PMF Convo #17 - Mohit Kumar, Ultrahuman

I recently spoke to Mohit Kumar, cofounder and CEO, Ultrahuman, a fast-growing consumer health startup, as part of my PMF Convo series, where I speak to founders, operators, VCs who have struggled with PMF (product-market fit) successfully, or unsuccessfully, with the startups they have founded or worked with (or work at).

Ultrahuman sells such devices as the Ring Air, a sleep tracking wearable; M1, a continuous glucose monitoring device and accompanying platform and Ultrahuman Home, that monitors environmental markers such as light, air quality etc. They help you track your healthcare vitals and help you improve on sleep, nutrition and health. Ring Air in particular has been a big hit with a rising share of revenue coming from international markets. Previously Mohit cofounded a food delivery enablement startup called Runnr (acquired by Zomato in 2017).?

In this interview, Mohit talks about how his view on product-market fit (PMF) have evolved, Ultrahuman’s PMF journey, why more and more brands should eschew performance marketing in favour of compounding channels like content, influencer partnerships etc., why nudging consumers to open your app in the morning is an effective growth hack to drive retention, as well as his advice to younger founders on building a personal runway before worrying about the company’s runway, and finally his fave books and podcasts.?

Mohit is an innovative thinker, and his differentiated approach to brand-building, long-term focus (and willingness to tradeoff short term gains), his passion for health all come through in this conversation. An edited transcript of our chat is here. Below, I have shared excerpts of the most interesting passages from the transcript of our chat along with my comments where relevant.

From just thinking about product to worrying about users

Mohit, when he was building his previous startup (Runnr): “I used to understand PMF as only a product problem that if you build a good enough product, it'll find its own market. “

Mohit, now, building Ultrahuman: “I need to build it for the right nature of the customer and in some way get access to that kind of customer. “

For selecting the initial beta-testers, the Ultrahuman team went through the twitter feeds of the people who had applied and weeded out those who were complainers or came across as negative people. They wanted positive-minded people who would understand that the early Ultrahuman product wouldn’t be perfect and were open to exploring and giving feedback on an imperfect product with a positive growth mindset. It is an interesting example of building alignment for the product with the persona or user base.

Mohit: “It's like you're building your own captable. So, you're not just getting people for money, you're getting people because they're getting on your product with some belief in you with a long-term mission.”

Mohit’s definition of PMF

Mohit: “One definition that we continue to use for PMF is every channel should, if it starts becoming progressively cheaper for us to acquire users, it's a PMF channel and every product that has PMF it progressively becomes easier to acquire users. Ultimately it's a user acquisition engine, right? In many ways. So if a product or a channel is helping us make acquisition cheaper month over month, it means there are signs of PMF. “

I liked this definition of PMF that Mohit lays out: enabling progressively cheaper and cheaper acquisition of consumers. He also seems to have a channel-lens view of PMF - certain channels seeing a drop in CAC and thus becoming PMF channels. In addition to CAC (Cost of Acquiring Customers) reduction as a strong signal of PMF, Mohit lays out other markers or signs of PMF: “CAC could be one, repeat revenue will be another one. So for example, if you have 20 stores in retail setup, and let's say you're predicting revenue for September, if 90% of the revenue is taken care of by the future month prediction revenue by all the old past accounts, that basically means that they're in some ways repeating or compounding. So repeating or compounding is another bit to think about, let's say the product market fit marker. I think engagement is a strong one to a large extent. “

Ultrahuman’s PMF Journey

Interesting observation from Mohit on how he sees each vertical at Ultrahuman going through their own PMF journey and thus being at different stages of the PMF continuum. This granular view of PMF (he sees even channels as along a PMF continuum) is an interesting perspective.

Mohit: “For us that took around four years to be honest. This actual feeling, and I would say that it's not like we have PMF everywhere in the company. There are a few capabilities or new product launches that are still very much in the nascency. They don't have PMF, they don't have any sort of even data to improve right now. So still, for example, we have a product called Ultrahuman Home, it's pretty early. We still believe that our CGM (Continuous Glucose Monitoring) product is pre- PMF right now. Ultrahuman Ring Air is the product that actually has acquired PMF to some extent. Some capabilities have had PMF within that. The software capability that we have built recently, which is power plugs, does not have PMF yet, it has to get PMF over time. So, you can see that some parts of the puzzle have PMF, some parts of the puzzle is that it will get to PMF. The good part is that on an overall basis, the part that has PMF is the largest part of the pie. That's like 84% of our revenue and that drives our flywheel and that actually helps other non PMF products to sustain so that we could take a much more patient approach towards those experiments.”

