How To Revolutionize Mental Health Care And Stay Sane Doing It
Modern Health co-founders Alyson Friedensohn and Erica Johnson tell Afore Capital how they are scaling up mental healthcare so that everyone has access to it.
Mental health. Everyone has it, just like we all have physical health, but that’s not to say everyone takes care of it. That’s especially true at the corporate level, where most companies ignore the mental health of their employees until it reaches a crisis point. But that approach is costly. The annual direct and indirect costs of mental health disorders to the global economy is estimated to be $2.5 trillion, with the overwhelming majority of those expenses coming indirectly, in the form of decreased productivity, absentee-ism, and more.
One of the reasons employers aren’t taking their workers’ mental well-being more seriously is because mental healthcare isn’t something you can automate. But co-founders Alyson Friedensohn and Erica Johnson of Modern Health think that conventional wisdom is wrong. Mental healthcare is scalable, as long as you’re talking about providing your employees with the tools and guidance they need to take care of their mental well-being before they reach a crisis point, through services like virtual counseling, coaching, and evidence-based digital tools.
Those services are just what Modern Health is offering employers. Backed by Afore and the venerable Kleiner Perkins, who helped them raise $11.4 million since 2018, Modern Health hopes that its preventative approach will help stem the tide of the American mental health crisis, while cutting down on the number of claims. And investors are taking notice, with Modern Health just closing its Series A, led by Mamoon Hamid at Kleiner Perkins. “Mental health is coming of age,” Hamid says. “It’s no longer something that’s fringe or just for specific people who really need help.”
We spoke to Alyson and Erica about why good mental health is as important for founders as it is for employees, why mental healthcare is so hard to scale, the secret skills every founder should have, and how the start-up scene needs to change to better accommodate women founders. The following interview has been edited for length and clarity.
Tell us about Modern Health’s founding. How did you first see this opportunity?
AF: I was working at a company called Collective Health. They administer health plans for self-insured employers. And while I was there, I had a front-row seat to the exact problem we’re solving now, which is that no one was taking a more holistic approach to mental health.
What I mean by that is when most people think about mental health, they think crisis mode, right? So they’re thinking about high-cost treatments like therapy and medication, which are not only expensive, but also aren’t scalable to treating the ever-increasing mental health issues that we’re dealing with.
So what I saw there was that there was a need to build a more preventative mental healthcare system, where we’re giving folks the tools that allow them to deal with the stresses that we all deal with in the working world before they hit the crisis stage. And so I left Collective Health, and started Modern Health with Erica, who has a neuroscience background and built the Brain Health Assessment used by Obamacare today.
Modern Health gives employers a number of digital tools to help their employees manage their mental health. Why should employers care?
AF: Mental health issues like depression and anxiety are on the rise. Why? Well, there’s a lot of factors, but if you zoom out a bit: on a biological level, if you look at the human mind and body, we look identical to what we looked like hundreds of thousands of years ago. In other words, we’re running a V1 operating system in a V1000 world. So on a neurological level, we just haven’t built the neural pathways that allows us to be resilient to the stresses that come from an era in which we’re always tethered into technology, which allows us so many more ways of communicating, but also keeps us plugged into all sorts of stresses that we can’t shut off, from whatever is happening politically to the problems at the office.
On a biological level, if you look at the human mind and body, we look identical to what we looked like hundreds of thousands of years ago. In other words, we’re running a V1 operating system in a V1000 world.
Regardless of the reasons, what I saw at Collective Health when I was working with employers is that claims against mental health are constantly increasing, which drives costs up. Meanwhile, mental health conditions have huge impacts on productivity — depression, for example, is the number one reason that employees go on medical leave. Human capital is the number one assets for employers, but right now, most simply aren’t effectively protecting literally the most important quality of that asset. So it’s just incredibly important to proactively work to ensure the mental health of your workforce, but before Modern Health, no one was really working towards that until it hit a crisis point.
Mental health care is usually thought of a person-to-person affair. You go in, you see a therapist or psychiatrist, you work out your issues one-on-one. That’s part of what makes mental health so hard to scale. How are you guys tackling that issue?
AF: One-on-one therapy is obviously not a scalable or cost-effective solution for everyone. But the thing is only 15–20% of people are dealing with a clinical mental health issue, like depression or chronic anxiety. The rest of those are people who are subclinical, and therefore can be treated with more scalable, low-cost solutions, like mindfulness coaching through a smartphone app. And our feeling is that by making those subclinical solutions available to everyone, you can help head off a good portion of mental health crises, by teaching people to act as their own therapist and be more resilient towards the stresses that are coming their way.
EJ: A big thing that we’re doing at Modern Health is educating folks about mental health. Mental health is like physical health: everyone has it, and needs to think about it, even when they aren’t in crisis. So what we’re giving users are the tools and expertise to better understand their own mental health, before they reach a crisis point that might require more expensive intervention.
Mental health is like physical health: everyone has it, and needs to think about it, even when they aren’t in crisis.
The life of a founder is stressful, but no one ever really talks about the mental health challenges that come from starting your own company. How do you two personally stay mentally health as you work to bring Modern Health to scale?
AF: There’s no way around it: building a company is stressful. There’s a lot of pressure around it. I think that’s actually a big part of why founders do what they do, though. They’re driven and motivated by that pressure, but on the flip side, it can have its toll. There’s so many stories out there about founders who have built big companies, only to walk away incredibly depressed.
