Hims: Has Evolved into An Optimization Machine

Update

Edited by Brian Birnbaum and an update of my original Hims deep dive.

By delivering a concierge experience via an app, Hims is essentially building a new front door for the healthcare system. Their vast potential lies within the (American) health care system’s failure as related to inflationary dynamics and general disregard for patient convenience and outcomes.

A digital concierge experience and budding back-end can fix these two problems over the long run.

Uber changed the transportation market not by refactoring the supply side but creating a demand-side funnel wide enough, for the supply side to eventually be forced to succumb. In my Hims deep dive, I explained that the company could change the healthcare market in the same way.

At that time Hims was confronting two major challenges:

1. A dependence on paid marketing to achieve growth (Section 1.0)

2. A cumbersome vertical integration process meant to bring costs under control (Section 2.0).

Together with its already healthy retention levels (85%+) and capacity to launch and gain traction in increasing healthcare verticals, the above endeavours should produce a healthy business going forward. Thus, a deep analysis of these two components of the business is paramount to assess the viability of the long thesis.

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The evolution from Q2 2022 (the time at which I wrote the deep dive) to now includes: