This Week in Startups - Hims & Hers CEO Andrew Dudum on the future of healthcare post-COVID, starting a company to SPAC’ing in 36 months | E1181

Episode Date: March 3, 2021

Check out Hims: https://www.forhims.com Check out Hers: https://www.forhers.com FOLLOW Andrew: https://twitter.com/andrewdudum FOLLOW Jason: https://linktr.ee/calacanis

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And Rippling. Rippling helps thousands of fast-growing startups automate their HR and IT, from their team's payroll and benefits to devices and apps. See how at rippling.com slash twist. Hey, everybody, welcome to this week in startups. We've got a great guest today on the program. Andrew Dudum is with us. He founded a little company that you may have heard of called Hems and HERS for Hems.com, for hers.com and their ticker symbol is H-I-M-S.

What people may not know is that this company was part of a startup studio. If you don't know what a startup studio is, oh, it's kind of like a weird combination of venture capital slash entrepreneurship slash incubator where a group of individuals create projects and then spin them out, try to find people to invest in them. And typically what happens is these all fail. Startup studios have a horrible track record of not working. But when the more typically one company works and then it becomes so big that it's very hard to work on the startup studio, I suspect, Andrew, that's part of what happened as part of your story. Tell everybody, how did you start Atomic?

And then which project in your startup studio was Hymns? And then what happened after Hymns blew up? And welcome to the program. Yeah, thanks, Jason, for having me. You just, I've been building companies for about 15 years. I started. I was an undergrad out in Philadelphia at Warren. And I was spending most of my time trying to get engineers to build projects for me

over at the engineering school as opposed to showing up to finance classes. So ended up dropping out after sophomore year and moving to San Francisco and building a company who was an early Sequoia company and selling it to Telefonica. And then kicked off Atomic, which was this venture studio with my partner, Jack Abraham. And the idea there was really simple, which was, you know, we'd built companies before. We'd worked with great investors in the Valley. The best people we'd worked with had amazing investor pattern recognition. And if you could combine that type of venture capital pattern recognition with operator pattern recognition,

we felt like you'd have a much higher hit rate at building companies that are actually going to succeed instead of the, you know, what, five or 10 percent of startups that ever have a chance. So starting in 2013, we launched that first fund. there was about $100 million fund with Peter Thiel and Mark Andreson is kind of the core LPs. And we started prototyping and testing ideas. We probably did 20 to 30 tests a year. Landing pages, go to market tests, calling up pretending to sell things that didn't exist, tracking all the data. And then from that, narrowing it down to three or four different companies that we'd invest in.

And then start to kind of build, as you were mentioning, and try to spin out as real companies. So, you know, it's really beautiful about the model is that you get really good at understanding relative customer demand across companies, right? You see so many different inputs from customers, what they love, what they're interested in, what they're willing to buy and not buy. And starting around 2015 and 16, this whole concept of, you know, everything is on demand, everything is accessible for my phone, everything is price transparent, except things when it comes to my health, was just really, an idea that we couldn't get out of our head. Why was it that I could get a car, I could get food, I could get clothes, but I couldn't get a doctor on demand to talk to. I couldn't get that product I want shipped to my door.

I had to go wait in a line for three weeks or three hours after waiting three weeks to actually talk to a doctor to get access to this stuff. And I think that was really the moment of Hems and Hers was we want to empower people. We want to give them control of their health care. We want to give them the control to. to buy products and talk to specialists, just like we have control in every other part of our life. And so we kicked off that project. We raised a couple hundred million dollars really quickly. You know, the company is only 36 months old from founding until IPO.

And so it was a really quick journey. Wow. And I decided to go and participate and run that company once we started it. And this journey to go public, you did it through a SPAC, I understand? We did. We partnered with Oak Tree Acquisition. Corp. So tell me about that process. And then what was the revenue when you when you spacked and when you started thinking about going public and how you made that decision?

Yeah. So we started thinking about going public probably about two years ago, which is really early in the company's life cycle, but we had gone from zero to, you know, approaching $100 million after just a year and a half, two years. And so, you know, with our business, it's a 76% gross margin business, 90% of the business is recurring revenue. So it's a really predictable, slow and steady growth. And it's not that slow, but it's just a very linear and consistent. And so we started planning for it early. We're fully expecting the traditional IPO process, because it's all I'd ever heard of, and all I'd ever really known. And our board is made up of very traditional investors in the Valley, and that's what they had known. And so as we were

starting to prep, we also started to hear from SPAC, you know, people coming to us and telling us the benefits of this structure. And we went through this four or five month process of just learning about learning about the whole thing. And I think ultimately walked away with saying, hey, that seems far more efficient, far more affordable in a lot of situations when you take into consideration,

this expensive pop and the bubble and all that that gets built in. And then also we get this, the opportunity to partner with really smart people through the, through the whole process. So we ended up partnering with Howard Marks at Oktra Acquisition Team, which is, you know, he's an amazing investor, amazing organization to help us go public.

