How Honeydew is Reinventing Telehealth for Skincare

It really felt like the universe sent me on this mission. I had severe cystic acne for almost 10 years and experienced both how debilitating it was to struggle with it and and how much it occupied my mind space, but also encountered pretty much every access issue that you can think of trying to get it treated. Acquisition was really expensive. And then we were like, let's try one other state. We added Florida and our business doubled overnight. And I'm like, hm, there's something interesting here. And we shifted strategies to get as many states as possible as quickly as possible. And it's really been transformational for the business. We found really good success and ROI working with like smaller influencers that just have real authentic stories to tell. Having them post that, get the organic traction from that, and then boost those with Spark Ads or like use clips of that as part of content that we

make for Meta and for Tik Tok. Welcome to Subversive, a podcast dedicated to sharing stories from the best consumer subscription apps in the world. We'll bring you lessons for how to grow your consumer subscription business, including insights and inflection points that led to exponential growth from leaders at category defining companies and innovative startups. Let's get into the show. My guest today is David Futuran, co-founder and CEO of an online skin health platform called Honeydew that helps people struggling with acne and other skin conditions get access to effective skin treatments and expert guidance from licensed dermatologists. In this episode, I talked to David about how his personal decadel long struggle with acne inspired him to start Honeydew, about how the company is democratizing access to Accutane and other life-changing skin treatments, and about how he expects AI to change the world of online tellahalth

in the coming years. All right, welcome David to the Subversive podcast. I'm super excited to have you on today to talk about Honeydew, which is taking teleaalth to the skin care and acne space. and um would love to start by just hearing a little bit more about your personal journey. Uh I know you've personally gone through your own ups and downs with acne and other skincare issues over the years. So let's start there and then we'll get to the origin story behind Honey.

>> Sure. So um I grew up in New York. Uh my parents were Soviet Jewish immigrants who uh left searching for a better life. They became doctors in America. And so I spent my whole life around healthcare. I spent my summers working in their offices and have always been very conscious of of the opportunity I have uh in life as a result of their decision. Making sure not to take that for granted and my parents always making sure to remind me not to take that for granted. Um and uh I lost my father pretty early on when I was 16 and it sent me on this journey of of much earlier in my life than I think most people get to. Like thinking about very consciously like what's important to me, how do I want to spend my time?

um and this opportunity that I have spent a lot of time deeply reflecting about this at 16 years old. My sisters like would literally like check in and ask me uh what I'm up to and I would just say I'm thinking and um and in the end it just kept coming back to me uh how much I love helping people even on an individual level um but that I know I could do this on a massive scale and that felt like a great fulfilling challenge. Um, so that kind of became my north star. Uh, didn't really know what that would look like. I did have a sense it'd be in healthcare because that's kind of what I'd been around all my life and have been very interested in um in that problem space and and just masochistic enough to want to take it on. And I also think that's where you can have a really big impact in people's life. But I didn't know that I would be starting Honeydew or or in skincare. So So happy to chat about how we got there.

>> Yeah. Yeah. Well, I love that first part of the story, which is you have these two parents who are first generation immigrants and so you felt the need to live up to their example and to make the most of the opportunities they afforded you and they were both doctors and so you spent a lot of time in and around the healthcare space, but then you've

also gone on record about your own struggles, personal struggles with acne and the impact that had on you as a teenager and a young adult. Um, so how did that factor into the Honey View story? >> Yeah. um pretty much is the whole story cuz I never expected to start a dermatology or skincare business and and know as much as I do about skincare as I do today. >> Mhm. >> It really felt like the universe kind of sent me on this mission. Um, I had severe cystic acne for almost 10 years and experienced both how debilitating it was uh to struggle with it and and how much it occupied my mind space uh but also encountered pretty much every access issue that you can think of trying to get it treated which felt really frustrating because I was in New York which has more derms than almost anywhere else in the country and had grown up in a family of physicians. So, you know, if I could can't get access to

derm care, like I just couldn't imagine what the rest of the world was going through and um really lived this problem, but still probably wouldn't have necessarily thought of starting this business had it not been for my co-founder um who if you ask him, he actually thinks he pitched me on this business, which kind of just like goes to show how meant to be it was. But I started this company with a dermatologist I was seeing in person who treated and cleared my skin. uh which was totally unplanned for, but we just like got to talking in an appointment built off of each other's energy and like have not looked back and have been building together now for three and a half years. Um and and so that was a huge part of uh where I was like, "All right, I've just got like one of the most nationally respected dermatologists in the world um to do this with me and this feels like really solvable because

it's it's it's not a science problem. It's a it's a logistics and access problem." And so uh yeah, we just and co happened so everybody started using tele medicine. And so we're like, "Yeah, there there's something real here." >> Yeah. I mean, every once in a while I've had those moments, too, in my life where it just feels like the universe is trying to tell you something. And it sounds like for you, there were there were several steps along the way that brought you to Honeydew. And so, maybe last thing before we get into the journey of Honeydew as a company.

