Andrew Dudum is the co-founder and CEO of Hims & Hers which offers a modern approach to health and wellness by eliminating stigmas and making it easier for people to access care as well as treatment for the conditions that impact their daily lives. The company has raised $200 million from Thrive Capital, Forerunner Ventures, SV Angel, Redpoint, Founders Fund, IVP, Cherubic Ventures, 8VC, Maverick Ventures, and Uphonest Capital. He also co-founded the venture builder Atomic which has raised $600 million from top tier investors such as Peter Thiel. Previously he co-founded Ledforpeace and Ever.com.
In this episode you will learn:
- Patterns of success
- How to find product-market fit
- Dealing in regulated environments
- Ways to remove friction points
- How Andrew creates marketing inventory instead of buying Facebook ads
- His one piece of advice if you are thinking of launching your own startup
About Andrew Dudum:
Andrew Dudum is the Founder and CEO of hims and hers, men’s and women’s wellness brands that provide access to medical-grade products and preventative solutions via telemedicine.
The idea for hims came after realizing that none of Andrew’s friends or peers broached uncomfortable – yet common – issues like hair loss and erectile dysfunction. He also realized there was a huge gap in terms of education in the men’s care industry.
Andrew is a serial entrepreneur. Previously he co-founded Atomic, a venture-builder in San Francisco backed by Peter Thiel and Marc Andreessen and is an active Angel Investor and Advisor to over two dozen startups.
He co-founded Ever.com in 2013, one of the top iOS productivity apps across 95+ countries, and earlier in his career, led product at Tokbox.com through their acquisition by Telefonica. In 2007, he founded Lendforpeace.com, the first non for profit micro-lending platform for the Middle East. Andrew attended the Wharton School of the University of Pennsylvania.
Connect with Andrew Dudum:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today, we’re going to have someone that I think is going to teach us a thing or two about building and scaling companies, about pattern recognition as well, about raising money. I think without further ado, Andrew Dudum, welcome to the show today.
Andrew Dudum: Thank you so much. I’m excited to be here.
Alejandro: You went to Wharton, but born and raised where, Andrew?
Andrew Dudum: I was born and raised in San Francisco, right in the heart of the city.
Alejandro: That’s amazing. How was life there growing up; just out of curiosity?
Andrew Dudum: You know. Back when I was growing up, it was a small little village. It’s a small place, 7 miles x 7 miles. It was very family, and it was very quaint, and there were only a few good restaurants if I remember correctly. A lot of people in the neighborhoods that I knew, they knew each other. So, it’s a lot different from nowadays where you’ve got IPOs, and startups and all types of big things happening, but it’s still a beautiful place to come back to and call home.
Alejandro: Got it. Especially real estate prices going through the roof.
Andrew Dudum: That’s right. It’s not the most affordable place to live in the world. That’s for sure.
Alejandro: Got it. Why being there with all this environment, and you have great universities, you decide to go to Wharton?
Andrew Dudum: I did. I grew up as a cellist interestingly enough. So, I was a musician for the first 15 or 16 years of my life. I was touring Europe, the U.S., and playing at Carnegie Hall, and hundreds of concerts and weddings. What I really wanted to do as I got to my later teens was to balance out that creative part of my brain with more business fundamentals, and traditional finance, and strategy thinking. I decided to go to Wharton at 18, undergrad and try to instill some of those basic principles that I knew I wanted to have as I scaled my career.
Alejandro: Would you say, just out of curiosity because one thing that I remember, I think it was Steve Jobs that said that some of his best employees were those that were musicians and that had that creativity. So, how would you say that creativity has served you as you were thinking about building and scaling companies?
Andrew Dudum: I think it’s really important. As an entrepreneur, one of the things that is our goal, it’s our key objective, is to figure out how to build something that has true outlier impact. That’s something that can stand above the crowd, can stand out, can resonate with people and humans on an emotional level in a very different way. Only if you achieve that can you actually build something that is known and is memorable? It’s harder and harder to do that nowadays with the ease and abilities for people to bring products and companies to market. One of the things I say is, it’s never been easier to start a company. For that reason, it’s never been harder to build a brand for those reasons. So, I think the people that have some type of unique background and brain, and that could be music, it could be art, it could be philosophy, it could be history, it could be a lot of things, I think really position themselves well when balanced with the more traditional business experience to bring something to consumers and to build something that is really unique and something that has the potential to stand above all and stand out to people who are looking at it.
