IPO-Level Bets: Dan Perez on Building Hinge Health from Zero to $400M ARR

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Welcome to First Builders, the podcast for those who shape companies from the ground up.
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I'm Amber Illeg, founder and general partner at the Council Capital, where we invest in early teams solving critical problems in essential industries.
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And I'm Rachel Choi, partner at the Council.
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This podcast is about the people behind the playbooks, those who took a leap early and helped define companies before anyone knew their names.
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And today's guest is someone whose entire career has been defined by bold moves and long-term vision.
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We're joined by Dan Perez, co-founder and CEO of Hinge Health, the pioneering digital health company that recently IPO'd, making it one of the first venture-backed digital health IPOs in nearly two years.
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And here's what makes this one especially exciting.
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Hinge Health reported nearly$400 million in annual recurring revenue in 2024.
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They support 20 million contracted lives and serve more than 2,000 enterprise customers, including many in the Fortune 500.
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It's one of the most significant exits in the musculoskeletal care space.
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Wow, that was a lot to say.
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And it started with a simple but radical idea that chronic pain treatment could go digital.
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We'll explore what gave him the courage to walk away from both Oxford and Cambridge, and how he and his co-founder, Gabriel Beckenberg, have maintained a strong partnership for over a decade, and what it really takes to scale a company like Hinge.
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Dan, welcome to First Builders.
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Thanks for having me, Rachel.
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Awesome.
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Well, before we dive too far into the origin story, we wanna um I wanted to share something personal.
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So Dan and I actually met years ago in grad school, and then we've been friends since then, and it's really been super incredible to just like watch your journey through Al, like making all those decisions to now leading this company at the forefront of digital health.
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It's it's just been an honor to really watch all of that.
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And then, you know, knowing you personally, I know, of course, how much thought and intention probably went into that choice to leave your PhD program, you know, after putting in all that time and effort and research.
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Take us back to that moment.
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What was going on through your head?
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Did it feel like a really big risk at a time?
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Or, you know, did you feel confident that you were meant to build something different or do something different?
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Well, thank you, Rachel.
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Thanks for having me.
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It's been great watching you as well move move through your PhD into industry and now into into venture capital.
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And you know, we both you know started our PhDs around the same time.
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You left with a with a degree, I left with somewhat less than a degree.
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But um it was, I think we both learned a lot.
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But you know, my my co-friend and I, we were actually doing our PhDs in the UK uh and mine was partially in the US as well.
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And when we were considering our paths, we were in our in our late 20s at the time.
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For us, it was about using just like a regret minimization framework.
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And I thought I had to, you know, my 80-year-old self and how to live my life so as to not have regrets.
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And I knew that if I dropped out of Oxford and founded a company at 80 years old, I wouldn't really be thinking to myself, oh gosh, I wish I would have finished that degree.
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I also knew that university had been there for 800 years before me, probably be there for 800 years after me.
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And so if I had needed to go back, the the option was was somewhat there, but pursuing it a startup idea, timing matters, and sometimes these these moments in life don't come back to us again.
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And I also knew that if if I stayed in school and and missed that opportunity to found the company, and that when I was 80 years old, I would be thinking, what if?
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And so, from from that point of point of view, for me, the least risky decision was actually not founding the company.
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And so, even in our in our darkest moments at Hinge, I I never once thought to go back to my PhD.
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Not once.
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I thought of other things, you know.
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You know, I have a hard day of like trying to grow revenue, particularly in healthcare, you know, thinking to myself, why the hell did we do healthcare?
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We should have been crypto bros.
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Those sorts of things came to my mind.
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Um, but but those fantasies were only temporary moments of weakness.
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Um, we feel very lucky to be in healthcare and have had the opportunity to build Hinge Health.
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How did you start to see yourself as a founder?
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Because Rachel mentioned even throughout grad school, before you even like took the plunge into Hinge, you were already very entrepreneurial.
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So was there, you know, a moment or a shift where you started to see yourself as a founder rather than a physician or researcher?
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You know, it's a great question because I was always entrepreneurial when I was when I was younger, and I like to to do things.
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I didn't see myself as an entrepreneur.
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I I actually think the transition was somewhat forced upon me, but you know, like a like a cold shower after after the initial shock, it actually felt great because I actually started even before grad school, I started with with in the medical school uh track, and I was actually in medical school, and let me tell you, if you're thinking about medical school, you could very easily plot out the next 20 years of your life.
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You know, it's four years of of college, then maybe a year of research, then four years of medical school, maybe another year of research to you know burnish that CV, and then like a five-year residency, plus or minus like two-year fellowship.
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And at that point, you're like 17, 18 years post-high school and you know, 36 years old.
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And but but it's it's very set, and you could just plan out here's the next four years of my life.
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I'm gonna be doing living in this city, doing this job for this this sort of certification.
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And then when I transition into the PhD route, um things were a lot less guaranteed.
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As you know, when you're when you're doing research, clinical research, and I was in biochemistry, and you're much more independent, and it's gonna be up to you, and like not everybody's gonna go down the same track, right?
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If you if you're the top of your class in medical school, they call you a doctor.
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If you're the bottom of your class in medical school, they call you a doctor, but it's not the same way in a PhD.
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And so it actually was one of the healthiest things that happened to me was switching from the from the medical school route to the clinical research route or the or the wet lab research route, biochemical uh chemical research, because it forced me to not have any more guaranteed expectations.
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I couldn't plan, I'd be much more comfortable with ambiguity.
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And to paraphrase Nietzsche, but you know, you could take a handful of certainty or embrace a cartload of beautiful puppies.
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And once I started getting down the research route and realizing there's a lot of possibility in like building things yourself, I just kept pooling on that thread.
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And yeah, during during the because PhDs are a lot less structured, I was able to pursue some extracurricular activities as Rachel saw.
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So I was I was not a great PhD student, but it taught me the values of entrepreneurship and like ran a few like student organizations and founded a few, and that it taught me how to you know hire people, build a team, bring enterprise revenue, deliver value to customers, and that was you know pretty addictive to me and my my co-founder.
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Yeah, I love it.
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Well, let's talk about the early days of Hinge Health.
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You and Gabrielle started the company over a decade ago.
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What was the spark for that?
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And did you have a moment when you realized the idea really had, you know, that real traction there?
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Yeah, so we we which is actually our third company that we founded.
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So we we founded a student organization that was never gonna scale to a billion dollar company, but it was actually for up until recently our most profitable organization that we've ever founded.
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Wow.
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And then we we founded a tech company called called Marbler, which is trying to commercialize University IP, which was really good at collecting press and not so good at collecting revenue.
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Um and then Hinge was our was our third company that we founded, and really we went back to our roots.
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I we both have a personal history of muscle skeleton, and we both had received about 12 months of rehab when we were younger, and we loved our experience with our with our physical therapist when we were younger, but we felt that going constantly going to the PT was actually quite onerous, it was actually quite costly, take time off work, take time off school, and we felt that technology could have delivered our care at a higher fidelity and a much higher convenience and higher level of personalization, and that was the inspiration around Hinge Health.
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And you know, we we felt that if we could use technology to automate this small sliver of healthcare delivery, that over time, as technology continued to mature, we'd be able to widen the aperture and continue to automate more aspects of healthcare delivery itself.
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Because, you know, healthcare is actually, despite all the technology you'll see in healthcare, it is remarkably manual.
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You're gonna walk into a hospital, you will see all sorts of machines worrying and lights blinking, but most healthcare delivery itself is still often one-on-one with a provider or one with multiple providers.
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The technology is on the periphery often, but it isn't delivering the care itself.
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And there's a lot of reasons for that.