On Channels

Performance marketing, per Mohit, is not a good channel; it gets expensive over time. It is designed to get more efficient at taking money away from you, he says! The channel that he recommends is SEO / content. Allied to that is working with key influencers on creating content for Ultrahuman’s Youtube channels, which has been better than using influencers to share promotional messages.?

Mohit: “When we started there was performance marketing, but luckily, we killed it very early, we didn't succeed in it. We failed in it in many ways and I think it was good that we failed in it. Any channel that depends on a pipe of money, so money on channel on, money off channel off, almost always never works is what we have seen. You'll notice that the more money you put in, the more efficient it becomes at taking your money essentially…In many scenarios you pump in money quickly, it'll actually increase the CAC….it does not compound. An example of a channel that becomes cheaper over time is a channel like SEO, like writing your own content, a channel like your own YouTube videos, those become cheaper over time because older videos, if they're made well, they'll have more credibility because of age. “

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Mohit: “the channels that worked for us, and it was a painful journey, was around, let's say for example, content creation, writing our own blog. Every month our traffic has grown YouTube videos. So, essentially giving a product to YouTubers and the YouTubers doing a review.?

So, it is now the largest and one of the most profitable channels of growth hacks. And the other cool thing is that when we launch a new feature or new brand, we can just go back to these people and say, look guys, we are launching something new and all those hundreds of millions of users who are available through their channels, we don't have to spend an extra dollar to actually acquire those users anymore. “

Morning usage of an app drives its retention

This passage below blew me away. Love to know other examples and case studies of this kind.

Mohit: “What we have seen is that there is a psychological angle to engagement for a user on an app. What I mean by that is as a human being, your learnability changes over the day. So, when you wake up you're more neuroplastic because your brain neurons are fresh, you want to learn more things and then it degrades over time and then by the time you go to sleep, you have built up adenosine in your brain and then you go to sleep because you are tired and you don't want to learn more things, alright? That's why reading something will excite neurons and you'll feel like i don’t want to use any more neurons, now let's go to sleep. Now interestingly, here's the fun part: the apps that get opened in the early part of the day, the neuroplastic part of the day are the ones that have the most amount of retention in the world.”

“if you say that app opens per day are important, you should probably give more weightage to apps being opened after people wake up maybe three to four hours from there because you're way more neuroplastic, you're learning new behaviours and if you end up making someone, I read this study somewhere that if you end up making someone open up the app 90 times within their first 120 days, which is pretty frequent, then you become a core part of their life, unmissable behaviour. “

His advice to younger founders: Build personal longevity before company longevity

First take care of yourself before you take care of your company is the advice Mohit gives younger founders.

Mohit: “The other advice which might be even new for me, and I found a lot of benefits personally, is that develop personal longevity before you can think about company longevity. What I mean by that is it could be your health, but also your bank balance, your personal bank balance where you, before starting your own company, have a comfortable runway personally before you can actually dedicate 24*7 to something like a mission. And generally the problem is a lot of people who are starting up, I meet and sometimes they'll have this question, I'm struggling because I'm on zero salary for the last two years, and I'm like, oh, how much money have you raised? I have $3 million in the bank. I am like, dude, if you take a 10 Lakh salary or 20 Lakh salary and make your company work, isn't that a better deal overall basically to survive?

Why are you being so krantikari (radical) in life for no reason? It's like yes, make the right kind of sacrifices, sacrifice your time, go 24*7, go all in. But why sacrifice your essentials, your basics, your nutrition, your health, your mental health, your family, etc? Those essentials are important. Statistically, this is why rich people get richer or successful people get more successful because the most successful businessman in India, people who create a business in India are the people who already have some kind of downside protection already. It's not the rags to riches folks. Rags to riches is the story which becomes famous because, oh, this guy slept on the streets and became a millionaire. That becomes famous. But that's not truth, that's not practical. It's good PR, but it's not practical, right? In most scenarios, if you're working in a job, develop four to five years of personal runway and invest in places where you could get some kind of interest, etc. get to a good comfortable place, then take the plunge or calculated risk.”

His recommended books and podcasts

These days, Mohit is reading a lot of public-market related content. He says “because it tells me about the future a little bit and has clues around what we are building towards….basically this other part which is how public companies suffered, grew, again, recovered.”

Recent reads - Buffettology

Fave reads - ‘Medical Physiology’, Emperor of All Maladies, Outlive

Podcasts - Tim Ferriss, Ben Greenfield, Huberman, Joe Rogan