If you had followed direct-to-consumer nutrition coaching startup Rise Health from its founding in 2013, it wouldn't surprise you that the company would end up being acquired by a primary care provider. That's because the company was founded to solve a healthcare problem, Rise Co-founder and CEO Suneel Gupta explained to the audience at the MobiHealthNews 2016 event in San Francisco last week.
During his opening remarks for the on-stage interview, Gupta said he agreed with some of the high-profile comments the American Medical Association CEO Dr. James Madara made at his organization's meeting over the weekend.
"[Madara said] that the role of these digital services is not to replace the physician but instead to leverage the physician," Gupta said. "We see the role very similarly. For us, we believe that to really change behavior and really help patient outcomes, working with a real human being does have power. But we know that's not very scalable. We also understand that, because it’s not very scalable, it leads to a pretty high price point. One of the things we realized was that having a registered dietitian in your life, having that type of attention, requires you to be either very sick or very rich. So the question we asked was: 'For the majority of the population who aren’t in that population, how do you increase scale so that you can lower the cost?' But in no way do we want to replace that human component, because we really think that the human touch is essential for the type of behavior change that we were going for."
Early on Rise decided that typical food tracking, calorie counting, and nutrition database searching wasn't going to work for its service. Gupta said his company focused on reducing friction as much as possible.
"What we were finding in our early experimentation was having something like a health database where you were actually looking up every item of food that you were eating, was decreasing the frequency by which you were going to engage," Gupta said. "It also had, and this won’t be surprising to anyone who has used MyFitnessPal or LoseIt, but we found people were sort of doing this in batches. At the end of the day they would go back and say, 'here are all the things I did today, let me look all that up and sort of batch that in all at once'. That is not the behavior, necessarily, that we wanted."
Instead, Rise employed a similar input mechanism that Massive Health used in its nutrition app, The Eatery: users just take a photo of their meal with the smartphone's camera.
"One of the reasons Rise was effective was that before each meal you were taking that one moment to take a photo of your food," Gupta said. "Take one moment and snap a photo. That’s it. Very, very low friction, but you were willing to do it right in the moment before the meal, which was very important for us. To ask you before the meal to actually look up all the things in the database, that was too high an ask we found. Or, at least, it was too high an ask to get the level of engagement and frequency that we wanted."
Gupta said his team employed a few different engagement metrics and they often correlated with each other in unexpected ways.
"We think about engagement a few different ways, one is frequency and the other is, obviously, just how long is a person with your product," Gupta said. "Sometimes I find in conversations I have with other people in the space they feel like those two things are in harmony: So the more engaged a person is, the longer they are going to be with your product. I haven’t found that to be the case. In fact, sometimes I think they can even work against each other. For Rise, we had incredibly high engagement in terms of frequency — 25 to 30 times a week on average. That’s how often a person actually looked at the app, engaged with an app. That is great for us because the higher frequency certainly mapped to better outcomes and results in the short term. It didn’t necessarily map to how long the person was going to stay with the service. In fact, we found in some cases, people who were even high engagement were burning out quicker."
A question from the audience prompted Gupta to share that about 20 percent of Rise's user base could be classified as multiyear users of the service. The other 80 percent averages between four and five months of active use. That said, Rise introduced a new "maintenance" version of its program that doesn't cost $48 a month or $120 a quarter. This stripped down version of Rise launched about nine months ago and is for those users who have met their weight loss goals. That's one of the main reasons people stop using Rise, Gupta said. He expects the size of the multiyear user group to grow as the maintenance program takes off.
So why did Gupta start Rise?
"When I was younger my father had his first triple bypass surgery when he was 43 years old," Gupta said. "Our family spent a lot of our time at the hospital with him and then healing ourselves as a family and trying to get ourselves back on our feet. One of the things that became very clear to us during that time was that a doctor can change your life, but a doctor can’t necessarily change the way you live. After leaving the hospital our big goal was really trying to figure out how to become healthier as a family. At that time I was about 30 or 40 pounds overweight, so I was clinically obese as a teenager, so we were all trying to get healthier."
Gupta spent his early career in product manager roles at big name tech companies like Mozilla and Groupon. Meanwhile, his older brother was a fast-rising neurosurgeon, and CNN's Chief Medical Correspondent, Dr. Sanjay Gupta. Suneel said his brother has always been one of his closest collaborators, so soon after his departure from Groupon, he and Sanjay (along with Rise's other co-founder and CTO Stuart Parmenter) put their heads together to combine what Suneel was seeing as major tech trends and Sanjay was seeing as big healthcare needs. The brothers recalled their experience as a family trying to eat better after their father's health scare and realized the need for nutrition coaching was even greater now than it was the two decades before.
Gupta said he saw healthcare as the larger opportunity for Rise, but he chose to start with a direct-to-consumer business model because it would help the team iterate faster.
"The most successful startups I know are the ones able to... test new ideas and get the data back, plow it back into the idea and continue to make it better and better. What was terrifying to me about B2B was that we wouldn’t be able to move quickly," he said.
Gupta said his original pitch to investors was that he would use a seed round to launch a consumer version of Rise prove that it works and develop it into a compelling offering over the course of two years. While many said no, Gupta said other investors, including Google Ventures and Greylock backed the company to the tune of $2.3 million. Rise would then take those learnings and that proven consumer product to healthcare companies and move into B2B channels.
"As a startup sometimes you can believe in your own hype," Gupta said. "One of the things that was interesting that happened for us was that we actually grew quicker in year one than we thought we were going to. We ended up crossing $1 million in revenue very, very quickly. And the growth rate was strong. Growing about 15 or 20 percent month-over-month. We were happy with the growth rate and there was a consideration at one point in time that we said, 'Hey could we actually do this and build out a real business here with meaning and size in the direct to consumer space?' It led to some tough conversations."
Gupta said that a consumer version of Rise would mean making the company squarely focused on weight loss, but to him the company should focus on its higher aspirations. As the team began exploring partnerships with potential B2B partners, Gupta said they were really impressed by One Medical's vision for primary care and that led to the acquisition talks.
"The thing is when you sell a company you are trying to take care of two types of people — your shareholders and your team... We did have a couple of companies we lined up that we thought would be really good for our shareholders but we didn’t think they’d be good for our team, who wouldn’t be happy there. And we had vice versa, places where we thought they had really great engineering culture but that wouldn’t take care of our shareholders. For us, One Medical has checked both of those boxes."
It's now been five months since One Medical acquired Rise for what the Wall Street Journal said was $20 million. Gupta is now One Medical's Director of Mobile Business, a title that seems to indicate the primary care provider sees potential in extending Gupta's experience at Rise to digital services beyond nutrition coaching. Gupta and One Medical aren't yet ready to disclose plans for how Rise fits in to its new parent company just yet.
"[At One Medical] we can roll out and deploy products and features very, very quickly with a cross-disciplinary team and get feedback and data without having to build a new partnership, or get new people or outside constituencies for all that stuff," Gupta said. "From a product development point of view, this place is awesome. It’s really great. We have been with them for five months so I think we are kind of out of the honeymoon period now. And it's still good. I truly am loving it there."