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You know, there's a lot of unstructured physical tasks, reimbursement constraints, and we wanted to try to get this to work for PT, and our aim is to continue over time to just peel away more aspects of in-person care and use technology to deliver it more conveniently at a higher level of personalization, increase the the quality and consistency of the outcomes, and that's that's that's the vision.
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So we got a a lot of work ahead of us, though.
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Yeah, and fast forward to today, I mean, just off the heels of an IPO.
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What does your customer base look like and how do they view hinge health and what you're able to do for them today?
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Well, we're very lucky.
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Great question.
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We have you know now over 2,300 um enterprise customers.
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We're gonna have a 98% logo retention in 2024, and so about 20 million American adults now have access to our program.
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We're able to have really, really strong outcomes.
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And 50 plus um health plans as health insurance companies, EPAs, and pharmacy benefit managers have selected us as their preferred or exclusive digital musculoskeletal partner, which we're really grateful for.
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And our customer base is really diverse.
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Like we have folks in education, like universities, schools for like you know, elementary school, high school teachers, we have government agencies, like nuclear power plants, like intelligence agencies using us for their employees.
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We have the you know some of the largest tech companies, you know, the top 10 um tech companies using several in the top 10 tech companies using us for their employees as well, and so as well as it now Medicare Advantage plans.
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And so we have a very now very diverse customer base from every conceivable industry.
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And so we've learned how to deliver rehab or you know, exercise therapy to to folks in in a bunch of different settings, and it also shows you that orthopedic conditions, you know, back joint muscle pain is does not discriminate.
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It gets us all white everywhere.
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It is it is uh it is remarkably equal opportunity when it comes to impacting people's lives, but it's also very gratifying because when you help somebody with with their knee pain, suddenly they could bend down the ground and play with their kids again, help somebody with their with their hip or back pain, they could go for a walk with their spouse after dinner, and you know, it has such a big impact on the on the downstream areas of of your health and and the quality of your life.
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And so it's very gratifying for us.
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Yeah, no, that's great.
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I mean, I love that the diverse aspect of the customer base because it really showcases like the increased access that you are providing, right?
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Like again, when you were saying like equaling um or leveling like that equal um playing field, it's it's doing that on the customer side too, like giving them all that access.
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So the other question I had for you were there moments when you thought this might not work and how did you navigate those as you were building?
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Yeah, um there were there have been uh I'd say dozen plus moments when you're like, gosh, this is this is not gonna work out.
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What the hell did we do?
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I've gotta go move back in with my parents, like, and we'd always like to to go back and like just think about what is actually going on here, and like we have we have overcome worse, worse challenges in the past.
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And each each each time that we've overcome like one of these you know key moments, it could have been, you know, very early on, could we actually get a real first customer?
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So it took us like over a year, 15 months, just to get a single customer to like raise her hand and say, I believe in you, I'm willing to take a take a chance.
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And after you've you've received dozens of no's and you know from investors and customers who are thinking, like, are we actually onto something?
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You know, what could be done?
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You know, we persevered because we we evolved the business model as as we went.
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We moved forward the the sales at the same time as we move forward the product development, and we felt we were getting closer and closer and closer to the to the value prop that we needed to deliver.
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We started actually in post-operative care for musculoskeletal conditions, and we realized over time that there actually wasn't much of an ROI in giving people post-operative rehab, but the the ROI was actually going earlier than surgery to actually prevent the surgery to begin with.
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And that was that came from a lot of customer conversations and you know understanding the um the space better because me and my co-founder we actually had post-operative rehab, that was that's what we knew best, and that's you know our point of view.
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And we realized actually most of the money spent is actually in chronic conditions like knee arthritis, hip arthritis, things actually happen in people much older than us, but that's that was the biggest opportunity for impact, and so we kept you know getting more and more confidence over time that we could overcome some of these key challenges.
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Uh, and another key challenge over time was you know, the LR care team, how do we um uh how do we actually raise you know venture capital to show show investors that this this will actually be a sustainable business long term?
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Could we actually navigate partnerships with some of the largest healthcare incumbents out there, particularly health insurance companies?
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And every single time we've met, you know, an existential crisis, it's it could be an oh shit moment, but we've we've developed a lot of confidence that if we tackle this soberly and chip away at it and break the problem down, we we could eventually overcome this.
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And it's given us a lot of confidence over the years.
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And I encourage other other startups to or entrepreneurs to also try to try to step back and try to realize the problem for what it is.
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It's a it's a a few mini problems, maybe, and tackle them one by one.
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Yeah, and I love that you shared that it took a year to get the first customer and that even this was your third business with your co-founder because we see that all the time in our portfolio, and even with talking with other co-investors, you know, certain founders and investors think that if things aren't perfect and like accelerating right out of the gate, there's something wrong, but often it doesn't work out right out of the gate.
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So um I appreciate you sharing that for any founders listening who might be going through it right now.
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Um our our Series A investor, I remember we were initially ranked, we were probably had like they probably had 30 investments at the time, and we were ranked like 29th as like you know the second most likely to go bankrupt after.
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What a turnaround! That's awesome.
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And I I think we'll we'll end up being their second or first or second best outcome now.
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So, you know, it it wasn't always obvious, but you know, we kept our heads down and we kept building.
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That's awesome.
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And then you filed to go public in a market where most companies are waiting it out, both in digital health as well as in just the broader tech ecosystem.
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And not only that, you did it with real revenue, profitability, healthy gross margin.
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But just given the rarity right now, like how did you decide that this was the right moment to take hinge public?
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Look, great question.
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And for other entrepreneurs thinking about the the, you know, making that plunge, you could be waiting forever for the perfect moment.
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And really it came down to our confidence in our product and the fundamentals of our business.
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And we've been planning this for a while, so it wasn't like a spur of the moment.
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We've been planning to go public and operating the business as uh as a public company for many years.
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And we had a great team in place.
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Our head of IR, Bianca, you know, was hired here years ago to come in and whip us into shape so we could do this.
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The entire business kind of been rallied around this for the last few years because it's if you're successful in the public markets, most of the time, not all the time, there are some weird bubbles that happen in the public markets, but it it is a sign of a sustainable organization.
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Yeah, you know, our vision is pretty bold.
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You know, we want to transform outcomes, experience, and cost by using technology to scale and automate the delivery of care.
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You know, that's just a vision statement if you cannot actually deliver on it and make it tangible and it and it must be realized by a business that's gonna have staying power.
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And we had to build a sustainable foundation.
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So, you know, our product can now automate 95% of human clinician hours associated with PT, and it's you know delivering really great value for the for the end user, that is the patient with back joint and muscle pain, and a real ROI for our customers.
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And then, you know, could we could we actually have the the go-to-market mechanics that you know you not just build a product, but in healthcare you gotta get paid for it, and you know, we we show that we have a repeatable go-to-market motion and then getting the cost structure right.
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And I tell you what, once once you are public, you have to open up your books, you have to be much more transparent, both with your employees, with your investors, and and and your customers.
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And we're seeing a lot more customer interest in us now that we're public because we have that level of transparency.
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They know that we're gonna be around and be a be a long-term partner.
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Look, with regards as well to the uncertainty, once you're public, like you just can't unpublic yourself.
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So you're gonna have to deal with this uncertainty, right?
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Like, you know, we had to navigate the tariffs, you know, on our way to IPL just to get investor interest, ramps up again, or something else happens, you know, geopolitical things happen, or interest rates rise, or a recession, public companies just gonna have to deal with it, and you're gonna have to learn how to take the punches and still continue on with your business.
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And I'd say the markets are always open for good companies.
