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From Biotech to Walgreens: Lessons From 25 Years as a Physician Executive · StartUp Health NOW Podcast

• 0:00
  Welcome back to Startup Health Now, the podcast where we celebrate the entrepreneurs and innovators who are transforming health. I'm your host, Logan Plaster.
• 0:08
  [music playing] This week, I'm turning the microphone entirely over to my boss, Steven Krein, the CEO and co-founder of Startup Health.
• 0:15
  And it should be noted, Steve's the original host of this podcast, alongside his co-founder, Unity Stoakes.
• 0:21
  In this episode, you'll hear highlights from a recent master class featuring Harry Leiter, a physician executive whose experience runs the gamut from biotech startups to being a physician executive at Walgreens.
• 0:33
  In the conversation, Steve and Harry get tactical about things like understanding your customer, bringing MVPs to market in healthcare, and how to survive long sales cycles, and they cover much, much, much more.
• 0:46
  With that, I'll turn the episode over to Steven Krein. [upbeat music] I'm really excited because we're bringing somebody who's been a CEO, a, a chief medical officer, a chief strategy officer, a chief executive officer.
• 1:02
  Um, over the last fifteen, twenty years, Harry Leiter has done everything that today I think couldn't be more relevant for an open conversation with this community.
• 1:14
  A discussion about, um, lessons learned, not only, um, of a lifetime as a physician and, uh, a part of startups and large companies, but someone who understands what is right around the corner.
• 1:28
  So without further ado, Dr. Harry Leiter.
• 1:31
  Thanks so much, Steve, for the opportunity and the very, very gracious words, and it's special for me to be honest here with you today for the reasons you mentioned and our shared history.
• 1:39
  Just to kick it off, you have CXO titles across so many different types of businesses, from small startups to large multi-billion dollar conglomerates.
• 1:49
  I'd love to hear kind of your twenty-twenty-four lay of the land and maybe some context from how your background plays into everything. I think, uh, there's a tension.
• 1:59
  There's so much innovation going on in healthcare, and a lot of it's being driven right now by AI, as we all know, which is a tran-transformational force that's catalyzing so many startup companies offering new types of value.
• 2:14
  But on the same token, we've seen a lot of, uh, startup healthcare companies struggle. Telemedicine has faced its, its headwinds, uh, post-COVID.
• 2:24
  The digital health companies, uh, are having trouble going public and getting funding even when they're in earlier stages.
• 2:30
  So I think it's a really interesting time where there's, uh, tremendous innovation still going on, but the, um, the commercial challenges are perhaps even, uh, more robust than they've been in, in recent years.
• 2:45
  If you could juxtapose your most recent role as CEO of a, of a biotech company- Right... with of chief medical officer of Walgreens. Oh my God, so different.
• 2:55
  So, uh, first of all, the, the biotech company's called Zeo Scientifics, and not only were we researching what are called exosomes. They're these little nanoparticles, a thousandth the width of a human hair.
• 3:08
  They're in almost all cells of our body, and they're kind of like the intel inside of stem cells, so they cause regrowth of things like cartilage or hair or skin, whatever.
• 3:18
  Uh, but we also sold exosomes, so it was a commercial company as well. So I was managing a team that was both doing research to get FDA approval and also commercializing. So, uh, that was a, a real challenge.
• 3:31
  Tiny company, limited resources, trying to create a sales strategy, a commercial strategy while funding the very, very expensive research to get FDA approval. Uh, on-- uh, contrast that with Walgreens.
• 3:44
  Unlimited resources in many ways, right? I mean, Fortune fifty company, eight thousand stores, big digital footprint.
• 3:53
  But the flip side with Walgreens is, uh, to get something done generally required, uh, quite a few meetings, and I'm being-- understating it.
• 4:01
  You had to present something nine times, get ten committees, six executives all to sign on the dotted line to really get something moving.
• 4:09
  So the big-- the challenge at a big company like Walgreens really was around speed and inertia and trying to get things moving. Whereas in a small company, uh, you may have less resources.
• 4:19
  You do have less resources, but you can make things happen much faster. And that's why most of my career, other than Walgreens, has been with startups and small companies. I'm really, uh, energized by that.