>> Tell me a little bit more about your co-founder. What's your co-founder's name? What's his background? I know he's a reputable dermatologist. And then what role does he play in the company's day-to-day operations? >> Yeah. Uh he is a Princeton Colombia trained board-certified dermatologist. Um he's got a textbook that's taught in every dermatology residency in the country. I like to joke that he's like a Z-list celebrity. Uh when we go to like these derm conferences, the residents are all like running up to take selfies with him. Um and he's just a great person, like amazing energy, very entrepreneurial and and very clinically, you know, brilliant, great at at at diagnosing and treating. Um, and that's super important for me because I never really wanted to start a skincare company, but I did want to solve this problem of acne. And so my goal wasn't like what's the least lowest friction

way I can start a skincare company. It's like what's the best way I can actually solve acne. And like having deep clinical expertise at the core is is so essential. Like this isn't like a medical adviser who's like there and face and name only. This is somebody who's like a 50-50 co-founder with me who's like part of our team day in and day out. It's been great. like having him to to to bounce our ideas off of and calibrate one another like what could be a good business opportunity and like what's clinically valid and and and safer and better than the standard of care and balancing those things. Um, and his day-to-day really it's like it's it's a mix of building up our clinical protocols and guidelines, training our medical team and screening them when we hire them, supervising them day-to-day, managing like escalations that come up for more complicated cases. Um, and then also identifying new treatment

opportunities. Uh there there's actually like quite a number of exciting new verticals that uh in dermatology that we're starting to explore that originated from his brain space. >> Yeah. Well, and this is something I see a lot with health care startups in particular and it makes sense, right? The stakes are very high even in dermatology. And so I know like function health for example has a connection to Peter Atia. You sort of need a medical expert or a chief medical officer who understands the ins and outs of how the system works and how to provide reliable care. And then you need the business side. And given your experience at Wharton and at Penn and and studying business specifically as it applies to healthcare, it makes sense. You guys you guys are a good team. So let's jump into this origin story behind Honeydew. And you've already talked a little bit about how you were personally struggling with

acne. You lived in New York where there are more dermatologists than any other state in the country. You couldn't even get access to Dr. Spitz yourself, your co-founder.

And so you ultimately sit down and decide you're going to start this company together. I guess what made you decide you all could succeed in a space where multiple other companies have tried but ultimately failed to really achieve any meaningful scale? >> First of all, I don't know if I'd say that that that companies have failed to achieve meaningful scale. I think there's actually quite a few players in um the more like commoditized like parts of Telerm that exist today that are doing you know well into nine figures in revenue. Um and uh and so I I think there's a number of companies that we can point to as like doing pretty well at scale. But the reason that we started Honeydew even when these other companies existed and thought that there's a high chance of success is uh really started from just me as a patient. Um and these companies were not an option for me. Like they didn't offer what I

actually needed. And so that's kind of what started the whole And then as as as I dug into like what's actually out there in the market, it just kind of got more validated that like a lot of the tellah health space more broadly but in particular in dermatology like companies that got really big have been really focused on these simple commoditized treatments. Like in the case of dermatology it's a topical cream. In the case of some other players it might be like ED pills or hair loss pills. Things that are like super commoditized generic like you could buy them for $5. They put a brand on them sell them for $50 a month and make money on the recurring purchase. But that might not be in dermatology like what I needed like that custom cream was not going to help me with the level of acne that I had. I needed like fully full like full strength FDA topicals, oral medication ultimately like am on Accutane now and

and have been on it and like I'm so grateful that I went on it. Um, but like you can't get that from any of the the players that were in the market. And um, and so that's where I really felt like we have an opportunity here because we're getting people we're focused on getting people the treatments that actually work even though they're way harder to prescribe. And we'll we can get into why. Um, versus like what makes a really good business model which is like, oh, I could just make like recurring revenue on this really simple product that I I brand and there's no operational like lift to do there.

>> So let's get into the why. And I know this relates to your core product thesis and maybe how it was differentiated from some of these other companies that had previously existed in Teladerm. So you in many ways you started with the hardest part of the problem, right? You started with the patients who really had acute acne or um skin care needs that weren't easily addressed by stuff that they could access off the shelf or or from other services. uh what what do you think were the pros and cons of that approach and how have you been a able to overcome some of the challenges specifically with just getting past some of the regulatory hurdles with Accutane in particular as a treatment for Aggie?

>> The cons are obviously just like operational complexity but I think the pros greatly outweigh the cons and that's why we're building in this model. Um mo more importantly than anything like we're just getting people better like we're actually getting them treatment that works and that makes all the difference um in customer satisfaction in our reflects in our business growth and outcomes, but it also just like from my personal mission of why I started this company, like this feels like the right thing to be doing. Um the the reason that like some of these treatments are so hard, like let's talk about Accutane for a second. It's a um for context, uh for listeners who might not know, it's an acne medication that's just like completely life-changing. Like when nothing else works, Accutane works.

It's it's really a godsend. Um the the problem is it's almost impossible to get because as hard as it is to get into a dermatologist's office with the 3 to 6 month weight that you'll have, it's that much harder to find one who will offer Accutane. And there's really two reasons for that. The first is that it's a regulated medication through what's called an FDA REM program, which exists to mitigate risk. In this case, the risk is that you can't take the medication during pregnancy because it can cause uh it can endanger the baby um if taken during a pregnancy.

>> And the government has taken a really strict approach to preventing that from happening. So there's like this government registry program essentially where every person who comes in contact with this medication, every doctor, every patient and every pharmacist has to be registered on this government website and every single month for every single patient they have to complete tasks on this government website that are time-sensitive. There are different tasks and and rules about the tasks for different types of patients and where they are in their treatment course. It's super convoluted and confusing. Nobody's really been able to manage this at scale. And nobody wants to deal with it.

