Speaker 1: These sees Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stanovic on Bloomberg Radio Full Transparency. Tim and I both
Speaker 1: have or Rings. Tim has his on I don't I
Speaker 1: forgot to take it off to do some chores. You
Speaker 1: are supposed to take it off to take you know,
Speaker 1: when you're doing dishes. I was doing something and I
Speaker 1: following the rules. It was kind of a rough night,
Speaker 1: white and I wasn't diving this time around, all right.
Speaker 1: As you may know, it is a privately held company
Speaker 1: that we follow a lot. The current issue Bloomberg Business
Speaker 1: Week magazine, the Pursuit section, it's one of the sleeptrackers
Speaker 1: profiled as part of a deep dive into the business
Speaker 1: of sleep, which we know tim is big business. But
Speaker 1: we know this Ring does a lot more than that. Yeah,
Speaker 1: it does. Let's start numbers here though. Um just last
Speaker 1: week last year, the market for sleep tracking devices society
Speaker 1: at fourteen point five billion. It's projected to reach sixty
Speaker 1: one two billion by the year. It's a lot of stuff,
Speaker 1: all right. So let's get to our guest, Tom Hale.
Speaker 1: He was named CEO of or Ring last April. He
Speaker 1: was former chief operating officer at home Away. They were
Speaker 1: acquired by Expedia. He's an a lump to Adobe Macromedia.
Speaker 1: He is in our Bloomberg Interactive Broker studio. Welcome, Welcome,
Speaker 1: Nice to have you here. Thank you so much. It's
Speaker 1: great to be here. So what's it been like? Wow,
Speaker 1: it's been an incredible joy to learn. I mean, you
Speaker 1: think about sort of this particular product being the intersection
Speaker 1: of health, physiology, physics, fashion right. I never saw myself
Speaker 1: as a purveyor of jewel, right now I am. And
Speaker 1: in technology, you think about what's going on in technology
Speaker 1: where you've got a I processing huge amounts of data
Speaker 1: and the intersection between health and technology is super interesting.
Speaker 1: So I've been climbing a huge learning curve. But that's
Speaker 1: been incredibly thrilling. What have you learned the most? Is
Speaker 1: it that the size of the market, or the size
Speaker 1: of the interest or what you know? I think it
Speaker 1: really is that there's a change under way which is
Speaker 1: about how people are approaching health. I think COVID kind
Speaker 1: of took the covers off. Everyone felt a little bit
Speaker 1: secure about their health, and then COVID came along and
Speaker 1: reminded everybody that health is fragile and you need to
Speaker 1: monitor it and manage it, and everyone started thinking about
Speaker 1: it very differently. And so that change that's a societal
Speaker 1: maybe even a global change, and in some sense, health
Speaker 1: wearable steers right into it. Okay, So or a monitor's
Speaker 1: health through the finger. It's a ring that you wear
Speaker 1: on your finger at tracks sleep, tracks activity throughout the day.
Speaker 1: They're a handful of sensors on it. Um. I'm wondering
Speaker 1: about the technology that goes into the ring, the hardware,
Speaker 1: but also what happens on the app and sort of
Speaker 1: which one is. I don't know where you're investing. Well,
Speaker 1: you have to invest in both, of course. I mean.
Speaker 1: Being the only smart ring on the market, we've actually
Speaker 1: got a lot of huge technical challenges that we have
Speaker 1: to manage, right. We have to make sure that the
Speaker 1: quality of the signal that we get is the highest
Speaker 1: and most accurate that is possible. Frankly, we are medical grade,
Speaker 1: you know, in terms of the accuracy of the of
Speaker 1: the device itself. Partially that has to do with just
Speaker 1: the location of where you are measuring on the human bodies.
Speaker 1: You said, doctors measure your pulse on your heartbeat and
Speaker 1: SPO two from the finger. They don't measure on the
Speaker 1: outside of your wrist. So we are just structurally advantaged
Speaker 1: in terms of accuracy. Now that being said, where a
Speaker 1: science driven organization, so we take that super super seriously.
Speaker 1: We validate everything, not just across like some small population,
Speaker 1: but across men, women, different ethnicities, different skin tones. A
Speaker 1: lot of the technology that are is used for these
Speaker 1: kinds of wearable sensors is light based. We shine lights
Speaker 1: into your body and based on the signal that comes back,
Speaker 1: the refraction, the absorption, we're making conclusions about your heart rate,
Speaker 1: your respiration, your heart rate variability, these metrics that come
Speaker 1: back to you. Guess what if you don't have the
Speaker 1: same tone in terms of skin color, The melanin in
Speaker 1: your skin absorbs that light differently, and so you have
Speaker 1: to be really thoughtful about how you measure so accuracy,
Speaker 1: the form factor, these are structural advantages and structural things
Speaker 1: that we focus on around at or that's the hardware.
