How Hims founder Andrew Dudum plans to build a $20 billion business
Hims’ minimalist packaging, bold serif lettering and casual tone of voice make it a millennial marketing dream. That modern branding gives the company’s wellness products the familiar not-your-parents’ feel of fellow digitally native brands. But under the hood, Hims, now a year old after launching last November, is a different company than the dime-a-dozen direct-to-consumer brands claiming to disrupt sleepy categories like socks and suitcases.
Hims’ products address problems that usually need a doctor’s prescription to treat, despite being highly common, including male pattern baldness, erectile dysfunction and acne. Customers only need to answer a few questions on the e-commerce site with a physician to receive prescription products, which rids the need to make an appointment, visit a doctor, get a prescription, have it filled and pick it up at a pharmacy.
Hims has raised $97 million in three rounds of funding in the past year. It has used that money to press into other areas. In October, the company introduced Hers for women, which offers birth control prescriptions and treatments for acne, hyperpigmentation, decreased sex drive and hair loss.
CEO and founder Andrew Dudum reflects on the company’s first year and shares his plans for building Hims into a multi-billion dollar business.
Hims is often lumped into the broader direct-to-consumer movement in retail. How do you see it?
While Hims looks like a DTC business, it’s unlike them in that we’re essentially giving men, and now women with Hers, access to licensed physicians in their state with a plethora of health products all on one platform. Most of these companies and brands focus on one single product and pave the way to make that product accessible. We do that across a category by simplifying healthcare. So we consider it a consumer healthcare brand, and it’s been an incredible year. In the first week, we did $1 million in sales, and that was our smallest week ever. It’s been rapidly growing since then.
We’re talked about in the [DTC] conversations though, because all the messaging that applies to traditional DTCs applies to us. We’re going directly to manufacturers, then packaging and branding ourselves, and selling products more affordably. But we’re also doing that for the health-care system. We’ve taken retail pharmacies like CVS and Walgreens out of the equation, which are expensive partners with expensive store locations. We’ve taken insurance plans out of the equation, which requires you to make visits and pay copays. We rip out those costs, and connect you to a licensed physician that can review you and in five minutes get you what you need. So to us, ‘DTC’ actually applies on a much bigger scale.
And the business looks a lot different than it did a year ago when it was considered a trendier Rogaine. What did the company roadmap look like from the outset?
The platform was built since the beginning to be a full health and wellness company. We want to be the single brand for men’s and women’s health that can consult you, so you can be proactive about healthcare. To complement that, we’ve also invested in education and content, so it’s a place you can come get advice and answers to questions people don’t always want to ask. We think what we’re building is a $10-20 billion company in the next few years, not a DTC brand that gets picked up by a big CPG company. That’s why we’re so excited. It’s limitless, as long as we can maintain the trust of customers and give them access to things they wouldn’t easily have access to otherwise.
What does a $10-20 billion business model look like today?
You have to take the access and affordability of launching products and brands, which has been revolutionized in the last couple of years in the space, and then use traditional, in-person assets and connections to build long-term trust. In a lot of ways, it’s never been easier to build a company, because you jump on a website, create a product and launch a Facebook ad campaign. But it’s never been harder to build a brand for those same reasons. When it’s easy to be viewed by millions, making something that can resonate is much, much harder. So you need to take the best of both worlds. It’s not enough to build a brand using just the last five years of DTC tactics, but it’s not enough to be a traditional retailer, either.
What it comes down to and what guides us is this: You need to build a really good company. But instead, you hear a lot of this: Raise a ton of money, spend it on marketing, get a bunch of customers and build really fast. I’m not convinced that that’s the best way to build a long-lasting business. So if you want to build a long-term brand, you have to have incredible financials very early. You need diversity in revenue and customer. And you need loyalty and love that could last for 20-plus years. A lot of brands being created could spend more time thinking about this stuff because the pump-and-dump of venture capital is not sustainable.
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