Pioneering Online Hearing Care: Interview with Audicus CEO, Patrick Freuler

Audicus is a online hearing care retailer that has been described as the Warby Parker of hearing aids. With us today is Audicus founder and CEO Patrick Freuler. Patrick, welcome and thank you for taking the time to be with us today and talk to us about Audicus. Let’s start by learning a little bit about you first. Thank you so much for having me here. And we’re excited to share a bit of our know my my background is in engineering. In fact, it’s in aerospace engineering, and I spent many years thereafter kind of using that engineering mindset and approach to look at interesting companies and interesting areas within healthcare that I felt could be solved with a more, how do you say, tech-enabled approach to ultimately increase access and increase accessibility. I spent a good amount of time advising companies in the healthcare space and investing in companies in the healthcare space and among others. Like, I got a good amount of exposure within the hearing technology industry. And I think that’s also where you start kind of like realizing how many people in your own environment suffer from hearing loss and feel increasingly isolated. You see their day to day impaired, see their relationships get impaired, and ultimately have more sinister downstream consequences of leaving that untreated. And I’ve seen this with countless people within my own environment, a lot of others, my own grandmother. And it is perhaps like a topic or condition that at least when we started Audicus, that was just really difficult to solve. It was very expensive to fix your hearing loss. Right, and very cumbersome, very complicated, at least back then. And we ultimately felt that perhaps we could come up with a solution that was perhaps a bit more accessible and perhaps a bit more affordable to folks with hearing loss that would allow them to get back on their feet a bit quicker. And that’s essentially how the contours for. Audicus came together. We started in a pretty kind of humble capacity. We started about ten years ago with just a very big vision and lots of people with lots of passion and ultimately started to build a solution. Know, through lots of trial and errors ultimately became one of the most important delivery models for online delivery models for hearing care out. You know today we are based in new york city, but know colleagues that are based across the country, as well as audiologists that we work with across the country free. And we’re very proud of all the impact that we’ve had today helped tens of thousands of people get reconnected with their loved ones. And besides being able to have developed a solution that was effective, the impact was just very important to us. So we’re a company that ultimately got to where it is today simply by focusing a lot on the customer, the patient universe. A lot of what allowed us to win was centered around really putting on some white gloves and helping folks get accustomed and acclimatized to hearing technology, especially since a lot of people came to us for those products for the very first time. And we couldn’t have gotten where we are today without that very much laser focus approach to customer support. So that’s essentially how it all got started. That’s what got us here today. That’s a wonderful. story just for the audience. You all are one of the pioneers when it comes to the online delivery of hearing care. You were doing this well before the OTC discussions were even being had, and you’ve been successful in what you’ve been doing, and you’ve done that through a wide array of products and service delivery. And that’s what I’d like to get into next is what are some of the products and things that you all are providing to consumers through this mechanism? That’s a really good question. So the first product that we offer to people is our hearing test and hearing screening tools, which allows you to basically learn about your hearing capabilities at a very in a very simple and very fast manner. Right. A lot of the first steps that you need to take in getting your hearing elf back is firstly, understanding. Better where you stand, right? And access to diagnostics has traditionally been more difficult. So that’s the first product that we offer. And all starts there, right? A conversation with our product Specialists or the guidance towards one of our products is always informed by how your hearing screening ultimately looks like. So that’s the first product. Now, in terms of actual hearing Products, we offer a pretty important range of devices. We have products that are traditional RIC devices with a lot of features that you would be expecting from a device from Direct Bluetooth streaming over to remote calibration capabilities and rechargeability. There’s products that have become very so. Sophisticated from a speech Intelligibility standpoint and I would say like our top of the range devices are basically encompassing all of that. Right. We do have devices that also go inside of the ear so we have completely in the canal products that are more discreet and perhaps address cost customers and patients that are looking for these types of solutions as well. And there’s a few models that sit in between and can kind of cover the range. Right. I think at the end though a lot of what ultimately decides a product selection is really a more holistic understanding of what you need. Right. It’s not just features features inside of