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Interview with Hilary Coles, Co-Founder of Hims and Hers

The Hustle’s Brad Wolverton interviews Hilary Coles, Co-Founder and VP of Product of Hims and Hers

Adam:   All right. This next one is pretty special. We’re doing an interview style so it won’t be a keynote. It’ll be an interview. The interview is Brad Wolverton, Brad is the head of content at the Hustle. He oversees our daily email trends and any advertising including overseeing our editorial and creative team. He is a previous New York Times, Washington Post and Business Week writer. He will be interviewing Hillary Coles who is the co-founder and VP of product at Hims and Hers.

Recently Hims and Hers was valued at $1 billion. They focus on sex, skin and hair products. They are absolutely taking the market by storm and you’re going to learn a little bit about that. Now, welcome Brad and Hillary.

Brad: Hillary it’s so nice to have you with us. Thanks for joining us today.

Hilary: Thanks Brad.

Brad: Well, you have quite a story. As Adam was saying, you’re a company that was recently valued at $1 billion. This whole thing started just two years ago. Literally November, 2017 you start Hims a year later you start Hers, but I’m going to ask you to start a little further back when you sort of started thinking about what the possibilities were. Can you tell us this story of how this all came together starting I guess summer of 2016?

Hillary:  Yeah, so I’m Canadian and I moved to the US for a business school and I remember when I moved, I went to the pharmacy to get my birth control, which in Canada had very privileged access to healthcare and never really thought about it to be honest. And the woman at the pharmacy was like, “Ma’am, you can’t just walk in here and demand things, that’s not how this works.” And that was my first kind of barrier that we came up against. And alongside that in the market, there were these incredible macro factors happening, which is just that telemedicine laws were changing across the country so that in the majority of the country you did not have to physically go see a doctor anymore. You could see them from the comfort of your couch or on your commute home through your phone, wherever you are comfortable. And alongside that there were these really important brand name drugs like Viagra, like Cialis, like Propecia that were coming off patent, which allowed us to offer consumer forward healthcare for the first time.

Brad: To become a really progressive director consumer of healthcare company. But in those early years, what did you think you were? What were you building?

Hilary: So I can kind of break it down. The building process into three chapters. We looked at what it would take to start a man’s wellness company at first. And it turns out it was so complicated and the more stones we were uncovering in the healthcare system, how expensive it was, how much time it took, how complicated it was. The more we realized we had to build a much bigger company that we had intended to. We had kind of started thinking we were at this quirky little company and the more we worked on it, the more we realized it was. The healthcare system today was incredibly terrible, was not serving the customers and should be approaching all of healthcare from a really consumer lens.

So that was our first chapter was understanding that every single state we would be live and needed to have its own medical entity and which took a ton of time and a ton of research.

And then we launched in that second chapter, our MVP company, which was called club room fun fact by Instagram is still live today. And we ran, we did it to understand our cost of customer acquisition. We did it to understand what people were really looking for specifically in the man’s hair loss space. And then I remember being on MailChimp and we’d hit a couple thousand customers and saying essentially BRB see you in six months. And then that chapter free was us really working on bringing Hims to market internist.

Brad: So you, your first week was pretty remarkable. You end up with $1 million in annual recurring revenue in one week.

Hilary: Yep.

Brad: That’s what you launched at.

Hilary:  That’s what you launch.

Brad: So I was going to ask her what her challenges were. But when you start off that strong, it’s kind of hard to ask for challenges. What were some of the challenges early on?

Hilary: Our biggest challenges were convincing people that this business was worth tackling. There were all these taboo super stigmatized topics and I remember showing up to a manufacturer in the middle of the country and begging him to put us on the line for a generic Rogaine. And he was like, “Truly, I can’t tell you enough that this product has not moved in 10 years.” I know exactly how much is being sold across the country. You’re not going to do it. I feel bad taking your money. Essentially we had people, agencies who are clearly just meeting with us out of favor or investors or friends of friends and who clearly did not want to be sitting talking to us about erectile dysfunction and representing us. It was that, and then this was an entirely new concept, right? You have direct to consumer businesses, you have subscription businesses, and then you have healthcare merged in with that.

