Partnership Between an OTC Manufacturer and Audiology Clinics: Soundwave Hearing Update with Anthony Florek

Bob Traynor 0:10
Welcome to This Week in hearing. I’m Bob Traynor, your host for this episode. Today, my guest is Anthony Florek, the CEO of Soundwave, and the makers of the Sontro over the counter hearing aid. Subscribers to This Week in Hearing will recall that that Tony and I had a discussion on last spring sometime way before the legalization of the the over the counter products. So welcome back to this week in hearing Tony. And thanks for coming in and discussing the soundwave product and the Sontro to give us at least an update and an orientation. We’ve spent so much time with our colleagues telling us all about this is what it is and how it’s going to work and all those things. We haven’t spent a lot of time talking with the actual manufacturers of these products.

Anthony Florek 1:04
Great, Bob, thanks for having me. And thanks for this week in hearing for sponsoring. So I thought I’d just give you remind the folks a little bit about my background, and then we can talk about something here. And we talked about the product and the technology and the regulations and some of the changes since we last spoke

Bob Traynor 1:20
well that’s a great way to begin because many people may have missed our first discussion. And of course, we’ve had a number of people that have begun their subscriptions since since the springtime. So so how did you get all involved with Soundwave and and in the hearing industry and all these kinds of things,

Anthony Florek 1:40
right? I’ll try and give you 30 years of medical device history. And I was I was actually in eyeballs in cataract implants and pick them ossification and LASIK. And then I for 15 years and then I started to work my way down the body to ears and ran a network of branded network, a corporate stores, the managed care responsibilities like training and sales administration and all that fun stuff. And then I decided to venture out on my own and ended up at a health tech incubator called Matter in Chicago, and met these folks from a company called resonance medical which came out of the northwestern invoke program. And they were actually putting a hearing test on a mobile phone. That was in the beginning of 2017. Right when all this OTC started to percolate later that year, the OTC was signed into law, I was helping them commercialize the product. And it was met with a lot of global manufacturers, we just had software, there wasn’t any hardware. So I decided to go out on my own and venture into the hardware space. I’ve got two partners, Chris Bowman, who was on our last podcast, and Joe toric. And Joe is our chief engineering officer. He’s in charge of the design of our hardware, he has a lot of contract manufacturing experience a global supply chain management experience in Chris Bowman is our technology officer. He’s really the architect behind the design of the Ototune software, which really drives our entire business model.

Bob Traynor 3:10
These guys were totally highly qualified as I recall, Chris with his with his background, and, and and the software engineers and some of those people. So it isn’t just two dudes sitting in a sitting in a room kind of putting together a couple of things. This is a a very well researched system that is designed specifically for over the counter use.

Anthony Florek 3:38
Yes, and we spent three years developing it while the FDA was putting together the regulations. So we started Soundwave here. And in 2018 We bought the residence medical and the assets and the software and the patents and and we put together the autotuned software along with our hardware and came out with our Sontro OTC hearing aid product earlier this year. The regulations as everyone knows, were passed, are published on October 17. And we’ve been off and running since then. And it’s been a fun, exciting experience to to test our business model in the marketplace in really drive towards partnerships with the audiology community and hearing care providers.

Bob Traynor 4:22
So right now, I understand there’s been some, some changes in the Sontro device in terms of maybe not so much in the hardware component but as understand more in the software side of the of the devices themselves. You bet