And so we decided to go out. And in our first year out, you know, which will be this year, we kind of put out there about 140 million roughly in revenue projections for the year at a, you know, 70-ish plus percent gross margins. So I think, you know, really hardy business, but also really young in that now people can invest in our growth because we're so early in our life cycle. When you have a 70 percent margin business, that's the gross margin or is that at the end the day. In other words, that's gross margin. So you're pouring that back into growth, is that

right? That's right. That's right. I think we're in, you know, the beginning phases of the next five and ten years where everything in healthcare is going to be going through a brand like him's and hers. No one's going to be waiting three weeks for an appointment. They're going to pick up their phone, click a button, start talking to a doctor, start kind of triaging who they should be in contact with. And so all of, you know, the business is really about forward-leaning how do you contact more customers, show them the benefits of him's and nerves, how do you launch into more conditions, you know, sleep, mental health, primary care, anxiety, and depression, all of these new things people need,

and how do you make it accessible and safe and affordable from the phone? So that's really where we're investing in. And it's just because we think the next five and ten years is such a big opportunity in front of us. And what do you, when you look at this, you're doing specifically erectile dysfunction, hair loss, sexual desire for women. And these are all drugs that have moved on to the generic marketplace. Is that the major innovation here is to wait for the drugs to move on to generic? And is that a major part of this or does it even matter?

No, that's a big part of it. You know, I think there's a few things that really have helped unlock this business. The first is that you can now safely provide telemedicine from your phone. This was not something five years ago that was even legal. Right now doctors can text message you. They can email you. You can send them a photo of your skin and they can evaluate it and then prescribe you some type of compounded trinanone for your acne, right, all via back and forth messaging.

So that opens up access in that anybody in a country can now talk to a specialist, right? They don't have to drive an hour or two. So I think that was the first thing. And that's really taken place in the last few years. And Teladoc, you know, the $40 billion public company has really helped. charge ahead in pushing that regulation. And then the second, from a price standpoint, you know, there have been so many medications that have been prohibitively expensive for a very long time.

You think about Viagra, as you were mentioning, that was $65 per pill. $65 per pill? That's right. That was the cash pay. That's a big cost for a good time. It's a lot of money. You have to start thinking really carefully if it's worth that. You know, $65.

So many jokes. So many jokes. Totally. So, you know, that price point, when you think about, you know, Pfizer and Viagra, there was a reason the marketing for Viagra was always, you know, older men, mostly Caucasian, on the beach with their beautiful white wife. Because it's the only group that could ever afford that medication. Wow.

I never understood that. That makes total sense. That's why they were going out for them. That's right. So now you have this world where things like propitia for hair law. L'ABA for sexual dysfunction, Tretanoin for things like acne and anti-aging, even frankly SSRI medications for anxiety and depression,

these are now cents to buy, right? And so you can offer them for cheap, affordable, $10, $20 a month price points, which just gives access to a whole group of people that otherwise never had a chance together. I saw some, I don't know if it was a Y Combinator company or something, was doing those anti-anxiety drugs basically it was kind of like

Hams. I forgot the name of it. You probably know it but there was somebody who was doing it just for people who have a problem with speaking in public to calm them down and do that. Did you offer those pills yet? I mean, would that be Xanax or something? What would that be? You know, it's not, there's a lot of options. Beta blockers are a really common medication

that are used for public speaking. Musicians, artists, politicians. It's a little known secret to a lot of people. It's an off-label use, but it's a very common off-label use by physicians. And so that is something that we see on beta blockers right now, Andrew. You know, I'm on beta-blockers probably every other day. So it's, you know, they are very helpful for me in my life at this point. Oh, really?

I meant it as a joke, but you're being serious. No, they literally, what they do is they keep your heart rate calm. So if you are doing an earnings call, you're doing these things, it's just, it just allows you to speak without any chance of kind of, kind of, body interaction. Huh. And this is, you're saying, celebrities use these.

I'm very good in front of people, so I don't have these, but I did used to get nervous on flights for a little while. Yep. But these probably wouldn't do a good job of that. That's probably more on the anxiety side of the house. This really is more for kind of that clammy feeling you get in your hands or your heart racing a little bit.

All right. When we get back from this quick break, I want to know how life has changed. now that you've gone through your SPAC and now you're a public CEO as opposed to running and a startup studio or a high growth company. Now you're open to the public, open to that scrutiny. You got shareholders. And let's face it, it's a really, you're a high profile company.

