One of the things I learned earliest in my career is if you can't hire people that are smarter than you, you will fail. What you gain confidence in with brand marketing over time is that consistency is required. Now, I am so excited for the show today. We have Andrew Dudum, founder and CEO of HIMS. Hims are reinventing healthcare, but wow, it's been a tough 6 months. They are down 66%. They've got a market cap of 4.35 billion as of today, but they do over 2.3 billion in revenue. It's nuts. I'm so excited to sit down with Andrew today where we discuss this and so much more.
When you're disrupting an industry, you have to have a team that is used to being uncomfortable and used to getting through it and used to staying calm and having that resilience. I might be the only person that believes this, but I think running the company in the public markets is more fun than being private. Ready to go.
Andrew, it's been like six, seven years. Like I was young and fresh when we lost.
I was a lot younger. We looked a lot better back then, but I say we're pretty good by now.
Listen, I think life's been pretty kind to both of us. Can I start with a super weird one? And you might be like, 'Dude, I thought we were buddies,' but I speak to so many public company CEOs today and I can't find a happy one. Seriously.
You know what? I think I might be the only person that believes this, but I think running the company in the public markets is more fun than being private.
Why? You get shit on every day, dude. I see it and I'm like, 'Oh, poor Andrew.' And I so remember our dinner with your lovely wife. And I'm like, 'Oh, so nice.' And I see the shit on.
I love it for a few reasons. One, if you're a highly competitive person, you get to put out high benchmarks every 90 days and see if you can actually deliver on it. And you can build a high performance team to say, 'Hey, we put this out and it's a big stretch. Let's go kick ass and figure it out.' When you're private, it's so easy to get cozy. You know, the worst case scenario if you got some VCs that call you and they're stressed out about something. But in the public markets, it's like it's boot camp. You have to deliver. So, I love that from a competitive standpoint. I also love the ability to hire talent in the public markets because they can see the vision and you're forced to not only talk about where you're going to go 10 years from now, but if you're going to actually make steps quarter to quarter to prove it. So, as a competitive person, I think it's a lot of fun. Also, when you step back, we went public really early. We went public after like I think 36 months of launching, which was a little bit crazy. When you look at the biggest companies in the world, they went public within the first few years of launching. Google, Facebook, Apple, Amazon, all of them, they didn't stay private for 10, 20 years. The founder was forced to figure it out in the public markets how we're going to grow, how we're going to get efficient, and how we're going to tell a big vision. And I think that's a lot of fun.
I love that. Google, Apple, Facebook, Amazon. Nice. Yeah. It's actually one of the oldest marketing tricks ever, which is marketing by association. You know this? It's called Six Flags. Do you remember Six Flags? The really shit theme parks. Yeah. So, I don't know them because I'm British, but they wanted to be better than everyone else and so they just did massive billboards that said 'not as good as Disney.'
I know. Yeah. I like good marketing.
Fascinated. You said there about going public so early. If you were sitting down with like the Collisons today, would you tell them to go public?
I think if your business is ready from a predictability standpoint and you have a long-term orientation, then I would encourage you to go public. I think those two things have to be true. I think you have to actually be able to predict your business with consistency because you can't enter the markets without that confidence. And you also have to be ready to sign up for a decade or two in the markets, right? This is not something, it's not a quick exit. It's not a liquidity event. It's the beginning. And so I would encourage any founder that has those two dynamics to consider it.
Do you think you can do what you want to do from a long-term strategic objective standpoint and have the, as you said, I love it, the 90-day ticker of like, hey, we've got to go hard for the 90 days?
I think you do. It takes discipline. I think it takes hiring the right people. I focus on hiring a certain type of people. They're not particularly fancy in background. They're not credentialed with like all of the really great tech companies. That's not what I look for. I look for mostly people who have been builders and have gone through some shit, is the honest reality. So if you look at our team, Yi, our CFO, he was the divisional CFO of Uber during COVID, the whole business disappeared overnight and he had to figure it out. Or Dhir, our chief product officer, she was at Robinhood during GameStop, right, had to figure out that chaos.
Do you seek out crisis in their lives? I know it sounds stupid, you've mentioned two very iconic.
Yeah, I seek out grit. I seek out a lot of grit because I think when you're disrupting an industry, which we are, and even in the last year our category has exploded and changed and been fraught with all types of chaos, you have to have a team that is used to being uncomfortable and used to getting through it and used to staying calm and having that resilience. And so I absolutely search for people that have seen those types of ups and downs and thrived in them because I think when you're disrupting, it's just inevitable that that's going to happen.
