20VC: Hims & Hers: $4.3BN Market Cap on $2.3BN of Revenue: The Comeback | Why Being Public is 10x Better | The Death of the "Strategy" Hire | Why Performance Marketing is Worse than Brand Marketing with Andrew Dudum

19:34The reason for that, I think the reason it happened in part is because companies like us and consumers applied massive pressure to change the distribution model, right? In 18 months, the distribution model has completely changed in pharmaceuticals in the US. Instead of going through PBMs and insurance, they're going straight to customers through platforms like ours at prices everyday people can afford. And so there's an arc to that price reduction. But I think for us, we want to have the absolute best and also want to be able to apply pressure to bring that cost down as much as we can.

20:03Harry Stebbings:Do you think like a pill pack sold too soon when you think about the erosion of PBM's power that you mentioned there and how challenging it was for a business like pill pack? I don't know too much about pill pack, to be totally honest. What I don't believe is that the pharmacy fulfillment part of our business independently is a particularly valuable business. How should I think about the preventative healthcare companies that I'm pitched every day, whether it's your pre-novos or your Necos in the UK, which is expanding to you? Is that the future? Some are much deeper, some are much shallower, some are much more expensive.

20:40Harry Stebbings:How do you understand, analyze that space? Is that something that HIMSS would do? We spend a ton of time looking at that space. And actually, we did a partnership with Pronovo that was announced just a couple of weeks ago. I think where there's a lot of interesting companies right now is in highly specialized levels of testing for clinical areas that are meaningfully unmet. Right. So you look at things like cardiovascular disease, right? Still one of the number one killers. Most dads die of a heart attack. Yet a statin is, you know, two cents for me to manufacture. And if you take a statin every day, then you won't die of a heart attack or you're meaningfully less likely to die of a heart attack.

21:17Yet nobody does it. And so there's biotech companies right now working on therapies where a single injection quarterly or a single injection annually can absolutely obliterate your cardiovascular risk. And if you can do something like that, you meaningfully curve that rate of death and you get ahead on prevention for cardiovascular disease. Pronovo, I think, is another interesting one, right? It's how do we get ahead of detection for things like cancer and early tumor detection? You know, my dad, you know, had stage four colon cancer when he was 39. It then cost the healthcare system hundreds and hundreds of thousands of dollars, if not millions of dollars to have surgery and then treat him for many years with chemotherapy, right?

21:58And then afterwards, the care involved to kind of get him back to a steady state. The idea of an annual exam that can scan your body for early signs, early proteins through blood testing, or early actually imaging signs that can detect a millimeter-sized tumor is incredibly fascinating. Now, I think a lot of clinical people, and they're smart, you know, believe something like that is not yet ready for mainstream. And It might not be. I kind of choose to be opportunistic in giving people the ability to make those tradeoffs for themselves. I take Pronovo annually. So, you know, I recommend it to my family.

22:30Is it perfect? Absolutely not.

22:32Harry Stebbings:How much is Pronovo? I think now it's maybe about a thousand or fifteen hundred bucks a year. OK, that's better than I thought. Yeah. And so I think and again, these are machines that cost five hundred thousand dollar one time purchase to buy. But then you're charging, you know, a thousand or two thousand dollars a month or a year. And so the idea that this cost could come down dramatically is very real. 500K machine capitalized over a decade. The cost could come down to something like$300 a year to do this test eventually. And that's where my brain goes when I'm thinking about the future is what are the Swiss cheese layers we can give people that together make up really great prevention, working backwards from what we know causes shortening of life and health span.

23:15Harry Stebbings:It's the biggest threat to your business, not actually open AI. And if ChatGPT is the kind of consumer interface with a lot of healthcare questions that people have today, which it is in most cases, actually, and that's why obviously health is a big focus for them. Is it not the most natural extension ever that they extend that into delivery, supply, being your on-demand doctor? You know, it's something that people have been talking about a lot. Actually, Daria was mentioning this recently. I think some of the most defensible businesses in the age of, you know, Anthropic and OpenAI are businesses that actually do something physical.

