Going Dutch!

Issue #69

May 28th, 2024

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Quick Hits:

✈️ Bark’s first flight has officially taken off

🐱 It’s not Max, it’s Dr. Max! This brilliant cat has just earned an honorary degree in litter-ature

🐈 Taylor Swift’s cats are in constant pain

🐶 Michael did what? The interesting evolution of dog names

🍅 Golden vs cherry tomato

Part 2 of our interview with Hims & Dutch founder Joe Spector. Last week, we mostly covered his journey & experience building Hims. This week's focus is the world of pet telehealth and his new company - Dutch 

Explain Dutch - what do you do? What's your special sauce & differentiator?

Dutch is a solution for pet parents’ health needs. We have a network of veterinarians who are there for you day and night at an affordable price. Several things make us different: in most states, our vets are available to write a prescription and actually solve your pet’s problem, we have almost round-the-clock availability of pets, and the cost of $11/month is an amazing deal for round-the-clock vet care.

You went from human pharmacy to animal pharmacy, applying the telehealth model to veterinary services, what did you see in the pet vet space that needed change that ultimately drove you to launch Dutch?

In sum, lack of access and a lack of affordable care options. The cost of care is egregiously expensive because most of the expenses are being paid out of pocket. There was very little virtual access prior to Dutch and as a result, the majority of pets were getting zero care for years.

It's been 3 years since you launched, how has it been different from your first 3 years in Hims?

Dutch launched in much earlier innings of pet telemedicine so we’ve had to create new paths for the first time whereas Hims arrived after human telemedicine had already gained traction and companies like Teladoc had already gone public.

There’s a lot more consumer education that still needs to be done and several states still don’t allow telemedicine.

The VC environment is very different. Hims raised over $500MM in 3 years. That just does not exist today (unless you’re an AI company). Overall, I think it’s a good thing because we are building a business that’s thoughtful about our burn rate and getting to profitability.

Why have you gotten pushback from "big vet" associations?

The purpose of any business association is to look out for the interests of its members. They’re not necessarily looking out for the interests of consumers or pets. I wrote about this in my Substack but essentially, they wrongly believe that telemedicine will wipe out the need to see in-person veterinarians. This is clearly not accurate and human telemedicine, which has been adopted much wider, has not led to the decimation of in-person doctor visits.

What is the process of finding & training vets to work on the platform?

There’s a lot of demand from veterinarians to find remote opportunities. There are very few ways for veterinarians to work from home. Many veterinarians are primary caregivers as well and telemedicine provides for a flexible work schedule, which is a rarity in the profession.

We wrote a pretty extensive overview here of what our training process looks like.

How were you able to get the domain dutch.com and why did you put so much emphasis on acquiring it?

The world of domains is super shady. On the one hand, a domain name is not going to make or break a company. The bigger issue is the long-term game. Dutch.com would have become a lot more expensive and a lot more costly if I tried to buy it now or even later as we continue to be more successful.

As far as getting the domain name it’s a whole set of dark arts that are specific to each situation. It’s usually about money and so the buyer/agent wants to see how much they can extract. But there are other factors like desire or time pressure for the buyer to sell or something emotional like who the domain is sold to. Years and years and years of negotiations helped me land this one. And it took about 6 months from beginning to end.

I'm sure this is one of your biggest headaches but a headache you probably have already dealt with at Hims. how do you navigate regulatory frameworks and ensure compliance with industry standards since the industry is fragmented based on the state you are in?

• Hire amazing lawyers - You have to be careful who you listen to. For example, the industry associations will state or interpret the law that is either inaccurate or favorable to their point of view, but that may not be the letter of the law. The devil’s in the details

• Make sure that at the end of the day, your service is helping people - Legislators and regulators are more likely to look favorably when there are lots of benefits to consumers

• Be prepared to have the thickest skin ever - When navigating a new field, there’s not a pre-existing playbook. That’s part of the “fun”.

PAWS right there!!! Don’t forget to subscribe 👇👇

You've raised hundreds of millions for Hims and over $40m for Dutch, raising capital is one of the things that founders struggle with the most. What are some things founders can do that could help them attract investors?

There will always be funding for a business with solid fundamentals (Revenue growth, LTV: CAC, payback are the main KPI’s)

At the seed stage, it’s about finding alignment between founder/idea and investor. I can tell you that even after the success of Hims, there were many VCs who questioned my ability to execute. It’s like dating, sometimes you hit it off and sometimes you don’t. As with dating, it’s important to be your true self.

The VC relationship is a long-term one, and your true self will end up showing up eventually. Also, be honest with yourself and these questions:

1. Is the idea meant for venture investing?

2. Is it de-risked enough for venture investing?

3. Do you have the correct team in place?

 If you were on a tight budget but wanted to get the word out about your new product, how would you go about it?

Look for symbiotic relationships. Is there a way that your product or service can be built into an existing network in a way that this network would promote and drive customers to your business? 

What are some major differences you've seen between general and pet-focused investors?

Pet-focused investors are by nature going to understand the industry nuances a lot more. 

General investors are going to come at investing from a dollars and cents perspective by looking at metrics such as CAC, payback, LTV: CAC

You reached the end, you deserve a treat 🍖

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Finally, What kind of dog can jump as high as a tall building?

Any kind. A building can't jump!

See you Thursday!