eargo hearing aids gormsen interview

Reimagining Hearing Wellness: Interview with Eargo President, Christian Gormsen

An early disruptor to the direct-to-consumer (DTC) hearing technology segment, Eargo is more than a technology company.
 
In this edition of This Week in Hearing, Eargo President and CEO, Christian Gormsen, sits down with Amyn Amlani to discuss the state of the hearing industry and his company’s attempt to reimagine what hearing wellness looks like from A to Z – from both a technology and service delivery perspective.

Full Episode Transcript

Amyn Amlani 0:10
Welcome to this week in hearing. One of the earliest disruptors in the direct to consumer technology segment of the hearing care market was Eargo. Today with me is Christian Gormsen. He CEO of Eargo, Christian, thank you so much for being here today.

Christian Gormsen 0:28
Amyn, thank you for having me.

Amyn Amlani 0:31
So, Christian, it’s a pleasure. And, you know, let’s start off a little bit by talking about you. What is your background before we engage in some of this other conversation?

Christian Gormsen 0:42
Again, I mean, thank you for having me, and hello to everyone. It’s really an honor to be here and talk about hearing health. I’m Christian Gormsen I’m the CEO of Eargo. We are a direct to consumer hearing aid company. We’ll get into more details about that later. Prior to that, I started my career out of Europe. Initially in advisory I was part of the early consolidation of the hearing aid back into the hearing aid industry in the late 90s. Leaving in 2000, I joined GN ReSound, as head of strategy and business development in early 2000s was part of the Resound Air launch and so on that many professionals probably a pivotal moment for the industry with open fits, but had a great opportunity to work in a great company bringing cultures together and launching innovative products. My focus area was really driving all of that change that happened in this period of time, and also building out distribution. So one of the big challenges has always been access and the hearing aid industry at GN we were really focused not necessarily on owning retail. We actually started divesting retail at that time, but also how do we partner with the Amplifons the {inaudible} of the world and how do we expand access? So in Europe, we started with Boots Hearingcare. We started with Specsavers, so vision and pharmacy. In the US, we really partnered with Costco. And so I was part of launching Kirkland Signature hearing aids in the mid 2000s. How did we bring that out? I think something that everybody is aware of I was president for global accounts. So running all the global retailers across the world. In addition to running Europe, and operations, I left GN in late 2012, worked as an advisor was part of the whole Siemens acquisition by private equity. So, what then became, you know, Signia. So that was an interesting journey. And around that time, I was introduced by investors to this new startup out of the US called Eargo, that were looking sort of to revolutionize the hearing it industry more on that later. But ended up initially advising them was a board member. And then in 2016, I moved with my family, from Europe, to the US and have been been here since.

Amyn Amlani 3:16
Wow, that’s a that’s an incredible story. So you’ve seen a number of different changes in the industry. But you know, the common theme that we’ve had Christian is hearing health matters. And we’re looking at hearing wellness for that individual. So let’s talk a little bit about hearing wellness. What is your ideologies about hearing wellness, for our audience?

Christian Gormsen 3:39
Yeah, no. And again, this is why I’m so excited to be talking with you today. Amyn, because this is why I joined two years ago, this is why I’ve stayed in this industry. I think collectively, if we’re honest, as an industry globally, US every single market, we we’ve failed in helping more people here better. I think the people we do help live better lives and different lives because of the help they’re getting. And be that’s partly the product, that’s probably the service delivered to them. But a penetration rate, like we’re looking at in the US have around 25% is honestly an embarrassment, right? Even in countries where we offer free hearing health- I’m from Scandinavia, right, but you look at the UK, it’s still less than 50% of the population who could benefit, right? And so the fundamental issue we have in hearing is people, you know, find excuses not to do something, right. And it’s like, how can we motivate instead of keep doing what we’ve always been doing – How can we do things differently to help motivate more people and sort of to remove the perception of the products and the industry to say, you know, the the analogy I always provide and then when I’ve been we’ve been through a lot at Eargo But when I talk to investors is, imagine I’m wearing a white coat. Imagine you’re sitting in a chair, I’m wearing glasses. And first of all, you would never think about the fact that I’m wearing glasses. I’m not, I’m not retired. And if you thought about why I’m wearing glasses, you’d be, I’m thankful that this person is doing his best to do his best on me. I’m thankful if I, on the other hand, would be wearing, you know, something like this behind my ear, your using. Why is he wearing that? What is wrong with him? and I’m a medical professional, maybe I’m a dentist, maybe I’m whatever, you would immediately have that feeling like what’s wrong? Right. And, and that’s wrong. That’s the perception we have. And I think this is where hearing health matters. We all know all the correlations about hearing loss. Hearing loss is probably the best early indicator of some of the worst diseases out there. You know, social isolation, depression, Alzheimer’s, we all know it. But it’s an early indicator, and what what it really is you can do something, you can proactively as an individual do something, to keep sharp to be more socially engaged, to not avoid, you know, these situations, to lean into it. And people choose deliberately not to do something. And I think that’s what about hearing health matters, because we know the best way to solve health on a much broader scale is to get people being more active, more engaged, and hearing is probably, if not the most important sense that you need in order to be engaged. And we’re not doing that. So what more can we do? I think that’s really my cry. And I think that’s also the cry of Eargo, what more can we do to really help people, you know, do something about their hearing? Sorry, that was a long ramble. You got me going there Amyn,

