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Episode > Season 2 Episode 14

How Dutch reimagined vet visits for pet owners

How Dutch reimagined vet visits for pet owners

Joe Spector, Founder and CEO @ Dutch

What's in this episode?

On this episode we are talking with Joe Spector, founder and CEO of Dutch. We talk with Joe about his family's immigration to America as refugees from the former Soviet Union and how that journey, and his parents' support, helped instill within him his entrepreneurial spirit.

Joe then walks us through starting Hims, and the knowledge in ecommerce and telemedicine he learned there, before being inspired to start Dutch. We get into the advantages of Dutch’s telemedicine approach to pets (for owners and animals alike), their onboarding flow for new customers, and why the focus on brand is so important for long term success.

So let’s get started!

Connect with Joe on LinkedIn. Check out Dutch.

Episode transcript

Chase Alderton: Joe, thank you for joining us.

Joe Spector: Thank you for having me. Excited to chat.

Chase Alderton: So I am really excited to get into the history of Dutch, but I know that your personal background is such an interesting piece to this whole entrepreneurship aspect for you, so give us kind of your brief history from where you started to kind of the doorstep of entrepreneurship, and we'll jump into that right afterwards.

Joe Spector: Sure. So much of what makes me who I am starts with coming to America from the former Soviet Union as a refugee. We came here with my parents, with my one red suitcase, lived on welfare for a long time, and I think certainly it's made me the appreciative of the entrepreneurship that America offers as an opportunity. And I think being in the situation I was at, I saw from my parents who basically said you're our investment, like we're the VC fund and you're the seed stage capital. And if you want to succeed, we'll love you, we'll support you, but we don't know anyone, we don't know anything and we need you to go and figure it out. And I think as a result, I've been very comfortable with figuring things out. The discomfort, I almost seek that out. I find that to be a place where I feel actually very comfortable and secure.

Joe Spector: And so after finishing business school, I think that's kind of when I realized that this is the place for me to be as an entrepreneur. I spent now almost 20 years in this space and after starting Hims and having an important hand in expanding our telemedicine coverage, both on the regulatory and operational side, led me to start Dutch and kind of take a lot of those learnings, and for the first time be a CEO of a company that takes a lot of the learnings from Hims, but finally doing it in my own way.

Chase Alderton: You said something really interesting that getting comfortable in the uncomfortable, every leadership book will have that phrase in there at some point, but very rarely is there a person who can really embody that as maybe as truthfully as you have over the last 20 years, so it's an incredible story. The journey obviously has been very long and very rewarding for you. How did Him start and where was kind of that falling in love with e-commerce entrepreneurship kind of thing? And then how did that translate over to Dutch

Joe Spector: With regard to e-commerce what drew me to that is wanting to work on products that affect people's daily lives. That's something that gets me going and I love to... And that wasn't more true with Hims where if we saved marriages, we helped people feel more confident in their skin. And when I met Andrew who's now the CEO of Hims, we just started to talk about the idea of what Hims would ultimately become. And for me, between the people, someone like Andrew who was incredibly smart, but the idea itself in my gut when I walked home that day after our first chat, I could feel that this is just a massive undertaking, and I wanted to be part of both in terms of its mission, as well as the difficult journey ahead because at the time most states did not allow for telemedicine to be practiced, and so I loved that challenge.

Chase Alderton: There was a legal piece of this telemedicine that wasn't allowed or it just didn't happen?

Joe Spector: Oh, massive. So, we now take it for granted because after the pandemic, telemedicine and so many other remote services are not just, you know they're expected, they're demanded, but back then actually most states required to have a physical exam like the traditional model before you could do anything via telemedicine, before you could prescribe something via telemedicine alone. So that was something that had to change. And because healthcare stayed by state regulated, had to be changed at the state level, and so that's something I spearheaded at Hims.

Chase Alderton: And that kind of defeats the purpose of a telemedicine if you have to go into an office or if your step one is physical, the next piece of that obviously is kind of irrelevant.

Joe Spector: I think a lot of... Because when you're using language and you using words, I think a lot of people will say some new word telemedicine, even though they're thinking like I can use this word like smoke and mirrors and mean one thing like new advanced technology, but really I still mean paper faxes. It's just that for some people, printing out a paper fax from their computer, I mean, maybe that's as advanced technologically as they get. So, I think there's a lot of word manipulation. But yeah, telemedicine means I don't come into a physical space ever.

Chase Alderton: It's the same as like this new remote work wave we have. If you are advertising a remote workspace, but it's really in the office three days a week, that's not remote work. You need to define what we're actually talking about here.

