Before growth, the evolution of Heard

In the words of Vic, we believe in a world where mental healthcare is tangible, affordable, and accessible to all.

Growing pains

This being said, better matching might not be the right way to solve that problem.

I will throw it out there, the therapist matching premise is not unique.

Yet, it seems as though, for most, it is the natural springboard into building in the mental health space. I see a new organization fighting this problem, with a unique perspective, every week. A lot of them came through our funnel to do their research.

It is a challenge. There is no doubt about it. I called 12 therapists, sat down with five, and found one that I enjoyed working with. I am here today because of therapy. Faraz and Vic both share the same story, as do millions in the United States and the rest of the world.

But when the premise is not unique, it comes down to the ability to execute rather than a defensible moat around a unique insight.

Yet, we found a unique insight, and we grew very fast. But, not the unique insight.

We started building in September, launched mid-September, and our numbers were impressive. They were impressive enough to get a nod from some notable VC firms. Impressive enough to help us build some important relationships. Impressive enough to raise a substantial amount of pre-seed capital, and start building up our MRR.

The problem

It is clear therapists will pay for client volume ?— that part of the premise is correct. See Psychology Today. Some will argue this, but the challenge is the demand side rather than the supply side. It is easy to sign up mental health professionals when you have client volume.

This is not to say that the therapist matching problem is not a good problem to solve. There are good companies in the space, with admirable missions and unique strategies. They have the opportunity to be good businesses, but perhaps, not great businesses. This is not to say that they will not evolve.

When you focus on the matching problem, you naturally become a marketplace. You sit in between the therapist and the client. You then become a performance marketing or lead gen solution.

What are we seeing?

There is one thing predetermined if you choose to go this route. You will end up in a system that is not built to support mental health care. Survival comes from employer-based models, insurance partnerships, primary care provider relationships, and a few other less consequential avenues, in the context of demand-side acquisition.

The employer-based models are currently being throttled by VC dollars (ie*a race to get in the door). Nonetheless, we are in a mental health boon where employers are adopting care for employees, but I would imagine they are cautiously building out value-based models that lead from limited to zero margin. Then there are insurance partnerships, where the incentives are not yet aligned. Quartet and Blue Cross are moving in a direction. Will they align incentives? Maybe. Perhaps they will figure out a model that works.

What does this mean for us?

At Heard, as we continued to grow and build, we started to realize an old trope from Sam Altman,

“A startup that prematurely targets a growth goal often ends up making a nebulous product. A product that some users sort of like and papering over this with ‘growth hacking’. That sort of works—until they start digging into retention numbers.”

Our paying users, the therapists, are very happy. Yet, we realized as a team of three, with a bit of help, we could not support the people that needed it most, the clients. We even had sustainable growth channels with an impressive referral business. I know what you are thinking — build a product for operations and hire more people. Double down! And there is a reason you see companies in this space hiring in operations specialists, billing managers, and care coordinators all much earlier than anticipated. But truthfully, when you look at the economics, CAC, and payback period, it just does not shake out long-term for a great business.

Again, we could evolve, but what is immense growth and a poor user experience?

The wrong product.

I could name a few companies out there in this space right now, but I’ll let the future graveyard and case studies tell that story. Maybe that’s too grim. Perhaps, this is just a business hat, and we should not be measuring mental health companies in terms of business opportunity. I digress.

Onward and upward

But all is not lost. In fact, nothing is lost, rather learned. The first investor I pitched, a trusted health tech expert, and a mental health tech bear, told me all of these things. I laughed when I looked at his email last week and remembered the first conversation we had. A few of our mentors and investors told us this same thing. But experience is better learned than taught. On the road is where the learning happens.

As such, we have found ourselves at a curious impasse from choosing the wrong metric and having bad segmentation. We spoke with every persona. We spoke with thousands of clients and hundreds of therapists. We spoke with virtually every payer, and everyone involved in the system. We spent intimate time together with the therapists that loved us most. Faraz developed incredible relationships, and as a result, we have gotten closer to the important metric.

What is that metric?

"Do any users love our product so much that they spontaneously tell other people to use it?”

So what’s next?

We have learned a lot about ourselves, the team, and our opportunity.

• We identified some gaps and are working to fill those with impressive and meaningful talent. These are people with battle scars and true operating experience that can support us in areas where we are not as experienced.
• We are battening down the hatches to build the product that matters. A product hand-in-hand with those who matter most, our customers.
• We built out a new OKR model, focused on the important metrics (not hyper-growth), with a different, more qualitative north star.

As with every startup, you are going to get it wrong. But that doesn't matter as long as you are learning and placing the magnifying glass where those learnings take you. And so we are making a big bet. A bet that is either extremely wrong or very, very right. And that is extremely thrilling.

So thrilling, I have incessantly pitched Lyft drivers, flight attendants, coffee baristas, friends and family in the last two days. 

In the words of Robert Frost, "The woods are lovely dark and deep. But I have promises to keep, And miles to go before I sleep, And miles to go before I sleep."