Amyn Amlani 7:06
no, no. And I think that’s fantastic. Because I think you made a couple of critical points, one of them being is that we have a disjointed system, between what we would call patient engagement and quality of life, right? Those are the two major pieces, the the quality of life is the benefit that somebody receives, from not only the product, but also from the services that the provider provides. But then you have this patient engagement component, and that patient engagement has, you know, various attributes that are positive. And then there are other attributes that are negative, like stigma, right. And so we have this disjointed, it’s waiting in one direction or another that doesn’t allow for these two pieces to align. And I think as you pointed out, the second piece of this is, there are new opportunities to take these two disjointed components and bring them together and hopefully, over time and time will tell that we’ll be able to synergize these so that that market is able to grow in such a way. What do you think of that comment?

Christian Gormsen 8:16
No, I couldn’t agree more. And I think that was really the notion behind Eargo, right? So to lead into that, but how do we, how do we bridge this and you don’t bridge it by by doing what you’ve always done. But you you definitely also don’t bridge it by doing something completely different, right? You want to learn from the best. And I think the best example, and I’m sorry for jumping up and down here, and I know, we’ll get to this point, you know, it’s the professional support, right, because you got the product that sort of embodies the embarrassment. And then you’ve got the professional support. And I think one of the key aspects that year ago was, from day one, we wandered professionals. For it to be an important part of the equation, we didn’t want to take it up, right. And then also, when we’ll get into the OTC discussions, I still believe that the single most important thing is for having good outcome. And I shouldn’t be saying that with a disruptive product its not the product, but it’s the experience that that the user ultimately has, and nobody is better qualified, and at delivering that experience than a hearing professional that is trained at it, and that has done this for our entire life. What we really focused on at Eargo is like how do we deliver that experience in a different way? You know, because the clinics, you know, it’s expensive, it’s not very efficient, we all know that. So how can we deliver the aspects that are delivered in a clinic in a more virtual manner in an easy accessible manner, you know, online over the phone, you know, video, these types of things. So that was a big part of, you know, The whole, you know, fundamental foundation of what a Eargo is?

Amyn Amlani 10:05
No, and I can appreciate that. I mean, if you think about the world, right, it one point in time, the only way that you could and let’s use food as an example, the only way that you could go out and have a meal was to get in the car and go somewhere. Now, you know, with the evolution of technology, with the differences in generational needs, there are different segments, right? So now, you can have a DoorDash, or you can have an Uber bring you something, you can go somewhere, you can go through a drive thru, there’s so many different ways in which food can be acquired. Same thing with groceries, same thing with shopping. So it’s, it’s, it’s allowing people to access as you put it, opportunities, and they’re doing it in different ways. And I think Eargo has one of those opportunities, which I find extremely fascinating.

Christian Gormsen 10:57
yeah No, no, and what I keep telling, I had a meeting with all our employees yesterday, so we were close to 300 people on Zoom some in person. And I said, this is not about one way or the other way. Because each individual is an individual and have different preferences. So like how do we meet the users where they are, some people want to go into a clinic, they want to have that very professional consultation, they want to feel like, and that’s absolutely fair, and there’s a great solution. Some people prefer to do it from the comfort of their home, the privacy, you know, not involving everybody else. Right. That’s another one. I think we cater very well to that. I think what I’m excited about also with OTC hearing now is, hey, you can go out and you can get some not same level of quality as a clinic, but you can go out get some experiences and Best Buy store on a wireless store and pharmacy. But it’s all about meeting the customers where they are as opposed to dictating. The only way you can get the help is if you do bad. That’s not very democratic, so to speak, if you forced to and and I think that’s been, you know, hate regulations and so on historically has driven that behavior the best we have been prescribing, this is the only way you can do it. Right. And that’s not that’s not keeping up with evolution, right evolution is you keep finding ways to make things more accessible.

Amyn Amlani 12:28
Yeah, no 100% In I want to bring this to light because I hear this quite a bit. There is a fear there’s an anxiety that having this type of different segmentation is actually going to cannibalize some practices in a negative way. And the argument could be yes, that’s true. But there’s also the flip side of that is, it’s not true, because there’s so many people to be helped, and we don’t have enough providers. You want to talk a little bit about that for us.

Christian Gormsen 13:01
Another great question. And in isolation, that view is correct, right? Hey, you know, some people are bound to make a decision and go through the clinical approach in isolation, but and I would agree with that concern, if we had 80% of the people who needed hearing aids wearing hearing aids, that’s not the case. You know, I think last year, what 4.4 million hearing aids were sold in America, right, roughly. But we know that number could have been 20 Millions, right? Literally 20 million, we know, devices, right? We know of as many people out there who are not getting the benefit, right. And the whole point is the more people we get into the industry, the more we will also people will understand that they were willing to get more, they will pay for more service, more support, more experience, and I think it’s looking at instead of looking narrow, looking at the full opportunity I’m completed with you here, because this is that’s what it’s really all about. And, you know, we’ve had some early pushback on the Eargo business model from the industry. And I’m like, you know, we’re not out to steal anyone’s lunch, right. We’re out to help more people hear better that because, again, as you said that, uh, no pun intended, but hearing health really matters, right. And this industry is so underserved. Right, especially the more and I think that’s another piece that’s important when you look at it. The truly underserved part is the earlier adopters for mild to moderate losses, you know that the severe profound losses are pretty well served, because they have to they can’t function without it right. But I think but we all know that the sooner you get comfortable wearing something using a product, the easier it is, you know, to benefit Problem head, right. And unfortunately, as we get older, we do get more stubborn. That is a fact of life, right? And change becomes harder as you age. Imagine if people started wearing and getting hearing support in their 50s and 60s, by the time they turned 70 or 80, they’ll, but they’ll be much better equipped, right? And will be much easier customers to do, they would still need to go to our clinic to make sure they get the right solution if their hearing loss is severe enough, right. So no, that’s a lot of opportunity here.

Amyn Amlani 15:35
Yeah, is what I really like about what you said is, you know, we need to think of things in a different way. And we need to cater to the consumer. And I really liked the slogan that you guys have come up with and that is reimagining what human wellness looks like. So we’re not looking back, we’re looking forward in order to help these individuals. Can you share a little bit about where that slogan came from? Because I’m a huge fan of that.

Christian Gormsen 16:02
I wish I could claim credit for it, we have some far more creative people. They’ve also been been part of repositioning the hearing category, you’re seeing some of that behind me, I’m sitting here in my office, right? So I gotta give credit where credit is due. And I think that’s bringing in consumer people with a consumer mindset from a creative brand point of view. That is like, what is it that people want to hear hearing aids, unfortunately, have a bad ring to it? Right. And I think the more we talk about wellness and these types of things, you know, people, you know, who doesn’t want to feel well, nobody, right? Everybody wants to feel well, what does it take to feel well, or heal? Well, well, it actually takes, you know, the hearing aid and the device and so on, but but at least we can deal with it. Right? So that’s really where it came from our you know, how do we, you know, we’ve spent since we launched Eargo, in 2017, you know, we get instantaneous feedback from thousands and thousands of people every day, we average 10,000 visitors to our website every day, right? We engage with a lot of users, which I think has has always been separated industry, the people who develop the technology don’t have direct end user engagement, right? They sell to the clinics, right? The clinics have engagement with users, but not that many, typically, the foot traffic in a clinic is not very high, right? And the amount of customer served as measured in, in hundreds, not in 1000s. Right? We’re getting 1000s of input every single day. Right. from customers and, you know, understanding how the customer thinks and behaves, what would help you consider. So what our team has really been focused on is, what does the customer want to hear? Right, and they want to hear about hearing well, right, they want that reimagined. And that’s ultimately where this whole phrase is coming from. And you know, when we started a year ago, that’s also what we said is, okay. We have one goal. And it’s it’s the user. Right, you know, our Northstar is the user, our Northstar apologies is not the clinic, it’s not the engineer, it’s not the clinic, you know, it is the user, right? And how do we find values? And how do we speak to that user, instead of having, you know, advanced environmental recognized optimization features, you know, we have a tendency in this industry to use very advanced words for a lot of the features that the what does it do? Right? You know, we have sound match, right? We have sound adapt. But how do we make all of this? You know, how do we speak to the user and not speak to the professional, not speak to the engineer, but really speak to the user?

Amyn Amlani 19:06
Yeah, in my understanding, Christian is is that you all have developed various entities within this slogan of reimagining what hearing wellness looks like. And one of them is service delivery, where you have an educational component, you have remote or telecare, and then you have the support mechanisms in place in order to help the end user fulfill that wellness goal or that Northstar that you’re talking about. Can you share a little bit about that with us, please?

