How We Built Ash Wellness | Interview with CEO David Stein
The following transcript was pulled from Episode 16 of BYOB: The Healthcare Podcast. It features a conversation between Ash Wellness CEO and co-founder David Stein and hosts Nakin Bhandari and Joseph De Los Santos.
Nakin Bhandari: Hi, David. Thanks so much for joining us on the podcast.
David Stein: Thanks for having me.
Nakin Bhandari: So tell us a little bit about yourself and your health about your healthcare background.
David Stein: Yeah, absolutely. So, I launched Ash about two years ago out of the program at Cornell Tech, the one-year MBA program there, and prior to that I really have no healthcare experience, previously worked in education, technology, startups, management consulting in the public sector, but have no... I guess like real healthcare experience prior to Ash. And it was all really born out of a personal experience I had, or rather a pain-point in accessing sexual health, testing and care ultimately and so I think just in that experience specifically, I don't think it ever escaped me.
And I got the care I needed ultimately, but I think, I was like it scares me that this doesn't exist in an easier, more convenient way, which is kind of the birthplace of Ash. And more broadly, what we do as a company is to provide a kind of remote diagnostic infrastructure, to help our partner organizations, be it academic medical assistants, telemedicine companies, public health departments, turn on remote testing programs for all different types of tests.
And the idea is that we're making healthcare more inclusive and accessible by bringing healthcare into the home and making it easier for people to access these services.
Nakin Bhandari: So tell us a little bit about how Ash got started. You're working at, or you're at Cornell Tech doing your MBA. What is the genesis of Ash?
David Stein: Yeah. So I guess it dates back to a little bit before that, but, I mean on the highest of level, so I don't, you know, I could talk about this for an hour alone, but I was living in DC, out of undergrad and transparently was sleeping with men for the first time and I was not out of the closet and I had a partner contact me and say, Hey, you might want to go get tested for STI and...I still remember that moment pretty vividly. But I think at the time I'd never been tested for STI period and I was closeted and there was just all this shame and stigma just generally around testing. And I looked long story short, everything was okay, but I was in shock at how hard it was to get tested and how I never wanted to do it again.
And I took a step back and I was like, I'm coming from a place of privilege where I have health insurance. I have a good-paying job. I can pay the quest bill. That's about to be delivered to me two weeks later, but I don't want to ever do this process again. And so, you know, kind of walking away from that experience, going to work at a bunch of startups in San Francisco, I was like, wait a second.
I could build something around this. I met an alum of the Cornell Tech program at a party in San Francisco. And she was telling me all about the program and how it's a one year MBA and the capstone of the course, this class called startup studio and they help you. Found your startup idea and they give you pre-seed funding in a competition sound.
There's like, this is a perfect opportunity to start Ash. So I applied only to Cornell Tech as a grad school program. Got in, came there with the idea of Ash from day one on campus was like, I'm starting to sexual health company. Join me. And naturally 99% of my classmates are like...what is wrong with this guy, but the 1% that weren't, aren't my co-founders, and we've now worked together for the last two and a half years or so. And we launched as an Ash actually as a direct to consumer brand focused on doing STI testing for the LGBTQ plus community or queer communities. Genesis of kind of how we got to the B2B side is COVID hit.
And we were selling at-home STI testing kits to a nation that was being told to stay at home isolated and socially distance. And we were like, okay, this is going to be a slight issue because we're trying to encourage people to have sex and get tested and so I think at the same time, we just realized we had built all the technology, the infrastructure and the platform to enable remote diagnostics and we could sell it.
To providers who are in a pandemic, couldn't bring their patients into a hospital clinic, a lab or whatever, and the rest is kind of history. It's taken off since then in a very good way.
Joseph De Los Santos: Yeah, thanks for sharing your story. I'm sure. I'm hoping that, you know, in the future we get more affirming care and resources out there.
Joseph De Los Santos: I think an important part of the story is that you're kind of an outsider going into healthcare. Can you tell us about that perspective?
David Stein: Yeah, I would say so. I have three co-founders that I started Ash with. one, it came from the product world at tabloid and worked on a bunch of kind of retail.
Products and companies and stuff, one being Chipotle. Another came from the biotech world, but on the research scientist side. So she was a research scientist, slicing and dicing mice to do a test for a biotech product. And then our third co-founder, Nick, came from the FinTech space. And so we all approached kind of healthcare, I think in a way.
Honestly, it's pretty naive. We were just like, why can't we do it this way? Why would it, why are they doing it that way? And I think as a result, we kind of just have been able to break down, you know, processes and ways in spaces, in places where things have been done traditionally for so many years in one way.
