How Ash Wellness Transitioned from D2C STD Testing Startup to B2B Virtual Care Partner
The following transcript was pulled from the October 26, 2021 podcast episode of the MedStreet Journal through OpenLoop. It features a conversation between Ash Wellness CEO and co-founder David Stein and host Rodney Hu.
[00:00:00] Rodney Hu: Hello, and welcome to another very special episode of the MedStreet Journal sponsored by OpenLoop, the trusted partner for telehealth companies across the US looking to launch and scale their virtual care services. Check them out at openloophealth.com. My name is Rodney. And today I'm joined by another very special guest.
[00:00:19] Mr. David Stein. He's a CEO and co-founder of Ash. So I'm excited to have him here and learn about what he's doing in the healthcare space. So with that being said, David, welcome to the podcast.
[00:00:29] David Stein: Thank you. Thanks for having me.
[00:00:32] Rodney Hu: Yeah. So let's just jump into it. Why don't you give people a brief background of like who you are and how you ended up at Ash and created this company?
[00:00:40] David Stein: Absolutely. Yeah, so we launched Ash just over or just about two years ago now. And actually launched out of a master's program at Cornell Tech, which is an offshoot of Cornell based in New York City proper. We came together as a [00:01:00] four-person co-founding team around the idea of making sexual health more inclusive and accessible.
[00:01:06] So we are mostly a queer LGBTQ+ co-founding team. And we just all had, honestly, personal pain points in the space of accessing inclusive and comprehensive sexual and wellness services. And so within the grad school program at Cornell Tech there is a class called startup studio, and it's similar to an incubator.
[00:01:32] They help you find a startup. Find a co-founding team and fund some of those startups. So we actually launched Ash right before COVID as a direct to consumer at home testing company for sexually transmitted infections. And it was aimed at the LGBT community. We were doing the most comprehensive and inclusive kind of testing that we were able to do at the time in the direct to consumer space, but fast forward to where we are now, we call [00:02:00] ourselves an at home health testing company or remote diagnostics platform.
[00:02:06] And so essentially how we got to where we are was we launched during COVID and we realized, more or less that through a series of events, that most of the providers in the space -- both, you know, traditional healthcare providers, like hospital systems, as well as telemedicine companies over COVID -- could really use the services and platform and infrastructure we had built
[00:02:32] to power remote diagnostics because they bring their patients in in the normal fashion they were used to doing. And so we decided to package and sell our platform and services to those partners. And the business really took off. So we expanded then from exclusively doing sexual at home testing kits for STI and prep, and some other diagnostics relates to that.
[00:02:55] And we now do over 60 different types of diagnostics and work [00:03:00] with public health institutions, universities traditional hospital systems, major tome medicine companies, et cetera, to power their remote diagnostics. We, for the most part do it in a white labeled fashion. So users don't even know Ash is on the backend.
[00:03:20] Rodney Hu: Dang, that's an interesting journey, man. So since seen in here, like the foundations and how you guys have been like learning and growing and just been able to stack on your success, and really being able to tackle the problem and you mentioned how you guys started with the LGBT community, is that who you guys are still primarily focused on right now.
[00:03:40] And is there a reason why you guys started there?
[00:03:43] David Stein: Yeah. Great question. I, so the reason we started there is just, honestly, most of us are queer or LGBTQ+, and we wanted to help our own communities and make testing more accessible for those communities. But I would say [00:04:00] now we don't necessarily target, exclusively LGBTQ+ providers or companies or healthcare verticals that target those communities.
[00:04:11] However, I would say, I think just naturally because of the work we do. And a lot of the companies and partners we work with happen to be LGBTQ+ servicing companies that help those communities. Yeah.
[00:04:30] Rodney Hu: Okay. And so like your guys' actual offering, like people can just go to your website and get this, or do they have to go through a provider or what sort of pathway did people have to like consume your product.
[00:04:41] David Stein: Yeah. Great question. So we actually, we used to have a direct consumer site where you could come to our website, order testing kit, and we'd ship it directly to your house. Now we exclusively sell through our partners. So it's the B2B to C model in that sense. And we're working with everyone [00:05:00] from a major traditional hospital system to a brand new telemedicine company that launched in the midst of COVID to a old school, public health department that you have in every kind of major city and stuff.
[00:05:14] And so for the most part I would say our partners have an online kind of telemedicine platform where they'll do consults and then based on that consult order diagnostics and our system plugs into their EMR EHR typically. We received the order, ship out a testing kit the customer user, patient, whatever you want to call them, does the self testing kit.
[00:05:39] We provide all the instructions and curate the user experience there. They send it back to one of our partner laboratories and then our labs test those samples and upload the results to our portal, which is then integrated into their their ultimate kind of dependent on the partner, EHR, EMR, so that the provider can [00:06:00] then provide next steps for the patient.