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And lucky for us as well, we weren't raising primary capital.
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By the time we went a free cash flow positive for for four straight quarters, and we weren't putting any money on our balance sheet, so it was all secondary or synthetic secondary.
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But I would say going public when you're free cash flow positive, it changes the tone of the investor conversations.
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We didn't have a lot of investors asking us around, are you still gonna be around?
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Will this ever be a sustainable business?
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Because we had already delivered four straight quarters of free cash flow consistently and it was growing.
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A lot of the questions were shit, well, how high could you take it?
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You know, more profitable could the business become?
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And because we believe it's a sustainable org.
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What are what let's talk about your roadmap?
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Let's talk about other things.
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And investor meetings, you know, maybe in the years beforehand, were not focused on those things.
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They were focused on will you actually be a sustainable org you're still losing a lot of money.
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And so that would that would be if if it when it comes to timing, I would think less external timing and more internal.
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You know, have you shown that your business could be sustainable and what is it gonna take for your business to be sustainable?
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If it's sustainable, there's there's not much on the macro that should that should give you pause towards going public.
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Yeah, that's great.
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I love like kind of the perspective on that.
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And it's probably it's similar to I feel like sometimes people always think about like waiting for the right time for something, and there's just not always gonna be that perfect time.
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Yeah, exactly.
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So let's talk about your co-founder relationship.
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You know, I remember Gabriel also back in the OBR days in grad school, but you and Gabriel have been building together for over a decade.
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That's practically a lifetime, right, in startup years.
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So, what helped that relationship last?
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And what advice would you give to other founders that are really trying to find that right person to build with?
00:17:42.799 --> 00:17:44.720
You know, I I've said this before, I'll say it again.
00:17:44.880 --> 00:17:51.359
If if you are an energetic American entrepreneur, you gotta get yourself a German co-founder.
00:17:51.680 --> 00:17:53.519
Um it is very specific.
00:17:53.920 --> 00:18:01.680
Um, Gabe, Gabe has been a phenomenal co-founder, phenomenal friend as well.
00:18:01.920 --> 00:18:17.359
And look, our our relationship is is has been built on trust over time and just getting to know each other and um knowing that uh we we both care about you know solving the problem and and and getting better individually as well.
00:18:17.519 --> 00:18:24.000
And you want to get a co-founder you can be honest with when things get tough, and who's willing to roll up their sleeves and who will get better themselves.
00:18:24.079 --> 00:18:28.960
Because you as a founder, you're gonna have to scale yourself, and your co-founder's gonna have to scale themselves as well.
00:18:29.119 --> 00:18:35.519
And you're both gonna have to be able to look back a year from now, two years from now, three years from now, and both have made significant leaps.
00:18:35.599 --> 00:18:36.960
And you know, me and Gabe, we grew up together.
00:18:37.039 --> 00:18:37.920
You know, I was a little older.
00:18:38.000 --> 00:18:42.400
We were I was probably 26 when we met with our first company, and he was like 24.
00:18:42.720 --> 00:18:52.640
And you know, fast forward, actually, it's been like 14 years we've been working together, but uh and about 10 on uh a little over 10 on hinge, and he was actually the best man at my wedding, one of my best men at my wedding.
00:18:52.720 --> 00:18:55.039
I'm the the godfather for for his first kid.
00:18:55.119 --> 00:18:58.640
You know, I love this guy like a brother, but we've you know we've pretty much grown up together.
00:18:58.720 --> 00:19:03.519
You know, I'm I'm now 40, not 26 anymore, and he's you know, 37, 38.
00:19:03.599 --> 00:19:05.200
Um, and we still do dinner once a week.
00:19:05.279 --> 00:19:12.480
I just actually confirmed our date night for Wednesday, and I think that that's also really helpful for co-founder relationships to continue to meet.
00:19:12.559 --> 00:19:15.920
Before we had kids, we would meet on Saturday morning for like three or four hours.
00:19:16.160 --> 00:19:29.200
Since we had kids, sometimes Saturday is a bit harder to meet up, but we'll still try to meet up at least once a week for dinner and just like talk about things, talk about life, talk about you know relationships, talk certainly talk about the company and how things are trending.
00:19:29.519 --> 00:19:36.880
And getting that time, you know, out of the office really helps just to stick around and we'll still go on hikes together, we'll still go on trips together.
00:19:37.039 --> 00:19:39.680
And I think it's sad when co-founder relationships do break down.
00:19:39.920 --> 00:19:53.759
We've had tense moments, like any relationship over you know, 14-15 years, but we've always been able to rebuild from them and uh and make sure that uh we we we trust that the other person has good intent.
00:19:54.000 --> 00:20:00.960
And I think sometimes co-founder relationships, particularly when the companies fail, and we've had two companies fail, they break down to like recriminations and this and that.
00:20:01.200 --> 00:20:10.160
Every time something didn't work out, we got back to the to the drawing board, and never once did we think, okay, we gotta move on with another thing, or you know, heaven forbid go to McKinsey or something.
00:20:10.319 --> 00:20:13.839
We always we stuck together and and we got a little bit better over time.
00:20:14.000 --> 00:20:19.200
And that was and that's been one of the most gratifying aspects of building a business is doing it with Gabe.
00:20:19.359 --> 00:20:19.920
That's awesome.
00:20:20.000 --> 00:20:29.680
Yeah, they always say um I find it to be true, like a co-founder relationship is just as high stakes, if not more, than a marriage, and it takes actual work to make sure it's gonna, you know, remain sustainable like that.
00:20:29.759 --> 00:20:32.240
So it's great to see you guys proactively put in the work.
00:20:32.400 --> 00:20:36.079
The other thing I wanted to ask is you've also scaled hinged through multiple inflection points.
00:20:36.160 --> 00:20:42.319
I'm sure there've been some times where you look around you and you don't even recognize the company that you're looking at because it's so different than six months ago.
00:20:42.480 --> 00:20:45.680
From team expansion to product evolution, go to market shifts.
00:20:45.839 --> 00:20:49.039
What was one internal bet that you made that really paid off?
00:20:49.279 --> 00:20:51.279
Gosh, it's hard to think of just one.
00:20:51.359 --> 00:21:12.880
There's been a there's been a couple, and I think you know, when you're building a product in like a new category that's growing, you're gonna have to make a couple of strategic moves because there's or quite a few, not just on like you know, product, but you might have to rethink distribution because you have to think through like there's no predicate examples for distribution or how are you gonna market this and and such like so?
00:21:12.960 --> 00:21:15.359
I think about a few first of those like channel partnerships.
00:21:15.519 --> 00:21:21.759
You know, we invested in our health plan relationships much earlier than I think most others in our space did.
00:21:22.000 --> 00:21:27.519
We we saw a few you know, exemplary examples, Lavongo and Omada, kind of strong, but then we went really, really deep.
00:21:27.599 --> 00:21:36.160
And I'd like to think we have the deepest health plan partnerships and integrations, then not just anybody in digital musculoskeletal care, but I think anybody within digital health, period.
00:21:36.319 --> 00:21:39.359
And that's had been an incredible moat for our business.
00:21:39.599 --> 00:21:41.680
Other key moat has been our product modes.
00:21:41.839 --> 00:21:43.200
You know, we launched a hardware device.
00:21:43.279 --> 00:21:48.000
A lot of a lot of tech companies stick to software, and there's a reason you say software because hardware is hard.
00:21:48.160 --> 00:21:54.799
But you know, we launched a hardware product, a proprietary electrical nerve stimulation device, and it was not something our clients were asking for.
00:21:54.960 --> 00:21:59.759
Not a single client asked us for this product, and that's okay because customers cannot tell you.