Joe Spector: That's right.

Chase Alderton: So then it seems pretty logical for you to go to Hims obviously over to Dutch and start this new company. It's still, to your words, telemedicine it's still telehealth. Give us a little bit of info about what Dutch is and why you found the need to start a pet telehealth company.

Joe Spector: I think for me, and going back to my immigration journey, it's been important to me to make things more fair for people who don't have a voice, don't have money, and increasing access was something that I found personally satisfying at Hims, and what I started to realize from having a anxious dog myself, is that it's actually pretty incredibly difficult to get veterinary care, and that that whole world has completely not caught up to all the advances that we've seen on the human telemedicine side. So I think that was kind of the aha eyeopening moment for me, and given everything I did at Hims on the regulatory and operations side, as well as just building a multi-billion dollar brand, I felt like I was in as best position as could be to take a lot of those learnings and do the same thing in vet care.

Chase Alderton: So is it as simple as you had an anxious pet that was something that made you want to start this and you had some experience or was there another driving factor?

Joe Spector: I would say the aha moment was an anxious pet, but I think it was also seeing a pattern recognition when I started to look at, essentially with the same team that I had around me at Hims on the regulatory side, when I started to look at the laws that currently exist in the veterinary space, they were in a very similar place where Hims was five years ago. So you have a handful of states that allow telemedicine, allow you to establish a relationship with a pet in order to prescribe remotely. And I think, again, the pandemic has been a force to make the regulators, the veterinarians to reconsider that in some cases, this is an appropriate way to provide access. So I just saw a ton of similarity and I felt like, okay, this is a great opportunity for me to take those skills and build out a business that takes a lot of the lessons learned from Hims.

Chase Alderton: Totally. That makes a lot of sense. So right before we jump into onboarding flow, I think that's something I really want to dive than to today, I just want to comment on one more thing, kind of about this whole regulatory issue. It seems like you're not only fighting to grow a brand and found a brand and create all these kind of things, but you're fighting local laws and state laws, and in some cases, national laws, is that just like kind of one of those other projects that in a startup you just figure, okay, it's just the next problem to solve. Or was that something significantly different that you just never experienced before? What was that process like?

Joe Spector: It was definitely something... On its face, it was entirely new, but I think I've had a life of not just the refugee experience, but so many other pretty difficult moments where it was like, okay, this is another thing I need to figure out and for better or for worse, when I see something that's conflict or insurmountable, I almost want to climb that hill even more. Yeah.

Chase Alderton: It's just a mindset of "Oh, you tell me I can't do it, okay, I'm going to go do it then."

Joe Spector: That's right. Yep. Potentially my life would be a lot easier if I didn't do that, but yeah, so I think it was another obstacle and look, like anything else, do I wish it was super easy and everyone just said yes? Yeah, I mean, that would be nice. But at the same time, when I think about... I mean, this is the conversation we had at the table when we were conceiving of Hims and when we were conceiving of Dutch is that, look, if it was easy everybody would do it. We're here to solve the difficult problems. And I also think this is why it's important to be a mission driven business in this case, and to understand like who you are, because like with Dutch, one of our principles is pets first. And so we're always thinking like in this decision in doing so, are we putting pets first? Are we thinking of pets first?

Joe Spector: So in doing that, I think that's kind of what would always, even if I had a bad day, would sort of ground me of like we're on the right side of history, we're trying to do the right thing, we're trying to create greater access, and if we keep being on the right side of history, eventually this should prove out itself.

Chase Alderton: I can see a lot of potential different avenues going down this road of lobbying and changing laws and state and local regulations and all these kind of things, so being a mission driven company and being grounded in that I think is really relatable through a lot of brands in every industry and every vertical. I think that makes a lot of sense for you.

Joe Spector: I will say to your like the other piece, just as an FYI is all the the pharmacy operations, our veterinarian network, this is all incredibly complex and it's very different than selling shoes and socks or luggage on the internet vitamins. It's because that in itself is complex like you said building a brand, but all the operations that stay by state, the regulatory framework, that makes this a really complex business, which is why I think having done it before immensely helps to not... You know it took me years to make some of these mistakes.

Chase Alderton: Yeah, not that selling anything online is easy with supply chains and everything's impacted right now because of COVID, but you start talking regulations and laws and all those kind of things and communications and doctors and veterinarians, and I can see where this gets out of hand very, very quickly.

