Episode #237: Ryan McQuaid, PlushCare, “If You Look At Virtual Visits Last Year, They’re Only 1-2% Of All Addressable Visits”
Guest: Ryan McQuaid is co-founder and CEO of PlushCare, a startup offering personalized, high quality healthcare from top U.S. medical doctors from the ease of a smartphone.
Date Recorded: 6/25/2020
To listen to Episode #237 on iTunes, click here
To listen to Episode #237 on Stitcher, click here
To listen to Episode #237 on Pocket Casts, click here
To listen to Episode #237 on Google Play, click here
To stream Episode #237, click here
Comments or suggestions? Email us Feedback@TheMebFaberShow.com or call us to leave a voicemail at 323 834 9159
Interested in sponsoring an episode? Email Justin at email@example.com
Summary: In episode 237 we welcome our guest, Ryan McQuaid, co-founder and CEO of PlushCare. In today’s episode, we’re getting into a hot topic in this pandemic environment, telehealth.
We start by hearing the origin story behind PlushCare as Ryan shares his personal experience of receiving fully digital support and medical care from a friend who was a Stanford physician, identifying that 1% of Americans can afford the price-tag of a concierge doctor, and pursuing the opportunity to democratize the model, making it widely available to all. We walk through the experience PlushCare provides patients and physicians, and the emphasis on investing a lot on the physician side of the business.
We cover the experience of navigating COVID as a telehealth provider, and the need to increase physician capacity 4X! We get into the state of the industry, and our Ryan’s thoughts about this being the future of patient-physician relationships, and the vision for the company going forward.
All this and more in episode 237 with Ryan McQuaid
Links from the Episode:
- 0:40 – Intro
- 1:56 – Welcome to our guest, Ryan McQuaid
- 4:02 – After college, Ryan’s move into finance and the startup world
- 6:55 – Shift to digital health
- 8:46 – Going from idea to launch
- 10:53 – Patient experience
- 12:46 – PlushCare Business model
- 13:20 – How this platform changes medicine for doctors
- 15:37 – Target demo for the platform
- 18:08 – How the early vision of the platform looked vs what they landed on
- 20:47 – How the pandemic has impacted business
- 22:38 – Raising capital
- 25:24 – The state of the industry
- 28:53 – Approach to testing for COVID-19
- 31:01 – Vision and expansion plans
- 32:50 – Marketing strategy
- 34:47 – Alternative business lines
- 37:03 – Most memorable moment
- 38:35 – Most memorable investment
- 40:15 – Best way to connect: plushcare.com or download the app.
Transcript of Episode 237:
Welcome Message: Welcome to “The Meb Faber Show” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.
Disclaimer: Meb Faber is the co-founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.
Meb: Hey, podcast listeners, another awesome and timely show for you today. Our guest is co-founder and CEO of PlushCare, a startup offering personalized high-quality healthcare from top U.S medical doctors from the ease of a smartphone. In today’s episode, we’re getting into a hot topic in this pandemic environment, telehealth. We’ll start by hearing the origin story behind PlushCare and the agony and ecstasy of being a startup entrepreneur. Our guest shares his personal experience of receiving fully-digital support and medical care from a friend, who was a Stanford doc, and the realization that only 1% of Americans can afford the price tag of a concierge doctor, and pursuing the opportunity to democratize the model, making it widely available to all. We’ll walk through the experience PlushCare provides patients and physicians and the emphasis on investing a lot on the physician side of the business. We’ll cover the experience of navigating COVID as a telehealth provider and the need to increase physician capacity 4x. We’ll get into the state of the industry and our guest’s thoughts about this being the future of patient-physician relationships and the vision for the company going forward. Also, if you check out plushcare.com, you can see that they offer free COVID antibody testing. Please enjoy this episode with PlushCare’s Ryan McQuaid.
Ryan, welcome to the show.
Ryan: Thanks, man. Fantastic to be on.
Meb: I see you have your coronavirus beard, as do I. Everyone seems to be going one of two ways, they either just grow everything out or they capitulate, like I did and shaved my head and grew out a beard. So where [inaudible 00:02:15] quarantining [inaudible 00:02:16] at?
Ryan: I am quarantining in San Francisco, in the Marina, with my wife, two kids, and two dogs. So, hopefully, none of them are making noise in the background.
