Oura CEO Tom Hale on Hardware-as-a-Service, navigating ZIRP, journey to CEO & more! | E1812

0:00Jason 2.0. Well, actually, this is Jason 1.0. you just never met him jason 2.0 was the fab bastard um i used to run marathons i'm a six degree black belt in taekwondo you know it was like a workout maniac and then uh for 20 years i just now you're back like a couple of pints of ice cream extra a year and added two pounds a year for 20 years isn't it like pernicious how it happens it sneaks right up on you doesn't it oh boy does it oh boy does it and uh now i'm reversing it and uh it's been freaking fantastic This Week in Startups is brought to you by Embroker's Startup Insurance Program helps startups secure the most important types of insurance at a lower cost and with less hassle.

0:44Save up to 20 % off of traditional insurance today at Embroker.com slash twist. While you're there, get an extra 10 % off using offer code twist, lemon.io. Need to speed up your product development without draining your budget? hire vetted engineers from Europe at lemon.io. Go to lemon.io slash twist to get 15 % off for the first four weeks. And LinkSquares, life for in-house legal just got a whole lot easier. From contract creation to execution and more, LinkSquares is the go-to for all your legal needs. Learn more at linksquares.com slash twist. All right, everybody. Welcome to this week in startups.

1:31My guest today is Tom Hale. He's the CEO of Aura. And interestingly, as you probably heard there in our cold open, I have been getting in shape. I had an Aura for a while, then I lost it. But I'm going to be getting on a new one because I'm getting healthy here and I'm tracking my rest. I'm tracking my sleep. But Tom was brought in to Aura in March of 2022. We course, is this week in startups. Of course, we had the founder of Aura on. But they brought Tom in because, hey, listen, to scale this business and hardware is so hard. But you do have a movement around the world of quantified self. People realize that if they take their health into their own hands, the outcome is going to be better than just relying on the reactive healthcare system we have here in America.

2:25So welcome to the program, Tom. Well, thank you, Jason. Appreciate it. Good to be here. Great to have you. Thanks for taking the time. I know you're super busy. So, listen, you've been in the industry for a while. You were chief product officer at Linden Labs. Yeah, back in the day. Second years of Second Life. Metaverse 1.0. You were at HomeAway. That's the people who did VRBO. I think that was an Austin-based company, was it? Correct. Yeah, I remember those cats. They're doing great. You're on the board of cars.com and you worked at Adobe SVB. So, you know, as a senior vice president, a bunch of different roles.

3:02So tell me, why did you take the job at or everybody knows or this is this week in startups? They know it's the ring you wear tracks, your sleep temperature, a bunch of stuff. But we'll get into all that. But why did you take the job? Because listen, you heard in my preamble there. Hardware is hard. man consumer hardware is particularly hard a lot of competition uh consumers are finicky high churn rates it's just hard uh in general so why'd you take the job yeah it's funny it's personal story really um the fall of 21 uh you know we'd sold um a company i was working at and uh it was in the process of being unsold um over the course of uh of that fall um this was Momentive, otherwise known as Survey Monkey, we sold it to Zendesk.

3:50And a variety of factors conspired to have it becoming unsold over the course of that fall. And I was losing sleep. It was brutal. I'm good friends with Xander Lurie. Yeah, it was brutal. And in fact, I had lunch with Xander Lurie yesterday. Yeah, big, big ring fan. So yeah, we were, you know, it was a very stressful time and I had some family stuff going on. And honestly, for the first time in my life, I'm a championship sleeper first in my life i'm losing sleep yeah so typical you know resilient grit filled you know kind of person i'm going to figure out what to do about it so i start researching and i come across this thing called the aura ring like oh i should really check into this look into it get the product and i fell in love with the product and and partially because it's a beautiful product well made it works it delivers on the promises great high quality data you know invisible in your life very different from the other wearables i've tried i've tried them all and uh i just was I was so convinced I did something kind of uncharacteristic, which is I kind of pushed myself into it.

