Business Model Innovation in Digital Health: Bob Allison, Co-Founder of PEAR Health Labs (Part 7)

Sramana Mitra: What is the financial engineering that makes all this possible?

Bob Allison: They were cash and stock, but mostly stock. We used valuation methodologies and acquired the companies usually in their 100% state, so we didn’t eliminate people and would just buy the tech. We typically bought the people because we thought they were important to delivering expertise.

Since we had been in business and Innovate has been successful many times over, we had a lot of credibility with banks and lenders. We were able to generate the cash flow that we needed to support the integration businesses while we were not profitable. We always kept our operating costs extremely lean. We were thinly managed. We would be probably 85% engineering and 15% everybody else.

Sramana Mitra: It’s a large deal business development kind of business. You need business development people and application engineers. This is similar to your semiconductor background.

Bob Allison: Yes. I’m not, nor have I ever been, a direct-to-consumer person.

Sramana Mitra: It’s good to recognize what you are and what you’re not.

Bob Allison: Exactly. What turned out to be right was, at the highest level, these are big problems for people to resolve. Some of our partners are the largest healthcare providers. They really need help. The solutions are from people who understand the technological movements that are going on and how fast it’s all changing.

AI is a big word now. We’ve been working with AI on the Performance Labs side for 25 years. They’ve been developing their advanced algorithms. They’re no slouch. The company has got 16 patents. A lot of it is around contextualization. They were measuring and counting steps long before your Apple Watch did. They knew the importance of that information was not for consumers but for health. They knew how important that was going to be and what it should do to inform the next step.

Sramana Mitra: If I want to use your technology, which is the best place where I can get a B2C version of this Aptiv?

Bob Allison: Yes. Everything that we have that is facing the consumer market is off of Aaptiv and our Aaptiv coach which is the AI-based experience that builds a program for you with a true AI engine. That product is going to be released Tuesday or Wednesday next week. It should be arriving shortly on both Apple and Google. [Is available now]

Sramana Mitra: What is the price point?

Bob Allison: On the consumer side, around $99 a year. It gets discounted at different promotional values to probably $69 to $79. That’s the product that you would see on the direct-to-consumer side. For the employer marketplace, we have another product called Aaptiv Enterprise. That is sold to an employer or a broker. It’s a discount off of that $99. The only real difference is that it has a bunch of analytics on the backend so we can report that information to them.

As part of that, Optum is one of our strategic partners. We license access to the gym networks from them. For the enterprise, we can also give a member access to over 15,000 gyms that are part of our apps. We might recommend an outdoor run. We might also recommend a workout at Club Pilates.

Then we build a similar product for the Medicare marketplace called Aaptiv Advantage. That’s targeted to the Medicare Advantage marketplace. PEAR does build private technology stacks for people. For you to experience it, you would just go to Aaptiv.

Sramana Mitra: It’s been a really interesting conversation. Thank you for your time.

This segment is part 7 in the series : Business Model Innovation in Digital Health: Bob Allison, Co-Founder of PEAR Health Labs
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