Bose and Lexie Hearing Partnership Aims to Increase Hearing Aid Access in US Market: Interview with Nic Klopper & Andy Sabin

Amyn Amlani 0:11
So about this time last week, the Food and Drug Administration released its final historic ruling on over the counter hearing aids, affording millions of Americans the opportunity to access hearing devices without the need to see a licensed professional. My guest today are no strangers to delivering hearing care treatment to Americans through these direct access channels. Thank you, gentlemen, for your time today. Nic, let’s start with you. If you could share a little bit about yourself with the audience. That would be great.

Nic Klopper 0:43
I mean, yeah, I’m Nic Klopper. I’m the CEO and co founder of a company by the name of hearX, we also have a direct to consumer and soon to be OTC brand by the name of Lexie Hearing. Were a spinoff from Ivy League university, playing in both the b2b and b2c space, where we develop disruptive technologies for both the enterprise customer and in consumer.

Amyn Amlani 1:12
Yeah, and also with us today is Andy Sabin, and he’s, and he’s at Bose. And he’ll share a little bit about yourself, please.

Andrew Sabin 1:20
Yeah, sure. I’ve been a Bose for about eight years. And before that, I had a small startup called ear machine. And our goal was to enable some of the OTC hearing aid stuff that is just hitting the news the this week or last week. So I’d have a PhD and communication sciences and disorders from Northwestern had the startup and I’ve been working at Bose for eight years. And my current role is a research franchise lead. So we have very few franchises in our research group. And I run our franchise that has to do with hearing, hearing the world around you. And of course, I’m tied into quite a bit of our partnership work. And so I get the pleasure of talking to Nic on a fairly regular basis.

Amyn Amlani 2:05
Yeah, and I’m excited about one the the new rules that have come out. And number two, you guys are pioneers in this space. I’m really curious to hear your thoughts, especially as it relates to those new guidelines on the consumer side. So gentlemen, any any thoughts that you’d like to share with the audience?

Andrew Sabin 2:25
Well, I mean, I think the first thing is just yea. We’ve been waiting for this for a while, right? It’s a couple of years late, which, you know, was unfortunate, but we’re just happy that it’s final. And, you know, I think that a lot of us have been speculating about what this market is going to look like, once it opens up. And that’s all speculation, we’re actually gonna see, we’re gonna find out. And I think it’s, like, 50 ish days from now, the market opens. And we’re really hopeful, you know, the thing that’s motivated a lot of us for a long time is just helping more people here. Right? There’s, you know, the adoption rates in the US are not great. And, you know, we think that bringing down the price and making it more accessible is going to bring new people into the market. That’s been the hypothesis all along. And finally, we’re gonna get some, you know, real world market evidence to see if that actually changes adoption. So I’m just eager to see what happens. It’s been a long time. And I really hope that it just helps a lot of people who wouldn’t have been able to hear better actually have access to a real solution.

Amyn Amlani 3:34
Nic, anything that you’d add to that?

Nic Klopper 3:36
Yeah, I mean, definitely resonate with Andy’s sentiment around, you know, increasing access. And I think that’s the main reason the bill was passed, right. And the ruling is now out is to increase that access and affordability. I do also appreciate that, I think there’s going to be a lot of education required to the end consumer, I’m not the Now that the rules are out. Of course, I think all of the players in the space. Now, as combined with Bose, hope that this will just be like, you know, fireworks from day one, I still appreciate that there’s we working with a slightly older demographic, do their work, they feel comfortable purchasing these devices, you know, in store or potentially online? And what do we need to do as companies to make that a safe and enjoyable experience? And I think it all comes down to execution. And I think the FDA did a great thing specifically in the self-fit category to go to 510 K. Just also making sure that we have reputable companies that play in this space.

Amyn Amlani 4:39
Yeah, and I and I appreciate what both of you have said and you know, if you also look at it from the supplier side, we just don’t have enough providers to handle all of the people that need our help. So, you know, the segmentation was forthcoming. I mean, it was inevitable the evolution of the profession is going to push us in different directions. Now that we’re here, what I’m really excited about is the way that you all are starting to share the the information and the education, the opportunities, the accessibility for consumers who want to take the bull by the horns and help themselves in, you know, areas that maybe rule where they don’t have provider care, or for those individuals who, you know, they the sticker price of a $6,000 set of devices is maybe a little overwhelming. And maybe they want to dabble a little bit to see what their value is before they move forward with professional care. So, you know, let’s see lumen has partnered with Walgreens in So Nic, can you talk a little bit about how that trajectory happened? And what that looks like?

