Acquired - Special- -Why Now- for Digital Health (with Levels founder Josh Clemente)

0:00So I would get brand flakes and eat it by not only the bowl full, but also like dumping and smoothies and stuff. And it is probably like the single most reactive substance I was putting in my body. It was always way above the diabetes threshold. It was like it was crazy. Welcome to this special episode of acquired the podcast about great technology companies and the stories and playbooks behind them.

0:36I'm Ben Gilbert and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs in our venture fund PSL Ventures. And I'm David Rosenpill and I am an angel investor based in San Francisco. And we are your hosts. Today we have a special episode that dives deep on the dynamic digital health ecosystem, especially with the lens on the complete upending of the landscape happening with companies going direct to the consumer.

1:04Today's episode primarily centers around levels, a new company that's on a mission to make all of us aware of our metabolic health aka track your blood glucose with a real-time wearable sensor known as a continuous glucose monitor or CGM.

1:21We were introduced to the company by two of our LPs and members of the acquired community shout out to Michael Mizrahi and Ben Grindel. One of our favorite things about the incredible community that has developed in Slack and on our LP calls is that we get to learn about some of the most interesting companies in our ecosystem today. We are joined on this episode by the founder of levels, Josh Clemente.

1:44Josh has a fascinating background, even before starting levels from his days as an early engineer at SpaceX, where he worked on Dragon Capsule as the lead life support systems engineer, and then afterwards at another Elon company Hyperloop One. If you are wondering how the business models behind these new direct consumer healthcare companies work, why the time is now for this revolution, or perhaps you just want to be one step closer to being a cyborg, this episode is for you.

2:14All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, LaGora, the agentic operating system that is redefining how the world's best legal teams work.

2:27Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Legora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm.

2:53for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Lugora's bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

3:23And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early LaGora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months. Truly insane numbers. And that is the real test.

4:15Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you now onto our interview with Josh Clemente from levels. So Josh, welcome to acquired. Super happy to be here. This is going to be so fun.

4:45We're excited to have you, David and I are both right around the one month mark. David, I think just finish using levels for his first month. I'm about to cross that threshold and so many insights, so much fun to learn all this really cool company you founded. And I think you guys are maybe winning for as in the startup category for market share of acquired community members as employees. Super, super fun to do this with you.

5:14Well, that's a trophy. I will hold Bradley. Well, Josh, I'd like to start with your background because before levels, you were doing some crazy interesting stuff. And I want to dive in to unpack some of that a little bit because, you know, we would like to have you as a guest on a quad, even if you hadn't started levels. So let's start in sort of the SpaceX and Elon chapter of the world working on Hyperloop. First of all, can you explain to us what you worked on at SpaceX? Yeah, I entered SpaceX as a manufacturer engineer. So I was fresh out of school. I only really wanted to work for Elon when I had graduated and I did not have, I didn't have that job lockdown. So I actually sold used cars at CarMax for like three months and just kind of like hung on to hope and work my network like crazy to try and get in.

6:03Wow, did you, did you call the email Elon? Like how I called emailed everyone, including recruiters at other Elon companies like Tesla. I actually got an internship at Tesla first and then they got DOE funding right as I was about to join and they shut down the design office I was going to work at and relocated and basically we're like, sorry, we don't have a space for you. So we'll do this again sometime. And so I was just like, well, how about SpaceX, you know, can you help me get in there? And what's crazy is that I actually out of pure coincidence, my uncle met Elon. He ended up working with Tolula Riley, Elon's former wife's father, and he met Elon. And I was like, oh, my nephew is really interested in your company. He didn't really know who Elon was, had no context whatsoever, and just dropped a name. And I don't...

6:52really know but like at some point that filtered down and I ended up getting a phone call back and I think my uncle like put in beyond just that in person but put in like an email good word as well to try and get me in there and anyway long story short after three months of selling cars I got a call from SpaceX and they were like here's an entry level manufacturing engineer job which is primarily focused on taking the concepts that have been designed or like first article has been built and tested and then getting those into production so figuring out you know we were a small company when I started with I think I was employee like 678 and it was just a big empty building which is 10 times smaller than it is today yeah so when I left it was probably around 5500 people and it's now yeah easily 7000 and growing so

7:42It was very much the Wild West days. I mean, you're taking these components that have been designed and tested, but you need to get them into spacecraft form and launched. And most of the stuff had never been done before. So it was all initial systems. And as a manufacturing engineer, it was focused around designing process, training up technicians and putting work instructions in place.

8:08And then also just kind of like building yourself. And so I spent a huge amount of time in that first stage in the factory, like on the factory floor, I was kind of like a glorified technician and then ended up learning a lot from the existing technicians and just like the hands-on process of building aerospace components. And I spent a ton of time down at Cape Canaveral just getting launch articles. So like once the vehicle was prepared for flight, it was then integrating all the final systems.

8:35putting it through wet dress and static fire and then watching it go to space. So it was just pretty wildly educational and from there I moved into what's called a responsible engineering position. You're responsible and to end there is no other individual to point to and say we didn't succeed. It's your fault. You know, it's the buck stops your type role. And so I worked there on a few structural systems and Finally, about halfway through my career at SpaceX, we had succeeded at getting the cargo vehicle through its COTS program. And we were starting on the human rated program at SpaceX. And so this required a life support system to be developed. And SpaceX had obviously no human rated experience. And I was one of the first four employees who had the opportunity to work in that department. And I look at that project as...

