Incentivizing Healthy Habits with Alec Zopf, Co-Founder & CTO at Wellth

(Intro Narrator at 00:00:02) Hello, my friends. Today, Joel is talking to Alec, CTO of Wellth App, and they discuss how Wellth App builds applications for patients to create healthy habits, how the relationship between company reach new areas in the medical field, and how they found a way to financially incentivize people to take care of themselves. All of this right here, right now, on the Modern CTO podcast.

(Joel Beasley at 00:00:34) Here we go. This is the Modern CTO podcast. So tell me a little bit about what Wellth does. Am I saying that right?

(Alec at 00:00:50) Yeah, we just say Wellth.

(Joel Beasley at 00:00:52) Wellth?

(Alec at 00:00:53) Yeah.

(Joel Beasley at 00:00:53) Wellth. Wellth. Sorry. Wellth. Tell me a little bit about what Wellth does.

(Alec at 00:00:59) Yeah, so we build mobile applications that go in the hands of patients as they're leaving the hospital or as they're leaving their doctor's office. And what we do is we basically provide a medication adherence rewards program. So we want patients to take their medications and to do the other elements of their care plan that their doctors prescribed. And as long as they do those things, we're willing to give them a financial bonus.

(Alec at 00:01:23) So when they start on our application, they get money deposited right into their account. They can see it in the app. As long as they do all the things they're supposed to and they just demonstrate that they're doing them by taking a picture of, let's say, their pills in their hands or a picture of the glucometer, other tasks like that, as long as they do those things, then they get to keep all that money. It gets paid out to them on a debit card or a gift card. If they don't do those things, each time they don't do them, they lose a small amount of money, like a dollar or two. And we found that this loss aversion is a really powerful motivator, and it's been able to get patients who were previously not as good at managing their health to be completely adherent.

(Joel Beasley at 00:02:01) Wow, man. Insurance companies must love you.

(Alec at 00:02:04) Insurance companies love us. The doctors love us. And, you know, I think the patients eventually love us too. They're getting paid and they're getting healthier and having better outcomes.

(Joel Beasley at 00:02:12) You know, I worked on something similar in the space. So I was at the vet, like veterinary clinic, and the girl checking me out says, you know, here's three things. You need two of these on Wednesdays and Fridays and two of these on Sundays and Mondays and only one of those on every other Thursday. And this one will last three weeks, this one's six weeks, and this one's two point four eight six weeks. And I'm like, what? And I'm like, can you just—I looked at her and I said, in the nicest way possible, I said the dog will probably die if you don't write out in a list the dates and what I was supposed to give them. Because handing me three bottles like that, I say, oh, yeah, you just read it. And then you read it, it's script. So what I built as, like, a little prototype was you take a picture of the directions on how to take it, and it takes the text and actually converts it into a schedule.

(Joel Beasley at 00:02:59) Nice. Yeah, just a little—so it reminded me of this when I heard, like, you know, incentives for taking your medicine because some of the schedules can be kind of crazy too about, like, when you actually have to take stuff.

(Alec at 00:03:10) Yeah, and I think it's really hard also for people to just sort of get over that hump of, first of all, acknowledging that you have to be doing this new medication regimen, but then also just remembering to do it and fighting the real battle, which is either forgetting or just not feeling motivated to do it. Even though we know that there's this long-term health outcome, it's hard to see that in the near term. So it's much easier if we can find a way to reflect that as value that's meaningful to you right now.

(Joel Beasley at 00:03:35) We're like hacking humans. We're like realizing how we actually work and then building tools to incentivize us based on that.

(Alec at 00:03:42) Totally. We know what's best for us, but we don't always do that. So the whole point of our company is to help us try to, you know, help ourselves to behave better, to do things that are in our best interest.

(Joel Beasley at 00:03:52) Yeah, like, no one is at a lack of information for how to be healthy. Right? You eat better food and you exercise, but it's like a multibillion-dollar industry finding different ways and convincing and telling people that same thing, just a different way.

(Joel Beasley at 00:04:11) It's like every health trainer, every period.