Nic Klopper 5:46
Yes, thanks Amyn, so this started about 18 months ago, in one or two pilots, we ran with Walgreens around, specifically testing how the consumer would react to once the OTC legislation comes out, right? How would they perceive install purchasing online purchasing and what their journey could look like? Right, so numerous types of small pilot tests isolated, you know, in one or two stores, and then as well online to see what we can or can’t do what the typical messaging needs to be to the consumer to make them feel safe? And how do they respond to the typical price points. I don’t say we have it right today. But I think we have a very good understanding of, you know, what the consumer is looking for, and what is important, and one thing that we have found is the importance of a human in the process as much as OTC we think, you know, it’s just a product on the shelf. And when people mistake that home, I think that’s, you know, kind of a tainted view on what this category could be. And that could be the reason, it could be the reality for lower priced products. But for the definitely the more premium Salford category, we have seen that that kind of human engagement, either through the pre sale process or post sale, where they actually asked specific questions about the hearing aids, has been instrumental in driving customer satisfaction ratings.

Amyn Amlani 7:09
Yeah, and I find that important point that you just made, you know, as providers, and I know, we’ll talk about this a little bit later. You know, one of the things that providers are concerned about is where’s their place in this space. And there’s always going to be a place because people are need the support in order to overcome the issues that they’re facing, the product alone is not going to do it. Because if that was the case, the silver bullet on the market today would have already handled the situation that we’re in. So getting back to the Lexie Lumen you’re at the Walgreens at the pharmacy here, you’ve got some services that are associated with it, you’ve got a hearing test, and some other things. Can you share a little bit about that aspect with the viewers who may not be quite well versed in, in your product and your services?

Nic Klopper 8:01
Yes, Amyn, so it all depends on kind of if you differentiate between an in store and online experience. So of course on online, we have a lot more flexibility with what we offer the consumer. And I think if you think about OTC people think about that convenience factor, that ability for them not to have to go to provider to get basic understanding. And one of that, of course, is their ability to understand what their urine capabilities are right? Do they have a hearing loss or what their severity of hearing loss is. So one of the things we implemented with Walgreens is, through their fine care experience is an online hearing assessment is very proprietary to hearX, we use a signal to noise ratio tests, which is called digits in noise, we represent digits in background noise, consumer can do that from their phone, or from their laptop in the convenience of their home, and do a hearing assessment to first establish if, you know, they would be a candidate to benefit from a hearing. And we’ve seen that a very nice step in the user journey. And which normally, you know, would have been fulfilled by the audiologist or so much more comprehensive tests, you know, diagnostic tests and bone conduction and air conduction, I’m going to try to replace that will be trying to give that consumer guidance about what their hearing ability could look like. And what we have found very fascinating is we ask the question about self perceived hearing loss, the beginning of that test for the consumer to tell us Do they think they have a hearing loss? And then you know, we correlate that back to do they actually have a hearing loss in the end, right. And it’s, it’s uncanny how correlated they are right. And I think that’s definitely the first step is just to confirm that suspicion that the consumer might have in that in that journey. Yeah, that’s

Amyn Amlani 9:30
interesting, because we know that as self perception increases, the likelihood of adoption goes up. And so are you seeing, you know, as as people have more of a severe loss, they’re more likely to engage with your product. Are you seeing anything like that? Can you talk about that?