9:28For sure the pinnacle of my experience at SpaceX. I mean the team was just unbelievable. Some of the best people I've ever met and had the opportunity to work with and I got to lead the pressurized life support systems team. So this was developing the oxygen breathing system. So the pressurized tanks that go in the vehicle that that carry high pressure oxygen distributed regulate it down to lower pressures into the cabin into the space suits sensing oxygen concentrations keeping the cabin at like environmentally safe pressures and compositions the fire suppression system the docking adapting system that that pressurizes kind of the space between international the international space station in the dragon capsule after docking kind of all of these pneumatic pressurization mechanisms and so I was able to lead that small team amazing team through to completion of the critical design review phase.

10:21That's great. And as we know now, you know, Dragon Cargo and Dragon Crew have both successfully gone up, so it must be crazy cool to see, you know, your work and action there. Yeah, I mean, it's pretty surreal to be honest with you. It felt like an impossible amount of time away always. And then all of a sudden, it's happened and it worked. And it's just such a huge, you know, it's how bad. The stress is still high. There's going to be another flight with four more astronauts later this year.

10:46So the stress is still high every time because each system is unique, but as SpaceX develops more experience with reusability and reflight, it just kind of, it allows kind of some more confidence and breathing room, I feel like, mm-hmm. Okay, so Josh, before diving into the next chapter of your career and founding levels, we got to ask like, Is there a fun Elon story that you've got or something crazy that everything that happens when you're working at SpaceX, I'm sure is crazy, but anything you want to share, I think one moment that always just reminds me of the kind of the unique culture of SpaceX was really the first major launch. So I got two SpaceX just after they flew the Falcon 9 1.0 rocket for the first time. So basically SpaceX

11:37failed three times to get the Falcon 1 rocket into orbit. The fourth time it was successful. Then on the first try, they got the larger Falcon 9 rocket into orbit. So I got there just after that success. So the second Falcon 9 rocket was getting ready to launch. And you know, at this time, the duration between launches was on the order of years. And so everyone was working full-time, basically hand-building a vehicle. So we had this machine, this entire like integrated first and second stage on the launch pad. And there was an air conditioning vent that basically conditioned the interstage. It's basically the hollow space between the first stage and second stage. And the second stage sits on top of it and has this very long vacuum nozzle. So it's designed to give better efficiency to the rocket engine in the vacuum of space. So it's very long and it's very, very thin. It's thin enough that you can tear it with your fingers and it's metallic.

12:35or it was metallic at the time. But it's very well supported, so the skirt it's called is supported by these rings. And so this air conditioning unit was blowing a high volume of air into the inner stage to keep it purging. And we noticed during inspections that the skirt had actually been fluttering in the high pressure sort of air source, and it actually torn. And this was a really big problem, of course, for a number of reasons.

13:03debris and also efficiency loss in the engine. The typical approach in old aerospace would be break everything down, de-integrate, push the schedule out, analyze everything, determine why this failure happened, press release, redesign. The SpaceX approach was Elon calls up one of the lead technicians in the entire company. His name was Kelly, and he used to basically work on airplanes and was an airplane mechanic, but the guy was just an absolute machine and and brilliant and Elon convinces him to get on an airplane to Cape Canaveral with a pair of shears go up in an extremely tall genie boom this guy is terrified of heights by the way crawl through a hole in the interstage which is about yay big into an integrated stacked rocket right so you're 100 plus feet off the ground there's a second stage above you and

13:57You got like essentially bombs below you and bombs above you. Yeah, no, it wasn't fueled up at the time, but certainly was. It was intimidating. I'm sure it to say the least. And then he trimmed the lower edge of the skirt off, removing the tear in the nozzle. And we did a little bit of propulsion analysis to ensure that the second stage would have what it took to get to orbit, even with the loss of efficiency of the smaller skirt.

14:23but you know basically Kelly hand trimmed this thing in the interstage walking around on the dome of the first stage and climbed out and we launched and we successfully got to orbit and the whole process was like I mean the whole company ground to a halt when this happened it was a huge scary situation and Kelly pulled it off part of the funny thing was that as an airplane mechanic Kelly was like this is a little bit scary actually but he was terrified to fly like he just he hated airplanes I think he's seen too much And that was the biggest problem was like convincing him to go up on the rocket was actually not the hard part. It was convincing him to get on an airplane to go to Cape Canaveral in the first. But, but I think it just speaks to the scrappiness of of everything back then. It was really wild west. Yeah, I'm sure you've thought about this a lot, but why does that work? Like SpaceX has worked and it's

15:11been because of a thousand or 10,000 of decisions like these, was the industry just too conservative before? Or is there something different about SpaceX that makes it possible for them where it wasn't possible for people before? Definitely. I mean, I think that this kind of goes to psychology generally, but people are either just like this scarcity syndrome that if you have something, you fear losing it. And if you don't yet have something, there's nothing to lose. And so SpaceX wasn't, we have nothing to lose mentality for it.

15:41the entirety of it's kind of early days and so it's basically like we're either going to run out of money and not get this contract and cease to exist or we're going to slice this thing off with scissors and try and and that's kind of like the the approach was we were always one launch away one launch failure away from from losing the company you know until probably 2014 once Falcon 9 1.1 flu we got a ton of orders on the books and things started to smooth out a little bit but up until then it was you know, Elon, every single opportunity he got was telling people, look, you personally have to succeed. And if you don't, 2000 people are going to lose their jobs, including you. And I mean, he would, he would not mince words. And I think that old aerospace had kind of been resting on its laurels in a sense, but also combined with the failures of the shuttle program was in the political nature of the, you know, the entire program.