Not the doctors, nor the patients who have to come in every 30 days to the doctor's office because you can only issue a 30-day supply at a time. Honeydew's obviously played a big role in simplifying that by taking a lot of that online and also building a lot of workflow tools to make complying with these regulations at scale feasible. And then the second thing is there's really a lot of misconception around Accutane.

Like historically, it's been considered this last resort medication. Um, and that derives from rumors that we had 20 to 40 years ago when there was concerns about potential side effects and even lawsuits about these side effects that, you know, by the way, Ro lost um, back then. They've since been overturned. But we now have 40 years of research on this medication. It's not a new medicine. Like we we know very clearly what side effects it has and if and how to manage those side effects. Uh, and also what side effects it doesn't have. And a lot of side effects that people used to think it had has been have been debunked. In particular, like one of the most interesting things that we've learned in the last 40 years is that it's uh the medication is actually just as effective at low doses as it is at higher doses.

>> And so you can actually give people a much better experience on this medication and reach the same results um with a lower dose course of therapy. And uh and so we have, you know, we we just have a different perspective at Honeydew. Like you don't need to try and fail 15 different things and go through this 10-year journey like I did to get better because you're either a candidate for regular dose Accutane based on the severity of your acne or you're a candidate for lowd dose Accutane uh if you don't if you have very stubborn acne and you don't want to try topicals or orals and and that's okay. Um as long as you're aware of everything that goes into it. And so, um, that's why historically it's been so hard, but we and we we've really been doing a lot to like change the prescribing pattern there.

>> Yeah. Well, and it's so funny because I think with many medications, you hear the opposite, which is doctors are just handing these medications out like candy. Not because they're malicious about it, but the way our medical system is structured, they're incentivized to do so in many ways. But in the case of Accutane, it's on the other end of that spectrum where for a variety of reasons, it sounded like one, it was just being prescribed at doses that were maybe higher than it needed to be prescribed, which was leading to unnecessary side effects. But then two, there were some misconceptions around how dangerous it actually was, so long as you're not pregnant. And so the government got involved and put up so much red tape that the cure was worse than the disease, right? Okay, they were they were protecting people for good reasons, but then the number of people who can get access to a potentially

life-changing treatment were suffering as a result. And I've had plenty of friends who've taken Accutane and have had similar results to yourself, right? It really changed their life. So, let's get into what I love about this episode is so many of the companies I talk to in consumer subscription, you know, they're digital only apps. They're selling great products and services, but they're pretty simple, pretty easy to replicate.

Honey is a service that is really, really hard to build. And what that means is getting it off the ground may be difficult, but if you can really get it to work, then there's real competitive advantages that you can build on over time. So, let's talk about some of the operational complexities you had to solve. And and first, let's just

start with breath, right? You started in uh I believe it was one state and then you've you announced last year you're in all 50 states nationally. What did that process look like and and what were the steps to get there? That was like one of the worst parts of starting this business and honestly something I was really naive about because I I thought like oh I'm an online company like we could serve the whole country and then I had to realize like actually having a national company is more like having 50 smaller companies in with all the different state laws that exist. Um and in particular with medical licensing where supply constrained like that there's not enough doctors and part of that is kind of like on purpose the medical boards are limiting the amount of licenses that they give out and so it's like it's pretty hard to get people licensed like there's all sorts of roadblocks. I remember when we were

trying to get my co-founder license in Texas, um, after like taking six months to review the application, they rejected it because they they wanted more information. They wanted a letter from the the dean of his medical school about why he took a gap year 30 years ago. Wow. Um, the dean is no longer with us, so we can secure this letter. >> So, it it was it was a process. Um, I'm proud to say my co-ounder is now at 51 state licensed derm. the the 51st state being like DC. Um >> and uh yeah, I mean it it really was just a lot of like um grit going after the state medical boards, following up, getting them the information. My co-founder got fingerprinted like a million times for for all the applications. Um and uh now we can finally do what we set out to do, which is like remove geographic barriers to care. Um and you could, you know, you could be in Wisconsin and see a dermatologist in in New York as long as

that dermatologist is licensed in Wisconsin. So I can guess but what are some of the implications of 50 states? I mean I I have to believe the whole is greater than the sum of its parts to a degree. What has it unlocked for you being nationwide? >> Hugely. Yeah. We actually started our initial strategy was like let's go state by state and really figure this out. And uh we were in New York for six full months just New York trying to do that.

Um and doing crazy things that I probably will never do again. Like we we rented a a booth in a mall and I went 9 to 6:00 p.m. every single day, 9:00 a.m. to 6:00 p.m. for a full month to the mall to like stand by a booth and see if I could like get people in the state to sign up. I think we got a total of zero signups the entire month. >> And I had like this huge poster of of me with like covered in acne saying like this was me trying to like catch attention. Total flop. Um, but it was really like acquisition was really expensive. And then we were like, let's try one other state. We added Florida and our business doubled overnight. And I'm like, hm, there's something interesting here. And we shift the strategies to get as many states as possible as quickly as possible. And it's really been transformational for the business.

