The Twenty Minute VCHow Hims & Hers Reached a $4.3BN Market Cap on $2.3BN of Revenue | Andrew Dudum
EVERY SPOKEN WORD
60 min read · 12,387 words- 0:00 – 1:17
Intro
- ADAndrew Dudum
One of the things I learned earliest in my career is if you can't hire people that are smarter than you, you will fail. What you gain confidence in with brand marketing over time is that consistency is required.
- HSHarry Stebbings
Now, I am so excited for the show today. We have Andrew Dudum, founder and CEO of Hims. Hims are reinventing healthcare, but wow, been a tough six months. They are down 66%. They've got a market cap of 4.35 billion as of today, but they do over 2.3 billion in revenue. It's nuts. I'm so excited to sit down with Andrew today, where we discuss this and so much more.
- ADAndrew Dudum
When you're disrupting an industry, you have to have a team that is used to being uncomfortable, and used to getting through it, and used to staying calm, and having that resilience. I might be the only person that believes this, but I think running the company in the public markets is more fun than being private.
- HSHarry Stebbings
Ready to go? [upbeat music] Andrew, it's been, like, six, seven years. I, I was, I was young and fresh when, when we last met.
- ADAndrew Dudum
So was I.
- HSHarry Stebbings
[laughs]
- ADAndrew Dudum
So, I was a, I was a lot younger. We looked a lot better back then, but I'd say we're pretty good right now.
- HSHarry Stebbings
I, I... listen, I think life's been pretty kind to both of us.
- 1:17 – 5:07
Why Running a Public Company Is More Fun Than Being Private
- HSHarry Stebbings
Um, can I start with a super weird one? And you might be like, "Dude, I thought we were buddies." But I, I speak to so many public company CEOs today, and I, I can't find a happy one. Are you [laughs] like, Hims & Hers-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... are you happy? Are you really happy?
- ADAndrew Dudum
I'm r- I'm r-
- HSHarry Stebbings
Are you?
- ADAndrew Dudum
You know what? I think, I think... I might be the only person that believes this, but I think running the company in the public markets is more fun than being private.
- HSHarry Stebbings
Why? You get shit on every day, dude. I see it, and I'm like, "Oh, poor Andrew."
- ADAndrew Dudum
No.
- HSHarry Stebbings
And I so remember our dinner with you-
- ADAndrew Dudum
No, I love it
- HSHarry Stebbings
... and your lovely wife, and I'm like, "Oh, I like... He's so nice," [laughs] and I see-
- ADAndrew Dudum
I love it
- HSHarry Stebbings
... the shit on Twitter.
- ADAndrew Dudum
I love it.
- HSHarry Stebbings
You do?
- ADAndrew Dudum
I, I l- I love it for a few reasons. One, um, if you're a highly competitive person, you get to put out high benchmarks every 90 days and see if you can actually deliver on it, and you can build a high performance team to say, "Hey, we put this out, and it's a big stretch. Let's go kick ass and figure it out." When you're private, it's so easy to get, to get cozy. You know, the worst case scenario, if you got some VCs that call you and they're stressed out about something. But in the public markets it's like, it's boot camp. It's, it's like you gotta be... You have to deliver. So I love that from a competitive standpoint. I also love the, the, the ability to hire talent, like, in the public markets because they, they can see the vision, and you're forced to not only talk about where you're gonna go 10 years from now, but if you're gonna actually, like, make steps quarter to quarter to prove it. So as a competitive person, I think it's a lot of fun. Also, when you step back, like, you know, we, we went public really early. We went public after, like, uh, I think 36 months of launching, which was a little bit crazy. Um, when you look at the biggest companies in the world, they went public within a first few years of launching. Google, Facebook, Apple, Amazon, all of them. Like, they didn't stay private for 10, 20 years. Uh, you know, they forced... The founder was forced to figure it out in the public markets, how we're gonna grow, how we're gonna get efficient, and how we're gonna tell a big vision and, and I think that's a lot of fun.
- HSHarry Stebbings
I love that. Google, Apple, Facebook, Amazon, Hims.
- ADAndrew Dudum
Right.
- HSHarry Stebbings
Nice. That, yeah, yeah, yeah. It's a, it's actually one of the oldest marketing tricks ever, which is, like, marketing by association. You know this? It's called Six Flags. Do you remember Six Flags, the really shit-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... theme parks? Yeah, yeah, yeah. So I don't know them 'cause I'm British, but, like, they wanted to be better than everyone else, and so they just did massive billboards that said, "Not as good as Disney." Smart.
- ADAndrew Dudum
Very sm- very smart.
- HSHarry Stebbings
Yeah. I know. Yeah, yeah. I'm, I'm... I, I like a good marketing. Um, uh, fascinated, y- you said there about going, uh, public so early.
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
If you were sitting down with, like, the Collisons today-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... would you tell them to go public?
- ADAndrew Dudum
I think if your business is ready from an, from an, uh, from a predictability standpoint, and you have a long-term orientation, then I would encourage you to go public. I think you... those two things have to be true. I think you have to actually be able to predict your business with consistency, because you can't enter the markets without that confidence. Um, and you also have to be ready to sign up for a decade or two in the markets, right? This is not something... It's not a quick exit, it's not a liquidity event. It's, that's the beginning. And so I would, I would encourage any founder that has those two dynamics to consider it.
- HSHarry Stebbings
Do you think you can do what you want to do from a long-term strategic objective standpoint, and have the, as you said, I love it, the 90-day ticker of like, "Hey, we've got to go hard for the 90 days"?
- ADAndrew Dudum
I think you do. It takes, it takes discipline. I think it takes hiring the right people. You know, I think I, I focus on hiring a certain type of people. Um, uh, you know, they're not particularly f- fancy in background. They're not credentialed with, like, all of the really great tech companies. Like, that's not what I look for. I look for mostly people who have been builders and have gone through some shit,
- 5:07 – 8:31
How to Hire for Grit: People Who Have Been Through Shit
- ADAndrew Dudum
is the, like, the honest reality. So if you look at our team, um, you know, Yemi, our CFO, he was, you know, the divisional CFO of Uber during COVID. The whole business disappeared overnight, and he had to figure it out. Uh, or Dheerja, our chief product officer, she was at Game- or she was at Robinhood during GameStop, right? Had to figure out that chaos. Or-
- HSHarry Stebbings
Do you seek out, do you seek out crisis in their lives? I know it sounds stupid. You've, you've mentioned two very iconic...
- ADAndrew Dudum
Yeah, I seek out grit. I seek out a lot of grit. Um, because I think when you're disrupting an industry, which we are, and, and even in the last year our category has exploded, and changed, and, and been fraught with all types of chaos. You have to have a team that is used to being uncomfortable, and used to getting through it, and used to staying calm, and having that, that resilience. And so I absolutely search for people that have seen those types of ups and down and, and thrived in them. Because-I, I think when you're disrupting, it's just inevitable that that's gonna happen
- HSHarry Stebbings
I spoke to so many people around you. I really, I stalked the shit out of you. Again, which was nice 'cause I know you, but, like, to, to kind of hear stories from owning donut shops, uh, didn't tell me that, did you? Uh, my Au- my Augustus Gloop was coming out there. But the, the talent element was one, and they said in particular, Jules Moltz, I think it was, from IVP, said that you're incredible when it comes to acquisition and retention. What do people get most wrong, do you think, about acquiring great talent today?