Christian Gormsen 19:37
Yeah, no, no. And I think they maybe to take the sequence where everybody can relate to sort of breaking a hey, typically the journey that everybody every participant in the hearing industry, it starts, you know, with the hearing aid, right, that that’s sort of how we all come about it and this is the hearing aid but 80-90% of the hearing aids sold in America, this is at So this is a great rechargeable RIC product. It’s actually rechargeable, which is somewhat new rechargeable wasn’t really present when we launched a year ago. Everything was actually replaceable batteries. Right? For comparison, this is the Eargo product, right? This is what made me fall in love with Eargo initially, it’s what’s the product design And because again, for for mild to moderate, you know the best size, right? This is a classic from an industry point of view, I would call this a CIC, it’s a CIC product fits in your year, you won’t be able to see it, it’s still an open fit, it has a very transparent tip the sign, that’s all part of the designs that were were made. And that was the initial reimagine. How do you get people to think about, you know, the invisibility, the comfort, it’s not an including device, there are a lot of CIC options and the industry but most of them are quite severely occluding. This one is a non occlusive CICS or so. So it’s quite comfortable. That was the original notion, okay, we make it rechargeable we do all of these things we give the customer what, whenever from a product. That’s how we started back in 2017. That was it. Okay, that is enough to reimagining hearing wellness. But well, we very quickly learned and we were going to sell it online, not through a clinic, we’ll sell it direct to consumer will leverage federal preemption, and we’ll do these things. And we were really struggling because customers, we did get customers, they were hard to convert. They didn’t really want to get them. But we got some and those that we got, we saw a return. It’s like why it’s a great product. But anyone who’s ever worked with a hearing aid knows about a hearing aid requires work, right requires maintenance, tuning, adaptation, it’s a rehabilitation process. So we very, very quickly said, Okay, we can’t, you know, it’s not going to work on its own. Right, we need to build, we need to manage expectations, before people even buy it, we need to make them aware what it means what hearing wellness means, right? Because it requires you as an individual to take active measures. If you do not clean your hearing aid, it is not going to work, right? You wear glasses, how often do you clean your glasses? Probably a couple of times a day, right? It’s those types of things, you got to do the same with a hearing aid. And if people and most people don’t expect to clean a hearing aid, right, it was like, Okay, how do we get that upfront in the process? Right? How do we make sure that the hearing aid actually works for them? Right? Because we cater for mild and moderate losses, we don’t cater for severe losses, profound losses, how do we how do we, how do we make sure we don’t want to sell to a person with a severe loss, because they’re not going to get a great experience? Because of their hearing threshold? They won’t get any benefit? How do we adjust so so we basically very quickly reimagined? The whole setup. So yes, we have, I think, a fantastic product and highly differentiated product, but the customers much more, we call it the Invisalign, or of hearing aids. Right. But you know, I think we have a great product, but to your point, it’s really the service accessibility. So we said the more we educate people upfront, actually, we saw our conversion go up, we would sell to more interested parties by educating them more upfront, instead of having a hearing professional, do all that, you know, the the initial one is really about creating that human connection. Why are we calling, you know, establishing that needs. So we actually had more more consultative trained people, you know, helping understand what the real issue was. And frankly, also that allowed us to focus our during professionals time, so we would establish a need, we would build that rapport, this is what it takes, it’s an investment. It’s not just a monetary investment, even though your goal is a mobile cost, it’s still an investment, it’s still a lot of money. It’s also a time investment and a personal investment, you get in or you get out what you put in, in terms of, you know, understanding how the device works. And of course, our model is very much based on, you know, empowerment of the user. So we did that up front. We took them into the sales process we have we developed an online hearing screener, or we actually acquired a company out of Holland Clementine, who developed you know, hearing screens because people want to understand, it’s not like they want their hearing fixed, they actually want to understand what’s happening. So we built that sort of in front of the sales process and then after the actual sale and the delivery of the product. While we really you know, we are almost insisting that our customers go through what we call an onboarding call. And these all of these calls are performed by licensed professionals so audiologist or HIS right but people who are actually live Is to and have practiced audiology before to help them understand, have I inserted in the right way? Am I getting feedback? Do I need to tune it in a different way, we can also remotely support the tuning, you can do some of it yourself as a bunch of features to have it announced, but it was really having that conversation with a professional and say, Okay, have you tried to take the tip off? Do you know how to clean it? You know, is it charging the right way? All of these things that typically people have to go into a clinic multiple times to be reminded how to do? How do we actually do that and drive and of course, we had created initially the video, click here, click here. But people watch a video when you have a conversation. A lot more happens, right? So this was a huge part of what we said, for some people, that initial call, is all they need. Some people need five calls, if some people need 10 calls. And we said we don’t want to differentiate, we don’t want to say you got you get once you will get all the help you need, right because of return. It’s bad for our business. But it’s also a bad experience for the user. Right? Because if a return, but the likelihood is not that they’re gonna go and get another hearing aid, it’s probably that they’re gonna give up on getting a hearing aid. So so that has really been sort of part of his Northstar driving, but how do we, how do we create the best customer experience? Right, while not incurring the cost, setup and inefficiencies of having a clinic? Right? Because, you know, we have customers from all over the country, the amount of clinics we would have to cater for that would be prohibitive. Right. So so that was really all the thinking. And when we talked, we talked about like, how do we decide our service delivery. And so we’re looking at it before purchase, so consideration, purchase, and then post purchase?