the product. It’s ultimately like also. A life you live right. And how your hearing loss ultimately is shaped right. And what your budget constraints are and ultimately how experienced you are with the product. And that kind of holistic understanding of someone is what our product specialist and audiology team does so well. Right. We build a relationship when you so we ultimately can tailor the right solution for you. Right. In our experience and we’ve been around for over ten years now, in our experience, the advisory piece is so important and it’s very difficult to just dispense hearing aids without without proper guidance. At least that’s what people learned along the way. No. And that’s well said. Just to clarify for the. Is not only do you have an online hearing test, but I believe I read somewhere that you also accept third party licensed hearing tests. Is that correct? That’s correct. Yeah, we accept that as well. Okay. An individual can come online, have their hearing tested, or have their hearing tested somewhere else and submit those results. And then I’m also looking at where your service offerings take place. Not only are they online, but I believe you all that partnered with Albertson’s. That’s correct. There’s some physical presence that we also have put in place. You can also come to our headquarters in New York and we have our clinic here. So if you need to see someone face to face, we. Can offer that. And I would say part of our strategy going forward is ultimately to also build far more of a physical presence over the next couple of years so that both those customers who want to pursue an online option but require or wish to have also physical touch points can do that as well. And so a lot of that effort is currently being obviously built around the latest over the counter hearing aid regulations, which has enabled a lot of that physical footprint to just grow much faster. Right? So we’re definitely looking forward to building what we call an omnichannel strategy that just covers a lot of these bases. I think that’s the benefit of having been in this market for ten years. You understand the journey, you understand the different. operational purchasing behaviors. People come in over online, people can come into the store. So you have either a mixture or a segmented model that’s omnichannel again. And then on top of that, you mentioned a couple of things, accessibility, so we kind of touched on that. You also have the affordability piece because you have something called an Audicus Plus member, and then you’ve also partnered with some groups about payment plans. Am I correct about that? That’s correct. And I would say our Audicus Plus programs are incredibly exciting because it is pretty much the first of its kind that the industry has seen and or at least in that form. And it basically is a model where you have a small activation fee for a hearing aid. And then thereafter, you can pretty much get on like a monthly plan with us, where you get access to our audiologists. You have all the care and hygiene utensils to be able to maintain the product and at the same time, and that’s what gets a lot of people ultimately excited, is that every 18 months, or you can basically send the old hearing aids back and we equip you with the latest model. So you’re always on the latest technology standard. And it’s a model that’s incredibly flexible because you can start with a very small kind of initial hurdle that’s orders of magnitude smaller than what you’d otherwise have to pay at an audiologist. And for whatever reason, you don’t like the products or you don’t derive. From them in a couple of months time, you can cancel anytime and just send the products back. So what we really wanted to design here was a model that would completely pulverize the price hurdle to trying hearing care, right, and really getting you accustomed with a product, getting you to understand how much it can really benefit you, without all the scary price hurdles in the process and without the scary kind of contractual obligations that come with it. It’s been very effective, and we’re very proud of the number of people that were able to help with that. I think it’s also perhaps also just saying the fact that this kind of more hearing as a service model, as we call it, really highlights and elevates the fact that. At the end, we are about that. We’re about service. We’re about really developing an ongoing relationship over many months, and that’s ultimately what we do best. Yeah. And I think you bring up a really important point, and that is that hearing it’s a service. So you’re providing relational types of intervention to help this person function better in their daily lives, reduce some of the social isolation that they exhibit, that they undertake, and it allows them to become part of their community or part of their environment again. And you all not only provide those devices, as you said, you also have other services. So if I’m not mistaken, you can be counseled through your platform. There’s repairs you talked about. The opportunity to have the latest technology within an eight month cycle of supplies. Can you talk a little bit about that? Because I think that’s really important, that you’re servicing not just the product, but the entire evolution of that person’s journey. Yeah, 100%. Look, I think at the end, from the moment someone takes a hearing test on our site or calls us for help, we’re building a relationship. Right. And these are