The inequality of mental health

Mike Nolet
Jan 22 · 4 min read

Introduction

I’ve been following Anand Giridharadas for a while now, and pondering his writing about inequality and the “elite charade”. TLDR; Elites are very socially engaged, but only in ways that enables them to retain their power & influence.

In this post, I bring his thinking to my experience building a mental health startup.

As a successful tech founder who now dedicates his time to helping people’s well-being, there’s something about the writing that resonates, yet stings. The success of the first tech startup I co-founded certainly led to unfair share of wealth going my way. And… here I am … claiming to be working to “change the world” (through my startup LiveBetter).

I founded LiveBetter with the idea that I could build a company that used technology to help people boost their well-being and everyday mental health. Using technology we could dramatically reduce the cost of providing help and thus both build a successful business AND help people at the same time.

It’s basically exactly as Anand writes:

“They reflect a highly influential view that the winners of an unjust status quo — and the tools and mentalities and values that helped them win — are the secret to redressing the injustices.”

The Economics of B2C Mental Health

After three years of development we find ourselves with an app that looks like it works. (Research study is in progress… should have the official results by end of Q1). People who use LiveBetter, get a meaningful boost to their wellbeing.

One of our goals for 2018 was to develop a viable business model & economics that could scale. Our strategy wasto go direct-to-consumer as we felt going through insurance would be too difficult, and going through companies would limit our audience to only those with well-intentioned employers, thus, people who probably need less of our service.

In Q3 we decided to test out a “freemium” service. You could chat with our bots for free, but access to our well-being boosting challenges was behind a paywall with a free trial.

Here’s where the math netted out:

  • Cost to acquire a customer (install->registration-> actual use): $4.50
  • % of customers who converted to paid: 3.4%
  • Assuming12-months of membership, customer LTV: $0.85.

So. CAC of $4.50. Revenue of $0.85. So even if we halved our acquisition costs and doubled our revenue, the math still doesn’t work.

After a few phone calls, some market research, it seems we’re not alone. Our numbers were pretty typical, and outside of Headspace and Calm, very very few people have found a way to do direct-to-consumer in a profitable way.

The solution that came back most off — pivot and go corporate! Cut off public access, do a research study that proves impact, and then sell into corporations at a significantly higher rate.

The Inequality of Mental Health

And this is where we get back to Anand.:

“There is still another, darker way of judging what goes on when elites put themselves in the vanguard of social change: that doing so not only fails to make things better, but also serves to keep things as they are.”

Wait. By working on social change, I help keep things as they are? That doesn’t sound. Guess what? He’s right.

The startup model is about driving revenue & profit. If we at LiveBetter want to make money the best strategy is to cut off public access and develop a corporate program.

Which corporations do you think would be our first target for such a program? Tech savvy companies in major metropolitan areas with office workers.

Which people do you think need the most help? The two populations that see the highest rise in mental health problems are not those in New York with steady jobs… it’s rural America & young people. The people “left behind” and those that are just entering adulthood.

Do these two populations have employers that would pay for a well-being app? Nope.

It gets to the root of Anand’s insight. We cannot truly change the status quo if we stay within it, and there is something fundamentally broken in the current economic system that helps those well-off get better and better off.

LiveBetter is a tiny microcosm of this… hey, got mental health problems? Well, if you’ve got a good job you get help, if not, well, deal with it.

Ok, so what can we do?

Well, first off, LiveBetter is back to free!

Next, by the end of the month we’ll be filing the paperwork to get setup as a non profit and request 501(3)(c) with the IRS to be recognized as a public-benefit corporation.

We realized that profit is not our primary motive… helping people is our motive. We don’t want to choose our customers by their ability to pay, but by their need. As such, the flip to non-profit puts our money (or lack there of?) where our mouth is.

This doesn’t mean we won’t try to develop revenue streams. But, the revenue streams we open will serve to enable us to get LiveBetter in the hands of as many as possible, not, to make more money. For example, in the coming weeks we’re rolling out a “patron model” where, although the app remains 100% free, you can choose to pay for a subscription from $0.45–9.99/month to support our development.

With these changes, we aim to become a public solution that helps everyone.

Stay tuned here on Medium … I’ll be writing more frequently about our journey this coming year! Or, follow me on twitter at mikeonhealth.

Mike Nolet

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Musings on behavior change and technology

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