And we're we, because we have that naivete and, and honestly like lack of knowledge, being able to create different pathways that are maybe better. And I think ultimately having a consumer kind of direct to consumer discipline to start also has been a key differentiator for us and winning business is just bringing a consumer experience to traditional healthcare.
Nakin Bhandari: So let's, let's talk about that because direct to consumer for STI testing might not be the first thing people think of, like, and it's not typically how it's done. And, so what, what made you guys think. It would be easier to go to the consumer and I think you've talked about that transition to now B2B, where you're reaching out, I assume to hospitals clinics.
What, what led to that transition?
David Stein: Yeah. So I think like, you know, there is a boom, B2C startups kind of across the board, be it your, you know, skincare that you can buy online to Roman doing erectile dysfunction too. Not even healthcare products, right? Like everyone was like, okay, great. We can do D2C and we can cut out the middleman and go directly to our customers.
And I think I came to business school, being super excited about that space and wanting to like, be a part of it. And then once we are in it, I think. aside from the fact that COVID happened. And we were trying to sell STI testing kits to people at the very beginning of COVID, which didn't fully make sense.
Two was customer acquisition on the direct consumer side is incredible and especially if you're in a crowded space, it's super expensive. So you're paying Facebook, Instagram, Google, et cetera, to acquire these customers digitally, and oftentimes cutting into your already slim margins. And ultimately the way we saw it was like, this is never going to be a winning business.
It costs us about $150 to acquire a customer for $150 tests. And the problem was too, is that. They weren't sticky just because they bought Ash tests, you know, in January when they wanted to retest in March, they were just going for the next best, cheapest, I should say, option and our competitors had raised hundreds of millions of dollars to our 150 K at the time.
And they were running and, you know, in our view kind of loss leaders just to acquire these customers and. You know, propelled by kind of all this venture money. And we're like, this is just not going to work, but I think just in the transition to the B2B side, we realized there was an opportunity in the traditional healthcare space in that COVID propelled all of these healthcare providers to adopt telehealth and these traditional healthcare providers and even new, new kind of startups, getting into a space to not have the expertise, the funding, the time, the resources to build out a remote diagnostic testing platform or program. And we pressure tested that more or less for a month.
And in that first month we sold four pilots. And so we were like, oh my goodness, we are onto something. I mean, let's pivot, you know, it's a no brainer at this point.
Joseph De Los Santos: That's awesome, thanks. Thanks for sharing. Could you talk more about, you know, from those pilots, how kind of continue to build things out, build out partnerships across the board and how that's looked like from that time?
David Stein: Yeah, absolutely. So I should say all of the pilots with the exception of one that we've done, we're paid pilots and mostly because we didn't have the funding to. Pay for testing, you know, and to run these pilots, like they had to be paid pilots. We weren't getting paid a ton of money. There weren't huge margins on those initial pilots and stuff, but they were paid pilots, so converting them to larger programs and more expensive kinds of testing and services for these different partners.
Wasn't as hard as one might imagine just because they were already paying. So it was a little bit easier that way. I would say generally though, the way we've approached partnerships and I kind of, our secret sauce from the get-go has been to sell sexual health work on specifically STI testing and prep testing.
And you know, we can run over 120 different types of tests. Only about 12 of them relate to sexual health. But what happened was, is that we just realized the sexual health use case was a really easy one for every single stakeholder to wrap their head around. So, you know, patients don't want to talk with their clinicians about their sexual health.
It's taboo. It's scary. It's stigmatized clinicians definitely know when to talk to their patients about their sexual health. And so everyone's like onboard, but then at the same time, you know, when you go to an average, primary care offering or a telemedicine company or a university or a public health department, some of the top line items that they're dealing with everyday day in day out is sexual health.
So even though it is stigmatized, even though, you know, all that kind of stuff. Like the combination of COVID the combination of us being in the right place at the right time with the infrastructure and the relationships and the testing and having the sexual health kind of sweet spot, I think is what got us our start.
Joseph De Los Santos: Awesome. I think on that point, it'd be good to note that. By the time this podcast runs, it'll be past national LGBT Health Awareness Week. Can you talk more about that and what it means and where we are in the journey?
David Stein: Yeah, absolutely. You know, I think we started Ash. To make sexual health more inclusive for specifically the LGBT community.
And so, you know, this week and generally just like the effort to make healthcare more inclusive and more accessible is something that's very personal for all of us. And I'd say everything that has joined our team since, and we're at about 20 people to date, similarly have had pain points in accessing healthcare.
And in a lot of ways because of their identity. And it doesn't necessarily mean it's always been because they're LGBTQ+ or somewhere in that rainbow. But I think what we fail to forget or what the average person fails to forget is that there's an extra layer or impetus being able to seek or access health care, any services related, being someone who is queer and LGBTQ plus.
