Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovich from Bloomberg Radio. They're part of
Speaker 1: the growing worribles market, one that by one estimate, expected
Speaker 1: to grow by more than seventies six or two seventies
Speaker 1: six billion by the end of Companies including Meta we
Speaker 1: know looking to move deeper into it um and another
Speaker 1: is our next guest, the Worrible Health platform or A Health,
Speaker 1: which just launched its third generation or A Ring. That
Speaker 1: was last week, So let's get into it, talk about
Speaker 1: the company and the outlook of the industry. Heartbreet Rye
Speaker 1: is CEO of or A Health and he joins us
Speaker 1: via zoom in San Francisco. Heartpretty great to have you here. Um,
Speaker 1: how are you? Oh great, Carol, Thanks thanks for asking.
Speaker 1: I was kidding them, I was cheasing before we got
Speaker 1: going that. It really was that random call on a
Speaker 1: summer night and I tracked down your number and was like, Hi,
Speaker 1: I want to talk about it. We're ring and there
Speaker 1: you were. Um, so glad to have you here. Tim
Speaker 1: and I are both very interested in the company. We
Speaker 1: have not yet used the product, so we were but
Speaker 1: we're very familiar with it. We're familiar with the wearables market.
Speaker 1: Tell us though for those who are not familiar with it,
Speaker 1: what exactly you guys are doing? Yeah? Look, so we
Speaker 1: we make a wearable ring called the Aura ring. You know,
Speaker 1: it looks like sorry, a normal ring, and it connects
Speaker 1: to your phone and we have you know, both both
Speaker 1: the iOS and Android, and you know, we give users
Speaker 1: daily insights about their health UM, mainly focusing on their sleep, activity,
Speaker 1: and something we call readiness. Well, I'm curious about how
Speaker 1: you get that data and then how you present the
Speaker 1: data because if you look at what you can do
Speaker 1: daytime heart rate, period prediction, improved temperature sensing, workout heart rate,
Speaker 1: improve sleep staging, blood oxygen sensing, UH, activity score, sleep score,
Speaker 1: activity detection, heart rate. I mean, the list goes on
Speaker 1: and on and on. How do you make this into
Speaker 1: actionable data that improves the life of somebody who's using
Speaker 1: the product? You know, Tim, It's a great question, right.
Speaker 1: It almost seems like it can be data overflow, UM,
Speaker 1: but we we keep it really simple and we personalize
Speaker 1: it to you. So we have three main scores, your
Speaker 1: activity score, your sleep score, and something called the writing
Speaker 1: as score, and the readiness score, something that takes and
Speaker 1: overall look at both your sleeping activity patterns over over
Speaker 1: the last two weeks and prior you know, frankly a
Speaker 1: month or so. UM. But then as you note some
Speaker 1: of these other features, right, like things like if you're
Speaker 1: getting you know, we we we've you have done some
Speaker 1: research on that during the pandemic UM. You know, we
Speaker 1: will actually have certain alerts that come through the the
Speaker 1: insight messages UM and our scores every day. So every
Speaker 1: day a user actually sees your own data, sees your
Speaker 1: scores that are personalized to them based on their baseline,
Speaker 1: and then it gives you a little bit of a
Speaker 1: tip or you know, an insight and we we really
Speaker 1: feel like that helps contextualize the data. And we're now
Speaker 1: starting to offer a lot more content UM, so you
Speaker 1: actually get you know, content and ways to learn about
Speaker 1: your health and actually things that you can do guided
Speaker 1: programs that can actually help you improve. So UM we
Speaker 1: try to simplify all that data down and giving people
Speaker 1: a little bit of nuggets every day, which we call
Speaker 1: our insight engine. So heart prey talk to us about
Speaker 1: UM some of the suggestions you give to people, because
Speaker 1: I'm always curious about the impact. I really love wearables,
Speaker 1: but it is a lot of information. Tell me though,
Speaker 1: how it can improve us, especially when it comes to
Speaker 1: something like sleep, which I have to tell you, whenever
Speaker 1: I go into a doctor with a problem, they're like, so,
Speaker 1: how are you sleeping? Because your body can keel unless
Speaker 1: you're sleeping. Well, it really is. I think you've described
Speaker 1: it as kind of the magic pill. Uh, and it
Speaker 1: seems so easy, but it's not always that way. Yeah. Look,
Speaker 1: I think all of us, unfortunately, know what a poor
Speaker 1: night of sleep feels like. Right, Like we're more stressful,
Speaker 1: more irritable, that we're grouchy, we're not as sharp as
Speaker 1: you want. Why we Tim and I are both very
Speaker 1: cranky today because we did not sleep well and we
Speaker 1: both hit our snooze buttons a million times this morning.