people with stories, with lives and context that needs to be understood to be able to tailor a solution for them. Right. And I think this relationship that we built from the ground up doesn’t end when someone receives a hearing aid in the mail. Right. It’s something that. Is ongoing. You need to help them get up to speed onboard them, make sure they know how to maintain the products, how to derive the best use from those products. And this is something that can take many weeks, times can take many months. And I think it’s really important that people know that we’re here for them, know for the duration, for the lifetime of the product. This is also the reason why we have so many people that purchase from us come back for their next pair. I mean, we’ve had people that are now on their fifth pair with us, like, folks that started with us, like, ten years ago. Okay? And these are also folks that over that time span have developed different needs and different living conditions, right? And therefore. Also need different types of products. Right. We’ve also seen people that started with one product and tried that for some time and felt that it wouldn’t fully meet their day to day needs and needed a different product. And so we helped them in these types of situations. Totally get to a solution that works. Right. And I think that’s something that our team does incredibly well. Right. It’s ultimately about finding a solution. It’s not about dispensing hardware. It’s about solving your problem. Right. And so I think the company, if you look at how it stacked up, the vast majority of or the biggest, how do you say, distribution of colleagues that we have are in some form of product specialists. Or support function because that’s ultimately how we built the company. And we are very stringent on really bringing on folks that have that empathy and can build that connection and ultimately want to be solution focused with whoever they deal with. Very important tool. I’ve chipped away at that and gotten that right over the course of this past decade. Yeah, I think the one thing that might be on people’s minds is OTCs are now part of our ecosystem. You’ve been doing this direct to consumer model now for about a decade. You’ve certainly learned some things and you’ve been successful doing it and you’ve continued to be successful even though consumers now have direct access to the technology and. And the services, either by seeing a professional or doing it by themselves. So having that experience, what can you share with our colleagues who are servicing other hearing impaired individuals about the landscape, given your experiences? That’s a really good question. I think so. Firstly, we think that the OTC development is a really good one for end consumers. It’s great to have more access to hearing products. Right. In more places, it’s more ambiguous, it’s more affordable. More people that were on the fence about doing something about their hearing now can give this lot right. Kind of tiptoe into that this is. Obviously still a very recent development. And what we’re seeing out there is a lot of companies trying really interesting things. You’re seeing hearing aids in pharmacies, you’re seeing hearing aids in consumer electronic stores. You’re seeing hearing aids online, right? And you’ll probably see hearing aids being offered in many more kind of outlets over the next couple of over the next couple of years. We count ourselves as part of that development, right? So overall, net net, I think OTC is a very important and very good thing for the end user net net right now, what we’ve learned over the years, though, is that, you know, most people that need hearing care skew a bit older. Most people also buy their products or buy. hearing aid for the very first time through these newer models. Right. And as a result, there is perhaps more education that is needed, right. Education around where you stand with your condition and your life, but at the same time, what the products can do for you and really managing the expectations and managing how to maintain that, I mean, maintain the product going forward. And I think that aspect, like the kind of assistance and guidance aspect is not going to go away. I think that aspect is going to still be very important. Even if you have newer channels, like newer retail channels. That an offer now hearing here. So I think there will be people that are okay buying it off the shelf and never having to deal. With someone ever again, and that’s okay. If that works for them, that’s okay, provided they stay healthy and everything’s in a good place. I do think, though, that perhaps the winning models are ultimately those that can kind of combine both, like easy access affordability, but still have a strong kind of support and guidance backbone that you can fall back on. I agree 100%. Having said that, and again, I agree with you 100%. What’s in the future, can you share anything that Audicus might be working on or can you reveal anything that you see in the forefront here? Yeah, sure. I think for us, there’s, like, a couple of I think there’s a couple of, like, important areas that we feel we we ought to be investing in and building a stronger presence and. Yeah. The first one really is perhaps like entering and expanding in this OTC landscape with a model that is, like I just mentioned, bringing those two important components together access and affordability and service. So over the next couple of quarters and years, we