So we couldn’t just use a regular fulfillment center. For example, we had to use a pharmacy that was also a fulfillment center because we can’t just give you medication off the back of a truck. A pharmacist literally has to be the one to close your individual Hims and Hers box. And we had our main fulfillment pharmacy in our very first day, so we had launched, had all these great PR articles written about us. We’re watching Stripe to see every single transaction come in, all 13 of us and our pharmacy calls and says, “Ah yeah, we’re not really interested in this anymore good luck though.” And we were like, “But this is our business we told all these people.” And so-

Brad: So they’re just trying to jerk you around on-

Hilary: Just trying to jerk you around.

Brad: On odd numbers on the price.

Hilary:  Mm-hmm.

Brad: Yeah Turns out [crosstalk 00:06:07].

Hilary: Flew down to Ohio and tried to figure out what we could do together.

Brad: Okay.

Hilary: Very glamorous

Brad: So when you think about this market though. I mean Viagra was doing like a billion and a half dollars in sales before the product came off patent. That’s obviously a lucrative market. How did you ward off competition early on?

Hilary:  So for us it wasn’t really about piggybacking on the brand of Viagra. It was about this market that Viagra had never properly addressed and it’s that men will start to experience a quarter of men under the age of 40 will start to experience erectile dysfunction and then that number will only grow. It’s not just old rich white guys in linen pants that got erectile dysfunction. It’s a very wide, very common condition.

And that was our approach, which is numbers game. Chances are that this will happen to you. If it does, that’s totally fine and totally normal. And by the way, there are options and you don’t have to go in, wait the 16 days it takes on average to go see a doctor in this country, pay the $150 it takes to see a PCP and then tell somebody about your deepest seated fears, but you’re also not on dr Google and Reddit where you’re only going to get told you’re going to die. So it’s like reputable, affordable, and targeted to this new market that can actually use it, not just for this rarefied guy who can only pay, who can afford a $500 a month.

Brad: So your market was way bigger than what they were doing is what you’re saying. And you recognized early on that people were going to search for these terms and that was the way in on this business.

Hilary: Yeah, we were talking backstage. I think there’s like the most modern human experience is not knowing the answer to something and Googling it and saying something’s wrong with my body and I don’t know what to do next. So I’m going to type it into Google or ask Reddit community and see if it’s normal. Has anyone else had this before? Like how weird is it before I’m going to start bringing it up to my family or my friends or my partner.

Brad:  What Andrew did I mean your co founder has said that like it’s the market you serve as we’re talking about Hims mostly. We also have Hers, we’ll get to that in a second. But with Hims it’s like the 2:00 AM search on Google.

Hilary: Yeah.

Brad: So you’re trading on that sort of market where people don’t take it into the open, they just ask their computer.

Hilary:  Exactly. And no one feels good about yourself. You’re like, “Oh, like, well am I weird?” “Am I different?” “What’s happening?” And now not only are you up at 2:00 AM and you’re stresed, but you have to figure out a way to solve it. And that just none of that existed. It was so complicated.

Brad: So get into some of the more granular stuff about how you built your business. One of the things I was curious about is how did you position yourself as an authority? Because you’ve obviously, you talked about the stigma of ED and you’ve helped reduced that stigma I think, but how’d you position yourself as an authority and what were your keys early on to sort of winning the search traffic?

Hilary:  Yeah, so we started in May of 2017 and we launched in November of 2017 building up an incredibly thorough content database because in this exercise of Googling what happens when, what is this normal? If we found there wasn’t a lot of reputable content out there, so we made sure that we had, and we still continue this practice. We had hundreds of pieces of organic content every single month because we need to ensure that A, our content is good and thorough and the best of what’s out there. And I think we rank top 10 I think in almost-

Brad: I’ll give you some quick facts for the audience. We did this a search on some research on Hims for a piece that we did on them for in our trends product. We found that there are at least 200 articles on the four Hims domain that rank number one for different medical keywords and every month there are around 70,000 searches related to the keywords, erectile dysfunction, Viagra for which Hims is also ranked number one.

Hilary: Right.

Brbad: So you’ve aced SEO, you basically, you’ve cornered that market that way.

Hilary: Well, it was important if all these men who are uncertain and confused and don’t know what to do and there wasn’t good content for them and that we thought that was totally unacceptable. And on the other side, and I think this applied even more to women, is about being seen by that content. And what I mean by that is having a breadth of saying, if you’re a woman with Pecos and you’re also going through, you’re all trying to find the right birth control for you, you’re trying to figure out your next play in your health care. It’s important that we have content that is speaking directly to you. If you are a man who’s married who has premature ejaculation and then is over the age of 40 we need to have content that directly applies to you.