Anthony Florek 4:39
so if everyone remembers we’re a 16 channel receiver in the canal BTE we have a toggle switch and then two directional microphones fits nicely behind the ear. Very small and compact device and really what drives our business model is the software we ordered tune. And some changes that we’ve made since that is three, three things that we think really differentiate our product and our value proposition from all the other OTC products out there. One is how we test the hearing. So we how we customize the hearing, it’s comparable to the gold standard, which is the audiogram that we do it and test it hearing a patient’s hearing. In situ, through the hearing aids, we tested all the frequencies and the intensities of both ears in three minutes. We do it on on a mobile phone, it works on both platforms. And it’s not a pick and click or anything of the sort. So a nice customization to someone’s hearing loss. And when the hearing test is over, the patient presses a button and programs the hearing aids in you know 15 seconds. And and that’s so that’s number one. Number two is if they fall outside of our mild to moderate indications since we are following we are at FDA class to medical device registered medical device, we’re an OTC hearing aid, we will soon be a self fitting and OTC hearing aid. But we abide by those fitting parameters. And if a patient has an asymmetric loss or falls outside those parameters, with a severe profound loss, we give the patients a warning message that says hey, take the hearing test again and make sure you get the same kind of warning message. And if you do, you really need to see a hearing provider. And what we’re going to what we plan our next public release, probably in early Q1 is we’ll have a mechanism for those patients to put in their zip code and we can geo track a network member. And we can send those patients to a hearing care provider which is ultimately what we want to do.

Bob Traynor 6:49
So that’s a refreshing kind of a thing, particularly with all the anxiety that a lot of the providers have relative to the OTC markets. But but for an OTC partner that is, we’ll send them patients as well as work with them on the mild to moderate group. That’s a refreshing statement, Tony.

Anthony Florek 7:13
Yeah, I think so too. And that that’s how we originally designed our business model in flexibility is a big part of it in when I read a network, all the great ideas came from the providers because they work with the patients every day. So people providers ask me questions all the time. And I listen. And I try and take all that information and continue to put it into the features and benefits of our software. So that’s thank you for for recognizing that and we’re super proud to partner we’re not trying to diss interrupt disintermediate anybody or this industry in particular, I think we’re one of the few OTC manufacturers that are that are approaching it this way. And I think it’s a great approach. And we’ve been at AAA twice we’ve been at IHS, we’ve been at audboss. We’ve been at all these meetings and people in our industry experience, we’ve got a nice team of expertise we join from that’s developing our hardware and our software. And I have the expertise in the sales and the marketing and distribution. So I think our founding team is a well established a lot of industry experience. And I think the partnerships really work and are the third thing, the third bucket that differentiates us from all other OTC products is our is our partnership with Amptify so as most folks know about amptify down in St. Louis and Nancy Tye Murray and Chris Cardinal and run a great team down there and, and our partnership is really special. So it’s a 12 week curriculum. We provide the first month free and no charge, the patients can sign up through the Ototune app. And the first week of the curriculum really focuses on the setup, the science of hearing aids, right. So you know, it’s FAQs, it’s how to videos, it’s all that fun direction that sometimes patients like and can use. And then they get they get to participate with a peer support community, they get a hearing health coach, they get zoom calls to help them with anything live with their hearing health coach. And they have certainly all of the amplified brain training games through the app which is which is a great way to support the whole patient. So if they have communication breakdowns, or they want to learn how to become a more effective listener, you know how to speech read all those things that go with the amptify curriculum really set us apart. So we’re not just selling a device that amplifies we’re trying to support the whole patient journey.

Bob Traynor 9:38
Now I have you know, one of the one of the successes with what even with the DTC Products has always been the sub the supplemental follow up that has been given and, and what to do with the over the counter products. This is the first time I’ve heard or that there’s a supplemental rehabilitative kind of thing, kind of activity that goes along with it. And there’s nobody better than Nancy to, to provide that as known her for many, many years. And we and add as a, as a high level professional and aural rehabilitation. So that’s a, that’s a great partnership that you’ve found yourself with. You know, one of the things too, though, that, that I think, is the hard part for clinicians. And so if I’m sitting in my clinic, I’m thinking, Okay, I know, I need to have some OTC products in my, in my office. And, and, and I don’t want to deal with some and I do want to deal with others, but maybe maybe this one or that one or the other. My understanding is that, that you don’t just put your product on a on a drugstore shelf, you’re working more with clinicians in their clinics to be the OTC provider. Can you tell me a little about that? Tell us a little about how that works and, and your relationships and the interactions with colleagues.