Speaker 1: So how do you technologically account for a white person
Speaker 1: versus a black person versus? How do you do it well?
Speaker 1: You have to make sure one we're we're lucky because
Speaker 1: we measure on the inside of the palm, right, and
Speaker 1: the inside of the palm generally actually is a lot
Speaker 1: narrower range. Even who have like sunburns or hair or
Speaker 1: tattoos or darker skin on the outside, they tend not
Speaker 1: to have sunburns or tattoos or hair on their palms.
Speaker 1: Maybe some people do, but you know, most don't, So
Speaker 1: that's actually a structural advantage. But we do things like
Speaker 1: we monitor when the light signal goes in what comes back,
Speaker 1: and we start to learn a little bit about like
Speaker 1: do we have to increase the amplitude to get a
Speaker 1: good signal? Do we have to decrease the amplitude, Because
Speaker 1: we're getting to like we're we're very intelligent about that.
Speaker 1: In fact, we did a m One of our big
Speaker 1: features last year was workout heart. Right. You guys might
Speaker 1: have I don't know, experienced, so it's basically different things
Speaker 1: that you can use it for. It's super accurate in
Speaker 1: terms of like measuring your heart rate during a workout.
Speaker 1: It's as accurate as a chest strap, which is, you know,
Speaker 1: kind of the gold standard for measuring your heart all right.
Speaker 1: So when we were testing it right before we shipped it,
Speaker 1: people are like, you know what, uh where we want
Speaker 1: to make sure that we validated this across a wide
Speaker 1: range of skin tones, and so we actually did a
Speaker 1: lot of work to test on a wide range of
Speaker 1: skin tones and we felt pretty good about it. We've
Speaker 1: made some tweaks in terms of the power of the signal,
Speaker 1: the light signal that we send into the body, but
Speaker 1: that kind of scientific validation is the key. And that's
Speaker 1: the hardware side. The software side, though, gets a lot
Speaker 1: of updates. The app gets a lot of updates. And
Speaker 1: the reason I ask is is because oftentimes with hardware,
Speaker 1: you see a brand new version each year. If that,
Speaker 1: if that this year, you didn't see a new version
Speaker 1: of of a ring with different sensors. You saw a
Speaker 1: different version in the you know, in a superficial sense.
Speaker 1: And I use the term superficial not in a project
Speaker 1: pejorative way, but you know, the idea that the sensors
Speaker 1: inside didn't change. Correct me if I'm wrong, but that's correct.
Speaker 1: The sensor platform is the same. By the way, we
Speaker 1: have two versions of the ring, right, yeah, the heritage
Speaker 1: and the horizon. That's what you're talking about, exactly, Um,
Speaker 1: do you which sensors would you add right now if
Speaker 1: you could? Or is it? Is it kind of like
Speaker 1: where it needs to be and the work needs to
Speaker 1: be done on the app side, the analysis side, well,
Speaker 1: we're always looking at new technologies as as they're emerging,
Speaker 1: and new capabilities as they're emerging. You know, a lot
Speaker 1: of people have have have sort of hypothesized that there
Speaker 1: are lots of things that you can do with new
Speaker 1: sensor technology. Um, really, I think the reality is that
Speaker 1: a lot of the ambitions here, like we can test
Speaker 1: your blood glucose, you know, non invasively, are possible, but
Speaker 1: definitely further away than most people are willing to admit.
Speaker 1: Elizabeth Holmes could do No, she's she's all over. I
Speaker 1: think that's her next process. I don't know, but but
Speaker 1: but you you know, the thing is is that you
Speaker 1: want to make sure that those things are validated accurate.
Speaker 1: The technology that goes into our ring today, some of
Speaker 1: it's very very recent, very very new. Some of it
Speaker 1: has been established, there's lots of science around it. So
Speaker 1: the reality is, I don't know that we need to
Speaker 1: see huge updates in it. I think what's what's really
Speaker 1: important about the ring from a maybe different from your
Speaker 1: your wrist, is that it's also comfortable and non battery consumptive.
