Thank you Mark Osborn of DiaHealth for creating these notes. To contribute to the TWiST PodNotes archive email us.

Episode Date: March 2, 2021

https://youtu.be/mmNNFm_m1dk

Guest: Andrew Dudum | Hims & Hers | Twitter | LinkedIn

Top Insights

• COVID-19 has accelerated and likely cemented the adoption of telemedicine.

"if you live in rural Nebraska you can actually talk to and get the best treatment for let's say melasma as if you were living in New York City and walked across the street to a cosmetic dermatologist"

• The Hims & Hers business model is a win-win for consumers and doctors, not so great for hospital systems, brick-and-mortar based pharmacy chains, big Pharma, and the black market
• SPACs are an important innovation in the financial markets

"as an investor if you live anywhere in the world you can invest in real innovation in real companies that are two, three, four years into a life cycle and truly understand and believe in that vision"

Intro and origin story

• Andrew is the founder of CEO of Hims and Hers (NYSE: HIMS)

• Andrew has an extensive entrepreneurial background:

  • He started his undergrad career while an undergrad at The Wharton School
  • He dropped out, moved to San Francisco, started a Sequoia-backed company and sold it to Telefonica
  • Launched a startup studio, Atomic, with his partner Jack Abraham, with Peter Thiel and Marc Andreessen as the core LPs. Their belief was that by partnering investors with amazing pattern recognition with top operators, they'd have a much better hit rate.
  • They ran 20-30 tests a year to narrow down to 3-4 companies they'd invest in. This helped them get really good at understanding relative customer demand across companies.
  • Around 2015-2016 they began to focus on health

  "why was it that I could get a car, I could get food, I could get clothes, but I couldn't get a doctor on demand to talk to, I couldn't get that product I want shipped to my door"

  • This was when they decided to launch Hims & Hers. They raised a couple hundred million dollars, Andrew decided to run the company, and they went from founding to IPO in 3 years.

Going public via SPAC

• The company went public on January 21, 2021 via a Special Purpose Acquisition Company (SPAC) established by Oaktree Acquisition Corp.
• They began thinking about going public a couple years ago after hitting $100 million in revenues. Their numbers had become relatively predictable and attractive by that point with 76% gross margin and 90% recurring revenue.
• They started planning with the assumption that they would go public via the traditional IPO process. After 4-5 months of researching the SPAC process, they concluded it was more efficient and affordable, eliminated the "expensive pop and the bubble" with traditional IPOs, and enabled them to partner with Howard Marks at Oaktree.