Nic Klopper 9:49
Yeah, it’s fascinating, the data, right, and I think we can have a two hour conversation on this specific topic. But what has been fascinating to us is kind of, there is a correlation between the severity of the hearing loss and their willingness to take action, we actually asked this readiness of stage of readiness question to customers, you know, you have a hearing loss, what is your readiness to change? Right. And Amyn, we all know from literature that a typical customer that fight or member finds out that they have a hearing loss normally takes about seven years to take action. Right. And I think we all think that OTC is just gonna change overnight, I don’t think that’s gonna be we, all we can do is try to shorten that. Right? And I don’t think that we know is the seven years due to stigma -is it denial? Is it price point? Is it access? Or is it a combination of all of those right, that drive that seven years for them to take action. But you’re correct, there is definitely a correlation to the severity of the hearing loss and a willingness to take action. And what we have seen is there’s also the severity of hearing loss to what customers are willing to pay. So customers in the mild to moderate category versus that severe hearing loss, definitely willing to pay more, because I think that it is just amplified, the challenge that they are experiencing on a day to day basis. Yeah.

Amyn Amlani 10:57
And so that’s on the front end. So that’s really interesting, because that’s on the front end, on the back end. Are you seeing folks call into your support group and asking for help? Or how’s that? How’s that playing out?

Nic Klopper 11:11
Yeah, so I mean, I think we’ve been speaking about that, you know, pre sale journey, till now, right to kind of confirming the hearing loss, you know, and then getting the hearing aids into the consumers hands, right, either that being from an in-store purchase, or that being from an online.com purchase. I think we spoke about the involvement of a human in the process and kind of the role of the provider, the audiologist, right. And I think what makes the legacy platform so unique, and that’s why partnership with Bose is so valuable to us is we have built a platform. And we see Lexie as a platform in which the lumen and new Lexie powered by Bose B1 product lives, where you have the ability to not just set up your hearing aid, but then also have access to a range of services. One of them flows includes Lexie Care, which is then a team of Lexie experts, which then can help guide you remotely through a video or voice call with specific amendments that you need to make your hearing aid which is then of course train on the product that can assist you kind of putting that, you know, expert there in your pocket. We also have a rewards program called Lexie rewards where customers are then onboard into the hearing aid, how to take care of it. But what’s the best use? How long should I be wearing it? How do I clean my hearing and all those typical things that a professional would teach you, you know, in the first 30, 50, or 100 days of use. And then of course, the ability to track the customer success so that we can preemptively step in and shoot the customer experience any challenge of sound quality, or experience in certain environments. Through that kind of context and Support Center.

Amyn Amlani 12:43
Yeah, in what I really love is it’s just not picking a product up off the shelf and putting it in your ears, you guys have actually built out a model. And I think people need to appreciate and understand the fact that this model exists. And it gives credence to the whole process that’s unnecessary. So again, it’s not just buying the product, there’s also help that’s necessary. And again, kudos to you and your team, for putting all that together. Because I think that’s that’s a great win-win, not only for accessibility, but also for usage, which we know is also an issue. Even for for people who go see a regular provider, they end up in the drawers because they don’t have the support that they always need.

Andrew Sabin 13:24
Just really quickly just say that, what Nick just said is really what made them such an appealing partner for Bose. Right? Hearing aids are a hard business, it’s complicated. from a patient perspective, it’s complicated. from a regulatory perspective, I think there’s still a lot to be learned in terms of this sort of digital first approach for a hearing aid market. And we’ve just been really impressed with the work that hearX/Lexie has done in this space. And we think that they’re sort of adding a really important layer to the hearing aid experience that really ensures some customer success.

Amyn Amlani 13:58
Yeah. And and, you know, as you’re saying that, Andy, I think the the key thing here is, is what you just pointed out is they built out this process. So it’s going to be interesting to see what other folks do because I think, you know, hearX has built out the gold standard, so to speak at this point in time. What are other companies going to do? So for example, you know, there’s there’s talk of consumer electronics companies coming to the to the marketplace, are they just going to simply dump their products on the market and expect that people are going to purchase them? I think to some extent, you’re going to get tech savvy folks that will. But at the end of the day, there’s such a wide spectrum because now we’re seeing four generations of people with hearing impairment. That’s a first. And so you know, your millennials may be a little more tech savvy, where you know, my dad who’s in the Silent Generation group needs a little more help. And then you’ve got these folks in between with the Baby Boomers and the Gen X and the Gen Y’s. And so, the segmentation that I alluded to Do a little bit earlier, that fork in the road is actually going to really expand. And I think you guys have the right initial steps as this fork starts to evolve, because it’s going to fan out in some capacity. And so, you know, Bose was one of the first companies to actually have with the Ear Machine, which I got to play with when I was in an academic setting, you know, one of the first components of this, and it’s evolved, and it’s evolved relative to this fan. That’s, that’s, that’s coming out. So can you talk a little bit about that Andy, because I’ve seen that evolution with your product