00:22:00.240 --> 00:22:01.119
How to surprise them.
00:22:01.279 --> 00:22:05.680
And we knew this would improve outcomes and that it would improve the member experience.
00:22:05.839 --> 00:22:12.000
And after millions and millions that we invested in the technology, it has become one of the most delightful aspects of our program.
00:22:12.240 --> 00:22:15.759
It gives members a technology alternative to opiates or pain pills.
00:22:15.920 --> 00:22:18.319
Another key aspect of our product was computer vision.
00:22:18.480 --> 00:22:26.720
We actually wrote, you know, five years before we entered the space in our Series A memo to our investors that eventually we'll have to move to computer vision and away from wearable sensors.
00:22:26.880 --> 00:22:32.400
And you know, see computer vision is a subfield of AI and human pose estimation is a subfield of computer vision.
00:22:32.559 --> 00:22:35.200
And what was holding us back was edge compute.
00:22:35.279 --> 00:22:43.200
We knew that, you know, the if we were to do the compute, and computer vision is very computational intensive in the cloud, there would be, you know, a lag, a delay.
00:22:43.359 --> 00:22:50.720
And so we were kind of waiting, you know, for five years, when will edge compute get to the point where we could transition our technology over here?
00:22:50.880 --> 00:22:59.359
And then we decided to make the leap about 18 months before we felt that the that the world was ready, knowing that it would take us about 18 to 2, 18 months, 24 months just to develop it.
00:22:59.519 --> 00:23:02.400
And by then we were hoping that the world would catch up, and it did.
00:23:02.640 --> 00:23:04.400
And and then the computer vision was ready to go.
00:23:04.480 --> 00:23:06.799
It had a phenomenal impact on a member experience.
00:23:06.880 --> 00:23:10.960
Now we could track 100 unique landmarks on your body using just a front-facing camera on your phone.
00:23:11.119 --> 00:23:13.839
And you know, two-dimensional computer vision is pretty computationally intensive.
00:23:14.000 --> 00:23:24.000
We use three-dimensional computer vision, so just us, Apple, and Google were the three you know uh companies using 3D human pose estimation, and we could do it just on anybody's device, which is you know really exciting.
00:23:24.079 --> 00:23:30.400
You know, our competitors still haven't been able to quite leap to 3D, and they still have to like send a tablet to people to get them to use their technology.
00:23:30.480 --> 00:23:33.759
And so we're really excited about you know some of these key product uh moves we made.
00:23:33.920 --> 00:23:38.720
And the last thing I would encourage digital health companies to do is um is validate their outcomes.
00:23:38.880 --> 00:23:47.039
Uh we've been publishing and validating our outcomes for a long time, and you know, certainly me and my co-founder we published a lot more outside of our PhDs than in our PhDs.
00:23:47.440 --> 00:23:48.559
But that that's been really key.
00:23:48.640 --> 00:23:54.160
So I would say the inflection points, you know, that think about distribution and our channel partnerships has been a key entry barrier.
00:23:54.240 --> 00:24:07.440
Think about you know product modes and and you know don't just do things that others are doing out in the market, be willing to do something different, and that's had a big impact on us, and then in somewhat unique to healthcare, you're gonna have to validate your outcomes and start early.
00:24:07.599 --> 00:24:08.319
Yeah, I love that.
00:24:08.480 --> 00:24:14.640
So the other thing also that I read when the IPO announcement came out, um, it was actually I think Embessemer's IPO announcement.
00:24:14.799 --> 00:24:16.319
They said something that really stood out to me.
00:24:16.400 --> 00:24:19.680
They said that Hinge didn't just digitize care, it redesigned it.
00:24:19.839 --> 00:24:23.200
So I'm curious, you know, from your perspective, what does that mean to you in practice?
00:24:23.279 --> 00:24:28.319
And how do you think that you're gonna keep ensuring that a company stays true to that kind of innovation as you scale?
00:24:28.559 --> 00:24:29.599
That's a great question, Rachel.
00:24:29.759 --> 00:24:36.559
To us, we're not simply, if I by not just digitizing care, redesigning it, it means we're not just simply taking existing processes and just putting them online.
00:24:36.880 --> 00:24:41.920
We're we're imagining how care should be delivered if we started with today's technology as a foundation.
00:24:42.079 --> 00:24:45.440
And so we're not we're not digitizing the status quo, we're trying to reset it.
00:24:45.599 --> 00:25:04.720
In fact, even last week, so we we announced our latest product that actually builds upon this because I while I firmly believe we're moving towards a future that uh where more and more aspects of healthcare will be automated, and we've made significant progress, and others have also made significant progress, most areas of healthcare today still require face-to-face interactions like surgery, imaging, injections.
00:25:04.880 --> 00:25:17.680
And to be clinically complete, we're actually creating a network of high-quality in-person providers across PT imaging and orthopedic specialists, such that now, whatever our technology cannot automate, we can send to in-person care.
00:25:17.839 --> 00:25:24.319
And that's part of like redesigning care, and that you know, we're we're not just saying you either come to digital health or you go to in-person care.
00:25:24.400 --> 00:25:26.480
We're trying to unify the care between the two.
00:25:26.640 --> 00:25:29.599
And that's not been something a lot of digital health companies have done.
00:25:29.759 --> 00:25:31.039
And we're really excited about this.
00:25:31.200 --> 00:25:41.279
Is that you know one area of of redesigning care, as well as you know, using our our software, our connected hardware to still peel away aspects of in-person care and automating as much as we can.
00:25:41.359 --> 00:25:44.720
And that's something that that just hasn't really existed before Hinge came along.
00:25:44.960 --> 00:25:48.480
Yeah, when I hear you talk about that, it's really about that integration piece, right?
00:25:48.640 --> 00:26:01.039
Like using technology to augment and not just say that, oh, it's only one or the other, because of course patient care does, I mean, there is gonna be a personal, like in-person component to it, and that's yeah, that will be needed as well.
00:26:01.119 --> 00:26:04.000
So I like I like that integration piece in the in the care delivery.
00:26:04.160 --> 00:26:05.279
Yeah, and it's also intellectually honest.
00:26:05.440 --> 00:26:17.599
Like the fact is, you know, we've been able to automate a big chunk of outpatient physical therapy, and physical therapy is like 1.2% of total, you know, healthcare spend, roughly, which is a big, big chunk, it's like 50 plus billion dollars in in the US.
00:26:18.160 --> 00:26:35.920
Um, the the fact is that there are many aspects of healthcare that can't be automated yet or delivered by software and connected hardware, and that just if you want to deliver an end-to-end musculoskeletal care episode, it might involve imaging, it might involve, you know, a steroid injection, it might involve an in-person evaluation, and some aspects could be delivered at home via technology.
00:26:36.000 --> 00:26:42.000
And so be an intellectual honest what can be delivered via technology today and automated, and what still requires in-person care.
00:26:42.079 --> 00:26:46.960
You know, maybe 200 years from now, it will all be delivered by software and connected hardware, but it's not today.
00:26:47.119 --> 00:26:47.279
Yep.
00:26:47.519 --> 00:26:52.799
So switching gears a little bit here, what's a belief about healthcare or startups that you think most founders get wrong?
00:26:53.039 --> 00:26:59.200
I'd say, you know, that you can move fast and break things, like in consumer tech, in healthcare, you can move fast.
00:26:59.519 --> 00:27:00.240
Especially in healthcare.
00:27:00.480 --> 00:27:01.039
Yeah, exactly.
00:27:01.119 --> 00:27:05.759
You need to try to move fast or you're gonna go bankrupt, but uh, but you have to deliver real outcomes along the way.