>> Uh, to your point about like the sum of the whole is greater than the individual parts. um there's just more people to target with marketing and to reach and there's compounding effects of that because you give more data to the ad platforms to like find the right types of people and word of mouth compounds faster and it just like really sets things in motion. >> Yeah, that makes a lot of sense and we're going to talk about acquisition strategy in a little bit. Um but one

other question I want to ask on the product side is >> yeah, >> you know, you're a business that depends on human beings. There's both the dermatologist themselves as well as the care team around the dermatologist that supports your patients and you have physical products and so there's a lot of complexity relative to your typical consumer subscription app. Um what implications has that had on your ability to scale? Yeah, thank thankfully we have great partners to support on the physical product side of things and so um we we haven't had to take too much of like the operational burden of of managing that end of it on the human uh physical you know there's a human physical element to this too which is like the the supply of of medical providers that's really complicated. Um and and remember we're coming in inherently with like a supply constrained market. there's just simply not enough dermatologists in the country

and that gap is widening, not closing. >> Um, so a huge part of our ability to scale and do what we're doing is like better leveraging every individual dermatologist properly, empowering them with uh extenders like like derm nurse practitioners and derm physician assistants. Balancing that's really challenging because you have fluctuations dayto-day, but hiring is not a day-to-day decision. and it's a long-term decision. And so even though at a micro level we don't really feel the supply constraint because we have like a a long wait list of providers interested in working for Honeydew, there's still like onboarding training and and you know time that licensing time that goes into getting them up to up and running, but the consumer can't wait that long.

So like if you know if you don't have enough providers on staff and we've struggled with this like you can go very quickly from same day next day availability within a day you can go to you don't have appointments for a full month and then customers are unhappy you're losing revenue but you don't want to overcorrect for that because then you have providers that don't have enough case load and then they're unhappy you're going to turn you're going to lose them and you don't want to lose them they're hard to come by. So, um, that's a really complicated problem and and I think it'll be a challenge for us along every step of of our journey as we scale. But I'm proud to say that, uh, for the last eight weeks in a row, we have been able to offer same day next availability to over 90% of the country.

And, um, we've gotten much better at it thanks to like some some product work we did. We licensing work. We're getting a lot more people licensed a lot faster now. Um because that means instead of moving parts uh in all, you know, like instead of dealing with 50 different equations because they can only operate in one state, we can like just deal with one equation for the whole country. >> Oh, that's great. >> Yeah. And and we've gotten better at forecasting as well.

>> Yeah. Yeah, I mean on top of the human component and the physical product component, it really is a two-sided marketplace and especially in a category where the doctors are already supply constrained because of the licensing challenges that you talked about. It really is a complex dynamic to manage marketplace liquidity. Um so one other thing on product before we get to acquisition and growth strategy. um

partnerships have been really important to your growth and >> as I understand it, you're now the lowest cost provider in the nation for many of the medications that you sell. >> Yeah. >> What have what have some of these partnerships looked like and how have you been able to to get such compelling partnerships so early in the company's journey as a small startup? >> That's one of the benefits of having a niche focus and and why for every entrepreneur honestly I recommend always starting niche. Like obviously there needs to be a big TAM that you ultimately go after, but it's so much better to start niche and have focused acquisition, product, etc. strategy, but it also really benefited us here in terms of partnerships because >> it wasn't that hard for us to get strong market leverage because our competition is these traditional brick-andmortar derm offices that let's say in the case of Accutane, maybe they're seeing 50

Accutane patients a month. That's not hard to compete with in terms of like market share. So like for us across all 50 states to treat even a few thousand people a month on Accutane, we're already the largest player and have like negotiating power with potential partners to say like make us your exclusive online provider. >> There's no there's no opportunity cost there because there there's no one else for them to turn to and and no derm office is is competing with our volume.

No individual derm office. So um we got negotiating leverage pretty early on to to like set up these exclusive distribution deals. Um and so that really um has made a big difference because um there's a lot of issues getting patients medications covered by insurance. That's like part of the frustration. Like you could wait six months to see the dermatologist and then you go to CVS and they're like this tube of cream is $600 and you're like WTF?

It's it's so frustrating. And um as a result, over a third of prescriptions are never even picked up from the pharmacy that that get sent out to for derm conditions >> because the price tag ends up being so high that people can't afford it. You >> usually Yeah, usually the price tag is the reason for it. And so it's so nice for us to say if you can't get it to you for like $0 through insurance, we actually have a really amazing cash price that we can get it to you for. And um it's been gamechanging. Um, and and our prices are so good, like they're they're better by a pretty significant margin than even the prices you'd get from a good RX coupon. Um, and that's, yeah, thanks to these partnerships that we've been able to set up.

>> Well, and I imagine part of this, too, is a lot of your customers are teenagers, right? Certainly not all. You've got plenty of adult customers, but >> teenagers by and large don't have a lot of disposable income. And so, if their parents can afford this medication, great. But if not, then every every little bit that you can lower cost goes a long way. The other thing we learned, by the way, is like especi especially for college age students, not everybody really gets how insurance works. So like often we see like people think like, "Oh, mom and dad have insurance. It's free. Uh so why would I pay anything?"