• 4:29
  Digging a little bit deeper, your time at Walgreens had to teach you a lot about- Yeah... how small startups are viewed by big companies. Yeah. Uh, and in fact, when we met, I think you were at Walgreens, so- Yeah...
• 4:44
  always intrigued by how everybody perceives the big companies and how great it would be to work with the big companies and collaborate with them. Right.
• 4:52
  But what is generally the view of how innovative startups can, can, well, maybe cannot work with large companies like that? Yeah. What you learned that you've taken with you as you've been working on these startups.
• 5:06
  I mean, yeah, I think big companies do look to small companies sometimes for, uh, uh, new services, new, new approaches or products that they can't do themselves.
• 5:17
  So for example, when I was at Walgreens, Steve, I, uh, led the effort to do a partnership with MD Live and bring the telemedicine program into Walgreens.
• 5:26
  So at the time, Walgreens had, maybe still has, if not the leading, the second leading healthcare app in the country because millions of people download the Walgreens app on their phone.
• 5:37
  And largely they use it to refill prescriptions or send them to another pharmacy if they're traveling. We built a digital infrastructure on top of that where you could do, uh, telemedicine visits.
• 5:48
  You could get rewarded for walking by linking your phone to the Walgreens account. Uh, but we did that through partnerships with WebMD, MD Live, because we didn't really have the experience, uh, to do a lot of that.
• 6:01
  Now, the flip side is the concern with working with a startup or small company is do they have the-- do they have the ability to scale?So if you do something with a Walgreens, you have to be prepared to scale very rapidly nationally.
• 6:13
  So that's the big concern. Also, big companies are overwhelmed with smaller companies or ve-- I hate to use the word vendors, but vendors that wanna work with them.
• 6:22
  So cutting through the noise, uh, can be very challenging. And then of course, I had the opportunity to work with the most controversial startup of all time in healthcare while I was at Walgreens, and that was Theranos.
• 6:35
  That not, uh, withstanding the, what we read about it, uh, couldn't have been fun on the inside cleaning up that mess. No, it was not. Um, and I think it was through some lessons learned, um, um,
• 6:50
  you know, because Theranos' information that they were sharing was fundamentally fraudulent, a-and that was proven by a court, as you know. It's very hard to do due diligence in an organization that's fudging their data.
• 7:03
  They claim they had contracts with the military. They claim they had contracts with pharmaceutical companies, all of which was not true.
• 7:10
  But I do think that the, the lesson learned is if something is really new and exciting, there is a responsibility to make sure it has what I call clinical integrity.
• 7:23
  That's obviously what Theranos did not do a real, real good job of. But it was a year of my life. I got to meet Elizabeth. I got to meet Sunny.
• 7:31
  We asked for their validation data, which they called as protected and proprietary, and we had to sort of wedge that out of them.
• 7:38
  And eventually, we got the, uh, Walgreens to pull the plug on their hundred and fifty million dollar investment in the pilot at Theranos.
• 7:44
  So it was a high wire act, and, um, I, I didn't know how it was gonna turn out, but it, it turned out okay. There was a big shift, not only while it was, um, getting unpacked in the media, but obviously afterwards.
• 7:57
  Lots of organizations became incredibly skittish, concerned, extra caution- Yeah... extra cautious as a result of that. Uh, some people thought that was great.
• 8:08
  It was a maturing of what was sloppy diligence or other things where people just, you know, presumed the entrepreneurs were, yes, selling a lot that they might not have yet.
• 8:19
  But where, where do you see the line drawn for organizations, and you've seen this now as CEO and CMO or CSO of these startups. Right.
• 8:29
  Different is the startup w- operating as a startup today post-Theranos than it was before. Yeah. I, I, I mean, the big lesson learned to me for a startup, um,
• 8:40
  is that the Silicon Valley ethos, Steve, this idea that you create a minimally viable product. You don't spend time making sure it's perfect. You kick it out there.
• 8:50
  You, you, you learn from the consumer or customer acceptance or non-acceptance, then you iterate quickly, and you keep doing that.
• 8:59
  It works for lots of things, like if it's a DoorDash app and it's just minimally viable, and your pizza gets there fifteen minutes late, or you don't get an alert, nobody gets hurt.
• 9:10
  But the whole concept of a minimally viable product in healthcare, I think, is an oxymoron. I don't think you can s-- you can test a minimally viable healthcare tool that affects people's lives.