4:43And it turns out they were doing a search at the time and doing a search because honestly, the company had been a little bit of a success and maybe a victim of its own success. It was growing so quickly, having to ship hundreds of thousands of rings, deal with people all over the planet, customer support, scaling, sales, marketing, the whole thing, that they really needed someone to kind of come in and put their arms around it. So I came in and they said, you know what? We're not looking for someone like you. You don't fit the profile. You know, software guy, subscriptions, big data, machine learning, you know, your background.

5:19We want somebody like consumer products from Nike, something like that. Wait a second. The thing you described, though, somebody, it sounds like, you know, having a data science background is pretty good if you're going to run Aura. So that was the argument I made. And I just said, hey, listen, I think you guys are making a huge mistake. And over the course of the search, I think I kind of convinced them. and stepped in. So it is, you're right. I think you nailed it. It's a scaling opportunity here. And it's also a business model transition. You know, I think we shipped it over into subscriptions.

5:47That's something I've been working on more or less my entire career. I mean, you know, back in the day when I worked at Adobe and before that a company called Macromedia, it was about shipping boxes of software. I mean, we ship CD-ROMs with, you know, software on it. And we switched over to subscriptions relatively early. Of course, Adobe's famous for that. They were kind of following in the footsteps of Macromedia after they acquired the company. And quite frankly, I felt like this is a really interesting model because you might say hardware is hard, but hardware plus software is a really differentiated proposition and a much, much better business model.

6:20Yeah. And Adobe might be one of the greatest examples of people doubting the subscription model. Adobe was famous for giving you that creative suite with hundreds of dollars. They printed money. every two years new version comes out you get the new cd-roms that was the dna of the company it's a big check to buy the adobe creative suite but it's worth it if you're in the creative arts you're you know a designer developer front-end developer whatever uh but they went to 20 bucks a month or 30 bucks a month and now that business has skyrocketed yeah skyrocketed value yeah subscriptions are powerful and so i think why are subscriptions beyond the fact that you know you You get paid money every month and you start the next month off plus or minus wherever you were last month.

7:05But why are subscriptions otherwise valuable in terms of the operation of a company and the development of a product in your mind? It starts with the customer value, right? Because the whole point of software is you're constantly releasing it. And even in these days of mobile client apps and cloud apps, all that stuff, you're constantly iterating the product. And you're able to release it over time and you're able to add value to it. And so, in some sense, you're matching the monetization of that product with the delivery of value. Whereas, you know, old model is, hey, we're going to sell you the software.

7:36Maybe we'll charge you a maintenance fee. But in subscriptions, it's ongoing. And by the way, the customer has the choice to say, hey, are you still delivering for value? So, at Wara, we have a subscription model. It's tied to a piece of hardware. You buy the ring. You know, it's something that you wear on your body. It's beautiful. A couple hundred bucks, three or four hundred bucks. Three or four hundred bucks, depending on which, you know, finish or, you know, scale you want. and and and the whole premise is that you know your your data is being monitored 24 7 and it's being captured and you know insights are being presented to you it's not just all the data that you're getting it's actually you know we're doing machine learning and kind of insights over to kind of give you something to let you know what's actually going on because you know you may not be an expert in your body it's a learning journey you're going on and that value delivery aligns with the value capture and that business model is really interesting because of course the challenge of hardware is that you end up you know engineering something and then shipping it and you're kind of like well you know we're gonna change it we have to wait 18 months before we can ship a new version of the hardware well that's not true today right you can actually deliver software value you can deliver daily if you want and so look at your tesla i mean i don't know if you drive a tesla but you get you do you get an update and it's like by the way you know now you can have apple music oh by the way you now you can you know we've changed the navigation to do this and you're like wow the reason people used to upgrade their cars is because the software got clunky and they'd be like this is so frustrating my friend got the new prius i got to get the new prius to upgrade the software yeah and i guess you know part of the genius over there from the tesla team is just constantly delighting customers with new things new capabilities what is it six bucks a month for for or ten bucks yeah it's really interesting i think there's a an interesting kind of question here around like well what's the right kind of ratio between hardware and software and i think I think where we landed, and I get all credit to the team here because I think in many ways this was something that, you know, I walked into the beginning of the transition about six months before, was really to sort of think about the ratio of software monetization to hardware monetization.