23:50Harry Stebbings:They require actual specialization and they require infrastructure. A huge part of what we do every single day is treat tens of thousands of patients with thousands of doctors that are specialized and licensed in every state or country in the world, and then actually help make people medicine. I mean, this is a million square feet of pharmacy fulfillment. This is, you know, hundreds of pharmacists and robotic machines that are actually compounding treatments or fulfilling branded pharmaceuticals. So when I actually think about the most defensive businesses, the businesses that can thrive in the age of AI and actually be enabled by them are ones where the conversation of something like ChatGPD massively expands the funnel of people engaging in health and wellness, but then can be driven to a platform that actually connects them with the specialist and connects them with the products and actually can get that delivered to their door.

24:39And ultimately, I think we're a combination of all of those businesses together. So, you know, I think there's a lot of opportunity with that funnel that opens up with things like Chachubuti.

24:48Harry Stebbings:I agree with you in terms of like physical infrastructure and real world requirements, meaning there's just inherently more value there because it's harder to do. So does that look like a partnership then? Say I come in and I say, hey, I've got a, I don't know, a rash here and I'm worried about it. And then they siphon it off to him. So what does that relationship look like? Yeah, I mean, I think it's similar to what you see on Google. I don't think it's going to be all that much different, right? That you'll be able to partner directly with Anthropic and ChatGPT and find patients that are looking for certain services and then have handoffs to specialized implementations, right?

25:24It's going to be, I think there's great opportunities to partner with all of these players.

25:27Harry Stebbings:We mentioned kind of transition of how people consume healthcare. In terms of how people find you, I actually had Eran from Monday on the show, which was a fascinating show. And he said that with AI Overview on Google, that they've lost 18%, or I might be butchering, maybe 15 % to 18 % of their AdWords in terms of acquisition. How are you seeing the way that people find him's change? You know, it hasn't had particularly dramatic changes since some of these new AI companies have grown. I think for us, a huge number of people that come to us are first time patients interested in some of these care categories.

26:08And so they're hearing about it through, you know, watching Fox News. They're hearing about it through watching NFL on Thursday nights. They're hearing about it from their friend who all of a sudden is feeling great. And the friend is talking about the treatments that they're on or the fact that they're getting care from him's and hers. So I think more and more for us, the brand and the spend is moving towards channels where you're talking about the opportunity to feel great. You're not reliant on maybe the AdWords, Google funnel that you mentioned. I do think those businesses inevitably will have struggle in transitioning to some of the chat-based interfaces.

26:47But there will be ad networks that are built through those chat-based interfaces that eventually just replace them. So ultimately, I'm not sure it will matter. But for us, I think an increasing amount of spend is actually going towards just telling people about all of the new things Hems and Hers is doing. the fact that you can feel great, the fact that it's affordable, and you can come check it out. And it's a lot of market creation, both in the US and globally, versus latent demand that you're capturing through some of these more streamlined channels.

27:13Harry Stebbings:If I gave you an unlimited checkbook, what would you spend on today that you're not currently spending on? I would definitely sponsor Ferrari F1, because I've told my wife that if I were to have one job That wasn't my current job. It'd be a Ferrari driver. But she did not really like that answer. Do you think that would be a net positive for him as a business? Don't laugh. The Ferrari sponsorship? Yeah. At this point, probably not because I'm not sure we're live in every market with the penetration we want where that global footprint matters. I think eventually it would. I think eventually in the coming years, you know, World Cup and global sponsorship opportunities actually do matter.

27:54because this year was a huge level of commitment to win internationally. I mean, we did not dip our toe. I mean, we acquired three or four companies.

28:03Harry Stebbings:Did you acquire Eucalyptus for like one and a half billion in cash? Somewhere around there. How does that come to be, dude? You know what? It comes to be because you get to know the people really well. I've known Tim probably four or five years. I think he was the best operator overseas. No question. I mean, his understanding of the customer, his ability to build a team that just moves fast experiments is willing to take risks and fail i mean when i first met tim he was live in like six or seven markets and it was all failing and he was telling me how chaotic it was and i was like i don't know man this sounds crazy you're in like indonesia you're in japan you're in all these different places like is it going to work he's like i'm not sure but we're going to try it and then a year later he's like okay it didn't work we're like toning it back we're going to focus here and like his humility and his willingness to experiment and test and learn is incredible.