• 9:22
  It has to work, at least work quite well before you release it to patients, the public, consumers, doctors, whoever the customer is.
• 9:31
  So I think that's the big learning post-Theranos, that we can't just take this Silicon Valley ethos and just throw something out there and learn. Yeah.
• 9:39
  And that, that's one of the challenges, I think, with non, uh, healthcare investors or non-mission aligned investors who might be expecting things to operate the same in healthcare that they do in the- Right...
• 9:51
  industries they're investing in. Um, we're gonna jump in. Katherine from ReadySpec has a question. Uh, I'm gonna make sure you're off mute, Katherine.
• 9:59
  We're gonna spotlight you, and you can ask Harry the question after introducing yourself. Sounds great. Uh, thank you. So my name's Katherine Bornbaum.
• 10:08
  I am the chief business officer at a startup called ReadySpec, where we are working to transform Alzheimer's diagnostics using, uh, broadly accessible retinal imaging and AI.
• 10:19
  Um, I am fascinated by your career path and, um, really would love to understand from your perspective when you're sitting in the Walgreens of the world, um, what is sort of a, a typical path for engaging with startups?
• 10:34
  In our experience to build relationships with big corporations, it's really sort of a, a multi-year relationship building, trust-building exercise before you can get to an MOU, an agreement, an investment, et cetera.
• 10:49
  I don't know if we're just really slow or [laughs] Yeah. No, not necessarily. Um, but I, I'd love your thoughts on that. Yeah.
• 10:55
  And also any advice you might have for how to find the right decision-makers within these large organizations.
• 11:01
  It is a real challenge, and in fact, just, um, pure serendipity, one of my clients right now is in the dementia detection space with not an optical scanning technology, but with a modified EEG technology. Oh, neat.
• 11:15
  So, yeah. So you're, you're in an exciting area. Um, you know, I get a lot of questions about payers. I spent the first third of my career in the payer space. Yeah.
• 11:25
  And a lot of companies are trying to create a commercial model where they charge payers. They, you know, that's the economic engine.
• 11:33
  And whether it's payers or a big company like Walgreens, I like to-- I tell people the sales cycle is twelve to eighteen months from the time you send out your first communication till you potentially land a contract.
• 11:44
  Mm. Just very typical. So you have to have a pipeline of a lot of, a lot of leads in order for just one or two to get through. A couple pearls, uh, are, number one, go for pilots.
• 11:58
  It's a lot easier for these organizations to think about a pilot than to think about an enterprise-wide program. And also, it's easier for you to execute, right?
• 12:06
  I mean, trying to do a national program out of the box is hard.Number two, getting key decision makers is really hard. Some key, key tactics that, that I, I advise is, um, you know, conferences are really important.
• 12:20
  If you can have a g-a, a great speaker that outlines the unmet need, uh, they don't let you just do a, um, obviously just do a sales pitch for your product, but at least if you can outline the unmet need and, and have some science behind the different approaches- Mm...
• 12:34
  people will come after you, you know, come up to you after the, the speech to learn more.
• 12:39
  Um, having an advisory board of, of people that represent your customer space, whether it be, uh, payers or whether it be integrated delivery systems who can both advise you about your strategy, and if they really love what you're doing, they can make some introductions because they believe in it.
• 12:57
  It is definitely, um, worth doing. And then there are a number of intermediary organizations that have relationships- Mm...
• 13:04
  with, um, whether it's payers or, or pharmacies or whatever, that can sometimes make the introductions for you. But this is the biggest challenge I see in startups, is when they're going from, "I've got a great idea
• 13:16
  or a great service," to, "How do I get someone to actually try it or buy it?" That, that's the hard point. Yeah. Thank you. Sure. Not easy, but you, y-y-you'll get there. Um, maybe this relates to...
• 13:30
  on that, along those themes, you mentioned the MVP, um, you mentioned pilots. Um, thinking about it from the perspective of your comment that it's just different than Silicon Valley- Right... um, what do you do?
• 13:45
  Are there creative approaches to, besides just a pilot, maybe structuring the proposal, what other things- Yeah... are the kind of pearls, u-using your words, the pearls- Yeah... to help this community out?
• 13:58
  What I neglected to mention, Steve, uh, to Katherine's good question, is, um, being really clear on what the value, uh, proposition is to your customer.