[00:06:03] And so just generally to answer your question, we now exclusively work with partners. So in order to access our testing kit your provider who, whatever healthcare service you're using has to be working with Ash.
[00:06:17] Rodney Hu: Interesting. Yeah, that was a nice answer. Cause you really painted the picture on really like the journey that someone goes through and like the transfer of information from when somebody expresses interest and how seamless you guys make that process because of whether it's your platform and how easily you integrate with other people's softwares or whatever tech stack they're using.
[00:06:39] So that's pretty interesting. And then I said, you said you guys white label that. So they don't even see your brand, they just get your guys's kits.
[00:06:49] David Stein: Exactly. Yeah. So for the most part, our partners the people that we're working with, the different organizations and staff prefer that, their patients, our customers don't know it's a third [00:07:00] party kind of doing the backend stuff for the diagnostics and kidding.
[00:07:04] So if we're working with a provider, let's just say in New York city called Metropolitan Doctors, the kit will say Metropolitan kit. And it will just look like it's all coming from that provider. And then they're exclusively working with that provider. And it kinda, I think what we've heard from our partners is just providing.
[00:07:27] A stickiness for those patients to say look how many services and 21st century new age tele health services, my provider is now offering and it looks like it's just fully coming from them.
[00:07:42] Rodney Hu: That's an interesting, so for the providers it makes sense for them to just partner with you instead of trying to figure out how to create and go through that whole process of developing that offer to their customers.
[00:07:56] They can just leverage someone who like [00:08:00] you and your brand and you, and your brand and your expertise to be able to deliver value to the end consumer.
[00:08:06] David Stein: Exactly. Exactly. We either have one or two things happen to us. So like we got into the space on the direct consumer side. And honestly, because we had, I guess what you could call humble beginnings with not a lot of funding and not a lot of resources.
[00:08:24] We built most of our services from scratch, which is a benefit now because we own those services. But to get into this space, to be able to provide diagnostics, to be able to provide the fulfillment side of the kidding relationships with labs, it's hard and it's expensive and it takes a lot of time.
[00:08:43] And so one of two things tends to happen -- either we'll do outreach to an organization who might be a candidate for a remote diagnostics and they'll say, okay this is interesting. We haven't really thought about it before, but we're going to [00:09:00] try build this ourselves. And what happens more often than not is they'll come back anywhere from two weeks to two months later and say, oh my goodness, this is insane -- way too hard to build it.
[00:09:12] Can we partner with you? Can you guys take care of everything for us? And obviously we're like, yes that's what we do. That's our service. Or we'll go to them when they already know a little bit about the space and either like they found us or, we found them and they're like, it's really hard to break into this space and figure out all the components that you need to turn something like this on let's work.
[00:09:36] Rodney Hu: Yeah, that's crazy. Cause you expose them, like you show them the tip of the iceberg and then they go and see like beneath the surface oh Dan, this is way more than we were expecting and it's overwhelming. So it was like, all cause then on their end, it's like do we need to spend the resources and time and energy and all those factors in building this.
[00:09:56] And you guys just come in, but I feel like that's like a benefit [00:10:00] to you guys as well. Cause you guys still get to deliver your value to the end consumer. But instead of going directly to them, you're like partnering people who are already working with your ideal client. So it's a win-win but obviously like this whole operation is interesting and complex as it is, doesn't happen with one person.
[00:10:19] So I just want to give you an opportunity to talk about the different team members and the different talents and skill sets that you pulled in to build this thing up, make it come to life.
[00:10:29] David Stein: Absolutely. And I always say it would be nowhere without our amazing a mazing team and my amazing co-founders, but what's interesting about our co-founding team breaking into the healthcare space and health tech kind of at home.
[00:10:44] Healthcare space is none of us had traditional healthcare background. So none of us have your MDs registered nurse or clinician clinical backgrounds in that traditional respect which I think has helped us a ton to [00:11:00] innovate and think differently and challenge, the norm and staff.
[00:11:04] But we came together as a four person co-founding team. So myself and I too, right now, all things sales and business development, my co-founder Kyle Waters who does ops and product and Keith. Six years previous to Ash working at Deloitte, doing a host of different product things and building out major mobile apps and web apps for fortune 500 companies MEO.
[00:11:29] She had spent the last five years at a biotech here in New York city, actually as a research scientist. So she probably is the closest thing to medical or political backgrounds. But she. Went back to grad school to do her design degree at Parsons. And we met her through the grad school program there.
[00:11:47] And so she leads all things brand and design for Ash. And then finally, Nick who spent the last few years prior to Ash in the FinTech space as a full stack engineer, came to Ash and is the [00:12:00] mastermind behind their entire platform. So leading our engineering team and building everything out and beyond that, we've honestly just rapidly grown in the last.
[00:12:10] Four or five months. So we went from a four person team, all of us doing everything and working insane hours to we're now about 15 people in a, hopefully 20 by the end of the year. But have now actually hired people with traditional health care backgrounds and more of those experiences that we don't necessarily have.
[00:12:31] We didn't necessarily have in house before.
[00:12:34] Rodney Hu: Dang. That's pretty cool. Like interested in inferior, you guys' growth journey. And so like, when you like first got started in, like you started, you took a risk creating this sort of solution. How did you go about validating that what you're working on was actually a problem that people were interested in solving.
[00:12:53] David Stein: Yeah. Wow. That is such a good question. So I have two answers to that because we started in the [00:13:00] direct to consumer space, so we started in a different product than what we are in today. But at the time we just, and we were in this grad school program that was, an incubator leading us to figuring out the best kind of product market fit and what we should put out there in the world. And so we just did a ton of customer discovery everything from surveys to interviewing people. My favorite story though, is this was pre COVID think it's probably like January 2020 the team
[00:13:34] went to Washington square park in New York city. And we were a sexual health and wellness company at the time, so exclusively. So we had printed out these huge posters that said we love sex or do you love sex? So do we come talk to us about it? And we were these crazy people in Washington square park, holding up signs, talking to people and user interviewing people around their testing habits and whether [00:14:00] or not they would consider using an at home testing kit and then also paying for it out of pocket.
[00:14:05] We did a ton of that kind of traditional and non-traditional user testing and customer discovery. And then I think beyond that, when we moved and pivoted to the B2B side, we had an interesting journey there. So I said before, we, that we just jumped into the B2B side and realized these providers would buy our products and needed them.
[00:14:28] But the journey is getting there was actually I guess a customer discovery user testing journey and in of itself in that we basically realized customer acquisition on the direct consumer side was very difficult in that, costs upwards of $150 to acquire a customer on the DTC side. And our test kits cost $150.
[00:14:50] So it was like a breakeven at best. And we were competing against major players in the space, Everly let's get checked. He would raise hundreds of millions of [00:15:00] dollars. And it was just a losing game. So we started to focus on partnerships as it being so quiet customers and. What better place to find people who want testing kits and want to do it in the privacy of their own homes and not talk to actual humans about it, than college campuses.
[00:15:15] So we started to do a lot of college campus outreach and specifically working with sororities and fraternities as a means to acquire customers and slowly. Holy shit. We can sell 150 testing kits to sorority for a couple hours of our time versus $150 for one customer that is never going to be, super loyal to Ash as a brand, because they're going where the best deal is that they're paying out of pocket.
[00:15:42] And we progressed from there. We went from sororities to a few telemedicine companies to a major university, and then. more traditional hospital systems and just realize, okay, everyone in this space, everyone in the healthcare space is moving into telemedicine over COVID [00:16:00] similar kind of journey, I would guess that open-loop experienced.
[00:16:03] And so they need these kind of wraparound services to enable them to do so and better provide care to their patients and meet their patients where they're at.
[00:16:11] Rodney Hu: That's interesting. And listening to you talk about that. They can make sense why you guys would go to the B2B side. Cause it was like the direct to consumer.
[00:16:21] If you had like breaking even it's like that one-to-one but if you go to the B2B model, it's like one to many, like each thing that you're spending time and money on you're leveraging instead of just instead of playing chess, you're playing or instead of playing checkers, you're playing chess at this point.
[00:16:37] It's every move is leverage. Ah, that's an interesting
[00:16:41] David Stein: and our favorite kind of I don't know, I guess sales pitch to more of those traditional clients was just that, we were enabling them to better serve their patients and we weren't competing with them. So all of a sudden, in COVID where telemedicine is taking [00:17:00] off and these traditional health.
[00:17:02] Health writers are bearing the brunt of caring for COVID patients. They're also losing revenue. And having to make staff cuts and, just going through generally a really tough time and also trying to stay relevant in the telehealth space and keep their kind of patient populations. And so our sales pitch for the most part was to go to them and say, Hey, we're not competing with you.
[00:17:23] We're helping you catch out. We're helping you better serve your patients. And we're helping you make the jump to tele-health through our platform and services.
[00:17:33] Rodney Hu: Interesting. I like the mindset of complimenting not competing because it's a lot more beneficial when you think like win-win situations and stuff like that.
[00:17:42] But over the past few years, you guys have learned, you guys have grown, you have a team, you have the infrastructure to be able to provide value. But what sort of problems are you guys experiencing now that you're trying to tackle and overcome?
[00:17:56] David Stein: Yeah. Great question. So I [00:18:00] think honestly, the, one of the biggest problems that we are, I guess I would say tackling is figuring out what is needed to convince that end payers.
[00:18:16] I think, major insurance company, major kind of a policy decision maker at some of these end payers to say. Remote diagnostic testing at home self testing kits is the future. And there's no going back. And so you should be reimbursing those testing kits at a hundred percent of the rate.