Meb: Goodness. I’ve spent a lot of time in that part of the world, I lived in San Francisco and Tahoe in the early 2000s, so my jogging route was right down by Crissy Field on out to the bridge and back. Loved that city. Used to get up a lot, haven’t been down there in quite a while. But LA’s not so bad either.
Okay, we’re gonna talk about a lot of fun stuff today, all things telemedicine. I’ve been following you guys since at least I think 2015, 2016. But I actually don’t know your origin story, so let’s rewind a little bit. You’re originally a cow guy?
Ryan: Yep. I grew up here in the Bay Area, went to high school in San Francisco, and then, went over to Berkeley for college and was on the crew team there, walked on the football team my freshman year, and I had several concussions prior to that, got another two concussions. And that was it, the end of my sports days.
Meb: I had a buddy who did grad school at Cal, and I have some fond memories of trying to play frisbee golf on their course, right along the water there, and remember going full 10 cup and losing probably, I don’t know, like 5, 6 ,7 frisbees on one hole over the water. And there was some young enterprising guy that just sat there all day, 6 pack of beer, selling frisbees for like 10 bucks each. So, I learned a lot of lessons there. Okay. You came out of Cal, decided the football career in the NFL was not for you. What next?
Ryan: When my athletic days ended, I got into day trading, which, looking back, it was essentially gambling. This was in the days of…I think around 2006. I got a bouncer job at a bar there called “Kip’s,” started making some money and opened up an e-trade account and learned about margin trading. So again, this was 2006 when you could declare whatever you wanted your income to be, thus I did so. Also went down to the bank and pulled out a loan to trade on that as well. And I can’t say it was the skill, I think the market generally was going up and I did incredibly well. Took those funds, I got kind of boring waking up at the same time every morning, looking at computers, and decided to roll that into a motor-scooter business.
I saw, as a student-athlete, everybody had a scooter, and gas prices were rising. There were imports coming in from China, so these were scooters similar to like a Vespa scooter. And what we identified was…you had very cheap low-quality Chinese scooters coming into the U.S. market on one end, and on the other end, you had Vespas which were like the Ferrari of scooters.
And so, my co-founder and I, we said, “Let’s go to China and get an exclusive relationship with a factory, tell them to use stainless steel screws and stuff that doesn’t just break apart,” and that’s what we did. We started importing them, it was an incredible time, as far as the power-sports industry goes. And unfortunately, we ran into the recession in 2008. The power-sports industry got crushed, we decided to liquidate the business. And that’s when I moved on to AT&T, into a management-training program, had multiple roles. The first role was actually being responsible for the network from San Jose down to Big Sur. And it was a union environment, I was 21-22-years-old, managing people that were over twice my age and didn’t like a youngster coming in telling them what to do. So it was an absolutely incredible experience. I still remember vividly, in our Monterey location, I got into a little bit of a tussle with one of the employees and it just opened up my eyes of management in a very fast way.
From there, I got more into the business, kind of internal-strategy side of AT&T. I took a job focused on digital health, so strategy and BD for digital health, that’s where I got a keen understanding of the healthcare ecosystem, both from a B2C perspective and also a B2B perspective.
And during that experience, I actually had an illness myself that got to the point where I would get up in the morning and I literally would have to crawl to the kitchen, I would be in so much pain. And a friend of mine, he was a Stanford physician, said, “Hey dude, you’re in your mid to late 20s. This isn’t normal. You need to get this handled.” And so, I, like 50% of Americans, I didn’t have a primary-care provider, so I didn’t know where to go. And he took on that relationship in a digital capacity. So he ordered me a diagnostic test, ordered me imaging, had some suspicion about what might’ve been going on with me, but referred me to a specialist to confirm. And it ended up being I had an autoimmune disease that I could get on Humira, it’s a drug manufactured by AbbVie, I’m sure everybody’s seen commercials for it. And within 3 weeks, my life was back to normal. It was absolutely incredible.
And so, throughout that experience, what we identified was 1% or less of Americans are fortunate enough to pay $10,000 a year for concierge doctor. And another probably similar percent are fortunate enough to have a friend or family member that’s an amazing physician who’s gone to Harvard, Stanford, Yale, etc.