(Alec at 00:04:14) Totally. And education is important, especially, you know, disease education and knowing what medications do and why you should take them. But that's only part of the toolkit. And I think motivation is a really important part of it too.

(Joel Beasley at 00:04:25) So who are your first customers? How did you get your start?

(Alec at 00:04:28) One of our sort of first pilot customers is a company called ElderServe or RiverSpring Health, and they are a managed long-term care provider or company. And so they have a whole bunch of patients who—a lot of them are dual eligible, so Medicaid and Medicare, which means that they're older and not that financially advantaged. And so what we did is we took a look at that population. We carved out the piece of it that were poorly managed type two diabetics. And we essentially went to work in that population, started enrolling those members and getting them to adhere to their medications.

(Alec at 00:05:05) And then when that went really well, we ended up expanding into heart failure as well there. And so that's been, like, our first real test of it. We're also running a randomized controlled study at an academic university, and then we have a handful of other customers in a similar space of Medicaid, and we're working on some commercial ones as well.

(Joel Beasley at 00:05:23) So who was it at first? Are you the author of the applications, or do you have a team, or like, how is it structured at the beginning when you first started trying to figure this out?

(Alec at 00:05:31) It's been a long road.

(Joel Beasley at 00:05:34) It's a long road. It always is. Look, it's better than a short road that goes nowhere.

(Alec at 00:05:38) So we started out in an accelerator called Tiger Labs, which is in Princeton. And we had some really good ideas, and we started basically building them in a bubble and not getting that much feedback. And then we started going out and making calls with kind of healthcare executives, and we'd get some useful information. We'd get some kind of, hey, that's interesting, you know, come back when I can buy it sort of things. But there's not really that much useful feedback for us. So for a while, we were just doing that. I was building simple prototypes on the web and very simple mobile app prototypes. Then we decided it was time for us to build our first application that we could actually test with users and get feedback.

(Alec at 00:06:16) My background before I started Wellth—it's sort of silly, right? We're a mobile application company. My background is data engineering primarily. Right? So I'm deep in the back end. So I had a lot to learn on the mobile side. And so our first prototype, we actually ended up using a dev shop called Apperson Labs. And we had them build out a prototype for us using something called Appcelerator Titanium.

(Joel Beasley at 00:06:38) Oh, I know. Yeah.

(Alec at 00:06:39) Yep. So it could be compatible with both iOS and Android with the same code base. And we used that to work for our test.

(Joel Beasley at 00:06:44) How'd that work for you?

(Alec at 00:06:45) It was okay. It was okay. It definitely worked. The user interface, it was good, but you could tell that it wasn't a native application. Just little things, right?

(Joel Beasley at 00:06:57) Oh, yeah. I've used it. I wrote a Titanium Excel app, and I was like—and then, because it's just like for—it's amazing for, like, a prototype to figure something out real quick. It's great.

(Joel Beasley at 00:07:10) But then I switched and tried, like, the React Native stuff and that's, like, for real. You know, that's really solid.

(Alec at 00:07:18) So we have—we've come full circle. Our first product was in the accelerator Titanium. We released that. We actually, we managed to do a test there, basically testing different incentive levels—high incentives versus low incentives versus basically no incentives—and found that the incentives really matter. So, like, our founding principle was true, and that was great to get out of that.

(Alec at 00:07:39) So then we hired an Android developer and iOS developer. We raised some money and started building native apps because we're like, we want to get out of this uncanny valley. We want to get to the point where the apps feel good. And we did that, and that's actually the product that's in the market right now. Nice.

(Alec at 00:07:57) Having really good results, and we're very proud of that. So about six months after product launch, we were looking at our code base. Like, okay, it's stable. It's good. It's operating. We know we want to add a bunch of features. We've learned enough now about the design that we actually think we want to do a pretty significant redesign visually of the application and user experience flows. And we know enough about the dumb mistakes we made with some of our data structures or, you know, assumptions we made that are no longer the case, that we think it might actually be a good idea to change some of those as well. And our developers are kind of getting lonely in their own code bases, you know, just the one iOS guy, just the one Android guy, and we kept fixing the same bugs in both places and realized we really ought to be operating out of one code base.