00:27:05.920 --> 00:27:07.599
And if you don't, you you won't last.
00:27:07.680 --> 00:27:14.000
And there's been a lot of flashes in the pan or shooting stars that like seemed really cool up front, but they didn't deliver lasting outcomes.
00:27:14.240 --> 00:27:25.279
And the second thing that I think a lot of digital health founders get wrong is you've got to move the product and the and the go-to-market aspects of the business together at the same time because the biggest buried innovation in healthcare is actually reimbursement.
00:27:25.519 --> 00:27:26.400
You're gonna have to crack.
00:27:26.559 --> 00:27:38.960
There's a lot of healthcare innovators coming out of PhD programs, coming out of medical school, who who I mean are a passion for health or technology and can maybe improve outcomes, maybe build something that people want to use, but they haven't been able to figure out who's gonna pay for it.
00:27:39.119 --> 00:27:42.720
And yes, there are consumer healthcare companies out there, we're not one of them.
00:27:42.880 --> 00:27:50.160
I think you know, my bias is that other than toothpaste and cosmetics, people expect their health insurance to kick in for their for their healthcare.
00:27:50.240 --> 00:27:57.519
And so you're gonna have to figure out how to how to crack healthcare reimbursement along with building your product, and you gotta get them both moving forward at the same time.
00:27:57.599 --> 00:28:03.920
And and that's what we did from you know, basically two months in after we had our prototype, we were figuring out how are we gonna sell this as well.
00:28:04.160 --> 00:28:08.960
Yeah, and then on the flip side, is there anything that you wish more investors understood about health tech companies?
00:28:09.359 --> 00:28:10.720
That it's gonna take a while.
00:28:10.880 --> 00:28:18.000
I think a lot of investors sometimes look at some of their consumer companies and and you know think that, you know, a healthcare company will scale like that.
00:28:18.160 --> 00:28:18.640
It can.
00:28:18.720 --> 00:28:28.160
Once you get your go-to-market, actually, healthcare, because of the entry barriers, you could actually have a really, really good return on invested capital within within healthcare.
00:28:28.319 --> 00:28:33.599
And your CAC could actually be a lot more efficient in healthcare as well, because you could have a bit of a captive audience.
00:28:33.759 --> 00:28:40.079
But you've you've got to understand that it's in healthcare, you're gonna have to understand how the money flows.
00:28:40.240 --> 00:28:43.440
And it's not just about you know the consumer paying for it.
00:28:43.519 --> 00:28:47.359
Some of the worst advice I got from from investors was, oh, just take it direct to consumer.
00:28:47.440 --> 00:28:49.519
And I'm so happy we did not take that investment.
00:28:49.680 --> 00:28:52.000
I got a lot of bad advice from investors along the way.
00:28:52.160 --> 00:28:55.759
That was that was maybe a top five bad, bad, bad advice that I ignored.
00:28:55.920 --> 00:28:58.559
Even as a young person, I ignored that because I knew that was bad advice.
00:28:58.799 --> 00:28:59.279
That's good.
00:28:59.440 --> 00:29:00.160
It's a good thing you did.
00:29:00.240 --> 00:29:01.440
Clearly, it paid off.
00:29:01.920 --> 00:29:08.880
And for anybody who doesn't know this acronym, MSK is muscular skeletal, musculoskeletal, which I'm struggling with.
00:29:09.119 --> 00:29:13.920
But, anyways, you've helped bring MSK care into the mainstream for employers and patients alike.
00:29:14.079 --> 00:29:17.279
What have you learned about behavior change, especially in healthcare?
00:29:17.599 --> 00:29:23.279
Well, look, healthcare is the baseline experience for a lot of us in healthcare, it's actually quite frustrating.
00:29:23.359 --> 00:29:33.039
You know, most of the time that we have in the healthcare episode is not with a provider, it's often with billing departments, reception desks, booking appointments, sitting in traffic, finding a parking spot.
00:29:41.359 --> 00:29:44.319
People don't often want to think about their health, they actually just want to live their lives.
00:29:44.559 --> 00:29:50.400
And so make it make it easy because you are you're not just competing with other healthcare companies, right?
00:29:50.480 --> 00:29:53.839
Why should I focus on my back pain versus my hypertension or my mental health today?
00:29:54.000 --> 00:29:58.400
You're competing with Netflix or or you know Instagram for people to spend their time.
00:29:58.559 --> 00:30:03.440
And for a lot of us in healthcare, we're sometimes getting people to do something that they don't really want to do.
00:30:03.599 --> 00:30:08.559
Like for us, you know, from a musculoskeletal care company, we'll focus on people with back joint and muscle pain.
00:30:08.640 --> 00:30:12.160
And I'm trying to get you to do something, you know, like move your painful knee.
00:30:12.240 --> 00:30:14.480
And that's that's something you just don't want to do right now.
00:30:14.559 --> 00:30:21.519
But I know if you move your painful knee, it might hurt in the in the short term, but long term it you're gonna feel better and your your move mobility is gonna improve.
00:30:21.599 --> 00:30:29.279
So, you know, make it simple and intuitive, and then secondly, help people score early wins so they have that confidence that, hey, this is working, I'm getting better.
00:30:29.359 --> 00:30:36.480
Because that could be incredibly motivating for people if they feel like they're making progress and they're taking in more control of their health.
00:30:36.640 --> 00:30:39.680
And lastly, you know, that the more personalized you can make it, the better.
00:30:39.759 --> 00:30:53.519
And that's one of the promises of digital health, in that you can make things a lot more personalized for people, their experience, their overall care plan, etc., versus, you know, maybe in-person care, which might not adjust as as frequently as digital care can.
00:30:53.759 --> 00:30:54.559
Yeah, absolutely.
00:30:54.720 --> 00:31:08.400
And you kind of touch on this earlier, actually, where you know, there's lots of other digital health companies, you know, it's a pretty um crowded space now with lots of different, I think, like focuses, you know, whether muscoskeletal or something else, mental health, behavioral health, things like that.
00:31:08.559 --> 00:31:14.000
Um, what do you think really helped like hinge health stand out, not just in the product, but also in the brand?
00:31:14.240 --> 00:31:18.240
Really good question, because look, I would not want to found a digital health company today.
00:31:18.400 --> 00:31:27.920
There was so much folks that have been launching, like the the barrier to entry is almost, you know, four to five times higher, I think, than when we launched Hinge in uh in October of 2014.
00:31:28.079 --> 00:31:33.119
And so I I do not envy the the seed stage, Series A stage digital health companies of today.
00:31:33.279 --> 00:31:41.279
But you know, a few things that have been very remunerative for us is focusing on being the best product on the market, the most validated, and the easiest to buy.
00:31:41.359 --> 00:31:45.440
And that that the that intersection has been very, very remunerative for us.
00:31:45.519 --> 00:31:54.000
So, firstly, the the being the best product on the market, you know, we try to be the most comprehensive and effective and being very intellectually honest of what will it take to move these outcomes.
00:31:54.160 --> 00:31:57.839
When we speak to benefits leaders, they are in charge of a big budget.
00:31:58.079 --> 00:32:00.880
And you know, you might trick a customer here or there.
00:32:01.039 --> 00:32:09.200
I see, you know, some startups that don't have great products, even outside of MSK, get to 10, 20 customers, then they're gonna get wobbly because they don't really have outcomes and they're gonna fall down.
00:32:09.359 --> 00:32:10.319
And we never wanted to be that.
00:32:10.400 --> 00:32:11.680
We never wanted to be a flash in the panel.