Alejandro: So, talking about entrepreneurship here, Andrew, in growing up in San Francisco, did you always know that you wanted to be an entrepreneur?
Andrew Dudum: Absolutely not. I knew that I didn’t want to have a boss was probably the primary thing I knew. I come from a line of [5:21] that have always been self-employed. They’ve built their own businesses. They built their own teams. I think there’s a bit of stubbornness there. I think there’s a bit of creativity there. I think there’s a bit of grit and desire to go out on one’s own. So, my father, my grandparents on both sides, most of my uncles, my great grandfather, they all were founders, and they were all business owners. I knew from an early age that was likely the path that I wanted to pursue. I hadn’t yet identified that as being an entrepreneur, however. I think it was not until maybe my late teens or early 20s when I was exposed to the startup mentality and the startup culture, and the idea of building and bringing things to market did my mentality really switch.
Alejandro: Got it. And your first project was LendforPeace. You did this one when you were at Wharton, so tell us about this project.
Andrew Dudum: That was the first company I ever founded. I was about 19 at Wharton. At that point in the early 2000s, there was an incredible trend happening around micro-lending. There was this group of ex-PayPal executives that founded a company called Kiva.org, which to this day has done amazing work across the world. Essentially the idea was to connect via a digital platform, an online platform, connect lenders, wherever they might be around the world, with people that need money. It’s very small loans. These are loans in the $500 range, $2,000 range, maybe a few thousand dollars, predominantly women who are taking these loans, and it’s for things like textile manufacturing, or maybe it’s to increase supply of stock in their grocery store, or maybe it’s to buy seeds and fertilizer for a farm. But, essentially, small loans that help these women and these families to build incredible businesses that they can live on and that they support their family on. In 2008 or 2009, I co-founded LendforPeace, which was a micro-lending platform which was exactly this. It connected people like you and me in the United States and around the world to be able to go online, read the story of men and women specifically in the Middle East in Lebanon, West Bank, Syria, etc. and to hear the things that they needed help with and the businesses they were running, the small little entrepreneurial shops they were starting up, and how a $500 loan could help them scale that for their family. It was an incredible business. It still runs today, and we’ve powered thousands of loans to women across the Middle East. It’s just a really beautiful platform to be able to help educate, cross nations, to understand people’s problems, but also to then have financial incentives to help them invest in their future. So, that was a really beautiful project and one of the first ones that I kicked off and ran.
Alejandro: One question comes to mind here is, what is the approach as you’re tackling, let’s say like a non-profit like LendforPeace versus a for-profit business?
Andrew Dudum: That’s a great question. I’ve always felt that they should be run in very similar manners. One of the things that I think is difficult about the nonprofit space is that for many, they are completely dependent or partially dependent on grant money or donations. When I built LendforPeace, we tried really hard to build that business model in such a way that it was sustainable and scalable, so that we could truly have very large impact and not be dependent on any one capital source or any one grant or a set of donations. I think that’s really similar to how I think about building companies today for profit businesses, which is you want to be able to stand on your own. You don’t want to have dependencies that are serious to your distribution. You don’t want to have dependencies that are core to your IP that are not owned in-house. You don’t want to have teams that are core to your execution that are not with you or at least part of your family. So, it’s a very similar idea, which is try your best to build the business in a way that can scale in a sustainable way, but also in a way that is not dependent on anyone or any group of individuals.
Alejandro: This business, did you start it with some classmates from Wharton, or what was the founding team?
Andrew Dudum: I did. I founded it with a fellow classmate from Wharton, who was exceptionally passionate about this space as well, and we built it together.
Alejandro: Got it. How big is it today, the business?
Andrew Dudum: Today, it scales quite nicely. We ended up partnering with Kiva.org, which is the largest micro-lending platform in the country today. That platform helps us power these thousands of loans. The hundreds of thousands of dollars are invested on the platform, and then get some type of return, and are returned to you as the lender. In doing so, you’re helping a lot of people around the world.
