Debunking the myths surrounding skincare

Chris:

Hello digital health community. I'm so excited for our guest today, David Futoran, the CEO and co-founder of Honeydew health, a company that is disrupting an impactful but often overlooked segment of health, which is skincare. And David has been pioneering playbooks for digital health, like full stack companies and direct to consumer and even B to C to B, if you're at all confused, hang tight, because we're going to discuss all of those things. David, welcome to the podcast, can you please introduce yourself to our audience?

David:

Sure. And thank you for having me, Chris. It'll be my pleasure to share anything I can that will be helpful for people to learn about the field and accomplish any goals they have. In short, about myself, I grew up surrounded by healthcare, both of my parents were practicing physicians. And I like to say I grew up kind of during the decline of the era of the independent practitioner, through my parents, I got to see a lot of challenges in the healthcare delivery field. And, then I went to Penn where I got a degree in biology and from Wharton in healthcare management, and Penn has really great healthcare programming. And they especially do a really good job of teaching you all the problems that exist in our healthcare system. So I came out of there really, like, motivated to try to make a difference in that there were so many problems to tackle. And there's so much spend on healthcare, and I also just had this itch to start doing that right away versus spending the right number of extra years studying to go into the medical field like my parents. So by the time I graduated college, I pretty much knew I wanted to be building in healthcare, and ended up starting Honeydew out of like a, you know, kind of completely organic series of events, but it ended up meeting pretty much all the criteria that I wanted to be focused on with what I'm working on, and especially within the healthcare field, which to me is also just holds like a piece of significance, because I'm very conscious about how I'm spending my time and wanting to do something meaningful, and there's really no better right, feel to be doing that. And then healthcare. I mean, health is like, front and center for everybody before almost anything else. That's kind of how I got here.

Chris:

That's great. Yeah. And I'm just curious, in that kind of curriculum at Penn, how did the problems that they instructed about aligned with the problems that you experienced, either through your parents or you personally, as you've been going into entrepreneurship within healthcare?

David:

Yeah, I mean, it's, uh, you know, you could spend years trying to teach through those problems. So it's a complicated thing to answer. And like a quick segment, but in short, there's just a lot of misaligned incentives and a lot of different stakeholders. There's the providers, the payers, the pharmaceutical companies, and all of them kind of have their own incentives that don't align with necessarily what's best for the patient. So like, an example of that would be like, if a clinician wants to prescribe a certain medication, they think it's the best for the patient, but the insurance company might not cover that medication, because of sort of, like, you know, a whole variety of bureaucratic reasons. That's an example. I think that most people can relate to, or have experienced.

Chris:

Yeah, no, and it's one of those industries where, you know, the people that you're building whatever technology or application experience for aren't necessarily the same people that are going to be paying for it. So there's always this awkward dichotomy of incentives and experiences and prioritizing, right, do you want to prioritize the people that need the intervention or the impact the service or prioritize the people that are going to pay for that? And I know you have an interesting answer and approach to that problem. But as far as being exposed to so many problems around healthcare, I believe you came into Honeydew because you had your own experiences in your past with the dermatologist and such and this is your second startup. Can you tell us about the part of your journey that led specifically to Honeydew and kind of reinventing how we look at skin care dermatology?

David:

Yeah, definitely so um, basically, there was a point in my life where I had really serious moderate to severe, leading to severe like chronic acne like cystic painful acne was all over my face. It was on my mind all the time. You I could just feel it there. It was. And it was painful. And it was embarrassing, and it was chronic. So you know, it just kept coming back flaring up all the time. And I was getting care at a dermatologists office. I had medications that worked well at controlling the flare ups and cleaning me up. But the process was, I mean, it was terrible. So like, my dermatologist has a four month waitlist. And I would have like, when I needed to refill, I would call the office and say I'm out of medications I need to refill. And they would tell me, you haven't been here in a while you have to come in. And I'm like, Okay, well, that's annoying, because I already know what I need, what when can I come in, and they're like, you have to like the next available appointment is four months from now. So I'd be waiting four months with a flare up walking around with that, in order to just come in to get my medications. And, you know, I had to travel there and sit in the waiting room for an hour and a half and, and the outcome, I already knew what the outcome was going to be. So in that process, like during an appointment, I just started getting into a conversation with my dermatologist. And I was like, Doc, do you have any idea how difficult it is to get into your office, and we just kind of , the conversation kind of spurred from there, we both were totally on the same page that the process is way more difficult than it needs to be for conditions like acne. And next thing, you know, I'm at a restaurant in Manhattan with my dermatologist talking about starting this business and doing it the right way. Virtually, which was ironic because it was like it took me four months to get an appointment with him for medical care. But all of a sudden, the next day, we're in a restaurant. So it's kind of funny at the time, but also a little bit weird. Like, we're, you know, I'm old enough to be his son, or He's, um, his son's age basically. And I'm at a restaurant with him with my dermatologist, but we just kind of had a really natural fit our personalities mesh really well, we have a great dynamic, and it was like an instant founder market fit. Because I'm a patient, I've had a lot of experience dealing with this condition and trying different approaches. And he's the clinician who's had years and years of experience treating it. And so immediately, we had a founding with both a clinician and a founder and a patient, which is unfortunately actually something that's pretty rare in the digital health field where you have both people at a table at the board level making decisions, oftentimes, it's either just the clinician, or maybe a patient with like a provider who has like some minor advisory share, but no real influence in the direction of the company. But both and he wasn't just you know, a doctor that I partnered with out of convenience, he's super entrepreneurial, brilliant, physician and co-founder, he's a Princeton undergrad Columbia med school, he has dermatology for the US Open. He has a textbook that's read and every dermatology residency in the country. So it was just a natural fit and from there, we just kind of started testing different approaches, we started talking to patients. And before long, we had people that were paying us money before we even built any technology. And we also had an investment from interest from people and sea level TelaDoc, which is like the global leader and biomedicines kind of really motivated us to jumpstart this journey. And so I basically went in, you know, we dove, like fully, basically to try to make this happen.

Chris:

Yeah, that's amazing. So that's like the serendipitous opportunity. And so he's a full co-founder at this point. And working is still working with you guys.

David:

Yeah, so he and I are co founders of the company. We're partners in this, both at the board level, like I said, which is so critical for the model that we're going for which it hasn't, you know, consumer facing angle, being the patient and having that experience is critical. It's failing responsibly. You know, you'll see a lot of things in the news these days with irresponsible telemedicine monies that are just kind of pumping medications. And yet we're very, very conscious about doing everything by the book doing best practice medicine, and you need to have a physician at the reins to make that happen.

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Chris:

Absolutely and what are some of those misconceptions around skincare in particular? So for example, you know, it doesn't seem to be as blessed into the same reimbursements or seriousness from insurance companies were almost considered a cosmetic that is outside of healthcare. What are some of those misconceptions that you guys talked about or what you're trying to tackle and how you do it?

David:

Yeah, I think it's helpful to first understand like the Um, kind of types of dermatology that exist or people associated with it, so there's really like two sects into dermatology, there's cosmetic dermatology. And then there's medical dermatology. And the fact that that kind of dichotomy even exists is maybe part of that problem or misconception, but cosmetic dermatology is, it's procedural care that's considered like elective like self enhancement, like if you need Botox, or some kind of laser hair removal, for example, those are procedures people do because they want to do them, but they're not considered like medically necessary. And then there's medical dermatology, the easiest example to explain that is skin cancer, where that's you know, clear cut medical condition, it's a cancer has a lot of expense to the health system, and they take it from a very medical lens. And that's where insurance kind of gets involved versus like, everything on the cosmetic dermatology side is cash pay. And in the medical ecosystem, so and then, then there's conditions like the one that we're focused on, which are chronic dermatology conditions like acne and psoriasis, eczema and those kind of fall into a gray area. And the reason for that really, I think, is because they're non morbid conditions. And chronic, which kind of results in kind of, is victim to two things. One is people are expected to just deal with those conditions, because they're non life threatening, because they're so common, that it's perceived as normal. I mean, 85% of people in their teens get acne at some point in their life. So it's like, because it's so ubiquitous, people just think it's something you have to deal with. And also, because it's not morbid health systems, don't see any direct downsides of of not covering it. So they just prefer not to. And so those conditions kind of fall into this gray area. And as a result, a lot of people may not go and get care for those conditions, because they don't know that there is treatment available that works. And it's totally fair game to get care for that. And payers are doing what they can, in cases not to cover those medications, although it's not fair to say that they don't cover that care at all. They certainly do, like medical visits can be covered by insurance, a lot of medications can also be covered by insurance, it's just starting to become harder and harder.