00:32:11.759 --> 00:32:21.519
We always wanted our product, the end user experience to drive real outcomes, both clinical outcomes and financial outcomes, and being like delightful for members to use, have a really good NPS.
00:32:21.759 --> 00:32:24.000
And even today, our our our product remains.
00:32:24.160 --> 00:32:29.759
We we estimate we have much higher engagement on our product than anybody else in our space, higher NPS.
00:32:29.839 --> 00:32:35.279
And last year, our usage on a per member basis was up 40% year over year.
00:32:35.440 --> 00:32:37.279
And so, like, really we're not done yet.
00:32:37.440 --> 00:32:46.000
We're constantly improving the the uh a member's um uh engagement set or sorry, the member's experience so that they're they're using it more than ever.
00:32:46.160 --> 00:32:48.720
Um, secondly, you know, can't constantly validate your outcomes.
00:32:48.960 --> 00:33:07.839
We published about 19 um studies, um, several with you know tier one institutions like a Stanford, Vanderbilt, um, University of Texas, University of Washington, and that's been really, really important to us to be able to demonstrate to our customers that our product works, both you know, really good clinical outcomes and good financial savings.
00:33:08.000 --> 00:33:10.559
And thirdly, you know, again, healthcare sold via channels.
00:33:10.640 --> 00:33:13.599
A benefits team might have two to three folks on on their team.
00:33:13.680 --> 00:33:25.039
And if you're doing an enterprise sale, whether it's SaaS business or or healthcare business, um, IT security business, you name it, um, you are not just selling to a company or selling to a person at that company.
00:33:25.279 --> 00:33:32.000
And how do you you know empathize with like what is it gonna take for them to bring this um through uh and implement it?
00:33:32.079 --> 00:33:36.799
They're gonna have to take it through security and IT security, you know, uh IT security review, legal review.
00:33:37.039 --> 00:33:43.759
They're gonna have to think about you know, how do we roll this out to you know our employees and for healthcare it's not just the employees, it's a dependence on the plan.
00:33:43.920 --> 00:33:48.400
So it's not just you know a piece of accounting software that used by the 20 accountants on the team.
00:33:48.720 --> 00:33:53.119
It is like everybody on the team and their wives and you know kids who are over 18.
00:33:53.200 --> 00:33:55.599
And so it's a the the barrier, the risk is a little higher.
00:33:55.759 --> 00:33:58.640
And we really thought about how do we make it easy to buy.
00:33:58.720 --> 00:34:10.480
So again, think about being the best product and never getting complacent because the product is never overdone, constantly validating your outcomes so the customers have confidence that you're gonna improve the outcomes that they mat that matter, and then making yourself easy to buy.
00:34:10.559 --> 00:34:17.199
And for us, by having our channel partnerships with health plans, we've made ourselves really the easiest solution to buy in that intersection.
00:34:17.280 --> 00:34:18.480
It's been really remunerative for us.
00:34:18.639 --> 00:34:19.039
It's awesome.
00:34:19.199 --> 00:34:20.320
And let's talk about leadership.
00:34:20.480 --> 00:34:25.440
What's been your biggest evolution as a CEO from those early days in 2014 to now post-IPO?
00:34:25.599 --> 00:34:27.519
You know, I think every leader's got to scale themselves.
00:34:27.599 --> 00:34:38.320
And so, first of all, I still read, you know, two to four books a month across business or philosophy or you know, even writing, and like try to develop new skills for yourself as a leader.
00:34:38.480 --> 00:34:40.079
And that's really, really important.
00:34:40.159 --> 00:34:42.639
And it and it really compounds over time.
00:34:42.800 --> 00:34:48.000
Just to get you know, five percent better, that's that will compound phenomenally after you know a year.
00:34:48.159 --> 00:34:53.199
You you do that five five percent improvement after 12 to 15 months, or you're twice as good in a given task.
00:34:53.280 --> 00:34:59.360
And if it's 5% better, you'd increase the the rate, you know, 5% better every week, then you're gonna really compound a lot.
00:34:59.440 --> 00:35:13.280
So, one, you've gotta see yourself as not just like born as a as a great entrepreneur or like you know, get too cocky if you get you know early success with investors, you know, stay humble and realize that you have a lot of work to do in terms of just building out your skills.
00:35:13.519 --> 00:35:18.480
Second bit that I've I've evolved as leaders is to learn, you know, how best to lead at all levels.
00:35:18.639 --> 00:35:22.079
I think a lot of bad advice you get, especially from MBA programs.
00:35:22.239 --> 00:35:24.800
My gosh, this is terrible talking advice on MBA programs.
00:35:24.960 --> 00:35:29.119
They they tell you that, you know, as you grow, you gotta delegate and delegate and delegate.
00:35:29.280 --> 00:35:37.519
That's the sign of a great leader, is that you know, you're at some point you're the CEO just turning some knobs and like setting vision in a room and talking to investors.
00:35:37.679 --> 00:35:39.039
That is utter bullshit.
00:35:39.280 --> 00:35:47.679
And so you can't do everything as a CEO, and particularly as a company continues to scale, but as a founder of CEO, I try to stay ultra hands-on for the most critical aspects of the business.
00:35:47.920 --> 00:35:49.360
And that is that is really important.
00:35:49.599 --> 00:35:54.320
Sometimes people come in and they're like shocked, like, hey, I'm a I'm a P3 designer.
00:35:54.400 --> 00:35:56.960
What do you mean I'm gonna present my work to the CEO next week?
00:35:57.039 --> 00:36:10.159
And he wants to see me present my work for the next you know few weeks because you're building a critical part of the product, and I want to be close to that, and I'm gonna care about the colour of the buttons on this part of the product, how we're placing this and how it might fit with you know something else that we're doing.
00:36:10.239 --> 00:36:14.480
And it's a sign of the importance of your work, but you know, CEOs should be in the details.
00:36:14.639 --> 00:36:20.000
But you of course you can't be overseeing every project, but be comfortable being able to zoom in and out.
00:36:20.159 --> 00:36:25.599
Some projects you're gonna stay at 30,000 feet, but be capable of coming down at three feet or even three inches.
00:36:25.679 --> 00:36:28.639
And it's not just relevant for CEOs, it's relevant for executives.
00:36:28.800 --> 00:36:34.159
We have hired a lot of executives over the years who are incapable of doing real work anymore.
00:36:34.239 --> 00:36:40.719
They can only delegate, they cannot write their own memos, they cannot write their own PRDs, they cannot actually get in and do IC work.
00:36:40.800 --> 00:36:51.519
So it doesn't matter what type of leader you are, a sales leader, you know, account manager, like in client success, a marketing leader, engineering leader, a product manager, designer, operations leader, a finance person.
00:36:51.920 --> 00:37:01.039
If you are a VP finance or senior director of finance or CFO, you gotta be able to dive into an Excel and do some work yourself sometimes and you know turn this project around.
00:37:01.119 --> 00:37:08.320
If you are a head of design, you gotta be able to say, you know what, team, leave the Figma with me, and I'm gonna, I'm gonna, I need to, you know, give you some feedback on this screen.
00:37:08.400 --> 00:37:19.039
And I actually want to like, you know, spend a couple of hours to think through some conceptual designs myself as well, and at least just to maintain that that ability to actually get your hands in the work.
00:37:19.119 --> 00:37:23.599
And of course, there might be 10 other projects you're just monitoring and giving benevolent neglect to.
00:37:23.840 --> 00:37:30.000
And when you're able to do that as well and be go into the trenches, it's not micromanagement, it's management.
00:37:30.159 --> 00:37:43.840
And um, and you you develop a lot of respect for the team because you could you could be at their level as well instead of just at a high level, and you develop a better sense of um of the of the work that's being done and a better judgment.