So just in like my experience in getting an STI test when I was living in DC, right out of undergrad. I don't know, 7, 8, 9, 10 years ago, however long it's been. I remember the doctor asked me, you know, and it's part of their questionnaire, but I didn't know this at the time. Do you sleep with men, women or both?
And I was like... excuse me? And I was super closeted and you know, all that kind of stuff. And I was like, this is so uncomfortable. And then after that, they asked me about… and at the time I didn't even know what PREP was. For those listening, it's the once daily pill from HIV and it's 99.9% effective if you take it every day to prevent contracting HIV and I remember going home and looking it up and being so flabbergasted and honestly offended. And I was like, I don't, how did they know? And I don't want to go back and to be honest to you, for me, it's actually pretty easy. I'm white, I'm, cis-gendered, I'm gay, whatever, but for other people in this community, be it, you know, people of color or the trans community, et cetera, it's a hundred X harder and people don't want to even call you by the correct pronoun and don't, don't acknowledge or accept your ability to, you know, decide that for yourself.
And so. I think it's an important way to just shine light on there's so much left to do in this space, but I think one thing that's just cool about Ash and what we're doing is by making access to at-home testing and the ability to do it from the comfort of your home or from a space where you are comfortable and able to, you know, seek out those services by nature, we're making it more inclusive and accessible for everyone and I think outside of like LGBTQ+ communities, if you just think about your average hourly wage worker, you know, who. It's like, okay, great. My doctor put in an order for Quest (Diagnostics) or LabCorp, a collection site whose hours are nine to five. And if I take off those hours, I'm not getting paid and I'm not getting tested and I'm not getting the care I need.
And so I just think it's, you know, bringing health care into the home or wherever the home is and virtualizing it and making it more accessible in that way is such an important cause for our LGBTQ+ community. But even beyond that.
Nakin Bhandari: So, can you talk a little bit about some of the partners that you've worked with, if, if you're allowed to and how have some of those partnerships changed your thoughts on raising capital?
I know you described some of your competitors were lost leaders and, you know, racking up millions and you guys started with just the Cornell Tech money. So how has that kind of changed your thought process and profitability?
David Stein: Yeah. So I think I have to be careful what I say here, but. I think a lot of what we do at Ash is focused on healthcare providers that ultimately are their end payer.
So the person paying for these services are insurance companies. And truthfully that's where 99% of Americans get their health care and, and get the services associated with anything health. And so related to that, when you look at those like traditional. Healthcare organizations. Entrance into the space that are maybe virtual first tele-health, et cetera.
But they're, they're billing insurance, ultimately for all of this, the customer acquisition game is a lot different, right? So your traditional healthcare providers, when we're going to work with academic medical systems, they have huge patient populations that they already serve. They've been serving for years, et cetera.
And they're now trying to virtualize and engage and all that kind of stuff, but they don't have the effort and the problem of having to acquire someone on Instagram, Google, Facebook. And I think when you add in the layer of insurance, right? So, you know, maybe 1% of Americans maybe can afford out-of-pocket healthcare payments, like to just perceive general health care, but the reason, you know, we kind of realized that it wasn't a winning game. Patients aren't sticky because they are going to go for wherever the next best deal is. If all the products are the same. Now, if you're billing insurance and I'm using a tele-health offering, I'm not going to go to the next best option, it's covered.
It's easy, it's convenient. And so, those two things combined, I think just change the nature of the partners. We're working with the markets we're going after. And ultimately, also obviously the accessibility, but as a result, right? It's a more sustainable model. I honestly reject the idea that some of these other competitors have publicly put out there and raise money around to say, let's not work within the existing system. Let's create a new way for health insurance. And I think that's such a privileged way to look at it. I think we have to work within the existing system and that 99% of Americans again, receive healthcare within the existing system. And yeah, I just, I think that's the way to do it.
Nakin Bhandari: So what does the future look like for Ash?
I know you described, looking at specific markets and certain partners. Are there markets that you're hoping to expand to that you're not in yet? Are there other sorts of testing that you're hoping to add along to the current offerings. What does the future look like?
David Stein: So I think, you know, we want to continue to be the experts in the remote Dyke diagnostic testing space, full stop, and truthfully, whether people know about us or not, once they do, they realize we are.
And, and the reason for that is because most other people in this space on the B2B kind of testing infrastructure side of the house have only done COVID testing. And that's what kind of popularized all of this. We have not touched COVID testing, we've done everything and so I think just in relation to the future of Ash, you want to keep being kind of a leader in remote diagnostic testing, expand into spaces and places that you know, allow for Self collected samples to be done.