Speaker 1: It's it's okay, it's it's rainy here in San Francisco.
Speaker 1: So I'm sure a lot of people did that say too,
Speaker 1: But um no, Look, I think unfortunately, as you mentioned
Speaker 1: that the actual impact to sleep in your health right
Speaker 1: is becoming more and more prevalent in in you know,
Speaker 1: the news, as it should be. Um, So you no,
Speaker 1: lack of sleep has actually been you know, linked to
Speaker 1: on set early onset of Alzheimer's to you know, unfortunately
Speaker 1: you know, higher incident rate of cancers, um and and
Speaker 1: even things you know, um, even things is is you
Speaker 1: know more simple as like even just your memory recalling
Speaker 1: what you can remember that day. Um. So I you know,
Speaker 1: I think sleep does have a huge impact in your health.
Speaker 1: And but what we find is by giving users this
Speaker 1: information every day, right, they're able to see if something's
Speaker 1: changing and something's off, and then they sort of ask themselves,
Speaker 1: what did I do yesterday? And so you may actually
Speaker 1: see that you're resting heart rate you know, on a
Speaker 1: certain night is actually higher than normal, right, and we'll
Speaker 1: give you a little message, Hey, it looks like your
Speaker 1: your heart rate was high, you know, higher than normal.
Speaker 1: What is that? Maybe because you ate too late, or
Speaker 1: maybe you're stressed or you know where you up late working.
Speaker 1: And so we actually try to give these messages to
Speaker 1: contextualize the data that allow users to ask themselves, hey,
Speaker 1: what did I do? And And frankly, you know, I
Speaker 1: think the analogy I like to use is, you know
Speaker 1: it's sort of like the car. Right, So cars nowaday
Speaker 1: have all types of sensors right, and you may have
Speaker 1: high pressure running low and in one tire. Now we're
Speaker 1: not you know, the car doesn't say, hey, your your
Speaker 1: tires flat. He doesn't say why that happened? Is it
Speaker 1: because you ran over a nail? Or you know you
Speaker 1: parked it outside up hill on a cold days? Your
Speaker 1: name front tires. So I think it's like that same
Speaker 1: analogy that if you look at that data, you know,
Speaker 1: what's that saying Peter Drucker, what could what gets measured
Speaker 1: gets mastered right right right, and you get when you
Speaker 1: start to see this date all the time, you can
Speaker 1: start to see if something's off. And I think it's
Speaker 1: that check engine light or that check tire and light.
Speaker 1: Heartbreat the thing that the first thing that I noticed
Speaker 1: about the Aura ring that's different than other wearable devices.
Speaker 1: It's is that it's on the finger rather than being
Speaker 1: on the wrist like the Apple Watch or the Whoop
Speaker 1: or you know previous examples of technology like job bone
Speaker 1: or or a fitbit for example, Why the why the finger? Yeah,
Speaker 1: look at Tim, it's a great question. Um No, I
Speaker 1: think from an accuracy point of view and convenience, it
Speaker 1: just ends up being sort of the sweet spot of wearables. So, um,
Speaker 1: you know, every hospital you walk into actually takes your
Speaker 1: heart rate on the finger and your SPO two as well.
Speaker 1: And actually most diabetics right measure measure their glucose by
Speaker 1: taking a finger prick, right, um, And it turns out
Speaker 1: that the pulse on your finger, the pulse signal is
Speaker 1: about a hundred times stronger than the rist where your
Speaker 1: typical wristwatch sits. So we use that phenomenon that you
Speaker 1: know other devices have used in the past, and actually
Speaker 1: made a wearable from that. I think, um, you know,
Speaker 1: what we found is that it's just much more accurate
Speaker 1: for a lot of these health features, including sleep, things
Speaker 1: like heart rid veriability which is a sign of stress,
Speaker 1: or even things like illness, and even period prediction and
Speaker 1: some of the women's health features that we've been developed developing.