9:34And the way I think about it is that, like, you buy this device, and you buy this device because you like it. You're thinking, you know, it's going to be great. I can wear it with my, you know, my Rolex. I can, if I'm a woman, I can wear it out. I don't feel like I have a piece of technology on my body. You know, it's 24-7. It weighs four grams. is made of titanium it looks you know matches my other jewelry all this kind of stuff that's very like specific to the hardware then you start learning and you go on this journey of like exploring your your physiology and learning what it means to be recovered and what it means to have a good night's sleep you know this sort of activity that we all do but no one's particularly good at because when you're sleeping you're asleep you have no no awareness of it yeah and that value uh you know it it's about you going on a journey to like almost listen to your body and to learn how to really listen to your body through numbers and through insights and through changes um that the ring itself and the software learns you it learns your baseline classic example one one person i know his body temperature and we track body temperature on the ring it's one of the metrics his body temperature normally is like 97.5 right so when he goes to the doctor and the doctor puts a thermometer in his mouth and says hey listen you know your temperature is 98.6 you know what he's got a fever right because his baseline is 97.5 so the thing is we're not all the same medicine is practiced on the averages but this is really about like you and your voice and your performance so that idea of being able to deliver value over time and having you go through journeys you might go through a sleep journey i'm not sleeping so i need to like figure that out how do i do that well stop doom scrolling stop paying attention netflix don't drink alcohol don't drink a lot of water or juice before you go to bed avoid sugar all these things are really basic and you can sort of experiment your way into it and realize what works for you because you know what works for you jason may not work for me may not work for someone else it's what works for you and you get the metrics to support it because we all know what's measured is managed all right listen we work with super early stage companies at my investment firm it's called launch i'm talking pre-series a right we're talking seed stage friends and family and you know what at that stage maybe they don't have insurance yet in fact just recently we had an amazing startup they didn't have D &O insurance.

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12:59I mean, you work at SurveyMonkey. It was a, yeah, you're trying to get information on your product, et cetera. so six bucks a month 300 bucks 400 bucks up front yeah have you consider is that ratio feel right to you or do you think you need to offer you know people the 30 a month like whoop is doing or some other folks you know they drop their price a little bit oh yeah 20 bucks a month yeah i think it's pretty pricey yeah yeah yeah i you know it's funny i i think our premise on that is um is that you don't want it to be something that people have to think about got it you know six bucks a month two cups of coffee whatever it is you know uh call it a penny a minute you know um you know so little so little money you just want people to think about it and i think their subscription fatigue is a thing you know what i mean i mean i you know we all we all feel it so i think what we really wanted to do was to price it in a way that like just makes it easy and the truth is is that if you've invested in the hardware and this is a really interesting i think maybe point maybe for your folks who are thinking about pricing models you've invested in the hardware and because you've invested in the hardware you're kind of invested in the outcome and so you're willing to really give the subscription like you know the time to to invest to see if you get the value so from our perspective the company has to deliver the value to you we have to deliver features and capabilities and so over the past um you know basically 12 months since we introduced subscription pricing we've introduced you know spo2 detection workout heart rate um body clock what's spo2 oh uh some blood oxygen if you remember during covid people people were measuring their blood oxygen oh you can do that with uh or i didn't know yeah so we measure it overnight and give you a really good reading sleeping disturbance what's your what is your chronotype now what what are all the things that that that um you know you want to do to customize you know some people actually don't want to do a certain amount of exercise they want to minimize the amount of exercise period prediction um connection with natural cycles which is an fda cleared i'm sorry fda approved contraception for women you know using your temperature to let you know where in your cycle you should and should not be having sex um you know new reporting reports hub sleeping score modifications polyphasic sleep you know have you heard of polyphasic sleep this is i haven't heard this now we're down the rabbit hole now there's now that you're going down all you know all into health they think about this so polyphasic sleep is is people who sleep multiple times over the course of a night like they might go to sleep early and then they wake up in the middle and then they go back to sleep it's basically like an app that might be me yeah like And, you know, famous Thomas Edison was famously polyphasic sleep.