Chris:

Right. And, you know, I mean, I think it's true that I mean, maybe for some skincare conditions, you know, it may not be life threatening, but it could be life altering in terms of the psychological impacts, right? Like, I mean, I had acne even when I was a teenager too. And no, I knew I wasn't going to die, but it definitely impacted my mental health. What do you think about those kinds of unseen or, you know, implicit impacts of those conditions?

David:

Yeah, 100%. I mean, we take these conditions really seriously, because they really affect a person's quality of life. And that's, you know, there's anecdotal evidence of that, you mentioned yourself, I had cystic acne, and I know what it felt like, like, I didn't want to go into class, I was embarrassed to raise my hand and have everyone turn around and look at me, like I could just feel it on my face. There's a lot of anecdotal impact that most people can probably say they've experienced. But there's also clinical academic research that has validated all of that showing downstream effects on mental health on anxiety and depression. There's one study that said those symptoms were comparable to psychological impacts of people who have chronic conditions like diabetes, and other really serious health care conditions. And there are studies showing the implicate like, how all of that has been exacerbated now by social media, and people like, Go may go out of their way to stay out of photos, there's been studies on productivity and absence of showing people just don't go to work on their bad days. All of that 100% exists. And, and that's why it's super important to be able to treat that condition and encourage that even. But the problem is on the payer landscape, like those are all kind of downstream effects that accumulate over time. And it takes a very sophisticated payer with not with, you know, and it takes a very sophisticated payer, who was able to get through probably a ton of bureaucratic loopholes to actually put something like that on the table and say, This is important for us to cover it because it's much easier to say like, Oh, this isn't a direct expense to us. Let's focus on areas where I'm reimbursing areas where we see clear direct cost impact and So, and then the other thing is like, churn rates don't help either. So like, if you look at a Medicaid patient, returning like every month, they're going from one Medicaid plan to another. So for a Medicaid payer to say, Yeah, well, he has all these downstream effects, but they're not going to be our customer after 18 months. So why are we paying for that?

Chris:

Somebody has some downstream effects. Yeah. So,

David:

Yeah, unfortunately, again, an example of totally misaligned incentives. But from a patient perspective, these conditions have real impact. It's not something to be brushed off or laughed about, like, it's always on people's minds, it's top of mind for people. So that's why we are doing what we can to treat them and to get people that care in the most affordable way possible.

Chris:

Awesome. Are there any other myths or controversies around skincare treatments that you would want to tuck around or different medications and whether they make sense, or things that our audience just may not know? Because they haven't been exposed? And as we dive into Honeydew, they may want to service.

David:

I think there's so much to, you know, so much patient education that can happen on different medications. And I could spend a whole segment just talking about, like, how different medications work. And honestly, I'm probably not even the best person to do it. Like that's why what we are focused on is making it so easy to connect with a licensed clinician, where you can have those kinds of discussions with and decide to figure out which kind of treatments are best for you. I'd say the medication that has the most controversy around it would be isotretinoin, which is commonly known as Accutane. Just because it's first of all, one of the most effective medications for acne and probably the only one with real clinically proven permanent, long term effects to clear acne. And also, because it's one of the most serious medications that has certain side effects that people are scared of, that people may not really understand or know much about. And because it's so much more complicated to get the drug, it kind of is like a self fulfilling prophecy, like, it's become very, very difficult to access the drug. It goes through an FDA rems program. And there's like bloodwork requirements for females, this pregnancy test and birth control requirements. And that seriousness of it kind of just creates even more like misconception sometimes about the medication. So that's probably one with the most controversy, happy to dive into more specifics there. But,yeah, as a general, I would say that.

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Chris:

Right, and that's where Honeydew comes in, though, is you guys want to connect with a licensed clinician that can help you navigate that whole landscape and, you know, around any Mr. Controversies to actually get you the care that you need. So let's talk about Honeydew, what is Honeydew and what's unique about it?