Alejandro: Cool Really cool. So, TokBox. At what point do you decide, “This is really cool, the non-profit, but I want to explore what else is out there?” What was that thought process and how did you land on TokBox because I believe this was a portfolio company of Sequoia, so this probably gave you the insight as to how a super-high-growth business is built and how it’s to scale.
Andrew Dudum: That’s right. While I was building LendforPeace, and I was at Wharton, one of the things that I noticed was that I was spending a lot of time, if not more time, hanging out with engineers, and hanging out with designers, and prototyping businesses, and trying to get them to skip class to build things with me. I was spending way more time doing that than actually going to class. After my second year at Wharton, I decided to leave, which I can say was a very hard decision. My parents were very concerned at the time. I came back to San Francisco, and I came back to join what you said is TokBox, which was a very early consumer video company that Sequoia Capital, that I had put about 5 million dollars into. The business was really exciting. It was off-the-cuff and heels of YouTube which Roelof Botha had funded at Sequoia. TokBox was the next investment, which was a live video platform to power companies like YouTube. So, I joined at around 20 years old or 19 years old, and I ran product for that company for about four years. That’s where I really for the first time got gritty and hit my head against the wall of learning how to build something, really struggling, working with incredible operators, learning how they did it, how they struggled through the process, bringing things to market, and iterating, and using analytics to improve those dynamics. So, it’s really where I got a lot of my Silicon Valley technology background experience that has been the foundation of what I’ve done since then.
Alejandro: Talking about product, one thing that definitely is everything for startups, and that is product/market fit. How do you define product/market fit?
Andrew Dudum: Product/market fit, to me, is when, despite whatever you might be doing to hinder your success, consumers are still trying to get the product. I’ve seen it with some of the best companies where consumers are willing to jump through all types of hoops. Maybe they have to register three times because the website is not compatible on Internet Explorer or Chrome, or they’re calling you to try to figure out where their order is because they didn’t get the shipping notification, or they didn’t get the email confirmation. All of those experiences when you see consumers fighting to get access to what you are selling or what you are offering, to me, that’s when you’ve had product/market fit. Most of the time, it’s happening despite yourself, which means the company might not be perfectly polished or there are tons of roadblocks or barriers in the way a consumer journey getting access to the thing that they need, but when you have that happening, when you have that dynamic of people fighting for access and fighting to learn more, that’s when you know you’ve found something that’s really special.
Alejandro: From a product perspective, what was your biggest lesson with TokBox?
Andrew Dudum: That’s a great question. I think at TokBox, one of my biggest core learnings was to use data and analytics to help inform decision-making. I remember in those early pivotal years; I was partnered up with an incredible VP of analytics who I still know today a decade+ later. He and I would look at retention. We would look at cohorts, AB tests, and we’d use all that data as much as we could along with talking to these consumers to be able to recommend what we felt was the right next step. That was the first time, I think, I really understood how you could run tests and set up situations to inform product decision-making. Today, that’s something that I think is exceptionally accepted and exceptionally widespread and is how many of the best technology companies run. For me, that was the first time that I really was exposed to that type of thinking.
Alejandro: Got it. Then the company was acquired by Telefónica, a company that I know well, being Spanish myself, Andrew. I wanted to ask you here, what was that process of all of the sudden the company is acquired. Now, you’re able not only to master what products look like in hypergrowth companies but also understand what the full cycle of a startup is as well. So, what was that process for you of saying, “Hey, this is actually how companies get bought”?