Andrew Sabin 15:35
Yeah, sure. For those who don’t understand or who aren’t familiar with Ear Machine. This is it goes back at least, gosh, almost 10 years now. But the idea was to try to figure out what’s the simplest interface that still ensures that users can get a setting that’s appropriate for them and their hearing loss. And so if you see the, the app that controls the Lexie B1, it has two sliders on it one’s called World volume, one’s called treble bass. And the world volume is sort of deceptively simple, right? It’s not just a volume control, what it’s actually doing is choosing prescriptions that are appropriate for the most common hearing losses. So it’s sort of like a presbycusis slider where if you move it towards the bottom, it’s choosing targets wide dynamic range compression targets for a mild hearing loss, and as you go up, it becomes closer to the moderate range. And then the treble bass is sort of trying to mimic what happens and fine tuning or at least a portion of what happens in fine tuning in the audiology clinic where, you know, patients say it’s too boomy, it’s too tinny, and they can sort of just sort of adjust the spectral slope to their liking. And, you know, it’s one thing to just sort of have an idea, but we’ve we’ve also tested scientifically, we’ve run a clinical study at Northwestern, there’s a paper published, I think it was 2020, in trends in hearing about it. But we let people actually take it out into their lives, listen to the settings that they chose, compared to the settings that would have been chosen for them, you know, using best practices from the audiology, from from an audiology clinic. And when people listen to those differences in the field, it seems like they tend to like the settings that they chose for themselves actually a little bit more even than what the audiologist would have chosen for them. So we’ve done the work to really vet out this, this thing works. And hey, look, there have also been two products on the market that use this mapping, right, we had Bose Hearphones, back in 2017, and then Bose Sound Control last year. And you just look at the ratings. It’s a pretty well rated product. And one thing that people often call out is the simplicity and the efficacy of that interface. So it’s a really, you know, to users, it’s just like, you know, the controls that they would see on their consumer, like their their consumer electronics products, right, a volume and a treble base. But behind the scenes, it’s doing quite a bit more. And it seems like it actually works for most sort of typically shaped hearing losses.

Amyn Amlani 18:08
Yeah, indeed, just for the audience, if I remember, right, these are connected using is it bluetooth headphones, or can you can you expand on that.

Andrew Sabin 18:20
So it’s just the control of the hearing aid is through Bluetooth. So you use the Lexie app, fiddle with the wheels, and that sends data to the hearing aid, which then updates all of the parameters of control wide dynamic range compression. Okay, okay, that

Amyn Amlani 18:37
was going back to the ear machine when we actually used the headphones, because this was back in 2013, I think or something. When we

Andrew Sabin 18:47
back when we were back in ancient history, when the iPhone actually had a headphone jack. You can still use it with a dongle, but it’s a non optimal experience. I recommend koleksi product.

Amyn Amlani 19:04
So let’s talk a little bit about this partnership now. So we’ve got the hearX component and how you guys are doing this online. You’ve got a product in which people can self fit this and the evidence shows that they’re able to do it. So what is this partnership now that you all have created?

Nic Klopper 19:20
So I mean, it’s it’s, it’s really off to a flying start. Of course, we’ve been connected with Bose for the last since 2019. We we’ve kind of assisted Bose in the aspirations of kind of launching their first product in the market. We’ve developed, you know, online hearing assessment for them. So I think we’ve come a long way with Bose and I think that relationship is just fostered over time. And what’s really, from a Lexie perspective, exciting to us is of course, not just the credibility that the Bose brand has got in the market but also the audio quality and sound engineering you know, that put into the product, the build quality of the product look the feel. I mean, that’s really the strong suit that Bose brings, right. And I think when we pay that consumer rhythm and touch and feel of the product, the audio quality with the audiological experience that hearX has got, and which you’ve bought into the legacy platform, I really think those two combined is what kind of puts us you know, definitely at the front, definitely in the current space, to have a very strong competing product in the market. But just want

Andrew Sabin 20:27
to echo everything that makes sense, I want to underscore it like- hearing is still really important to both despite what you may have read in the press. And our partnership with Lexie is maybe the best statement about where, you know, we have one product out. And we’re looking forward to doing even more with them. We think that they’re the there’s a nice complementary relationship between them, where we have some really nice technology, they have a really nice platform and the combined we really think we could help a whole lot of people with hearing loss.

