The Magical PMF Moment for Telehealth Founders

Product-Market Fit (PMF). It’s the thing that every founder strives for. Some find it before their seed round. Others realize they have it after months of iteration post seed. And some unfortunately will never find it. Over the last six months we met up with telehealth founders in Primary’s network and discussed that magical turning point where they knew they had hit product-market fit for their company (and how they measured it along the way). Read on to see what they had to say.

And if you haven’t already, check out our newly developed framework for evaluating verticalized telehealth companies.

What are some of the ways you measured your initial PMF?

“The day that we launched the website, we had opened up sign-ups for friends and family. We had also taken out a few Google search ads and within hours, a woman in upstate New York became our first customer after having spent only 3 minutes on the site. We had acquired our first member without any reviews for a program that costs $1,550. I wasn’t sure the size of the market, but I knew that we had found product market fit.”—Isabelle Kenyon from Calibrate

“Customers told us when we had a product market fit. We started seeing it in our AOV, with most customers choosing to pay for at least a year of service on day 1. Then our retention numbers exceeded our most optimistic expectations.” —Gene Kakaulin from Curex

“We’ve gone through 4 major iterations to get to where we are today, having found PMF in our two most recent models. We know we hit on PMF when we start to see organic referrals among customers—the best measure that our product was resonating and creating value for our customers.” —Pan Chaudhury from Perry Health

“Our product market fit has always been measured in the feedback that we receive from our patients. We receive countless emails and calls of gratitude for the work that Paloma Health does. These messages affirm that we are addressing a significant pain point, and they ultimately lead to our growth. Beyond product-market fit, we are obsessed with product-channel fit, which focuses on the power law of acquisition–having one strong acquisition channel is fundamental to success.” —Guillaume Cohen-Skalli from Paloma Health

What was the turning point or aha moment?

“Women weren't just asking us questions for things that maybe could be treated on the internet, like a UTI or birth control prescription. They were also bringing our app with them to the real world and messaging us in the doctor's office. So in the waiting room, it was, 'Hey, Tia, why do I have a deductible?' In the exam room, it was, 'Hey, Tia, which IUD should I get?' And post appointment, it was, 'Hey, Tia, can you explain my test results?' So we were care coordinator, transmitter, navigator, all the way through and decided that we had this really powerful thing. We were at the digital front door and women loved and trusted us. Why would we refer them into the healthcare system that they hated? All the value creation was actually in the delivery of care. And so we had this kind of 'aha' moment and decided to bet the business on becoming a care provider.” —Carolyn Witte from Tia

“We launched the product first in Israel with one of the largest HMOs there. We got a bunch of PR coverage and became the number one free app in 2018... not only in health but across the board. This was before TikTok, and we ranked ahead of Snap, ahead of Facebook and Instagram and WhatsApp and all those top apps. I'm naturally optimistic about K Health’s future, but my sense then was awe and confirmation: People really need information and they then really need to resolve their problems ASAP. That’s what K Health does and that’s what matters for our business.” —Allon Bloch from K Health

How can founders emulate your PMF journey?

“I would suggest founders constantly examine the different incentive structures that exist in the system and how their offering fits – learn about the ins and outs of capitated models, ACOs, direct contracting, employer incentives, payor incentives, etc. The key to PMF may be a change in how the product is positioned in the ecosystem as opposed to the product itself.” —Pan Chaudhury from Perry Health

“It is vitally important that consumer healthcare founders take an extremely consumer-centric approach. One of the first systems we implemented was an automated system to solicit and collect reviews after a patient is checked out. Founders should be interviewing patients, reading customer support inquiries, and honing in on the pain point that is being solved. Once this is identified as the north star, it opens the door to properly messaging, marketing, and scaling your product.” —Guillaume Cohen-Skalli from Paloma Health

How did your take on PMF evolve?

“There are different phases, I guess, of product market fit. Hone’s business is complex because you could arguably say that selling at home assessments would lead you to believe that you're at product market fit. You could arguably say that a patient needing a physician and purchasing the product could mean product market fit. That was the first data point. The second data point was after the patients saw the physicians and they were willing to pay us $200 per month for this product, and it happened probably a 100 times over and we could start to see some repeatability in the model. We said, wow, there's definitely a real product market fit.

Then after your 90 day check-ins happen and they continue to actually buy a little bit more medication because their physician was recommending it, then we thought this is product market fit. But the most interesting one was when we saw patients that couldn't get their assessments done right, for whatever reason, be it COVID-19, delays from the U.S. Postal Service, etc. They didn't throw a middle finger at us and say, 'I hate you.' They said, 'I am sticking around and I need to get this medication.' No one would put themselves through that many finger pricks and spend that kind of time if they didn't really need something. And so I think that the combination of all those things told us there's something very real here.” —Saad Alam from Hone

Curious to learn more or swap ideas about digital health? Reach out to me at jason@primary.vc or @jasonrshuman on Twitter.