Hims&Hers D2C Growth
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In JCNews, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read.
Let’s talk about this together on LinkedIn or on Twitter. Enjoy!
💡The weekly must-read
Each week, I share with you a must-read.
👉Bold Strategies That Propelled Hims & Hers Into Unicorn Status (Youtube)
To test a business idea: traditionally we will start with something like 50 thousand dollars to get a little bit of signal and then it might expand up into a hundred or two hundred thousand. But you're talking about relatively small seed checks necessary for one or two individuals to build prototypes, get data, call people, try to sell things, try to understand product market fit, positioning price points offers...
So for example with Hims and Hers, the crazy part about that company was we used about fifty thousand dollars to get that company started. With fifty thousand we built a prototype over the weekend that would let men download a mobile app and answer questions about their health and then sign up for a package relating to different types of medical conditions that they were worried about.
That prototype was called clubroom at the time; that's because in my gym there was an old deodorant bottle called clubroom and I said okay that seems like a good test name.
So we literally got this thing up and running two or three people on a weekend. In the first five weeks of that prototype, we did a million in sales signing up for the offer and again nothing was built yet; it was signing up for a waitlist they put in a credit card and then I would manually email them and say “hey you've been added to the list”.
I love the way they test aggressively with “little money”, and they email manually people for example. I do think it should really inform our niche strategy.
Proprietary marketing strategy which is that you don't want to be subject to the whims of action based marketing platforms like Facebook or Instagram.
Advertising in urinals and stadiums is a thing a lot of people haven't done: are you rolling up these stadiums or is there a third party that you were working with?
The way we think about this is we want to create inventory not buy inventory: so our entire marketing team and our entire marketing strategy goes into every room they walk, into in every store and every gym and every locker room and every restaurant, every bar and their eyes are looking around for literally things we could write, places we could have a relationship with.
The criteria is what you want to show where: maybe erectile dysfunction is something you want to talk about when you're in a urinal, but hair loss is something you want to talk about when you're in the gym locker room and you're looking in the mirror and you're realizing that you know you're thinning...
The reason we think about this is because for better or worse, the auction-based marketing channels are effective and they're efficient. For that reason companies become dependent on them and in building companies in the last decade at aAtomic I've seen a lot of companies that become too dependent on; what happened is the saturation rates as you want to continue to grow and pump more dollars into those channels, the costs go up the curves and you get worse the retention of the customer gets worse and all of a sudden you're really stuck in this limbo.
How they think about auction based online marketing for Hims and Hers.
We want to be owning proprietary relationships with other partners and so there is no third-party agency. For buying a urinal, you have to go to the SF Giants and say “hey, I love the walls and the urinals and I don't think you're making any money off of it, what if we paid you X?”.
I love this strategy of owning the relationship, deciding ourselves the creative ideas to build new channels without being dependent on auction based.
🏯Building a company
In addition to selected articles, I share one of Alan's leadership principles each week - the same one I share internally and with our investors every Wednesday.
👉 Alaners make provisional decisions guided by our intuition and 70% of the data, fail and iterate (Healthy Business)
At Alan we want to be taking risks and building a culture of resilience and antifragility instead of heavier processes. When we can afford it (meaning it’s a reversible decision), we want to move forward and if we fail, we iterate.
No need to get it right the first time! What matters is that we maintain a bias for action, we learn, we iterate. Being resilient reduces the mental load of making mistakes.
As an example, we may have too many people in decision meetings for hiring. It may be better and more smartly frugal for the company to have less people, and if someone out of the meeting finds the decision obviously wrong, they call an appeal to the decision (that can then be confirmed or infirmed).
We get a more resilient and less costly process as a result.
👉How to show progress in a project (basecamp)
Estimates don’t show uncertainty
Work like a hill with unknown and known
The moments when somebody is stuck or going in circles are where the biggest risks and opportunities lie. If we catch those moments early, we can address them with help from someone senior or by reworking the concept.
Effective teams sequence their problem solving in the same way. They choose the most important problems first with the most unknowns, get them to the top of the hill, and leave the things that are the most routine or least worrisome for last.
