Hims Scored Big With Male Consumers. Can It Repeat The Trick With Women?
Andrew Dudum, the 30-year-old founder and CEO of the men’s wellness startup Hims, could easily double as a stand-in for one of the millennial male models featured in his company’s Instagram ads and TV commercials. His hair is immaculate; his skin looks great. His warm, engaging manner is an invitation to confide. In college, he says, he was the one other guys trusted enough to ask for advice about acne cream.
With his back to the windows of a conference room overlooking a gorgeous view of San Francisco’s Presidio National Park, just a few blocks from where the Bay Area native went to middle school, Dudum is explaining how his comfort with delicate subjects ended up making him the perfect choice to build a company predicated on catering to and consoling two of men’s deepest insecurities -- their fears of hair loss and erectile dysfunction.
You’ve almost certainly seen ads for Hims in the past year. They’ve been everywhere, from Instagram to Monday Night Football, often featuring gorgeously handsome young men glowing with health but also executing a set of themes -- a slumping cactus, a saggy eggplant, phrases like “hard made easy” -- that make you wonder, Are they suggesting what I think they are suggesting?
The answer is yes. Hims’ basic business is providing access to cheap, generic versions of drugs like Rogaine and Viagra online. Doing so is a little complicated: Hims routes shoppers to a network of doctors and pharmacies that can prescribe these products, and the drugs then arrive at consumers’ doors in beautiful Hims packaging. But its genius is in its pitch, a message delivered with style, panache, and most important, a wink-and-a-nod sense of humor rarely associated with the worlds of male-pattern baldness or performance anxiety.
The branding isn’t just a trick to move product; it’s a clue to Dudum’s grand ambition to build far more than just a low-cost online pharmacy. In his vision, Hims’ ascent to a “10- or 20-billion-dollar company” will be predicated on its success at becoming a trusted partner in a long-term healthcare-and-wellness relationship; a one-stop-shop serving as a “holistic” source not just of bedroom pick-me-ups, healthy hairlines, and supple skin but also information, advice, and comfort. As an example, he cites the Hims blog, which devotes itself to answering a wide variety of men’s questions with a blend of jokiness and utility -- anything from “What three museums should you visit in New York?” all the way to “How does masturbation affect performance with your partner?” (Short answer on that second one: Probably nothing to worry about, but you maybe shouldn’t overdo the online porn.)
This is not, to put it bluntly, your father’s prescription-drug marketing campaign. But there’s no arguing with what works. Since launching in November 2017, Hims has been successful enough in establishing its brand to the tune of tens of millions in sales and an estimated valuation of close to a half billion dollars. The business model has proved so robust, in fact, that on November 1, 2018, Hims launched a women’s wellness company, called Hers.
Which raises a question: How exactly does a company specifically targeted to men’s sensibilities about sensitive issues translate across the gender borderline and reach out to women? It’s easy enough to argue that men’s wellness is an underserved (and stigmatized) market begging for disruption. But women’s wellness? A glance at any magazine stand would suggest that the female wellness market is, if anything, overserved.
It’s a puzzler -- until you pose the question to Hims’ battalion of female executives and immediately find yourself deep in discussion about one of the great banes of womankind: urinary tract infections. And suddenly, everything makes sense.
Like most startup founders, Andrew Dudum has a favorite creation story. During dinner at a nice New York restaurant a couple of years back, his younger sister started berating him for his “ashy skin” and general pasty wrinkledness. According to Dudum, she grabbed his credit card and ordered $200 worth of skin-care products, all with fancy French names. Dudum says he was a little embarrassed to have the packages arrive at his door and professes himself shocked at the “outrageous” prices, but he trusted his sister.
“I started using them kind of reluctantly and then pretty quickly got into the habit,” he says. “Later I was traveling with a buddy and was putting on a moisturizer, and he cracked a joke about it. But when I got home a couple of weeks later, that same buddy shot me a text: ‘Would you mind sending me a screenshot of that product?’ ”
Voilà! Rightly or wrongly, Silicon Valley has long been stereotyped as a creation engine for 20-something males seeking easy ways to solve their inconveniences. As a partner in Atomic, a venture capital firm that specializes in developing its own startups, Dudum was always on the lookout for a consumer pain point that could be transformed into a business opportunity. His sister handed him one on a moisturized silver platter: Men suck at taking care of themselves.
When faced with a mysterious itch or a bedroom failure, says Dudum, “what we all do is open up a Google search browser in incognito mode and type in things like ‘Is it normal for x?’ And then you inevitably end up on WebMD and think you are going to die.”
Identifying a potential market was just the starting point. Hims’ basic business model also takes advantage of two relatively recent developments that have opened up huge opportunities in the world of direct-to-consumer healthcare. Changes in state telemedicine laws now allow customers across the U.S. to obtain prescription medicine without physically going to a doctor. Meanwhile, a handful of powerhouse drugs -- Viagra, Rogaine, Propecia -- are now available in cheap, generic form. Suddenly, a man looking for help doesn’t need to go to the doctor and answer a bunch of embarrassing questions. From the comfort of his iPhone, he can sign up with Hims and, pending approval by a physician within the company’s network, get a kit of drugs (“packaged and designed in such a way that you would be proud to have them out in your bathroom,” says Dudum) mailed to his door every month for rock-bottom prices ($5 a month for hair-loss drugs, $30 for 10 ED pills).