28:50And because of that, they've just moved so much faster than everybody else. I mean, they're the dominant player in Australia, dominant player in the UK, dominant player in Germany, quickly growing in Japan. I mean, it's just a phenomenal business. The power of what we built in the US from a cashflow standpoint has enabled us in the last four or five years to buy that business with pretty moderate dilution, right? Because you can actually just fund the purchase of it off the balance sheet over the next couple of years, which is incredible. And so we have committed a huge amount of dollars in focus internationally because I just think the opportunity for the brand is pretty consistent, whether there's a national system in the UK or not.

29:28Harry Stebbings:They give you cold sweats at night, being as aggressive as you have been as quickly as you have been. You know, I remember interviewing Dax from Lightspeed, Dax to Silver. And he mentioned the challenge, Lightspeed, the POS system in a lot of restaurants. And he mentioned the challenge in acquiring so much so quickly. I think they made like 18 acquisitions in like a two-year period. Are you worried of like, oh, fuck, I now have to integrate Eucalyptus in these three other businesses? Definitely. There is a very fine line of driving so fast that you're losing control. There's no question about that.

30:02What I've found, at least in running this business, is if you don't feel like you are getting close to that line, you're probably not pushing hard enough. And so I do think that uncomfortable gut feeling where you're constantly questioning, constantly evaluating, constantly tweaking the strategy or the tactics like that feeling is what success feels like. And so I've I've kind of taught my team that we're going to get really comfortable with that feeling. We're going to get really comfortable sitting in that feeling and questioning and reevaluating and pushing, because I think that's how you win.

30:36I was a rower in high school and I remember my coach saying the group of guys out there that is willing to be the most uncomfortable and in the most pain are going to win this race. And that's actually true in that sport. And that's true in most sports. And I think that's true in business. It's like if you can put yourself in environments where you're being aggressive but smart, taking the right bets, but have a team that is bought into the mission and comfortable with that level of aggressive risk. And I think it's the right formula. So to me, that's what makes this fun.

31:08Harry Stebbings:When, with the benefit of hindsight, did you push too hard and you had to pull back? In the early years, and I think we still, I still, you know, try to moderate this. With our business, like we could launch so many things within like a month. You know, you could launch a skincare routine. You could launch like a makeup brand. You could launch sleep vitamins. You could launch like a wearable device. I mean, there's just like anything people are doing in health and wellness could live in the hims and hers brand, which is pretty powerful and also extremely risky, right? Because if you do too much and you move into the wrong areas, you waste a ton of resource.

31:43So in the early years, I thought just having everything on the platform was how you win. And so we invested in skincare regimens and we invested in vitamin supplements and we invested in so many things that in retrospect were fairly commodity products. And for pretty much the same price or even less, you could walk across the street to Walgreens and get something that was pretty much the same thing. And I think that that was a massive mistake. You know, I think it was it was a belief that just assortment won. And I think there's a more nuanced perspective that the right assortment wins. And so we're really careful about categories we enter products we launch to make sure that their products and offerings that that are actually differentiated for people that are hard for other people to receive and get get access to.

32:29And maybe that means it's pharmaceutical grade, it's manufactured in a way that is very, very challenging to get quality, or there's a level of personalization that is required in this care of treatment that makes it unique to you. But when I think about some of the early DTC brands that launched, they were selling commodity products and those products capped out at a billion in revenue or a couple hundred million in Facebook spend. And the curves were like this, and that's my nightmare. You know, and so in the early years, made a lot of those mistakes and try to make sure we don't do that again.

33:00Harry Stebbings:I do want to go back to the brand marketing element, just because I suppose you mentioned, obviously, brand being a core component of like the defensibility. You know, when I when I interviewed Nick at Revolut, he said brand marketing was the single biggest thing he's changed his mind on in the journey of Revolut, which I thought was an interesting statement. What do you know now about brand marketing and spend on things that seem facile? What do you know now that you wish you'd known? You know, I think what you gain confidence in with brand marketing over time is that consistency is required.