And so I think both that breadth and that depth has been key drivers for us and having people feel like we are meeting them where they are at when they come to us.

Brad: So you told me you hired someone. One of my old companies was NerdWallet, which does SEO really well. You hired someone from there. But then you also created this team of writers and content producers and you have like 10 to 15 people that are full time-

Hilary: Mm-hmm (affirmative).

Brad: That helped generate these millions of page views a month. Is it true that like half of the people who you get business from originate from a blog post?

Hilary: Yes. It’s 90% of the people who come on our platform, the men who come on our platform have never sought treatment for the condition they’re coming to us for. It’s unbelievable. So to have that, it really speaks to how important information is and doubling down and saying, this is my market and I’m going to serve them and I’m going to think through that whole life cycle that they’re going to have with me.

Brad: So this is a pretty radical change in how people buy medicine. Can you walk me through how your products reach these customers and what’s so different about that than traditional medicine?

Hilary: Yeah. So when initially started, if you were a man looking for hair loss products as an example, your options were to use women’s products to go to the very poorly stocked back corner of a pharmacy to buy drugs. Illicitly online. None of these are very good options. And so we recreated it so that it was clear and you were in control and it functioned that way that we believed it should function, which is a lot, which should look like a lot of the other e-com experiences you see.

So today when you go to forhims.com or for hers.com you can go, you can select your condition and then fill out a medical questionnaire which will be reviewed by a doctor who’s licensed in your state. Our average tenure of doctors who have been average experience level of doctors is 14 years. So doctor who’s licensed in your state will be matched to you. We’ll review your answers, help you decide what’s the next best step for you. And if it’s appropriate, we’ll get medicine, we can help you get access to medicine and have that shipped directly to your door.

So skipping that pharmacy, skipping going into the doctor, having a be entirely on your hands because fundamentally we believe that the only voices that should matter in making your healthcare decisions are the doctor and the patient.

Brad:  For convenience. You haven’t talked about price.

Hilary: Yes, affordability.

Brad:  Viagra costs like four or five times more than what your product, your generic alternative does. But there’s more than that to your success in the convenience and the price. I mean, I’m thinking about this stat you just shared about the 90% of your customers haven’t been treated for ED or hair loss. So you’ve almost created new markets. How else have you done that? What are some of the other successful growth strategies you’ve had?

Hilary: Yeah, So one thing we did early on and we’ve continued to do is think beyond the Instagram scroll. So even before we launched Hims in November, 2017 we locked up channels. I’ve got exclusivity, which is what I would recommend to everyone in the seat room ask for exclusivity in your category and we test in at least 2000 given channels on any given day. We’ve taken over the urinals at the giant stadium because that is a couple of seconds, couple of minutes of attention where you have eyeballs. And so if you have this strategy of anything is a channel. If you try hard and believe in yourself, like we’ve sponsored cornhole tournaments, we do direct mail, we do out of home, we do TV, we’re not overly relying on any one thing.

And I think that’s part of, Andrew and I had worked together at an almond app consumer app before and we had been totally thrown around by the Apple store and if competitors and Facebook and Instagram and we just knew we could never do that again. So we’ve always been extremely diversified and I think that really speaks to us Hims and Hers being for everyone because it’s not just about the same people that are on their Instagram that every other DTC company is. Yeah. Is targeting. It should be for everyone and each person is going to be different and find us in a different way.

Brad: You’ve also been responsible for a lot of the growth in the social space, the organic growth.

Hilary: Mm-hmm.

Brad: You’ve, can you talk a little bit about the unboxings that we were talking about earlier in the, I think you called them shower parties.

Hillary: Yeah, so one of the ways we didn’t know that this, we didn’t know how this company would be received, the brand would be received. I remember even early on my fiance was like, “I don’t think Hims is a very good name.” The cactus stuff is cool, but like I don’t know. And so we were like, is everyone going to laugh at us? And the pink and the cactus and who knows? But we liked it and we believed in it. And that’s something else I would say is if it resonates with you, it’s worthwhile. And so we launched November, 2017 13 employees and you see posts rolling in on social and it’s like your mom and your friends and all people that we know. And I think two weeks after launch we got an unboxing video and suddenly like I picked my head up and ask the office, does anyone know this guy?