15:25And there's debates about that. I get to... You can drop science on that. Yeah, great. So we track that now because that's sort of a case where like, you know, most sleep trackers don't even know about polyphasic sleep. And we're really conscious of it. So we give you that data visibility. So that kind of constant delivery of value and new capabilities being delivered in the product, in addition to the data and the insights that you're getting, because, you know, your health doesn't stay the same, right? your health changes you lost you know what did you lose 40 pounds yeah you know your metrics your metrics are changing as a result of that and so being able to kind of have the the system learn you the new you know whatever you want to call it jason 1.0 or jason 3.0 jason back to jason 1.0 yeah i 2.0 is fat jason now i'm jason 3.0 jason 3.0 you know you you want to get that um that those differences showing up in your metrics and and the thing is like of course that the system needs to relearn you because you're a different you and that value delivery aligned with subscription i think that's the key it's very different than say your typical kind of piece of hardware that people i think most people have an expectation they buy a wearable and that's kind of what it is and then you know six months later they've thrown in in their in their drawer because they've gotten all the value out of it and we're continuing to add value we are like i think it's shocking to me the retention on this product is off the charts really interesting the charts you know we have it at 12 months 88 of the people are still in the app checking for data we have people who have been wearing this product for seven years wow they've gone through three generations of value i think women in particular who are tracking their cycle tracking their health thinking about how their body is changing not on not you know not just on their cycle where hormones are dropping you know in a pretty predictable way over over 30 days but in their life from you know the onset of menopause to the child-bearing years to perimenopause to menopause we'll probably see ltbs measured in decades that's a really different product is a major part of that that the fact that you know this the temperature and is temperature a super important yeah vector because you know i don't get i don't think i get my body temperature for my apple watch do i uh it depends which one you have and and also depends on when you measure it i mean perfect examples like one of the things that people really enjoy about the rings that it kind of disappears into the background, right?

17:42You don't really have to, it's not, it's not clamoring for your attention. It's not another digital mouth to feed, like, you know, saying, Hey, please plug me in or, you know, put me on the charger. It just sort of goes in the background. You get a seven day battery life, you know, you put it on, you don't think about it, you check the data when you need, but it's constantly there 24 seven. People wear this product in a way that allows the data to kind of just be environmental and passively tracked. And then the algorithms can work on the data and present the information back what do you do when people lose this thing that's uh you know it's so easy to lose yeah well speak for yourself we don't we don't actually get that many people uh losing them but um but you know it's a small item you know whatever it could call that we actually do make it possible for people to to contact us if they want and we can we can give them a little bit of help to get to get back up because okay very good yeah they get really yeah they get bent out of shape when they don't have their data yeah and you can you use the device without the subscription or it's required to get the subscription and do you give people like a certain number of months when they first acted.

18:39Super interesting. And I think I grew up on freemium software, right? I mean, SurveyMonkey's classic. It's like the OG freemium software product where you get a ton of value and then, hey, you want to do something extra, you sort of switch over into the paywall. This product is different. And it's different because it's not a freemium product. And that's because it's a hardware product. You know what a freemium product is in hardware? It's a company that's going out of business, right? Yeah. because hardware has a physical cost and you have to ship it places and if it has a warranty issue, you have to take it back and then you have to refurb it.

19:13There's this sort of economics that make it difficult to do a freemium model. So I think with the innovation here, and you saw this because I think Fitbit famously had a hardware model with freemium attached to it and it was not super successful. You know, one, two, three percent. It actually pissed me off and it made me leave the Fitbit ecosystem after seven years because I was like, ah, you've trained me. I've bought so many of these things And now like you're deprecating the product. And I just felt like I was, I was baited and switched. Um, and I think it's very hard to change it once you've, you know, taught people how to do it.