will be building that type presence with bigger retail partners and ultimately also built that on the back of the experiences that we’ve had over the past ten years because we’ve made a lot of mistakes along the way as well. Learned a lot of things on what to do and what to not do. And I think right now there’s a lot of retailers that are looking to enter this category worry without that experience. Right. And I think this is something that where we can add a lot of value and. That’s perhaps like the first big push into retail-assisted retail, as we call it. And like, when I say assisted retail, it’s not just assisted at the physical level, but ultimately being able to combine this with online and virtual assistants as well. Right. So really having those two worlds come together. So I think that’s like one big push that is going to be important and is very much aligned with our mission. I would say the second piece that’s very much aligned with our mission is really driving our Audicus plus subscription models forward, because I think we’re now dealing with a consumer segment that is quite different than they were ten years ago. Right. Ten years. Last ten years. We’ve seen a lot in that demographic. Right. The average 55 plus year old is a lot more astute with technology. They’re far more, how do you say, accustomed to dealing with health in a more kind of remote and digital manner. And I think those two, three years of pandemic living have definitely accelerated that as well. Right? And so you’re dealing with a customer segment that is perhaps also more okay with or has perhaps different expectations and higher expectations on how hearing care should look like. And that’s why I think our super easy, very kind of carefree type of subscription models can be a very, how do you say simple way, affordable way for people to get going, which is also aligned with how think I would say the third piece that is very important for us as well is just working more closely with managed care organizations. And benefit organizations. And I think that’s also part of the healthcare ecosystem that has become more and more activated and more and more interested in hearing care. Right. And if you see the number of insurance companies that offer some form of hearing aid benefit now compared to ten years ago, it’s a very different last scale, which is very good for consumers. And so I think it’s done wonders to open up the markets and help more people get back on their feet. And I think there is a lot of opportunity for these types of, how do you say, bigger managed care organizations to ultimately embrace models like ours. So I would say these are the three areas OTC retail expansion with an assisted model subscription. And manage care. I agree 100%. It’s going to be interesting to see how hearing care changes. And it’s going to be a different world in a different place. In ten years, we can come back and look at this video and say, how did Patrick, did Patrick have a crystal ball? And was he able to predict what was happening in the future? And I think to a certain degree, a lot of what you’re saying will come true in the future, because that is exactly where it’s headed. There may be other things that are coming that we don’t see yet. And individuals like yourself who have been ahead of the curve will be able to take those things, manage them and then get those out to the consumer in a way that benefits them at the end of the day because people don’t ever hearing it because they look good on you. They use them because of the functional benefit that they provide. Exactly. It’s about the benefits. Right. And I think. Important is that at some point we get to a stage where just by having more dialogue and more exposure and also just like, more people being okay wearing hearing aids or just wearing hearing aids to start off with, where as a result of that, the product becomes less stigmatized as well. Right. And once you can get to that point, you get a bit of a flywheel effect where you solve or dress your earring in a far less kind of psychologically taxing way. And just a way like at some point, I don’t know, 100 years ago, it was psychologically taxing to wear glasses. Now it’s it right. It’s not a problem or less of a problem 100%. And with that. You hit the nail on the head. Ten years from now, we’ll be talking about the hearing care market in a very, very different light. I think we’re going to see a downward push to where younger individuals will be wearing it, because they’re used to having that technology in their ears. And the way that the algorithms and the engineering is advancing at such a high rate, the ability of those devices to do the things that are hampering communication, I think, will be overcome in a better capacity. And folks who were just talking about hearing aids like they talk about eyeglasses and they’ll see the it’s. It’s a credit to you and others who have foreseen what these opportunities are. And so, Patrick, wish you all the best of luck. We’d love to have you go on in a couple of years or a couple of months to see how you all have grown. And again, we’ll pull out the old video. That we’re recording now and say, did Patrick have the crystal ball? And then we’ll recreate the crystal ball and see if you can predict the future again. Yeah, fingers crossed. It’s been my pleasure. And thanks for being on. And we hope to have you on again. Awesome. Thank you so much for having me. It was great to be on this. You. Thanks.