And so, we took a step back and reflected and said, “Well, what happens if we can provide the service and democratize it for every American for the same price that you pay for Spotify or Netflix?” And so, that’s what we set out to do. We commercially launched in 2015, and it’s been a pretty incredible ride since then.
Meb: We’re gonna dive deep into that. I was smiling as you were making some of these revelations and it was funny because I was like, “You’re only slightly too early, the day trading has now returned with Stool Presidente, Barstool trading in the market. It’s largely because there’s no sports going on. But I was also smiling, one, because, when I lived in San Francisco, a couple of my friends had Vespas, but second, it’s like you’re slightly too early for the big scooter craze that’s now, over the past 5 years, taken over the world. But you seem to have found the right niche for you and, as is so often the case with entrepreneurs, there is some sort of personal experience that just sucks so bad or is just so obviously wrong that you’re like, “Clearly someone needs to be doing this better. This cannot go on the way that it is.” And unfortunately, you had to go through the health experience you did, but it’s fascinating to see that kind of going through that became part of the impetus for PlushCare. All right, so you got the idea. What next?
Ryan: So, when we had the idea, I went to a guy I knew, I told him I was leaving AT&T, he was a CEO of a marketing agency, and he said, “Hey, whatever you’re working on, I want it to be the first check.” And so, that was the first check to get started. We did it in an incredibly bootstrapped way. I coded together a WordPress site mixed in with web services, so people can have their first interaction. And my co-founder was a physician, and so, he was the one seeing patients. I was customer support. So it was completely bootstrapped. We were revenue generating from day one.
And I think, given that bootstrap nature, from day one we’ve been so obsessed about providing patients what we consider a wow experience. So, not a good experience but going above and beyond in any possible way so we can ensure that they remember us as people treating them not as a number but, again, going along the lines of a concierge provider but for an affordable price.
Meb: Walk me through that experience. Because, let’s say, someone today is listening to this and they go to the website, download the app. How does it work? Give me kind of the patient side and then we can dive into the back-end doctor side too.
Ryan: We’ve made it super simple. So, you can either go to the website, download the app, you pick a primary-care provider that you’re gonna have a relationship with, so you can see…you can pick it based on gender, where they’ve done their training, where they have the most experience. And you’d pick an appointment with that individual, you then, are able to put in your insurance information. So we do a real-time insurance check of what your co-pay is, it would be the same primary-care office visit co-pay that you go into the doctor in person. Which is a pretty big innovation in itself, you go to the doctor today, you don’t know what you’re gonna pay until you get a bill 90 days later in the mail. So, we tell you what you’re gonna pay. And then, at the time of your appointment, your cell phone rings like a FaceTime call and you have a chat with a doctor. All of our physicians are trained at the top 50 U.S. medical schools and, on average, they have 15 years of experience. So again, we really want to provide an amazing experience to patients.
And you tell them what’s going on. So, visit reasons are episodic, urgent-care visit reasons, or they could be preventative, so, “I wanna make sure I’m not pre-diabetic or I wanna take a proactive approach to my health.” Or they could be for chronic conditions. So, if you have diabetes or hypertension, our physicians can manage your ongoing health just like a regular in-person primary-care provider would. And then, that doctor is assigned to you on an ongoing basis. You can message them in our app along with the medical assistants or nurses that are part of your care team. And again, it’s super easy.
Meb: You alluded to it earlier, but what’s the general business model for PlushCare? Is it subscription-based? Is it based on the number of visits? How does it work?
Ryan: Yeah, so it’s a combination of both. We charge a monthly subscription, so it’s 14,99 a month. And then, in addition to that, if you have a video consultation with a doctor, we’ll charge you your co-pay, on average that’s $20. And then, we bill the insurer for the remainder amount. So, typically for a visit we’re making about over $100 per visit.
Meb: On the doctor’s side, talk to me a little bit about that. I feel like this is a pretty new world of telemedicine. How has the experience been for…I’ve listened to a few doctors that work with you guys describe it, but for the audience, how has sort of their experience changed? Anything positive? Anything negative? And just mainly, what are the big differences between working with PlushCare versus traditional primary care?