19:45Also their hardware kept breaking. And that was the biggest problem I had was just, it wasn't a very, um, I was, I was replacing it so often, uh, that I had like ongoing streams of them, like every year it would break. And I'm like, I'm buying the top ones. I bought this for all my family. Like, why does this keep breaking? The build quality was terrible. Well, you know, it's funny. I mean, you talk about losing your aura ring. You'll probably find it at some point, you know, and like, it'll still be functional. But like, we've had people put them through the wash and still functions, right? And we've had people, you know, they've run over them with their car on asphalt and still functions.

20:21And that's because it's made, you know, it's titanium. It's really, it's a very strong build. It's a finished company. You got some amazing engineers and folks building the product. but you know maybe maybe to your point um you know this notion of a business model it's it's a little bit like there's some expectation and training that you have to do with your customer you have to educate my thing this is super relevant for every startup especially one who's disrupting because you got to get people thinking in a new way about the value that you deliver most people are trained to think oh i buy a hardware product i use it once i use it twice i use it three times but i don't pay again for it yeah peloton i think maybe showed us the way that like if you buy a piece of hardware like there's things that you might reasonably expect to to pay as you as you use it as it goes along yeah and they seem to have provided some decent amount of value in terms of the courses yeah because you're and you have live courses so they keep adding like if you're really into this like they have yoga and stretching i have the tread i just reactivated the tread the only problem i have with that product is the dark patterns i don't know if you're aware of dark patterns sure like you know you try to you sign up for the wall street journal or the new york times it's the easiest subscription you ever did like you they'll subscribe you instantly you try to unsubscribe good you're on the phone and wait times and then they try to convince you not to and uh now it's it's gotten so bad this is what lena khan is um she's cracking down on yeah she's i think it's a good place for her to focus her energy instead of trying to stop things that you know are minor acquisitions because it really does cause consumer harm and i was telling the peloton team like um why can't i open the app up and pause it if i'm away for the summer and i'm not going to use it for three months why do i got to give you 128 or 26 why can't i just pause it and they're like you can call us and pause it i'm like really really that's what you want me to do you you you literally made the most sophisticated treadmill and bike in the history of bikes and then tonal was the same And Tonal doesn't have a pause feature.

22:18So I'm putting both of you on blast. Tonal and Peloton right now. Get your acts together. Dark patterns make me not want to use your products. I mean, it's just so gnarly. That's why I hate Equinox. And I would never go to Equinox again. You got to win the customer. You got to deliver the value. That's what it comes down to. And quite frankly, I think you got to also match the value delivered with the value captured. Right? I mean,$6 a month, honestly, I have a hard time with anybody who complains about that. You said that's two coffees, by the way. I don't know where you're buying coffee these days, but cheap date.

22:52If you're in the Bay Area, about$7,$8 is when they present you with the tip after you bought a$4.50 or$5.50. $20 a blue bottle. How about$1,$2, or$3 for a tip on a$4 coffee? I'm like, I'm a generous guy, but it's a little crazy right now. Do you know what's funny? I don't even drink coffee anymore. That's one of the things that you think about. What are the products that have really changed your behavior in your life? I mean, you can count them on the fingers of one hand. And I'll tell you something. I used to be, and this goes back to kind of the personal story about aura. So, I used to be somebody who drank coffee probably twice a day, maybe two to three times a day, always.

