Founder Five: Pete Shalek and Steve Marks from Joyable
We’re catching up with some of the most successful founders we’ve worked with to share insights and advice from their experience of starting and growing businesses. Recently, we worked with the Joyable team on their iOS app, and we were inspired by their customer-focused mindset. For those who are not yet familiar, Joyable offers an online Cognitive Behavioral Therapy (CBT) program for overcoming social anxiety. Every decision made by Pete and Steve from the outset was validated by real consumer experience. From shadowing doctors in hospitals to directly emailing every customer, they are an exceptional example of how to derisk a business idea (and help address a real problem).
What was the aha moment that motivated you to start Joyable?
Pete: To start Joyable or to build our product?
Alexa: To solve this problem.
Pete: I knew I wanted to do something in healthcare and I wanted to see problems on the ground. I wanted to do some customer development work. So I convinced some doctors at Stanford Hospital, where I was in business school, to let me shadow them. I was following doctors in the emergency room around for eight hours a day which is a fascinating thing to do. It was a really fun thing to do. There were a lot of things that needed to be fixed as anyone who works in a hospital will tell you. There are many things that can be improved in hospitals even at great hospitals.
“That hit me really hard. This idea that someone was in bad enough shape that they went to an emergency room and they were being told to wait three months. It felt like there was some insight there.”
But the thing that struck me most was the number of people who came in every day to the emergency room with behavioral health issues. They may have had a panic attack thinking they had a heart attack. A whole range of issues and the doctors there 1) aren’t trained to treat them. It’s not their speciality and 2) the people they wanted to refer these patients to — great psychologists, behaviorists who were near campus, oftentimes had three month plus waits. That hit me really hard. This idea that someone was in bad enough shape that they went to an emergency room and they were being told to wait three months. It felt like there was some insight there. We need to find a way to increase supply of effective solutions for people’s mental health issues.
Alexa: That’s pretty rare. You just thought you could solve a problem in healthcare and said, “I’m confident if I go to the hospital, I’ll find something to work on.”
Pete: I don’t think there’s a shortage of problems to solve in healthcare. Nobody doubts the size of the market or the existence of the need. The challenge is finding something that you can actually implement in a meaningful way. A point where people are willing to pay. You have this bizarre series of incentives that exist in healthcare that make it really hard to find and implement solutions.
I actually came out of that time in the hospital with a whole host of things that were problems. The question was which of these could you actually solve in a way that would allow you to build a business. Behavioral health started with that insight and it was validated over time by tests we ran that there was real need direct to consumer.
Alexa: And Steve how did you get involved?
Steve: I had experienced the problem firsthand. I’d had a number of family members and friends who had suffered from a whole range of mental health issues. I’d had a close friend who went through a bout of acute anxiety in 2013. I’d seen other mental health issues before as I alluded to but never anxiety. It was really eye opening to me how paralyzing it could be and how hard it was to get help.
I helped lead the search for treatment and I found that there were so many barriers — what is my friend experiencing? what do you do about it? who’s good at helping people? how do you get in the door with them? — and then, in many cases, most importantly, how do you pay for it? On the other hand, I learned that in the clinical world, this is a relatively solved problem. There is a very evidence-based treatment that works an enormously high percentage of the time and has been around for decades. It’s not that complicated, all things considered and it definitely doesn’t have to be that expensive.
“At the beginning, he was selling me on it and by the end, I was selling him on it.”
You see this at a micro level. There’s this giant disconnect. Then, you overlay the macro data of tens of millions of people suffering from anxiety, social anxiety, depression every year and not getting help. And you ask why in 2016 in America (then it was 2013) can we not bring these two sides together?
Simultaneously, Pete and I would get together about once a week and I’d hear what he was working on [with Joyable]. He’s one of my closest friends from business school. My passion for the idea grew as I was watching the experience unfold [with my friend] and seeing how incredibly hard it was to get help. Long story short, he started looking for someone to work with and at the beginning, he was selling me on it and by the end, I was selling him on it. That was late 2013.
“You see this at a micro level. There’s this giant disconnect. Then, you overlay the macro data of tens of millions of people suffering from anxiety, social anxiety, depression every year and not getting help.”
Alexa: What was the first thing you guys did when you decided to hone in on this problem of anxiety and social anxiety specifically?
