On this podcast, we talked about the things you can compensate your partner network with aside from money, the benefits and risks of being a pioneer in the marketplace, and so much more!
Josh Rome is the Founder and CEO of Runway Health, the first direct-to-consumer telehealth company building a brand around travel health.
With a career spanning technology, pharma and travel, Josh is uniquely positioned to build a transformative company at the intersection of these industries.
Josh started his career at Adobe, helping publishers digitize their traditional print publication workflows through the launch of Adobe’s Digital Publishing Suite.
He then joined Patagonia Pharmaceuticals, a start-up specialty pharmaceutical company developing innovative prescription therapies for rare dermatologic diseases.
Josh led business development efforts to secure an international licensing deal valued at over $100MM, a $1.5MM FDA grant, and ultimately the divestiture of Patagonia’s lead assets to a public dermatology company in 2019.
With an opportunity to better align his career with his passion for travel, Josh then launched CitySpeak, a daily travel based newsletter turned boutique travel agency.
Through this experience, Josh identified the gap between travelers' needs and the current marketplace, which ultimately resulted in the genesis of Runway.
Josh is an avid traveler and adventurer, having ventured to over 60 countries, circumnavigating the globe on Semester at Sea, and climbing mountains such as Kilimanjaro and Toubkal.
In This Conversation We Discuss:
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Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer. And today, we're welcoming to the show, Josh Rome.
Josh is the founder and CEO of Runway, the first D2C, direct-to-consumer telehealth brand focused on travel health. Welcome to the show, Josh.
Hey, Chase. Great to be here.
Oh, it's gonna be fantastic. So for those that are unaware, can you just let us know what it is? A telehealth direct-to-consumer brand? What kinds of products are you guys bringing into the market?
Yeah, so we're the first company focused exclusively on travel health. So when I talk about travel health, I'm referring to prescription medications that you take for many of the most common travel ailments.
So that includes things like malaria, prophylaxis, motion sickness medication, altitude sickness medication, even things like antibiotics for travelers, diarrhea, and sleep aids.
Any prescription medication product that you might need to take along with you on your travels.
I know that this is a really common problem when you're going to --and I hate to say this but-- third world countries or people or countries that do not have an advanced health care system.
Is that correct?
Yes. So something like traveler's diarrhea is probably the most common travel related ailment.
20% to 50% of travelers traveling to developing countries will encounter traveler's diarrhea at some point in their lives, in their travels.
Awesome. Alright, so just take me back in time. We're gonna through all of this, particularly to this idea [that] comes from what was going on in your life.
What was the catalyst for like, "You know what? I think there's an opportunity here."
For sure. So my career spans the tech pharma and travel space, so I feel uniquely well-positioned to tie this all together with Runway.
But after a successful exit from the pharmaceutical industry in 2019, I had an opportunity to try to better align my career with my passions. So I've been an avid traveler my entire life.
I've been to over 60 countries and went on a program called Semester at Sea for a study abroad program. I've climbed mountains like Kilimanjaro, and Toubkal in Africa. Travel has just always been this really defining characteristic of my personality.
So with that, looking to rebrand my career, I started a daily travel-based newsletter called CitySpeak.
I grew that to a few thousand subscribers, and then ultimately leveraged that user base into opening up my own boutique travel agency.
I affiliated with one of the largest agent networks in the US, a company called Protravel, and started managing itineraries and selling travel throughout the world.
So through that experience, I identified this gap in the industry. And that was after booking a honeymoon in Bali, or a family going on an African Safari or a father and son that were flying to Machu Picchu.
I would always get asked these questions related to "What types of medications do I need for my trip?" Or "What types of health concerns should I be aware [of]?"
And at the time, all I could really do was refer them to either their primary care physician or suggest that they visit a travel clinic.
I'm 36 years old. I don't actually have a PCP. 35% of millennials don't. And the Travel Clinic industry is highly fragmented, it's notoriously costly, and overall, a poor consumer experience in today's day and age.
Oh man. This is gonna be such a fun conversation.
So you saw this gap in the market and you decided "There might be an opportunity here."
I would say that healthcare is probably the most regimented industry, maybe only surpassed by finance. How did you...
What was the first step like getting into this and trying to just figure out if this is a good idea or not?
Yeah, so a couple things. I leveraged some... Once the initial seed was planted, I leveraged some of the initial insights and access to data I had from my former life in the pharma industry.
And I would say the real genesis of Runway was when I uncovered that this segment of the healthcare industry that was branded or called "travel health" was actually larger than both erectile dysfunction and hair loss combined.
So I'm sure you're familiar with companies like Hims and Hers and Roman and the way that they really were able to pioneer DTC telehealth for initially men's wellness, growing that to women's wellness, dermatology, mental health, etc.
Identifying this gap in travel health and feeling like there was a blue ocean approach to a potentially larger market than what some of these other companies were building.