• 14:11
  I mean, it's gonna be different to a Walgreens than it's gonna be to a health plan. So for example, in the area of dementia, um, the value to a health plan, is it saving money?
• 14:21
  Is that the key value proposition which health plans focus on? Is it increasing the risk-adjusted, risk-adjusted HCC scores, which health plans get for patients that have chronic illness?
• 14:32
  I'm not suggesting what it should be for you, Katherine, or for your, for other people on the line, but I find a lot of startup companies need to sharpen up a little bit for their, uh, their commercial go-to-market strategy.
• 14:45
  What is the value proposition, number one, and then what data do they have to actually suggest that it's gonna be successful? Because everybody that purchases the product or service is doing it for a reason. So how...
• 14:56
  I call it a value roadmap, having a roadmap of the data you have to, uh, accumulate to actually suggest that what you're gonna do adds value to your customer.
• 15:06
  And then the last thing on, on contracting is for your first client, or maybe your second, I'm a big fan of putting a little bit of your fees at risk to say, "I've got skin in the game," and actually have some performance metrics, and if you don't achieve them, you don't get paid as much.
• 15:22
  That convinces a lot of purchasers, even if it's not a lot of money, that you have confidence in, in your program, your service, or your product. What, um,
• 15:33
  what are the biggest mistakes you see made over and over again when you were consider-- either considering it when you were at Walgreens or what you see in your current practice?
• 15:41
  And we should mention what you're doing now, because I think it bridges back to where- Yeah...
• 15:46
  this expertise is actually very relevant to, uh, people who might not have a chief medical officer or have clearly the go-to-market background that you do that, that might be useful lessons learned that you still see being made.
• 16:00
  Yeah. Thank you. And to Steve's point, I'm starting off sort of... I've just recently started a fractional executive business to help small companies out who can't afford a full-time CMO or CSO.
• 16:10
  But, um, I think a couple of the big mistakes I see repetitively being made, Steve, are, uh, assuming that payers are gonna adopt the technology quickly.
• 16:20
  A lot of companies really believe payers are gonna come on board quickly, and it takes longer, and it's very hard to do. Um, on the B2C side, underestimating
• 16:32
  the spend that is required to capture customers if you're going B2C. It's millions of dollars to try to build a brand and to get people to purchase a product, uh, uh, B2C.
• 16:45
  So that's why so many of the startups are going B2B, because they just don't have the wherewithal to create a B2C strategy.
• 16:52
  Um, and then the last I'll mention, because it's, I'm just passionate about it, is something I mentioned earlier, the clinical integrity of the product. Does it really do what it's, it's supposed to do or the service?
• 17:02
  And I see companies that really aren't quite there yet, uh, selling their service. So those are, those are kind of the three, speed to market,
• 17:11
  u-uh, u-underestimating the difficulties with, uh, payers or providers, and then ex- and then the, the challenge of, uh, cutting through the noise on B2C. Excellent.
• 17:21
  So I'm gonna come back to a question around the fundraising challenges related to some of these things, especially when you talk about how much money is needed.
• 17:28
  But I wanna go over to Sam Royston from Replica to come off mute and ask your question. Hey, Harry. Uh- Introduce yourself- I'm Sam. I'm the CEO and founder of Replica Health. Hey, Sam.
• 17:40
  Um, we do AI for metabolic data, basically. So- Okay... we build context-aware intelligence that can be integrated into drug delivery systems- Okay...
• 17:51
  starting with type One diabetes, but we think this will be applicable outside of that eventually too. And who is your customer, um, when you do this? Yeah.
• 18:00
  So we've developed a, a direct-to-consumer application, or sorry, like a B2C application. Okay. We think that's important for the feedback loop of our business. Okay.
• 18:09
  So we have actual diabetics using our product and providing feedback- Yeah. It's something, yeah... and we used to think that was a sustainable business model. Yeah.
• 18:16
  They would actually just fund the whole thing, but turns out there's not enough people with all the requisite sensors and stuff- Right...
• 18:22
  um, to, to really make that a viable customer base.So we've pivoted a little bit toward, um, licensing to, like, medical device companies. Uh-huh.
• 18:31
  Um, there's-- I'm not-- I can't really discuss exactly which companies, but- No, that's okay. Sure. Device companies.
