The direct-to-consumer telemedicine company, Hims, launched with a bang in 2017, recording $1 million in sales in its first week. Since then, the company has launched a women’s health product line, Hers, forged a partnership with Ochsner Health System, and expanded its reach to all 50 states. We sat down with CEO and Founder, Andrew Dudum, to talk about the consumerization of healthcare and why Hims has been able to grow so rapidly.

Hims Founder and CEO Andrew Dudum, Photo Credit: Hims

What is your background? How did you come up with the idea to start Hims?

I have been building companies for almost a decade. When I was at Wharton for undergrad, I spent most of my time hanging out at the engineering school trying to convince engineers to build companies with me instead of paying attention in my corporate finance classes. I ended up taking a year leave from Wharton to run product for a 5-person venture capital backed startup. That was the beginning of me falling in love with the idea of being able to craft and design and build businesses from scratch. I ended up selling that company to Telefonica in 2012. I then founded Atomic Labs with a fellow Wharton drop-out, Jack Abraham. Atomic was essentially an entrepreneur’s dream land–it provided a capital pool from some of the best investors we knew including Marc Andressen and Peter Thiel, and the ability to test and iterate on a dozen to two dozen ideas a year. I’ve had the blessing to be able to learn a lot about the 0 to 1 phase of early stage companies. This has allowed me to be able to identify which markets have unique advantages that allow you to grow quickly and in a differentiated manner. When we first had the idea for Hims five years ago, it felt like one of those few opportunities that come around once every couple of decades. It was an amazing opportunity to build a brand that normalized healthcare for men and women.

Hims has made a name for itself through its branding. How do you think about the importance of branding and marketing as it pertains to healthcare companies?

I think branding is wildly undervalued. It is hard to quantify the value of a brand, so quants have a hard time investing in it. However if you have ambitions to build a company that lasts longer than a couple of years, you should be doing everything possible to build moats in compounding the value in your company over that period. I think one of the best ways to do that is a brand. The trust that you have with a customer and the license they give you to expand into other products and deliver more value to them transfers into customer love, customer retention, and organic growth. We believe one of the most valuable assets we have is our trust and relationship with our customers.

Digital health companies are notoriously hard to scale. Hims had $1 million in sales in its first week and is on a rapid growth trajectory. What do you attribute this to?

I think what we did differently from most digital health companies is that we chose to build a company that owns the relationship with the end user. We help the patient navigate the health care process, purchase the right offering, and connect with physicians. In the healthcare world, there are a lot of businesses that make a lot of money behind the scenes. What is unfortunate is that so much of the money and so much of the incentive are not directly tied to driving a better experience and outcome for health customers. In contrast, we want to be the ones that solve the problems our patients are facing. With that type of mentality, there is an ability to grow very quickly, because if you do it right, you can be directly adding value to the customer.

You recently announced a collaboration with Ochsner. How did that come about and what do you intend to accomplish there?

Ochsner is one of the most innovative health systems in the country. For the last few years, they have been pushing the boundaries on how to leverage technology to drive better outcomes for their patients. We are working with Ochsner to expand what we can offer to our patients. We want to leverage the expertise of the health system to offer a path forward for patients struggling with chronic conditions. The partnership is all about condition expansion–we want to broaden who we can support with an innovative partner.

As you start to expand your offerings to more chronic conditions beyond erectile dysfunction and hair loss, what are some of the most relevant conditions that you think could be addressed by your platform?

There are so many conditions that can be addressed through telemedicine. Most healthcare experts estimate that somewhere around 75% to 80% of what takes place in the hospital can be done at home. We are looking big picture at the major conditions that affect the vast majority of the population in the United States, and thinking about how we can bring digital health services to these customers in a safe, clinically proven, and affordable manner. Of particular focus is behavioral health, anxiety, depression, and cardiovascular disease.

Let’s talk specifically about Hims’ sister brand, Hers. Femtech has recently become a widely discussed topic area in healthcare. Was it always your intention to launch products specifically for women? Where do you see this business going over the next few years?

We have always had the vision of building the brand into Hims and Hers which is quite frankly why we named the company Hims. It was exciting to launch Hers on our first birthday. We want to have a relationship with a household that allows it to rely on our brand for its health and wellness needs. What you’ll see from Hers is continued rapid expansion across categories from supplements and vitamins to sexual health, fertility, and menopause. Going forward, we don’t think of them as different brands.

Many argue that healthcare will become increasingly consumer driven, but it is still a highly regulated industry that struggles to provide transparency to consumers. What is your outlook on the consumerization of healthcare and what needs to happen to make healthcare more transparent?

I think increased consumerization is a necessary next step in healthcare. When you think of every other part of our lives, we have choice in our purchase decisions. That choice is dependent on having transparency of our options–knowing what something costs, how it works, what its benefits are and what its side effects are. That doesn’t exist in any capacity in the health system today. When I think about the consumerization of healthcare, I think about choice and transparency. I believe customers should be treated like customers and not just patients. We are still in the early innings but I have full confidence that we’ll have a complete overhaul of how we think about the health system and how we interact with it.

Interview by Monica Adibe, January 2020