David:

Yeah, I want to just comment on one thing you were just saying, which is kind of echoing that and just a surprising, like, just it's been surprising for me learning just how much like skincare advice medical advice people get from like influencers and social media. Now, it's like a big trend on Tik-Tok, on Instagram reels and people will take advice from influencers who don't have any medical degree, no training. There's a lot of misinformation out there, and literally hundreds and hundreds of dollars, trying products and kind of like experiment themselves, oftentimes making their condition worse. Just because the people are spending money on product, and there's that just the whole consumerization aspect, like it's how consumers orient whereas like medic medical care has typically been like outside of that consumer sphere. So aren't like thinking like, oh, well, why would I spend like $600 on all these products when I could just spend like, a couple 100 bucks for a year of medical care and like a clinician will tell me exactly what I need for medications that will be covered by insurance. So yeah, we're trying to kind of like, educate consumers and fight that dynamic. Like just talk to a licensed clinician, it's more affordable than just like self experimenting with all these products. So sorry for that diversion. But to answer your question about what Honeydew is, I guess kind of leads into that is we're a dermatology service ecosystem. Basically we're building at starting virtual first we're building an ecosystem where patients can access professional services starting with consultations with licensed dermatology providers, eventually with other kinds of national services like a skin dietitian, for example, a place where they can access Honeydew  vetted, dermatologist bedded products. So they, you know, kind of navigate through the 1000s of options that are out there and end up with products that are actually good for them, a place where they can get diagnostic services. And then eventually also even, you know, procedural care online, we started doing some in person stuff. So it's basically just your dermatology partner, where you can go check for your dermatology needs. Right now, we're really focused on acne care, because it's just such a big market with a lot of need. But all of our dermatology providers and our dermatology platform that we've built, it's all, it all translates to other chronic dermatology conditions as well.

Chris:

Right? Yeah, and you used a cool word, which is ecosystem, you're building your own ecosystem. And you also used the word platform for dermatologists and connecting patients with the right dermatologist or a service or product. And what I want to talk around is this whole concept of within digital health today needing to be full stack. And full stack, what it used to mean is up and down the layers of software engineering and code. But what it means within healthcare is that you have experiences for these different personas and roles and even entity types to, in order to be able to deliver care. So we talked around in the healthcare, one of the challenges is that A, the person using it or who it's for is not necessarily the person buying it. And then even within digital health, there's going to be a patient side, a provider side and another side. So I'm curious where you weigh in on that whole concept of Do you consider Honeydew a full stack startup? And I don't know, what is your approach when you have to build more than one experience at the same time?

David:

So yeah, I mean, Honeydew is a full stack, healthcare service, healthcare solution. And we decided to go that route, because we decided it's really the only way to make a meaningful change in the way health care is delivered. On, at least for now, both the levers of access and quality, maybe we'll find other levers to focus on too. But even those are huge problems to go after the difficulty of accessing dermatology care and the quality of care that you can receive consistent. And the only way for us to really make a difference there is to own the entire solution. So we have our own clinicians, we built our own platform completely from scratch, we have our own care teams, we have partnerships with pharmacies, that's the I guess the one place where we haven't fully verticalized ownership is on the medication aspect is we're kind of hesitant, that line of like making money off of people's medications, because that's not really the best practice of medicine, like there shouldn't be incentive, you know, then you can argue there's an incentive to prescribe that medication because the company makes money on it and a lot of direct to consumer telemedicine startups actually take that model. But we, we avoid doing that, we don't cross that line, we do work closely with pharmacy partners who we can make sure provide our patients experience. So we're managing a to z that entire patient experience. Because if we were just the technology platform, for example, that made it much easier to dermatology care with our like dermatology workflows and our photo based progress tracking. Yeah, it would improve part of the experience, but we'd have no control over like how that clinician is delivering care. Are they doing a good job? Or are they just pumping medications. So because at the founding team level, we've been able to have both the both sides of of the healthcare delivery process down from the start, which is the patient consumer experience and the clinician high quality care experience. we're uniquely positioned to be kind of improving that ourselves versus just like supplying people with the technology to figure it out on their own. So and it also makes the company much more defensible, because we're, we're a brand we have, and we have a lot of superpowers. It's our clinical team. It's our technology platform. It's our partnerships and relationships. And all of those are like different shields in the company as opposed to just having one of those. Of course, on the flip side, it's a much more challenging model to operate on. Um, you have to be responsible for all those different arms of the company and, you know, Clinical Operations, Business Operations, you have to figure out where you're allocating your resources as an early stage startup, that's very tough, but I don't know, we entrepreneurs like to suffer. And I'm having a fun time doing it. And so I think it's totally worth it in the long run.