• 18:37
  Other ones are digital service providers, and then even other ones are, like, pharma companies- Yeah...new kind of insulin or something, and they want us to use our software to help them measure some characteristic of it.
• 18:48
  Yeah, I could see where that would be helpful. Yeah. So
• 18:52
  one interesting thing that I've found is when we're trying to negotiate deals, uh, it's, it's, in my experience, for whatever reason, it's almost been easier to get them to agree to, um,
• 19:04
  just a contract for some deliverable where there's no, no equity taken, right? Mm-hmm. Um, r-rather than a sort of strategic investment.
• 19:14
  And it's counterintuitive to me because with the strategic investment they're, they're getting a piece of the company, and it seems like a better deal from my perspective.
• 19:22
  But I'm just wondering what, what's your perspective there, and how did you guys think about this at Walgreens? Yeah. You know, it's interesting.
• 19:27
  When I was at Walgreens, we actually had a s-small venture capital fund, uh, that was, uh, owned by Walgreens called Well Ventures.
• 19:35
  Made-- We made investments maybe in a dozen or fifteen different small companies, and then eventually the fund was shut.
• 19:42
  Um, I, I think for these bigger organizations, whether they be pharma or, or, or, or maybe so-some of the bigger digital companies, the long-term horizon and the, and the, you know, and, and the, the risk involved in equity, it just doesn't resonate that much, you know?
• 20:00
  Um, so I think, uh, the--
• 20:03
  i-it makes sense to me that many of them are just looking for a service, uh, or some deliverable, and they're-- it's a whole different business model to create a portfolio of companies and hope that one out of fifteen is a, is a grand slam.
• 20:18
  Right. That, that makes a lot of sense. I mean, it seems like, um, you could structure an equity deal such that the company had to do XYZ research- You could...that you would be paying for otherwise.
• 20:30
  So that's kind of what I'm wondering about, but yeah. Yeah. I mean, I, I could see some organizations doing it, but, but I think in the early stages of most businesses, cash is king.
• 20:42
  So, you know, if you can get the- Yeah. No, it's better for me too, so I'm, I'm into it. Yeah.
• 20:49
  Along those lines, you know, one of the things that comes up, and I think you have experience with successful companies and companies that are not s-- have not been successful- Right...whether it be raising or otherwise.
• 21:01
  Um, I'm gonna let Michael Harris come off mute and ask his question, which is related to some of the struggles that a lot of entrepreneurs typically feel in healthcare.
• 21:10
  I think it's, you know, it's, it's, it's amplified because of some of the lack of funding cha-- lack of funders or funding available and some of the other regulatory long sales cycle issues.
• 21:20
  But Michael Harris, you are up. Great. Very nice to meet you. Pleasure, Michael. Thank you for sharing your journey. It's been really helpful to hear. Uh, my name is Michael Harris. I'm the co-founder of Niche.
• 21:32
  We, uh, go into the lived experience of young people living with a complex or chronic medical condition and identify the barriers to access of care, and, uh, we remove those barriers, so those young people who are our most vulnerable get access to the highest level of care.
• 21:48
  Our customers are twofold. Um, one of our, uh, primary customers are our payer partners because- Right...by keeping kids out of high-end care, uh, and avoidable hospitalizations, we reduce the spend that payers pay out.
• 22:00
  And then our other customers are institutions like the children's hospital I'm employed at- Mm-hmm...because by freeing up beds, we can backfill beds, increase revenues.
• 22:10
  We reduce length of stay, which also has a financial value. Sure. So having said all that, right now, healthcare is, as you probably know, a pretty rough place to be.
• 22:19
  There's, there-- Most healthcare institutions are laying people off- Yes...cutting costs, and programs like us are at risk because they don't view us as essential, right?
• 22:29
  They, they look at things like surgery and, uh, high procedure programs, and they also don't look at, uh, health equity efforts like ours.
• 22:36
  So when you're in that space, what, what keeps you, um, seeing possibilities, seeing-- having an optimistic framework, uh, when you're in the, the valley of despair?
• 22:46
  'Cause we could- [laughs] We could use anything you got. Yeah.
• 22:49
  Well, I mean, we're-- there's attitudinal issues, and that I think, um, is one set of things, and then there's sort of strategic issues-- strategic strategies or strategic issues.