Ryan: Yeah, so it’s interesting. As I mentioned, we’ve taken this approach of having super high pedigree physicians, and that was to gain consumer trust with the new modality of care. What that strategy has also done is it’s been a recruiting magnet to get other amazing positions. The old saying goes, “A players wanna work next to A players,” and so, we have doctors that have known about telehealth for 15 or 20 years but have viewed it as kind of call-centre doctors. And so, we have changed that perspective for physicians. And if you talk to our physicians, they, similar to patients, physicians are burnt out. Just like patients feel like they’re getting treated like a number, physicians feel like they’re treating patients like numbers and they’re just on this never-ending wheel where they just can’t have a good relationship with patients. And so, working with PlushCare, we pay them a salary, so they’re not worried about the number of patients that they see, or on an hourly basis. And we have, on the back-end, created our own electronic health record, we’ve taken over all the billings. So, all the administrative bullshit that doctors typically have to deal with, we have removed that from them, and so they can just focus on creating a strong relationship with patients. And you combine an amazing pedigree of physicians, we go through extensive interview processes to ensure they have great bedside manner and are providing amazing care. So you take those two, and then, you remove all the administrative burden and you’re able to deliver a [inaudible 00:15:30] experience. And that’s what we have today, which is off the charts, as I’m sure you know.
Meb: That’s incredible. What’s the sort of target demo, are you guys available across the country or only in a few states?
Ryan: We’re available across the country.
Meb: And what’s the target demo? Because I feel like this maybe even a little bit surprising, is it kind of across the board? Is it urban? Is it families? Does it tend to be individuals? Is it rural? What’s the sort of use case for most of the patients?
Ryan: The median age is 40-years-old, which I think it skews on the older side then, people would typically think, they think, “Seeing a doctor over your smartphone,” I think people typically think patients are 20 to 30-years-old. So, the median age is 40-years-old, about 65% are female. And if you look at the in-person visits, those are actually similar numbers. So we are seeing that virtual visits are just somewhat of a reflection of in-person visits, which is strong validation that we’re not targeting some super niche population. And as far as where people live, there’s a value proposition. If you’re in San Francisco and you don’t wanna drive to park and find parking, pay 30 for parking and then sit in the doctor’s office where it’s filled with germs, you’re gonna be wasting time getting there, you’re gonna be wasting time sitting in the office. So there’s the fantastic value proposition in an urban environment. Go to the opposite side of the spectrum, in a rural environment, there just isn’t a doctor’s office. So we are seeing similar penetration no matter whether somebody lives in a rural area, suburban area, or an urban area.
Meb: It’s funny because some of these businesses, we talk a lot about on this podcast about sort of this concept of frustration arbitrage where experience is so bad, not necessarily when you were going through it, but upon reflection, and you hit upon a few things, one, going to the doctor’s office. And last thing you wanna do is, when you have some weird rash or wart on your face or you’re sick, that you’re gonna run into a bunch of people you know, one, so there’s like a stigma and shame about going. Two, you end up getting sick half the time from going. You end up waiting like an hour, they call you when they feel like it, the doctors rush, haven’t prepared…I mean there’s so many things wrong with that experience that, having gone through sort of a telehealth before, you look at it like, “Oh, okay, so why would I ever do that again?” It’s like calling an Uber versus standing outside and waving your arm for a taxi, it’s like, “Why would you ever go back to doing that?” and it seems like such a fundamental shift. Tell me about…kind of, as you guys build this, it’s been fun to watch the journey over the past 5 years. What was sort of the early-days vision of what the company looks like versus…and we’ll get to 2020 in a minute, let’s stick with, say, 2019. What was the kind of progression of what you guys building out the tech and developing sort of the offering over the years? What has been sort of the main any pivots or differences where you’re like, “Oh man, we fully thought this would be a good idea. It was terrible, so we started doing more of this, this surprised us.” Any general just kind of your thoughts?
Ryan: Yeah. So, we’ve spent the last several years really, number one, building out the tech, as you mentioned, so the patient-facing experience. But even a larger investment is on the physician side, building your own electronic health record is no easy undertaking. There are companies that that is their entire company is it’s focused on building an electronic health record. So that was a big undertaking but we felt, again, we needed to empower the physicians to be able to provide them an amazing experience so they were happy and those patients were happy.
The second one was getting a license to practice medicine in all 50 states, which isn’t simple. And some of the things I’m describing, if you look at why Amazon acquired PillPack, it was to speed up their strategy because healthcare takes time. It’s not like you’re creating a business to sell purses online where you can open up a store and be dumping money in the product and marketing within 2 months. So the medical licenses took a long time.