Speaker 1: I don't know if this has been your experience. Every
Speaker 1: five days or so, I give it a charge and
Speaker 1: you don't have to think about it. You just don't
Speaker 1: have to think about it. It's just they're sort of
Speaker 1: silently in the background keeping track your metrics. The data
Speaker 1: is being processed, the algorithms are running, the recommendations and
Speaker 1: insights are coming through. And that's the software, right. The
Speaker 1: software is your health condition is different from your health condition.
Speaker 1: Let's understand that and give you the appropriate messages. That's personalization,
Speaker 1: that's machine learning, that's that's very different. I think the
Speaker 1: pace of software innovation incredibly rapid. Right, we're releasing two
Speaker 1: three features a month, because that's the pace of software hardware.
Speaker 1: You kind of wanted to be stable because you don't
Speaker 1: want to change it all the time. I agree, Um,
Speaker 1: who is your typical consumer? Well, what would you guess?
Speaker 1: What would you guess? I'm thinking like a guy in
Speaker 1: his thirties, guy in his thirties Kendall Roy from Succession, Well, yeah,
Speaker 1: or yeah, that was that was also yeah the Billions
Speaker 1: where well did can I just ask you before we
Speaker 1: get into this series, what does that stuff do for you? First?
Speaker 1: Of all, it's great recognition, but what does it do
Speaker 1: the needle it well, you know, funnily enough, when when
Speaker 1: it used to be airtime, it would actually you can
Speaker 1: see it, but but it's not airtimes now it's all
Speaker 1: streaming on demand, right. But I think it just puts
Speaker 1: us in people's consideration. They now understand there is a
Speaker 1: smart ring category and you can wear it. And if
Speaker 1: if you're like the cast member of Billions, like maybe
Speaker 1: maybe you want to be a little careful. That's I
Speaker 1: was going to say is sometimes, you know, sometimes it's
Speaker 1: worn by somebody who's not necessarily a fan favorite, right,
Speaker 1: you're not really sympathetic to Kendall Roy? Does that? Does
Speaker 1: that bother you? No? Look, I mean what do they say?
Speaker 1: No bad, no bad pr um? You know when what
Speaker 1: is it when the Mr Big does he die on
Speaker 1: a Palozon? I can't remember? Maybe that's maybe that's a
Speaker 1: bad example. Let's not go there. It was not great
Speaker 1: Palozon hasn't been doing that. Yeah, let's hope you know
Speaker 1: when when the next one doesn't die. And my point
Speaker 1: is all that stuff is positive and all all the
Speaker 1: you know, halo around influencers, media personality, CEO Davos was crazy.
Speaker 1: It was, you know, lousy with or a rings. You know,
Speaker 1: it's crazy. So that's really powerful for us. But the
Speaker 1: reality is, I think most people, you know, how they
Speaker 1: learned about it. They learned about it from my friend.
Speaker 1: Well we talk about I feel like there's bonding, like
Speaker 1: when you see somebody's on it's like, yeah, it's just
Speaker 1: really the term you can use, but I won't say
Speaker 1: it on air, but I can't say it. Yeah, we'll
Speaker 1: have to talk about later. I'm not sure where you
Speaker 1: refering to know. Okay, okay, all right, we're gonna come
Speaker 1: back with Tom Hale. Still got a ton of questions
Speaker 1: to ask. If I want to get back to is
Speaker 1: it tim is see the typical demo? Well, actually, you
Speaker 1: know what's interesting is the typical demo is a perfect
Speaker 1: bell curve around the age thirty five and equal male
Speaker 1: to female. Yeah, we're gonna talk more about this, and
Speaker 1: we wanna talk about growth in the business and where
Speaker 1: it's all going. Tom Hale, Chief Executive Officers or in
Speaker 1: our Bloomberg Interactive Broker studio. Our conversation will continue in
Speaker 1: just a moment. Tom Hale still with US, Chief Executive
Speaker 1: officer of or still in our interactive broker's studio. So
Speaker 1: we're talking about your demo. So just let's go back there.
Speaker 1: So your your typical buyer, I hate to say that,
Speaker 1: your average buyer of an horror ring is who. Yeah,
Speaker 1: it's um it's actually a perfect bell curve on on
Speaker 1: either side of age thirty five. And so you see,
Speaker 1: you know, folks are aging in place who want to
Speaker 1: manage their health, people who have chronic illnesses who are
Speaker 1: trying to make sure they don't get sick. You have
Speaker 1: thirty year old athletes who are training for their marathon
Speaker 1: or their ten k. You have twenty year olds who
Speaker 1: are women who are just coming to maturity and want
Speaker 1: to manage their contraception using you know, non hormonal contraception.