• 23:00
  So in terms of attitudinal, I think the most, uh, powerful force is, um, having a really tight, high-performing team that is passionate and really enjoys working with o-- with each other and that are in it because they believe in it.
• 23:17
  Um, you know, that's-- it's just magic. You know, when-- And I've had a few times in my life where I've been able to create that kind of team, and I still remember.
• 23:25
  It's still, you know, I can't forget about all the things we did. And even when there were tough times, being, uh, aligned with people who are equally invested in the mission is sustaining.
• 23:37
  That's the, the, the biggest pearl I have around attitude. But in terms of strategy, when I hear you talk about your business, it seems pretty compelling.
• 23:47
  I mean, things like keeping people out of the hospital, reducing costs for health plans, and I assume some of these plans are maybe Medicaid plans if it's young people.
• 23:55
  I mean, to health plans, if you can keep people out of a hospital, and fifty to seventy percent of the costs are hospital costs in health plans, that seems pretty compelling.
• 24:03
  So I guess I wonder a little bit about why that isn't resonating more. Is it that there's competition doing better? Maybe not. Is it 'cause you don't have the data to really be, uh, as compelling as you'd like to be?
• 24:15
  Is the business model too expensive?
• 24:18
  But it sounds to me like you're offering something really valuable, so I would also go back to better understand from your customers or, or get some advisors to what do you think the, what do you think the headwinds are due to?Bill from Zinnia Hi, Harry.
• 24:36
  Thanks for joining us today. Oh, pleasure, Bill. So my name is Bill Yanowski. I'm a co-founder and CEO of Zinnia.
• 24:43
  Uh, we're part of the Alzheimer's Moonshot, and our solution falls within the caregiver resources and support, uh, kind of area. Great.
• 24:52
  So Zinnia is therapeutic TV for dementia, and we create, uh, high-quality visual experiences that are specifically crafted for that person living with dementia. Uh-huh.
• 25:02
  And the caregiver uses it to reduce agitation and redirect, uh, to ease activities of daily living that someone might be resistant to doing, like drinking water or going to bed, uh, and using it to engage and connect.
• 25:14
  You know, we've kind of begun with the, uh, direct consumer and, and as you mentioned, it-- we found the difficulties in, around that. Um, but it's been good to get a good base of users, data- Right... et cetera.
• 25:26
  And now as we think about shifting to companies and, you know, we're looking for who has access to a lot of dementia caregivers and what is important to them that we could help them with.
• 25:39
  So, you know, I think about Walgreens, you mentioned, um, the app that you built.
• 25:44
  Um, and I'm just wondering, you know, how you thought about ongoing customer engagement, just kind of generally overall and within specific conditions, um, and, and what your goals were for the app and how you measured those KPIs.
• 25:57
  And, you know, again, thinking about that, of how could we potentially bolster some of that, um, you know, for organizations like that.
• 26:04
  As I think about your business, first of all, it's a great, great mission, so congratulations. Thank you. I'm sure you're helping a lot of people, uh, and their families.
• 26:13
  Um, I don't see Walgreens or retail pharmacy being a big customer.
• 26:18
  Um, uh, I mean, just off the cuff, I think about more, uh, home care companies, uh, that are going to the home with, uh, for patients with dementia or, um, vis- you know, nursing companies and things like that that are dealing with folks that really could use help because it will shorten their visits.
• 26:37
  The patients are more, uh, uh, perhaps doing better. They have lesser needs.
• 26:43
  Um, uh, I would look at the organizations that really, uh, are providing care directly to patients, uh, suffering from dementia as the ones who would mostly benefit from this.
• 26:54
  Just a word about D2C, because we hinted at it, uh, B2C, getting data that way initially, like you pointed out, is a great strategy, but trying to scale that way, as you mentioned, is really hard.
• 27:05
  Most of the people on this call probably know about the famous, uh, LTV to CAC ratio that is used for B2C, uh, uh, services. If you haven't heard of it, it's, uh, it's worth knowing.
• 27:18
  Basically says that, uh, for something to be economically viable in a direct-to-consumer or B2C, uh, mode, the long-term value of a customer, meaning the profit you make on a given patient or customer over their lifetime, not re-revenue, but their profit, divided by the amount of money you have to spend to get every new customer, which is the customer acquisition cost, needs to be three to one or higher.