And we have all these stonk traders from Reddit and Robin Hood. It's a different world even than I think maybe even you anticipated in terms of going public so I want to hear all about what it's been like and we'll talk about that when we get back on this week and startups from websites and online stores to marketing tools and analytic Squarespace is the all-in-one platform to build a beautiful online presence and run your business with Squarespace you can blog or publish content easily promote your business announce upcoming events or special projects sell products and services of all kind and more No matter the problem, Squarespace is the answer because they have beautiful templates by world-class

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Andrew Dudum is here. He is on the Twitter, Andrew D-U-D-U-M. Podcasting a big channel for you? Is that the best channel for you? It's a good channel for us. We have money. For people that know the brand, they've seen us all over the place. You've got New York City subway stations, urinals,

and SF Giants or San Diego Padres or going to the bathroom and ads right in front of you. So we like to be kind of creative in finding our target. What's the best marketing channel these days? Are podcasts blown out now? Too much podcast advertising going on?

Too hard to get onto them? No, I think podcasts are still great. You've got a long tail at this point, right? There's so much content being created so frequently. And you have really committed, loyal customers, right? They love listening and they live and die by it. And so I think it's a great way for people to hear about things that the host trusts and oftentimes they use.

So I think there's an amount of authenticity there with podcasts that's still really precious, I think, in that world. Now, maybe five years from now, it will get blown out way too much, but at this point, it's still really valuable. Yeah, it seems like it's a really great marketing channel for certain products, SaaS products, subscription, any subscription, a consumer or otherwise, you have a lifetime value. What's it like being public now after this epic run to $140 million run rate in 36 months? You know, it's exciting to me, to be honest.

I think, you know, we have built this company from the beginning as a company that has the fundamentals to be a great public story, right? It's a brand that I think people love and can resonate with. It's provocative in a lot of ways. It's authentic. It's raw. It's encouraging people to take care of themselves and be well. And sometimes that means it's, you know, a little bit spunky and how it does it. Right. It's, it's got fundamentals of a great public business. You've got, as we're talking about, you know, 76% gross margins in Q3 last year, 90 plus percent recurring revenue and really, really fast revenue growth. Like, you just don't see companies that have that type of economics where you're not burning money on fire, but it's actually growing really

fast. And then lastly, it's a business that from a vision standpoint, you know, you're in the first inning of an incredibly long baseball game, right? Like, there is no way in five years from now, we're going to be making appointments for doctor visits three weeks from now, and then we're going to drive an hour and wait in line. It's just not going to happen. And when you talk to the younger demographic, the kids in their 15, they're in their 20s or in their 30s, they are already all over this. You know, their expectations for what health care looks and feels like is so different from people in their 40s, 50s and 60s that you just get. You know, they're already. You know, they're give it time and everybody is going to accept healthcare as a business and brand like

him's and hers. And so that ability to build a great business, but also tell this fun, long-term story. I mean, I'm 32 years old. I plan to run this business for a very long time. Being able to share that with the market and talk about the enthusiasm of what health care can be has been a ton of fun for me. I think it's really excited a lot of investors. And I think it's a very rare combination of long-term vision and a business that actually

works really, really today. So technical question, when you use these kind of services, you take the survey that a doctor would do in their office. The doctor would ask a bunch of questions and then decide if this medicine was right for you and then give you a prescription. Here, people go online, they fill out the survey. The survey is standardized. So that means you would have better compliance than even a doctor asking because a doctor might forget to ask a question or two. So you have this nice standardization there. But then how does the doctor get involved. And I think the critique people would have of this business is that you're losing that firsthand, you know, interaction with the doctor. So how many doctors do you have?

Are they on staff? And then how often do they actually pick up the phone and talk to somebody? Is it all done over SMS or is it all done over this web interface? How does it work? How many doctors service? How many patients? And I think that's the only thing people would ever say critical of this online consultation is, oh, you're not talking to a real doctor. But you are talking to a real doctor, correct? Yeah, you're absolutely talking to a real doctor. It's just simply through the internet. That's really the only difference.

And I actually think, Jason, to your point, what I've seen is the ability to see patients with clinical excellence is so much better in a digital world. If you think about it, like what is not better when you can track it, when you can have transparency into prescribing behavior, when you can see what people are submitting, right, you have this standardization that allows, I think, for actually higher quality medicine in a lot of situations and standardize it. So if you live in rural Nebraska, you can actually talk to and get the best treatment for, let's say, melasma, as if you were living in New York City and walked across the street to a cosmetic dermatologist. So there's this,

there's this huge access, you know, standardization. that's amazing. And so we have about, you know, three, 400 doctors on the platform at this point. They're specialists in different conditions, dermatologists, primary care, internal medicine, emergency room docs that you get connected with the second you go onto the platform and you submit all your information. And then for a lot of conditions, people will jump on the phone. They'll jump on a video chat. They'll have a 45-minute psychiatric consultation if they're talking about anxiety or depression or they may jump on the phone and say, hey, I'm reviewing your about your acne? Can you send me some more photos of the left side of your cheeks so I could