Brad: What’s an unboxing video?

Hilary: An unboxing video? So well, so we find out, no one knows this guy, but this guy has posted a video opening the Hims box talking about how the smell cause then we were spraying every single box with our favorite cologne. He’s talking about how you open the shampoo and what the shampoo smells like, how it feels, what the black cherry gummy bears tastes like, what this whole process looks like and how he heard about Hims and he’s using it and isn’t it amazing? We’re like, “This guy is openly talking about his hair loss publicly on a social channel and tags us.” He wants it to be a part, he wants it to be public. That outpouring had never happened before and that was when we really knew we were onto something. And so we posted it and started receiving all of these other videos and the videos got even more intimate.

We had these, we called them shower parties, and essentially it was guys singing into their Hims shampoo, hair growth shampoo bottle. And he was just feeling himself like in the shower, starting off their day, having a great time. And they were submitting these publicly, again, saying like, I’m in control. I’m taking care of my health. Here’s the Hims hair loss. And I don’t think, I think there’s a little bit more believable now, but three years ago, two years ago was not.

Brad: You didn’t expect to get locks-

Hilary: We couldn’t imagine-

Brad: Locks of men’s hair.

Hilary: Yeah, exactly.

Brad: So one of the reasons that you’ve succeeded, it sounds like, is because of the failures of modern medicine. So how has your company found traction as a result of what other healthcare services do wrong?

Hilary: I think both the healthcare system, I think that for starters, the healthcare system lost sight of its on customer. It was not creating services that were affordable, that were transparent, that were designed in a way that were understandable and empowering the average consumer. And so we started there and we created everything from the moment you enter forhims.com forhers.com the moment you receive the product. It’s all with you in control as the end consumer. And no one had ever put that consumer lens to medicine and our brand that speaks to you in such a direct way. No one had ever done that. It was all like this high level meant to be complicated. Terribleness and then on the wellness side, I also think they did a poor job. Wellness has become this entity that is really expensive and is made for people that have the time to just look online for hours and compare reviews and try to understand what they’re going to do with their limited disposable income just for trying to take care of themselves.

So I think both healthcare and wellness before Hims,and Hers were not doing a good job of empowering the consumer to take care of themselves. And fundamentally that’s how we’ve approached everything. And I think that’s made all the difference and why we’ve seen such traction.

Brad:  So speaking of the, we’ve talked a lot about the men’s products, but on the women’s side, one product I came across recently that was rated really highly, it was called the morning glow vitamin C serum which-

Hilary:  That’s mens.

Brad: That’s mens exactly, I’m sorry. So it’s a pretty, I’m just trying to think in terms of the products you mentioned as we were talking about there’s a lot of stuff in the market that’s like, you know gimmickry.

Hilary:  Yeah.

Brad: And you told me that there’s really only three things you need. So what are the products that you need? If you’re-

Hilary:  So for skincare you really only need three things. We have a board of dermatologist that we work for, we work with and give us and we are lucky enough to get their information and they all say the same thing. You three products, you need sunscreen, you need a vitamin C serum, which we offer and you need a retinoid or vitamin A, which essentially is like a time machine for your face and speeds up cell turnover.

And between those three things you got your bases covered and everything else. I mean there’s not even a lot of science around face wash and moisturizer. To be honest.

Brad: It’s a lot of money people spend on.

Hilary:  It’s a lot of money people spend, and again it’s very much on our brand to directly say you-

Brad: You really need to put wipe the serum on your face. That’s what you’re telling me though.

Hilary: Yes.

Brad: The vitamin C?

Hilary: Yeah.

Brad: Okay.

Hilary:  Do it.

Brad: It’s $33 it’s a lot cheaper than some of these moisturizers.

Hilary: Dermatologist not covered by most insurance plans. I average cost of tretinoin, which we carry on our site for less than $40 is $200 if you go to a pharmacy.

Brad: You told me that you expect year three to be about how you show up in real life, not just what your products look like in an Insta feed. What do you want people to think about when they think of Hims and Hers?