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Chris:

Awesome. And how's it going so far, in terms of your early adopters.

David:

It's been good, we're seeing that this model is, is working. People, like we have much more control over the patient experience as a result of this. And so we can make sure that the patients are both having a good experience on the technology they're using, and with the clinicians and clinical care that they're receiving. And it's been going really well, the patient feedback has been really strong so far. And, and because of the way we built the platform, like a lot of it is also like evidence based, so you actually see progress photos of how people are doing and, and there's like no documented success. And, yeah, I mean, overall, like, I've been very pleased with the level of clinical care, we've been able to deliver with the patient feedback that we've been receiving. So I'd say the model is working out pretty well. And we've been getting an influx of patients, actually from other solutions that are out there that have them, they've, you know, services where they may not be full stack, or as focused on the care management things. And they just don't get responses, like patients, like patients have questions, nobody responds to them. And, you know, so that's something we directly have control over in our full stack model. So it's been interesting to see that, to see patients coming in from those other services, and just having a better experience with us.

Chris:

Yeah, that's great. And what are some of those better experiences that you've been able to build? And why are they different from in person? So for example, you mentioned photo tracking of progress, right? That's something where, hey, if I was going to see my dermatologist, I would probably, I imagine, have no idea how to just email them a photo of my progress and want to get their feedback. What are some of those types of ways because I can tell that you've actually revisited what is the right way to deliver dermatology care? What are some of those, like new features or experiences that you've found really effective? Like photo tracking?

David:

Yeah, so I mean, on the photo tracking note, it's not even like you wouldn't know how to do it. It's just like dermatologists don't do it. Like you don't really take photos of your face, when you see a dermatologist for acne and brick and mortars just don't know. What how to, you know, think about that, like, then you walk in a month or two or three later, how the heck do they know what you used to look like they've seen hundreds of patients in between appointments. So it's really hard to get a real evidence based approach to see how the treatment plan is working. So photos make a huge difference. And, you know, and then we created that in an organized way that clinicians can reference that patients can reference versus just like, a patient storing it in their like photo gallery, and like trying to avoid getting lost in like an email, you know, like the Bermuda Triangle of email that like the physicians will never review. So Right. That's definitely an important feature. But part of it is also just like the clinical operational model. Like, for example, we take a hybrid approach, like there's no one size fits all, like there are a lot of solutions out there that are like 100%, on the asynchronous because just higher margins, that way, it's easier to scale. So like, you'll fill out a quiz, they'll send prescriptions to you, you never talk to a doctor and get one out, you know, they'll say you have ongoing support after but like, you can't really get in touch with a doctor. And that model just doesn't work. In certain situations like we started every pay we have. There's no question about the efficiency of doing like a store and forward like was based visit. And a lot of times it's more convenient. And so we certainly enable that for like routine follow up care. Our initial consult with every single patient is real time over video, they meet with their clinician, as they talk to them questions and have that more personal relationship, then if they're having routine follow up, they can do that asynchronously. And if there's complications or further questions, they can have another synchronous visit. And so like having that hybrid blend is something that really, like enhances that patient experience because oftentimes patients need to have a conversation with their clinician and they don't just want to like get a refill of their medications. There's more to it. So that's been part of it. It's the way we structure our care models. So it's not all on the clinicians to just be responded like, there's some questions that like around like, my skin is dry, what should I do like different things that like having different people within the patient's care team that can answer those questions. That kind of operational model makes it more scalable. So it doesn't also all fall on the clinician. So there's a lot of components to it. But I said those have been probably the biggest impact. It's the structure of the care team, the technology that lets us do dermatology, specific care, and just the hybrid sync and async model that we have.