Pete: I was a student at the time so I did two things. They’re kind of two sides that I saw. I needed something that was tremendously evidence based so I needed to do some research. Fortunately, at the time, I was still a student so I blasted every professor in the psychology and psychiatry department which was about 100 people and the hit rate was enormous — I met with 60 or so clinicians. I began to hear about computerized cognitive behavioral therapy [CBT] and all these new technologies that enabled scaling the supply side. Then, on the demand side, I posted on Craigslist and ended up speaking with literally over a couple hundred people who had anxiety, depression, and social anxiety. I started to understand the different verticals, what was going on in people’s lives and what they really needed.
Below the cost, stigma and accessibility issues — which are all valid — I wanted to know what was actually happening to these people. What came out of that was this knowledge of a solution that existed [CBT] and this awareness that people needed something would really help them and that they could believe in; there was this tremendous amount of skepticism. They wanted the change, but were asking “could I change?” Putting those two things together, I began to think there’s some form of potential solution that could really work.
“I created an incredibly hacky prototype which was a three week online program overcoming social anxiety…[Then] I posted on Craigslist and said, sign up for this three week course and pay $20.”
How did you know that you were onto something?
Pete: I created an incredibly hacky prototype which was a three week online program overcoming social anxiety. It was videos that were hosted on YouTube, it was activities that were done in Google Forms and the coaching was done by me, over email primarily. There was almost nothing there. I posted on Craigslist and said, sign up for this three week course and pay $20. I did this in a few cities and within 48 hours, around 175 people had come back to me saying they were interested. And I thought oh my god, there’s something here! I got on the phone with each person. My wife works at Square so I used a Square reader and I got people’s credit card information. They paid for it and I led them through this course.
Craigslist isn’t the darkest part of the internet, but it’s not far from the darkest part of the internet. I would never give somebody on Craigslist my credit card information. But I got enough people to do it that it was clear there was some pull for this type of product.
Alexa: Did you follow through and coach them through the program?
Pete: Yes, I coached them through the three week program. Learned a ton. Saw the frequency of activities. People said their anxiety declined. We did a very loose self-report on anxiety decline and got some satisfaction numbers. People were really happy with it. I saw what people liked about coaching, didn’t like about coaching. It’s a far cry from our product as it is today but it was a very rough MVP that gave us a first sign that there was demand in the market. Then, as Steve mentioned, we started working together and that’s when we started building the first real version of Joyable with the idea that we needed to prove we could generate the outcomes that the literature suggested we would be able to generate. That was the next risk that we started to work on.
“The way we like to think about it is for the first version of the product there was so much text. It was like for three months, Steve wrote a Rails app and I wrote a self-help book.”
Steve: Yeah, we started from the principle of not wanting to sell something that didn’t work. That was the very first thing: prove this works. When Pete and I formally started working together, he had done the work he just described in trying to establish in a very lean way, is there demand? is this even worth spending time on? And he believed, and when I looked at the data he shared, I believed, this is pretty promising. It feels worth investing some of our time to build a more real version of the product. More fulsome. More trust-inspiring. (Even though, our design skills then aren’t what they now are as a company.) A full CBT program that we would expect to deliver outcomes and substantially reduce people’s anxiety.
So we put our heads down and spent three months building that product. Then, we had a Beta which we distributed to people and got a bunch of people to sign up. We coached them through, at that point, a three month program that was an online based very closely on CBT [Cognitive Behavioral Therapy] with coaching. We had sat with our program architect [Dr. Lisa McTeague] at a whiteboard and sketched out what CBT is and what the evidence most closely supports. Here is the best way based on the evidence to translate that into an online program with a coach. We spent a lot of time doing that down at Stanford. Then, we created the product and got people through it and the outcomes were really exciting.
Alexa: Yeah, that is exciting. And you guys built the product yourselves, is that right?
Pete and Steve: Yes
“Outcomes first. The core of what we do is help people and if we ever forget that this business is meaningful, it’s nowhere towards our mission.”
Alexa: Did you know Rails or how did you build the product?
Pete: Steve knows Rails is what I would say. I did a little bit of HTML and CSS. The way we like to think about it is for the first version of the product there was so much text. It was like for three months, Steve wrote a Rails app and I wrote a self-help book. We put those two things together and that was our first version of the product. Steve was super impressive. We held a bug bash with all of our business school friends when we had the first version of the product and everyone was like “Steve, you built this? This is incredible!”