16:36was worried about losing what they had. Any failure was career ending for a politician, and any failure was potentially career ending for the engineer. Failure is not an option in old space, and it was always an option for SpaceX. That proliferates the culture all the way through to live streaming explosions of Starship. No other program does that because it's like airing your dirty laundry. That's such a good point. We can talk about this forever, but I got to hear about how levels came to be. So I'm wearing a continuous glucose monitor on my arm. It has a patch with your logo over it. Like catch me up from you were a SpaceX engineer to you decided to have David and I sitting across the internet from you wearing this. How did it come to be? It kind of started at SpaceX and partially in a good way, partially in a bad way. But I kind of hit a total burnout wall in the late

17:32Part of the life support program I was working on and you know in retrospect I was burning the candle in multiple directions at once and you know certainly was Just working was not managing stress sleeping very poorly my average sleep was like probably four to five hours and my approach to like maintaining wellness was Working out as hard as possible as a crossfit, you know, but I was a trainer, but I didn't really train people. I would just I would train myself I gotta imagine this was pretty common at SpaceX, so at least it doesn't look like you liked it much to this day. Yeah, there's definitely one of the, you know, it's a classic, I think, startup environment where everyone wants to be the hardest worker. And you give a bunch of people who are who don't like to fail an impossible deadline and they're just gonna, like, the failure mode's gonna be them. They're just gonna, like, physically burn out trying to succeed. And that's what it was like at SpaceX. And I think it still is to some extent. But yeah, I was just...

18:30You know kind of doing I had been doing this for my entire career at SpaceX, but I think there's a compounding return and we can touch on this you know as it relates to metabolic health in a little bit, but I had gotten to the point where I woke up one day and was just like I think I have a terminal illness like I have zero energy my mood is always low. I'm not I'm not the optimistic like sort of happy person I think I am anymore and I don't know what change, but I just constantly feel irritable and I am struggling to make it through the day in terms of not just professional performance, personal performance, just keeping my siblings from hating me and my significant other from walking away. It was that degree of something is wrong here. And I was getting these bouts of fatigue that were truly symptomatic. I would be 11, 30 in the morning and I would feel this shakiness and cold sweat and a whole body tingling or itchiness type sensation.

19:29And I would just need to like sit down. And so I was like, am I about to pass out? I had never passed out. I didn't lose consciousness or anything, but it was just, it was a very real sensation. And so I'm describing this to my doctor and we ran a bunch of blood panels, kind of the standard stuff, and nothing came up. And so anyway, this was kind of going on in the background. And I was also working on the life support program. And part of the, you know, we were designing a super high pressure oxygen system to deliver breathing gas to you.

19:58to the crew. And, you know, something that divers and astronauts could potentially face in a failure scenario is a high pressure, high oxygen concentration environment. And what actually happens there is because oxygen is such a reactive molecule, you can generate a huge amount of oxygen toxicity in the brain. It's called central nervous system toxicity. And this can cause neurological shutdown. You can cause seizures, potentially even death.

20:23So this is why divers are limited. They can't really just breathe pure oxygen underwater forever. They only have a short period of time. So I'm kind of thinking about failure scenarios, like how do we avoid anything like this ever happening, obviously, but also what does happen? And I read a paper just randomly in my kind of side research from Dominic Diagostino, who's a ketogenic researcher at University of South Florida. And this paper described a series of studies he did on rodents.

20:53where they fed rodents a ketogenic diet actually gave them exogenous ketones as well as feeding them just a high fat diet which for the uninitiated is basically almost zero carbs zero sugar the only macronutrients reading are fats and proteins exactly so in a certain macronutrient ratio which is very high fat your body will generate these macronutrient bodies called ketones which are essentially a water soluble fat molecule and that's crucial because water soluble means that it can cross the blood brain barrier and provide energy for the brain so typically the brain is fueled by sugar glucose solely and traditional fatty acids can't cross that barrier so ketones can so they are a brain energy source and they you know in this study he gave these rodents a ketogenic diet and Then submitted them to a high oxygen high pressure environment and the result was that these these rats could live up to five times longer without seizure

21:51just because of the ketogenic state they were in. And that completely blew my mind because up until this point, I was a calorie is a calorie absolutist. And it didn't matter what you ate. If you worked out hard enough, it was all just energy in the end. Right. It's all thermodynamics, you know, that you're in a closed system. So why should, you know, like you should be able to burn it off. Right. Just an equation. And so there, although this wasn't in humans, I'm obviously extrapolating to humans and thinking, wait a minute.

22:21So the macro nutrient selection here is giving these rodents superpowers. They can live five times longer in a deadly environment. What is going on here? How is this possible? And that was the first moment where I started to think what superpowers can be unlocked with dietary selection and what am I doing to select for diet? Is there any objective data that I'm using to guide my choices? And I was very unhappy by my findings, which was that...

22:48I have the only reason I eat things is because they taste good or because somebody else told me I should eat them. Like there's no data. So I started to just self-experiment. And this is like, you know, as I'm approaching the end of my time at SpaceX, I'm still getting these like extremely weird kind of stress induced or I don't know, they were symptomatic episodes and trying to figure out what's going on. And then I come across this paper and I'm like, maybe there's more to it than just the gym. You know, I work out really hard.

23:17I've got a decent amount of muscle I can run fast, but I don't feel healthy. Clearly there's a difference between the way you look and how healthy you are or perceive yourself to be. That's when I started self-experimenting. My goal is to understand where my energy is coming from and how to optimize it. The primary energy molecule in the modern human is glucose. It's the sugar byproduct of carbohydrate breakdown.