Chris:

Great. Yeah, no, I mean, that there's a lot, I think, unique about what you're doing. And then the other unique part is your approach to distribution. Right. So there's these relatively new playbooks within digital health in particular, direct to consumer is something that existed way less, let's say before the pandemic, and now there's the okay B to C to B, type of model that wasn't even crystallized when you were starting Honeydew  do I think a 16 put out their white paper slash blog on our b2c to be is the new digital playbook people need to know but you were already doing it? How did you start kind of thinking around and implementing that kind of playbook before? You know if it was really even a thing?

David:

Yeah, I mean, it was really up to me just like the logical thing to do. Previously, before starting Honeydew  I was at a different digital health startup. And just kind of to gain experience in the healthcare field. And we were doing b2b enterprise healthcare sales, I was really good at it, I got to know how that market works really well. But the sales cycles are like 12 to 24 months, it's really tough, especially for a straight up like, that's like your entire run rate that's higher run rate for a deal that may or may not go through it's, and it's, and then you're just kind of like, in that time burning a lot of capital, trying to maintain and keep your team together while you wait for something to happen. And I walked away from that thinking like, this isn't the best way to get started like, and also, in the meantime, we were also like building bait like every for every contract, we were closing, we were building some unique things based on like the needs of that business. But like it wasn't necessarily about like the needs of the patient. And so that was a contrast. I also didn't love that, like when you're selling directly to businesses, you're not building a product or for the end user, you're building a product for the business. So I walked out of that job knowing I want to do something in the consumer world, because I want to build a product for the consumer. And because I don't have to wait 12 months to make something happen. You can go after you're doing something valuable that benefits people, they'll sign up for it, and you'll get customers right away. And so that's what we did, I didn't have a way to like coined that term. At the time, I just knew like we wanted to be working with consumers and building for them. And eventually, we would be large enough and have enough legitimacy and some sustainable direct to consumer revenues, we can then go and sell enterprise healthcare deals, like there's a lot of aligned incentives for, for businesses, to become channel partners for us and adopt our solution to provide like dermatology care to their students, for example, but I knew right away, I wanted to start with consumers, I just didn't have a fancy way to to name it. And oftentimes I'd get backlash from people just like, you know, how do you operate two business models at once, like either build a consumer company or build a b2b company. And, and then like you mentioned, Giulia, you came out with that. playbook, you just seem to be and I was like, okay, there, there we go, we have a new buzzword that kind of explains exactly what we want it to be doing. So there was a huge smile on my face when that playbook came out. But that's because it just felt like the natural way to go about it, we're going to end up with a product that's built for consumers. And, and so all the you know, kind of everything is aligned in the way we're building our product and the way we're building our clinical team. And then, you know, we'll take that to enterprise channel partners as opposed to starting there.

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Chris:

Got it. Yeah, it's interesting. It aligns to, we see desert health startups go through a few stages as a company. One is just more the idea phase where the whole goal is to show proof to whomever it is, you know, to be able to raise your first money or build your team or land your first pilot that your idea has value in the first place. And then the second is to be viable. Okay, well, now that you believe your idea has been Eric, go ahead and get it into people's hands and validate that. And then later, you can worry about attaining scale. Now, it sounds like you've been really focusing on establishing that Viable Product Market Fit for the patients. So I'm curious, what have been your signals in terms of, I don't know, what would be your strongest signals from patients that you have something that they really love to use? Well,

David:

I mean, there's some standard metrics that like most businesses go by, like our patient NPS score is a 91, which is really high, you know, like, people hate. But right. So I think that says a lot. And on the clinician side, too, by the way, our clinic, okay, loving the experience, some clinicians hate, you know, the how administrative healthcare has become as well. So it's, those are kind of two end users, it's not just the patient, we're opportunity and solution for missions as well want to deliver dermatology care. And so that's, I think, like a nice metric to show that kind of symbol. But that's like, just the day to day chat messages that we're seeing from our teams. On every single follow up, we ask our patients, how are they feeling about their progress. And so we're keeping a gauge on patient satisfaction and patient engagement. And, and, you know, they're just writing messages about how life changing has been, how much more confidence they have, going about their life, how easy we've made it for them to get care. We also havelike, like, an interesting sector of our customer bases, like just a lot of really busy moms who have multiple children, and otherwise we'd be stuck coordinating all their appointments, trying to take them to those appointments. And we make their lives easier, too. Because we just created a really easy way for them to get care for their children. So, you know, we're small enough now that like, we still kind of feed off of a lot of that anecdotal feedback as well. But we, you know, from a metric perspective, or a quantitative perspective, that the NPS score has just been really strong.