But they don't really get that mom and dad gets a bill at the end of the month with like all the co-pays, deductibles, and uh it's actually not free. Healthcare insurance is so expensive. >> Oh yeah. Yeah. Well, and as a business owner myself, it's even worse if you own your own business and you're not employed. >> Uh somebody needs to solve that problem. and I'll have them on my podcast. Uh well, let's get to growth. So, we've talked about your personal journey and why solving this problem around acne and other skinare issues is was so important to you personally and we talked about how uh the product is a and service is a complex one and the operational challenges you needed to overcome to really get to the beginnings of escape velocity. Now, we'll talk about growth.

And so, to start with, very simple question. To what degree is Honeydew currently relying on paid versus organic acquisition channels to scale? >> We are still relying on on paid channels to to a fair extent. Uh but it's like probably a 7030 split right now. Um and our organic presence is really starting to grow actually. Um it's just not something that we've spent a lot of time heavily investing in. Like we were very conscious when we started the business that because of how operationally complex our business is that we need to invest in the product and technology behind it. we need to invest in the, you know, supply partnerships and operational back end um before we really distracted ourselves too much with marketing because that that that potential is not going away. And thankfully, there were like some really great uh channels that uh we can control spend through and we like gained efficiency pretty quickly through. Um

and they're continuing to scale really well. Um and honestly, I think like we're nowhere near tapping out the potential of these channels. Uh and you know there these are these channels the like channels like like Meta and like Google they reach so many people. I think like it's often underestimate like underappreciated how many people they actually reach. And I know it's like easy to be scared of pay channels because there's like a lot of graveyard you know there's a big graveyard of companies that that were too reliant on them and flop. But there's also a lot of companies that have really succeeded scaling on paid channels. Um >> well and I I would think you have two very specific advantages when it comes to paid. One is you are solving. It's the definition of a painkiller, right?

There's physical pain and emotional pain caused by acne. And so this isn't something where you're spending $50 to acquire a subscriber who then maybe turns after one month because they don't really need your product. >> That's right. >> And this and the second thing is I would imagine on Google in particular, there are a lot of search queries that you could pay for particular keywords that are highly relevant to targeting your your customer. And then on meta there are probably demographic variables that are correlated with your target patient.

So which particular channels have been most effective for you? You've already talked about meta and Google, but are there any others longer tail channels that have been surprisingly important for Honeydew? >> Yeah, and I mean by the way on meta Google like we were like exclusively Google for for quite a while and Google is still our largest channel today and scaling pretty well which people often like are surprised by because uh usually that answer is meta. Um, we only launched Meta like 6 months ago and it's scaling pretty well and and maybe it'll become our biggest channel down the line, but um, Google's actually like there's a big opportunity on Google for us for exactly the reason you said, which is like they're they're great keywords that are like really not competitive and uh, high search volumes for them. Um, other channels that have been interesting for us, one interesting one is Reddit. Honestly, like I spend a

lot of time actually like on the Accutane subreddit answering questions, uh, engaging with content. Um, and I've had a lot of fun on that and we've definitely gotten customers from that. Uh, we're doing some work with Tik Tok now that's kind of interesting. Again, derm is like such a visual thing like you can really see the impact of the medicine and it's usually uh highly engaged content particularly if you're talking about something controversial like Accutane. So, uh we're seeing some early success there and have some you know good lessons learned there too. Um and we're doing Tik Tok both on you know from the organic sense working with micro influencers but also from a paid perspective leveraging those videos that they create to then actually run ads.

Well, and it doesn't surprise me that you say you've done well on both Google and Reddit. I've found I don't have a huge amount of data on this, but anecdotally, I find that a lot of our clients that are successful on Google also end up being successful on Reddit because when you think about it with Google, it's a set of keywords that are sort of creating a center of gravity around which target customers coales. >> And then with Reddit, it's the same thing. It's just around forums or subreddits where people are congregating and talking about very specific problems. And so if you have a product that is highly specific to a particular use case and both of those channels tend to be pretty effective. Let's switch

gears and talk about Tik Tok and YouTube and these influencers cuz I imagine you have a lot of your audience is teenagers. We were talking about that earlier. So you have a largely Gen Z audience and you have a product that is serving a condition that is highly visual. And so I would imagine that Honeydew lends itself pretty well to video ads or UGC generated on video platforms. How has that performed for you? >> Yeah, like it's we're we're earlier in that space, but we've had some like pretty good ROI initially with our experiments. Um and and we're trying to figure out how we scale this now. Um but yeah, to to all the points that you mentioned, like it's going pretty well.

Like you don't have to have somebody with um a lot of followers. We we actually like engaged our the largest influencer we worked with had a million followers and um we on Tik Tok and we reached out to her uh and she re she responded actually like oh I'm actually a Honeydew customer. I'd love to work with you guys which was huge kind of just like exciting moment for me. >> Totally coincidentally this person was actually on Honeydew. Um but and and she did a great video, but it didn't perform any differently than videos with micro influencers that we work with that, you know, get paid $100, $200 for a video.

Um, >> and so, uh, we found really good success and ROI working with like smaller influencers that just have real authentic stories to tell, having them post that, get the organic traction from that, and then, you know, boost those with spark ads or like use clips of that as part of like content that we make um, for meta and for Tik Tok. Uh, we had pretty good success with that early on and now we're trying to think through the question of like how do we pick up the volume of that?