And then, third, it was getting contracted with insurance plans, which is not easy. That’s why doctors don’t open up their own doctors’ offices anymore, it’s because all this stuff is extremely time-consuming. Getting contracted with health plans, in some instances, it’s compared to working with the DMV, except there’s nowhere to show up and complain to. So that’s healthcare.
And I think we knew it was gonna take time, I think something that was eye-opening was it probably took even longer than we expected it to take. But we have been super disciplined, from a financial perspective and realistic expectations. We knew that there was gonna be some type of inflection point in the market. If you look at virtual visits last year, they’re only 1% to 2 % of all of addressable visits. And so, did we know it was gonna be a once-in-every-100-year flu pandemic that was gonna be the tailwind? No, we had no idea, but we knew that there was gonna be some type of inflection in the market. And so, that’s what we have been waiting pretty patiently for. And now we’re in a pretty incredible spot.
Meb: Now that we’re on that topic, let’s go ahead and talk about it. 2019 rolled around, the new decade is upon us, and the pandemic hit. For me, it was right after I got back from a ski trip and have been going slightly insane ever since, so…like most of us. They opened the beaches in LA, so I’m a little bit more back to normal. But talk to me a little bit about what this year has been like. I imagine, for many, first 6 months of this year feels like an entire decade already, but you not only have a company but also children and animals. So let’s hear about what this has been like for PlushCare.
Ryan: We had a pretty busy flu season. I think this year, I wanna say like 40 to 50 million people got the flu. So a super busy flu season. And then, at the tail end of that, in March, we had COVID hit. And so, we were expecting a flu season, we see a spike, and we’re expecting to have that start teetering off a little bit, or at least the seasonality of it, obviously, we’re a fast-growing tech company, so we’re constantly growing. But instead, from first or second week of March to the last week of March, we had to increase our position capacity I think 4x. So, I mean we were busting our ass to get doctors on board, getting customer-support folks to again be able to continue providing this 90-Net-Promoter-Score experience. Super proud of the team, we were able to continue providing that amazing experience in addition to the financing, which you mentioned, my co-founder and I both had babies a week apart. It’s been quite the crazy last 3 months, but definitely exciting.
Meb: I’ve enjoyed following the updates from you guys over the years. Were you essentially self-funded for majority of this period? You raised the early seed round, and then, just now, congratulations, a 22-million, 23-million-dollar Series A?
Ryan: 23 million in financing, this was our Series B. I mean you could’ve previously called the other one a large seed round. But whatever you wanna call it, we had raised about 8 million dollars of capital previously, and then, 23 million dollars of money, which we recently announced.
Meb: Congrats. Can you tell us a little bit about the experience for those listeners, about raising capital while running a business during a pandemic? Was this an enjoyable process, a difficult process? Both?
Ryan: So, we actually had…I can go back to the first time around. Prior to our Series A, it was challenging. We had raised money from individuals and we got to a point, I think, we had raised several hundred thousand dollars. And there was a point where I remember pitching VC firms. We had less than 30 days of cash left. And so, quickly our financing plan, I told my co-founder, I said, “Dude, there’s no freaking way that we’re gonna raise money from a VC. We don’t have enough time.” And so, what we did, we went out and just busted our ass, raised money from individuals, and then, on top of that, met an amazing investor, Jeff Richards from GGV, and also the [inaudible 00:24:05] and [inaudible 00:24:06], which you had participated in. And Jeff put in money into that round, and we liked him a lot, he’s a former entrepreneur, we didn’t even run a process, we had gotten to know him for a little bit. And he’s been a great partner building the company to date.
And then, the most recent round, we were actually planning to raise or run a process in about April-May time frame. And kind of a similar situation, we met the folks at Transformation who are incredible health-care investors, two come from Sequoia, leading healthcare investing there, and then one comes from Bain Capital, leading health-care investing there as well.
And we met them at the beginning of the year, they said, “Well, you guys think about us jumping the process?” and we both mutually were excited to do so. And we didn’t even get into running the process this year, so people have asked, “Oh, how did you raise the round during the pandemic?” fortunately, the details were getting worked out by that point.