Amyn Amlani 27:02
Well, that’s tremendous, because you, you know, most, most of your, and again, not to throw anybody under the bus. But most of these traditional models, leave that to the the clinician to find out and you see huge variability in performance, which in my eyes is probably one of the reasons that we see the low penetration that we do. It looks like, again, you guys have reimagined what hearing looks like, by thinking not just the product through but also the services. And on top of that, you’ve also considered the accessibility piece with online shopping, the affordability piece with, you know, the financing that you guys have available. And then also you have warranties that people can purchase as well. So you thought through that whole process, which is what I really appreciate about some of the things that Eargo is starting to bring to the market, which we hope will proliferate, as this new segment of OTC continues to evolve.

Christian Gormsen 28:04
No, exactly. And that’s also I’ve been out publicly saying, I’m very excited about what’s happening with OTC. I’ve also said, I’m also concerned, as I’m not concerned that the wrong people and damaging hearing, but I am concerned about the confusion, right, because the expectations are very high. And I think a lot of retailers have a tendency to promise that just get this device and everything’s great. And we know, you know, we’ve lived it. I think we have a great product. And we’ve launched multiple generations of products. But we know that a great product without service is not a good recipe. Right. And, you know, that’s why our emphasis in the OTC world and we definitely want to participate is like, how do we still enable, luckily, we have the back end that can deliver a lot of the support, right? But also, how can we work with OTC retail partners that are willing to do more education upfront than just put it on a shelf in the back or in a clamshell? Right? Because people will have the wrong expectation, right? And the expectation the bulk of the expectation is being created when you buy a product. Right. And if you don’t have that some discussions or consultation before you buy it, but you just like pull it off the shelf. Your expectation is it’s going to it’s going to be as easy to hear as as taking a product off the shelf. And that’s not going to work. I had a big discussion yesterday with our whole company. As I said, we have about 40 licensed professionals that a year ago and you know, part of the concern is do we have a job in the future. And on top of that, you’re looking at the Meta layoffs and the Twitter layoffs. It’s a little bit of a scary market right now. And, of course, the FDA does not require a professional to be involved in the sale of a hearing aid, nor the support of a hearing aid for mild and moderate, which is a huge part of our market. And as like, I know the FDA, but there’s also there’s a limitation to how much you can regulate. And I think over regulation has also led to, you know, a stagnation in the industry for a long time. So I think that the FDA is doing the right thing. But as a as a company at Eargo, we will insist on having service available. Right. And I said, I think this is going to be because relative to a clinic year ago, is significantly cheaper. But relative to some of the offerings, we’re already seeing over the counter, we’re actually more expensive. We’re becoming the clinic from a price point point of view. But I think it’s not just the product, right? It’s also a service, it’s also the experience. And what I told all our professionals is, you know, we’re proud to have you, we believe that you are a foundation and a pillar, you know, that we’re going to be successful, right? Because some customers might not need it, but I bet that the majority of customers will benefit from getting support. Right. And, and nobody delivers better support than hearing professionals, because that’s what they’re trained at. These are people who actually care that people hear better, and they know what it takes to hear better, right. That’s the whole training, that’s the choice that these individuals have made in their life, is that they want to help people here.

Amyn Amlani 31:40
Yeah, no, and I appreciate that comment, because I think that is so so true. And I want to go back to one thing that you said that I think, again, is important, and that is the experience of the individual with the with the with the unit, and with the individual. So I could come in, and you could trust me, we put the device in the ear. And for a lot of individuals, where the the rubber kind of hits the road in the wrong way, and you end up with a flat tire is with the occlusion effect. And you all have found a way to lessen that through a I think you guys call it a I think it occurred because of a fishing fly. And it has reduced the the occlusion effect. And it’s allowed these devices to be small, which I think is absolutely fascinating. Can you share a little bit about that?