33:31So I think in the early years with brand marketing, as companies are growing, they throw some dollars. You know, let's do an out of home campaign in New York because it's like really cool. It's like takeover subways, right, which we did a ton of. And they do it once. And this team is so fucking excited because it's so cool and you can see it and you take pictures of it. But you do it once and then like months go by and it gets taken off. And then that's it because you did it. And it was fun and cool. And you look at the numbers and like, ah, maybe there was like a little spike in New York City, maybe on this day.

34:00Like you can't really tell, probably not, but you hopeful. And then the next year, like, okay, what are we gonna do this year, right? Like that's just like, it's a guaranteed way to just lose money. It's a great way to feel good. And it's super fun. It's like so much fun. And we've done a ton of it and it's really fun. Like that's not a business strategy. I think in order to have brand marketing work, I think it has to be consistent. It has to be consistently random, if that makes sense. Like you have to be appearing in different places for people in a randomized way, but with consistency because it's the multiple hits.

34:30Like you have to be hit 10 different times in 10 different ways for all of a sudden that to say, hey, there's like a cultural zeitgeist association with hymns right now that I need to pay attention to. Like, what are they doing that is showing up in so many ways in my life where your brand trust elevates, your cultural relevancy elevates. So it isn't a one off thing. And I think in the early years, you hope it is, you try to track it, but it does require a level of dollars. It requires a level of consistency. And actually, Kathy, our chief comms officer, told me this when we were interviewing, which I completely believe.

35:03She's like, the thing early companies struggle with when it comes to communications and their brand is they get bored of saying the same thing. And then they move on to the next thing, right? Like early companies, we're excited, we're young, we're changing. So like, here's our vision and here's what we stand for. Then three months later, like, it's changed up a little bit. I want to say something different because I already said that thing in that last podcast. Let me say something new in this new one. And in fact, what makes great brands great is the fact that everybody knows why they exist, why they fight, who their customer is, what the value is they deliver.

35:35And it's because they say the same damn thing in 20 different ways every single week. And so I think that's one of the key parts about brand marketing or comms in general is consistency, making sure that that message and that narrative is not changing, which requires an immense amount of discipline. And in many ways, it's like a lot less fun. It's much more of an engine. But over many, many years, I do think it builds.

35:58Harry Stebbings:When you're bored of saying it, you've got to remember that there's a new team member that's never, ever heard it before. That's right. So you need to deliver it with the same passion and gusto that you did. I also think not enough for opinionated enough. If you look at the HIMSS and HERS brand today, where would you say you are not opinionated enough? I think hims and hers will increasingly have a stronger perspective of what great healthcare looks like. And I think as we grow, we are building an understanding of patients at a scale that I don't think most have, right? When you think about the fact that we're treating 10, 20 ,000 patients a day, like the largest health systems in the world are not treating 10 to 15 ,000 patients per day.

36:38There's an immense amount of knowledge that's being built around different types of patients, their demographics, their risk factors, their biomarkers, what medicines and treatments work, why, what side effects they have, how much they feel better, combination therapies that are beneficial. Like there's just an immense amount of knowledge base growing where I think we're going to be able to start having stronger perspectives of what excellence looks like in healthcare. What do we believe the gold standard in preventative care is? Like if you, Harry, you want to be the absolute healthiest 29 year old, right?

37:10And be ahead of the curve. What are the 10 things you should be doing? What are the tests you should be doing specifically for you? What are the treatments, whether they're holistic supplements or maybe sauna, right? That you should be doing. And what's that exact regimen and get ahead of it. And there you go. You're going to be a, you're going to be gold standard, right?

37:31Harry Stebbings:I'm so far off gold standard, dude. You're doing great. You're doing great. And I think that's actually the point of like, Like to me, that's such a key part of the hims and hers brand is like everybody feels that way. Everyone feels so far away from optimal. And it's really fucking hard to take the first step to have that confidence to like make a change. And so most people that come to hims and hers are first time customers, because I think we as a brand try really hard to empower you and say, hey, that first step is going to be easy. We're going to make it easy. It's kind of like that old Marine or Navy SEAL story of like, you make your bed in the morning, right?