23:44and I started, I got a finger prick blue commenter, it's called, it's this little device you prick your finger, bleed on a strip and you can get a single data point. You're in the equivalent of Elon on the plane back from Russia building the Excel spreadsheet. Say it like, hey guys, I think we can put something in order for a lot less money. Or to be even more obnoxious about the metaphor, like it's as if Fitbit hadn't been invented yet and you're just like, hey, are you walking right now once a day?

24:13Right. Yeah, it was it was like What is glucose was it was step one and then okay? How do I gather this information into like an insight? Basically, I'm having these energy issues and The energy is coming from these macronutrients I'm not in a key to ketogenic state which means my energy is either coming from glucose or it's coming from fat Those are the two sources that it can be coming from and I can measure glucose by buying this little device at CVS and pricking my finger So I'm going to try to learn something here Started pricking my finger got very obsessed with it started doing it like 60 times a day at one crazy point and then I was plotting the numbers in Excel to like kind of emulate a continuous data source The problem was at this point I had started sleeping more as I was tapering down my my SpaceX work and and moving into hyperloop to can touch on in a minute, but so I'm sleeping more I am in meetings I'm doing work, you know I'm working out during those time periods. I can't prick my finger right so I've basically got

25:11point cloud in the morning, point cloud in the evening, nothing in between. And it's not making any sense. It's just like, it's stuff, but it's not helpful. And then I read a book called Wired to Eat, which talks about continuous glucose monitoring. And I was completely unsophisticated about biosensors. Would they on the market yet? Or was this still before the Libre index? So, you know, CGMs, continuous glucose monitors have been available in, you know, kind of trickling from the research, like lab environment through to just therapeutic research studies. The first one kind of came out actually it was an early Dexcom or a Medtronic. Those came out in the kind of 2006 to 2010 time frame. So they've been out for some time, but there hasn't been a mass market move until right around this time. So 2017, the freestyle Libre from Abbott hit the market. And so this is 2017. It was like just coming out. And the price point was good. And there had been Dexcom EG5 and G4 prior to that, but they were like, you know,

26:09a thousand plus dollars a month minimum and very hard to get. Yeah. And deckcom is its own, it was a startup, started to build a continuous glucose monitoring device for a diabetic therapeutic purpose. Exactly. So at this time, you know, really even now, all continuous glucose monitors have been developed for the sole purpose of measuring blood sugar so that you can manage diabetes.

26:35Dexcom, they only do one thing. They develop continuous glucose monitoring sensors for type 1 diabetes. They're starting to move into type 2. The difference between type 1 and type 2 is that type 1's an autoimmune condition primarily where the pancreas stops producing insulin. An insulin is the hormone that is, it acts like a key to open the lock in your cells and let glucose in. So insulin's a signaling hormone.

26:59When the pancreas stops producing it blood sugar levels start to go very high and it can be in when glucose gets very high Similar to that oxygen scenario. It's a reactive molecule. You start getting tissue destruction So type two diabetes is considered more of a chronic lifestyle illness So this is where over time you break down the insulin glucose feedback loop and either your body can't produce enough insulin to keep up with demand or you're just Kind of outpacing the production of insulin and you create what's called insulin resistance by amplifying demand to the point where your cells stop responding to it And when you say breaking the feedback loop, this is like I have actively made lifestyle choices in what I'm eating where like the natural

27:44feedback loop in my body of, hey, I should be producing this much insulin based on what the macronutrients that just came in were like, that just gets all out of whack and you can no longer rely on the natural system to function anymore. Yeah, it seems to be actually potentially an adaptive response where your body's kind of designed, we've been historically in a certain range of blood sugar values. And that's where you want to stay. And if we're constantly Jamming more glucose into the system than it was kind of designed for the you require more insulin than than you're designed for so the devices have been developed For this condition for for diabetes specifically, which is very acute type one is very acute type two is kind of a longer, you know sort of Time frame where it's a specter. It's a spectrum exactly it can get extremely acute totally I think they're both acute frankly, but type one is it's a situation where if you

28:40If you don't use insulin exogenously injected, the damage is happening much faster and the effects are very immediate. Type 2 tends to be semi-controlled in the sense that glucose levels won't go as high because there is still some insulin feedback. So this is where the devices have been primarily focused. So 2017, I read about this and I was like, oh man, I need one of those. I'm trying to emulate this with fingerprinting my fingers are black and blue and I still haven't discovered anything. So I went to my doctor and I was like, Hey, you know, check out my spreadsheet. You know, look, I'm freaking my finger. I'd love to get a CGM and he was like, Dude, you are one of the healthiest people I see. If you, if you saw the people who need that device, you'd kind of be ashamed to ask for it. Like that's, that's for people who have a disorder. You're like, yeah, I'm trying to not get a disorder here. So that was my, I was like, kind of surprised by that response. I thought,

29:39Well, firstly, I mean, if you look at systems generally, you measure what you don't want to fail. You don't just measure the thing that is broken because that's obviously useless at that point. So in systems engineering, especially complex systems, you get as much data as you can and you observe failure modes as they develop and find ways to counter them. And so having already dove into the research on the metabolic health, crisis that I had not known about at the time or had not known about prior, but it was aware of at the time. I was like, well, this is just, you know, it's just me trying to learn more about myself and like understand if there's something going on with my metabolic system. And yeah, my physician was just totally opposed and was not willing to get me access to a CGM. Well, this is, and this is what we, what are the things we really wanted to explore on this episode with you is like,