Andrew Dudum: Yeah. It was a fascinating experience, and it was the first one that I had. So, I went in completely with eyes wide open. It’s so fascinating because, on one hand, there’s nothing that’s ever more exciting than when your company is getting bought. You have the executive teams from Spain, Telefónica is one of the largest Telco’s in the world, flying into your office, and they’re meeting you, and hugging you, and there’s champagne, and it’s exciting. So, in a lot of ways, you feel like you’ve succeeded, and a lot of startup mentality and startup stories. Selling a company is an incredible milestone, and it’s one very few people experience, and it’s sought after as an end goal. In many ways, it is for a lot of companies, but it’s also exceptionally bittersweet. You then have to experience the friction of blending a 40 or 50-person company into a 280,000-person Telco, a global telecommunications giant. Processes and mechanisms that you had in a 40 to 50-person team of how to build product, and how to get it out to market, and how to do it quickly, all the sudden needs to be evaluated at a much different scale. Right now, there are multi-year roadmaps, and there are capital allocation budgets, and there are things that you need to go through when you’re dealing with a company of that magnitude. So, in a lot of ways, all acquisitions. I’ve gone through a few that I’ve been lucky to go through at this point, and so have many of my closest friends. I think, for the most part, they’re bittersweet. You’re incredibly excited, you’re incredibly proud, you feel like you’ve accomplished something, and in a lot of ways on the flipside, you also know that there’s a lot of work now to do. There’s a lot of cultural blending that needs to take place. In a lot of ways, that early team that was so spirited and full of love that knew each other is now going to be blended into a much larger company and into much bigger processes. Sometimes, that’s very difficult. With every good comes its challenges. I think at this point when I think of building companies, acquisitions are one outcome, but they’re not necessarily always the outcome that is the right outcome for the company. In some situations, it’s to keep the business completely independent or to take it public, or other paths such as that.
Alejandro: As an employee having gone through that, I’m sure it gave you a lot of perspective on how people view things from what lens is like either as a founder or in this case, you were the employee. What was something that you learned, and for the people that are listening, maybe a tip that you can give them? If you go through an acquisition, you should absolutely do this or keep this in mind.
Andrew Dudum: You know, the one point of advice that I give all friends who are going through this process is to be patient and to be open-minded to whatever the outcome might be. I say that because acquisitions are big. They involve the merging of cultures, the merging of companies, the merging of processes, a lot of different things like that. It takes time. It realistically takes time to figure out whether or not those entities are going to be able to work together well and how they’re going to find synergies. My recommendation to people going through that process, both founders, as well as employees, is to be patient. See how it unfolds, and be part of that process of making it successful. But I think it often does take time, so people need to understand that and be willing to experience the ups and downs until you can make it work in a lot of situations.
Alejandro: Right after this, you started Atomic. Atomic, one of the big milestones I would say in your professional career. How did you come across this idea? Tell us how it happened.
Andrew Dudum: Atomic is a phenomenal organization. It’s probably one of the things I’m most proud of in my career. It’s an organization I co-founded with a couple of close friends from Wharton as well who had also built companies and sold them to large companies. So, we had gone through the process of entrepreneurship and acquisition during the same period. The idea for Atomic was to bring together the best operators, the best builders of technology and startups that we could find and couple them with the best investors that we could find. One of the things that as an entrepreneur you experience, and one of the things I experienced with TokBox and our board there, which included incredible investors from Sequoia, Bain Capital, Kevin Hart, who is one of the best operators and co-founder of Eventbrite and Zoom is that incredible investors have incredible pattern recognition. They’ve gone through the process of funding, helping, advising, restructuring, hiring for startups, and they’ve done it dozens and dozens and dozens of times. When you can bring together operators that have built companies before and scaled them, that have done that multiple times, and coupled them, and put them in the same room as investors who have funded and advised and mentored companies dozens and dozens of times, the thesis was, you should be able to build a much better system for bringing companies to market in ways that are more efficient, less capital-intensive, are more meaningful, can scale quicker, have a higher chance of being enduring businesses, and be able to do that on a reproducible manner at a statistical rate that’s much higher than doing it outside of that ecosystem. So, it was really the idea of can we build a company that can more efficiently build bigger companies? That’s really been the vision for Atomic, and it’s been an incredible six and seven years of trying to make that a success.
Alejandro: So, a company builder. When you guys started this in 2013, the concept – even today, there are a lot of people that don’t get the venture-builder model. How do you define? What is it really like, a venture builder?