38:06Because when you make your bed in the morning, you've completed something like a very tactical action. You've had success. There's like positive adrenaline. And then from there, you're going to do other great things throughout the day. Like hims and hers. I want to make it so easy for everyone to take that first step in feeling great that it empowers a lot of people to do so. And from your question, we're going to have a stronger opinion about what great actually looks like.

38:27Harry Stebbings:So for anyone wondering, that is General McRaven's commencement speech. One of the greatest speeches I think recorded on the Internet. I've listened to it probably a thousand times. It used to be the start of every single run because it's 16 minutes, which is always the most painful of any run, the first 16. So amazing aligned. I've got an out there idea for you. You said that you want to make it easier. Why do you not have HIMSS preventative assessments in every city and say, hey, we'll tell you what's wrong with you, like a pre-novo does or like any of the preventative. And you can choose to buy with us or not.

39:03Harry Stebbings:But by doing that, you're building up the world's largest set of healthcare data for free. And you give it for free and the treatment's what they pay for. It's like you're a loss leader. Also, what a goodwill engine. I would go to the dinner party. Even if I didn't buy products, I'll go to all my friends and be like, you'll never guess. I found this out about myself when I went to HIMSS. Oh, what's HIMSS? I think we are very close to that being a reality. Do you have the elasticity and budget to do that? I don't mean that really. It requires two tangible things. So last year we acquired your BioHealth, which is one of the few at-home blood collection devices.

39:40I have it right here on my desk. And this device costs just a couple of bucks to manufacture. and you can click it on your arm and it's got 30 micro needles inside of it. Each of the micro needles smaller than an eyelash. So if you feel nothing, you click a button, you feel nothing. And then a small tube of blood gets extracted from your arm in about a minute or two. You can then peel that off and you can mail it to New Jersey, which is where we have a lab processing facility and we'll have a couple others in the next year and two and run a full panel, you know, 50 biomarkers and it will cost us like almost nothing.

40:13Now, today, if you go to Quest or LabCorp and try to get that panel, cash pay maybe costs you$1 ,000 or$2 ,000. If you go online and go to different competitors, maybe it costs like$300 or$500 for that panel. And my goal, my vision is very quickly, I want to give that away as a part of the Hims and Hers membership for free. Because if you can get a sense of those metrics, and I'm not talking about just baseline metrics, like, you know, your cholesterol and things. I'm actually talking about things that are even more sophisticated, like genetic predisposition risks, which, you know, very few people get access to, or cancer risks or polygenic risk stores.

40:55If you have a really accelerated risk of colon cancer, there's things you should be doing that are different. To me, that is the vision, a preventative front door that is near cost or free. And that requires us to spend hundreds of millions of dollars, which we're doing right now to totally verticalize this stuff and actually own the devices, the lab processing and that fulfillment, but then a platform that says, here's everything we know, here's what we can help you with. Give guidance and again, make that next step really, really easy.

41:22Harry Stebbings:I thought it was really interesting, Gokul Rajaram, who's amazing. He basically said his biggest lesson from Square, where he was for many years, was that when you're running a multi-product company, not every product line has to be profitable. That's so right. Yeah. And I think for us, I think that entry point and that data collection, it serves two purposes. One, most people just don't even have access to this stuff. So they don't even know if they're like doing well. You know, I'll give you an example. One of my best friends, mid thirties, he's trying to live healthy. He was telling me the other day how he's running a lot.

41:54He looked at his cholesterol numbers and they were like kind of out of whack. So he's like now starting to eat more salmon and going for a run. I'm like, oh, that's great, awesome. And then I told him, hey, have you done testing for this specific genetic risk factor for heart disease? It's called lipoprotein little a. He's like, no, I've never done that test. So he ran and did that test and he came back and he's like, my number is like 450. I was like, well, that's a problem because that number should be like under 70. And if it's 450, it means there's a pretty good chance you're going to have a heart attack at like 50 or 60.

42:23And he looked at me, I'm like, do you have, has anyone ever had a heart attack in your family? He's like, well, my, my dad died when he was 60 and my dad and my grandfather died at 55, both of heart attacks. And like, to me, that moment was why all of this matters because he went to his doctor, he went to a cardiologist because he was trying to do well. They gave him a set of panel and blood tests and his numbers were a little bit off. So he started to go for runs. Great first step. What they didn't test was a genetic predisposition marker that we now know is so much more important. And if you have that high genetic predisposition number, your cholesterol numbers need to be like amazing, not good.