Hilary:  We believe Hims, his and Hers is about empowerment and about de-stigmatization and about you being in control of your healthcare, your options, whatever you choose, and in this world where it’s not particularly hard to launch a company and market it on Instagram, it makes the trust of how you show up in person that much more important, especially with healthcare. And so we want to be in our quest to be for everybody. We want to be showing up in real life and having people experience us and trust us and see that we are affordable. We are not complicated. You know exactly what you’re getting from us and our goal really is to be in every single household in the next five years.

Brad: Last question then we’re going to get to some of your all’s questions. I’d love to get your take sort of take off your Hims Hers cap for just a minute and project out a little bit about other interesting disruptions you expect to see in the healthcare industry in the next few years. If you were putting your money on something, what would it be?

Hilary: Oh man, I’m really excited about a couple of things. I’m very excited about generally how you can use technology to improve affordability and access to greater number of people. And I think AI is a really interesting way of doing that because some of the triage tools that are out there are able to get people to the right care to the right product that they need when they need it, which is a huge problem in healthcare system today.

The other thing I think is really interesting is digital therapeutics. So I think in this idea that medicine is not just a pill, medicine is a process. Understanding how for chronic conditions like diabetes, for hypertension, for addiction, for example, how you can use online programs like CBT, how you can create comprehensive products that will help patients longterm have better adherence, have better outcomes. I think it’s this holistic idea of health that hasn’t been touched upon before. It was kind of like you take your pill and go or go for a walk. Like there wasn’t that melding of everything. And so I’m really excited to see what comes up.

Brad:  It sounds like you’ve got, maybe there’s a bigger evaluation here that we should be talking about than $1 billion. It’s a bigger company.

Hilary: Lots-

Brad: Thank you so much. I want to take a few questions here. So the first question is how have you pushed in an industry driven by regulations that are out of your control to change faster to meet consumer desires and behaviors?

Hilary: Yeah, I think that’s the key thing is we’ve always made it about improving customer experience and meeting consumers where we are. And we’ve had really great success working with state level legislation most recently in Florida to help push through telemedicine regulations that would allow consumers to see doctors asynchronously. So you’re not in person on their own time and ultimately on their own to say so. So we’ve had a good amount of success. It’s required building out a legal and compliance team and us kind of proactively entering the fields. But it’s been really, really exciting.

Brad: Since you’ve have several direct competitors like RO, how do you see this market, your approach to competing and if there’s room for many similar brands?

Hilary: Yeah, I think about it the way you’d think about Ride share maybe 10 years ago when you had to convince people to get in a stranger’s car, you’re now convincing people to see a doctor, which by the way, no one is doing right now and see a doctor on their phone. So I think there’s a ton of space in the market and we never truthfully don’t think of competitors that much because the needs are so wide and so underserved right now that the more competition, the more that people feel comfortable seeing a doctor and seeing the doctor on the phone is better outcomes for everyone.

Brad: Awesome. And the last one I have, you had barriers trying to advertise a pretty sexualized product?

Hilary:  Yeah. When we launched Hims, Facebook, Instagram, a lot of companies had no rules and regulations around like eggs that were peeled. By the way, fun fact, I Hanfield those or cacti that looked like looked quite phallic and telemedicine. So it was like totally new and unchanged. And then a year later or untapped in a year later when we launched Hers, all of a sudden they had something, some of these infrastructures and play on these rules. And I think everyone is trying to get smarter on it and it’s been a dance. Truthfully. We submit things, they get rejected, sometimes we modify them and we keep going. I think we have a very curious creative team that’s always looking to push the boundaries and if we can shoot for way up there and end up here, we think we’re still doing a better job than not talking about it, which is the alternative.

Brad:  So one last question, sorry. I will go one more because this is a good one. Research has shown that anxiety, depression and pornography addiction as causes

[crosstalk 00:25:52]

please? Oh, sorry. Has shown anxiety, depression and pornography addiction as causes of ED, erectile dysfunction. Does Hims have plans to address these causes as well?

Hillary: I-

Brad: We should be talking out of school.

Hilary: So to my something I’m very excited about right now is how you can holistically address improving your health. And I think you absolutely need to consider your mental wellness along with your physical wellness. And I think that’s an area that we are thinking about a lot right now. And that’s all I’ll say.

Brad: All right, to a little bit of news for you. Thank you so much for joining us today, Hillary.

Hilary: Thanks everybody.

Brad: Good job.

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