So, you know, we are going after areas that are exclusively clinically necessary. It's how I like to refer to it. So the idea of being there again is that these areas are, and the tests that we're, you know, providing kind of. Remote diagnostic testing for our set that are always going to be insurance reimbursable.
And because they are completely clinically necessary to provide followup treatment or to prescribe a medication or whatever it may be. And so we want to continue to expand into those further areas. Those, those include chronic kidney disease, heart disease, hypertension, diabetes, et cetera, all of the top killers in the U S but the idea being is that, you know, these chronic care areas are our spaces and places where patients have to go to labs, diagnostic kind of facilities regularly to get diagnostics, run for their clinicians, to be able to provide care. And we can just make it easier, more accessible and make those patients' lives easier and allow them to be more adherent to what their clinician is asking them to do. And I feel you have better long-term health outcomes. I think beyond that, right? Just in terms of the diagnostic space and the clinical areas that we'd like to go after is we've really our, you know, our dream is to become the powerhouse behind all things at home healthcare.
So expand outside of diagnostics to other wraparound technology services that bring healthcare into the home. Think, think about this. You know, we have such a unique touch point by providing testing kits to people's doorsteps people are whether they know it or not are into because we're white labeled or interacting with our kits, our software, our products in a very personal way in their homes and the ability to expand to other types of care that you know, we can include in the kit and a physical kit, that's already being sent out to the house, be it through devices, glucose monitors, blood pressure, whatever it may be. There's a lot of opportunity to expand there and we want to continue to kind of be the powerhouse behind enabling all of that for the providers, let the providers do what they do best, which is the provision of care and experts in their clinical areas. But let us do what we do best, which is the operations logistics on the software behind powering it all.
Nakin Bhandari: Awesome. Yeah, I think that's a really important point that people tend to forget about moving forward healthcare. A lot of it is going to be not just digital, but remote monitoring in the patient home.
So patients don't have to leave and being able to enable that technology will be super important.
Joseph De Los Santos: Yeah. I'm curious how the conversation has changed. Like from when you started, you know, this, this project, this startup to, to now around, you know, having more inclusive care?
David Stein: You know, that's a great question. I think it's, Hmm. It's become a… it's hard for me to say really…and I'll tell you why. I think it's definitely become a box that like every single provider organization or partner in this health care delivery system in America, has to check that box and say, we're trying to be more equitable and inclusive.
Create more avenues of excess stability for these different types of care for all types of community members and blah, blah, blah, blah, blah. And it opens up doors for us. For sure. I think when push comes to shove, I don't know if it really carries through until people see dollars. I think recently, especially like in, you know, the majority of the business we still do today to sexual health specific to the LGBT community.
And people realize that it is actually a place where a lot of money is spent and so they get excited about it. But until they realize that they don't really care, I, you know, I think like the black life lives matter movement during COVID kind of brought attention to so many. Inequities in society are specifically around healthcare.
But to be honest with you, not to say that, like the show that, you know, these different companies put on to say they're doing health equity kind of work is not good. It's just, I haven't seen it actually make people make business decisions based on it, or decide to turn on remote testing programs.
Cause they're going to access patients that wouldn't be able to access us. Otherwise, I wish that was the case. Hopefully we're going towards that, but I haven't seen it in practice to be honest.
Joseph De Los Santos: No, that's definitely something that in conversations we've had in previous podcasts, we've kind of elaborated and heard from our guests too.
It's like, there's a lot of talk, but we're waiting for the action. So hopefully, you know, coming kind of two years post or Floyd, and a lot of these things we could see kind of the fruit of those efforts.
Nakin Bhandari: I was going to ask, taking what you've learned these last couple of years, working on Ash from the inception of an idea, going to Cornell Tech and building out the actual company.
What advice would you have to an early careerist? Someone who has an idea maybe for a startup doesn't know what to do or is maybe just interested in healthcare. What kind of advice would you give that person?
David Stein: Yeah, I wish it was like super novel and different, but I think, you know, the most important thing is just doing it in a space and making sure it's a problem that you really, really care about because. Even as we have seen success, as of late, it's a rollercoaster, it's a rollercoaster ride constantly and there's apps and there's downs. And, and if you're not, if you're not fully in it and you don't really see like the light at the end of the tunnel, which for us is like, we are making all this impact and we can measure it and we can see it and it's worth it.
But if you can't see it and you don't care about the space and after you don't care about the problem enough, I don't think we would still be doing this, you know, two and a half years later. It's just really, really hard. And I think, I think the last thing related to that, which is. Also probably not novel advice.
It's just important to find a really good team to do it with. You absolutely cannot do it alone and to find people that are smarter than you and better than you and every single way to help kind of build the dream.
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