Anthony Florek 11:09
Yeah, and so far, our interactions, my interactions with the hearing care providers, audiology community has been extraordinarily positive. People want more information, people want to understand how to help more people. Certainly it’s not across the board. But as people understand more about our value proposition and our business model, what we’re trying to do, they asked more questions, and they become interested. So when I ran a network, I think we may have done the math before, but I’m gonna reiterate it because I think it’s impactful. So we’re positioning our product for the tested, not treated patients, right. So if there’s 10 Hearing evaluations in a given week, 40% of the time, on average, folks are walking out with nothing. And because of the marketing expense to get them into the chair, and the chair time that can run 1000 $1,200, there might be 7 or8 hours of marketing expense per patient, there might be two or 3 hours of chair time. And it’s a really inefficient business model for walking out with nothing. So if we can somehow capture those patients, those tested, not treated patients with an OTC product, because they might be a younger patient, they might be a patient that has a more mild to moderate loss, they might not see the value and a higher price today, at this point in their journey. Can we keep them in the providers purview of care? Can we keep them in their ecosystem, versus going to a Walmart or going online or going down the street or doing nothing? So we can start the journey of hearing amplification with a younger patient? That’s

Bob Traynor 12:41
well, yeah, you know, and I know, I’m speaking for virtually all audiologists, and even dispensers as well, who’ve listened to a patient say, Well, I know I have a little hearing loss, but it’s not really that bad. And by that bad, they’re saying it’s not the traditional high cost products. It is, it’s it’s bad enough to need something but not that bad. So So, so your, your your approach is correct. And, you know, and as Mike Valente told us a few months ago, you know, the OTC products are probably the best marketing that audiology and hearing loss and amplification ever had. Just because it’s in the it’s in the in the news all the time, and people are beginning to hear about it. And they know they need this, but they don’t want to do that and all these different things. And, and so I see that your your system is kind of moving toward that. So if I’m a clinician, and then my clinic and I say okay, Tony, I want to work with your company. How do I go about doing that?

Anthony Florek 14:01
Sure. So a couple of ways. We’re selling through audiology wholesalers like Westone, and Microsonic and having conversations with Oaktree and Warnertech right to provide our products that might be a route people folks providers want to do because they ordered their supplies from those companies. Were part of buying groups like AudConnex and Fuel Medical and others. So that knows are ways to access our products. Certainly, you could go on hearsoundwave.com, we have a professional page, you can sign up for wholesale calm in about three minutes. And we can supply you with products right from our fulfillment center. So kind of two or three different ways to approach it. And I think what I’m seeing out there is folks actually stocking the product. So if they have the option for the test and not treated patient or they might have an option for the folks that are walking in and Just asking about OTC and are just focused on OTC right. So you don’t want to send those folks somewhere else, you want to capture them, and fit them or send them home with a product where they can do it themselves so that the providers are approaching it in different ways. So if certainly having product in stock is step one, and then I’m seeing more and more providers starting to advertise through their website, so getting involved in the digital marketplace, because if they’re not, other providers will, or other drug retailers will. So I think you really have to have a digital presence in your marketplace. So your website, and whether you sell it on your website, or you’re just talking about it in educating in advertising, you need to do all the above, if folks need help, and they want to fulfill it on their website, we have an option to do that as well, you can contact me directly. And we have a whole affiliate program that we can help you do and fulfill product. Obviously, we’ll sell it to you so you can stock it. And some of the other folks that are really on the leading edge are opening up OTC hearing aid offices that are supporting their their other brick and mortar offices that that provide prescription hearing aid. So I’m seeing really a whole spectrum of ideas come from this very creative group of audiologists, and hearing care providers that are doing exactly what you’re saying about they’re trying to capture the share of the marketplace. I’ve never seen more press in my life. Around one topic, OTC hearing aids is the biggest lead generation program out there. And I think that providers have an incredible opportunity now to capture those younger patients,

Bob Traynor 16:44
versus going to go from maybe a 20 25% penetration rate into the overall market, and increase that substantially just because of the visibility and the ease by which patients can obtain a product, play with it a little bit. And, and, and I’m impressed with the sound wave idea that you’re going to send them to another colleague or or back into the clinic for something that’s more appropriate for their impairment if it doesn’t fit. And, and again, so so. So if I order products directly from one of the suppliers that you’ve mentioned, would we then work directly with Soundwave for repairs and, and some of those kinds of things?