Speaker 1: You've got young kids, fifteen year olds who are training
Speaker 1: for the first time and thinking about recovery and how
Speaker 1: to do it. So it's a pretty broad span. Health,
Speaker 1: of course, is a money killered beast. People are having
Speaker 1: different health situations as they move through their life. Is
Speaker 1: that what's really driving people to ultimately get it? It's
Speaker 1: about sleep and health. So some people people who are
Speaker 1: you know, I mean honestly I think as you get older,
Speaker 1: sleep becomes this thing. And if you're a woman or
Speaker 1: a man in a certain age, like sleep becomes really important.
Speaker 1: Fads are out of the nest. So sleep is really
Speaker 1: a big driver. And the thing is as like sleep
Speaker 1: is this habit that everybody does, but no one's particularly
Speaker 1: good at, right, And when you lose sleep, wow, you
Speaker 1: feel it right, taching to acquire looking at Carol right there? Ye,
Speaker 1: sleep as sleep is this? I was just reading that.
Speaker 1: They say there's something that goes on with your brain
Speaker 1: as you get older that affects your ability to kind
Speaker 1: of stay asleep throughout. Lots of things change, right, pressures
Speaker 1: of life, stress, you know, all sorts of things asleep.
Speaker 1: So okay, talk about the scores here because that's mainly
Speaker 1: what I look at ye on the app when I
Speaker 1: wake up in the morning to see how I slept.
Speaker 1: What what do you aim for? What should people be sleeping? Like?
Speaker 1: I think this is the things that everybody's health situation
Speaker 1: is a little bit different. Really, what you're looking at
Speaker 1: is your baseline. Again, medicine has been practiced for years
Speaker 1: on the averages, and the truth is that we're all different.
Speaker 1: In fact, not only are we different, but we're also
Speaker 1: constantly changing. So the metrics that go into those three scores,
Speaker 1: and the three scores for for clarity are sleep, activity,
Speaker 1: and readiness. And sleep is really like how well did
Speaker 1: you sleep, and it really understands a lot. How quickly
Speaker 1: did you fall asleep, how much disturbances did you have,
Speaker 1: how many how many times did you move around, how
Speaker 1: many times did you wake up? Did you fall asleep quickly?
Speaker 1: Did you fall asleep within your normal bedtime? All these
Speaker 1: things are factors and we come up with one score,
Speaker 1: and that score is like somewhere between zero and a hundred.
Speaker 1: Very few people get a hundred. Some people do. Most people,
Speaker 1: if you look at the bell curve, probably distributed between
Speaker 1: seventy and eighty five. So if you're in that, you're
Speaker 1: pretty good, right and I go for a I go
Speaker 1: for seventy five? Are up? Yeah? Um, But it's not easy.
Speaker 1: And duration, by the way, is a really important right,
Speaker 1: but it's not the only factor when it comes to
Speaker 1: the data dump. If you will, there is a point
Speaker 1: where you know it gets to be a lot. How
Speaker 1: do you make sure that you're giving people smarter information,
Speaker 1: enough information? Like what's the balance? So well, I think
Speaker 1: we think about it as most people just want to
Speaker 1: check how they deviated from their baseline. And that's actually
Speaker 1: one of the things that the software does. It learns
Speaker 1: you kind of learns your patterns and then say, well,
Speaker 1: this is a deviation from that pattern, so maybe something's
Speaker 1: going on, and that the software kind of says, maybe
Speaker 1: you should take a rest. You're gonna look, it's so
Speaker 1: good today. Did you have a drink last night? You know,
Speaker 1: it's like and and that that kind of like supportive
Speaker 1: approach is really difference, really unique in the in the
Speaker 1: wearable space, because we're not saying get your ten thousand
Speaker 1: steps whether you like it or not, or whether you
Speaker 1: feel up to it or not. It's like we actually
Speaker 1: our activity score adjusts, you know, we we actually the
Speaker 1: activity goal we set at just based on your readiness
Speaker 1: or honestly, okay, let's talk numbers here. Yeah, let's talk
Speaker 1: about the business. Yeah, I want to hear about the business.
Speaker 1: So you know, you can buy one of these rings
Speaker 1: bucks bucks. That's a one time revenue hit for you guys.
Speaker 1: But then there's the membership six bucks a month. Do
Speaker 1: you need to have the membership in order to get
Speaker 1: to use the ring. Um No is the answer. Um.