- ADAndrew Dudum
I think often people as they scale, maybe founders as they scale, um, fall into the trap of trying to hire people that, um, have seen bigger scale than them and are more strategic, and they, they feel like they've gotten to the point of success where now it's time where they up level the talent to non-startup-y folks, right, to, like, real professional people. Uh, and I think that is a huge, huge mistake. Huge mistake. Um, you know, when I look at, you know, Chris Payne is on our board, who's one of my mentors-
- HSHarry Stebbings
I've spoken to Chris
- ADAndrew Dudum
... Yeah, Chri- a great guy, I think one of the best operators I've ever met. And when I look at the team over at, that, that Tony's built at DoorDash, you know, that team is, is an operating machine, and they're huge, right? It's a $80 hundred billion company, um, yet they're still operating with speed and focus like a startup. And I think so much of that is because the team that Tony's assembled around them is a team of operators that love to build. Uh, and, and so I think as you scale, there's a pressure to go hire that big strategy person wh-who, who has more credentials than you, and it's kind of, it feels almost confidence inducing as a founder to, like, get to that level, and I think you have to fight that at all costs. I'd have made mistakes, I've hired people like that because I thought it w- was the right move and, and have always come back to find people who love the mission, who love to build, who are tactically excellent at what, what the function actually requires, um, and again, who are gritty as hell.
- HSHarry Stebbings
What are you not excellent at in the role of CEO, but persist relentlessly despite your lack of skill?
- ADAndrew Dudum
[laughs] So many things. [laughs] So many things. I mean, I'm constantly trying to find the balance of being in the weeds and building a team that can scale independently of me, right? Like, you're, you're... That, that line of how hands-on you should be, how strategically involved you should be, how tactically involved you should be
- 8:31 – 10:58
Founder Mode vs Trusting Your Team
- ADAndrew Dudum
versus-
- HSHarry Stebbings
Where do you, where do you come down on that then? 'Cause we have the founder mode and the-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... you know, I love Ryan at Flexport, but, like, that I'm so in the weeds and I love him for it.
- ADAndrew Dudum
Yeah. I think you have to h- I, I think you have to be intentional about where you get into the weeds. Um, I, I don't believe in this concept of, like, every design review comes through me, everything that ships comes through me, every decision comes through me. Like, it's y- One of the things I learned earliest in my career is if you can't hire people that are smarter than you, you will fail. And young managers struggle with this all the ti- all the time. They, they're scared to hire people that are better than them 'cause they feel like, "If I hire somebody better than me, well, what the, what the fuck am I even doing here? Why am I here if I just hired somebody who's better than me?" And in fact, it's completely the opposite. If you wanna continue to scale in our organization or any organization that's growing, you have to realize that your job is changing every 12 months, right? To level yourself up to the next, next highest leverage f- focus area. In order to do that, you have to replace yourself every 12 months with talent equal or better always. And so, um, to me, that's a really important realization that f- as, as a CEO and founder, which is I wanna hire people better than me, and, and so I trust them. Yet at the same time, if there are specific areas of the business that are critical, um, either strategic decisions or tactical implementations being worked on, you have to know when you go deep. And you need to acknowledge to the team, "Hey, this is something that's really important. I'm gonna go deep on it. I'm not gonna go deep on everything, but this is important. I'm, I'm gonna be in the weeds here."
- HSHarry Stebbings
Dude, I sit in these boards nowadays, and honestly, they're mostly useless. It's so exhausting. Um, and AI is at the top of every big company board discussion topic, okay? No shit.
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
How does your business change with AI? How many people do you have today?
- ADAndrew Dudum
About 2,000 employees.
- HSHarry Stebbings
Okay, you have 2,000 employees. How many do you think you'll have in 2030?
- ADAndrew Dudum
That's a great question. Probably not many more than 2 to 3,000.
- HSHarry Stebbings
That's a big range.
- ADAndrew Dudum
Yeah. We operate about a million square feet of pharmacy fulfillment throughout the US, and so we have a, a large chunk of labor force, which is actually just variable labor responsible for actually pharmacy oversight, pharmacy, um, review, and actually shipment of medication. AI can do a lot, uh, in regard to efficiency for core product engineering, accounting, finance, marketing, et cetera. But when you're actually running facilities, physical s-
- 10:58 – 11:08
How Many Employees Will Hims Have in 2030?
- ADAndrew Dudum
facilities, and a lot of this is actually required doctor and pharmacy oversight, you know, tho-those you can't get as much leverage on.
- HSHarry Stebbings
Are you pushing AI down into every function of the org?
- ADAndrew Dudum
Yes.
- 11:08 – 13:58
Where AI Is Having the Biggest Impact at Hims
- ADAndrew Dudum
Yes.
- HSHarry Stebbings
Are you seeing it have dramatic implications? That we, we have, we have eng and we have customer support. I think we over exaggerate elsewhere where it has impact.
- ADAndrew Dudum
I think those two areas are critical. We're also seeing it have massive leverage in design, right? So we deploy about a billion dollars in marketing spend every year across the Hims and Hers brands. And the, uh, you know, the cost to do a live photo shoot, uh, the speed of a food photo shoot for every single product launch, you know, we probably have thousands of variations of TV commercials, uh, Facebook ads, Google ads, et cetera. The speed of iteration with AI in that function I think is actually one of the most tangible that I've seen across our organization.
- HSHarry Stebbings
In terms of cost reduction and in terms of supply expansion.
- ADAndrew Dudum
It's mostly r- in re- regard to output. You know, I would say it's, you have the same s- team, but you're probably delivering three to four times the amountThe other area that we see a, a, a big degree, uh, improvement is actually on the clinical side. So we treat, you know, 10,000-plus patients a day. We're probably the largest healthcare system in the US, and, uh, if you actually look at volume of patients treated. Um, and now with recent markets, you know, definitely the, the largest globally at, from a digital health standpoint. And if you can apply AI to the, the medical side, the ER, the EMR, right, where doctors are actually making clinical decisions, and it can help, you know, give guidance with regard to certain protocols and speed up that, that process, that is a, a huge amount of leverage for the clinical end, um, from an efficiency standpoint, but it's also a meaningful improvement in quality because you have essentially a, uh, you know, an intelligent brain helping standardize care across thousands of doctors that are making decisions every single minute.
- HSHarry Stebbings
When you speak about the explosion of the business [clears throat] , that explosion is driven largely by, you know, GLP-1s and, and weight loss. How much of that is the core business today? Is it like 80% weight loss, 20% everything else? What does that look like?
- ADAndrew Dudum
No, no. And I think that's one of the funny things about our business is we are constantly in the headlines as a single category business. When we first launched, when me, you and I first met, we were the erectile dysfunction business, right? And it was, uh, you know, f- front page of the New York Times, and it was, uh, uh, fun and silly and provocative, and all we did from everyone's perspective was ED. Uh, and then we launched hair, and then all of a sudden it was like we're a hair loss business. Uh, and then we launched the Hers business and everyone said, "Oh, Hers is never gonna work. You're just an ED and hair loss business." Uh, you know, and then eventually we launched GLP-1s, and everyone said, "Oh, now you're just a weight loss business." And, you know, a year from now people will say, "Oh, you're just like a peptides business," probably, if I were to take a guess, right? And, and so I think the, the reality is under the hood is that you have a dozen
- 13:58 – 14:45
Hims Is Not a Weight Loss Business
- ADAndrew Dudum
completely different clinical categories, completely different businesses, each scaling with very solid, robust growth, which is why this business is interesting. Like, that's why I run this business is the durability of it is quite strong because you have 10 different businesses with completely different customer segments. So weight loss is actually, you know, uh, nowhere near the majority of this business, um, um, and, and I don't think ever will be, um, just because you're continuing to expand core categories and a lot of new categories, so-
- HSHarry Stebbings
Do you run those as separate businesses? When I had Nick from Revolut on the show, he, he said something fascinating. He said, "We run 26 different product experiments at the same time. I treat it much like a venture incubator, and I give them more or less money dependent on how well they perform." Do you run them as like a venture incubation unit?