30:33This disconnects it feels looking at this industry like this huge disconnect developed between Uses in a therapeutic sense as like medical interventions for your doctor's totally right like there were there are people out there who need this way more than you do But that's so zero some thinking right like you know Just because giving you access to a CGM Isn't gonna prevent somebody else from getting that to So how did the light bulbs start going off about like well? Hey, maybe maybe this can be a consumer device, too Well, I you know eventually after trying for several months I was able to get a CGM but it was through a friend of mine who brought one back from elsewhere where they're over the counter So he actually went to Australia and threw some in his backpack where you can buy him just like a glucometer and

31:29You know, I was still just interested. I was like, I wonder what's going on. I'm pricking my finger, didn't have any insight set. Put the CGM on and was instantly blown away by how bad things were. My blood sugar was essentially, you know, it looked much more like a heart rate trace than a blood sugar trace and huge spikes, huge crashes. Everything I was doing, all of the meals I was consuming were putting me.

31:53above what would be considered the pre-diabetic post-prandial threshold, so where your glucose should be after a meal, and often very often well into the diabetic range. And so my body was not managing blood sugar spikes effectively. It was able to bring them back, so it's not like I was diabetic and had lost control, but it seemed to be like blood sugar would go very high. My body would release a ton of insulin over compensate. I'd have these precipitous crashes, and I was able to just immediately, you know, correlate those crashes with the sensations I had been having where the shakiness, the hunger, the irritability was all perfectly sing. And just by tuning, you know, within two weeks, I had tuned my approached diet just like trial and error on the meals I was eating and was able to bring those huge spikes down to a minima. And, you know, at the time, I still wasn't sophisticated on what the ideal levels would be. And actually much of this remains to be discovered. But

32:50I was able to identify that things I was eating that I thought were healthy, large servings of sweet potatoes, brown rice, quinoa. I was having huge, you know, again, in the diabetic range responses to, which was highly counterintuitive. I thought, you know, I'm a person who's like, I eat the paleo crossfit style. You know, it's like, even though I love sugar, I love candy and I love dessert. Like, that's not what I'm eating for dinner anymore. I was in college, but so just this realization that things were going haywire and it was the things that I thought I was doing well that were causing these huge inconsistencies. Josh, I'll tell you in my first week of using levels, I was doing the thing that I think the setup guide recommends, which is eat your normal diet. Don't try and eat healthy. The goal of this is to see what your normal stuff does.

33:42I had recently worked in like no sugar, just like, steel cut oatmeal into my diet. And I think it wasn't actually steel cut. It was like the quaker hole out, but it was advertised as whole. And like it was wild how much that spiked my blood sugar afterwards. It was like I just like a holy bad. Yeah. Through a ton of gushers in my mouth or something. And I was staring at it like, okay, I guess that's not as good for me as I thought it was. Absolutely. And I mean, oatmeal is a prime example. So Google healthiest breakfast and it's like top three no matter what is oatmeal. And you know, it's considered hard healthy. Well, last time I checked and it has been a few months, but one of the worst foods in the data set was oatmeal. So like something like 70 plus percent of people that were eating oatmeal while using levels had exceeded that

34:31prediabetes threshold was well into the significant blood sugar spike territory from a food that's described as heart healthy. And the reason that that's interesting is that glucose variability, the number and peak sort of amplitude of blood sugar spikes is closely correlated with cardiovascular disease. So because that's an inflammatory event, the number of these that are happening throughout the day, which is obviously higher for people with diabetes, is it's connected with negative heart outcomes. And so it draws into question how these how hard healthy it how that ended up on the oatmeal canister and you know we're seeing a lot of these examples but at the time you know it was just a realization you know I'm using this device which basically just spits out raw data gives you like you're at 88 right now and at least gives you an error trend arrow but it's not telling you anything about

35:23what is creating this situation that you're in. It doesn't tell you how nutrition, exercise, sleep, stress are related. And I started to intuit these things through use. And it quickly became the most powerful accountability and education tool about how my body works that I'd ever used in my life. And that's really the realization was just, this thing was hard to get and it's completely transformed my approach to life. So I'm a person who cares about health, but never knew the effects of cortisol.

35:52I had been stressed for a few years professionally and personally, sitting through a meeting with a CGM on, and seeing without calories, my blood sugar exceed 145 milligrams per deciliter, which is the post-prandial threshold for prediabetic response, changed my perspective on stress in one fell swoop. I'd never seen anything so serious. Oh, man, I'll tell you, that was one of the biggest Lessons for me the during one of the weeks I was wearing level wearing a CGM for me guys Jenny and I were in Texas during the crazy power outages I store was not even water and like My blood sugar is during that week versus other weeks. It was just unreal to see the data of like like I knew I was feeling bad like I was very stressed I was very unhappy much higher David or like more spiky

36:50Yeah, much more spiky, not big spikes, big crashes. And like I saw it in my moon, I'm like, yeah, I'm very unhappy. I feel terrible. And like there it is in the data. All right, listeners. Now is a great time to tell you about a long time friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would not and you're done.

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38:05which is exactly why more than 16,000 companies today run on Vanta. Companies like ramp, cursor, and snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment. And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust.