Meb: That’s great. Because you get to hear both sides of it, the early agony of the startup phase, almost out of cash in the bank, and of course the product/market fit and the time where things are running smooth. Talk to me a little bit about the state of the industry. I know there’s a couple other players out there, I think there’s one large public company, but still, you mentioned it’s pretty early days in the infancy in general, maybe 1% penetration. What does the sort of state of telemedicine look like today with sort of the adoption and competitors, as well as an eye towards the future?
Ryan: Yeah, I mean I think we’re in the super early days. As I mentioned last year, penetration was 1% to 2% of the total addressable market. So, I would say we’re in the American online days of the internet.
Meb: Someone was saying they still make like 500 million dollars from subscription revenues, I think people that have forgotten or have died or don’t even know they have it.
Ryan: I would say the industry…I think the pandemic speeds the adoption curve up probably 3 to 4 years. And I think there’s going to be multiple types of players. You have hospitals and health systems that wanna be able to provide virtual care. And so, people like American Well are powering their ability to do that. Same with Epic, integrating telehealth into their EMR, so more of a feature.
The approach we’ve taken is we’ve said, “Hey, the One Medical has been super successful. They got started in 2006,” back then, having a kind of fancy health-spa-like brick-and-mortar clinic was innovative where you could book online. Our hypothesis was that, “Yeah, that was innovative in 2006, but the future is really all those services being able to provide virtual.” And again, it’s that continuity of care where you’re still building a relationship with your physician, even though it’s in a virtual environment. Whereas the legacy telehealth has been kind of a one-up from a nurse call line. So, everybody remembers the days in the 90s where nurse call lines, or maybe even before then, got popular on the back of your insurance card. Well, traditional telehealth has been, “Just reach a doctor when you call that call centre.” And we really think the future is gonna be establishing an intimate relationship with a physician virtually and bringing that relationship back that people experienced back in the day when a doctor would show up to your home, and being able to provide every American that experience.
And so, I think there’s gonna be people that focus in multiple areas of telehealth to date, again, it’s been…the market in its infancy, and so, everybody lumps every company into telehealth, but we’re gonna start to see multiple categories within the telehealth category. And so, our focus is creating the most amazing member-based primary-care experience out there.
Meb: I was listening to a conversation with one of your doctors, years ago, and I’m smiling because, at the time, I think you were only open in like five states. And she was like, you know, “It’s interesting because people would assume the experience would be less intimate,” she’s like, “but I get to see you in your home,” like, “your kids walk by, your dogs are there, I get to see what’s going on in your home.” And a lot of people are more comfortable, the sterile sort of environment of a doctor’s office, and again, with a bunch of people around, it’s a different feeling than being in your house. And for the listeners, if you haven’t been through it, go to plushcare.com, check it out, sign up. At least try it and see what it feels like. And I’d be hard-pressed to know if there’s anyone that goes back.
You guys have the big splash on your website that’s talking about coronavirus testing. You wanna talk to the listeners about that? If they want to figure out, like most of us, if they had it or not, they got it, what’s y’all’s approach?
Ryan: Yeah. So, what we’ve noticed actually during this time, a lot of people think that coronavirus visits would be a huge percent of our total visits. And what we’re experiencing is that’s actually not the case. People are coming to us for kind of traditional primary-care visit reasons. That said, we do have coronavirus antibody testing, along with coronavirus PCR testing, to see if you actually have it. And we can send you in for…we don’t do the testing ourselves but we have a network of partners that we’ll send you in for testing for…and so, we’ve done thousands of tests and, to date, I’ve seen most people for the antibody testing test, I think it’s sub 10% are testing positive for having had coronavirus. And it seems like we’re seeing spikes here again. So, I think time will tell where things go in the future. But from our perspective, nothing’s changed.
Here, in San Francisco, we were actually way ahead and stopped shutting down. And so, our thesis was, “It could only get worse.” Everybody was in their home when this started, and now people are going out and there’s no vaccine, there’s no great treatment for it. And so, “If we open things up, it’s bound to get worse.” So, we’re hopeful that people are obviously working on vaccines and other solutions, and are trying to do our part to keep people healthy.
Meb: We’re recording this late June, listeners, so, if the world’s fallen into a deep dark pit, by the time this publishes around the 4th of July, just to give you a little context. My original quarantine plan was to go quarantine in Mammoth but they shut down all the mountains. I was an early quarantiner, first week of March, but that was quickly squashed. But we’re heading to the mountains this summer, so we’ll hide out in the mountains of Colorado, which is where my crew is.