- 14:45 – 16:51
Running Hims Like a Venture Portfolio of Bets
- ADAndrew Dudum
Yeah, absolutely. I mean, y- you know, wh- when we first met, I was, um, you know, over with, with Jack Abraham running Atomic Ventures for a long time. Um, and that training of zero to one exploration, um, that is what Hims and Hers is, right? Like, I think of it as a public shell for innovation in bringing great healthcare to consumers, which means every year we're testing completely new go-to-market strategies, completely new categories, and the way we think about it is internally is just different bets. Um, and some bets you, you starve, and some bets you fund, and some bets you, you ring-fence to allow exploration for a year or two. Um, but they're run, uh, uh, increasingly independently, and I think the, the DNA of management is, is to look at it as a portfolio that continues to scale. Because ultimately in our business, you know, health and wellness, what, what makes up great health and wellness is constantly changing. There's new diagnostics, there's new devices, there's new drugs, uh, there's new learnings about, you know, the sauna and, you know, cold plunges or whatever it might be, whatever's trendy, right? Like, all of this is changing, and it's gonna continue to accelerate, and our job is to curate the best and bring it to people at scale at an affordable cost. And so we have to think about this frankly as a portfolio that's constantly evolving.
- HSHarry Stebbings
I can't get my head around the sauna, Andrew.
- ADAndrew Dudum
You have to do the sauna four times a w-
- HSHarry Stebbings
No, I... No, I don't, I don't-
- ADAndrew Dudum
Four times a week, 300 degrees for 20 minutes. It cuts all cognitive bias-
- HSHarry Stebbings
Have you seen what it does to the motility of your sperm?
- ADAndrew Dudum
Yeah, yeah. You just put an ice-
- HSHarry Stebbings
You've got three kids, buddy. Some of us have got none, okay?
- ADAndrew Dudum
Just gotta, just gotta bring an ice pack in there.
- HSHarry Stebbings
I'm not gonna bring an ice pack for my balls. I'm sorry. This is... Uh, genuinely this was, like, the most unattractive thing ever, and it's like, you know, Huberman's like, "Oh, it, it extends life by, like, you know, three decades."
- ADAndrew Dudum
Yeah, it does too. Yeah, it does.
- HSHarry Stebbings
And I'm like, "Pfft."
- ADAndrew Dudum
He's right.
- HSHarry Stebbings
I'm not doing ice packs.
- ADAndrew Dudum
I'll, I'll, I'll... We'll, we'll sauna together next time I'm in London.
- HSHarry Stebbings
I'd li- I'd do it with you.
- ADAndrew Dudum
Yeah. All right. Let's do it.
- HSHarry Stebbings
[laughs] There you, there you go. Um, y- you said there about kind of the bets. What did you do that with the benefit of hindsight you wish you hadn't done?
- 16:51 – 19:02
First to Market vs. Best in Market
- ADAndrew Dudum
For us as a business, I think it's important to constantly be in a customer's mind, the mind share of the new evolving health and wellness categories. And so I think, uh, in many categories we've been, um, quick to market, and in many categories we've been kind of like, uh, you know, patient to market. And in retrospect, I constantly am kind of evolving my perspective on, like, how fast we should be there. My net-net takeaway is I don't think we actually need to be first ever in market. Um, I wanna be best in market. And so when I think of new categories, peptides, for example, right? You know, there's a lot of conversation about 10, 15 peptides going from class two, category two to, to category one compounding so that people can actually get access to things like BPC-157, TB-500. This is an incredibly interesting category. You won't see us be first to market in this category. Um, you'll see us when we launch it feel extremely confident in the clinical protocols, extremely confident in the guardrails, make sure that the supply chain and the quality is done to a level we are, you know, feel is bulletproof from a pharmaceutical standpoint. So, you know, there's a lot of, a lot of introspection, uh, i- in my, in my brain around speed and prioritization of which categories to enter, but what I always come back toIs not being first, but being best, so that from a brand standpoint, people know Hims and Hers to be high quality and trusted. Like, when we actually bring something to market, you know it's safe, you know it's done right, and you know it could be something that's, that's powerful and, and important for your, for your health.
- HSHarry Stebbings
I always remember, um, Hugo Barra, who was the product guy from Xiaomi, and he said on the show, "When you're doing anything in physical product, you need to choose one."
- ADAndrew Dudum
Right.
- HSHarry Stebbings
"You need to be feature king, or you need to be price king."
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
What are you?
- ADAndrew Dudum
I think you have to be both for us.
- HSHarry Stebbings
[laughs]
- ADAndrew Dudum
I think you have to have the best at the most affordable price eventually.
- HSHarry Stebbings
And how come it was $1,800 to $2,000 for Wegovy and Ozempic then [laughs] which wasn't
- 19:02 – 21:06
Why Hims Wants to Be Both Price King and Feature King
- HSHarry Stebbings
wholesale?
- ADAndrew Dudum
Well, well what is it now?
- HSHarry Stebbings
Well, the self-pay price at the time was 300 to 400.
- ADAndrew Dudum
Yeah. It's down to about $149 in 18 months.
- HSHarry Stebbings
On Hims?
- ADAndrew Dudum
We just announced the Wegovy pill, 149. So I think w- I think for us-
- HSHarry Stebbings
Is that not post Novo deal, though?
- ADAndrew Dudum
Oh, yeah, yeah. It's through partnership. No, absolutely.
- HSHarry Stebbings
Go- totally get you.
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
So, so we wanna be price king and feature king.
- ADAndrew Dudum
I think for us, we wanna curate the absolute best at prices the masses can afford. And I think the way you do that is you, you work with ecosystem partners, you leverage the scale of the platform, right? We're the largest global distributor at this point probably of, of medicines. Um, and so by able to then working with, you know, the best diagnostic companies, the cancer GRAIL detection company. I don't know if you've ever taken this test. Um-
- HSHarry Stebbings
No
- ADAndrew Dudum
... this is a test that I've been taking for five years. I've had everyone in my family take because there's, there's cancer in my family. It's called the Gallery test by GRAIL. Um, it's a blood test, and it can detect, you know, 50 to 100 cancers, and it, and it focuses specifically, it's best at from a clinical standpoint some of the harder-to-find cancers, uh, prostate, pancreatic, ovarian cancer. Um, and it's a simple blood test. Uh, you know, we, this blood test was thousands of dollars for the last few years. We're able to work directly with, with GRAIL, bring that test, I think it's in market now in Hims and Hers at, like, 600 bucks. Um, and my hope is over the coming years they'll continue to come down to a few hundred bucks, where everybody could do this on an annual basis like going to the dentist, right? It's just check to see if there's any early signs, any early protein indicators of, of stage one cancer tumors. So, so there's an arc, right? When the GLP-1s first came out, it was $2,000 list price. We pla- applied incredible pressure to the drug companies. Um, I think the current administration in the US did an amazing job. Um, and, and thanks to the drug companies, they actually agreed to bring them down from the thousands of dollars to 150 to $200 cash
- 21:06 – 25:27
How Hims Helped Cut GLP-1 Prices by 80% in 18 Months
- ADAndrew Dudum
pay prices. I mean, that is, like, completely transformative. It's not something that's really happened in pharmaceutical, uh, history, that the blockbuster drug of the century gets cut by 80% in 18 months, right? And, and the reason for that, I think the reason it happened in part is because companies like us and consumers applied massive pressure to change the distribution model, right? In 18 months, the distribution model has completely changed in pharmaceuticals in the US. Instead of going through PBMs and insurance, they're going straight to customers through platforms like ours at prices everyday people can afford. And so there's an arc to that price, uh, reduction, but I think for us, we wanna have the absolute best, um, and also wanna be able to apply pressure to bring that cost down as much as we can.
- HSHarry Stebbings
Do you think, like, a PillPack sold too soon when you think about the erosion of PBM's power that you mentioned there and how challenging it was for a business like PillPack?
- ADAndrew Dudum
You know, I don't, I don't know too much about PillPack to be totally honest. I, I, I, I don't, uh, what I, what I don't believe is that the pharmacy fulfillment part of our business independently is a particularly valuable business.