38:31We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get a thousand dollars off Vanta at Vanta.com slash acquired. That's V-A-N-T-A dot com slash acquired for a thousand dollars off and just tell them that Ben and David sent you. Josh, I want to take us in a little bit of a more sort of flash forward direction here. So folks should know that when you when you are using levels today it is an Abbott freestyle Libre device so we're still not to the point where you're not like making your own CGM at all but let's just talk about the scale the company a little bit thousands of people that are customers that are wearing these things are using this app that are entering their food to help understand how to correlate oh this meal you know precipitated this spike so obviously that it's a company it's a commercial enterprise now you started to start up how did you

39:26come to the conclusion that hey, I actually, there's a startup to be started here and I can be the consumer brand rather than just assuming, oh, you know what, Abbott or whoever is gonna, the makers of the device are gonna be successful in the consumer market. Yeah, I mean, my sort of patient zero experience with the technology was the only reason that I paid attention here. It was just like, this thing has changed my perspective. It's given me confidence in areas that I didn't previously know anything and it's informed me.

39:53much more than a textbook would have about what's happening behind the scenes nutrition exercise sleep and stress all in one device so this is something that has real potential but there's a huge accessibility problem like it's not being used for general wellness it's not being used for education it's only being used post frankly post diagnosis when someone's already sick and things have already gotten to a bad place and the realization that you know across society we have an epidemic of metabolic breakdown that is largely caused by chronic lifestyle choices so that is the key unlock is that we are breaking our bodies down over decades without feedback on the positive or negative effects of our choices and this has led to a situation where we have 90 million people in the United States with prediabetes 70% of whom will convert to type 2 diabetes within their lifetime in 84% of them don't know

40:47that they have this situation. It's because we're making these chronic choices without feedback. So this was the tool, in my opinion, and it's powerful for post-diagnosis to manage a condition, but potentially even more powerful to prevent that next wave. So that's kind of where things started to congeal in my mind that this could really bring a lot of solutions into people's lives. But the technology alone, like the device alone, requires way too much you know, I had spent hundreds of hours frankly at this point pouring over research articles. I was like, you can't rely on that for people to get context for what's what's coming out of the device. So it seemed like the huge value proposition was building an insights layer on top of this raw data. So pull it in, and you know, aura and whoop and others do this now with heart rate and heart rate variability data. You know, you take an LED that costs a few pennies and can measure heart rate.

41:44and you transform it into a behavior change tool by adding an insights layer that tells you how what factors have affected your sleep, what a recovery score looks like, and why you should want to focus in this area of your lifestyle in order to improve it.

42:00or another allegory would be there's a huge amount of code between the sensor pack that's on the back of my Apple Watch and the rings that Apple is presenting me on, you know, hey, make sure you go on a seven minute brisk walk before bed. Exactly. Yeah, so it's the difference between that Excel spreadsheet and a meal score saying, you know, this was a one or a nine out of 10 helping people just understand, okay, large scale. I don't need to know.

42:26the background data on how, you know, what the optimal blood sugar range is and what milligrams per desk leader are, what a post-prandial peak is, I just need to know that that meal is not working as well as this other one. And so that was the insight is that it's really a data science problem. It's ideally, innovation in hardware is going to be able to drive these sensors down to a more commoditized space. But the value proposition is not going to improve if someone doesn't build the insights layer on top of it.

42:54to contextualize and create behavior change so that that's where things started just kind of came together as like what do I wish this experience I'd been like rather than what it was and go build that. So you started working on the company in like 2017 right yeah it was it was actually late 2017 early 2018 when I when I went full full bore on it. And I'm imagining from the outside just think about what was going on at that time.

43:21That was right around the time of the rise of hymns and hers and Roman and like there was this new idea out there that like hey Things that are you know locked behind medical prescriptions But that really aren't dangerous and could be beneficial to large portions of non therapeutic populations There might be a way to get that to the public Did you guys see that like were you thinking the same thing? How how did that? Absolutely come about for you guys. Yeah, I mean one of the One of the earliest issues was like, okay, let's say we build the app that provides insights, you know, it can pull in CGM data. Well, nobody has CGMs and there's no way to get your hands on them. So no one's going to even Google that thing. No one's going to find that in the App Store. We have to get the hardware and the software together into the hands of people who want it. And that was a huge, it was like, oh man, that's, that's a big, complicated, hairy ball of pain to figure that out because it's a, you know, these were class three.

44:17regulated medical devices prescription only so that's that's where things started was like actually the accessibility of the hardware is the problem to solve first before we can solve the behavior change issue and companies like him's and Roman and others were demonstrating a new model where you combine telehealth capability with low risk products medical products into a direct consumer experience and it is a traditional practitioner licensed physician reviewing information about their patient developing patient physician relationship and then a male order pharmacy powering the whole thing but most of that is is kind of hidden in in an experiential sense from the end user it feels very much like ordering something online which is really convenient and you look at Romans numbers like you know they work in sexual dysfunction for men and they've got massive conversion rates that like no sexual therapeutic physician is seeing the number of young men come to them for Viagra

45:14at nearly the rate that Roman is like they they've because of the privacy and the sort of stick by the distance between you know it's just like there's a lot of stigma there and so this like convenience factor in the privacy factor has probably a lot of people to improve their lives that otherwise wouldn't so I think like that was a very unique business model that they put together and it gave us a lot of ideas like okay maybe there is a way despite the the sort of onerous regulations there is a way that we can design something that would be elegant and as close to a delightful experience as you can get while still maintaining regulatory ethics. And just to put a fine point on it, what you're basically saying is, yeah, people are still totally getting prescribed. The doctor is just, you know, someone that's sending them a survey and communicating over text and, you know, it's happening through a web browser that feels like an online checkout, a little more friction as it should have, but not like, you know, you don't have to go anywhere. You can do it from your phone or computer. That's right. Yeah, so we, you know, we said about developing

46:13a relationship with an independent network of physicians who intellectually are on board with the concept of informational biometrics. So using what would otherwise be used for management of a condition, but instead for education awareness. Starting there and then building the platform where we can collect the information necessary and deliver it to the physician who will then engage in asynchronous electronic consultation with that patient.