(Alec at 00:08:41) So now we've come full circle and we've actually built a whole new application in React Native. And our formerly native Java and Swift developers are now JavaScript developers and they're writing a great React Native app.

(Joel Beasley at 00:08:53) That's amazing because it allows them to also port anything that's not already ported as a package. Right? So they can get really low level because they're native developers by default.

(Alec at 00:09:03) Yeah, it's great actually because our application is very camera-focused. And so at first with the React Native app, we use just a default off-the-shelf camera, but they've actually been going back through and implementing a whole new camera module with a lot of, like, extensions and stuff that they only know about because they're deep in the native elements of that.

(Joel Beasley at 00:09:22) Right. They don't have to—they're not reliant on the community porting features. They can go in and—right, they're adding their bindings or whatever it may be. So what's, like, the next step with the business?

(Alec at 00:09:32) So our big goal now is just to get more users. And I know that sounds simple, but it's towards a larger situation.

(Joel Beasley at 00:09:40) Though, your goal that you're trying to achieve for everyone to hit should be as simple a goal.

(Alec at 00:09:45) Exactly. The longer-term goal of the business is to get to the point where we can service large customers, especially health insurers. So that's where the revenue starts getting really juicy for us and where we can serve a lot of people at once. To get to that point, we have to have, first of all, pretty clear evidence that our product is effective so that it's actually achieving the objectives that it's meant to. And then also that it can scale to large numbers of people, right? Because a health insurer will come in and say, great, I'm ready to implement this with, you know, 10,000, 20,000, 50,000 people. And right now, you know, our patient populations are in the hundreds or the low thousands. Right? So our goal is to get that population much larger to get to the point where it's 5,000 or 10,000, and then we feel like we're ready to address these much larger customers.

(Joel Beasley at 00:10:30) That's so exciting, man. You sound like you have a really clear view. What sort of material do you consume, like books and things like that? Where do you get your leadership information from?

(Alec at 00:10:43) I'm all over the place. I read a lot of blogs. You know, I certainly read the stuff that's coming out of Rock Health. It's always interesting.

(Joel Beasley at 00:10:49) Mhmm.

(Alec at 00:10:50) There's a handful of other healthcare blogs. Of course, I just read Hacker News, you know, whatever comes through when I get a little burnt out and want to open a web tab and just let my mind wander for a little bit. Yeah. But a lot of what we get is coming out of either behavioral economics research or it's coming out of some of the business backgrounds of my co-founder and other people in my business. So my co-founder—he did bioengineering in college, and then he did some time at Goldman Sachs as a healthcare investment banker, and then was working at a hedge fund called OrbiMed Advisors, which is a healthcare-focused hedge fund.

(Alec at 00:11:25) And he was working on a deal. He was looking at health insurers, and so he got to really know the healthcare industry very well. So it's been fascinating to kind of pull some of that information out of his mind and get acquainted with that. And, you know, as we talk about sort of the long-term goals of our company, it's the melding of the technology side that I'm bringing and the business side that he's bringing and trying to figure out how we can figure all that out into a strategy roadmap.

(Joel Beasley at 00:11:47) Yeah. That's super essential, the fact that you have a co-founder that has relationships in the space and is willing to handle that side of the business so that you can focus on the product and the scaling of the technology.

(Alec at 00:11:59) Yeah. And it's interesting. It's definitely the relationships. It's also just even understanding the landscape. I had no idea when we started this business—he kept using words like payers and providers, and I didn't really know what that meant. A payer is a healthcare insurer, and a provider is like a doctor or a hospital. Mhmm. To really understand that whole business landscape is a challenge, but now that we get it a lot better, now that I get it a lot better, it's really helped me to think about what we can do with the products, both from a product management and a technology side.

(Joel Beasley at 00:12:27) Yeah. Understanding the landscape is so important. I was talking this morning to Chad Fowler, and we were discussing how a lot of the entrepreneurs, they go to VCs or to raise money, and they just want, you know, they want money from them or whatever it may be, and they present to them. But a lot of them don't understand how they get money. And so these funds get money by going out and pitching to people who have money that they're going to manage their high volatility, like high-risk in the technology market, and they have a profile, and so their perspective is every investment I make as a fund needs to be able to pay back the entire fund because 80% of them are going to fail.