- HSHarry Stebbings
How should I think about the preventative healthcare companies that I'm pitched every day, whether it's your Prenovos or your Nacos in the UK, which is expanding to you?
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
I- is that the future, where some are much deeper, some are much shallower, some are much more expansive? How do you understand, analyze that space? Is that something that Hims would do?
- ADAndrew Dudum
We spend a ton of time looking at that space and, and have actually, we did a partnership with Prenovo that was announced just a couple weeks ago. Um, I, I think where there's a lot of interesting companies right now is in highly specialized levels of testing for clinical areas that are, that are, um, meaningfully unmet, right? So you look at things like, uh, cardiovascular disease, um, right? Still one of the number one killers. Most dads die of a heart attack. Um, yet a, a statin is, [laughs] you know, 2 cents for me to manufacture, and if you take a statin every day, um, then you won't die of a heart attack, or you're meaningfully less likely to die of a heart attack. Yet nobody does it. And so there's, there's, you know, biotech companies right now working on therapies where a single injection quarterly or a single injection annually can absolutely obliterate your cardiovascular risk. And if you can do something like that, you meaningfully, you know, curve that rate of death, and you get ahead on prevention for cardiovascular disease. Prenovo, I think is, is another interesting one, right? It's, it's how do we get ahead of detection for things like cancer and, and early tumor detection. You know, my, my dad, you know, had stage four colon cancer when he was 39. It then cost the healthcare system, you know, hundreds and hundreds of thousands of dollars, if not millions of dollars, to have surgery and then treat him for many years with chemotherapy, right? And then afterwards, the care involved to, to kind of get him back to a steady state. The idea of an annual exam that can scan your body for early signs, early proteins through blood testing or early actually imaging signs that can detect a, the, you know, a millimeter-sized tumor-Is incredibly fascinating. Now, I think a lot of clinical people, um, and they're smart, you know, believe something like that is not yet ready for mainstream, and it might not be, right? I, I kind of choose to be opportunistic in giving people, um, uh, the ability to make those trade-offs for themselves. I take Prenuvo annually, so, you know, I recommend it to my family. Is it perfect? Absolutely not.
- HSHarry Stebbings
How much is Prenuvo?
- ADAndrew Dudum
I think now it's maybe about 1,000 or 1,500 bucks a month, uh, a year. Um-
- HSHarry Stebbings
Okay. That's better than I thought.
- ADAndrew Dudum
Yeah. And so I think, and again, these are, these are machines that cost $500,000 one-time purchase to, to buy, um, but then you're charging, you know, $1,000 or $2,000 a month, or a year, um, uh, and so the idea that this cost could come down dramatically is very real, right? A 500K machine capitalized over a decade, you know, that co- the cost could come down to something like $300 a year to do this test eventually. Um, and that's where my brain goes when I'm thinking about the future is, what are the, the Swiss cheese layers we can give people that together make up really great prevention working backwards from what we know
- 25:27 – 28:26
Is ChatGPT the Biggest Threat or the Biggest Opportunity?
- ADAndrew Dudum
causes, uh, you know, shortening of life and, and health span.
- HSHarry Stebbings
Is the biggest threat to your business not actually open AI? And if ChatGPT is the kind of consumer interface with a lot of healthcare questions that people have today, which, you know, it is in most cases, actually, and that's why obviously health is a big focus for them. Is it not the most natural extension ever that they extend that into delivery, supply, being your on-demand doctor?
- ADAndrew Dudum
Something that people have been talking about a lot, actually Daria was mentioning this recently. I think some of the most def- defensible businesses in the age of, you know, Anthropic and OpenAI are businesses that actually do something physical. Like, they, they require actual specialization and they require infrastructure. And, uh, a huge part of what we do every single day is treat tens of thousands of patients with thousands of doctors that are specialized and licensed in every state or country in the world, and then actually help make people medicine. Um, and this is a million square feet of pharmacy fulfillment. This is, you know, hundreds of pharmacists and robotic machines that are actually compounding treatments or fulfilling branded pharmaceuticals. So when I actually think about the most, uh, the most defensive businesses, the businesses that can thrive in the age of AI and actually be enabled by them, are ones where the conversation of something like ChatGPT massively expands the funnel of people engaging in health and wellness, but then can be driven to a platform that actually connects them with the specialist and connects them with the products, and actually can get that delivered to their door. Um, and ultimately I think we're a combination of all of those businesses together. So, uh, you know, I think there's, there's a lot of opportunity with, with that funnel that opens up with things like, uh, ChatGPT.
- HSHarry Stebbings
Yeah, I agree with you in terms of, like, physical infrastructure and real-world requirements meaning there's just inherently more value there-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... 'cause it's harder to do. So does that look like a partnership then? Say I come in and I say, "Hey, I've got a, I don't know, a, a rash here, um, and I'm worried about it," and then they siphon it off to Hims. So h- how do, what does that relationship look like?
- ADAndrew Dudum
Yeah, I mean, I think it's similar to what you see on Google. I don't think it's gonna be all that much different, right? That you'll be able to, to partner directly with, uh, Anthropic and ChatGPT and, and find patients that are looking for certain services and then have handoffs to specialized implementations, right? It's, it's gonna be, um, I, I think there's great opportunities to partner with all of these players.
- HSHarry Stebbings
We mentioned the kind of transition of how people, like, consume healthcare.
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
In terms of how people find you, I actually had Eran from Monday on the show, which was a fascinating show, and he said that with AI Overview on Google, that they've lost 18%, or I might be butchering it, maybe 15, 15 to 18% of their, uh, AdWords in terms of acquisition. How are you seeing the way that people find Hims change?
- 28:26 – 29:58
How AI Overviews Are Changing Patient Acquisition
- ADAndrew Dudum
You know, it hasn't had particularly dramatic changes since, um, since, you know, some of these new AI companies have, have grown. I think for us, a huge number of people that come to us are, are first-time patients interested in some of these care categories. And so they're hearing about it through, you know, watching Fox News, they're hearing about it through watching, uh, NFL on Thursday nights, they're hearing about it from their friend who all of a sudden is feeling great and the friend is talking about the treatments that they're on or, or the fact that they're getting care from Hims and Hers. So I think more and more for us, the brand and the, the spend is moving towards channels where you're talking about the opportunity to feel great. You're not reliant on, you know, maybe the, the AdWords Google funnel that, that you mentioned. I do think those businesses inevitably will have struggle in transitioning to some of the, the, um, you know, the chat-based interfaces, but there'll be ad networks that are built through those chat-based interfaces that, that eventually just replace them. So, um, ultimately I'm not sure it will matter. But for us, I think a increasing amount of spend is actually going towards just telling people about all of the new things Hims and Hers is doing, the fact that you can feel great, the fact that it's affordable, and you can come check it out. Um, and it's, it's a lot of market creation both in the US and globally versus latent demand that you're capturing through, through some of these more streamlined channels.
- HSHarry Stebbings
If I gave you an unlimited checkbook, what would you spend on today that you're not currently spending
- 29:58 – 32:56
The Eucalyptus Acquisition & Going Global
- HSHarry Stebbings
on?
- ADAndrew Dudum
I would definitely sponsor, um, Ferrari F1 because I, I've, I've told my wife that if I were to have one job that wasn't my current job, it would be a Ferrari driver. Um, uh, but she did not really like that, that answer. Um, no, but I think we would probably-
- HSHarry Stebbings
Do, do you think that would be a net positive for Hims as a business? Don't laugh
- ADAndrew Dudum
The Ferrari f- sponsorship?
- HSHarry Stebbings
Yeah.