23:23And then in the evening to fall asleep, I drank a glass of wine or have a beer or something to kind of take the edge off and drop to sleep. Turns out, that's terrible for your health, right? Alcohol is a poison, basically. And the way your brain metabolizes alcohol is basically poisoning your cells. coffee is a stimulant that also works by basically you know it's not just about creating alertness caffeine does create alertness but it also you know it upsets the way your body wants to sleep it slows that process down so i was in that state i've been sleep deprived for really you know 25 years and i went cold turkey um stop drinking alcohol stop drinking coffee and it was literally like walking out of a black and white movie into a color you know technicolor movie i was like oh my god what is this feeling and i was like i need to i need to be involved with this company because of the impact it has and sleep is one of these things like a good night's sleep it makes a difference the next time day your clarity of cognition you know your your energy level your mood your ability to handle stress sleep is this really it's like a powerful drug that is available to you for free you don't need a prescription for and the thing is of course over the long term sleep affects all these things with your health in a material way whether it's alzheimer's or cardiac health it's one of the eight factors that the american health association site says you know what what what what is what are the things you can do to reduce the risk of having cardiovascular disease it is really implicated in diabetes it turns out that sleep regulates in some some ways that the the two kind of um hormones that that manage whether you feel hungry and whether you feel full and so if you're not sleeping well you're gonna be snacking and you're gonna be having less willpower to resist snacking and then you're also gonna like you know you're not gonna to feel full so you'll eat twice as much and maybe have you know a quarter of the of the of feeling satisfaction boom it's uh extra weight yeah and so when you figured out you were gonna you would use the aura the aura you get a sleep score of some type like uh and yours went from what to what after taking out caffeine and booze well let me let me check you know it was pretty dramatic i i think i was kind of in the 60s and uh you know i went uh i went up up into the 80s but but really the score was was there but it was also i felt just dramatically different you know i'm part of this new found bio thing where i'm i got a like a coach and i'm going through my health and we're running three tests for me for sleep one of them's like eyeglasses another one's a supplement and just a couple of different oh and then one's going to be a warm shower for five minutes before I go to bed.

25:53And so I have like three different tests. I'm testing each of them for four days in a row. And then he's like, you got to get yourself an aura whoop or something to, we got to start tracking your sleep. And so I'm in the process of doing all that because he thinks that's like the first place to start to sleep in terms of health. And so, or one of the first places. It's the foundation. I mean, you know, in many ways, it makes other parts of your health journey just that much easier to manage. And sleep, of course, is this incredible, incredibly positive thing in many ways for your short term and your long term.

26:26Imagine this. You got an idea for a tech startup. You're going to change the world. I know it. But you got a problem. You don't have any engineers. Engineers, hard to come by. They're very busy. They got jobs backed up. Well, you need to find great engineers. You need to find them quickly. And you need to reduce your burn rate, right? Because you can't be spending like a drunken sailor. You have a limited amount of resources as a startup. Now imagine, there was a partner out there waiting to help you who had a thousand on-demand developers, and they were vetted, experienced, results-oriented, and passionate about helping your startup grow.

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27:32And Twist listeners get 15 % off the first four weeks. What a deal. So stop burning money. Hire developers smarter and visit Lemon.io slash twist. Easy peasy. lemon squeezy at lemon.io slash twist let's talk about operating a company coming in to take over uh from the founders and lead the company um when you come in uh i've heard this uh it's a great line in a book uh i'm listening to right now on audible uh about like you don't want to cannonball into the pool you want to just slowly walk into the pool when you're the new leader sure so what approach did you take did you cannonball into the pool and give a big speech Or did you slowly walk into the pool?

28:14I think this is true. And by the way, I've been an entrepreneur and investor and been in small companies of my own and also in small teams inside of bigger companies. And so one of the things you got to recognize is that if you come in, you got to learn the topography of the organization. Right. You got to know who knows what's up and who knows what's down. And you got to, in this case, companies really finish company. You know, you described Harpreet as the founder. He wasn't the founder. Company was founded in Finland. Hmm. And in fact, one of the dynamics was this sort of US and Finland dynamic in the company.

28:47And one of the first things that I said I was going to do was within a week of starting, I was going to go to Finland. I'm just going to go to the fount of this product and be like, hey, listen, you guys invented this thing. Let's talk about that. So entering very carefully, I think the irony of the whole thing is that about three days after I started, I got COVID. I hadn't had COVID the whole time. Oh, wow. Yeah, I got COVID from somebody in the office. I was so glad to join the company, you know, catching babies and shaking hands. Got COVID. And I was like, I need to go to Finland. And my colleague was like, you're not going to Finland.