(Joel Beasley at 00:13:09) So that's like the qualifier. So they're saying a lot of the conversations I've had with people, like, off the calls, like, on these micro calls is, you know, they've got so much money, like, why can't they just give me, you know, $200,000 or, like, whatever it may be. And I'm like, okay, well, this is going to be an education. Right? So they need to believe that your idea is going to be able to actually pay back, like, the entire fund. Like, it'll be that successful that you—as they'll make a hundred investments and every single one of them needs to be able to pay back the fund with their hit.

(Alec at 00:13:39) Yeah, it's been kind of a crazy process also just learning about that VC market. Right? And it's definitely, you know, just a little bit of pressure thinking about, wow, I need to return, you know, a hundred X. But when you look at the industry and you look at what's out there—right, if we look at some of these health insurer contracts, that might bring in $10 million, $20 million of annual revenue, just that one contract alone. So once you get really good traction, you can scale. The healthcare market is so big. There's so many dollars being spent. There's so many problems to solve that it's very possible.

(Joel Beasley at 00:14:10) Yeah. And then it also, if you put your focus on the value to the individual using it, that's how you win. Because when you put that first, opportunity just floods you and it's just unbelievable what can happen. Because someone's using it and they love it, and then they talk about it with someone else, and then they love it and they talk about it with someone else. And then eventually enough people are talking that the people that are hearing about it, Jenny or John, who owns a $10 billion medical firm or insurer firm or payer or payee, whatever it may be, right? And then they're like, we have to have this. Three of my friends say it's the greatest thing ever.

(Joel Beasley at 00:14:48) Why doesn't my company have this? We're like the largest in the industry. Go get those Wellth people, right? And then that's where you get into a position where you switch from you pushing out to people coming in, which is a great position to be in.

(Alec at 00:15:04) My co-founder, Matt, loves to talk about the snowball effect, which is the idea that as we've been building this product and as we've been building the company and building our reputation, you know, we're gradually just adding these little bits of either testimonials from people or evidence that we can produce or just a working application and sort of a rigorous process. And all these little things keep adding up little by little, and there's all these stakeholders in the system too, right? There's the users that you're talking about.

(Alec at 00:15:31) There's the doctors who are working with those users who are patients, and then there's the hospital system that the doctors exist in, and there's the payers that are working the hospital system, then there's the insurers. And so as we get to the point where we get recognition from all those different entities, it's exactly right that it's that sort of brand recognition, that awareness, and that reputation of quality and building that mindset and mind share among all those people is what has really allowed us to begin to succeed.

(Joel Beasley at 00:15:57) Yeah. You want to be the cool piece of technology that they're talking about.

(Alec at 00:16:02) Yeah. Exactly.

(Joel Beasley at 00:16:02) So I love your headphones. They look like drummer headphones. They are. Yeah? You play a little drums?

(Alec at 00:16:09) I have been. I have been. Yeah.

(Joel Beasley at 00:16:11) What do you like playing?

(Alec at 00:16:13) So I play in a jazz fusion band, actually.

(Joel Beasley at 00:16:17) Yeah. Yeah.

(Alec at 00:16:19) Yeah. So we play all kinds of stuff. We play like Herbie Hancock. We play the Brecker Brothers, Snarky Puppy, Stevie Wonder, a little bit of everything.

(Joel Beasley at 00:16:29) You have to put that into your VC pitch to be like, we're good on timing. Exactly. Right? Exactly. So do you ever get people that mention that you look young?

(Alec at 00:16:41) I do. I used to get it a lot. People used to think I was still in college when I was like 27. Yeah. And now I get, you know, maybe I'm 25 or something.

(Alec at 00:16:49) So.

(Joel Beasley at 00:16:50) Yep. I roll with.

(Alec at 00:16:51) It's a little annoying.