Speaker 1: But I think one of the things that we think
Speaker 1: a lot about is that your health really is priceless.
Speaker 1: And actually the algorithms and the processing and the R
Speaker 1: and D that we do that looks at your data,
Speaker 1: it becomes more valuable over time. Right. It's not just
Speaker 1: did you get your steps in today? And by the way,
Speaker 1: once you figured out what ten thou steps looks like,
Speaker 1: do you really need to be told you got The
Speaker 1: other thing that I'm curious about is, um, how many
Speaker 1: people like churn people who buy them and keep them
Speaker 1: because wearables are just known for people throwing them in
Speaker 1: a drawer. So I can't give you all fatigue e
Speaker 1: device fatigue. And I think that's where the software comes
Speaker 1: in because we think about not only is your data changing, right,
Speaker 1: because let's put it for example, a lot of people
Speaker 1: get sick and the ring tells them, hey, listen, you
Speaker 1: look like you might want to go into rest mode,
Speaker 1: and the app reconfigures itself around you being sick. The
Speaker 1: activity score go away, the advice changes, the tone changes.
Speaker 1: It goes from being like go for it to be
Speaker 1: like take a break, And that customization, that experience is
Speaker 1: different because your health condition has changed, all right, So
Speaker 1: that idea that your health condition is changing all the time,
Speaker 1: and the way the app can figures that's value over time.
Speaker 1: It did this to me when I got COVID. It
Speaker 1: realized that I had COVID, right, you know, it was
Speaker 1: like crazy sleep and stuff, televated body temperature and it's
Speaker 1: you know, asked if I wanted to switch in the
Speaker 1: rest mode. You didn't answer my question about how many
Speaker 1: people keep their ring on? Yeah, So two facts that
Speaker 1: I could share. So one is the average war time.
Speaker 1: So if you look at the mean wear time over
Speaker 1: twenty four hour period, the average mean about twenty two
Speaker 1: hours and thirty minutes. Okay, that's the mean. When you
Speaker 1: look at the median, it's actually twenty three hours and
Speaker 1: thirty minutes. So what does that mean. It means half
Speaker 1: above half a exactly. So that means most people are
Speaker 1: wearing it more than twenty three hours. But I guess
Speaker 1: when somebody puts the ring on, do they keep it
Speaker 1: on for twelve months? Do they keep it on? The
Speaker 1: second stat the second stat is after twenty sorry, after
Speaker 1: fifty two weeks, we have eight percent of the people
Speaker 1: still engaged with the That is shocking because, as you said,
Speaker 1: in the wearable world, the typical thing is you get
Speaker 1: the wearable, you try it on, you get some value,
Speaker 1: and you throw it in the drawer because you figured
Speaker 1: it out, or you have to charge it. All right,
Speaker 1: So how much is the business growing? Your private but
Speaker 1: give us some metrics can tell you. Are you growing?
Speaker 1: I think, oh, we're in hyper growth. That would that
Speaker 1: would be the phrase that year. Every year I'm making
Speaker 1: a face. You can't see it on well maybe you can.
Speaker 1: But we're growing incredibly quickly and are profiting in a
Speaker 1: down market. We're investing, you're investing. Will you go public? Um?
Speaker 1: I think we're building the business and we want to
Speaker 1: build a big business. And um, Honestly, having been in
Speaker 1: public companies, I'm not in any rush to go public.
Speaker 1: I want to make sure we're set up right. You
Speaker 1: need to raise any more money? Um No, we're probably
Speaker 1: set maybe even to a public event. We might we
Speaker 1: might see one more round, even to a public event. Yea,
Speaker 1: oh so it could be a consideration. But you never
Speaker 1: you did not hear it here actually did and going
Speaker 1: it alone, have no plans. Let me put it this way.
Speaker 1: To be explosit we have no plans to go public.
Speaker 1: I mean, could an Apple like has Apple come out?
Speaker 1: This was also recently, I think maybe by a colleague
Speaker 1: of yours, And I said, when when when Tim calls?
Speaker 1: Like I'm gonna pick up the phone, but he hasn't
Speaker 1: called yet. All right, this was a lot of fun.
Speaker 1: Come back soon, it okay, Tom Tom Hale, Chief executive
Speaker 1: Officer of Or of course. Uh here in our Interactive
Speaker 1: Broker studio, you're listening in watching Bloomberg Business Week, Carol Master,
Speaker 1: Tim Stanovic, and this is Bloomberg