Speaker 1: And one thing I'm curious, and I'm thinking of people
Speaker 1: heart Preach who are listening and saying, okay, lots of
Speaker 1: information and give me a heads up. Do you have
Speaker 1: any anecdote stories about the impact that this device has
Speaker 1: had on people's lives? Totally? I think, you know, frankly,
Speaker 1: we've heard everything from people out people finding out they
Speaker 1: have a serious medical condition. Um by realizing they have
Speaker 1: abnormal sleep patterns or that their heart it was really high,
Speaker 1: um compared to others that think, you um, two people
Speaker 1: just realizing like hey, I was trying to realize the
Speaker 1: days that I actually have a glass or two wine,
Speaker 1: you know, with dinner, that that actually ends up producing
Speaker 1: my sleep score the next DA and I sort of
Speaker 1: feel way worse. And I think, you know, we found
Speaker 1: people just adjusting your daily habits to funding out about
Speaker 1: things that may be affecting their health that are much
Speaker 1: more seriously and and and you know, frankly, I think
Speaker 1: it's those stories that we hear from our users that
Speaker 1: really keep us in our team going, Hey, hang on
Speaker 1: one second, I just want to mention a headline crossing
Speaker 1: the Bloomberg Rivian automotive we mentioned earlier, targeting an IP
Speaker 1: evaluation just above sixty billion that initially coming from down Jones.
Speaker 1: While it just cross that they plan to sell a
Speaker 1: hundred thirty five million shares at fifty seven to sixty
Speaker 1: two dollars each. Uh in that I p O. So again,
Speaker 1: we continue to see the e V space really often running. Hey, Hartprett,
Speaker 1: while we're talking about IPOs. What's the endgame for you guys?
Speaker 1: Because Tim and I were talking to before we get
Speaker 1: started with ut Man, this could be a great add
Speaker 1: on for a lot of well known companies that are
Speaker 1: out there that are pursuing UH wearables are already in
Speaker 1: the space. Could be an Apple, could be a Facebook
Speaker 1: like you could kind of go a lot of different
Speaker 1: places Amazon. Thank you, Tim. What's what's the plan for
Speaker 1: you guys? Yeah, No, Look, I think it's a great question.
Speaker 1: I think from from our perspective, you know, we'll we'll
Speaker 1: do whatever you know, really allows for the best risk
Speaker 1: return for our shareholders and also frankly, what allows us
Speaker 1: that we think to keep executing on our mission right
Speaker 1: and and really to bring the world health as a
Speaker 1: daily practice. And so you know what that means an
Speaker 1: I p O or you know what that means an acquisition.
Speaker 1: I think you know, we're We're not focused on that.
Speaker 1: We're just focused on really making the best possible products
Speaker 1: and solutions for our customers. Hey, one thing that I'm
Speaker 1: wondering about is hardware versus services revenue. If we think
Speaker 1: about Apple, for example, in the way that it's increasingly
Speaker 1: moving into services. UH, the aura ring how much is
Speaker 1: it first of all the third generation? Yeah, it's and
Speaker 1: we do have a membership model. So yeah, so what
Speaker 1: question of month is you know, after after six month
Speaker 1: free trial that we give you to the software. So
Speaker 1: how do you make the software part of it? How
Speaker 1: do you make that a must buy for people who
Speaker 1: have it? Like can they can they get the or
Speaker 1: ring and use it without having the software? Yeah? So
Speaker 1: we um, you know, I think the best way to
Speaker 1: do is give people the full experience, right. I think
Speaker 1: that's something we you know, probably learn from Spotify out
Speaker 1: there right as you know, just your your listeners right there.