Joe Spector: Yeah. And this is either with respect to Hims it's people's lives or pets who are almost like your children, so if a damaged piece of good arrives, it's certainly different than something that you actually putting in your body, something that you need to get better. So it's kind of like-

Chase Alderton: Absolutely.

Joe Spector: ... the bar is even... It's like if customers already had high expectations, this is like it couldn't be higher when it comes to your health or your pet's health.

Chase Alderton: A hundred percent, a hundred percent. I totally agree with you. Let's hop into onboarding flow a little bit because it's actually a nice transition. Like you said, it's very different from selling shoes or luggage or vitamins or any of that. Onboarding flows are always super in interesting to me, personally, of how people figure out what am I actually buying and how do the customer experience works, but you're not actually selling a product here, you're selling kind of the consultation. So walk us through kind of what a checkout flow would look like, and let's use your dog's example. So you have a dog with separation anxiety, for example, how does that checkout flow work? What's the process like?

Joe Spector: Yeah. Again, one of the most amazing things about what Dutch is doing about telemedicine is that we can take the mind of a specialist in this case, a behaviorist specialist, and there's less than a hundred behavior specialists in this country, so they're far and few in between, and we've worked with several of them to create what a medical visit would look like and essentially scale that across the country. So, if I have a dog like mine who is barking and nibbling at my feet and behaving in a way that's not normal, I can come to dutch.com, I can go through what would be a very comprehensive medical exam, where I'm asked questions, I'm asked potentially follow up questions with a vet in my state. I might have to send a photo. And based on that, I get a customized treatment plan then delivered to my door.

Joe Spector: So the checkout flow is you have your medical exam, you register, have your exam, you authorize your credit card. Another benefit is the entire visit is risk free, so if you're not a candidate or it's not anxiety, you don't pay anything, and if you are, you get a custom treatment plan which gives you if you need medication, if it's an over-the-counter a plan, you get a behavior modification plan for your pet, and then you have the ability to message and interact with the vet as follow ups. And with a lot of these as part of your subscription membership fee. With the conditions we treat they're chronic, and so in the non-telemedicine world, you'd have to come in again, back in person to check in. What it makes animals different than humans is their weights can vary quite a bit, so you may find the right medicine even, but you may need a higher dosage or you may need to try a different medicine, so there's kind of a lot of that back and forth that again, telemedicine can help facilitate.

Chase Alderton: There's a whole lot in there. Let's double tap on a couple things. One being the word risk or the term risk free. I think that's thrown around a lot on a lot of websites now. Everything's risk free and free refunds and all that kind of stuff. That's actually quite remarkable that you can do a true risk free offering. You go through the whole checkout process or onboarding process, you talk to someone, you kind of figure out what's going on, and if they deem that actually isn't it and you're not a candidate here, there's free. That is a true risk free opportunity there.

Joe Spector: Totally. Totally. Yeah, you definitely, you had a vet who was licensed, who has passed our criteria to be on our platform, lives in your state and that has reviewed your information and yeah, if you're not an appropriate candidate, you don't pay.

Chase Alderton: And so then this is where kind of the subscription model comes in, which is that, obviously this isn't just, "Hey, take this one pill and you're good to go for the rest of your life," this is an ongoing thing, so that's where it ends up being this kind of recurring, is the dosage working? Is the medicine working or is there behavior changing? How do we kind of twist and tweak this to make sure we get the right thing? Usually that takes a certain amount of months.

Joe Spector: Yep, exactly. And so-

Chase Alderton: Go ahead.

Joe Spector: I was just going to say, this is what in building this business, if you have an anxious dog, you're likely going back to the vet to get simply sometimes a different dosage, and that's that. So we can facilitate you saving several hours of your day and getting you that prescription delivered to your door, all within the convenience of your home. And another thing is, and of your pet, right? Because again, this whole thing is like not only is it inconvenient for you as the pet owner, but you're having to drag this poor animal into a clinic. We still have COVID where in many states you're sitting in a parking lot, a stranger takes away an anxious dog... I mean, it's not pets first like our guiding principle.

Chase Alderton: That's exactly where I was going to go next is not only talking human time in savings and all of that effort and energy, but we're talking, this is a true pet issue. And if they have to keep going in and back and forth. And cars, obviously a lot of times are not friendly for pets, that's a huge benefit as well that you can't put a dollar value on that.

Joe Spector: Yep. And what makes Dutch again, super special is that for these certain conditions, you can have kind from beginning to end all through telemedicine. We're not just saying, "You know what? Yeah, your dog really needs some help. Go see someone in person."

Chase Alderton: Right.