evaluate if it's cystic versus hormonal? So they're actually having the exact same conversations you would have in person, but you're doing it via video, via phone, via messaging. And in a lot of situations, that just makes it easier for people. So the doctors become consultants for you. And when you have orders come in, you just route it to the next available doctor. Is it like sort of that has that expertise? Yeah, we're a platform. So you come in, you live in San Francisco, you're worried about acne, we're going to tee you up with the leading dermatologist that is available on the platform right then and there so you guys can connect and then work on that issue. What does a doctor get paid for doing one of these online

consultations and what does the median mean, you know, time that they take to review it? It can't take more than 15 minutes to do one, right? You know, it's really similar to what you see in person care. You know, so doctors, what we'll do is we'll pay doctors an hourly rate on the platform. The same that they'd get paid in that local geography. So it might be $100, $150 an hour. And so they're getting paid the same amount, but they really prefer it because, you know, like everybody else, they like working from home too. From home too. Yeah. I mean, they're walking their dog. Four or five of these in an hour or? Yeah, they're talking to, you know, four or five patients an hour just like they would in person. But their lifestyle is so much better, right? They're walking

around the block, talking to a patient on a call instead of stuck in a, a, hospital tiny room for, you know, eight hours a day. So it's really this win-win where the doctors love it. They're running to platforms like ours because it gives them flexibility and they get paid the same amount. And patients obviously love it because they can just do it from the comfort of their home. Who's losing in all of this? That is always when you look at one of these businesses, you're wondering, who's losing? It does seem when things go generic, obviously pharmaceutical companies lose because they don't get to charge your price gouge $65 versus what is generic Viagra cost versus Viagra. You should six upwards of $65 a pill for Viagra. Yeah, it might cost a couple of dollars per

pill for generic versus 65. So yeah. Okay, so it's makes that tradeoff decision a lot. Yeah, a lot easier decision now. Five percent of the cost. A cup of caught, when it comes down to the cost of a glass of wine or a cup of coffee, I think it's pretty easy decision to make. Yep. That's right. Do you guys take insurance or is it so cheap now that people don't even bother going through their insurance? And does the insurance company like that or hate that? So we are, for the most part, so cheap that we don't even need to take insurance. The average person in the country has a high deductible insurance plan. That means when they just go to see the doctor, it might cost 40 to 50 bucks, just to see the doctor.

And then on average, people have about $2,000 deductible for the whole year, which means, you know, you're paying a couple hundred bucks a month out of pocket before you even get to use your insurance. Most people never even hit that. And so with Hems and hers, you come, you pay 20 to 30 bucks a month. Not only do you get that first visit with the doctor or the psychiatrist or the dermatologist, but for that same 20 to 30 bucks, you also get the medication, the personalized treatment, and the delivery of it, and unlimited conversations and access to that doctor to adjust it. So it is so much cheaper, and it's all the cost of just one visit on your co-pay of insurance. Why can't I get, you know, every flu season, every couple of flu seasons,

I have to get a Z-Pack or whatever it's called. Zethromycin? Zetromycin. Zetromycin. You're not a doctor, right? I'm not a doctor. Neither is her doctor, so don't take any medical advice here. But one time, I got sick.

I was on vacation in Paris, and I was getting on the train to go to Venice the next day, as one does. And I went down to the farm. I said, I needed to get this Z-Pack or whatever. And they said, yeah, just go to the pharmacy, dummy. Yeah. Because I asked the front desk for a doctor's. You don't need to go to the doctor. Just go across the street.

see that green symbol? I went over there. I was like, yeah, is that weed? I'm like, no, it's not weed. It's, that's a pharmacy symbol. I was like, okay, because it's a met as it looks like weed. Yeah. It looks like we're the same. Not the same. So we go in and the person's like, oh, how are you feeling? I say, got this, whatever, I tell them the symptoms. He's like, okay. And then he just gives me one. And I say, could I buy two? So I have an extra one. He's like, sure. And you just hand me too. Yeah. Yeah. So in some, and I think Mexico is known for this. People buy all kinds of medicines over the counter of Mexico as well. Is this something that in the United States, we need to rethink why some of these things are prescription to begin with?

You know, I think it's a great question. What you have in the U.S. healthcare system, unfortunately, is a lot of incentives where a lot of money is exchanged, but none of it is in the best interest of a customer getting great health care at a great cost. nobody's making money with that as the incentive at all. So you think about women and access to something like birth control. And that's something we have on the hers platform. It's a big seller for us. In order to get a birth control prescription, women are often told that they need to come in and get a pap smear test. Right.

So they come in and get a pap smear test. Turns out that's how the hospital makes a ton of money. They then claim this pap smear test. They get reimbursed a huge amount of money. And then they give this woman a three-month test. prescription and say, hey, you have to come back in three months for a checkup. And the only way the woman gets the other three months is if they come back in and have an appointment, all of that reappointment, pass me or checkup, all of that is then getting

billed to the insurance company, making this hospital system a ton of money. But what it's doing is forcing that mom or that woman to struggle to get access to something that should be just over the counter. You go to other places in the world, you just pick up birth control. There's no reason that you need a prescription. Charlie Munger said, if you remember, show me the incentive and I'll show you the outcome. That's right. When we get back from this quick break, I want to know how COVID and the pandemic has facilitated remote work and remote doctors working remote, remote consultations.