42:57They have to be incredible or you're going to have a heart attack. Like there are so many therapies he should be starting now because he now has access to that number. That's the kind of stuff I want to give away for free. Like that level of information helps people actually like get preventative, not reactive and put it on a care spectrum where if somebody wants to be aggressive, they can. If somebody wants to be conservative, they can. But I want to give people information and then I want to give them choice and assortment and a doctor to help navigate that for a cost that isn't overwhelming.

43:27Harry Stebbings:I'm sorry to be, and this may be a total tangent, but is it not like totally fucked that doctors get incentivized by drug companies? One of the things I learned earliest in my career is if you can't hire people that are smarter than you, you will fail. You know, I think what you gain confidence in with brand marketing over time is that consistency is required. Yeah, the whole thing is totally fucked, right? If you look at the existing system in the U.S., almost nothing has to do with patient outcomes or patient happiness, right? So many people make money. Everybody makes money, but none of them make money in any way that's actually reflective of success of the customer or patient.

44:03And I think that's where our model is most powerful. Like we only make money at him's and hers if you are happier and healthier, period. Because you pay us, you pay us to be healthier. If you don't feel healthier, if you don't feel happier, you stop paying us. And so our incentive is only aligned with you. And we then fight behind the scenes, the drug companies, we fight the diagnostic companies, we fight everybody and we work with them, but we apply pressure to them to get the best stuff at the best price to bring it to you. but ultimately we only succeed if you succeed.

44:34Harry Stebbings:In a way though, your business is like my business, which is like, we don't want you to be too successful where you don't need us. A world where businesses don't need venture capital is a problem for me. That's not a good thing. A world where humans don't need any medication, Andrew, I hate to say it, is not a good business for you. Well, for us, it's not necessarily about medication, right? Like you will always need somebody to help quarterback your wealth and your health, right? Like as you grow, as you age, you're always going to want to have somebody who's an expert partner that's available to you 24-7 that you trust, that can help you navigate how you feel in life.

45:11And this changes, right? Like at different milestones, like you might not be there yet, but in the 10 years from now, though, things will be popping up all the time, that trusted partner becomes so valuable. But I don't think that changes. And so that relationship that can last decades with him's and hers is what matters, right? Like me just getting you a specific treatment today and making the most money I can from you today. That actually isn't what matters to me long term, right? I'm 37. I've got like a multi-decade perspective on how big this business can be. In order for it to reach that maximum value, you have to build a brand that people trust to have with you for a very long time.

45:48And that means often saying, hey, right now this treatment might not be for you. But we're here for you when something else pops up. And here's more information. And here's more diagnostics. And here's maybe a wearable device. And here's some other habits and food and nutritional support to help you along the way.

46:02Harry Stebbings:What is your least profitable product that is most important? Right now, it's the lab testing offering. Right now, it's lab testing because we offer it essentially at cost. We haven't verticalized any of this infrastructure. So it costs us pretty much just as much money as we sell it for. And again, it's because I believe the loss leader value to the patient is incredibly important. And that margin will continue to be terrible because what we're going to do is continue to reduce the cost as we verticalize it and then actually reduce the cost to the consumer. So that will always be, I think, a platform benefit from my standpoint where we try to make nothing on but give patients information and access.

46:42And that ultimately can be really transformative for them.

46:44Harry Stebbings:What do you think not enough people know about HIMSS that they should know? I think a lot of people are still trying to understand why we are fighting so hard, right? People see us in the headlines all the time. Recently seeing us in the headlines for GLP-1s and, you know, with drug company conversations. Can I be a dick? Why do we see negative connotations with you and not Ro? It seems like the world likes to dunk on you more than Ro. I think when it comes to HIMSS as a disruptor, we are actually disrupting. I think we are pushing buttons that structurally change how people get access to care in this country.