00:37:43.920 --> 00:37:48.639
And so leading at all levels, and and then lastly, probably like you know, managing people differently.
00:37:48.719 --> 00:37:55.360
And I wish I would have known this earlier and have evolved as a CEO is like you know, not everyone is the same, and so you shouldn't treat them the same.
00:37:55.519 --> 00:38:02.800
You know, don't assume that you know the management tactic that worked on one person will work on the next person, or that you know, everybody's good at the same things.
00:38:02.960 --> 00:38:14.320
You know, everybody has like unique superpowers, and when you position somebody, put them in the right position to flourish, where like the thing that they're doing almost comes naturally, they do beautiful work.
00:38:14.480 --> 00:38:21.199
And I wish I would have known that earlier, and that it's it's okay that somebody might not be good at this task that I expect other people to do good at.
00:38:21.280 --> 00:38:28.559
They're they're good at other things, and like they find out what they're really good at, and if that fits with your org, you're gonna get you know really good stuff coming out of them.
00:38:28.639 --> 00:38:30.800
Um, and I probably learned that a bit later in my career.
00:38:31.199 --> 00:38:32.400
Yeah, no, absolutely.
00:38:32.639 --> 00:38:34.880
Well, as you look ahead, what's your North Star?
00:38:35.119 --> 00:38:38.719
Like, you know, not just for the company, but for how you want to lead in this new chapter.
00:38:38.960 --> 00:38:40.480
But we have a full vision a hedge.
00:38:40.559 --> 00:38:44.239
You know, we want to use technology to scale and automate the delivery of care.
00:38:44.400 --> 00:38:48.400
And I want our company to be stubbornly focused on delivering against that vision.
00:38:48.480 --> 00:38:52.320
And we will shop at reimagine the delivery of care, but it's gonna take focus to make that happen.
00:38:52.480 --> 00:39:02.639
But what you're gonna see over time is that we have our core product in digital physical therapy, and we want to continue to enhance this product as we capture more of the total physical therapy spend.
00:39:02.719 --> 00:39:24.960
But we want to use technology to continue to peel away aspects of in-person care, um, to use technology to say on a V1 scale and automate, you know, a waste 60 to 70% of provider interactions, with confidence that by the time we get to version three or version four, we could get to 80, 85, 90% plus of provider interactions could be scalably delivered by our technology.
00:39:25.119 --> 00:39:33.119
And not all areas of healthcare are amenable to technology automation today, but more and more being are opening up to technology automation every day.
00:39:33.199 --> 00:39:33.840
And we're really excited.
00:39:33.920 --> 00:39:35.599
This is we're gonna chew on this for 50 years.
00:39:35.840 --> 00:39:36.320
That's awesome.
00:39:36.960 --> 00:39:38.960
And I promise this is our last question.
00:39:39.039 --> 00:39:47.039
Um you mentioned, yeah, you mentioned reading two to four books a month, which is absolutely incredible to get five percent smarter at any given time.
00:39:47.199 --> 00:39:51.440
Um are there maybe one to three books you could recommend to folks listening to this podcast?
00:39:51.679 --> 00:39:51.840
Sure.
00:39:51.920 --> 00:39:52.880
Let me actually pull up a list.
00:39:52.960 --> 00:39:57.119
I actually I would say not only should you read books, you should actively read them.
00:39:57.199 --> 00:40:12.000
And what I mean active is that um you're taking notes, and so instead of just passively reading it, I take notes and then I review my notes after, and I have like a running Notion Doc where I will, you know, once or twice a year, I will read my notes for all of the books that I've read.
00:40:12.159 --> 00:40:14.960
And I that you know helps to reinforce some of the principles.
00:40:15.039 --> 00:40:16.480
And it's not just like business books.
00:40:16.559 --> 00:40:26.960
I read fiction, I read, you know, I think you learn a lot about human nature from fiction, particularly, you know, some of the books we read in high school that none of us really appreciated because it's wasted on high school students.
00:40:27.519 --> 00:40:27.920
It really is.
00:40:28.239 --> 00:40:28.559
Oh gosh.
00:40:32.719 --> 00:40:35.199
Steinbeck is like really interesting.
00:40:35.440 --> 00:40:38.320
Yeah, they're incredible, and particularly books that have like stood the test of time.
00:40:38.400 --> 00:40:40.400
But books that I would I would recommend for some founders.
00:40:40.559 --> 00:40:42.639
One is is actually Competition Demystified.
00:40:42.719 --> 00:40:49.119
This is a business book, and uh he basically talks about Porter's five forces, which I think a lot of us are are familiar with.
00:40:49.280 --> 00:40:50.960
You know, they weren't all created equal.
00:40:51.119 --> 00:40:54.400
And the most important force is is is actually entry barriers.
00:40:54.559 --> 00:40:59.760
And how could you, as a as a as an entrepreneur, over time discover what are your company's entry barriers?
00:40:59.840 --> 00:41:01.440
It might not always be obvious up front.
00:41:01.599 --> 00:41:09.679
And then once you identify what those entry barriers are, you need to invest in and reinforce them so that long term your profits will not be competed away.
00:41:09.840 --> 00:41:12.239
And that is something that we've really invested in at Hinge Health.
00:41:12.320 --> 00:41:15.280
And what you know, we have we have two key entry barriers for our business.
00:41:15.440 --> 00:41:21.440
One is is our is our channel partnerships, which we've really invested in and run up the score and take very, very seriously.
00:41:21.599 --> 00:41:28.960
And then the other is our is our product working on roadmap islands that we believe is you know sometimes three, four years ahead or is in our space or working on.
00:41:29.119 --> 00:41:39.280
And you're gonna have to find out for yourself what are your unique entry barriers, and it might not be obvious for you in the first three or four years of your business, they might reveal themselves over time, but it's it's really, really important.
00:41:39.360 --> 00:41:43.599
And I found this book to be fascinating in that technology is not always the entry barrier, right?
00:41:43.679 --> 00:41:55.920
And there's been many examples in history where somebody with you know really cool technology still gets their profits competed away because other people are able to approximate that that technology, and that wasn't really an entry barrier.
00:41:56.000 --> 00:42:00.480
So Competition Demystified was was one key book that I I encourage a lot of folks to read.
00:42:00.639 --> 00:42:03.519
Um, another one is um high output management.
00:42:03.599 --> 00:42:05.119
I try to read that every now and then.
00:42:05.360 --> 00:42:06.800
It's uh it's an excellent book.
00:42:06.960 --> 00:42:15.280
It was for it was written by the uh former founder of Intel, Andy Grove, and I read that early on in my career and continue to try to read it.
00:42:15.360 --> 00:42:17.199
I've probably read it, you know, three or four times.
00:42:17.440 --> 00:42:22.800
The maybe a third book for particularly for healthcare entrepreneurs is um The Innovators Prescription.
00:42:22.880 --> 00:42:25.519
So it's written by Clay Christensen, who wrote Innovator's Dilemma.
00:42:25.599 --> 00:42:26.239
It's a thick book.
00:42:26.400 --> 00:42:32.239
I've also read it about three times, and every, you know, the first time you're not gonna get capture everything, you'll capture the broad contours.
00:42:32.400 --> 00:42:38.079
The second time you'll you'll you'll capture quite a bit more, and then the third time it really started to crystallize for me.
00:42:38.239 --> 00:42:40.159
And that's been really important.
00:42:40.320 --> 00:42:44.159
It's required reading at the senior leadership team level at Hinge Health.
00:42:44.239 --> 00:42:48.000
Me and my chief medical officer, we always riff on some of the concepts.