As the tech news website TechCrunch declared shortly after Hims’ launch, “It’s never been a better time to be a man who privately suffers from erectile dysfunction, premature ejaculation, or hair loss.”
A long-stigmatized market, a newly available distribution system, and a product for which all the R&D has been taken care of by a third party adds up to a rare triple play. “As an investor looking at companies,” says Forerunner Ventures’ Kirsten Green, a seed investor in Hims who previously struck gold with the likes of Warby Parker, Bonobos, and Dollar Shave Club, “you are hoping to find the one thing that is a big structural underpinning that says there is a chance for this company to really break onto the scene and make a mark. If you find two of those things intersecting, you get more excited. And when you find three, you are off the charts.”
Dudum’s VC partnership, Atomic, prides itself on a methodical approach to identifying startup opportunities. After Dudum returned to California from his New York dinner with his sister, Atomic conducted a set of focus group studies to see if there really was a legitimate business model for selling men’s wellness products to men like, well, Dudum.
They investigated questions such as “‘How many people have access to a doctor?’ ” says Dudum, “and ‘What are the three or four issues men feel most impact their self-esteem?”’ A clear set of categories emerged: skin care, hair loss, sexual wellness, and sleep. The next step was to find out who was already marketing to those men. “We asked them, ‘Are you using any of these products?’ ” says Dudum, “and they answered, ‘I didn’t even know those products existed!’ ”
Atomic started talking to doctors and discovered that there was strong patient demand for drugs in aforementioned categories among all ages of the male demographic. The conclusion: “The disconnect between the statistical need [for the drugs] and how they were being marketed was just huge,” says Dudum.
The next step was to test the thesis, and Atomic spent $50,000 on a prototype iPhone app. (“We built it over the weekend,” recalls Dudum.) App users could input their specific problem, answer 15 or 20 medical questions, and put in their credit card info to get on the waiting list to buy the products when they might finally be made available. The result was a million dollars in presales in five weeks.
Armed with the extraordinary numbers, Dudum had little trouble raising $7 million in seed capital from Green’s Forerunner Ventures and Josh Kushner’s Thrive Capital. Hims launched in 2017 and immediately notched one million dollars in revenue in its first week, says Dudum. He declined to release any other revenue numbers covering the past year but did boast that “we are shipping more product in the first year than any consumer company has ever done.” And the investors that would come to look inside Hims’ books were obviously impressed: It would go on to raise $90 million in two more rounds.
When Hims launched, its executives took stock of what needed the most attention. Because it was piggybacking off the generics market, Hims didn’t have to pour obscene amounts of cash into drug R&D or complicated distribution. Sure, there were operational challenges -- as chief product and operations officer Melissa Baird points out, managing telemedicine compliance laws that vary from state to state can be a nightmare -- but the brand’s first priority had to be consumer-focused. It needed to strike exactly the right tone in a multichannel marketing blitzkrieg, while at the same time loading up on exquisitely sensitive customer support. After all, when young men ask questions about ED drugs, they tend to get a little nervous.
So almost immediately after launch, Hims made sure it was everywhere -- popping up on Facebook, Instagram, Twitter, and your TV. Dudum says he set the tone for its marketing but worked closely with Hilary Coles, brand lead for Hims and Hers, to ensure it never crossed over from funny to off-putting. They also backed up their gut reactions with relentless AB testing, focus groups, and constant attention to feedback. Once a consumer received their first dose of we’re-here-to-help-you-have-fun innuendo, they figured, brand awareness would stick.
Exhibit A in pitch-perfect advertising: In late September, Hims posted a picture on Instagram of a sign in a Home Depot store listing the available hardware offerings on aisle 15: Lubricants, Rope & Chain, Screws, Tie Downs. The accompanying text read “I need a lady in the streets and Home Depot aisle 15 in the sheets.” The first comment, also from Hims, declared that “we may not be able to promise this…but we can help you get some when these situations present themselves. Check out our prescription ED kit today.”
But if marketing was the hook, consumer service would be what reels a guy in. Fully a quarter (as of late October) of Hims’ 56-person staff is dedicated to consumer service -- making sure that every tweet, every Facebook complaint, every discreet DM inquiry, and every call to the telephone number posted prominently on the Hims website gets answered promptly. Disruptive Silicon Valley startups have traditionally viewed direct human interaction as a bug in the system, a dreaded drag on the bottom line; the overriding goal is usually to cook up an algorithm that does away with the need to answer phones or emails. But according to Forerunner’s Kirsten Green, such tactics simply do not fly in the modern online retail market -- a consequence, ironically, of tech giants like Amazon and Apple training consumers to expect excellent service. “Having a great product -- a strong value proposition -- is table stakes,” says Green. “The win is much more likely to come from a great experience.”