Andrew Dudum: Oh, it’s chaos. Venture builders are essentially the early periods when a company is going from that phase of idea to pen-on-paper to prototype to taking to a customer, those crazy months of zero to one that Peter Thiel mentions all the time who is actually one of the early investors in Atomic. Going through that really special, beautiful, magical creation phase, and you’re doing it over and over and over again. So, what is it like? It’s crazy. You’re experimenting. You’re using data. You’re brainstorming. It’s a very open and energizing and creative part of the life cycle of the company. It’s usually very, very small teams. You know, three, four-person teams that are doing these prototypes and moving fast and learning. And it’s a very creative point. You’re testing ideas and validating them. You’re throwing out many of them that are proving not to work, but to me, it’s one of the most special and enjoyable parts of that experience. We get the privilege at Atomic of being able to do that 10, 15 times per year. There’s constantly evolution happening. We’ve been able to essentially put lightning in a bottle and capture that creativity and energy of that early phase and be able to do it over, and over, and over again with the purpose of getting better at it and identifying patterns to hopefully be able to improve the next time we build a company.
Alejandro: Obviously, you were eluding to this, Peter Thiel, Marc Andreessen. You guys raised like 200 million to invest in those ideas, and basically build the team, and then let them fly. One of the things that I wanted to ask you here, Andrew is, how do you know, or at what point do you know that an idea has legs?
Andrew Dudum: It comes back to what I was saying about product/market fit. When you have people, regular people, normal people, not your friends, not your family, not people in the office, but when you have people you don’t know, who you’ve never interacted with who come across your idea and come across a webpage or a product or they hear about it, and then they’re pushing and fighting to learn about it and get access to it and take out their credit card and pay for it, that’s when you know you’ve got something special. We’ve seen this happen over and over again where there’s a real difference between that period where you’re asking friends, “What do you think about this? Would you buy it? Would you consider it, or you’re sending it out to your family?” They’re like, “Yeah, I’ll buy it.” That’s very different. Your mom is always going to want to buy whatever you’re building. Your best friend is always going to tell you that what you’re building is a great idea. Those are beautiful people that support you and help you and push you along, but that is not product/market fit. Product/market fit is when other people, people you don’t know, are fighting to get access to it. That’s when you really know you’ve got something, and you’ve hit on something that is a spark.
Alejandro: Got it. One thing that I also want to ask you here as follow-up is you guys have been involved with about 12 companies, which is remarkable. So, you’ve seen a lot. In terms of pattern recognition, what would you say are the top three ingredients that really give that potential of success to an early-stage company?
Andrew Dudum: The top three patterns that essentially identify that you feel like there’s something here. Is that right?
Andrew Dudum: Yeah, that’s a great one. I think the first is always creative. It’s a very emotional aspect. When it’s an idea that you really can’t stop thinking about, and it’s because the space and the market that you’re talking about entering is so big and so deep that there are endless opportunities for creativity. That’s one of the really important parts of the special idea is the market is really massive. It’s big, and for that reason, you as a creative and business thinker keep thinking about it. It’s not a cut-and-dry business where you’re buying something or selling it. There’s opportunity to expand and to grow. I think that’s one of the parts of identifying the business and the space that is really important to something that can be big. So, that would be the first one. The second, when it comes to pattern recognition, is something that is a story that emotionally is very easy to understand. I think the best companies that have been built when you look through history, and you look at the businesses today are ones that feel very obvious, the ones that seem to make extreme sense. It’s not extraordinarily complex in idea; it’s not extraordinarily complex in how it works. It’s something that as a human, you can tell somebody and they get it. I found that over time, the ability to share the story of the company and the reason for why it exists, and why that’s important, and being able to do that really easily where other people look at you and say, “Ah, yeah. That makes so much sense.” That narrative is exceptionally important because that’s a narrative that grows organically. That’s the storyline that people then tell their friends, or they tell their family, or they tell people at work as to why they’re using this service or company or, “Hey. Did you hear about this?” It’s the clip that is viral. So, that needs to be exceptionally human. It needs to be something that people can digest very easily. It needs to be something people can resonate and tell others. But I think the best ideas, the best companies I’ve seen, you can articulate that very quickly and in an emotional way that people really understand. That’s the second. The third, I think, is more quantitative. When you can see the way in which a company is going to grow, and you can actually quantify that growth, I think it’s something that is really special, and it’s something that we spend a lot of time at Atomic on, which is how are we going to bring this Product? How are we going to bring this business to market? What are the ways