[00:18:40] And you should be embracing your users, your providers, your partners to use them. And the reason is because, we see on average Bid hearings to actually getting tested. Be it for what ever, your providers ordering a test score is much higher when we send a test kit to [00:19:00] someone's house.
[00:19:00] Then when we ask them to go to quest or lab Corp, in-person blood draw on. Make an appointment show up to that appointment, get there, take time off work to do and so it's just a no-brainer across the board and that actually, if you can test people more frequently, and I think this is a lesson learned across the board there, COVID all around the world.
[00:19:21] If you can test people more frequently and understand kind of the data points that you need to provide care and prevent a long-term. Issues to put it, as broadly as possible. It's actually, long-term cheaper to test more frequently than it is to avoid that on the short term and say, okay we don't need to test people as frequently or as much as one would think.
[00:19:45] So I'd say the biggest challenge is just getting that last part of this ultimate kind of stakeholder journey, right? Everyone from the consumer to a provider, to administrators, to the policy, [00:20:00] kind of people at the end to except this new way, the remote diagnostic test.
[00:20:05] Rodney Hu: Nice and just really getting them to buy into like the convenience factor of what you guys are doing and how it plays into the overall picture.
[00:20:15] It's interesting. So we're coming up towards the end of the interview, but I just had one more question. And it's what sort of advice would you have for other CEOs of other healthcare entrepreneurs looking to get their solution out to the market.
[00:20:28] David Stein: Yeah, that is a great question. I would say what keeps our team going truthfully through all the ups and downs and in the last year we've experienced a lot of success and good things, but it's honestly constantly a roller coaster, but the best piece of advice is just working.
[00:20:48] And it's not novel by any means, but working on something that you're really passionate about from personal standpoint. And so we came into this space because we were like, it is hard to [00:21:00] go and find STI testing, even in a major metropolitan city, like New York if you're a queer person or not even a queer person, but if you're anyone.
[00:21:08] And so how do we make that more accessible and more inclusive? And to date we've shipped over 12,000 testing kits to people across 47 of the 50 states, I think is the stat, but we've actually done it. We've made sexual health and healthcare generally more inclusive and more accessible by believing in what we set out to do.
[00:21:30] And it, it all started from personal kind of pain point. So I think just generally working on something that you're personally passionate about is is really important. The journey is a roller coaster without a doubt.
[00:21:45] Rodney Hu: Yeah, it's nice. It's no straight line for sure. But it's how you navigate those adversities, get your solution announced to the market.
[00:21:53] I appreciate that advice, but we covered a lot of the high-level topics, but I like to end each interview on a little lighter [00:22:00] exercise with something I call a rapid fire round. So I'm just going to ask you a set of questions and you give me whatever answers you come up with.
[00:22:07] David Stein: Okay.
[00:22:08] Rodney Hu: All right. Cool. Question number one. What is your favorite book of all time?
[00:22:12] David Stein: Ooh. Great question. It is man's search for meaning. I always mess up the name. But yeah, excellent book just by a Holocaust survivor psychologist person who has a lot of good life lessons.
[00:22:27] Rodney Hu: Awesome. Number two, who is the most influential person in your life or career.
[00:22:31] David Stein: Yeah, I'd say my mom, she is -- she raised four boys while being a full time physician and, has just really risen in her career and done it all. And it's very inspiring.
[00:22:45] Rodney Hu: Awesome. Shout out to Mom. Number three, what is one goal you want to accomplish within the next year?
[00:22:51] David Stein: I would say, I think figuring out the insurance side of stuff. Figuring out what major insurers [00:23:00] can back and ultimately reimburse around at home testing kits.
[00:23:04] Rodney Hu: Okay. And then last but not least, what is one piece of advice you would give to your 20 year old self?
[00:23:09] David Stein: Be yourself. People like you more and are attracted to you more. And they work with you and want to be around you when you're just your truth.
[00:23:19] Rodney Hu: Awesome. Excellent piece of advice. Perfect way to end today's podcast. David, just want to say thank you again for jumping on and just sharing the value and sharing your journey, the story behind Ash. But before you go ahead and plug, where can people connect with you if they want to learn more?
[00:23:35] David Stein: Absolutely. So our website is poweredbyash.com. And our social handles are meet M E T Ash Wellness Twitter, Instagram, all that kind of stuff. And I always say if anybody wants to email me directly, be it for, to work with us [00:24:00] or job or ideas, comments, thoughts about the space, always happy to entertain a conversation there.
[00:24:06] And it's just David at powered by Ash.
[00:24:10] Rodney Hu: Awesome. And I'll be sure to include links to all of those in the resources section. But with that being said, that ends today's episode catch you guys on the next one.
[00:24:19] David Stein: Thank you, Rodney.
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