- ADAndrew Dudum
At this point, probably not, because I'm not sure we're, we're live in every market with the penetration we would want, where that, that global footprint matters. Um, I think eventually it would. I think eventually in the coming years, you know, World Cup and, and global sponsorship opportunities actually do matter because we are... You know, this year was a, a huge level of commitment to win internationally. I mean, we, we did not dip our toe. I mean, we, we acquired three or four companies very large-
- HSHarry Stebbings
Did you acquire Eucalyptus for, like, one and a half billion in cash?
- ADAndrew Dudum
Somewhere around there.
- HSHarry Stebbings
So, I mean-
- ADAndrew Dudum
That's right
- HSHarry Stebbings
... how does that come to be, dude?
- ADAndrew Dudum
You know what? It, it comes to be because you get to know the people really well. I've known Tim probably four or five years. I think he was the best operator overseas, no question. I mean, his understanding of the customer, his ability to build a team that just moves fast, experiments, um, is willing to take risks and fail. I mean, when I first met Tim, he was live in like six or seven markets, and it was all failing. And he was telling me how chaotic it was, and I was like, "I don't know, man, this sounds crazy. You're in, like, Indonesia, you're in Japan, you're in all these different places. Like, is it gonna work?" He's like, "I'm not sure, but we're gonna try it." And then a year later, he's like, "Okay, it didn't work. We're, we're, like, toning it back."
- HSHarry Stebbings
[laughs]
- ADAndrew Dudum
"We're gonna focus here in..." But, like, his, his, his humility and his willingness to experiment and test and learn is incredible. And he-- and because of that, they've just moved so much faster than everybody else. I mean, they're the dominant player in Australia, dominant player in the UK, dominant player in Germany, uh, you know, quickly growing in Japan. I mean, it's just a phenomenal business, and I think the power of what we've built in the US from a cash flow standpoint has enabled us in the last four or five years to buy that business with pretty m- you know, m- moderate dilution, right? 'Cause you can actually just fund the purchase of it off the balance sheet, um, over the next couple of years, which is incredible. And so we have committed a huge amount of dollars and focus internationally because I just think the opportunity for the brand, um, is pretty consistent. Whether there's a national system in, in the UK or, or not, people are like-
- HSHarry Stebbings
Does it give you... Does it give you cold sweats at night, being as aggressive as you have been, as quickly as you have been? You know, I, I remember interviewing Dax from Lightspeed, Dax Dasilva, and he mentioned the challenge, Lightspeed, the POS system in a lot of restaurants, and he mentioned the challenge in acquiring so much so quickly. I think they made like 18 acquisitions in, like, two-year period. Are you worried of like, "Oh, fuck, I now have to integrate Eucalyptus and these three other businesses"?
- 32:56 – 36:56
The Fine Line Between Aggressive Growth and Losing Control
- ADAndrew Dudum
Definitely. You, you... There is a very fine line of, of, uh, driving so fast that you're losing control. There's no question about that. Um, what I've found, at least in running this business, is, is if you don't feel like you are getting close to that line, you're probably not pushing hard enough. And so I do think, um, that uncomfortable gut feeling where you're constantly questioning, constantly evaluating, constantly tweaking the strategy or the tactics, like, that feeling is what, uh, uh, success feels like. And so I've, I've kind of taught my team that we're gonna get really comfortable with that feeling. We're gonna get really comfortable sitting in that feeling and questioning and, and reevaluating and pushing, um, because I think that's how you win, right? Like, um, I was a rower in high school, and I remember, you know, my coach saying, you know, "The, the, the group of guys out there that is willing to be the most uncomfortable and in the most pain are gonna win this race." And, and that's actually true in that sport, and that's true in, in, you know, in most sports, and I think that's true in business is, like, if you can put yourself in environments where you're being aggressive but smart, taking the right bets, but have a team that is, you know, bu- bought into the mission and comfortable with that level of, of aggressive risk, and I think, I think it's the right formula. So to me, that's what makes this fun.
- HSHarry Stebbings
When, with the benefit of hindsight, did you push too hard and you had to pull back?
- ADAndrew Dudum
In the early years, and, and I think we still... I still, you know, try to moderate this. With our business, like, we could launch, we could launch so many things within, like, a month. You know, you could launch a, um, a skincare routine. You could launch, like, a makeup brand. You could launch sleep vitamins. You could launch, like, a wearable device. You could... I mean, there's just, like... Anything people are doing in health and wellness could live in the Hims and Hers brand, which is pretty powerful and also extremely, um, risky, right? Because if you, if you do too much and you, you move into the wrong areas, you, you waste a ton of resource. So in the early years, um, you know, I thought just having everything on the platform was how you win, and so we invested in, uh, skincare regimens, and we invested in vitamin supplements, and we invested in, you know, so many things that in retrospect were c- were fairly commodity products. Um, and, uh, for pretty much the same price or even less, you could walk across the street to Walgreens and get something that was pretty much the same thing, and I think that, that was a massive mistake. You know, I think it was a, it was a belief that just assortment won, and I think there's a more nuanced perspective that the right assortment wins. And, and so, um, we're, we're really careful about categories we enter, products we launch to make sure that they're products and offerings that, that are actually differentiated for people, that are hard for other people to receive and get, get access to, and maybe that means it's pharmaceutical grade, it's manufactured in, in a way that is, is, you know, uh, very, very challenging to get quality, um, or there's a level of personalization that is required in this care of treatment that makes it unique to you. But when I think about some of the early d- D2C brands, um, that launched, you know, they were selling commodity products, and those products capped out at, you know, a, a billion in revenue or, you know, a couple hundred million in Facebook spend, and the curves were like this, and that's my nightmare, you know? And, and so, um, in the early years, made a lot of those mistakes and, and, you know, try to, try to make sure we, we don't do that again.
- HSHarry Stebbings
I do wanna get back to brand marketing element just 'cause I, I suppose you mentioned obviously brand being a core component of, like, the defensibility.
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
You know, when I, when I interviewed Nick at Revolut, he said brand marketing was the single biggest thing he's changed his mind on in the journey of Revolut, which I thought was an interesting statement.What do you know now about brand marketing and spend on things that seem facile? What do you know now that you wish you'd known?
- 36:56 – 39:00
What Andrew Got Wrong About Brand Marketing
- ADAndrew Dudum
You know, I think what you, what you gain confidence in with brand marketing over time is that consistency, um, consistency is required. So I think in the early years with brand marketing, as companies are growing, they throw some dollars. You know, let's do an out of home campaign in New York, 'cause it's, like, really cool. Let's, like, take over subways, right? Which we did a ton of. I mean, they do it once, and everyone- this team is so fucking excited 'cause it's so cool and you can see it and you take pictures of it, um, but you do it once. Um, a-and then, like, months go by and, and it gets taken off, and then, and then that's it, right? Um, because you did it and it was fun and cool, and you look at the numbers and like, ah, maybe there was, like, a little spike in New York City maybe on this day. Like, you can't really tell. Probably not, but you, you're hopeful. Um, and then the next year you're like, "Okay, what are we gonna do this year," right? Like, that's just like, it's a guaranteed way to just lose money. It's a great way to feel good, and it's super fun. It's, like, so much fun, and we've done ton of it and it's really fun, but, like, that's not a business strategy. I think in order to have brand marketing work, I think it has to be consistent. It has to be consistently random, if that makes sense. Like, you have to be appearing in different places for people in a randomized way, but with consistency, because it's the multiple hits. Like, you have to be hit 10 different times in 10 different ways for all of a sudden that to say, "Hey, there's, like, a cultural zeitgeist association with Hims right now that I need to pay attention to. Like, what are they doing that is, that is, uh, s-showing up in so many ways in my life?" Where your brand trust elevates, your cultural relevancy elevates. So it, it isn't a one-off thing, and I think in the early years you, you know, you hope it is, um, and you try to track it, but it does require a level of, of dollars. It requires a medel- me- level of consistency. And actually, you know, Kathy, our chief comms officer, told me this w- when I, when we were interviewing, which I completely believe. She's like, "The, the thing early companies struggle with when it comes to communications and their brand is they get, they get bored of saying the same thing, and then they move on to the
- 39:00 – 43:22
Why Great Brands Say the Same Thing in 20 Different Ways
- ADAndrew Dudum
next thing," right? Like, early companies, we're excited, we're young, we're changing, so, like, "Here's our vision, and here's what we stand for." Then three months later they're like, "Hmm, it's changed up a little bit. I wanna say something different 'cause I already said that thing in that last podcast. Let me say something new in this new one." And in fact, what makes great brands great is the fact that everybody knows why they exist, why they fight, who their customer is, what the value is they deliver, and it's because they say the same damn thing in 20 different ways every single week. And so I think that's one of the key parts about brand marketing or, or comms in general, um, is consistency, is, uh, uh, making sure that that message and that narrative is not changing out of which requires an immense amount of discipline. Um, and in many ways, it's, like, a lot less fun. It's much more of an engine. Um, but, but over many, many years I do think it, it builds.