Joe Spector: Back to this notion of the definition of true telemedicine, we're able to in conditions where you can't appropriately diagnose without in person, we can provide someone a full end-to-end solution on our platform.

Chase Alderton: Let's talk through a little bit about drop off of the onboarding flow. I know that in a true kind of e-commerce, we can go back to the socks example. If you're just selling socks, it's fairly easy to drop off through the checkoff flow if you're asking what's your size? What's your color preference? All these kind of qualifying questions. Do you see much drop off in the onboarding flow? And how do you keep customers engaged question after question, if you're doing this whole comprehensive exam?

Joe Spector: Yep. The key is, I would say consumer education from beginning, middle and end. It is definitely on the one hand, humans have gotten more comfortable with human telemedicine, pet telemedicine is a newer concept, so it's something where we have provide kind of manage expectations and provide education. I think the one thing that's been super interesting is we have a very comprehensive medical exam flow, but what's been interesting both in the data as well as qualitatively is consumers are saying like, "Oh wow, you guys know what you're doing. And by you guys, I mean the vet specialist who help craft the experience.

Chase Alderton: I hope so. That seems like a big piece of this.

Joe Spector: But I think, usually in e-commerce you kind of want to minimize the steps. Here-

Chase Alderton: Exactly.

Joe Spector: ... I think maximizing the steps has actually given people comfort, but I think what we're continuing to introduce and test is more education along the way to make sure expectations are aligned in the beginning, and then at the end of like what will happen because again, it's not a one and done process. You're not just like, "Okay, my socks are going to be delivered." It's "When do I hear from the vet next? What is this medicine for? How often do I take it?" So there's just multiple things going on, so I think providing education is the thing that minimizes drop off.

Chase Alderton: Even on the front end before you even start walking through that onboarding flow, a lot of "Hey, this is going to take X amount of time. Here's what you can expect the end of this. Well, here's the next step once we're through here." All of those kind of educational pieces, it's total counterintuitive to what you would expect selling socks or selling any other physical product in e-commerce, is you want to extend it, you want to have a lot of education, you want the buyer to be very involved from the front

Joe Spector: And it goes back to where pets are like your children, so you're not going to mess around with that whereas something else it's either self explanatory or if I buy the wrong size, I can just return it, get a different size. This is like, no, I can't get this wrong and I need a solution fairly soon to this issue. So it also, it needs to be the right thing, I need to trust it and I need to be able to follow up on this relatively quickly, as far as how I get it, and as far as the next steps on how I manage it.

Chase Alderton: Last question, that's product focused. How does pricing work? Because it seems like there's a huge network of things that are involved between people, between logistics. And I know obviously the consultations is a big thing. Other than the convenience of the actual telehealth telemedicine visit, which I know the work convenience may include a lot of different things, but price seems to be a big one, so how does price work with Dutch?

Joe Spector: We spend and continue to spend a lot of time on our price strategy. We wanted to make our pricing really simple and friendly for the consumer. So for example, our anxiety pricing, it's $39 per month, and that includes your veterinary visit. It includes prescription medication, and it includes the follow up that you're getting access to as part of your membership. If you think of whenever I visited a vet, I'm usually out several hundred dollars like period plus time, so it's definitely competitive to that. The cost of the medicine is essentially competitive to what you'd find anywhere else, but then where you're really saving is on the cost of the veterinary visit, and then just the general access to a vet, pretty much as soon as you're ready to address the issue.

Chase Alderton: When you say follow-ups, you mean essentially the communication between your next month's payment, so all of that communication is included in that $39.

Joe Spector: That's right. Yeah.

Chase Alderton: Wow, that's pretty impressive. I don't know a single thing about pet medicine and what all these things cost, but that definitely sounds as bad as competitive as you're going to get, especially considering that to get into the door of any doctor's office is going to cost you 39 bucks anywhere you go, so.

Joe Spector: Yeah. And you might not even be able to get an appointment for several weeks to begin with, by which point your issue or your allergy issue continues to get worse.

Chase Alderton: Totally. So the other really important piece to this whole puzzle, which we've obviously talked a lot about so far, but community, I think is a big one. There's obviously neighborhoods, I think, in the physical world when you're talking at a doctor's office or a veterinarian, you talk to your neighbors, where do you bring your dog? How does this work? what are the processes you're taking? How are you building this kind of online community since Dutch has launched? How do you create that one-to-one interaction?