I spoke to so many people around you, really I thought the shit out of you again, which was nice because I know you, but to kind of hear stories from owning doughnut shops. You didn't tell me that, did you? My Augustus group was coming out there, but the talent element was one and they said in particular Jules Maltz, I think it was from IVP, said that you're incredible when it comes to acquisition and retention. What do people get most wrong, do you think, about acquiring great talent today?
I think often people as they scale, maybe founders as they scale, fall into the trap of trying to hire people that have seen bigger scale than them and are more strategic and they feel like they've gotten to the point of success where now it's time where they uplevel the talent to non-startup folks, right, to like real professional people. And I think that is a huge, huge mistake. Huge mistake. You know, when I look at, Chris Payne is on our board, who's one of my mentors.
Yeah. Chris, a great guy. I think one of the best operators I've ever met. And when I look at the team that Tony's built at DoorDash, that team is an operating machine. And they're huge, right? It's an 80 billion dollar company. Yet they're still operating with speed and focus like a startup. And I think so much of that is because the team that Tony's assembled around them is a team of operators that love to build. And so I think as you scale there's a pressure to go hire that big strategy person with more credentials than you and it feels almost confidence inducing as a founder to get to that level. And I think you have to fight that at all costs. I've made mistakes. I've hired people like that because I thought it was the right move. And have always come back to find people who love the mission, who love to build, who are tactically excellent at what the function actually requires. And again, who are gritty as hell.
What are you not excellent at in the role of CEO, but persist relentlessly despite your lack of skill?
So many things. I mean, I'm constantly trying to find the balance of being in the weeds and building a team that can scale independently of me, right? That line of how hands-on you should be, how strategically involved you should be, how tactically involved you should be versus.
Where do you come down on that then? Because we have the founder mode and the, you know, I love Ryan at Flexport, but like the I'm so in the weeds and I love him for it.
Yeah, I think you have to be intentional about where you get into the weeds. I don't believe in this concept of like every design review comes through me, everything that ships comes through me, every decision comes through me. One of the things I learned earliest in my career is if you can't hire people that are smarter than you, you will fail. And young managers struggle with this all the time. They're scared to hire people that are better than them because they feel like if I hire somebody better than me, well, what the fuck am I even doing here? Why am I here if I just hired somebody who's better than me? And in fact, it's completely the opposite. If you want to continue to scale in our organization or any organization that's growing, you have to realize that your job is changing every 12 months, right? To level yourself up to the next highest leverage focus area. In order to do that, you have to replace yourself every 12 months with talent equal or better always. And so, to me, that's a really important realization that as a CEO and founder, which is I want to hire people better than me and so I trust them. Yet, at the same time, if there are specific areas of the business that are critical, either strategic decisions or tactical implementations being worked on, you have to know when you go deep and you need to acknowledge to the team, hey, this is something that's really important. I'm going to go deep on it. I'm not going to go deep on everything, but this is important. I'm going to be in the weeds here. Dude, I sit in these boards nowadays and honestly, they're mostly useless. It's so exhausting. And AI is at the top of every big company board discussion topic. Okay. No shit.
How does your business change with AI? How many people do you have today?
Okay. You have 2,000 employees. How many do you think you'll have in 2030?
That's a great question. Probably not many more than two to three thousand.
Yeah, we operate about a million square feet of pharmacy fulfillment throughout the US. And so we have a large chunk of labor force which is actually just variable labor responsible for actually pharmacy oversight, pharmacy review and actually shipment of medication. AI can do a lot in regard to efficiency for core product engineering, accounting, finance, marketing, etc. But when you're actually running facilities, physical facilities, and a lot of this is actually required doctor and pharmacy oversight, you know, those you can't get as much leverage on.
Are you pushing AI down into every function of the or.
Are you seeing it have dramatic implications?
We have in customer support. I think we overexaggerate elsewhere where it has impact.
I think those two areas are critical. We're also seeing it have massive leverage in design, right? So, we deploy about a billion dollars in marketing spend every year across the Hims and Hers brands and the cost to do a live photo shoot, the speed of a photo shoot for every single product launch, you know, we probably have thousands of variations of TV commercials, Facebook ads, Google ads, etc. The speed of iteration with AI in that function I think is actually one of the most tangible that I've seen across our organization.
In terms of cost reduction and in terms of supply expansion.
