A letter from our Founder
It was during a marketing strategy meeting while at Everlywell, a consumer health company, when it hit me: we were giving away millions of dollars to big tech companies that were monetizing the data of Americans who could barely afford to take care of their health, and it was time we fixed that.
Before starting my MBA at Harvard Business School, I led business strategy at Everlywell. At the time we were debating how to increase sales of our more clinical home lab tests (like our HbA1c or diabetes test).
We knew that if taken by a diabetic, our home diabetes test could serve a real clinical need. However, since Everlywell’s inception, our team has had difficulty finding those people. How do we use existing advertising platforms like Facebook to find people with a specific health condition?
The short answer is – you can’t. We realized Facebook or Instagram doesn’t know which users have which health issues, so targeting users based on their age, interest in yoga, and food preferences as a proxy just wasn’t going to cut it. In other words, our ads were being viewed by thousands of people who didn’t actually need our test. As a result of the pay-per-impression model, the cost to acquire customers through these platforms was exorbitant – hence, the strategy session on what to do next.
The room was feeling somewhat defeated as we struggled to think of better, more scalable ways to find this high clinical need audience. That’s when my colleague and good friend, Brett, had a crazy ah-ha moment.
He blurted out: “Why are we giving all of our customer acquisition cost away to Facebook? Facebook’s making all the profit off of our customer’s data…if we paid our customers that money instead, wouldn’t it make it cheaper for them to take our test?”
Pay our customers to buy our product? We all looked at him sideways and began to slowly chuckle. Everyone discounted the idea because it sounded strange and, of course, we needed Facebook in order to attract people to our website (i.e., even if we paid our customer to buy our tests, how would they know about this offer if they never made it to our site?).
But Brett’s question continued to ring in my ears for the next two weeks. Why does Facebook get to monetize our data? Why can’t we monetize our own data?
If I’m willingly giving Facebook my data, shouldn’t I get a piece of that pie too?
That’s when the idea for Frontdoor Health was born. What if we cut out the middlemen, and built a platform where instead of advertisers paying Facebook and Google to find new customers like you, advertisers paid you.
Over this past year at Harvard Business School, I conducted a small, hacky pilot to see if this would work. In short – it did.
I had people provide me their unique health information (health history, health interests, solutions they already use today, etc.), and every week I curated health and wellness solutions for them based on their unique health info.
If they purchased a product and showed me a receipt of purchase, I Venmo’d them ~30% cash back (simulating the customer acquisition cost that an Everlywell would pay them on my platform). If they didn’t buy the product, they answered a 1 question survey of why not, which I used to continue to refine my product curation.
The results exceeded my expectations. Within just a month, every person in my pilot study bought at least one product with a majority buying more than one, and they earned hundreds of dollars in cash back throughout the process.
In real-life, the “Everlywells” (or health and wellness companies sponsoring products on my platform) would have also saved thousands because they were only paying when a product was actually purchased (vs. per impression) and their “ads” were only being served to people who:
- are already high-intent / interested in taking charge of their own health (i.e., they’ve signed up for my service)
- have the unique health issue that their product addresses (i.e., highly targeted product curation)
- are getting cash back on every purchase (instead of ad spend going to Facebook)
Because of the confluence of these conditions, it was no surprise at all that our average ad click-through-rate (CTR) and, of those who clicked a product link, average percent who purchased a product (CVR) stabilized at a whopping ~45% CTR and ~30% CVR, compared to industry average of a ~1-3% CTR and CVR. Even if at mass-scale we could achieve a fraction of our CTR and CVR, that would be significant.
In other words, our service saves health and wellness companies money, and most importantly, saves consumers money, who are paying out-of-pocket for these health and wellness solutions.
However, there was also another insight I gained when conducting the pilot: people often didn’t buy products when they weren’t sure if the products were clinically sound. In fact, they often wished they could speak with a physician about the product before they bought it.
To address this, I added a physician in the email thread, who the participant could pay a small fee to if they had any questions. Participants were unsurprisingly more likely to buy when a physician was on standby (even if they never engaged the physician at all). They voiced a feeling of reassurance just knowing they could receive guidance from a board-certified physician when shopping for over-the-counter health products.
This sparked another realization: not only is taking charge of your health expensive, but it’s also confusing. Walking into a CVS and seeing this isn’t exactly a delightful experience:
So why can’t we leverage physicians as shopping assistants to guide consumers through their purchasing decisions? Physicians benefit because they can finally tap into this emerging trend of consumer-directed health, patients benefit from having a physician on standby to help them find the right product.
I imagine a world where this can be the new front door to healthcare. If you’re a healthcare company excited about having a better way to acquire first-time customers, a physician excited about tapping into this emerging trend, or a consumer looking for a better way to take charge of your data and health, check out our website and sign-up now.