that consumers or buyers are going to hear about this? What are the ways that they’re going to find out and want to buy it? We talk a lot about this being our distribution channels, our growth strategy. I think one of the things we spend a lot of time on is, is there a proprietary growth strategy? What I mean by that is, is there a way to bring this product to market in a way that nobody else could have access to. Maybe it’s because you know some type of secret or some type of tidbit of information as to a channel that could scale, or maybe you’ve tested sales. Sales works beautifully in a market that nobody’s even thinking about. But what is the quantitative way? What is the way you can test to really understand how you’re going to bring it to market in a very efficient manner? The reason I think that’s really important is, I have a core belief after having built and prototyped dozens of companies that just because you build an amazing product, just because you build an amazing brand or company doesn’t guarantee that it will grow. It doesn’t guarantee that it will win. There are incredible and amazing brands, stories, and products out there that are beautiful that never see mass scale, and it’s because it hasn’t quite figured out a way to scale. It hasn’t figured out a proprietary distribution channel or growth channel. So, we spend a lot of time at Atomic, and I spend a lot of time with hims & hers and with other companies of not only making sure it’s a beautiful product but spending a lot of time on understanding what is the proprietary distribution channel that’s going to help get this product to millions and millions of people?
Alejandro: Obviously, we eluded to this. You guys have done 12 companies, and hims & hers is the second company where you are really an operator. The first one is Ever Co. You were the executive. Then you stepped it up to the board. I want to really hone in now on the hims & hers operation, which is now the most recent one. Before we go into that, Atomic as a whole, the company has raised 500 to 600 million. Is that right?
Andrew Dudum: Yeah, maybe across all of Atomic. It’s portfolio companies. It’s somewhere around there. It’s quite a large number.
Alejandro: Really amazing. Let’s talk about hims & hers. How did you guys come up with this, and what were some of the early days like?
Andrew Dudum: The early days were a really interesting mix of creative and business insights. So, from an emotional, creative standpoint, the idea of hims & hers has been something that I and our team have been thinking about for a long time. It’s this idea that normal people, consumers should have a more efficient and easier way to get access to stuff that makes them feel great. As a man, in my teens and twenties, there were things that I was concerned about. Maybe it was hair loss, acne, sleep, or whatever it might have been. One of the things that was very obvious was that men didn’t discuss. They didn’t talk with each other about these issues. We didn’t openly brainstorm of ways to find solutions. What we would do is open up Google, we’d open up incognito browser mode, we’d type a search, “Is it normal for x to happen.” You’d find a result. Three or four clicks later, you’d realize you’re going to die, and you shut the computer. Right? It’s a very scary experience. So, there’s this really human and creative and emotional part of hims & hers which was just people need better access to care. The existing system, the existing hospital health care system is expensive. It’s hard to access. It takes weeks. You have to take time off from work. It’s exceptionally uncomfortable to talk about stigmatized issues in-person and in public. So, there really should be a brand that can make that easy; that can make that normal; that can make it affordable; that make it accessible for you to invest in being healthy. That can mean things for sleep. It could mean things for self-esteem. It could mean things for anxiety. It could mean things for immunity, hair loss, sexual wellness, dermatology, acne, birth control. It could mean a lot of stuff. But it’s all about just a very human desire to want to take control of your health and wellness, and to be able to buy things and get access to things that make you feel better; make you feel good. That was something that I was really passionate about, and the team was exceptionally passionate about. Then what we tried to do is, could we mirror that passion, that creativity with a business case? Was there really an analytical and financial foundation to build the business like hims & hers? Was there actually a model? You know, I went Wharton. I left after two years. I always make the joke that I know enough to be dangerous, but not enough to be an expert. So, I know enough to know that you should be able to build a really great business at the core of what you’re trying to solve. With hims & hers, it became very clear that there was an incredible business opportunity. So, there are a few things. 1) There were laws in the United States that were changing. There was this opportunity to bring medicine via the internet. These are telemedicine laws. So, for the first time, just a couple of years ago, states passed these laws, which let us go online, talk to a doctor, and get medicine. So, you can remove all types of friction points like going to a doctor. That was huge. Then there were other things that were changing like pads. For example, things like Viagra, a very famous sexual-wellness medication. Viagra used to cost $65 per pill when it was on pads. Last year, it went off pad, which allows hims to sell it generic for $2 per pill. This was happening dozens of times with dozens of medicines. So, the opportunity to remove price and bring that down to affordable level, and then to be able to bring it to market from your computer and buy it from your phone. All of those things really brought a really powerful business case to the table.