46:41And so, these are all inside of the telehealth regulations that have been built and are, yes, definitely similar to the hymns, hers, and romans, but building it in such a way that it was specific and unique to the CGM use case, which again, this is a device, it's minimally invasive, it has a little filament that goes beneath the skin, but it's not a drug. It doesn't have symptoms, side effects, complications, allergy considerations. The risk is quite low, especially given that the user is not managing an acute condition. So there is no situation where someone who's using levels for information about their diet is going to inject insulin and potentially over inject due to faulty data. That's the situation that type 1 diabetes and CGM is is built upon. Oh, so what if someone says, yeah, I am type 1 diabetic. Like do you say, well, actually, you should go see a doctor about this. Yeah, right now, the software that we're building.

47:36is it's not approved as a medical device, it's not approved for diabetes management. So right now, although we are working as quickly as we can to get to the point where we could get this approved for therapeutic use as well, today we aren't there and it's really important that people who are managing in acute condition have a close relationship with their primary care provider and all CGM data is being interpreted in a larger diabetes management context. So very much, I think, You know, it's a very different implementation for CGM and we will get there and I think there's tons of lifestyle unlocked to be had for people with diabetes still and looking forward to get there, but we're not quite ready. Yeah. Yeah. And so do I have it right that the regulations...

48:21didn't necessarily change to enable this. It was just that several people sort of all at the same time. I know curology is one of them in sort of the dermatology space. Obviously, him's her as Roman that you've talked about. It was sort of a reinterpretation or using technology to apply to existing regulations, not some new regulation that came about that made it possible. Well, there have been some serious changes in the telehealth regulatory space actually since COVID. So much of this was It was already plausible, but it wasn't clear. Many systems were, for example, not allowed to be used with telehealth. When COVID rolled around, which is obviously a little bit after we had launched, we saw a huge number of, I think, improvements where physicians could be licensed across many states. Right now you have to be state-by-state licensed even to practice telehealth. You could also use the platform of choice, so if you want to engage in synchronous consultation with a patient, you can use FaceTime or you can use Google Meet.

49:21platform is most convenient rather than having to use these clunky, hippocompliant, EMRs is what they're called. Yeah, where you have a built-in web client that it's just very old school and nobody has those platforms. You got to download an application, et cetera. So we saw a lot of, I think, advancement and just sort of a span of an overnight awareness of how much these onerous regulations are sort of falling behind the times.

49:48But yeah, prior to that, 2018-2019 companies had been building inside of those onerous regulations, but primarily leveraging asynchronous capability. So there is many states do allow physicians to correspond just through written communication as opposed to having to be synchronous. And that's the most convenient path for somebody who's not managing in acute condition. It's the most convenient path for them to engage in these sorts of optional Medical product requests and it feels like from just like a business model standpoint what this in say That you and other companies had a you know around this time. It's sort of unlocks really a connection of like a marketing, you know, a whole new class of marketing like a you're marketing to a whole a wholly different customer base than Medical devices in a therapeutic sense were before but that enables

50:44Advertising is part of it. You go on lots of podcasts. You can talk to this whole population. And now they have an experience that's not... It's not a... You watch TV ad for a drug and it's like, talk to your doctor about so-and-so. It's like, no, would this be... This is something that could be additive to your life. Just like an apple watch, just like a Fitbit or the like. And if you want to experience this product...

51:10Here's an easy consumer-friendly way route to do it. You don't have to go decide, yeah, I'm going to make an appointment. I'm going to remember to bring this up. It might be a little embarrassing. My doctor might make me feel weird. I think this goes to the why-now question of digital health, which is historically, there's two ways to approach health. It's like you're either general wellness and making only general statements. You're just saying, eat healthier and work out more.

51:38or you're going down the route of a medical experience, which is, as we all know, peppered with regulation, very complicated, inconvenient. There's quite a bit of friction there. And this is how, if you look at the space, this is kind of how the company's kind of filter out. You've got, you know, the Levangos and the Omadas and the Anduos. And these are organizations that, once you're past the diagnosis phase, well, now you're in the captured audience. And so it's like, your insurance will reimburse your doctor will prescribe customer experience. I will say it is amazing whether there's a PSL ventures company that we've invested in alertive there's so much innovation in this space even if you're not going the direct consumer route you guys have gone like what alertive is sort of showing is well what if you just bring these great like anomada and lavanga like these great consumer experiences to that sort of existing funnel population rather than the new unlock like they're sort of like a dual.

52:35you know, two different paths of innovation going on here. Totally. No doubt about it. There's I think most of us just kind of avoid, like if it becomes too inconvenient, we just avoid the medical experience altogether. It's like, I'll just kick the can down the road and certain people can't, you know, it's like they have a legitimate condition. It's so it's so challenging to carry on your day-to-day life and have a healthcare issue because the system is not designed for convenience. Right. But to your point, once you're in that, like you also should have a great experience. Exactly.