• 27:45
  So if you're charging, uh, let's say your profit on a patient, um, uh, is, um, uh, three hundred dollars, okay, I'm just making up a number, the most you can spend to acquire a new customer is a hundred.
• 28:01
  That's where a lot of these companies blow up is they have to spend so much money marketing, and when you market something direct to consumer, you can't charge that much.
• 28:09
  When I was at Jealouses, a company that had a weight loss product, we did all the market research and figured out the most we really could charge was about a hundred dollars a month for our weight loss product.
• 28:19
  Thanks, Bill. All right, we got time for one more. We're gonna squeeze Catherine in for a follow-up question.
• 28:24
  As a small startup that is not yet regulated, um, but on the cusp of that, I'd love your thoughts on how we should think about building out sales and marketing teams- Mm-hmm...
• 28:34
  uh, in a way that's sort of responsible, but gonna help us drive the outcomes we need. So any advice on that would be deeply appreciated.
• 28:41
  And again, your customers that you want the sales and marketing team to go after are more payers in your case? Uh, no. In our case, um, we'd be looking for, um, health system organizations. Uh- Okay...
• 28:56
  typically, um, like eye care networks, things like that. You know, the, the, the binomial choice many times is do you hire your own sales-- Well, there's three choices.
• 29:06
  Do you hire your own small sales force when you're getting started, right? Yeah. Do you outsource it? Because there are companies that can hire sales reps for you and, you know, work with you to train them. Mm-hmm.
• 29:18
  Or do you work through some sort of distributor network where you have people that are already in the field calling on your customer base? Right.
• 29:25
  I can't tell you, Catherine, there's a right answer, but I can kind of give the pros and cons of each. Sure. The problem with hiring your own salespeople is it's pretty expensive, frankly.
• 29:35
  I mean, good salespeople expect to earn a fair bit of money. You can structure it so that maybe half their money is salary and half is an incentive. But, but, you know, it, it, it is a costly choice.
• 29:47
  The pro is that they're totally dedicated to you. They wake up in the morning work-- you know, thinking about you, and they're passionate about what you do, and they don't offer anything else.
• 29:57
  Um, if you're a small company, outsourcing it, I don't think works as well if you're really small. It just isn't that economically viable to outsource hiring three, five, six sales reps.
• 30:07
  But like when I was at Jealouses, the weight loss company, when we wanted fifty to sixty sales reps across the country and wanted to do it quickly, we did work- Yeah...
• 30:15
  with a firm that, that executed that for us, and the only-- we hired the managers, but the, but the on-the-street salespeople were outsourced.
• 30:23
  And then the distributor strategy is the quickest way to go to market, especially if there's someone that's offering a complementary service or device. Mm-hmm.
• 30:31
  The problem with distributors is, on any given day, they may or may not be focused on your product or service. You don't, you don't necessarily get all their attention, and they're not necessarily as knowledgeable.
• 30:43
  So there's no perfect answer.
• 30:45
  Um, I think it pays to have at least a, a very, very small internal sales force of people that are really dedicated to you and then maybe amplify it with, with distributors or something like that. That's great.
• 30:56
  Thank you. I appreciate it. Sure. Excellent. Thank Cat-- Thank you, Catherine, for coming back, uh, with a great question. Um, Harry, first of all, thank you. What's your biggest insight from spending time with us?
• 31:08
  [laughs] Well, the, the, the energy of your partners and the transformers and the Moonshot people to really drive things forward despite the, the headwinds. I mean, all small companies and startups have some headwinds.
• 31:22
  Everybody's sharing their headwinds and the areas that cause challenge and pain, but there's just so much passion about really bringing these innovations to patients and doctors and the healthcare system.
• 31:33
  It's, it's, it's very inspiring, and congratulations to you for, for your work on, on catalyzing all this, Steven. Well, we're, uh, we're honored that you spent the time with us. Harry, thank you.
• 31:44
  Uh, appreciate everybody, especially the Alzheimer's community that was on a back-to-back Office Hour and Masterclass. Thanks to all of you. Have a wonderful day or evening, no matter where you're calling in from.
• 31:53
  Harry, we'll talk soon. Thanks again for the opportunity. [outro jingle] Thanks for listening to Starter Health Now. We'll be back again with another episode next week. [outro jingle]