Christian Gormsen 32:31
Yes. No, this is the reason why I worked at Eargo. Right. As I said, I joined GN right at the time of resound air, I’d been part of as a consultant to them. And I think the revolutionary part of resound air was that open, open fit, right, you know, very transparent hearing, you wouldn’t block out any outside noise or very low frequency, you would amplify, you know, the frequencies that you were losing. So you would hear speech. And so one better and I think resound air was truly a revolution in the hearing industry at that time, right. And, of course, that was driven by the digital processors with feedback suppression, or, you know, all of those things. When I saw the original design of eargo, in 2014. I was like, I remember putting it in my ear and my ear didn’t occlude, right, because a lot of them, the shells, and also the receiver shells, but even the receiver domes, and no pun intended to this one, but many people will recognize it, I actually quite occlusive. So when you put them in, like, you know, it’s like wearing my airpods as I’m doing right now, and you get that occluded feeling and personally, I’ve always it makes me uncomfortable. occlusion makes me uncomfortable, because I lose my sense of surroundings, I lose my low frequency awareness. And I never had that before Eargo. So the whole concept was not just the design of the of the tip to begin with, which is much more layered, allowing air to pass through, but also the choices of material how it’s actually being done. So what people don’t recognize is Eargo invest more in tip designs than any other of the large manufacturers because it’s a bad fit in the year that makes a huge difference to the perception I think the industry has unfortunately gotten down to very generic domes and so on which would do a great job of occluding your ear but again, that’s no different from a headset. But then you become reliant on the microphones or have to compensate for that you don’t actually leverage the human anatomy and the original thinking of the inventor of the Eargo Flexi fiber was an ENT surgeon and what he really wanting to do, you want it to create a healthier and a healthier meets air circulation. air can circulate so you don’t get that heating sensation you do when you occlude your your because you’re you know you actually Heat up the inside of the ear. He also wanted to do it so that when you pulled out the hearing aid, instead of pushing in your wax and debris, you would actually pull it out. So it kind of worked as a, as an ear cleaner concept. So his whole original concept I just broke it off was just the very, very tip. And that was sort of his invention. But he ran a patent on then his two sons, and his one son and his friend, basically came up with the electronics package, you know, can we build an electronic package microphone speaker processor that would allow for sort of modern audio processing. But that was the whole foundation of Eargo. And I think what we’ve done since then, has been, you know, we actually recruited the former CTO of Starkey. Starkey has always been a world leader when it comes to in ear technology. So we recruited him into the company, like how do we develop the very best setup between like the physical fit, as well as, of course, the processing package. And that is what your goal is, but it originates out of the the passion to create a healthy ear, that would allow air circulation, not suppress low frequency, background noise, and so on, which gives us our sense of awareness. And then still create a good fit and the year so that you could deliver audio.

Amyn Amlani 36:34
That’s incredible. And so as you’re talking about processors, you have, I see, I believe it’s for products that are available on the market. You’ve got the Eargo 6, the Eargo 5, the Eargo, Neo HiFi, hi, Fi excuse me, and the Eargo Max, can you talk a little bit about your products, please?

Christian Gormsen 36:52
Yeah, no, no. So the products is, like we said a year ago, six is our sixth product. So we went to a to a very simple numerical, I think, again, we started off wherever industry started coming up with all sorts of creative names, but doesn’t ring a bell to anyone but the engineers and the product marketing teams, right? And it’s like, why are we doing that? You spend so much power naming a device, that’s what really matters is what does ego stand for? And ego stands for? Unique? You know, like you said, reimagining, hearing, wellness, right, that’s what your goal is. And it’s just, it’s not just the product, it’s also the service and everything we talked about, as like, why don’t we just name them numerically, because that’s something that I think nobody has done it any better than our friends from Apple, right? You kind of know, the the highest numbers is the latest product. And that has more features or benefits or software opportunities when the earlier products. So so that has really been the analogy. And we’ve also been focusing on creating a high cadence of innovation, because some customers are truly Reliant and they’re actually happy. And they want every time you have something new, they want that and they’re willing to make that investment because again, it’s a product you’re dependent on. So we’ve gone with a high cadence of innovation, we’ve done annual launches, since we launched a year ago, instead of, you know, three to four years between major product launches, as I think we know from industry, but then the industry offers seven different products within a family. So how do we simplify to one product style, we only have the CIC style, invisible, comfortable in the year, right? But run at a higher cadence. So we bring out new innovation improvements in in processing or design improvements, or tip improvements. All of these are aspects that we we upgrade on not necessarily all of them with every product launch. But when do we have something meaningful to introduce to the customers, right? So so you’re gonna six is our latest, we launched that this year, back in January, right? A Eargo, 5 and 6 are the same hardware platform. So same hardware, but you know, upgraded algorithm package from five to six. And I think another important piece of a year ago five with this whole platform, we moved from relying on an external processor or algorithm package, right, we had been sourcing that to our in house algorithm package, right, so that we now have much more control over, you know, environmental adaptation, or we call it adapt, right or tuning we call it sound match, right? But all of these algorithms are, you know, designed and developed and optimized to our specific product design. But we change that than five. So Neo hifi was an earlier generation, it was a contact based charging had more of an angle into it. And, you know, what we’ve kept pushing for has been miniaturization and the ego and five and six, you know, is basically a custom lithium ion battery cell that we co developed with Varta micro batteries out of Germany. So, you know, we put innovation into all of them, but we want to make sure that every product stands for invisibility, right, you know, good sound quality, and that the sound quality is improving in every single release we make. Of course, the sound quality can also be improved through the chip design, through various things, you know, how we adapt the presets, all our products come preset, so they work out of the box without a mobile connection. Because some people actually want that, right. Some people want further personalization and want the ability to do that, you have that, but it’s not a requirement. That was also like, we want to meet the customers where they are. And if they want more, they can do more. But baseline, you know, it literally works coming out of the box, right? That that was another important aspect. Because we saw that as our opportunity in the market, there’s a lot of products in the industry, or you can say all products and industry, they don’t work out of the box, they only work if they’re being set up by a professional. And we wanted to say, and there’s nothing wrong in that. But we said we wanted to be differentiated from that. Right? That was part of the whole, you know, design journey that we went