>> Yep. Well, and what you're saying there is something I've heard consistently across the board and something we've seen with our own clients, which is typically even if you have somebody who's perfect for your product, who has a huge following, so much of Tik Tok in particular is just a numbers game because of the way the algorithm works and how much of it is just serendipity and hitting the right message at the right time that strikes a nerve. And so what I'm seeing more and more companies do is aggregate portfolios of dozens or even hundreds of micro influencers.

Yeah. Pay them a hundred or $200 a pop or even pay them on a performance basis. So there's no flat fee at all. It's entirely performance driven. And then a lot of them are going to be duds. But as long as you get a few outliers, then that can end up making up for all the rest. And in the aggreate, it performs better than paying three or four influencers a ton of money to go try to >> Yep. >> sell your message. >> Exactly. one video hitting can make up for like a bunch of failed videos.

>> I'm curious, as long as we're on this topic, are there any particular tools that you all are using to scale UGC content and advertising? Whether that those be tools to identify the right content that's going to perform the best and or AI tools that just allow you to create more of this content at scale. We have definitely experimented with a bunch of things um including like generative content tools. Uh but usually for for nonhuman like ads that don't involve humans like we we're very conscious about using like real people in any of our visual and video ads. Um to stay true I mean because it is a healthcare service and we want to be like really true to like having real patients and like people who've really used the medicine talking about it. Um, so we've not unlocked like AI patients >> at the moment, but we've used tools to like help uh manage the the content and do the contracting work and and such

like we we use up Fluence right now. We're testing that tool as like a a creator engagement platform. Um, we're also doing just a lot of DMing and and just like, you know, yeah, nothing really as good as just like rolling up your sleeves. And uh, and my for you page, by the way, now just like does it for me. It's like all people on Accutane. So, um, just scrolling through and directly messaging them. >> Yeah, this again is pretty consistent with what I've heard elsewhere that there are more and more promising tools that are simplifying some of this process, whether it's identifying the right creators, identifying the right trends to create content around or even, you know, using VO3 to create entirely AI generated ads. But especially for a service like yours where so much of it comes down to trust and safety, I would imagine AI generated content is particularly tenuous because it could really undermine the trust that you're

trying to build with your patients. So we've talked about acquisition channels.

Let's talk about onboarding because especially with a hightouch product like this where the consequences are significant. I would imagine that just getting users from a channel like Meta or Tik Tok or Reddit or Google to your product is just the beginning. Then you have to convince them to actually connect with a doctor, invest in a care team, put down money for a subscription. What has the onboarding flow looked like and how is it iterated over time to make sure that you're connecting these patients to your value promise as quickly and effectively as possible?

Yeah. And by the way, it's different for different channels, too. Like somebody coming in from Google has a very different like uh like commitment to to buying and like uh willingness to go through a certain onboarding flow than somebody coming from Meta for example. And that was like a learning for us because we started exclusively on Google and we had the very bottom of funnel customers coming in and um it was a very different experience when we started advertising to Meta and like people were seeing ads who like weren't necessarily searching actively for what we're offering. And so >> there's that thing to that that's a consideration to have too. But we've like really just anchored to trying to provide value as fast as possible. And one thing that we've done in this regard that um I really don't know a single other company in our space uh that's done this and when I talk to other founders in like the tele health

industry they're like what uh is we don't ask for the credit card up front uh when we put in front of a doctor. Uh you can actually get on a video call with our doctors >> without ever putting in your credit card information for your initial visit. And that was a decision we made early on when we like, you know, didn't have any real traction as a decision to prioritize volume and data like learnings over um noise reduction. And we like really haven't just haven't changed that decision um since and it's been three and a half years. Um that may change over time uh cuz there there is noise that comes through like there's no shows and things to deal with as a result of of not requiring a credit card. But yeah, we we really as a company just anchored to like listen like this is a high consideration product. We'll get you in front of a doctor. You see if this is right for you and then you can make a decision or not

if you sign up and if you sign up we know you're going to be getting treated for quite some time. So like we'll make it up on the back end and that's okay because we know we can deliver that value. >> Some of the best consumer subscription products out there that I know of use what they call a reverse trial model which is essentially what you're describing, right? You get access to the premium version of the product without having to put a credit card or other payment method down up front. Now, in your case, it's a little different because there's still an intake flow and you're meeting a doctor and you're making sure it's a good fit, but the the through line is companies that are really confident in their core product and their value promise and their ability to convert and retain subscribers can do this and and trust that it's all going to work out on the back end. And I would imagine another

big advantage is much lower subscriber turn rates, much lower refund and dispute rates, all of which leads to a healthier long-term business model.