47:24If you look in the last 18 months, like we were talking about, the most important medicines of the century got cut by 80%. Not only did they get cut in cost, but now they're available through consumer channels at prices everyone can afford. I think we played a part of that intentionally, right? We applied massive pressure, regulatory pressure, consumer pressure. We leverage hundreds of thousands of patients to raise their voices to say, hey, these medicines could save our lives. Let's actually get them to us in ways we can afford. And coverage is now expanding dramatically and the prices are tanking.

47:54And so I think our willingness to be at the forefront of disruption and push on behalf of consumers, I think, causes friction.

48:03Harry Stebbings:And Ro isn't innovating in that way, hence they don't get the criticism. I don't know if I won't talk specifically about any other brand because I'm not sure their strategy. But I would say, you know, in order to actually disrupt the system, you have to break part of the system. And I think our strategy is doing that. What part of the system would you most like to break that you haven't broken yet? I think we're in the middle right now of breaking how health care is distributed entirely. So instead of going through the PBMs and then through insurance and then through reimbursements, all of that complexity that nobody understands in the U.S., I don't think any of that makes sense.

48:41All of it, or as much of it as possible, will go through consumer channels like him's and hers, where you can pick up your phone, have on-demand access, have total price transparency, have complete choice of which doctor, which specialists, which treatment, complete information access, and then control. The system in the U.S. is entirely paternalistic, right? You get treated with whatever they want to give you. And the incentives and reimbursements and costs are so convoluted that it's wildly overwhelming. And so when I think of every other industry we love, food delivery, financial services, banking, retail, everything is simple.

49:21It's on demand, from your mobile device, price transparency, customer choice. Yet the one thing that is the most important part of our life doesn't have any of those elements. And it's the biggest industry in the U.S. It's where we spend the most money, too. And so I think that's entirely going to change. And so I don't think HIMSS is a D2C company. I think HIMSS is disrupting how health care is delivered in a consumer-focused fashion. And I think we're in the midst of that change. I think people are just coming around to it. And you're starting to see it with the GLP-1s as a prime example. but I think in the next five years, it's going to accelerate dramatically.

49:56Harry Stebbings:The lock-in and power of Epic is just mind-boggling. Does that progress or prevent innovation in the healthcare industry? I don't think it's relevant, actually. When you look at the patients coming to Hims and Hers today, the patients starting their healthcare journey, the majority of them do not have legacy data and systems within all DMR platforms. right they they moved to a new city they moved to new york and they're 22 and they're like i don't have a doctor yet i'm feeling a little sad what do i do right and their their first time entry into the health care system is hims and hers and so the the wave of of health care for the future for the next 20 years for the 50 years after that is going to be a patient population that's starting today and that's why i think you know you have to you have to build a relationship early you have to have an assortment of care that starts young for people so that you can give them an example of what grade looks like and then build with them over many, many years.

50:55Harry Stebbings:Final one, and then I promise we'll do a quick fine. I know I've jumped around the whole thing, but that's why I love what I do these days. I think your food industry is at the root of all your healthcare problems. What you guys do to your food is not natural. Apples are not meant to be that large. Salmon is not meant to be that cut. Do you agree that food is at the root of a lot of your healthcare have problems and 100 % how genuinely dude how do you eat healthily and sustainably in New York today when it's all completely artificial yeah it's really challenging I think the current administration is doing an amazing job on that issue I really do right like the push to eat real food the push to normalize the fact that all of the ingredients on these labels is garbage it's chemicals the push to educate people to actually see what is good for you and look at those labels and require food companies to disclose it and to force changes on high processed foods or corn syrup use.

51:51Like it's poison. You know, my wife is, my wife is French. And so when, when we're visiting her family overseas, I look at the labels. It's crazy. I mean, you know, when you look at a French fried bag of, in a French grocery store, it's potatoes and it's olive oil and that's it. You know, you, You go to Safeway here in the US and you look at it and it's 40 different things. So I think there's a huge problem with the food industry. I think the government applying pressure and regulation there is a wonderful idea for people because undoubtedly that's a massive part of the obesity epidemic in the country and also probably the mental health epidemic and many, many other things.