For both Erica and I, the most important thing as we build out Modern Health is to practice what we preach, and maintain a healthy perspective on why we are here in the first place . We both have partners, and we make sure to spend time with them, out of the office. And we’re also there for each other. We both know that the best version of ourselves is when we’re taking care of each other, so every Monday, we spend just an hour, playing therapist to each other. 99% of that time isn’t work-related at all, but it’s in many ways the most important hour of the week for us.
EJ: Just to add a bit to the stress that comes from founders, 20–25% of the population suffers from some clinical diagnosis like anxiety or depression. Statistically, though, that rate is more like between 50–75% for founders, about three-times higher than the general population. So yes, the mental health of founders is a very real problem that we’re both aware of.
My answer is a bit boring, but I like to think in terms of the basic building blocks of mental health. It’s important to get enough sleep, and to eat healthy. We take care of our emotional health by supporting each other, and invest in coaching and therapy for ourselves to keep both our work and professional relationships as positive as possible. We invest in our mental health, same as we invest in our company. Because they’re really the same thing.
We invest in our mental health, same as we invest in our company. Because they’re really the same thing.
Tell me about your first meeting with Afore Capital. What was that like?
AF: We were at Y-Combinator and they actually reached out to us before Demo Day. Now, the rule is not to speak to investors before Demo Day, but Gaurav wrote us a really thoughtful and personal note and really just showed how much he believed in this market.
That meant a lot to us, because it’s sometimes hard to prove to investors you’ve got a unique insight worth putting money into. Our unique insight was based on a combined 20 years in the healthcare space, and seeing the issue become a bigger and bigger problem over that time, but we still had other investors saying to us: “Well, mental health in the workspace isn’t that big of an issue…” Now it’s the number one cause of disability worldwide.
So what set Afore aside in our mind was that they immediately saw the same thing that we did. From the get-go, Gaurav knew that taking a more preventive approach to the mental health space was important and untapped, and so we were both just immediately excited about the possibility of partnering with them.
Congratulations on your Series A. What was the experience like of raising that round, and how was it different than the first round?
AF: Thank you. Yes, it’s exciting to work with Mamoon Hamid at Kleiner Perkins: we’re pumped to have him join our board. I guess to some extent, it was similar to the first one, in that when you find the right partner, you just know. But finding that partner can be hard. You need to feel like you can be truthful with them, and actually share your problems with them, and get guidance from them when you need it, because otherwise, what’s the point?
So for us, it was all about finding a partner who wasn’t just a passive partner, but who was aligned with our culture and our mission, which is to care about other people and to prioritize mental health. And Mamoon immediately checked those boxes. He’s a family guy who gets the space we’re in and we could trust to not only believe in us, but look out for us. Whereas some of the other investors we met only cared about making money which, don’t get me wrong, is a huge part of why you build a company. But it shouldn’t be the only reason.
What’s the environment like out there for women founders? What advice would you give to anyone looking up to you two as role models?
EJ: Well, you tell me. Only 2% of all VC funding in 2018 and 2019 went to entirely woman-founded teams. Obviously, that’s pretty stark. So I think I would say to anyone who is looking up to us as a role model, first of all, you need to find a support network of like-minded women, because trust me, you’re not going to be able to do this without them. But when you do become successful, you need to remember to pay it forward, and mentor other women who want to become founders. Because the only way we’re going to bridge the gap in Silicon Valley’s equity disparity is by empowering more women to start companies and demand what they deserve when they get a seat at the table.
The only way we’re going to bridge the gap in Silicon Valley’s equity disparity is by empowering more women to start companies and demand what they deserve when they get a seat at the table.
AF: So much about being a founder is about having confidence. In this space, your Achilles heel is always going to be self-doubt. So yes, you need to find people to support you, but they don’t have to just be women. Both Erica and I have had a number of women who served as role models through our careers, but we’ve also been supported by a lot of men. So my advice would be that whether you are looking to start a company or just grow into a leadership position, make sure to surround yourself with people who prioritize helping women reach their goals, and creating equitable environments for them to thrive in.
Outside of work, what are you guys currently obsessed with?
AF: My big passion is yoga. I’m a yoga instructor. Obviously, founding a company and teaching class every day is difficult, so I’ve had to cut back my teaching, but I still make a point of teaching yoga for an hour every other Monday. Teaching that class highlights to me the importance of being part of a community outside of work and social media, where you feel like you can belong. It’s also the one hour of my week where I don’t have to think about anything except what I’m saying to my class and what my body is doing. It’s the one hour of my time that I’m committed to never giving up as long as I’m running a company.
EJ: I actually read a lot about mental health in my spare time. I’m currently reading a book called The Happiness Advantage that talks about positive psychology and how it impacts return-on-investment. But similar to Alyson, I also try to keep up with my rock climbing, and I’m also currently obsessed with rowing.
Final question: what is a skill that founders should have that people never mention? Why is it important?
EJ: Self-care. A lot of founders put pressure on themselves to give everything of themselves to their co-founders, their investors, their employees. But being gentle on yourself and investing in activities and friendships that recharge you is critical. It’s absolutely necessary for making sure you’re ready for the marathon journey of building a company.
I think to be a successful leader you have to actually believe in and care about the people around you.
AF: Compassion and empathy. The best leaders are the ones who other people not only respect, but feel personally connected to. I think to be a successful leader you have to actually believe in and care about the people around you. There might be leaders out there who can get away without that and still build successful companies, but they’re anomalies. The thing you need to remember is that while the goal might be to build a company worth a billion dollars, you can’t just be focused on the destination: you also need to enjoy the journey, which means caring about the people you’re on the journey with.