When I started thinking about really putting the pieces together to actually intangibly build Runway...
So, we live in an environment and with an ecosystem that's very different [from] what some of those early pioneers had to manage. So they had to build out their own physician networks, they had to form partnerships with various pharmacies.
Today, there is an entire ecosystem of vendors, frankly, that allow smaller startups to integrate into the market much quicker and also allows them to scale much faster.
So we're using partners for things like our telehealth services, which allows us to launch into all 50 states rather than building out a state by state network.
Similarly, we're working with a partner pharmacy that is licensed in all 50 states and they can ship our medications to patients throughout the US.
These are opportunities that were afforded to us because of the telehealth ecosystem that has been built up over the past 5 years and beyond.
And really gives us and many other companies entering the space today an advantage over some of those early adopters.
Yeah, something that I read the other day, which I was thinking about the whole time you were just talking, was that the first people that go into a new market invest the most and are most likely to go bankrupt because they have to pave the way for everyone else.
And a good proof of concept there is...
Well not proof of concept.
But obviously on the agency side of things, whenever there's a brand new ad platform or technology when people jump on it, and adopt it, and tie their business around it, you don't know if it's going to be there in 6 months or a year. So, it's definitely a little more risky.
But obviously, risk versus reward.
No one's going to sit back here and say that Hims isn't doing all right.
Totally. And it's actually funny you say that, because some of our partners and investors have actually said the same thing to me about travel health and that we're really leading the way and travel health and we actually have a very unique and differentiated strategy towards customer acquisition that we can pave the path and pave the way.
But as soon as we prove out this concept, there will be others following behind us potentially with greater access to capital, bigger teams that we're always going to be fighting to keep our space at the top and build out our moat.
But there's unique challenges to certainly being first to market.
Absolutely. And I think that one of the more interesting approaches that you have here is instead of building your own partner network, instead of building your own pharmaceutical network, you chose to go with partners.
Now I'm just gonna guess here and you can share as much or as little as you can about this, but it definitely doesn't make your margins as healthy as possible.
But it also helps you get to the next phase of your business a lot faster.
Yeah. And that's exactly it. Less capital intensive from the outset, allows us to get to proof of concept much faster in a much more scalable fashion.
As we can continue to grow, gain traction, raise additional capital to take on some of those vendor relationships, bring them internal, we'll be able to have healthier margins down the road.
Right now for us...
We launched in May of this year. It's all about gaining that initial traction, all about building out proof of concept. And once we have that, I'm confident we can really start running with this.
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Now, let's just talk about building this business and acquiring new customers. What was that go-to-market strategy?
How are you getting people into the pipeline to start...
...making some money?
Yeah. So that's frankly the most exciting part of the business for me. When you look at competitors in the direct-to-consumer healthcare space, we've used names like Hims and Hers or Roman.
Already, it's really difficult to build communities around health care conditions, hair loss or erectile dysfunction.
Generally, if you're not familiar with one of those brands, you're gonna have to go to a general practitioner or PCP, chat with them about your problems, and if they determine that you're a candidate for medication, they're gonna go ahead and write you a prescription.
And in no case is that general practitioner gonna refer you to a third party telehealth platform to get access to your medications.
Meanwhile, --And frankly, I experienced this firsthand as a formal travel supplier-- when I was booking that trip to Bali or when I was booking that African Safari, I was the first to know who might be a candidate for medication.
And we can leverage these travel suppliers to effectively become the voice and ambassadors for Runway to build out our customer base, to refill our sales funnel year after year, and allow us to acquire customers at a much more cost effective manner.
So we are really trying to prove out right now this B2B2C marketing strategy rather than what I would call a traditional growth marketing strategy of paid search and paid social.
A lot of DTC brands that you talked to today, I'm sure, are spending a tremendous amount of money on Facebook ads and Instagram ads and Google search.
And what we're seeing is Apple will enact a new privacy restriction that makes the efficiencies go down, or the cost to acquire customers through Facebook is constantly --seemingly constantly-- increasing.
If we can build our business through a partner network, we'll be able to profit from our customers day one and build a real and sustainable business, which is very exciting.
We are seeing what's happening in the markets right now with these high growth customers that are spending a ton of money to acquire customers.
These high growth companies that are spending a ton of money to acquire customers, but don't have that path to profitability.
Meanwhile, Runway, as we build out our partner network, build out our community of both travelers and travel suppliers, we can build a real sustainable business and then your future.
Yeah. That is such a unique strategy. I don't think it's a strategy we've talked about on the show before. I'm racking my brain to think about it.
But the way I'm gonna really simplify what you guys are doing over there for the listeners sure is you are partnering with people in other businesses that are selling other products to your target demographic, as opposed to trying to acquire those people further up the funnel with awareness ads through paid search engines.
Now, I'm also just going to guess here that with these partnerships, that it's probably an affiliate deal where you're not really paying upfront, you're only paying when things happen.