As the end of the cycle approaches, teams should have finished the important things and left a variety of “nice to haves” and “maybes” lingering around.
🗞In the news
📱Technologies
👉 Roblox going public (Stratechery)
An average of 36.2 million people from around the world come to Roblox every day to connect with friends.
Together they play, learn, communicate, explore, and expand their friendships, all in 3D digital worlds that are entirely user-generated, built by our community of nearly 7 million active developers. We call this emerging category.
👉 The tiny tokens challenging platform power (Platformer)
New marketplaces for NFTs are opening up all the time. (Meet Mirror, Zora, Nifty Gateway, and Foundation.) The technology opens up possibilities that seem strange today, but we may taken for granted soon.
👉 Clubhouse’s Inevitability (Stratechery, Stratechery)
I love this notion of “only on the internet feature”:
Clubhouse centralizes creation and consumption into a tight feedback loop. In fact, conversation consumers can, by raising their hand and being recognized by the moderator, become creators in a matter of seconds.
This capability is enabled by the “only on the Internet” feature that makes Clubhouse transformational: the fact that it is live. In many mediums this feature would be fatal: one isn’t always free to watch a live video, and believe me, it is not very exciting to watch me type. However, the fact that audio can be consumed while you are doing something else allows the immediacy and vibrancy of live conversation to shine.
How they access contacts and what to do:
That is also why it is so important that Clubhouse incentivizes its users to import their contacts: the startup is bootstrapping a social network off of your phone’s address book.
I get the argument around banning contact exports; unsurprisingly, there are calls that Apple do exactly that in the wake of Clubhouse’s rise (never mind the fact that contacts have been accessible — and thus have been accessed! — in this way for years).
👉 Brad Pitt and Clubhouse (Platformer)
No, that was not Brad Pitt hosting a two-hour conversation on Clubhouse. Time for Clubhouse to get a verification strategy. I keep meaning to write this in a column, but the best verification strategy right now is actually Tinder’s!
🏥 Healthcare
👉 Viewpoint: Lessons from Operation Warp Speed can help overcome EU vaccines crisis (Science Business)
Despite European Medicines Agency approval of three COVID-19 vaccines and the hundreds of millions of doses procured through advance purchase agreements negotiated by the European Commission, member states are facing a shortage of vaccine supplies and falling behind (https://ourworldindata.org/covid- vaccinations) Israel, the UK and the US in terms of vaccines coverage.
At this stage of the game, demand is bound to be outstripping demand, but in Europe that problem has been compounded by issues at manufacturing plants of both the Pfizer/BioNTech and AstraZeneca vaccines.
Although vaccine research by Oxford University (where the AstraZeneca vaccine originated), BioNTech and Johnson & Johnson has been supported by the EU, clinical trials and manufacturing of COVID-19 vaccines have not.
Building of vaccine manufacturing facilities that are on standby to be mobilised in response to emerging infectious threats is probably the most important element, given – as the example of the AstraZeneca vaccine illustrates - rapid vaccine production at scale is a major challenge.
👉 Cigna's Evernorth to acquire telehealth company MDLive (Fierce Healthcare)
Cigna will acquire telehealth platform MDLive
Cigna has been a longtime partner of and investor in MDLive and will fold it into its Evernorth subsidiary, which houses its health services business. The deal is expected to close in the second quarter of 2021, pending regulatory approvals.
💚 Alan
👉 [French] #Tech4Values2021 (FranceDigitale) Alan is proud to contribute to "#Tech4Values 2021 - The Tech Champions Best Practices Guide" to grow the ecosystem's positive track record in sustainability and responsibility.
🙍 Featured in this newsletter
Andrew Dudum 🇺🇸 Founder & CEO, hims & hers | Twitter | LinkedIn
Ben Thompson 🇺🇸 Author/Founder, Stratechery | Twitter | LinkedIn
Casey Newton 🇺🇸 Founder, Platformer News | Twitter | LinkedIn
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