Amyn Amlani 41:43
through. So having said all that, I you were just talking about how you have an iteration come out every year, is it fair to say that we will see a new iteration in 2023?

Christian Gormsen 41:57
Hey, we don’t want to get ahead of us but, no, we see a lot of opportunities to continue to improve the product we have and make it even better. And you know, what I love about working at Eargo is we get so much end user feedback, because we have that direct link to the end users. So yes, our ambition is to launch a new product, that’s even better set up, right. So I think it’s a fair assumption that we will be be launching new products, right? We believe that, you know, if you don’t continue to invest into innovation, you’re gonna run out of if you just buy products that are available from somebody else, then you’re not really reimagining things when you’re just trying to compete, although we want to compete, but we also want to keep pushing the innovation. So that’s an important aspect. And I can be honest, I wouldn’t have joined this company, if we were just a distribution company. You know, part of it for me was, well, we, we have the distribution side, we have the customers, but I also want to be able to really influence what the customers are getting. I don’t think hearing aids are a commodity. I think there’s I think there’s real innovation to be made. And I think we’re well positioned to do so.

Amyn Amlani 43:24
Yeah, it I really appreciate that. And, you know, as we as we move towards the back end of our, our interview here, one of the things that I’m really curious about as you’re talking about innovation, you’re talking about service, you to me, it seems like you’ve hit on all of the aspects that it takes from the person knowing that they have a hearing loss to the time that they get it and beyond. You know, how do you think that this OTC market is going to open up roads? Not only for the distributors and the manufacturers, but also for the consumers?

Christian Gormsen 44:03
Yeah, no, I think we talked about it already. Right. I think it’s, it’s, you know, hearing becoming visible. Right. So far hearing has been hidden to the clinics, which typically aren’t ideally located, right? Yes, it’s been at a Costco, but it’s always been like, hidden away, right. The advertisements for hearing has been very much like, you know, save money. Now. It’s been very sort of price driven. It’s been newspaper driven. So I think what OTC really does, it opens up for all retailers to create, you know, you know, or to talk to their customers and all retailers have some level of hearing loss walking through them. So I think hearing will become much more visible. And I think just by being visible, it’ll already trigger more thought, disk. Question. And I think the key for OTC hearing is how do we create good experiences. And I think that’s where there’s still a lot of learnings to be had. But I think the visibility, the awareness of hearing loss is gonna grow. It’s like, oh, well, if I can suddenly get it into pharmacy or into electronic store, or wireless, you know, wherever store, it will, subconsciously, be elevated from an awareness point of view. And I think that that’s such an important first step here. And when I think the other thing, you know, industry insiders are very familiar with the operators and have trust in certain companies and not trusted other companies. But let’s be honest, none of those companies unknown to any end users, right. And I think by having more reputable places where you shop, where you have been buying other things actually keyed up, I think that’s been a huge part of Costco success, right? Costco is not exactly known for, hey, this is where you’re gonna get all the best support in the world. But you know, you can trust them. And you know, if you have a problem, they’ll take care of you, and you’ll at least get your money back. Right, you have that level of trust, you know, they’re not gonna leave you hanging, right? People are concerned with online, they could be concerned with a small mom and pop. But people have confidence in that. And I think that’s another huge benefit of OTC that you’re bringing in, much more recognizable and, you know, locations that people trust, right. You know, I think we all feel that way. Hey, Oh, it must be real, if it’s there. Right. So I think there’s a lot here. But I also think, given the audience of this podcast, I think this is where I think there’s a real opportunity not to push back – OTC is happening, you know, and I’m involved in so many discussions, it’s happening. It’s coming, and nothing is gonna stop that. And I think instead of pushing back against, like, how do how do we engage with OTC right how to support that, right? Because OTC is not for everyone, right? severe losses, profound losses are definitely not. But also there’s a lot of people with mild and moderate loss who want more than then then the at least the current OTC models can provide. And that’s a huge opportunity for all the clinics there. But it requires that mindset that of not resisting the change, but sort of embracing it, and opening up and saying, How can you as a, as a practice, owner or practice participant? How can you engage in this right? How can you potentially work with these outlets, and, you know, it opens up on new revenue models, I think there’s a lot of exciting things here that are happening. From, from a provider point of view.