All right, so you just raised this big chunk of cash. What are you guys gonna spend it on? Looking forward to the 2020s, what’s sort of the vision, what’s the goal for kind of the next 1-3-5 years?
Ryan: I mentioned the kind of foundation we played, how we’ve been super disciplined financially. The exciting thing for us was we actually didn’t need this capital from a runway perspective. We had built a business that was self-sustainable, and so, for us this was really to put our foot on the gas and take advantage of this infrastructure and platform and foundation that we’ve laid and make PlushCare into a household name that everybody knows and the most loved and trusted primary-care provider in the U.S. And so, if you think of timing of people thinking about their health, that’s another factor in play and we wanna make sure that we are top of mind when people are thinking of their health. So, investing a significant amount into marketing, into product, to continue improving the product to make it better to people. So, our customer-support staff, our physicians, just getting the infrastructure of the company set to go from hundreds of thousands of users to millions of users. Which, I have to pinch myself, I still remember the days when I mentioned it was just me putting together the website, answering calls, and James, my co-founder, speaking of patients. Like we would go to lunch and celebrate somebody booking a visit. And here we are, hundreds of thousands of visits later going to millions, it’s pretty incredible. I remember the financials and the forecast that we were giving people had us getting to this, but we kept looking at each other saying, “How the fuck are we gonna do that?” like, “we can’t even imagine what that looks like.”
Meb: We put that on the deck but we never really thought that was gonna happen. I imagine you plan on largely [inaudible 00:32:50], this is such a massive opportunity, simply blocking and tackling and growing seems to be the most obvious…and by the way, is the main channel…like you got your word of mouth, but then, is it mostly digital marking of getting people to funnel, to try it kind of out for the first time? Is that the main…and then, is it through Instagram, do you guys do it through Facebook, Google Ads? What’s your kind of main channels?
Ryan: As I mentioned, providing a good experience doesn’t really get people talking about it, you have to provide a wow experience. And so, if you look at PlushCare reviews, people literally write in the reviews, “Wow, that was the most amazing physician experience I’ve ever had.” So, 30% of users are coming from word-of-mouth acquisition and that continues to go up. And then, other channels are digital to date, so organic search, paid search, Facebook, Instagram. We brought on a Chief Marketing Officer last year that completely redid all of our branding and it’s gonna move us higher up the funnel into more traditional marketing mediums. So you’ll be seeing TV advertising from us, podcasts, direct mail, etc. So we’ll be significantly amping up the amount of marketing spent, which is pretty exciting.
Meb: I was just laughing because we made one direct-mail experiment. So we have like over 40,000 investors and they’re all over kind of the world. We have almost none, in my local community, Manhattan Beach, here in Los Angeles. And so, we said, “Let’s do a little direct mail. We’ll send out a postcard to everyone, let them know we’re right down the road if they wanna come visit and say hi.” And we must’ve sent out, I don’t even know, 10,000 postcards. We got one email or call that said, “Don’t ever email me, call me [inaudible 00:34:30],” and one that returned it in a manila envelope and it’s like, “Don’t ever mail me again.” That was it, that was our only experience. But people…it’s highly successful, otherwise they wouldn’t be doing it. We clearly…takeaways, don’t put Meb’s face on the postcard. We should A/B tested some more.
As far as the main business, you guys have such a massive opportunity of probably a 100x from where you are now, just in your business. Are there any other kinda alternative business lines that you guys think about or [inaudible 00:35:00] about, whether it be, you may already do this, partnering with corporations, expanding, I don’t know, the state of telemedicine internationally. Any other things you guys kick around?
Ryan: You know, of course the people using our service are employees of major corporations. And so, we do have the benefit teams now reaching out to us saying, “Hey, how can we more closely partner with PlushCare to get the rest of our employees that might not know about PlushCare access to the service?” So, that’s definitely an opportunity. And you’ve seen One Medical do something similar, create amazing consumer experience and then go work with companies to expand that and create more awareness.