Amyn Amlani 20:56
Yeah, and that’s, that brings up an interesting point here. So you’re going to eventually come up with new products right now there’s the lumen, and there’s the B1 device. So how does somebody decide between A or B, how does that happen? Or do they both work for the same category of individuals?

Nic Klopper 21:16
Great. So Amyn, I think it’s two completely different experiences. And I think consumers, specifically now the OTC market, is looking for choice. And they differ, where the lumen customer are looking for a more automated experience. Where as the Powered by Bose customer is looking for that customization, customization, which we spoke about the machine technologies they bring, and I think that all, you know, plays into, you know, how wide the OTC category will be for customers. And I think that the idea is that they will have choice, and then they will choose the product that’s best suited for them.

Amyn Amlani 21:56
Alright, gentlemen, so what’s the future gonna hold for us? I mean, we’ve talked about what the bill is, you guys have some amazing products that are out on the market for the consumer. You know, so as a provider, should I sell these in my practice is probably one question that folks are asking themselves. This, I think the second question is, is if someone comes in with this product, how do I help them? And then the third thing that I’ll ask you, is, what’s next?

Andrew Sabin 22:26
So maybe to the question of, should I sell this? I mean, of course, the answer is yes. You know, no bias here. You know, what can you do? I think, I think there’s a lot of innovation going on, on the provider level, I think, you know, Amyn, you and I have a lot of shared contacts with people who are trying to rethink how audiologists kind of structure their businesses, you know, unbundling, of course, is the key word. But there’s a ton audiologist, a ton of value that audiologists provide, and that can totally apply to adding value to the OTC space. Education, maintenance, even if they wanted to do some real ear fitting, you could put a probe mic in with these products and, you know, tell you where an audiologist would have said it, that might be really valuable to us or so I think, you know, for audiologists who are open to it, I think there’s a real lot of opportunities. What happens next? I don’t know. You know, I think I’ve been consistently wrong about what’s going to happen in terms of the regulations and the market developments. I think we’re gonna have to listen to the customers. I mean, I think we’re all going to be paying really close attention. Once these OTC regs are actually live again, which is in October, looking for any signal in the market. And we will try to, you know, iterate based on what people actually want and will respond to them.

Nic Klopper 23:50
Yeah, I wanted to just kind of resonate 100% with Andy saying, I will bring a bit of a different perspective on almost the same sentence, is, I think the advantage of the OTC legislation coming into effect in a couple of you know, less than two months from now is, I think there’s going to be a lot of awareness creation, and that all around for both the consumer will be fantastic. But of course, the audiologist and the provider, that’s also going to be fantastic. And I think there’s been a very strong view from the FDA and the legislation around what types of consumers this category will be going after, right. And I do think that it’s those customers top of funnel. And I think over time, those customers, you know, I don’t think building new hearing aid to model won’t need one, you know, in five or 10 years from now and could end up at the provider, either, you know, getting a much more powerful device that fits kind of their hearing requirements at that stage. And if we think the US, you know, globally is still one of the most penetrated markets are still are highly unpenetrated. You know, I think there are massive growth For an awareness operation that’s required now. And I think also, I hope that this OTC legislation will also play a big role in kind of de stigmatizing hearing loss, which I think is a big challenge we have to overcome.

Amyn Amlani 25:15
Yeah, gentlemen, I’ve really enjoyed this. I think there’s a lot of perspective here. Of course, there’s a lot of unknowns. We may have to circle back in time and maybe revisit this, this video to see what we said and what actually happened down the road. But again, I’m really excited. I think, I really think that the products that you guys have out on the market benefit everybody, including the providers, especially the patients, and at the end of the day, it’s a win win for everybody. So thank you for all that you guys do and best of luck, and, you know, again, let’s circle back and see what happens.