>> Um, a couple more questions before we get to our lightning round. So now that you all have the beginnings of real momentum, how do you expect your growth levers to change over the next few years as the company scales and you've already gotten through many operational hurdles, but what are what are some of the next ones that you expect to need to clear? I think that um aside from obviously just like winning more market shares uh and building you know to become the brand in the space that we're in which is the most important thing like the the way the the things that are are on the road map for us in terms of growth factors are first of all integrating the experience end to end we've really focused on the access and expertise part of the equation but then you still have to get your lab work done and and get your medication and there are friction points that that happen there actually a lot of friction points and integrating

that to all be under the Honeydew umbrella where we manage the whole checkout experience. It's a growth vector for us. It's a better patient experience for the customer. Um so that's one. Another one is um serving those customers deeper. So this is part of like transitioning them from hey you came for this specific skin issue and we're going to get it cleared to what's like our broader vision which is to be their skincare partner for life. So, now that we've cleared your acne with Accutane, what does your postacutane maintenance routine look like to prevent relapse and then work on other things you might be concerned about like your skin's longevity and and wrinkles or pigmentation or scarring you have after acne or or the the texture and coloration of it um and working on that with them. We're running some experiments on that now and and seeing some good earlier results. And then the third thing is um building

replicating this kind of experience and funnel. we we we have for acne with other condition types uh like eczema and psoriasis, hydronitis superiva, some others and we've already gotten some early market validation that we can acquire patients here. We we have hundreds of patients in each of these condition groups like collecting new cohort data for us. Um, but we've not built a product experience for them. And I think like in terms of your like this ties into your question of like operationally like what what's next and challenging for us. And I think figuring out pricing and packaging is going to be a core part of that because what we're learning is different users uh need different types of pricing. Um, even with an acne and Accutane patient is not the same as a patient on a custom topical. And an acne patient is definitely not the same as somebody like on an injectable biologic take once

every three months. And it doesn't make sense for someone taking a medication once every three months to be paying a monthly plan. So, um, we really need to get pricing and packaging right. And it sounds a lot easier than it is because there's so many edge cases considerations. People have multiple conditions that we're treating. And so, um, that's going to be a big focus for me in the next six months. >> Yeah. Well, that last point you made around expanding beyond acne and Accutane treatments into all these other skin conditions goes back to your original point, which is why it's so powerful to start in one niche, but then once you've really earned the respect of your target customer, that it unlocks all sorts of additional opportunities if you're in the right market. And I think some of the most valuable consumer subscription apps out there followed a similar trajectory. You've got Strava

that started in cycling and then expanded to running and now all these other outdoor activities. You've got Dolingo that spent over a decade exclusively on language learning, but now they're doing math. they're doing uh reading and writing, they're doing science, they're doing chess, right? And so if if if you're really good at one thing, then more often than not, it will lead to opportunities to expand into other things. But you got to you got to start somewhere. Um last question before

our lightning round. So, how do you think AI will factor into the service that you're building at? >> Yeah, we we'd be remiss if we didn't mention the word AI at least. >> I got to do it. I do it on almost every episode. People are probably getting tired of it, but everybody's talking about AI right now, so we got >> No, you have to. I mean, yeah, to me it's kind of like uh asking how you use AI is kind of like saying like how you use software. Like it's like you can't not really use it. Um for for us, there's three areas I see like it really playing a pivotal role. And the first is an empowering people. Like fundamentally, there's a huge gatekeeping problem. there's a very small supply of experts that have knowledge and it's really hard to get to those experts and they're really expensive and there's a gatekeeping problem and AI is really uh a huge opportunity to solve that gatekeeping problem and and part of our vision is to

really make it free for people to get clinically backed guidance um through interactions like an AI like clinically trained chatbot or like an AI face scanner where you get your skin scores and some product recommendations personalized to those skin scores and and then you can funnel to a consult with a dermatologist if and when it's relevant, but not in every single case. And so, um, that's one. Another one is diagnostic and clinical decision support. Uh, so this is on the back end.

Uh, and for something like acne, it's probably not that exciting because it's pretty easy to diagnose acne. But as you get into more specialized conditions, even parts of eczema and psoriasis, but there's also others that are even more complicated to diagnose in dermatology. Not every provider is made equal and that means the already small supply of of providers is actually even smaller because only a few of them are specialized and uh visual diagnostics that can provide like a reliable and accurate differential >> really solves that problem because you can now empower providers to do more and like maintain a certain level of quality. Um so that I'm really excited about. Our perspective on that is that we're not going to be the ones that build that tool. there's a lot of people trying to build that tool and and working on it successfully and I think that's going to be more or less kind of

commoditized and something we we plug into our service and not something we have to build from scratch. Um and then the third is operational unlocks and this is like in 2023 like a whole bunch of all the VCs were saying like health you know health tech enabled services like these are non-investable uh businesses and I didn't believe that then but I definitely think that this isn't true anymore now with the advent of AI. Uh there's just so many cool operational efficiencies you can gain using technologies. And I'll just give you one example which is um when patients send us trap messages, they don't uh the the care team doesn't know what the message is until they read it.

And so we don't know who it needs to go to, how urgent it is, but an LLM can read that message and properly route it to the right person at with the right urgency. Uh made very clear from the start and that allows us to offer a much better service. And those kinds of things on the margins like make all the difference in like what the customer experience is like and how scalable the business is. >> Yeah, I love that. Well, and I had another guest on the podcast a couple months ago uh from Superpower, which is creating a platform for basically holistic healthcare starting with labs and then kind of figuring out um you know more in-depth health problems to solve based off of your unique stats.