- HSHarry Stebbings
I agree with you. I also think, like, everyone, when you're bored of saying it, you've gotta remember that there's a new team member that's never ever heard it before.
- ADAndrew Dudum
That's right.
- HSHarry Stebbings
And so you need to deliver it-
- ADAndrew Dudum
That's great
- HSHarry Stebbings
... with the same passion and gusto that you did. I also think not enough are opinionated enough. If you look at the Hims and Hers brand today, where would you say you are not opinionated enough?
- ADAndrew Dudum
I think Hims and Hers will increasingly have a stronger perspective of what great healthcare looks like. And I think as we grow, you know, we are building an understanding of patients at a scale that I don't think most have, right? When you think about the fact that we're treating 10, 20,000 patients a day. Like, the largest health systems in the world are not treating 10 to 15,000 patients per day. So th-there's an immense amount of knowledge that's being built around, uh, different types of patients, their demographics, their risk factors, their biomarkers, what medicines and treatments work, why, what side effects they have, how much they feel better, um, combination therapies that are beneficial. Like, th-there's just an immense amount of knowledge base growing where I think we're gonna be able to start having stronger perspectives of what excellence looks like in healthcare. What do we believe the gold standard in preventative care is? Like, if you, Harry, wanna be the absolute healthiest 29-year-old, right, and be ahead of the curve, right, w-what are the 10 things you should be doing? What are the tests you should be doing specifically for you? What are the, the treatments, whether they're holistic supplements or maybe sauna, right, that you should be doing? Um, and what's that exact regiment? And get ahead of it. And there you go. You're just, you're gonna be a, you're gonna be gold standard, right?
- HSHarry Stebbings
[laughs]
- ADAndrew Dudum
More and more, like-
- HSHarry Stebbings
I'm so far off gold standard, dude.
- ADAndrew Dudum
No, you're, you're doing great. You're doing great, and I think that that's the point of... Like, to me, that's such a key part of the Hims and Hers brand is, like, everybody feels that way. Everyone feels so far away from optimal, and it's really fucking hard to take the first step to have that confidence to, to, like, make a change. And so most people that come to Hims and Hers are first time customers because I think we as a brand try really hard to empower you and say, "Hey, that first step is gonna be easy. We're gonna make it easy." It's kind of like that old Marine or, or Navy SEAL story of, like, you make your bed in the morning, right? Because when you make your bed in the morning, you've completed something. Like, a very tactical action. You've had success. There's, like, positive adrenaline, and then from there you're gonna do other great things throughout the day. Like, Hims and Hers, I wanna make it so easy for everyone to take that first step in feeling great that, that it empowers a lot of people to do so. And from your pers- from your s- your question, we're gonna have a stronger opinion about what great actually looks like.
- HSHarry Stebbings
So for anyone wondering, that is General McRaven's commencement speech. One of the greatest speeches, I think, recorded on the internet. I've listened to it probably 1,000 times. It used to be the start of every single run 'cause it's 16 minutes, which is always the most painful of any run, the first 16. So amazing aligned. I've got an out there idea for you. You said that you wanna make it easier. Why do you not have Hims preventative assessments in every city and say, "Hey, we'll tell you what's wrong with you," like a Prenuvo does or like any of the preventative telehealth, "And you can choose to buy with us or not." But by doing that, you're building up the world's largest set of healthcare data for free, and you give
- 43:22 – 44:33
The Vision: Free Preventative Health as a Loss Leader
- HSHarry Stebbings
it for free, and the treatment's what they pay for. It's like you're a loss leader. Also, what a goodwill engine. I would go to the dinner party even if I didn't talk about... Even if I didn't buy products, I'd go to all my friends and be like, "You'll never guess. I found this out about myself when I went to Hims."
- ADAndrew Dudum
Yeah.
- HSHarry Stebbings
"Oh, what's Hims?"
- ADAndrew Dudum
I think we are, we are, um, very close to that being a reality. Um, in the last-
- HSHarry Stebbings
Are you a... Do you have the elasticity in budget to do that? I don't mean that rudely, but that's-
- ADAndrew Dudum
Well, it requires verticalization. It requires two tangible things. So last year we acquired, uh, Your Bio Health, which is one of the, the few at home blood collection devices. I have it right here on my desk. Um, and this device costs just a couple bucks to manufacture, and you can click it on your arm, and it's got 30 microneedles enti- in-inside of it. Each of the microneedles is smaller than an eyelash. So if... You feel nothing. You click a button, you feel nothing, and then a small tube of blood gets extracted from your arm in about a minute or two. You can then peel that off, and you can mail it to New Jersey, which is where we have a lab processing facility, and we'll have a couple others in the next year or two, um, and run a full panel, you know, 50 biomarkers, and it will cost us, like, almost nothing.
- 44:33 – 46:57
The At-Home Blood Testing Device That Could Change Everything
- ADAndrew Dudum
Now, today, if you go to, to Quest or LabCorp and try to get that panel, uh, cash pay maybe costs you 1,000 bucks or 2,000 bucks. If you, you know, uh, go online and go to different competitors, maybe it costs, like, 300 or 500 bucks for that panel. Um, uh, and, and my, my goal, my vision is, like, very quickly I wanna give that away as a part of the Hims and Hers membership for free. Um, because if you can get a sense of those metrics... And, and I'm not talking about just, like, baseline metrics like, you know, your cholesterol and the things. I'm actually talking about things that are even more sophisticated like genetic predisposition risks, which, you know, very few people get access to, um, or, or cancer risks or polygenic risk scores. If you have a really accelerated risk of colon cancer, there's things you should be doing that are different. Um, so to me that is the vision, a preventative front door that is near cost or free, and that requires us to spend hundreds of millions of dollars, which we're doing right now, to totally verticalize this stuff and actually own the devices, the lab processing, and that fulfillment. Um, but then a platform that says, "Here's everything we know. Here's what we can help you with," right? And, and give guidance and, again, make that next step really, really easy.
- HSHarry Stebbings
Yeah, I thought it was really interesting. Gokul Rajaram, he's amazing. I don't know if you know this. But he basically said his biggest lesson from Square, where he was for many years, was that when you're running a multi-product company, not every product line has to be profitable.
- ADAndrew Dudum
[laughs] That's so right. Yeah, and I, [laughs] and I think for us, um, I, I think that entry point and that data collection, it serves two purposes. One, most people just don't even have access to this stuff, so they don't even know if they're, like, doing well. You know, I'll give you a b- an example. One of my best friends, um, you know, he's m- mid-30s. He's trying to live healthy. He was telling me the other day how he's running a lot. Yeah, and he, he looked at his cholesterol numbers, and they were, they were, like, kind of out of whack, so he's, like, now starting to eat more salmon and going for a run. I'm like, "Oh, that's great. Awesome." And then I told him, "Hey, have you done testing for this specific genetic risk factor for heart disease? It's, it's called lipoprotein little A." Uh, he's like, "No, I've never done that test." So he ran... He did that test, and he came back, and he's like, "My number is, like, 450." And I was like, "Well, that's a problem because that number should be, like, under 70. And if it's 450, it means there's a pretty good chance you're gonna have a heart attack at, like, 50 or 60."