There is an intriguing implication behind Green’s analysis. If the quality of customer experience is the ultimate trump card, then Hims’ success doesn’t rely upon the structural idiosyncrasies of the men’s wellness market or the new opportunities presented by telemedicine or off-patent drugs. The real trick is executing consistently at a moving target -- giving consumers a sublime experience in an environment in which they are always expecting more. Friendly price points, stylish “unboxing” experiences, immediate gratification -- you can have the best business idea in the world, but if you can’t solve the alchemy of ever-more demanding customer expectations, you won’t build long-term customer relationships.
Dudum wants today’s 20-something user of Hims shampoo to eventually become a 60-something user of Hims-branded cholesterol drugs. Hims, he believes, can become a comprehensive “interaction touch point” for dealing with the entire healthcare system.
Pulling off such a feat will require more than just a sense of humor about erectile dysfunction. But the closer one focuses on Hims’ success at creating an enjoyable customer experience for men, the more one begins to understand its confidence that it can copy-and-paste its approach to women.
In November 2018, just one year after going after the men’s wellness markets, Hims launched a spin-off brand called Hers and started chasing women -- which is a little bit like Napoleon deciding to invade Russia after conquering Luxembourg.
In large part, it’s a decision based on necessity. Competition isn’t far behind. The newly off-patent drugs and changes in telemedicine laws have inspired a rush of startups -- Keeps is targeting hair loss; Roman and Lemonaid Health are going after erectile dysfunction; Nurx and Maven are targeting birth control and other aspects of women’s health; and in June 2018, in a move that jolted the entire retail pharmaceutical industry, Amazon purchased the online pharmacy PillPack. Bottom line: To execute on his goal of building a really big company, Dudum would have to move fast.
But as he tells it, the rather remarkable decision for a barely year-old company to vastly expand its target market was also born out of his staff’s own needs. “Most of our leadership team is women,” he says.
“We were in a meeting thinking about our product road maps for men: how to speak to men, how to create access to physicians and generic medications, and so on,” says Dudum. “To my surprise, there was massive frustration on the part of the women on the team with the fact that this access didn’t also exist for them. It’s not about over-the-counter skin-care products, and it’s not about blending different combinations of salicylic acid into antiwrinkle cream that you can buy at Sephora. It’s about real medicine. It’s about the fact that when a woman has a UTI and she calls to get a prescription, she is forced to take time off work to see a doctor. Or it’s frustration that 20 million women in the U.S. are still saying that they can’t get access to birth control, which is insane.”
It is a rare startup founder who can pivot from erectile dysfunction to UTIs in the course of a one-hour interview. But in listening to Andrew Dudum make his new, expanded, gender-equitable pitch, I began to get an inkling of why investors like Kirsten Green and Joshua Kushner were so high on him (and Hims). There’s obviously no guarantee that Hers will explode out of the box like Hims; the market for women’s wellness is packed with competition. But could there be an opportunity to cash in on women frustrated by the inconvenience of UTI’s? How could there not be? It also does not seem unreasonable that a company with a C-suite dominated by women would naturally gravitate to thinking about how healthcare distribution and marketing models would apply to their own gender.
“It’s about having respect for women and their time and resources,” says VP of product Hilary Coles, who leads the Hers brand in addition to her Hims responsibilities. “Sometimes it feels like you have to kick out one gender to make room for the other, but it’s been incredible to watch this conversation come together in what I feel is a genuinely equal playing field.”
“I think his decision to hire a lot of women from the beginning created a more respectful culture overall,” adds Baird, the COO, “because the things we have to talk about in our meetings can sometimes be things that a normal company would not be discussing in a professional environment.”
Dudum says the decision to staff his company with a majority of female executives was entirely intentional, and inspired, on his part, by the example of his sister (who is now the product manager at Hims and Hers).
RELATED: How the Female Leaders of Hims Got Men to Happily Talk About Hair Loss and Erectile Dysfunction
“If you are going to build a brand from day zero that’s about destigmatizing issues for men,” says Dudum, “relying on men who are stigmatized to help create that is quite difficult. Having the sisters and the wives and the aunts and the nieces and the family members and the partners of those men help craft a loving and yet direct message is the only way you are going to build a brand that embodies diversity of thought and diversity of opinion in its tone.”
Whether Hims and its “badass sister,” Hers, can realize Dudum’s ambition depends on a confounding number of unpredictable variables. Doctors are naturally worried about the medical consequences of moving out of the physical clinic and into online forums. Cheap generics are a classic commodity business, extremely vulnerable to the likes of Amazon. The complexity and exorbitant costs of healthcare financing create a conundrum larger than any single startup.
But there seems something to be said for the simple, low-cost gratification of treating awkward human needs with humor and relentless attention to customer service. Crack that code and a brand’s potential is unlimited -- for both men and women, and anything in between.