29:19You got COVID. We're not letting you fly. So, I didn't know. But, yeah, right. You don't cannonball in. You pay attention. You listen. You see what plans are going. You know, you start to look around. It was an interesting time, too, right? It was, you know, the Ukraine war was a couple months in. And the stock market had really started to melt down. Yeah. Every investor. End of days. It was end of days. End of days. And I'm assuming, you know, it's not your team. A friend of mine recently took over a company that was that scale and he hadn't hired the team. And they didn't, not all of them were fans of his.

29:57In your case, you might've come in a little more neutral and less polarizing. Yeah. But I'm curious, like how you just get to know the team. Like what approach do you take? Like, how many employees did they have when you joined? You know, 480, something like that. So you're not doing one-on-ones with 480 people. That's just not enough hours in the day. So what is the approach? Do you do, like, skip meetings where you, you know, skip over the manager and meet with their team? How do you... You got it. I mean, I think, you know, you pay attention. You go to meetings, keep your mouth shut. You use your ears.

30:30You look for patterns. A lot of what I think people do at operating at scales, they're looking for patterns. You know, they're making assessments. um you know i i started um adding people team one of the first hires i made was a chief people officer right because that that person's job full time is to make connections and understand the landscape of the team uh second thing i did was look at the intellectual property you know base and understand how how uh what the longevity of the intellectual property was and then the third thing i did was i started to really like understand where the uh innovation was coming from and it turned out that finland finland was really the fount of the innovation most of the sales and marketing is in the u.s most of the rnds in finland so making sure that we were connected there and that those people you know understood that as innovators you know they're the value creators in the company let's make sure that they're appreciated so we started doing something i think this is important for anybody's startup or scale operator you start to think about the company culture right what is the culture um we're a wellness company okay so wellness is part of the you know part of the culture and it's finished company i don't know much you know about finland But like, you know, they have sunlight, you know, during the summer, but they don't have sunlight during the rest of the year for some of these folks who are living, you know, close to the Arctic Circle.

31:41So, there's a very important culture of like, you make hay when the sun shines. Like, you know, you're going to go out there and enjoy in the summer. So, you got to have some respect for the culture. But at the same time, you got to think, what do you want to change about the culture? What do you want to drive about the culture? We have an incredible set of values. Our values are, you know, embedded in the product. Like, the product should be invisible. It shouldn't be, you know, begging for your attention or asking to be charged. So those are values embedded in the product, but also in the company.

32:06We have values of collaboration. Finland is a big part of the thread of the culture of this company. It's a socialist country. It's really oriented around a collectivist vibe. It's respectful of nature. There's all these values that are permeating the company because of the people, right? So you start that, well, what do you need to do? You got these great values. You got aim higher or Ubuntu, which means we do things together. We earn trust. Trust is incredibly critical. we're a healthcare company we're we're managing your your health data you have to trust us we have to trust each other so these values are critical and one of the values that i think you know honestly we really need to establish was this one of like hey we we're gonna we're gonna look at this problem that we're facing right now with ukraine war and meltdown and you know we're spending money because the you know there was a marketing push they raised a bunch of money they're spending a bunch of money in the company and we said like we're gonna talk to people and ask what i want so i went around and asked somebody woman who ran the science organization in finland her name was heli brilliantly and i said hey heli like i'm new ceo like what what should i be listening to tell me what you think she goes tom you know what we want black coffee no sugar and so we we created a ceremony and this is maybe the advice for your your your listeners and founders we created a ceremony called the black coffee meeting and the black coffee meetings where like you're not you know you're not blowing smoke was as americans you know i think we have a tendency to want to see the bright side and be optimistic and see what the opportunity is and they said just give us you know tell us the truth and and don't sugarcoat it how are we doing what's going on well the good news is we're doing great but you had to earn that trust because if if you are doing great and you say you're doing great but no one believes you then then you know what are you so um and this was going right into that right yeah they're candid oh they're they're blunt you know they're blunt and taciturn and they're also very funny as as a as a group they actually have a good sense of humor i like it that sounds good to me yeah so but so then just going back to your your question about how you come into an organization you got to respect what's there you got to know what's there you got to assess what's there and then you got to think what are the what are the additions here what are the what are the other ingredients that you want to love in here hey you know what wellness is wonderful but you know what's really great if you want to have a mission-driven company that wants to change the world of health from interventionist health to prevention, guess what?