That's correct. Yeah. And just to talk about who those travel suppliers are for us. So that can be one of the 150,000 individual travel agents in the US that are managing individual itineraries for travelers that can be tour operators like an Abercrombie & Kent or an andBeyond.
That could be a travel insurance company that's selling travel insurance into a traveler after their trip.
These are all different touch points to that traveler that afford Runway a complimentary opportunity to provide their service that also enhances the service of that original seller of travel.
So that travel advisor, that's booking that African Safari is already suggesting that that traveler requires or procures travel insurance. They're making sure that they're all set up with their flights and logistics.
Having them also recommend a better, more effective, more cost effective way to obtain relevant travel health medication and access to US-based physicians during their travels is an additional value add that they can offer.
The fact that we're compensating them for it through an affiliate marketing opportunity is, frankly, just icing on the cake.
Some of our partners to date have actually wanted us to just donate those commissions to some of the conservation efforts that they're working on. So it's interesting for us.
Right now, we're playing, frankly, different levers seeing what is resonating most with the partners, what is most valuable to them?
Is it purely our service? Is it that commission? Is it a co-promotion or co-marketing effort?
Yeah, I'll even tell you on my side of things. Whenever... Running an agency, having the direct ear of Ecommerce merchants every day...
Our inboxes are inundated with partner opportunities that run the gamut from being one sided to one of us to just being a terrible fit. And the things that are more exciting to us are actually solving a problem for our customers...
The last thing is really the money at times, it's more value in other forms, be it co-marketing or just having someone actually help you solve a problem.
Yeah. And especially this...
Where we are coming out of COVID right now, we're seeing travelers travel with this heightened sense of awareness towards their health and travel. We are focused on this proactive or prepared traveler, which today is every traveler, because they're navigating so many of these different hurdles that COVID has resulted in.
And being a support system for that proactive traveler really just elevates the experience for all and when it's coming from that trusted travel advisor or that trusted tour operator, it elevates them along the way.
Absolutely. Now, looking back at building this business, or maybe just in your career, [are] there any mistakes or learning experiences that you can remember that you think might resonate with a founder getting into the direct-to-consumer space?
So this is, frankly, my first foray into the direct-to-consumer space. So there are a lot of new learnings.
I think, for us, what's most important is that we are experimenting regularly, trying a lot of different things, not being afraid to fail, frankly.
We're managing the budget in a way that we are taking a lot of smaller experiments, rather than leaning heavily into some of the seriously big risk style marketing strategies.
So for us, it's trying a lot and not being afraid to run with what's working and and walk away from what's not.
Now Josh, is there anything that I forgot to ask you about today that you think might resonate with our audience?
One thing that I think is interesting about being the first to market with a new strategy is how we can really define and craft our own story and our own success metrics.
So as we've seen in the SaaS industry over the past few years, it's all a focus on ARR, annual recurring revenue, MRR, and really defining success based on those metrics.
At Runway, we're developing our own success metrics.
So because we have this B2B2C strategy, because we are building out a partner network of hundreds of suppliers, all with the goal that we can have millions of touch points with travelers, we're building out our own metrics of "ATT" - annual travelers touch points.
Knowing that if we can extend to 2 million or 5 million annual traveler touch points through our partner network, you can look at a conversion rate of 0.25% or .05% or 2% or 3% of those ATTs, those annual traveler touch points, knowing that we're able to build again, that real and sustainable business through those metrics, because we're able to profit off of our customers from day one. So it's really exciting.
It's also challenging in crafting that story and speaking with investors, speaking with partners, and getting them to understand that we have a different strategy than what they're typically used to.
But what we are really working towards today with our recent launch is building out those first few and early case studies that we can show to the world that this model is working and will allow us to build a real and successful business down the road.
I think that's fantastic coming up with the KPI that matters to your business.
For most direct-to-consumer businesses, the KPIs are somewhere along the lines of AOV, conversion rate, and sessions.
But with you, your business is a little more unique with what you said that business to business to customer strategy, which is so cool, and it's got my brain spinning.
But most business books that you'll read will talk about simplifying the data that you're looking at. And your dashboard, if it's more than 5 metrics you care about and if you can't see the health of your business with 3 to 5 numbers, you're doing too much.
And I think coming up with those KPIs that truly matter to your business is such an insightful strategy for any business regardless if you're direct-to-consumer or not.
You can be traditional or whatever, that is such an insightful strategy. Just keep it simple, know which ones you need to look at to know if the business is growing or doing what needs to be done.
Yeah, I absolutely agree.
Awesome. Josh, you've talked so much about these innovative products that you guys are bringing to market.
Now if I've got some travel coming up, or any of the listeners are curious as to what's going on, where should they go to check it out?
Awesome. Josh, thanks so much for coming on the show.
Thank you so much, Chase. Really appreciate it.
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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