It's mostly in regard to output. You know, I would say it's you have the same team but you're probably delivering three to four times the amount. The other area that we see a big degree of improvement is actually on the clinical side. So we treat 10,000 plus patients a day. We're probably the largest health care system in the US if you actually look at volume of patients treated and now with recent markets, definitely the largest globally from a digital health standpoint. And if you can apply AI to the medical side, the EMR, right, where doctors are actually making clinical decisions and it can help give guidance with regard to certain protocols and speed up that process. That is a huge amount of leverage for the clinical end from an efficiency standpoint, but it's also a meaningful improvement in quality because you have essentially an intelligent brain helping standardize care across thousands of doctors that are making decisions every single minute.
When you speak about the explosion of the business, that explosion is driven largely by you GLP1s and weight loss. How much of that is the core business today? Is it like 80% weight loss, 20% everything else? What does that look like?
No, no. I think that's one of the funny things about our business is we are constantly in the headlines as a single category business. When we first launched, when you and I first met, we were the erectile dysfunction business, right? And it was, you know, front page of New York Times and it was fun and silly and provocative and all we did from everyone's perspective was ED. And then we launched hair and then all of a sudden it was like we're a hair loss business. And then we launched the HERS business and everyone said, 'Oh, hers is never going to work. You're just an ED and hair loss business.' And then eventually we launched GLP1s and everyone said, 'Oh, now you're just a weight loss business.' And, you know, a year from now people will say, 'Oh, you're just like a peptides business probably if I were to take a guess, right?' And so I think the reality is under the hood is that you have a dozen completely different clinical categories, completely different businesses, each scaling with very solid robust growth, which is why this business is interesting. Like that's why I run this business is the durability of it is quite strong because you have 10 different businesses with completely different customer segments. So weight loss is actually nowhere near the majority of this business and I don't think ever will be just because you're continuing to expand core categories and a lot of new categories. So.
Do you run those as separate businesses? When I had Nick from Revolut on the show, he said something fascinating. He said, 'We run 26 different product experiments at the same time. I treat it much like a venture incubator and I give them more or less money depending on how well they perform.' Do you run them as like a venture incubation unit?
Yeah, absolutely. I mean, you know, when we first met, I was over with Jack Abraham running Atomic Ventures for a long time. And that training of zero to one exploration, that is what Hims and Hers is, right? Like I think of it as a public shell for innovation in bringing great healthcare to consumers, which means every year we're testing completely new go-to-market strategies, completely new categories. And the way we think about it internally is just different bets. And some bets you starve and some bets you fund and some bets you ring fence to allow exploration for a year or two. But they're run increasingly independently. And I think the DNA of management is to look at it as a portfolio that continues to scale because ultimately in our business, health and wellness, what makes up great health and wellness is constantly changing. There's new diagnostics, there's new devices, there's new drugs, there's new learnings about, you know, the sauna and cold plunges or whatever it might be, whatever's trendy, right? Like all of this is changing and it's going to continue to accelerate and our job is to curate the best and bring it to people at scale at an affordable cost. And so we have to think about this, frankly, as a portfolio that's constantly evolving.
I can't get my head around the sauna, Andrew.
You have to do the sauna four times a week.
For 20 minutes. It cuts all cost.
Have you seen what it does to the motility of your sperm?
Three kids, buddy. Some of us have got none. Okay.
Got to bring an ice pack in there.
I'm not going to bring an ice pack for my balls. I'm sorry. This is genuinely the most unattractive thing ever. And it's like, you know, Huberman's like, 'Oh, it extends life by like, you know, three decades.' Mate.
He's right doing ice pack.
We'll sauna together next time I'm in London.
You said there about kind of the bets. What did you do that with the benefit of hindsight you wish you hadn't done?
For us as a business, I think it's important to constantly be in a customer's mind, the mind share of the new evolving health and wellness categories. And so I think in many categories we've been quick to market and in many categories we've been kind of patient to market. And in retrospect I constantly am kind of evolving my perspective on like how fast we should be there. My net net takeaway is I don't think we actually need to be first ever in market. I want to be best in market. And so when I think of new categories, peptides for an example, right? You know, a lot of conversation about 10, 15 peptides going from class 2 category 2 to category 1 compounding so that people can actually get access to things like BPC-157, TB-500. This is an incredibly interesting category. You won't see us be first to market in this category. You'll see us when we launch it feel extremely confident in the clinical protocols, extremely confident in the guardrails, make sure that the supply chain and the quality is done to a level we feel is bulletproof from a pharmaceutical standpoint. So you know, there's a lot of introspection in my brain around speed and prioritization of which categories to enter but what I always come back to is not being first but being best so that from a brand standpoint people know Hims and Hers to be high quality and trusted. Like when we actually bring something to market, you know it's safe. You know it's done right and you know it could be something that's powerful and important for your health.