Anthony Florek 17:36
Yeah, so we don’t repair the product. We, we have a one year warranty on the hearing aid and the receivers, a 45 day money back guarantee. So we’ll replace if there’s a warranty replacement will will replace the product within that one year. We’ll soon at the beginning of next year, have a lost stolen damaged policy on our website for $92. So folks, can you know everything that we do in the OTC marketplace? Places ala carte, right? So sure, it’s hard for us to we’re not we’re not selling, you know, 4 or 5000, our hearing aid prescription here and that bundles all those extras. And so our menu is a little more is more ala carte. So we don’t we’re at a point now where we’re struggling to keep up with the production. So yeah, which is great, which is fun, good problem we have. So unfortunately, we can’t supply free demos like global manufacturers oftentimes will. So we ask that you purchase a demo products. So you can get familiar with our ordering system, get your wholesale account set up or order through, again an audiology wholesaler or buying group. But get you know, train your staff, I’m happy to, to set up calls. I talked to a lot of folks in the audiology community every single day, every single week, who want me to help train their teams, if they so desire, happy to do that. I’m happy to help them understand how to position it for folks that are coming in or for their tests and not treated patients happy to help them understand how to how to price the product. Right. Most folks in the audiology community are bundling their prescription hearing aids, it’s been done that way for a long, long time. But when you get below $1,000 Does it make sense to bundle a product? I often get the question, well, I can buy a prescription hearing aid for $300 and sell for 1000. Why do I need yours? Well, why would you want you because when you do the math, on the marketing costs that it still takes to get the patient in and the chair time, I don’t think you’re making much profit. So why don’t you sell an OTC product that you can send the folks home with and still make some margin, you can do an ala carte service program for 250 or $300, which is what I’m hearing. So you can make five or $600 on that product. Again, keeping them in your purview of care. So I think there’s different ways to approach it and I think this is one of a few ideas that you should have in your in your cabinet solution, please. I mean, there’s a lot of global manufacturers that have hearables. Right with OTC indications, I think that should be part of providers cabinet solution, but certainly, the central OTC hearing aid should also be part of it.

Bob Traynor 20:14
And the the idea of the unbundling where there’s a cost for the product, and then costs for the services that may go along with the product. And, and the follow up and some of those questions and counseling that much may be taken care of by the Amptify people, however, but but when when the when the free system kind of runs out? What does the does the person do? They either re up with the Amptify people or maybe have, have our practitioners kind of move in with an unbundled type of program. So, yeah, all the

Anthony Florek 20:53
above. So we provide the first month free, they can sign up, you know, certainly from month to month three with the Amptify folks. And what I love listening to providers, I love talking to providers, because they’re also trying to figure out, figure it out. I don’t know that we have all the answers, but together, I think we do. And it might be the front office that helps with an OTC product I’ve had providers tell me that it might be a hearing care practitioner that’s licensed that does it or an assistant that does it. But certainly, it’s it’s one of those ideas that people can test and figure out what works best for their individual practice. And it’s fun having those conversations, at the meetings and on the phone and with you, Bob to explore that and then try and figure out, you know, the more I hear, the more I can become an expert on and Well,

Bob Traynor 21:45
I think I don’t think it’s it’s just the manufacturers are just the clinicians. I think also the patients are trying to figure it out to virtually everybody. Okay, let’s scratch our head and how are we going to how are we going to interface within this system, as a manufacturer, as a clinician. And, as as patients, it’s been my my opinion for a very long time that if you are an audiology clinic, and you are a the Hearing Center, then there’s no reason why you shouldn’t have all kinds of products relative to hearing and hearing loss within your clinic. There’s no reason when people go to Best Buy and buy or buy a set of OTC hearing aids or headsets or any of the other kinds of things that go along with with hearing impairment.