Chris:

Great, great. And how about in terms of things like subscriptions and churn and, and whatnot retention?

David:

Yeah, great question. So you know, the other thing we've been seeing right now, the way we've set it up is, you can either sign up for like a monthly subscription, or an annual, and just like, overwhelming percentage of our, of our subscription member base has just like started signing up for the annual subscription, paying up, you know, upfront for 12 months of care, because they know the value of what we're delivering, they're jumping at the low price point. And because they know they knew waiting four months to get a dermatologist, and it would be about the same price per visit, if they have a high deductible, or, you know, their copay would be more expensive than what they're paying for like an entire year of care on our platform. And so, retention has been, I mean, we're still an early stage company. But retention has been really good, because so much of a member base signs up for an annual membership upfront, and even on the monthly membership, they're sticking around for a while because they're having a good experience. So yeah, so you know, so far that that's looking good. And it kind of plays into our long term vision to be their dermatology partner for life. So right now we're helping them get clear, and we're treating them for acne, it's a chronic problem that, you know, happens over the course of years. And so we'll be there for them for those years. But when they no longer have acne, now we have a trusted relationship with them. And we want to continue to be their dermatologist for other conditions that they might experience if it's psoriasis, or it's hair loss, or whatever it might be, or it's a rash or some fungal condition. So, um, you know, it's early days, but early signals have been really strong.

Chris:

Right. And then one of the knocks on potentially direct to consumer businesses is the acquisition cost of new customers in particular, if it's very, you're offering competitive service, and then a response to that can be like issues that you just touched upon, right? Well, I mean, we're establishing a long term partnership with these people, and we're going to have a great lifetime value. Right, that's, that's mutually exchanged. How have you found the cost of customer acquisition? Is that kind of your thesis around it?

David:

Yeah, great question. And I think it's so key because sometimes people just talk about those things in isolation, like just focus on CAC but it's not about CACS. It's about CACS on TV, that's the golden ratio. And so LTV is a very important lever to focus on. If you can Throw the LTV you can pay more to acquire a customer and then you can out compete your competitors. The unit economics work well. So that's an absolutely critical metric. And having the ability to service people over a longer period of time, certainly makes the economics work on CAC, specifically. It's, it's an interesting metric, because that is something like so many investors are focused on like, you won't believe the number of times like, like, investors are kind of almost just tired at this point, like Oh, and other direct to consumer, you know, virtual healthcare play, like, I don't even want to like think about it, it's just like, it's going to be high CACs. I think a lot of that is because investors have made investments in telemedicine that are going through this now where they're seeing their cost of customer acquisition rise. And the reason for it is because of how simple it's become, to become more or offer virtual care these days, like there are literally companies whose whole existence is to make it easy for other companies to do virtual care, like they'll supply you with some kind of basic platform, they might even supply you with some iron fence. And in the dermatology world, I think the clearest way that we've seen is like this model of like delivering a custom formula cream to your house every month, like urology started that they're killing it. And then there was like a rise of a ton of copycats, because it's so easy to do that model, like a lot of them even use the same manufacturer, just white label a bottle out of some like mail order pharmacy. And so the barriers to entry are pretty low, and they're all bidding for the same like keywords and impression space on the advertising channels. So caps have gone up. And so I think the key to keeping caps low is finding opportunities where there isn't a lot of competition where people aren't getting certainly for us at Honeydew we absolutely treat people with like milder symptoms of like conditions like acne, would just prefer more approach but where we really differentiate and have more defensibility is like a lot of the care that we specialize in delivering is people with moderate to severe forms of condition like acne where they need full strength medication, oral medication, maybe they need Accutane, and you know, those things are expensive, and they need to be covered by insurance. That's a lot, it's a lot more difficult of a model to pull off, there's a lot less competitors in that space. It requires certain clinical operational rigor, also a certain technology infrastructure, like for Accutane to process lab work to track the you know, confirmation dates and pregnancy tests. I mean, there's a lot more that goes into it than just filling out a quiz and shipping a bottle to your house every month, that doesn't require a lot of clinical attention. So by focusing on those areas, we've been able to keep our CAC way low within, you know, what's expected in the direct to consumer telemedicine industry. And, and that's getting us a really strong foot in the door to growing in a scalable way with good unit economics. So, you know, then we can focus on growing our town and focusing on other things, but our niche right now has really been in that moderate to severe category of care.