52:29Harry Stebbings:Yeah, I'm totally with you. I feel, and actually on this one, I feel really sorry for, I don't know how it says about being classist, wealthist, whatever. But I feel really sorry if you don't have money because I think it's really hard then. Oh, yeah. It's so difficult. I mean, we've got three little boys and I, you know, we try to, you know, feed them well. And so we'll buy like a carton of organic blueberries. Right. And that carton is expensive. Organic blueberries in San Francisco might be like seven bucks. And I'll open it and I'll put it in front of the boys for breakfast and they'll grab handfuls and it'll be done in 15 seconds.

53:03Right. And so the idea that, you know, healthy food costs this much and is consumed that easily is a real challenge right now. And so anything people can be doing to eat locally, to have local farms, to make sustainability in their communities easier and better, I think is all positive.

53:21Harry Stebbings:Yeah, I totally get that. Dude, I want to do a quick fire round with you. Okay. So I'm going to say a short statement. You give me your immediate thoughts. Does that sound okay? Sounds good. What decision have you made in the last two years that you would reverse today? I think I was too slow to force the company to invest in completely disrupting their team processes with AI. Which process was disrupted most? I think customer care, provider quality, all patient interactions. I think we were a year or two too slow on totally changing the model of how patients interact with the platform. CAC goes up or retention goes down.

54:04Harry Stebbings:Which scares you more? Retention going down. Why? There are always ways to optimize efficiency on acquisition. There are always new channels, new brand campaigns, new growth avenues. But if you don't have a sticky customer and for some reason they're becoming less sticky, your product market fit, your patient happiness, your customer happiness is going in the wrong direction. CAC only ever goes one way. Agree or disagree? Disagree. At scale, I think with scale, with assortment, with brand value, new channels become unlocked, new efficiency grows, leverage accelerates with assortment. It often only goes one way, but I don't think always.

54:43Harry Stebbings:Other than Ferrari, what do you not sponsor that you would most like to? World Cup. Like the event itself, the FIFA World Cup brought to you by HIMSS? Yep. Well, you got the US one coming, dude. It's not too late to spend some dollars. Right. What advice would you give to yourself starting HIMSS again? You mentioned Jack and Atomic and starting it as part of Atomic. What do you tell yourself going back to the very start? I would tell myself to trust my instincts as we continue to build and get bigger and bigger, continue to trust my instincts. And also remember that it's going to be a long journey and the ups and downs are going to come and go.

55:27But that the persistence is going to be most important.

55:30Harry Stebbings:And I think we do meaningful jobs and you do a hugely meaningful job. But I think the most meaningful job that you probably do, which you'll agree with, is being a father. final one what's your biggest advice on being a great father now having three boys you know there's a there's a something i watched once where they asked a whole bunch of little kids what their absolute perfect afternoon was and these are like two three four five year olds and the perfect afternoon was all these kids answered the same way just playing with their mom and dad just like sitting with blocks and playing with their mom and dad or drawing with their mom and dad or or something with their mom and dad.

56:07And I don't think, you know, when you're exhausted and you're a parent and you're trying to do everything and pulled so many different ways, you realize that actually all the kids want to do is just have you present and truly present. And so my greatest advice I think would be to try really, really hard to just play with them. Like actually play, like get down on your knees, on your butt, in whatever they're doing and just ask what they're doing and ask if you can do it with them because they light up because in parenting, like it's, it's hard to actually make time for that. But I've found that, that that's, that's really the most important and valuable stuff.

56:44Harry Stebbings:Dude, I so appreciate you. I so appreciate the friendship. I so appreciate you putting up with my incredibly wayward comment. I mean, real breadth to the conversation. You've got to give me credit, but you've been fantastic. Appreciate you having me. Good to see you again. But before we leave you today You're in back-to-back meetings all day You're trying to stay present But you're also worried you'll forget the decision The action item The important next step That's where Granola comes in Granola is an AI-powered notepad for meetings You jot down rough notes like you always do And in the background Granola transcribes And turns them into really clear, useful notes When the meeting ends No bots joining your call No distractions Just a clean notepad that helps you focus During or after the call, you can chat with your notes, ask Granola to pull out action items, help you negotiate, write a follow-up email even, or coach you using recipes, which are pre-made prompts.

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