00:42:48.159 --> 00:42:50.239
I agree with about 85-90% of it.
00:42:50.320 --> 00:42:52.239
And it's just it's just it's a fascinating book.
00:42:52.320 --> 00:42:56.480
But it does underline that the biggest buried innovation in healthcare is reimbursement.
00:42:56.559 --> 00:43:07.280
If you can't figure out how to get your product paid for, you're gonna really struggle to build a health technology company because it's so it could be quite rigid how how you unlock payments for your product.
00:43:07.519 --> 00:43:17.360
And I have found after 10 plus years in digital health, a lot of healthcare veterans, even who work for health insurance companies, don't really understand the concepts of healthcare reimbursement.
00:43:17.440 --> 00:43:26.480
Like the real nuances of how to make this work and like you know how you how the money moves to through providers and you know, health plans and employers and you know, how to health plans.
00:43:26.559 --> 00:43:35.199
Like it's actually quite quite nuanced, but once you figure it out, you know, the the fog somewhat dissipates, and you can plot out your business strategy much more effortlessly.
00:43:35.280 --> 00:43:36.800
So those are three books I recommend.
00:43:37.039 --> 00:43:37.519
It's awesome.
00:43:37.679 --> 00:43:38.880
Thanks so much for sharing those with us.
00:43:38.960 --> 00:43:40.400
I'm excited to add them to my list.
00:43:40.559 --> 00:43:40.719
Yeah.
00:43:41.039 --> 00:43:41.360
Thank you.
00:43:41.519 --> 00:43:45.679
Um appreciate the time and uh hope that was useful for for your yes.
00:43:45.840 --> 00:43:46.800
No, this was so great.
00:43:46.960 --> 00:43:48.000
Thanks so much for being here.
00:43:48.079 --> 00:43:49.119
I know you're super busy.
00:43:49.199 --> 00:43:51.599
Um, where can people follow you or learn more about Hingehelf?
00:43:51.840 --> 00:43:59.039
Um, they can find me on LinkedIn, they could um uh find me on Twitter as well, I'm not as active there, but they could find me both of those, and they're always welcome to to drop me an email as well.
00:43:59.280 --> 00:43:59.840
That's great.
00:44:00.159 --> 00:44:01.039
Well, thank you so much.
00:44:01.440 --> 00:44:01.599
Yeah.
00:44:01.920 --> 00:44:02.639
Thank you, ladies.
00:44:02.719 --> 00:44:03.440
I appreciate it.
00:44:03.679 --> 00:44:05.119
That was such a great conversation.
00:44:05.199 --> 00:44:08.159
I was so glad that uh we were able to get Dan on the podcast.
00:44:08.639 --> 00:44:12.320
Remember, what a stood out for um to you from this conversation.
00:44:12.639 --> 00:44:21.039
Yeah, I mean, one thing I mentioned during the podcast, but just want to, you know, nail down at the end is really like this wasn't always a success story.
00:44:21.119 --> 00:44:24.000
Um, you know, this was his third company with his co-founder.
00:44:24.159 --> 00:44:25.920
It took them a year to get their first customer.
00:44:26.000 --> 00:44:30.400
And I definitely know founders and investors that would feel like, oh my gosh, is this even worth it at this point?
00:44:30.559 --> 00:44:31.840
It's taking way too long.
00:44:32.079 --> 00:44:39.199
And it was amazing to hear that he knew that even for one of his investors, he was being stack-ranked in their portfolio.
00:44:39.280 --> 00:44:42.639
And, you know, Hinge was number 28 out of 30.
00:44:42.880 --> 00:44:48.159
And now, fast forward to today, and they're one of the top one to two performers in that portfolio.
00:44:48.320 --> 00:44:53.840
I just think I thought that was really telling because, you know, even at the council, we talk about this all the time, Rachel.
00:44:54.000 --> 00:44:56.719
You know, we're really betting on the captain to guide the ship.
00:44:56.880 --> 00:45:02.239
It's not necessarily about, you know, everything they've planned from day one going right because we know that it won't.
00:45:02.320 --> 00:45:05.440
Um, and so I just love how open and honest he was about that.
00:45:05.519 --> 00:45:07.039
And I love that comeback story.
00:45:07.119 --> 00:45:08.079
I thought it was amazing.
00:45:08.239 --> 00:45:20.320
And then the other thing that um really stuck out to me a couple times in the conversation was that he is a CEO that is constantly looking ahead to what's next in the industry that he's in, as well as the broader ecosystem around it.
00:45:20.559 --> 00:45:24.880
So even that bet they made on hardware, it wasn't anybody asking them to do it.
00:45:25.119 --> 00:45:33.039
They just were kind of looking at where computer vision and other technology was going to intersect their business in 18 to 24 months, and they wanted to be ready when it was time.
00:45:33.199 --> 00:45:47.679
And I just thought that was so inspiring because you do see a lot of founders and investors in the startup space that can be very reactive to sort of the trend of the moment, whether that's crypto, web 3, AI, everybody's trying to like rebrand themselves in you know that moment.
00:45:48.159 --> 00:45:59.920
And I think it's way more powerful to be building just something with hardcore utility and then also thinking ahead to whether that's 18 months or five years ahead, but really making some strategic bets.
00:46:00.000 --> 00:46:02.000
So I thought that was really inspiring.
00:46:02.320 --> 00:46:03.599
Yeah, absolutely.
00:46:03.760 --> 00:46:14.320
Um, and especially when you were talking about like the intentionality around like the IPO timing and everything like that, like the thing that stuck out to me was um just the fact that like it's not about the external readiness, right?
00:46:14.400 --> 00:46:19.840
Because some you know, timing is never going to be perfect, markets will change, you know, um as they will.
00:46:20.000 --> 00:46:26.239
And he was really focused on more the internal readiness of the company because that's like is what going to like really matter, right?
00:46:26.320 --> 00:46:31.360
It's the intrinsic value that you're creating um, you know, out there from your company as well.
00:46:31.599 --> 00:46:41.840
And then the other thing that he mentioned that um, you know, I really loved was just how he thought about all of these things in parallel that actually make the company successful.
00:46:42.000 --> 00:46:47.360
You can't just focus on one key lever like product development or having that best product out there.
00:46:47.440 --> 00:46:51.199
It needs to be the product plus the go-to-market and distribution, right?
00:46:51.280 --> 00:47:01.760
And it has to be also with like understanding the customer and the team, you know, everything has to really work um in sync in order to have that success as a company.
00:47:02.000 --> 00:47:02.639
Yeah, totally.
00:47:02.719 --> 00:47:03.920
It's like the legs of a stool.
00:47:04.000 --> 00:47:06.880
If one of them is broken, the the thing is not gonna stand up.
00:47:07.039 --> 00:47:09.519
So, uh, or if you're only standing on one leg.
00:47:10.000 --> 00:47:10.719
So yeah.
00:47:10.880 --> 00:47:13.199
Well, uh everyone, thank you so much for listening in.
00:47:13.280 --> 00:47:24.800
And if you enjoyed this episode, share it with the founder or someone you think is founder curious, leave a sub-review, and make sure that you subscribe to First Builders whenever you uh get a chance and wherever you get your podcasts.
00:47:25.119 --> 00:47:25.519
Awesome.
00:47:25.599 --> 00:47:30.000
And you can also follow us at the Council Cap on LinkedIn and Twitter or X.
00:47:30.239 --> 00:47:36.719
And then be sure to uh subscribe to our newsletter as well on thecouncil.co for more insights from early operators.
00:47:37.119 --> 00:47:39.280
Thanks for listening, and we'll see you next time.