Joe Spector: So we have several things I think going well for us. First of all, pet parents, as well as just the influx of new pet ownership during the pandemic. Again, think of all the first time parents who coddle and helicopter over their kids, I think you see the same trend on the pet side. So there is more interest than maybe in any other field except children for people wanting community, having a million questions, because they're doing it for the first time. So there's definitely lots of underlying natural demand. And then we have a network of several dozen licensed veterinarians who are... And I think veterinarians are very special people too, because if you talk to them, one trend you see is that many veterinarians wanted to be a veterinarian since they were five years old.

Joe Spector: So again, unlike so many other professions where you fall into it, you learn about it in college, a common trend is like these people love animals just so much. So that makes it just the most extraordinary kind of community to be a part of and to activate. And on our end, we're starting to do more and more. And it's something I saw at Hims where we invest in community, it's a lot harder with Hims for people to talk about their own issues. I mean, another thing, people are more open about whatever's going on with their pets, but when-

Chase Alderton: [crosstalk 00:28:07] no nursing factor when-

Joe Spector: That's right.

Chase Alderton: ... you can say, "Hey, this person or this pet has anxiety."

Joe Spector: Yeah it's-

Chase Alderton: It's a lot...

Joe Spector: Yeah, exactly.

Chase Alderton: You can respond to that.

Joe Spector: Yeah. So, we're activating our social channels and offering advice from people who actually have knowledge, the veterinarians, but then it also happens on the messaging side for people, again, as part of their membership, they're messaging their veterinarians back and forth. So it happens in private and will continue to make more investments on the public side to build out the community.

Chase Alderton: Super cool, community is always a piece of the whole pie that I really enjoy talking about, and this is obviously such a unique product and such a unique community, so I'm always curious to hear how all that stuff plays out. So a couple final rapid fire questions for you. What's a piece of advice you would give to a subscription brand who's just launching?

Joe Spector: I would say, think about your product and think about the customer and a subscription model may not be the right way for you to go. So I would just, first of all, make sure you're not forcing that to happen. And I think consumers, if you are going to offer a subscription, make sure you're providing them with a ton of value every single month.

Chase Alderton: If you're expecting them to come back month over month, that value needs to be there month over month.

Joe Spector: Yeah. And you got do the homework for the consumer, like make sure they understand that value month after month.

Chase Alderton: Very much agreed on that one. Let's kind of flip the script and move upmarket a little bit. What's a piece of advice you give to a brand who has maybe already launched and scaled a little bit who's trying to kind of keep scaling and get past those revenue numbers?

Joe Spector: Invest in brand. I think a lot of times founders are extremely ROI focused, which is a short term metric, and brand might not show up for a year or more, and those are the investments you need to make today. I think the other advice is hire good people and pay for them, and don't be cheap. I think one of the bad habit I developed as an immigrant, back in being in a survivor mode is like I'm sometimes too incredibly cheap, and there's sometimes a clear correlation between how much you pay for stuff and what you get out of it, so I think if you want high quality candidates, if you want a beautiful brand, you likely have to pay for it. And that's okay, it'll be worth it in the long run.

Chase Alderton: Those are both really good pieces. I'm particularly a huge fan of the brand piece. We get a lot of product people in here who talk about investing in product and processes and all that kind of stuff, and brand is one good one that not a lot of people recognize all the time.

Joe Spector: Yeah, and especially, again, with what we're doing when it comes to healthcare, people want to feel trust, and a good brand exudes trust and quality that you invested in this, that you showed up, you did the right thing, you did the homework, you wanted to look... If you're putting in this kind of effort into how something looks and feels, it's signaling you probably care about the quality of the medicine you're giving me, so I think certainly again for a healthcare company, I think has a heightened sense of importance.

Chase Alderton: Last question for you, what physical products do you subscribe to?

Joe Spector: Hims of course.

Chase Alderton: I slipped a bit there.

Joe Spector: Lately it's been... Another one is Thistle for better, healthier eating has been a favorite. And then my wife has SaloonBox, a cocktail subscription business. So that's always... I'm a big fan of that and other kind of drug to consumer cocktail and wine products especially in the pandemic.

Chase Alderton: Oh yeah. Oh yeah. Everyone's got to get there fix at some point.

Joe Spector: Yeah.

Chase Alderton: Joe, very inspiring story. Thank you so much for being on the podcast. We appreciate it.

Joe Spector: Awesome. Thank you for

Chase Alderton: We'd like to thank Joe once again for joining us. If you're interested in Dutch, you can head over to dutch.com. If you're looking for more of our episodes, check us out at rechargepayments.com/hitsubscribe. And to get the latest episodes, remember to hit subscribe on whatever platform you're listening from.

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