Alejandro: For you guys, obviously, just building a company is quite a hustle. There are so many fires and fronts that you have to deal with. Did you find that some of the regulatory framework and navigating all of that is also like an added challenge?
Andrew Dudum: Absolutely. I think every great business that I’ve seen be built has some type of part of the business that requires the entrepreneur to hit their head on the wall hundreds and hundreds of times. I say that because I think best businesses have moats. In a lot of those moats, those moats are simply the entrepreneur and the team’s willingness to endure pain for a certain amount of time to figure something out. That, in and of itself, can be an incredible moat. So, when I was looking a hims & hers and the regulatory aspects, some of the things that I looked at were companies like Lyft, and companies like Uber that have had to push the regulation to make what they want and what consumers need, which is great access to ridesharing legal in different states where it’s currently not. So, they endured this pain of pushing on behalf of the consumer and now have been able to build an incredible market and incredible business. I think of companies like Airbnb, which in many states and many counties and many cities was something they had to push to make local counties and mayors and regulators comfortable with the idea of living and co-living in all of these short-term rentals. But they pushed on behalf of the consumer because they knew consumers wanted it, and it would be better for people. So, I think with hims & hers it’s the same thing. People need access to great care. They need access in the form factors, and they are used to using like their phone and like their computer. They need access on their time when they’re free. They need access in prices that are affordable. So, all of these are things that hims & hers, we’ve had to push, and we had to push over and over and over again, and we’re going to continue to have to push on behalf of the consumer. It’s very clear that it’s right, it’s very clear it’s the future, and it’s very clear it will be better for all people once we’re done.
Alejandro: One of the things I want to ask you as well is, every morning going to work, I remember seeing you guys in the suburb. It was unbelievable. It was like I needed to look somewhere, and everywhere I was looking there inside the subway, I saw hims & hers. So, really great marketing that you guys have done. What have been some of the growth hacks that you have seen that really worked out in the beginning?
Andrew Dudum: That’s a good question. The first thing I would say is, I probably can’t tell you a single growth hack because I don’t really think about them as growth hacks. When I think of growth hacks, I think of things that are short term and maybe not scalable. That’s really not how we think about at hims & hers. The way we think about it is, what are channels that catch people’s attention in ways that are unique? So, something that we think about a lot is this difference between creating inventory versus buying inventory. What I mean by that is, buying advertisements on Facebook and Instagram is a very easy thing to do, and it’s a very efficient thing to do. You can spend some money. All the sudden your company has advertisements, and you’re selling product. Here’s one of the risks. It’s so easy to do that everybody else can do it. So, when I said it’s never been easier to start a company, it’s because channels like Facebook exist to get your message out to consumers, and it’s true, it’s never been easier. The problem with it is that because it’s so easy, it’s not differentiated, which means anybody can do it, and it’s not proprietary to you. The problem with that is over time, those costs get expensive, and they’re not in your control. So, what we think about at hims is, instead of buying inventory, like buying Facebook ads, we think about creating inventory. So, what are places where men and women are spending 20 seconds or 30 seconds not distracted by other people, they’re not distracted by work, they’re in an environment where they have a couple of seconds to look on a wall or look in front of them and evaluate something. We try to go and build marketing campaigns and advertising campaigns in those places. Ideally, we build them with inventory that doesn’t exist. So, we go to these subways, and we say, “Hey, we want to put something right there. You’ve never sold any advertisement there, but we’re going to buy it from you.” We’re going to go to gym locker rooms, and we’re going to take over gym locker rooms. We’re going to go in front of urinals. There are hundreds of thousands of urinals in the United States. Men are staring right in front of urinals for 20 seconds. We’re going to put an advertisement right there because they’re going to be staring at it. They’re not going to look side to side because they’re really focused on what they’re doing. We’re going to put a billboard right in front of them. We spend a lot of time thinking about that concept of creating inventory, and also, where is our consumer? Where is our guy? Where is our girl spending 20 or 30 seconds free of distraction, and let’s go get some amazing branding and amazing marketing right then and there?
