A Case Study in Equity Crowdfunding: Cary Breese, CEO of NowRx (Part 3)

Sramana Mitra: When you started digging into this problem, what did you learn about the competitive landscape because, today, online pharmacies are present. 

Cary Breese: What struck me immediately was that the products themselves that pharmacies maintain in their inventory are fairly non-perishable commodity items.

It struck me that you could have those housed in a local fulfillment center that wouldn’t have to be a retail facility. It could be a commercial space and save money on the retail space. By saving money on the retail space, you could absorb the cost of doing deliveries.

The idea and the vision was always to replicate and exceed the experience that patients have when they go to their local pharmacies. Back to that time when I had a prescription, I had to drive to the pharmacy to get my prescription. It was the same day of service.

That was always our vision from the beginning – to create a model in pharmacy that replicates the same-day experience that many patients have without having to go to a pharmacy. While there are online pharmacies and pharmacies have been doing mail delivery for decades, we never felt that it was a sufficient answer, given the way consumer markets are heading.

Consumers are looking for more convenience in their life and we always thought that the bar would have to be same-day delivery prescription for everyday customers. This would be the same day and same hour, free of charge. You could do it from a micro fulfillment center effectively and profitably while you absorb the delivery cost.

To make that work, you need to have multiple fulfillment centers local to customers and local to their communities. We have a driver that leaves our fulfillment center with ten deliveries that go out in an hour where they make those deliveries and go back to the pharmacy.

Immediately, the vision is different from an online pharmacy. This is something different. It’s somewhere between retail and online. It’s the best of both worlds. It has the convenience and efficiency of mail delivery, but it has the immediacy of a retail experience. 

Sramana Mitra: What were you going to do to address these issues? What was the model that you thought was necessary to deliver the service that you thought was necessary? 

Cary Breese: We started with a vision of customer experience that we wanted to create. We want to have an experience where a customer leaving his doctor’s office with a prescription in his hand could drive home or go to work and have his prescription filled remotely with just an app.

Then it would be delivered to his home or office the same day free of charge. That was the experience that we wanted to create. There are a variety of things that we had to look into to see how to create that. 

Sramana Mitra: What was your analysis? What was needed in the backend to deliver this level of service?

Cary Breese: We knew that we needed a front-end app and a fulfillment process on the back. I immediately researched how pharmacies operate, license, and regulate. How could I stand up to a pharmacy fulfillment center? What would be the process to get licensed and get inventory? Early on, I had some contacts in the pharmacy industry.

I sat down on LinkedIn and looked at people I was connected to that had pharmacy experience in their background. I started calling people and telling them that I had these ideas and I was looking for advisors. I found a couple of interesting people.

I also found a program for startup pharmacies from a company called McKesson. They were offering a loan program for people that wanted to start their own pharmacy. They called it RX ownership. They had business plans that they had templates for.

I turned to my partner and told him, “Hey, I know I can start a pharmacy. I know how to do it. We just need to find a small warehouse somewhere. I can get it licensed, funded and I can also get inventory for it. You can build the app for it.” He went and built the app and I went off and built the pharmacy.

Sramana Mitra: When did you launch this?

Cary Breese: The servers were operational in January of 2016. We did about six months of work before that, so maybe July 2015 was when we leased a warehouse in California. It was around that time that we started the licensing process, got the inventory, and started to hire the staff. We issued our first prescription in January 2016.  

This segment is part 3 in the series : A Case Study in Equity Crowdfunding: Cary Breese, CEO of NowRx
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