And what that will look like post, because now we've got, you know, almost three million shots going in arms. We're going to be on the other side of this pandemic in weeks to, you know, a couple of months. months. I wonder what your thoughts are on what the world looks like post-COVID for remote health. We get back on this week in startups. 2021 is looking up. New beginnings means new opportunities to grow your business. If part of your strategy is adding new members to your team, well, LinkedIn jobs finds the right person quickly. To make things better, your first job post is free, but only if you use the this week in startups code, which is LinkedIn.com slash twist.

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LinkedIn.com slash twist. And I want to get you that. that first job listing phrase so you understand why I'm so obsessed with it. Go to LinkedIn.com slash twist. Go to LinkedIn.com slash T-W-I-S-T for a job posting for free. Terms and conditions, of course. Apply. Welcome back to this weekend startups.

Thanks to our partners. Andrew Dudum is here. You can follow them on Twitter. Andrew D-U-D-U-M. Tons of jokes when you were a kid, dude. Tons of jokes. So I still get them. I still get them.

I won't do it. I get them too. Kalakinas. people kind of all kinds of butcher in my name. Before we went to break, I was curious, you know, you were doing this telemedicine thing. You were a pioneer. Pandemic happens. Now, remote medicine is the standard.

So you went from being this like voice in the wilderness saying there must be a better way to a world that has absolutely adopted and now believes everything you're saying. Overnight, it becomes a huge forcing function. Everybody understands how to order food remotely. Everybody understands what Amazon Prime. is or DoorDash, you know, etc. And one of these things is they're all doing distance telemedicine. So what is the world going to look like now that people have gotten a taste of this? Can we go back and do all doctors believe in it now because they had no choice? And then is everybody starting to say,

oh, well, you know what? We used to have this incentive to bring you in twice. But now we're getting paid anyway. So, you know, it works. And I can see three times as many patients. If I don't have them and I have to do this, you know, greeting them in the office and I don't have to be in the office. So is everybody now convinced that this is the better way? You know, I think, I think the people that have been paying attention are all convinced. I mean, everybody that I've spoken to who a year and two ago would tell me, I don't know if this is going to last. I don't know if it's even safe.

Doctors are never going to be comfortable with doing this have all now said, there's no, there's no question. This is what the future looks like. It is so clear. And so what you have is this whole swarm of now infrastructure changing to accommodate it. You have all of these doctors in these hospital systems reevaluating their lives. Should I be in a sterile hospital room my entire life where I'm taking notes on an EMR that was made, you know, an epic EMR that, you know, it was made 20 years ago or 10 years ago and it hasn't been updated and it's brutal? Or could I be walking around my block and have a mobile app with Hems and hers where I click a button and all of a sudden I'm talking to a patient as I'm walking my dog. You know, like that. They're literally having these

debates internally at themselves because these options now exist. And also what's happening as hospital systems are saying, you know, oh, shoot, okay, well, now we're going to assume patients aren't going to come to us every day for the normal stuff because it's clear they can go online. So where do we make our money and how do we change our footprints? Because you've got these huge hospital systems with huge amounts of brick and mortar costs and real estate property costs. Yeah, the infrastructure is insane. It's huge, right? And they need a, you know, the way they were making money is by forcing that woman in to get the Papsmere test so that she could get her birth control and that's not going to cut it anymore. And so they're all restrategizing on how they can narrow

their footprint, minimize their costs and focus on the things that they will make money from in the future, which is things like procedural work, right? If somebody comes to Hems and hers and is suffering from anxiety or depression, we can take care of them. If they say, hey, I also broke my leg, we're going to say, great, we have the hospital system in Nebraska where you live. That's a partner of ours. We're going to make a referral and you can go get that taken care of. And that's where that hospital system is going to, you know, make money. But for the 80 plus percent of other things, it's going to be digital platforms like Hems and Hers.

I'm curious what you think of like the one medicals of the world. and the temptation now that you're a public company and those things seem to be great top of the funnel and provide that comprehensive system. Do you ever think, well, we're a pure play doing this telemedicine, but that maybe you would want to have actual physical locations or buy one of those companies? You know, I actually do think it could make a lot of sense in the next few years, specifically because I think when you're talking about healthcare, some people want to come in and have a conversation. It's just the reality. Now, is it the majority? Definitely not.