And so that's an instance where the bet is that over the long run AI can actually um improve the quality of healthcare diagnostics and care to the same level or better than a doctor. But I think in the short term some of the biggest opportunities are just around reducing cost and complexity. And so what I hear you saying is we talked earlier around how access to these medications is difficult both because you just can't get in front of a doctor or in some cases because it's so expensive. And so every bit of cost that you can strip out of the system means potential savings you can pass along to the customer which is really powerful in a in a market like this. Well, let's

jump to our lightning round. So I'll ask you a few rapid fire questions and we'll just keep the answers relatively short and fun here. And the first one is the same question I always ask at the beginning of our lightning round, which is what would you say the best part about working at Honeydew is and what's one thing you would change? >> Yeah, the best part is definitely the the patient reviews and stories that we hear. They're so inspiring and and motivating and it makes every tough day worth it. Um these are really emotional uh conditions that we're treating. Uh and then the the thing I change is uh the laws that we have to follow. There are so many roadblocks and they're very expensive to to deal with in healthcare to like drive innovation. And so a lot of laws I would change.

>> Yeah, I'm sure there are a lot of healthcare startups that would say the same thing. Um, what do you think is the biggest misconception most people have about Accutane? We talked a little bit about this earlier, but anything more you want to say on that? >> Yeah, ju just that the fact that it's a last resort that will destroy you is like a total misconception. It can be managed very safely and you can have a smoother course even at a lower dose and and save the years of suffering.

>> Yeah. Well, I think it's also one of these things where I mean even now, right, it's probably not that there's zero risk to taking Accutane. There's there's risk to taking almost any medication, but what people don't talk about enough are the consequences of acne going untreated and there's there's the physical pain and discomfort, but there's also the mental and emotional damage it can do to somebody over years and years. And so, at some point, you got to weigh the costs versus the benefits. And the benefits are very clear, >> huge. And there was actually a study um that came out evaluating things like psychiatric distress and that actually concluded it was a meta analysis of over a million patients and found that people who finished Accutane were statistically significantly less likely to commit suicide um than patients who did other forms of treatment or no treatment at all. Um so 100% and other medications

have side effects too like the standard of care for acne care is like chronic prescribing of antibiotics which totally destroys your gut and nobody talks about that either. So yeah. >> Yeah. Yeah. That's a great point. Okay, a few more here. What is the most inspiring story you've heard recently from a Honeydew patient? >> Um we we recently did a a grand rounds with all of our clinicians and a clinician presented this and I I really was moving, but it was a story about a 12-year-old boy who had such a bad breakout of acne that he literally left school and started getting homeschooled um because he was so embarrassed to to go to class. Um and his skin is looking so good now. Like I cannot like it's truly acne is truly a miracle drug. Like the the disparity between the before and after photos are incredible. And so yeah, just really moving to see progress in situations like that.

>> Yeah, I'm going to have to check in with you in a couple years and see how that story progresses because I can only imagine what an inflection point that is in a teenager's life. >> Um >> after acne, what's the next skin condition you're most excited for honeydew to tackle? >> I'm going to cop out and give you two, which is eczema and psoriasis. And the reason I say two is cuz like we have we don't have enough data to really like pick one just yet. We're we're doing experiments with both right now. Um and the motions are pretty similar for both.

Um but there's just for the first time ever, unlike Accutane, which has been in in the market for 40 years and just completely slept on, there's never been good treatments for eczema and psoriasis. It was just been like throw a topical steroid at it and like deal like deal with the symptoms and good luck. And now we have like really amazing treatments. There's a huge boom in drug innovation in these for these conditions. Uh, and it's the same problem. People just can't get them. So, uh, we I just feel like we're really well positioned to solve that problem for these more complex meds because we've done it with Accutane.

>> Yeah, it makes a ton of sense. And by starting with one of the hardest problems, it should just get a little bit easier from here. So, last question, I'll go with a variant on it. We talked already about how AI is impacting Honeydew today, primarily as it relates to lowering costs and removing unnecessary complexity. At what point do you think AI will start to be able to improve the quality of the care that you offer? specifically as it relates to like diagnosing the right treatment for a particular skin condition and what timeline do you think it's going to take to get there?

>> And my answer to this might surprise you, but I actually think this is happening today. Um, this isn't something that's tomorrow, 3 years, 5 years or 10 years from now. This is really happening today. It's really like the first time ever that healthcare is like not lagging behind in technology adoption. Um, and you see that through things like open evidence, doing like their, you know, medical test scoring and succeeding. Um, there's a ton of visual diagnostic tools in the case of dermatology that like have great accuracy with diagnosing, uh, medical conditions. Um, and so this is happening today. Um, and the impact is happening today. The like the adoption of that will grow over time, but the tools exist today and the adoption of those tools is already happening today.

>> That's really exciting to hear. Well, it's been such a pleasure having you on, David, and this this was a particularly heartwarming episode given the mission of your company and how many people's lives it's touching. Anything else you want to leave our audience with before we wrap up? >> I I I guess I just, you know, to reiterate like the um the importance of pricing market fit as much as product market fit. I I I mentioned that that's going to be a focus for us in the next six months, but I just don't think people talk about it enough. Everyone always talks about product market fit, but pricing market fit is so gamechanging if you get it right in a business. Um, and uh, shout out to like some work that we've done together working through some of the pricing and packaging. Um, really excited to get that stuff into production and testing it.

>> Well, you're certainly preaching the choir. I couldn't agree more. I think pricing is one of the most overlooked levers for a lot of startups. Um, but that's exciting to hear and and especially because the more efficient you guys can get on price, hopefully the the more you can pass along some of that efficiency to your to your customers over time. Thanks, David. This has been a real pleasure. Yeah, thanks