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Chris:

Okay, cool. And any, I mean, what are the next biggest milestones or priorities for you and Honeydew?

David:

Um, I mean, I think the clear step for us right now is just expanding to other states. We're doing that, we already have licenses in five states. But we've only been delivering care in New York thus far, just keeping very focused proving out by model refining operations, we're finding the technology platform, and now that it's been going pretty well, we need to start our geographic expansion strategy. So just getting the solution out to other states is critical. And then after that, it's going to be expanding the kinds of conditions that we treat and then expanding what we can do for people with condition. So moving from just the professional service where they meet with a clinician and get prescriptions to now they can maybe consult with other professionals that are relevant like a skin dietician, or they could order a diagnostic tests to their house or via like, certain products that like if someone's on an antibiotic and they need a probiotic to make it easier. Right, so there's a lot of ways to grow. But right now, for us, the number one thing is just going to be taking what we have that's working without professional care for acne and just growing that to you know, across the country.

Chris:

 So I have one last question for you, David. And just for really our audience, you're on your second startup now. And there are so many patients or families of patients who became really passionate, like you did about starting a startup that solves one of their own problems. What would you advise them about those first steps and taking the journey to building their own startup?

David:

Yeah, I mean, I'd say one is to just make sure you're emotionally connected to the problem. I think that's something that people can often overlook, when they're like, oh, I have this great idea, I want to go working on it. And I mean, having a great idea is certainly part of the process. But if it's not an idea that you're really passionate about solving from, like an impact perspective, and like a personal significance perspective, then you're gonna have a really hard time staying committed to it. Because there's going to be a lot of really hard days, it's very rare that like, things just work and they start scaling, like, more often than not, you have more bad days and good days. And on those bad days, it's really easy to just say, like, why am I spending my time on making a lot more money doing this or like, I have this other idea I want to work on and it's just not sustainable. Like you have to, every time, there's a difficult moment, you have to say, Well, I'm actually really passionate about what we're doing. And there's an impact and meaning here. And if you don't have that, you'll have a tough time. So I'd say find a problem you're actually emotionally connected to, say, also just focus, like, what's the number one thing that you can improve, because there's so many different areas to grow and expand your market, like I talked about a few of those for Honeydew. But you have to start with one really, really, really specific thing, because you won't have enough resources to make it all happen. And when you start with that one really specific things most of the time, you can actually test it, and see the interest for it without even having to build a product, which is how we got started, like what we were doing before we ever built the platform. And then I'd say the last piece of advice would just be talking to entrepreneurs. There's a huge asymmetry of information investors know a lot more than we do, especially as first time entrepreneurs are. And so just talking to people who are Jews, maybe a few steps ahead of you, they can provide advice that could sit you know, save you like literally millions and millions of dollars, just with some helpful tips. and involve them any way you can in your business. Because they're kind of, they know how things work. And entrepreneurs are really willing to help each other like I found, wherever I go, like any state like there's entrepreneurs are really willing to collaborate and give advice. So yeah, just don't be afraid to talk to people.

Chris:

That's great. Yeah, David, I think you're one of those who are a few steps ahead of much of our audience. And I'm really excited to have met you. You are definitely a passionate entrepreneur, building something that would have helped you which is I think the best kind of founder. I appreciate you reaching out and advocating for what you know is a very impactful holistic health issue for so many people, including but not just us, former teenagers. We'll be rooting for you. Thank you for coming on.

David:

Thank you. Pleasure being here, Chris.

Chris:

Yeah, thanks, David. Bye

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