing him in as a partner and Chief Technology Officer. “By the following March we had a dot.com,” Jenkins said. “We had a distribution channel. The cost of sales was low. We focused on profitability.”
Private Equity at the Gate
The initial deal with Blue Cross enabled them to launch the company without seeking venture funding. Even so, they could have used the money. “We wear the fact we didn’t raise venture money as a badge of honor now,” Jenkins said. “But believe me, we would have taken it back then. But no one wanted to talk to three guys building software in Charleston.”
Last year the firm did raise a modicum of money through local investors and Jenkins concedes it might be time to “put fuel on the fire.” “Private equity and VCs guys have been calling us for a while,” he said. Although he won’t share revenue information, he adds: “We think we have a billion dollar company.“ Recently, the company moved into its new headquarters on Charleston's well-known Daniel Island where Jenkins hopes to realize that dream.
In Search of Talent
The deal with Blue Cross allowed them to ramp-up, client -wise, quickly. But they had to find the talent to help handle the growth. To add to the challenge, Jenkins is committed to developing all the technology in-house.
“Our biggest constraint on growth is simply the low supply of engineers in Charleston,” he said. To address the issue Jenkins hired the head of the computer department from the College of Charleston so the company could “manufacture” its own programmers.
Last January the company brought in its first outside executive, Jerry Lapore, as Chief Operating Officer. “Everyone was reporting to me,” Jenkins said. “It got to be too much. Lapore came to Benefitfocus with a world-class background having worked for Microsoft in Global Services, at Aetna and as the Chief Technology office at Signa.
Until recently Jenkins also continued to be the major sales force behind the growing company. But last year the firm hired Paul Sparrow as Senior Vice President of Sales & Marketing. Sparrow had worked 10 years for Johnson & Johnson, and most recently worked for WebMD. He moved from Nashville to join Benefitfocus.
Overall, Benefitfocus employs 350 people at its headquarters and small sales staffs in 15 states.
“Employees own a fair amount of the company,” Jenkins said, “Which has been a good thing for all of us.”
Taking a Cue From You-Tube
Jenkins is not resting on his dogwood blossoms. Recognizing the growing power of broadcasting over the Internet, Jenkins recently poached Charleston local newswoman, Nina Sossamon to help launch a media division called BF Media. The concept is not entirely in-focus to an outsider, but the team, which includes a total of 7, hopes to create a healthcare portal to get information out to the consumer via different Internet properties, such as their clients’ web sites.
“Nina has been a friend of mine here in Charleston for a while,” Jenkins said. “She’s a mom and we would often talk about what we would fix in the healthcare system. Now we have the ability to speak directly to the consumer.” The primary focus will be to develop content around questions the general public has about the healthcare system, medical breakthroughs, and consumers’ personal stories.
Downtime
A single-dad, Jenkins hobby is his children, Alex, age 14, and Olivia, age 12. As a family, the three are often at the beach, playing cards and watching movies. “We are also into cars,” he said. “We bought a 1966 Mustang and are restoring it.”
As for Jenkins’ dream of flying? The company owns a Cirrus SR22. So while someone somewhere is checking to see what it will cost to add her newborn daughter to her company health plan, Jenkins just might be up in the Cirrus, maybe right now, while you’re reading this story, flying over the ocean, Daniel Island, or the historic district. No doubt, from Jenkins’ vantage point, the view of Charleston looks pretty good.
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