Speaker 1: Their free trial was really the free experience, right, and
Speaker 1: then over time it's sort of degraded and they started
Speaker 1: to put more adload on it and things like that, right,
Speaker 1: and limiting the functionality. And so I think, you know,
Speaker 1: from our perspective is you know, when you buy an
Speaker 1: or ran, it comes with six months right of of
Speaker 1: our membership services, right, which is all the data, all
Speaker 1: the insights, all the content, all the features. And you know,
Speaker 1: after six months, if you choose not to continue to pay, um,
Speaker 1: we just leave our members with just the three basic scores,
Speaker 1: which is your sleep score, your activity score and your
Speaker 1: readiness score, so you no longer get the personalized insights
Speaker 1: every day that are generated and nor access to some
Speaker 1: of the content or even the deeper features and data. Um,
Speaker 1: you know. And frankly, I think as you're seeing, right,
Speaker 1: these wearables have changed. Right when Fitbick came out in
Speaker 1: the beginning, it was really just a step tracker. Right
Speaker 1: now these wearables including aura writer or a sleep lab
Speaker 1: on your finger, right, an illness monitoring system on your
Speaker 1: on your finger and and I think you know the
Speaker 1: capability that that that's needed. To do that, you have
Speaker 1: to invest a lot more as a company, and so
Speaker 1: I think our our membership, you know, revenue does allow
Speaker 1: us to invest more rapidly in developing those features that
Speaker 1: we think are best in class. And we hope to
Speaker 1: do that because that's what our consumers and future members want.
Speaker 1: What can you tell us about metrics where Bloomberg we're
Speaker 1: a little nerdy about when it comes to some of
Speaker 1: the business. Uh, metrics and a company, So how many
Speaker 1: rings have you sold? What kind of growth are you
Speaker 1: seeing top line? And I'm curious about membership growth too, totally. Well,
Speaker 1: you know, we we just announced our new genjury just
Speaker 1: last week. So, um, not a lot of membership growth
Speaker 1: yet that we can say because it's so new. UM,
Speaker 1: But no, we've we've said, we've sold over half a
Speaker 1: million rings. Now you know, we've been doubling revenue every
Speaker 1: year since we started, um, you know, including this year.
Speaker 1: So I think, you know, luckily, things are on good trajectory.
Speaker 1: You know, the teams now nearly you know, over three
Speaker 1: fifty people. UM, So I think, you know, by any
Speaker 1: means you look at, we've been we've been growing pretty
Speaker 1: pretty darn fast. And so you know, I think again,
Speaker 1: like you're you're going to see more of these companies
Speaker 1: come public and you know, or or get acquired because
Speaker 1: we're we're seeing so much investment by everyone, as you
Speaker 1: mentioned in a Facebook or or meta, I should say,
Speaker 1: even getting into space. Anybody knocking down the door, anybody
Speaker 1: knocking down the door, I think they're they all have
Speaker 1: their you know, they're they're all keeping their eyes open
Speaker 1: and ears to the ground. And so I think there's
Speaker 1: there's no shortage of opportunity to space. And I think
Speaker 1: the big tech companies you know, see that as well.
Speaker 1: He's not going to tell us he's not okay, but okay,
Speaker 1: is there other devices that will come on the market
Speaker 1: to expand the brand somehow? I think, Look, we were
Speaker 1: focused on that ring form factor with the accuracy that
Speaker 1: we have. You know, we've been we've shown that, you know,
Speaker 1: we're most accurate wearable out there on on things like
Speaker 1: sleep and sleep staging. And you've now with illness. We
Speaker 1: have three studies that you know showed our ability, you know,
Speaker 1: during the pandemic to to see if people are getting
Speaker 1: sick before they feel symptoms. And you know, the rings
Speaker 1: went you know into the NBA bubble and w NBA
Speaker 1: bubbles and and you know, I think the reason that
Speaker 1: they chose our device over other devices, right is because
Speaker 1: of our accuracy. Um And so I think you're you're
Speaker 1: gonna see more and more features coming out that show
Speaker 1: that the advantage of the form factor, and hence we'll
Speaker 1: stick to the ring. We still have a we still
Speaker 1: have a million more in question. So you're gonna have
Speaker 1: to come back because I'm also curious about health care
Speaker 1: companies and really leaning into that area as well. So
Speaker 1: come back and give us an update very very soon.
Speaker 1: Heartbreeat Rye, his chief executive officer at or health, joining
Speaker 1: us via zoom from San Francisco,