Steve: Pete likes to be modest and understate his role in the early days but it’s amazing to me that we have the incredibly successful product that we do. Pete’s been the product visionary from day one. So he wrote a self-help book but he also had a vision of what the user experience was like. He was designing what it should look like. For somebody with no formal training, he did an incredible job of designing something that actually worked. If you look at the history of putting CBT online, the challenge is getting people to do the activities. Looking at what Pete had the vision to create is pretty impressive.
Alexa: And who else was involved with you guys at that point? When you’re having this bug bash and you’re starting the beta? Who else was on the team?
Pete: We had the two of us. We had our scientific advisors and primarily our program architect, Dr. Lisa McTeague, who is still tremendously helpful with the company. She helped outline the overall program. Steve had the great insight which was that if we were going to build an app ourselves, we should have a technical advisor. He had known someone from undergrad who spent a little bit of time with us helping us through the most tricky architecture decisions. Then, we had a lot of support from friends and family really. My wife jokes that she would come home and Steve and I would be sitting on the couch banging away at something. She’d open a bottle of wine. Steve and she would have a glass of wine. And then, we would continue doing whatever we were doing. My wife designed our first logo and all sorts of other random pieces. We had just a lot of friends helping. Am I underselling anyone? Someone’s going to say, “You forgot me in the story!”
Steve: Not explicitly but it takes a village. We wouldn’t be here without all of our friends, advisors and supporters.
What did you get right in the early days of Joyable?
Pete: Outcomes first. The core of what we do is help people and if we ever forget that this business is meaningful, it’s nowhere towards our mission. And we really have built that into the DNA of the company — that everything always happens in the context of outcomes.
Steve: That was the same thing I was going to say.
“The place we started was very by the book, what we know is what the evidence supports…but if we had learned sooner about the opportunity to innovate on this and engage people better, I think we might even be a little further along.”
What’s the one thing you would change if you could go back and do something differently?
Pete: We designed the initial program with this idea — and I think this partially comes because neither Steve nor I were product designers — this idea that we wanted to create a tool that anyone could use however they wanted. This very open world tool. Yeah, I think tool’s the right word for it. It wasn’t a product. You need to complete these activities and we built it so that you could complete those activities in any different way. Systematically over time, we’ve found that more guidance is helpful for people. That the decision, figuring out what to do is really hard and we should own that with the software and they should be in charge of doing it. So if I could go back two years probably the top thing I would change — and this is a product perspective — is I would’ve architectured a much more tightly, constructed program. Maybe it wouldn’t have applied to as many people but it would’ve been much simpler for that group of people.
Steve: I’d probably say something pretty similar. There are lots of little things I can think about. There are lots of people I wish we’d hired far sooner than we hired them who’ve made an amazing impact on the business. But I think that it’s so easy to say that hindsight is 20–20. One comment Pete made as soon as the Beta was out the door. Actually, I think a couple days before was “Oh, I wish we had done this totally differently.” [Laughs]
Pete: [Laughs] Yeah, I’d forgotten that.
Steve: “I already have a totally different vision for how this should be.” You learn so much along the way that it’s easy to sit here and say we would have done it differently.
We’re facing a really challenging user experience problem. How do you get people through a moderately complex, nuanced program? How do you get them to see that they’re making progress? — when it can, at times, be very challenging. I think that there was probably an opportunity earlier, which we now are embracing in a very fulsome way, to innovate on some of the ways we can get people through [the program]. The place we started was very by the book, what we know is what the evidence supports. We’re starting with the outcomes. We’re taking so many risks, let’s not try to create a new program too. And I am so glad we did that. But if we had learned sooner about the opportunity to innovate on this and engage people better, I think we might even be a little further along.
“Hiring great people is hard. It is incredibly time consuming. We spend, as a company, probably as much time on that challenge in some ways as on any other.”
What’s the biggest challenge you guys are facing now?
Pete: Adherence. How do you empower and motivate and inspire someone to go through a process of behavior change that’s hard? We have great adherence numbers on a relative basis to other online programs but that remains the biggest challenge in behavioral health broadly. Whether it’s quitting smoking or weight loss or overcoming social anxiety — how do you help people do the hard work to see benefit? We know what people need to do and they can do it but it’s a really hard thing to do. Making that as simple and as easy as possible is our number one challenge today.
Steve: I totally agree with Pete but I’ll give a very different answer. Hiring great people is hard. It is incredibly time consuming. We spend, as a company, probably as much time on that challenge in some ways as on any other. We’ve worked really hard at it and we’ve been very fortunate to hire an amazing team so far. Continuing to have a really high hiring bar and bring in people who can take the company to the next level continues to be a huge focus for us.
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