(Joel Beasley at 00:16:53) Yeah, it does. But I like to talk about it. I've had a couple guests that look young, and I like to bring it up because you can tell. You can see me.

(Joel Beasley at 00:17:02) And so even when I'm rolling around with my daughter and my wife, and we're both in our early thirties, people still think that we're very young.

(Alec at 00:17:11) I think it's a blessing though. It's kind of nice to be in a meeting when someone underestimates you because they think you're younger as well.

(Joel Beasley at 00:17:17) This is the conversation I was having with someone else that looked young. I said, I love it because it allows me to go in under the radar, and the whole time they're just like, lack experience. They don't know what they, they haven't seen anything in life. They don't. And they build this whole persona in their mind before I even open my mouth. Totally.

(Joel Beasley at 00:17:34) And then I just answer their questions and share some insight and speak last, which is the thing that I've learned is the best. Because when you speak last, you have something to say. Right? Sure. And then they're just like, oh man. Then you get that chance because they underestimate you and then they get, they'll talk about you like, oh, so surprised, like when they're wrong, you know. It's so great. So that helps definitely with the VC. Now, because we're older, we experience that a lot younger. You've been in technology for quite a while, right? Yeah.

(Joel Beasley at 00:18:05) Yeah. Yeah. So I mean, I started writing code at eight with my father. He was a programmer, and so he taught me, and so I was writing code all the way through high school and just always. And so I was like 16 sitting in a room with board members, and they were all just looking at me like I was the youngest thing in the world. I'm just like, yeah, I made this code and it does this. And I was just really relaxed just showing them what I did, and their minds were blown because it was useful to their business. The fact that someone who looked like their grandkid who is not necessarily achieving something in life could bring such value to their business, they admired. And I'm like, look, I'm just here to build something cool that is useful to people.

(Alec at 00:18:48) Absolutely. Yeah. And that's exact experience in life for sure.

(Joel Beasley at 00:18:51) Yeah. That's exactly what you're doing.

(Alec at 00:18:53) Yeah. I mean, I started when I was 13 doing web development and working for a friend's company for a while and then sort of being an intern and working in labs and things like that. I think it's sort of a, it's fractal anyway. Like, you can get that when you're 13 and working with someone who's, you know, 35. And even now, it feels like that in the health care industry, right, even just being 32, but you're working with these really long established and very set in their ways organizations in some cases.

(Alec at 00:19:20) So it still feels like that same experience of like, wow, you kids could actually make something that's going to help us.

(Joel Beasley at 00:19:27) Yeah. Isn't it interesting, even when you're 18 or 16 and you're working with the 30 year olds that are helping you and moving forward, they're just like so in the market and so much senior to you. And then when you hit the thirties range, you're like, everyone will always see you as a kid that's a decade older than you or two decades older than you. Right?

(Alec at 00:19:50) Right.

(Joel Beasley at 00:19:50) It's unbelievable. But the transition in technology, it's really helped a lot that a lot of younger people had some real big success or that it was talked about because now it's curved the hurdle a little bit. At some points, I've seen companies do really stupid things just because the individual was young and smart, thinking, oh, it's going to be just like that. And it's just like, no.

(Joel Beasley at 00:20:16) Not all young people are smart.

(Alec at 00:20:20) Right. Right. Yeah. And I think especially in some markets that can happen a lot more easily than others. Right? I think it's very easy to underestimate the depth of knowledge that's required in health care to do something. So, you know, let's say if you're starting a biotech company, you have to have people who are really experienced, you know, PhDs, postdocs, et cetera to really do something useful. I think there's, I was listening to an Andreessen Horowitz podcast about health care recently talking about the same thing of that Silicon Valley needs to learn a little bit of humility when it approaches health care because you can kind of waltz in there with this Silicon Valley bravado and say, you know, I know how to solve everything. You just got to think outside of the box. And then, you know, some of these problems, it's not that they haven't been solved because of no one thinking outside of the box.

(Alec at 00:21:04) It's just because it's actually really hard to solve. It's a very complex system.