But most people prioritize efficiency and affordability and ease. But you will always have some population that says, you know, is there a place I can come in and just, you know, smell the shampoo that I'm buying for my, you know, dandruff, you know, or can I just talk to the nurse about my acne just to make sure she sees it? So I think there, you know, I wouldn't be surprised if you see hymns and hers pop-ups all over the country in the years to come. But I think overwhelmingly, the experience is better online. It's more efficient. It's more affordable. And I think in a lot of situations, it's safer because it's standardized. Yeah, that seems to me to be the great part of this is that the ability to abuse the system. I mean, people were doctor shopping for for many years

with these prescriptions, for opioids, et cetera. And there was no central location. It's not like somebody can sign up for hymns or your competitors and contemporaries, 25 times with 25 phone numbers, with 25 emails, 25 credit cards. It would be much better for society if there were, more standardization. And when you think about the compliance of doctors, let's say we find out that there is an adverse effect for this particular drug, let's call it the hack me drug.

Well, then you have to retrain every doctor that that adverse effect occurs, but you have one form, correct me if I'm wrong, like each doctor does not make their own form. There is one form. So then you add it to that one form and that every doctor knows, okay, people who are allergic to peanuts might be allergic to this drug as well. We have less people dying. What other countries do you, have you spread into other countries, or in Mexico or in Europe or in Canada? Or are those countries so functional with or are the countries that are highly functional with universal health care not viable for a company like Hymns?

You know, so it's actually the opposite. The companies that have built out universal health care systems have created amazing safety nets for the population. If you are really sick, like we're talking about that procedural work, right? You break your leg, you hit your head, you need to go in somewhere. You are covered and you're not going to go bankrupt. You're not going to lose your house. You're not going to lose your savings because something went wrong. But what they've done in a lot of situations is built great safety.

nets, but not great everyday experiences. So, for example, we're live in the UK. We have a team in the UK. We have hymns and hers in the UK. It still takes three to four weeks with with the system out in London if you want to have an appointment to even get on the schedule, right? And so you're here at home struggling from, you know, let's say depression and you want to talk to a psychiatrist and you have to wait a month before you can even have that first conversation, right? So, you know, I think in those countries, the Hyms and Hempsteader's experience is actually really appreciated because it simplifies everyday health concerns into something that's on demand. And so many of those government-run systems are not necessarily run for speed and beauty and

efficiency. They're run for, you know, base level care for really kind of emergency type situations. And so, you know, we start in the UK. I think you'll absolutely see us in the coming years kind of hop up. around to more markets and open them up because, you know, this type of empowerment where the customer can pick up their phone and get transparent pricing and have a specialist talk to them right then and there is something that really in the European and the Canadian, Australian, Middle Eastern, Asian markets is really interesting. And we did a tour out there right before COVID for three

or four weeks meeting with the hospital systems and the governments out there. And I think it's something that they're really excited about. Yeah. It feels to me like if this, system works so well here in the United States and you have all those other countries, you'll be sourcing medicine and you'll have one system that can scale across many, many GOs. What are the concerns with, I brought up doctor shopping before and people doing fake prescriptions and then reselling them? Seems to me that the price is so cheap and the platform is so open right now that what would be the actual benefit, it's almost like when we got legalized or an underground market for Viagra seems to not exist if you can go on Hymns or Roman or whoever and just order it in 10

seconds, right? That's right. You know, I think when you provide great access to all of these things, you clean up alongside it all these black market dynamics, right? When you, you know, one of the crazy stats, if you tried to buy Viagra online, 80% of it is fraudulent medication. It's not real Viagra. That was a big deal 10 years ago. I remember Google had to ban all this and Yahoo. God, I forgot that whole storyline of fake medications were being sold online. That's right. There's these online pharmacies.

You're going to hit with ads everywhere. They say buy this medication. And so with the standardization of platforms like hymns and hers that are trusted U.S. clinically run organizations, you know that the medicine you're getting is genuine. You know it's safe. And you also then take out so much of the cost that there's no black market dynamics. there's no incentive to take advantage of the system. And as you said, it's so standardized.

Anybody that was trying to game the system would get picked up incredibly quickly, right? It's just so much more transparent. You wouldn't have any of these situations where doctors go rogue and are prescribing things they shouldn't for months and months and months without somebody knowing. None of that can ever happen in a digital first telemedicine platform. So to me, that is, I mean, with data and with tech. You can get standardization and transparency. And in healthcare, those are two things you do not have that we need. What are the next categories to just give us a little bit of a preview when we get back from this final break?

What are the next categories that you think online consultations will work well for when we get back on the swing of startups? Let's face it, this new world of remote work is here to stay. We all know that. And so are all of the HR and IT headaches that come with it. like how do you register your startup with dozens of state tax agencies, right? You had some employees, they were living right near your office and then they decided, you know what, Yolo, I'm going to move somewhere else during the pandemic. Well, you are going to need to have your startup register with dozens of state tax agencies now. Or you have to comply with a gazillion different

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or just a better way to manage your HR and IT, visit rippling.com slash twist. That's Rippling, R-I-P-L-I-N-G dot com slash twist. Welcome back to this week in startup. I'm curious what categories are next, not just for Hems, but just in general for society. We hear a lot of ads for online therapy and matchmaking services for that. Yeah. What do you think the next services that you could provide might be or services that we think will move online just naturally?