- 46:57 – 48:12
Why Not Every Product Line Has to Be Profitable
- ADAndrew Dudum
And he looked at me. I'm like, "Do you have... Ha- Has anyone ever had a heart attack in your family?" He's like, "Well, my, my dad died when he was 60, and my da- and my grandfather died at 55, both of heart attacks." Like, to me, that moment was why all of this matters because he went to his doctor, he went to a cardiologist 'cause he was trying to do well. They gave him a set of panel and blood tests, and his numbers were a little bit off, so he started to go for runs. Great first step. What they didn't test was a genetic predisposition marker that we now know is so much more important. And if you have that high genetic predisposition number, your cholesterol numbers need to be, like, amazing, not good. They have to be incredible, or you're gonna have a heart attack. Like, there are so many therapies he should be starting now because he now has access to that number. That's the kind of stuff I want to give away for free. Like, that, that level of information helps people actually, like, get preventative, not reactive, and, and put it on a care spectrum where if somebody wants to be aggressive, they can. If somebody wants to be conservative, they can. But I want to give people information, and then I want to give them choice and assortment and a doctor to help navigate that, um, for a cost that, that i- that isn't overwhelming.
- HSHarry Stebbings
I'm sorry to be l... And this may be a total tangent, but is it not, like, totally fucked that doctors get incentivized by drug companies
- 48:12 – 52:05
Why the US Healthcare System's Incentives Are Totally Broken
- HSHarry Stebbings
on-
- ADAndrew Dudum
Yeah, the whole thing is totally fucked, right? If you look at the existing sy- system in the US, almost nothing has to do with patient outcomes or patient happiness, right? So many people make money. Everybody makes money, but none of them make money in any way that's actually reflective of success of the customer or patient. Um, and I think that's where our model is most powerful. Like, we only make money at Hims and Hers if you are happier and healthier, period. Because you pay us. You pay us to be healthier.If you don't feel healthier, if you don't feel happier, you stop paying us. And so our incentive is only aligned with, with you. And we then fight behind the scenes the drug companies, we fight the diagnostic companies, we fight everybody, and we work with them, but we apply pressure to them to get the best stuff at the best price to bring it to you. But ultimately, we only succeed if you succeed.
- HSHarry Stebbings
In a way, though, we're like, we, we don't... Your, your, your business is like my business [laughs] which is like we don't want you to be too successful where you don't need us. A world where businesses don't need venture capital is a problem for me. [laughs] That's, that's not a good thing. A world where humans don't need any medication, Andrew, I hate to say it, is not a good business for you [laughs]
- ADAndrew Dudum
Well, for us, it's not necessarily about medication, right? Like w- you will always need somebody to help quarterback your wealth and your health, right? Like, as you grow, as you age, you're always gonna wanna have somebody who's an expert partner that's available to you twenty-four/seven that you trust that can help you navigate how you feel in life. And, and this changes, right? Like, at different milestones, like you might not be there yet, but in the ten years from now though, things will be popping up all the time and, and that, that trusted partner becomes so valuable. Um, and it could be super acute, it could be something small, but, but I don't think that changes. And so that relationship that can last decades with Hims and Hers is what matters, right? Like, me just getting you a specific treatment today and making the most money I can from you today, th- that actually isn't what matters to me long term, right? I'm 37. I've got like a multi-decade perspective on how big this business can be. In order for it to reach that, that maximum value, you have to build a brand that people trust to have with you for a very long time, and that means often saying, "Hey, right now, this treatment might not be for you. You know, uh, but we're here for you when something else pops up, and here's more information and here's more diagnostics and here's maybe a wearable device, and here are some other habits and food and nutritional support, um, to help you along the way."
- HSHarry Stebbings
What is your least profitable product that is most important? Do you remember we said about multi-product companies-
- ADAndrew Dudum
Yeah
- HSHarry Stebbings
... don't have to be... Yeah.
- ADAndrew Dudum
Right, right now, it's the lab testing offering. We offer it essentially a- at cost. We haven't verticalized any of this infrastructure, so it costs us, you know, you know, pretty much just as much money as we, we sell it for. Um, and again, it's because I believe the loss leader value to the patient is incredibly important, and that margin will continue to be terrible because what we're gonna do is continue to reduce the cost as we verticalize it and then actually reduce the cost to the consumer. Um, so that, that will always be, I think, um, a platform benefit from my standpoint where we try to make nothing on, um, but give patients information and access and, and that ultimately can be really transformative for them.
- HSHarry Stebbings
What do you think not enough people know about Hims that they should know?
- ADAndrew Dudum
I think a lot of people, um, are still trying to understand why we are fighting so hard, right? People see us in the headlines all the time, right? Um, recently seeing us in the headlines for, for GLP-1s and, you know, with drug company conversations. Um, and so I-
- HSHarry Stebbings
Can I be a dick? Why do we see the negative connotations with you and not Ro? It seems like the world likes to dunk on you more than Ro. [laughs]
- 52:05 – 53:49
Why Hims Gets Dunked on More Than Competitors
- ADAndrew Dudum
Yeah. I, I think when it comes to Hims as a disruptor, w- we are actually disrupting. I think we are pushing buttons that structurally change how people get access to care in this country. If you look in the last 18 months, like we were talking about, um, the most important medicines of the century got cut by 80%. Not only did they get cut in cost, but now they're available through consumer channels at prices everyone can afford. Um, I think we played a part of that intentionally, right? We applied massive pressure, regulatory pressure, consumer pressure. We leveraged, you know, hundreds of thousands of patients to, to raise their voices to say, "Hey, these medicines could save our lives. Like, let's actually get them to us in ways we can afford." And coverage is now expanding dramatically and the prices are tanking. And so I think our willingness to be at the, at the forefront of disruption and push on behalf of consumers, I think causes friction, right? Um, and I think we're comfortable with that friction. I think people understanding why we're doing it is, is super important because, you know, w- we, we like to push where it's important to customers and I think ultimately that is gonna benefit how the ecosystem works.
- HSHarry Stebbings
And Ro isn't innovating in that way, hence they don't get the criticism?
- ADAndrew Dudum
I don't, I don't know if I... You know, I won't talk specifically about a- any other brand 'cause I'm not sure their strategy, but, but I would say, um, you know, in order to actually disrupt the system, you have to break part of the system and, and I think our strategy is, is, is doing that. Um-
- HSHarry Stebbings
What system would you-- What part of the system would you most like to break that you haven't broken yet?
- 53:49 – 59:15
The Part of the Healthcare System Hims Most Wants to Break
- ADAndrew Dudum
I think we're in the middle right now of breaking how, uh, healthcare is distributed entirely. So instead of going through the PBMs and then through insurance and then through reimbursements, all of that complexity that nobody understands in the US, I don't think any of it makes sense. I think all of it or as much of it as possible will go through consumer channels like Hims and Hers, where you can pick up your phone, have on-demand access, have total price transparency, have complete choice of which doctor, which specialists, which treatment, complete information access, and then, and then control. The system in the US is entirely paternalistic, right? You get treated with whatever they, they, they want to, to give you and, and the incentives and reimbursements and costs are so convoluted that it's, it's wildly overwhelming. And so when I think of every other industry we love-Food delivery, you know, financial services, banking, uh, retail, everything is simple. It's on demand from your mobile device, price transparency, customer choice. Yet the one thing that is the most important part of our life doesn't have any of those elements, and it's the biggest industry in the US. It's where we spend the most money too. And so I think that's entirely gonna change. And so I don't think Hims is a D2C company. I think Hims is disrupting how healthcare is delivered in a, in a consumer-focused fashion, and, and I think we're in the midst of that change. I think people are s- are, are just coming around to it, and you're starting to see it with, with the GLP-1s as a prime example. But I think in the next five years it's gonna accelerate dramatically.