(Joel Beasley at 00:21:08) Well, you're definitely dealing with things in the physical world that are a little bit different because I mean, you have physics and science involved and, you know, when you want to build a limb, right, that is half bio and then half organic and connects to the two. Like, yeah. Sure. It sounds easy in just theory. But, right, it takes like a million specialists, and then it's just like, I don't think we've actually done that yet.

(Alec at 00:21:36) But, yeah, I actually, I have some somewhat close intimate knowledge with some of those neuroengineering systems. That's actually what I wanted to do originally. Yeah. So I worked in a lab that was doing neuroengineering at UPenn, now at Stanford. And actually, one of the guys that I had worked with at the time is now working, I think he's actually a co-founder of Neuralink, Elon Musk's startup.

(Joel Beasley at 00:21:57) What? Yeah. This is crazy. So you're really interested in that?

(Alec at 00:22:05) I'm very interested in that. I pursued it for a little while, and I realized after a handful of summers of working in labs that working in a lab is just not really for me. I need something with a little bit more freedom, a little bit more autonomy. And I think you can get that later, or you can get that if you really take the right path in an academic lab. But I just gravitated towards software and towards startups.

(Joel Beasley at 00:22:28) Yeah. The path was a little bit clearer. You could have that right now. You're a great leader, man. So you'll have a one-on-one, and then you'll pick something that they're going to focus on for the next week before your next one-on-one. And these are your direct reports. Right? So and then that comes back up and you'll revisit it?

(Alec at 00:22:47) I'll try to. If I remember it too. Right? It's hard to even keep track of all that. I keep notes sometimes, and I generally know. We're a small enough team so that it's easy to remember sort of what people are focusing on.

(Joel Beasley at 00:23:00) Oh, give me a couple things that you've had people work on.

(Alec at 00:23:05) So I think some of it has been around communication. So ways that we can communicate better with each other, ways that we can facilitate the flow of information between the business and the tech sides, between the tech people and each other. Some of it has also been around, it sounds so middle school or something, but like attitude. I want us to all be highly competent, but also still humble. And I think there have been times when people get just a little bit overconfident about a certain aspect of their work, and it's important to always keep the perspective that someone else could know something that you don't, even if it's your core technology, and that there's huge value in being able to be open and learn from other people.

(Joel Beasley at 00:23:54) Highly competent and still humble. Oh, I love it. Dude, that's so great, isn't it?

(Alec at 00:24:00) Yeah. Those are the people that I'm just amazed by. When you see someone who just bleeds and oozes excellence, but can still operate really well on a team and just isn't an asshole, then.

(Joel Beasley at 00:24:13) Well, you want people that are like you. That's how you like.

(Alec at 00:24:17) If I use confidence all the time. But it's the idea. I want people who will be a great part of a team in that way.

(Joel Beasley at 00:24:27) And then, you know, I've also noticed that it's a lot, we're as animals. Right? We're monkey see monkey do, heavily driven. So a lot of people will be adapting behaviors just because they know someone who's successful who's kind of a jerk. Like the Steve Jobs effect, right? So many entrepreneurs wanted to treat their people poorly because they thought that Steve Jobs treated their people poorly. Right? Right. And they thought that, oh, if I imitate that individual, I'll have success.

(Alec at 00:24:53) And there are times that you have to be dedicated to what you believe. So we have a list of values up in our office, and one of them that we came up with as a team was to be thoughtfully confrontational. So it's really important when you strongly believe in something that you're able to confront people about it and be able to speak your mind and sort of hold your ground, but also to be thoughtful about it and not just to come out attacking. You know, you can be a Steve Jobs. You can have a passion for product.

(Alec at 00:25:21) You don't have to be an asshole to people to get your job done necessarily.

(Joel Beasley at 00:25:25) Amen. I mean, like, preach it. I wish I had like a little flag I could wave. Totally. So people want to find out more about you. Do you hang out on LinkedIn, Twitter, email?

(Alec at 00:25:35) Yeah. Yeah. Instagram, Twitter. You can always check me out at wellthapp.com.

(Joel Beasley at 00:25:42) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you'd like to hear discussed on the podcast, either add me on LinkedIn or send me an email, [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.