Alejandro: That’s amazing. By the way, I agree with this mentality. I think that Facebook, the ads, and all of this, everyone is doing it, so there has to be a way that is sustainable to build a business. Otherwise, it’s not going to be a good outcome potentially. I want to ask you, Andrew, how big is the business today, hims & hers?
Andrew Dudum: The business is quite large. We’ve only been around for a little bit over a year. We did a million in sales in the first week of the business’ operation. That was, I believe, the smallest week we’ve ever had in sales to date. Every month, the acceleration continues to grow, and it’s just been unbelievable. I think we really hit an emotional chord of helping people get access to things they need and things that make them feel great and doing it in a way that’s beautiful and normalized and destigmatized and easy and affordable. The team now is about 50 to 60 people, but from a business standpoint, I would say we’ve built one of if not the fastest growing consumer brands from a revenue standpoint in the last decade or two.
Alejandro: You guys have also raised some money. How much capital have you guys raised to date?
Andrew Dudum: We have. We’ve raised a little over 200 million in the last year or so.
Alejandro: Also, great investors. Redpoint, Founders Fund, Thrive. I mean, amazing people. One thing that I want to ask you here is, in a world where the vision of hims & hers is fully realized, what does that world look like, Andrew?
Andrew Dudum: We are building hims & hers in a manner to be enduring brands that people love. Household names that people across the country, no matter their background, no matter their socioeconomic status or their ethnicity or their sexuality. They are brands that people use and engage with on a daily basis to feel better, to get access to things that make them feel great. So, when we’re successful, and hopefully, this continues to grow in the coming years, what we’re all pushing for, is to build a trusted relationship that can help people get access to the things that are good for them, and help people have a more interconnected and ongoing relationship with their wellness and with their health. If we can pull that off, I think what you end up having is a population of the United States, a next generation of people in their 20s and 30s that are very engaged with their health and wellness. They are very aware of how they, and they are very aware of the things that make them feel better. They are very educated about those things, and they’re taking action, and being proactive about it.
Alejandro: I think that timing is everything when you’re building something. Without a doubt, we’ve been living in a world where it was all about, “You get ill, and then you get cured by the doctor.” But the problem is that doctors are not trained to really prevent. I think that the fact that you guys are really riding in this timing where people are more conscious about taking care of themselves and preventing potential catastrophic situations is just fantastic. One question, Andrew, that I typically ask the guests that we have on the show is, knowing what you know now – you’ve been around the block a few times, and you’ve seen everything. We’ve been talking a lot about pattern recognition and things like that. So, if you had the opportunity to go back and have a conversation with your younger self and give yourself one piece of business advice before launching a business, what would that be and why?
Andrew Dudum: The one piece of advice I would say is to surround yourself with people that are smarter than you. It’s something that I try very desperately to do today and have in the last few years, and I will continue to try to do in the future. I think somebody once told me: your intelligence is the average of the five people you spend the most time with. So, when building a company, it is critical to identify areas that you need to learn and to surround yourself with people who are excellent. Continue to do that even if you’re a public CEO, run a multi-billion-dollar company, just continue to be curious and continue to surround yourself with people that are better than you.
Alejandro: I love it. For the folks that are listening, what is the best way for them to reach out and say hi, Andrew?
Andrew Dudum: You can shoot me an email. It’s probably pretty easy to figure out that. It’s all over the internet. You can shoot me a tweet, and I’ll get right back to you, but I’m available on a lot of channels to help whenever I can.
Alejandro: Amazing. Well, Andrew thank you so much for being on the DealMakers show today.
Andrew Dudum: Thank you.
* * *
YOU MAY ALSO LIKE:
Steve Newman On Creating Google Docs in 100 days Giving Microsoft A Run For Its Money
Emil Eifrem: From Having $2,000 Left In The Bank To Building A Billion Dollar Business