34:27That works if you're a successful business. If you're not a successful business, you're never going to reach that mission. So for one of the first things we did, connect the idea of the mission to the idea of measuring the company. We're a product that measures you and gives you data. What's the aura ring for the company? How does it measure the company? What are the measurements that we want to pay attention to? What is it telling us? What are the insights? That big, big unlock for everybody. Yeah. And so getting through 2022 hard. I don't know if you did a riff. I assume you had to do some kind of a riff or get this, you know, spending under control.

35:02I had to stop hiring cold. I had to put my foot right on hard on the brakes. And that was like within 30 days, right? Like stop hiring. Had to figure out where we needed to hire. We were spending on marketing. I mean, we were running commercials and, you know, I went to a bar. I hadn't even started the job. went to a bar saw a commercial and i was like wow first of all i don't go to bars second of all yeah there's a commercial on the chances of those things intersecting like that's a bullet hitting a bullet in a civil war battlefield yeah but it turns out they were advertising a lot so it wasn't a surprise at all that i saw it in a bar any sports event was it working was the advertising even working or it's you know it's hard it was but it's you know it's a lot of money as you know so uh so so you know very early on um a couple months in i'm like listen we're gonna stop spending money on marketing let's let's let's see what happens i was like no you can't do that business is going to fall apart if we stop spending on marketing no no no let's just we'll just see trust me it's okay so we turned we turned the money off a little while business goes down a little bit but you know not too bad and i said well let's let's try a little next month let's let's take a little bit further take it down 30 and business goes down a little it doesn't go down 30 maybe you know five to five ten percent next month i said let's cut it off see what happens cut it off you know what happened best month we've ever had oh wow what explains that well what explains that so we we learned two things one we learned the power of referral which is this is a product that people love and if if they see you wearing it they're going to talk to you about it it's it's got that property call that real world virality real world yeah exactly real world virality people love talking about what's your score jason how you doing how did you sleep last night tell me what's your readiness people want to like they want to talk about it they want to understand it so what we saw was that that referral business was was the flywheel that was driving the business really interesting passion for the product wonderful second thing we learned and we introduced a capability in the product which was an integration with um an fda cleared digital contraception basically uses your temperature if you're a person who menstruates or a woman you your temperature fluctuates over the course of your cycle and and it tells you what phase you are in your cycle when you're you know when you're dropping an egg and you're fertile like your temperature drops it's very clear and we worked with this uh company natural cycles and in the past in natural cycles you had to like take your temperature with a thermometer right and you had to do it right as you woke up because you may not know this but your temperature changes over the course of the night it lowers as you get to sleep and then as you wake up it rises and so as you if you if you take your temperature after you've gotten up and walked around you might get an elevated temperature which by the way might tell you that you won't get pregnant but but you will because you took your temperature too late So, Aura captures your temperature overnight.

37:43It relays this to the Natural Cycles app. The Natural Cycles app algorithm looks at it and says, hey, you know what? You're not going to get pregnant. So, you know, feel free to procreate as you wish. Or you have a real risk. So, don't do it. You know, this is a red day. This is not a day for you to have sex. And quite frankly, you know what? What turns out young women who don't want hormonal contraception, who don't, you know, are trying to listen to their bodies, are trying to understand that they love this product. And it solves a big pain point for them. So those two things, referral and an integration, drove our business to make the best month ever.

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