I always remember Hugo Barra who was the product guy from Xiaomi and he said on the show when you're doing anything in physical product you need to choose one. You need to be feature king or you need to be price king.
I think you have to be both for us. I think you have to have the best at the most affordable price eventually.
How come it was $1,800 to $2,000 for Wegovy and Ozempic then, which wasn't wholesale?
Well, the self-pay price at the time was $300 to 400.
Yeah, it's down to about $149 in 18 months on Hims.
We just announced the Wegovy pill $149.
Is that post Novo deal though?
Oh yeah. Yeah. It's through partnership. No, absolutely.
Totally get you. So we want to be price king and feature king.
I think for us we want to curate the absolute best at prices the masses can afford. And I think the way you do that is you work with ecosystem partners. You leverage the scale of the platform. Right? We're the largest global distributor at this point probably of medicines. And so by able to then working with the best diagnostic companies, the cancer Grail detection company. I don't know if you've ever taken this test.
This is a test that I've been taking for 5 years. I've had everyone in my family take because there's cancer in my family. It's called the Galleri test by Grail. It's a blood test and it can detect, you know, 50 to 100 cancers and it focuses specifically, it's best at from a clinical standpoint some of the harder to find cancers, prostate, pancreatic, ovarian, and breast cancer. And it's a simple blood test. You know, this blood test was thousands of dollars for the last few years.
We were able to work directly with Grail, bring that test, I think it's in market now in Hims and Hers at like 600 bucks. And my hope is over the coming years it'll continue to come down to a few hundred bucks where everybody could do this on an annual basis like going to the dentist, right? It's just check to see if there's any early signs, any early protein indicators of stage one cancer tumors. So, there's an arc, right? When the GLP1s first came out, it was $2,000 list price. We applied incredible pressure to the drug companies. I think the current administration, the US did an amazing job. And thanks to the drug companies, they actually agreed to bring them down from the thousands of dollars to $150 to $200 cash pay prices. I mean, that is completely transformative. It's not something that's really happened in pharmaceutical history that the blockbuster drug of the century gets cut by 80% in 18 months, right? And the reason for that, I think the reason it happened in part is because companies like us and consumers applied massive pressure to change the distribution model, right? In 18 months, the distribution model has completely changed in pharmaceuticals in the US. Instead of going through PBMs and insurance, they're going straight to customers through platforms like ours at prices everyday people can afford. And so there's an arc to that price reduction, but I think for us, we want to have the absolute best and also want to be able to apply pressure to bring that cost down as much as we can.
Do you think like a PillPack sold too soon when you think about the erosion of PBM's power that you mentioned there and how challenging it was for a business like PillPack?
You know, I don't know too much about PillPack to be totally honest. I don't, what I don't believe is that the pharmacy fulfillment part of our business independently is a particularly valuable business.
How should I think about the preventative health care companies that I'm pitched every day? Whether it's your Prenovos or your Neko's in the UK, which is expanding to you, is that the future? Some are much deeper, some are much shallower, some are much more expensive. How do you understand analyze that space? Is that something that HIMS would do?
We spend a ton of time looking at that space and have actually, we did a partnership with Prenovo that was announced just a couple of weeks ago. I think where there's a lot of interesting companies right now is in highly specialized levels of testing for clinical areas that are meaningfully unmet. Right? So you look at things like cardiovascular disease, right, still one of the number one killers. Most dads die of a heart attack. Yet a statin is, you know, two cents for me to manufacture. And if you take a statin every day, then you won't die of a heart attack or you're meaningfully less likely to have a heart attack. Yet, nobody does it. And so there's biotech companies right now working on therapies where a single injection quarterly or a single injection annually can absolutely obliterate your cardiovascular risk. And if you can do something like that, you meaningfully curve that rate of death and you get ahead on prevention for cardiovascular disease. Prenovo, I think, is another interesting one, right? It's how do we get ahead of detection for things like cancer and early tumor detection. You know, my dad had stage 4 colon cancer when he was 39. It then costs the health care system hundreds and hundreds of thousands of dollars, if not millions of dollars to have surgery and then treat him for many years with chemotherapy, right? And then afterwards, the care involved to get him back to a steady state. The idea of an annual exam that can scan your body for early signs, early proteins through blood testing or early actually imaging signs that can detect a millimeter size tumor is incredibly fascinating. Now, I think a lot of clinical people and they're smart, believe something like that is not yet ready for mainstream and it might not be, right? I kind of choose to be opportunistic in giving people the ability to make those trade-offs for themselves. I take Prenovo annually. So, you know, I recommend it to my family. Is it perfect? Absolutely not.