Anthony Florek 22:39
Yeah, absolutely. Just a quick note, we have a Midwest based customer support team as well, that’s that’s from Soundwave hearing. So so you get the patient can in. That’s why we designed this product offering to be flexible. So whether it’s the hearing care practitioner, the front office person or someone else in their office, whether it’s the Amptify team, whether it’s the soundwave customer support team, or if the individual wants to go to our website where we have user manuals and Quickstart guides and in how to videos. So there’s different ways adults learn different ways. And they need support in different ways. So we designed our model to try and meet all those all those ways that we can support the patient.

Bob Traynor 23:22
Cool. So So where do you see Soundwave and the Sontro product in the next couple of years? Tony?

Anthony Florek 23:31
Well, great question. So let me get out my crystal ball that I hope that our distribution channels spread wide and spread deep. So it because we want to be a national brand, in all these channels, because of the way we designed our app leads to the hearing care practitioners. And that’s that’s how we designed it. So if if we’re on Amazon or walmart.com, or if we’re on BestBuy, or in CVS or Walgreens stores or all these independent drug retailers, I get a lot of interest from those folks, or foreign government channels, or different online channels. I think whoever buys our products, ultimately will need the next level of care and will continue to direct that next level of care to the hearing care providers. Certainly, we hope to expand our growth with the audiology community. And we’d like to be a 25, 50, 100 million dollar company and 2-3-4 or five years and have a robust product line. So in q1 and q2, we’ll have expect to have a streaming product. So currently, we’re Bluetooth enabled. We’re in both iOS and Android platform. We hope to have streaming in q1 and rechargeability and streaming in q2. We’re not going to race to the bottom on price, or MSRP is 999. But we’ll waterfall technologies down between 800 and $1,000 to give a couple of different price points for folks But but we don’t have Super Bowl specials or, or, you know, that kind of stuff. I mean, we just, we’re just we’re just trying to, I don’t think patients understand the difference between wide dynamic range compression and 16 channels and adaptive directionality, but they understand the difference in streaming, and rechargeability. And that’s how we’ll differentiate our price points in the marketplace. And, again, we want a robust product line, we’re coming out with something called the odor to an assistant, which is our hearing tests on a tablet with a set of headphones that are that are calibrated that the audiology community can use for health fairs or lunch and learns with

Bob Traynor 25:38
or point of sale probably too. Yeah, they want.

Anthony Florek 25:42
Yeah. So again, another tool to help those clinicians screen folks, some of the drug retailers are interested in that and products as well. So we’re trying to make it as easy as possible for folks to get their hearing checked one way or another. We have an online hearing tested hearsoundwave.com. So there’s, there’s different ways for consumers to understand what their level of hearing loss is, and, and what their application needs might be.

Bob Traynor 26:09
Yeah, it’s a, you know, we all found lots of differences with the COVID, the COVID issues that happen to all of us with the advent of telehealth and tele audiology, with, with being able to provide support for patients, even if it’s just by phone, or if it’s by zoom. II and sometimes it’s it, in fact, probably most of the time, it isn’t so much tune in the device, it’s how you stick it in your air, and what are you going to do and, and all those are, those are problems that are adorable, and on and on and on just just helping a new consumer. Right, right through the system. And, and, and so I would encourage our, our colleagues at this week in hearing to listen to the messages that we’ve presented here today. And, and and maybe at the next meeting, go by and talk with the people that Soundwave as well as maybe some of the other OTC manufacturers as well to begin your journey into the OTC market because manufacturers while many of them may not be necessarily the same on the OTC market. Here’s one that is interested in providing rehabilitative follow up, as well as directing patients back in to the audiology clinic when necessary.

Anthony Florek 27:45
I could just said it better myself. Well,

Bob Traynor 27:46
that’s, that’s that’s why we’re here right? Anyway, but the deal is, again, I want to thank Tony Florek for being our guest today, the CEO of Soundwave, Soundwave and the manufacturer of the Sontro over the counter product. And thanks again for giving us an update on on the Sontro and the way in which the marketing strategy for Soundwave has has kind of begun to interface into the traditional system of audiology and audiology clinics and dispensers as well.

Anthony Florek 28:26
Bob, thanks to you and This Week in Hearing and I hope to learn and grow together very exciting time for for hearing care providers in the audiology community.