Yeah. You know, the big ones right now, like you were saying, are mental health, dermatology, primary care. These are the obvious ones. the ones that I think people kind of tilt their head and they go, oh, I didn't know you could do that as well. Things like weight loss, diabetes, hypertension, high cholesterol. These are all chronic conditions that, frankly, in a lot of situations, are the biggest killers of people in this country and around the world, right?

But there are things that, you know, are in a lot of situations asymptomatic. We're talking about like high cholesterol. If you're 40 years old, there's like a 40 or 50 percent chance. of high cholesterol and it's pretty dangerous and you should get it treated. Most men don't get it treated at all. And it's because they don't know. They're lazy. They think it's too expensive.

They don't want to schedule an appointment with a doctor. So think about this with Hems and Hurs. Let's say you get an annual kit. You're a member of Hems and HERS. You get a kit sent to your door that says your annual checkup. You prick your finger. You drop a little bit of blood on a pad of paper and you mail it back to us in our lab. And then we say, hey, you know, you're pre-diabetic.

We're a little worried about that. You have high cholesterol. We're setting you lipitor next week in the mail, the right dose. Start taking that. And you're a little bit low on these couple of vitamins. And so we're going to boost you up and start sending you some supplements. That type of simplicity, I think, is how you get huge amounts of chronic illness reduced in this country. And that's the biggest cause of death is things like diabetes and hypertension and high cholesterol and weight management.

I think metformin is another one that I take metformin. I consulted with my doctor after reading all about it. I turned 50. And metformin, it turns out a lot of like the most intelligent, anti-aging, longevity folks are now prescribing metformin, which is like five cents a day or something. Yeah. It's super cheap. You guys offer metformin yet?

We do not offer it, but I know a lot of people that take it for the exact same reason as you. Yeah. It's really a fascinating to see that the smartest, people like in the world like Harvard doctors or from what I understand do your own research folks and talk to your doctor. But I did the research on it after, you know, talking to friends of mine who are into this kind of like body optimization stuff. Tim Ferriss type people of the world. I won't say Tim Ferriss specifically told me to take it. But the Tim Ferriss, Kevin Rose crowd, and all those people who are doing longevity seem to have brought up metforma. I did a lot of research

on it. And I was like, okay, this seems like this is a no-brainer for somebody my age and started taking it. I think that's people taking, the trend now is people taking more control of their health care and knowing as much about their doctor, as much as their doctors know on a superficial level at least, because all the information's out there, right? So then how does the role of a doctor change in all of this? Are they just moving to being like rubber stamping and just, you know, like you said, pick up their phone while they're walking the dog? Or is there some, what's the future of a doctor? Are they just going to be like sitting there at their desk clicking yes? No, no, no. What we see on the platform. is that overwhelmingly, and we treat thousands of people a day on the Hymns and Heurts and Heurts platform. We've done almost 3 million medical visits in the last couple years. We power a lot of patients every day. And they're not coming for the most part saying, I want this drug and I want this dosage for this issue. That's not what they do. Most of them come in and they say, hey, I'm really struggling with anxiety and I've tried these three things and it hasn't worked. Doctor, what do you think? You know, they might have researched,

hey, I was thinking about this or that. Or maybe they come in with hair loss and they say, hey, I've tried monoxidil. It didn't really work. I was thinking about finestriad. What do you think? And so what you have, I think, in this future world is a really personal health care partner. Right?

You have a partnership. You have a coach. You have an advisor. You have a mentor. You have somebody that you are paying to be your personal consultant to make sure you're doing the best, healthiest choices for your body. And I think that's really different from a health care system where you are the recipient of anything this person says, right? And you pay the cost, no matter what it is, and you suffer the side effects, no matter the drug, they recommend.

You don't really ask much many questions. You just kind of get what you get. This model is flipped where you now are the one making decisions for the most part, but you have a really trusted expert to help guide you along the way. And I think that's really, I think, the future world of health care, which is a beautiful world. It's an empowered world and it's an educated world. How does, how do the Walgreens and Amazon's of the world look at you? I mean, I would think that a CVS and Walgreens and all those pharmacies have to look at you and go, oh, wow, nobody's coming into Walgreens or CVS to get their ED drugs or hair loss drugs anymore. When they can do this online, why even make the jump? Are they your competitor?

now? Are they the ones who are losing out mostly? Is this high-cost infrastructure group? I think they're rethinking their strategies is maybe the best way to put it. Right. They've got a lot of expensive real estate all over the country. And people aren't really excited to be waiting in lines anymore for things they can have delivered to their door the same day. And so, you know, it's no surprise that the chief medical officer at Walgreens joined us about two years ago as our chief medical officer. And he was running the medical and clinical side there for five years. And so I think people are seeing the innovation and healthcare moving towards platforms like us. And I think those are the ones that are going to have to figure out new business models because

the core of how they made money, if you think about Walgreens and CVS, they make money on the pharmacy. That's why it's in the very back. That's what brings people in. So they put it in the back so that you walk through all the aisles, you pick up a shampoo, you pick up some gum, but you're going there for the pharmacy. And so without that, I do think there is like a real structural difference and change they're going to have to make about their business model. How do you think about Amazon? Are they directly competing with you yet? Are they sniffing around? Because I know they have their own pharmacy online. That's a big deal. But are they doing online's consultations yet or no? No, they're not doing anything. They're really not doing anything like

that. What they're doing, and this is about time, I'm happy they're doing this, is making it easy if you have a prescription to get affordable medication sent to your door. The way the world works today is if you have this insurance or that insurance, or it's this drug or that drug, some drugs might be $10, some might be $500. And the discrepancy makes no sense. You could go to a CVS, a Walgreens, and a hospital pharmacy, and the cost of the drug could be like four times different at each of those locations. So what Walgreens or what Amazon is doing is standardizing it, say, hey, we're going to rip out all this costs that CVS and Walgreens have been making and we're going to ship it to you directly. For us, pretty much every single

person that comes to Hems and Hers is going through a medical experience. They're coming and they're having, they're essentially paying for this personalized concierge experience with a specialty doctor. And that's not anything that, you know, Amazon does. It's, I think, pretty far removed from what they're really good at, which is frankly fulfilling things affordably and quickly. And for that, I think something like an online pharmacy is great. All right. Fantastic. There you have it, folks.

Congratulations on your success, Andrew. Did I miss anything? No, you asked totally good stuff, Jason. No, not too difficult. It's really great to have somebody on who's growing this fast. And then who went out in spacked. I think you are the fastest to IPO company I think I've seen in modern history. Is there anybody who's done three years to an IPO at this point?

Not that I know of. I mean, desktop metal went pretty fast. I think that we were lucky to be involved in that. I think that was five or six years. But this is going to change things forever in Silicon Valley. If companies can get out as public companies in your five with as little as 50 or $150 million in revenue, could be a super game changer, yeah. That's right.

I think it's massive. And I think, you know, what's really exciting is it gives the public markets real opportunities to invest in innovation that just hasn't been there in the last decade, right? Companies have been saving private for so long that all the capital is moving to, you know, Amazon, Facebook, Netflix, Google, et cetera. Now you can actually really, as an investor, if you live anywhere in the world, you're a retail investor, you can invest in real innovation, real companies that are two, three, four years in their life cycle and truly understand and believe in that vision. And people, I think, a lot of times forget that the biggest companies in the world

went public pretty darn fast after their launch. You're talking about Google, Apple. These companies went public Amazon just three, four, five years after they were founded. And so I think it's going to be a huge shift now getting these growth companies to the public markets, giving investors the opportunity to invest to them, and then allowing companies like us to get really good at weighing growth and efficiency and public market storytelling. And I think ultimately you'll have a lot better companies in the public markets pretty soon. Or any chance you can, did you say before that you do same day prescriptions or what's the

medium time? It might take a day or two to get delivered to your house, depending on the time of day you get your prescription. I mean, that would be crazy if in a major city you could actually get it delivered same day. We do do that in New York City. We have a partnership there that gets it delivered same day. Oh, really? You use postmates or something or like delivery?

We don't use postmates. We use capsule. Oh, really? It's a same day delivery startup? That's right. That's really smart. I think that's a really interesting vision for Uber, too, that they now are doing this, like, last mile from the bodega or any store to your doorstep is going to be incredible.

You have some big show office in New York that you're no longer using during the pandemic? We have a beautiful show office in San Francisco down in Soma that we are thankfully not paying anymore for it all. And we went fully remote. We cut the whole thing. We went fully remote. And since then, we've hired people. In Nigeria, in the UK, in Mexico, in Argentina, in Canada. Wait, you're a publicly listed company without a headquarters.

We have 200 people at the company and not a single office. I think this is another first for remote work. Do you think you're going to get an office ever now that you're a $2 billion company? It's probably traded. I don't even know where we would put it, to be honest, because everyone is all over the country and the world, quite literally. the world. So it's a new, it's a new phase we're in, I think, at this point. Oh, man. If only I could just, if only we could all just order a vaccine from him. That's right. Soon. Have you come running and

give us a shot in the arm. Well, it's, we're going to have more. I mean, talk about science. I mean, we're going to have more shots that we know what to do with in just a couple of weeks. So that's right. I look forward to seeing you in person at some point, someday and in the new times. And we can talk about the old times and the transition times in between continued success. And we'll see you all next time on this week of startups. Bye-bye.