The thing that gets me really excited is the capabilities that we can continue forward with some of the stuff that none of us are even thinking about. Like I mentioned, I came from AT&T not many years ago. The engineers at AT&T said there’s no freaking way we’re gonna send TV through copper wires. And look where we are, you get streaming TV through copper wires. And so, as I think of the capabilities that we can have, and we’re already starting to see some of those. We’ve partnered with Fitbit, which is public, but you take wearables and the data that our physicians can get from these wearable sensors is incredible. We start detecting people have the coronavirus before they’re even showing any symptoms or other illnesses, whether it’s episodic stuff like that or chronic issues, and prevent them. So, if you’re pre-diabetic, can we identify that, adjust your lifestyle? Or if that doesn’t work, get you on the proper medication to make sure you don’t convert into a diabetic. If you look at what a company called Cologuard is doing, you can now get a colonoscopy in your home.
So I think the amount of things that we’re gonna see patients being able to do in their home is incredible and gets me super excited. And I think, in an incredibly frictionless and seamless way, again, your watch just passively doing a lot of this stuff. So that’s what gets me excited about the future.
Meb: As you look back over the journey with the company, what’s been the most memorable moment? Are there any stories you look back on that particularly stick out or good, bad, in between? Anything come to mind?
Ryan: A moment I had was, when I started, we had 30 days of cash left, I dropped out of the MBA program at Berkeley, I quit my job. And of course, during a time like that, I started to reflect and doubt like, “Am I passionate about this?” like, “is this worth continuing for?” And it felt bad because here I thought I was pitching investors how great of an idea this was and I thought to myself and said, “When I’m busting my ass training for sports, many times my mind is telling me, ‘Give up, it’s not worth it.'” And so, I think, as an entrepreneur, everybody or most people will go through that and experience that. And I think for me it was very peaceful to have that sports analogy where that’s how your mind’s programmed. When things get tough, your mind’s gonna tell you to give up but it doesn’t mean it’s the right thing. So, when I reflect back, that is one thing that sticks out that I think is relevant for other people out there that are grinding and experiencing obstacles, to continue working through it.
Meb: The life of an entrepreneur is one of lots of dark deep struggles, and hopefully, the light at the end of the tunnel. You guys have certainly made it out the other side, so congrats. Going back to E-trade, we also ask investors what’s been the most memorable investment they’ve made. Again, it could be good, it could be bad, it could be in between, it could be totally nonsensical. And as you’re thinking about it, I reflect back because E-trade was definitely the first brokerage I ever opened in my own name and I think it was also the first stock I ever bought on my own, very meta. E-trade and my E-trade account. And they used to even have that funky E-trade building down on Market Street in San Francisco, I don’t know if you remember that.
Meb: They’re now owned by Morgan Stanley, so who knows what’s gonna happen to them, but some fond memories. Anything come to mind?
Ryan: So back in the day-trading days, there was one company that I got emotionally attached to, which if you’re day trading, [inaudible 00:39:23], I don’t have much advice that anybody should take but that’s the first advice I’d give, “Don’t get emotionally attached to a stock.” And it was 3DIcon Corporation, I don’t know if they exist anymore. Again, it was essentially gambling, these were, quote-unquote, penny stocks. I bought it at 15 cents and brought it all the way up to 3 bucks.
Meb: And did you sell it at least?
Ryan: I didn’t sell as much of it as I should have, but essentially they were trying to create a hologram technology. And again, it goes to show, do your due diligence, don’t get attached to a company, unless it’s a company you’re building yourself and you know all the ins and outs.
Meb: I mean look at the irony, pretty soon PlushCare, pretty soon gonna be doing hologram meetings, so you can just pull up your iPhone hologram and chat with your doctor and they can examine you virtually. It’s all coming full circle.
Ryan: It is.
Meb: Ryan, this has been a lot of fun. It’s rewarding to see both your journey but also kind of how the future is already here. Where do people go if they wanna find out more on what you guys are doing, they wanna sign up to book an appointment? What’s the best place?
Ryan: Yeah, you just go to plushcare.com or download our app on iTunes or the Google Play Store. And it’s super simple to sign up and have an appointment.
Meb: Ryan, thanks so much for joining us today.
Ryan: Appreciate it, man. Have a good one.
Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback@ themebfabershow.com, we love to read the reviews. Please review us on iTunes and subscribe the show anywhere good podcasts are found. My current favourite is Breaker. Thanks for listening, friends, and good investing.