Amyn Amlani 47:51
Yeah, and I’m gonna, I’m gonna file this away christian and come back to you in a couple of years and say, you know, we had this discussion, and we were predicting, or at least having a discussion of what we might see down the road. Let’s go back and listen to what you and I talked about and see where we’re at. I hope you’ll take me up on that offer, you know, a few 18 months or so down the road? Where as the as the market has an opportunity to evolve itself?

Christian Gormsen 48:15
Yep, no, that will be fun, I would enjoy that. And that’s what I’m telling my team here. I say, hey, the world, I literally had a discussion this morning. All right. And I was like, Hey, we’re going to see a lot of turbulence the next 12 to 18 months in this industry. I think it’s true, this is not a hurricane that’s going to destroy things. I think this is winds of change, that are gonna change the industry. And it will take probably, to your point 18 months for things to stabilize, right? What happens with insurance, prescriptions versus OTC or what the CMS think. But I think these are all changed for the better. I don’t see anything deteriorating, I actually think and see things getting better. But it’ll be fun to have that discussion.

Amyn Amlani 49:02
Well, Christian, I really appreciate your time, your insights. And, you know, I’m glad we had the opportunity to share what Eargo is, because I’m not sure that everyone does. And now that they have the opportunity to hear this, it’ll at least give them one more tool to fit into their toolbox. As you know, they continue to serve the patients of today and tomorrow.

Christian Gormsen 49:25
Great Well, Amyn, again, thank you for having me. I’d love to come back. And I’d love to, you know, I think we all on the same mission here. You know, one hearing health matters, but it is really about making more people hear better. And that’s why we’re all in this industry. And we should work together on that.

Amyn Amlani 49:44
Wonderful. Thank you, Christian.

Christian Gormsen 49:46
Great to meet you. Thank you

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About the Panel

Christian Gormsen has been President and CEO of Eargo since 2016 and has served as a member of Eargo’s Board of Directors since 2014. Eargo is a disruptive innovator within hearing health, one of the world’s largest health opportunities. Eargo has a virtually invisible and easy to use hearing aid that is supported by licensed professionals through telecare. The company is also recognized as one of America’s top companies with regards to culture, diversity, women, and outlook.

Christian has over two decades of wide-ranging experiences, including a ten-year tenure as an executive at GN ReSound, a global leader in intelligent audio solutions including hearing aids. He began his career in investment banking before transitioning to McKinsey & Company. Gormsen received a B.S. in economics and his M.S. in economics and business administration from the Copenhagen Business School.

Christian is a seasoned fundraiser having raised hundreds of million $’s in private rounds as well as IPO, and speaker within disruptive healthcare and consumerization. Amongst others he has spoken and participated on panels at the following top conferences: Collision, JP Morgan Healthcare, Wells Fargo Healthcare, William Blair Annual Growth Stock, SVB Leerink Innovate Next, NEA Annual Meeting, Maveron Annual Meeting, Best Buy Health Summit, and more.

 

Amyn M. Amlani, PhD, is President of Otolithic, LLC, a consulting firm that provides competitive market analysis and support strategy, economic and financial assessments, segment targeting strategies and tactics, professional development, and consumer insights. Dr. Amlani has been in hearing care for 25+ years, with extensive professional experience in the independent and medical audiology practice channels, as an academic and scholar, and in industry. Dr. Amlani also serves as section editor of Hearing Economics for Hearing Health Technology Matters (HHTM).

 

About HHTM

HHTM's mission is to bridge the knowledge gaps in treating hearing loss by providing timely information and lively insights to anyone who cares about hearing loss. Our contributors and readers are drawn from many sectors of the hearing field, including practitioners, researchers, manufacturers, educators, and, importantly, consumers with hearing loss and those who love them.

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