- HSHarry Stebbings
The lock-in and power of Epic is just mind-boggling. Does that progress or prevent innovation in the healthcare industry?
- ADAndrew Dudum
I don't think it's relevant, actually. When you look at the patients coming to Hims and Hers today, the patients starting their healthcare journey, the majority of them do not have legacy data and systems within old EMR platforms, right? They, they moved to a new city, they moved to New York, and they're 22 and they're like, "I don't have a doctor, yet I'm feeling a little sad. What do I do?" Right? And their, their first time entry into the healthcare system is Hims and Hers. And so the, the wave of, of healthcare for the future, for the next 20 years, for the 50 years after that, i- is gonna be a po- patient population that's starting today. Um, and that's why I think, uh, you know, you have to, you have to build a relationship early. You have to have a, an assortment of care that starts young for people so that you can give them a, an example of what great looks like, uh, and then build with them over many, many years.
- HSHarry Stebbings
Final one, and then I promise we'll do a quick fire. And I know I've jumped around the whole thing, but that's why I love what I do these days. Um, like, I think your food industry is at the root of all your healthcare problems. What you guys do to your food is not fucking natural. Like, apples are not meant to be that large. You know, salmon is not meant to be that cut. Do you agree that food is at the root of a lot of your healthcare problems and-
- ADAndrew Dudum
100%. 100%. I think the two-
- HSHarry Stebbings
And how do, how... Genuinely, dude, how do you eat healthfully and sustainably in New York today when it's all completely artificial?
- ADAndrew Dudum
Yeah, it's really challenging. I d- I, I, I think the current administration is doing an amazing job on that issue. I really do, right? Like y- the, the, the push to eat real food, the push to normalize the fact that all of the ingredients on these labels is garbage, it's chemicals, uh, the, the push to educate people to actually see what is good for you and look at those labels and, and require food companies to disclose it, and to force changes on high processed foods or, or, uh, corn syrup use. Like, it's poison. Uh, you know, my wife is, my wife is French, and so when, when we're visiting her family overseas, I look at the labels, it's crazy. I mean, y- you know, when you look at a french fry bag of, in, in a French gr- grocery store, it's potatoes, and it's olive oil, and that's it. You know? You, you go to Safeway here in the US and you look at it and it's 40 different things. So I, I, I think there's a huge problem with the food industry. I think the, the government applying pressure and regulation there is a wonderful idea for people because undoubtedly that's a massive part of, of the obesity epidemic in the country and also probably the mental health epidemic and, and many, many other things.
- HSHarry Stebbings
Yeah. I'm totally with you. I f- I feel... And actually on this one, I feel really sorry for, I, I don't know how else to end up being classist, wealthist, whatever, but I feel really sorry if you don't have money because I think it's really hard then to ash.
- ADAndrew Dudum
Oh, yeah. It's, it's so difficult. I mean, I've, we've got three little boys and I, you know, we try to, you know, f- feed them well and, and so we'll buy like, a carton of organic blueberries, right? And that carton is expensive. Organic blueberries in San Francisco, it might be like, seven bucks. Um, and I'll, I'll open it and I'll put it in front of the boys for breakfast, and they'll grab handfuls and, and it'll be done in 15 seconds. The idea that, you know, healthy food costs this much and is consumed that easily is a real challenge, uh, right now. And so anything people can be doing to eat locally, to have local farms, to, to make sustainability in their communities easier and better I think is, is, is all positive.
- 59:15 – 1:03:30
Quick-Fire Round
- HSHarry Stebbings
Dude, I wanna do a quick fire round with you, okay? So I'm gonna say a short statement, you give me your immediate thoughts. Does that sound okay?
- ADAndrew Dudum
Sounds good.
- HSHarry Stebbings
What decision have you made in the last two years that you would reverse today?
- ADAndrew Dudum
I think I was too slow to force the company to invest in completely, uh, disrupting their team processes with AI.
- HSHarry Stebbings
Which process was disrupted most?
- ADAndrew Dudum
I think customer care, provider quality, all patient interactions. I think we, we were a year too, uh, too slow on, on totally changing the model of how patients interact with the platform.
- HSHarry Stebbings
CAC goes up or retention goes down, which scares you more?
- ADAndrew Dudum
Retention going down. There are always ways to optimize efficiency on acquisition. There are always new channels, new brand campaigns, new, new growth avenues. But if you don't have a sticky customer, and for some reason they're becoming less sticky, your product market fit, your patient happiness, your customer happiness is going in the wrong direction.
- HSHarry Stebbings
CAC only ever goes one way. Agree or disagree?
- ADAndrew Dudum
Disagree.
- HSHarry Stebbings
Why?
- ADAndrew Dudum
At scale, I think, uh, with scale, with assortment, with brand value, uh, new channels become unlocked, new efficiency grows, uh, leverage accelerates with assortment. Um, uh, I, I think, uh, it often only goes one way, but I don't think always.
- HSHarry Stebbings
Other than Ferrari, what do you not sponsor that you would most like to?
- ADAndrew Dudum
World Cup
- HSHarry Stebbings
Like the event itself?
- ADAndrew Dudum
Mm-hmm.
- HSHarry Stebbings
Or like, like the FIFA World Cup brought to you by Hims?
- ADAndrew Dudum
Mm-hmm. Yep.
- HSHarry Stebbings
Well, you got the US one coming, dude. It's, it's not too late to spend some dollars. [laughs]
- ADAndrew Dudum
Great. [laughs]
- HSHarry Stebbings
Dude, I, I love that. Um, what advice would you give to yourself starting Hims again? You mentioned Jack and Atomic and starting it as part of Atomic. What, what do you tell yourself going back to the very start?
- ADAndrew Dudum
I would tell myself to trust my instincts as we continue to build and get bigger and bigger, continue to trust my instincts, and also remember that it's gonna be a long journey and the ups and downs are gonna come and go, um, but that the persistence is gonna be most important.
- HSHarry Stebbings
And now I think, you know, we do meaningful jobs, and you do a hugely meaningful job, but I think the most meaningful job that you probably do, which you'll agree with, is being a father.
- ADAndrew Dudum
Yep.
- HSHarry Stebbings
Um, what's your final one? What's your biggest advice on being a great father now having three boys?
- ADAndrew Dudum
You know, there's a, there's a, um, something I watched once where they asked a whole bunch of little kids, um, what their absolute perfect afternoon was, and these are like two, three, four, five-year-olds. And the perfect afternoon was, all these kids answered the same way, just playing with their mom and dad. Just like sitting with blocks and playing with their mom and dad, or drawing with their mom and dad or, or something with their mom and dad. And I don't think, you know, when you're exhausted and you're a parent and you're trying to do everything and pulled so many different ways, you realize that actually all the kids wanna do is just have you present and, and, and truly present. And so my greatest advice, I think, would be to, to try really, really hard to just play with them. Like, actually play. Like, get down on your, on your knees, on your butt in whatever they're doing, uh, and just ask what they're doing and ask if you can do it with them, um, because you... They'll like, they light up. Uh, because in parenting, like it's, it's hard to actually, uh, make time for that, but I've found that, that, that's, that's really the most important and valuable stuff.
- HSHarry Stebbings
Dude, I, I so appreciate you. I so appreciate the friendship. I so appreciate you putting up with my incredibly wayward conver- I mean, real breadth to the conversation. You gotta give me credit. Um, but you've been fantastic.
- ADAndrew Dudum
Appreciate you having me, Matty. Good to see you again.
Episode duration: 1:03:40
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