53:05there's a ton of opportunity there. But, you know, it's been like you have superficial kind of population generalities happening in the digital L space for the general wellness group. And then once you're post-diagnosis, you get more targeted, more consistent information, but the friction level is so high and the actionability of the data is just not the focus. Again, once you get into the captured, I hate using terminology like this but it is very true. Once you're in the captured audience, you have a payer who's going to reimburse, you have a doctor who is gonna draw from their list of potential treatments and they're gonna diagnose and prescribe. And then you, the end user, are just going to go through whatever experience has been built. And it's like your feedback, your customer experience, your frankly process of improvement

54:01falls behind, I think, where any consumer mass market consumer product would be just because there's so many conflicting incentives in there. Yeah. Well, you mentioned, you know, pay or for folks in the audience who aren't deep in the space. You know, we're talking about insurance companies and mostly and maybe employers, you know, occasionally. And the government too, through Medicare and Medicaid, you know, and this is where, you know, that sort of business model of your, uh, If you're a company, if you're a medical device company, if you're a pharmaceutical company, if you're something that's been historically operating in the therapeutic space, it's a great business. You know, this why biotech, this is why medical device venture has done has been a thing for so many decades. But it's so different than the tech world where it's like, you get something, you demonstrate efficacy, you prove that to payers, all those categories over a long period of time. And then you basically just have a license to print money.

54:57For right. Well, it's it's classic disruptive innovation versus sustain innovation. If you're working within this existing system, like you can make the patient experience 10 times better, but you're still working within insurance companies and billing codes and existing clinics and again, can be a great business. It takes years to get that set up where you're like, yep, I got the code from a billing code. Now I'm, you know, yeah, yep.

55:22but the levels him's hers approach that's the disruptive innovation that's the thing where you're saying like it's exactly Josh what what you're talking about you bring your spreadsheet to your doctor or frankly right now I'm even thinking about okay I have my levels data and I I want to go like figure out if I'm diabetic well I should go talk with a doctor and show my data I do get this sense that I'll get kind of laughed at of like what is this toy that you're like is this not a medical experience like wait come on don't come to me with this yeah you know again it's it comes back to the way that they

55:52healthcare system is set up here is all oriented. And it wasn't always this way, but I've talked to many doctors who believe this is the route. The insurance coding system changed everything. So once it became a requirement that a physician enter a diagnostic code in order to proceed with treatment, everything changed. It went from the nuance of an individual to if you don't fit this bucket, I can't do anything for you. And this is the reason that no one, well, this combined with, I think, well-intentioned, but overreaching data privacy rules have led to a situation where no one uses their healthcare data to make a decision in their lifestyle ever. Like, I can basically make that statement and feel confident about it because it's just true. People don't, they get their blood work done once a year maybe. You get a single point, that's extrapolated to define your health overall. And you don't use that to decide what to eat for lunch. You don't know whether or not you're sleeping well.

56:50And so you have companies that are, once you're in that diagnostic coded section, it's like, all right, I get this amount of reimbursement. It doesn't matter whether my product is 10 times better. I'm still going to get that same reimbursement. So my costs go up, but I certainly don't get a higher. The payer is not going to pay me more. So you have a situation where everyone's forced to conformity and you get one option. And the consumer, no matter how price and sensitive they are, if they're using an insurance reimbursement route, they don't have selection choice.

57:19So I think the future is a situation where you're hybridizing this and you're taking really high quality information and you're going cash pay only direct consumer and you're providing the framework to meet the regulatory requirement, but you're sort of working outside of the three-party system. You're saying, this is the premium option. And if user experience factors into your healthcare journey or your general wellness journey, this is the option that I can deliver that.

57:48that experience, that quality of experience. And that's certainly, I think, where the entire market, we're going to see a move in this direction because that also unlocks traditional market forces. And so now you can have a situation where economies of scale step in, prices drop, and now you're genuinely competing. It may start out pricey, but with time, I think we can get to the point where these premium non-reimburs options are actually price competitive.

58:16Yeah, okay, great. So let's talk about your business model at levels. What your guys' vision is for how this works. Well, maybe to start, can you walk us through from a business model since how levels works today and maybe a little bit what you're thinking about as next step down the road and then after that? For sure. So today we're still in development. So we're in what we call our beta mode, which is invitation only.

58:45The process is you get invited into the beta and you fill out kind of an e-commerce like checkout experience. So you pay for the program and then you move into a questionnaire process which is a consultation for a prescription consultation intake form. And so you fill out some of the medical history required there. That gets transmitted to an in-state physician. So this physician is part of a network that is wholly independent of levels and their license in the same state that you reside in.

59:15they review your consultation form, and they determine whether or not an informational CGM is right for you, the individual. And this is entirely in the physician's hands. Levels has no control over who gets a prescription, who doesn't get a prescription. And that's required for obviously ethical independence, and the physician doesn't have any requirements or quotas or anything like that from levels. And so after that process, and potentially an exchange of information, the physician may have extra questions.

59:43they ask the patient to entirely up to them. Once we get a determination from the physician, we then fulfill, if a prescription was received, we fulfill that order through our male order pharmacy partner. So that whole process feels very seamless to the end user. And you end up getting access to a CGM device if prescribed and the level software. So then you go through a one month experience where you wear the CGM system, you go about your life The first week, we recommend you don't really make any changes. You just kind of see where you are, how your body is responding to the choices you're making, the nutrition selections, the exercise you're doing, the sleep that you're currently sustaining, et cetera. In the middle two weeks, we recommend you start exploring. So try things you maybe don't normally do, eat different foods, sleep well, walk after meals, all of these different sort of call metabolic challenges, but testing the boundary cases. And then the final week, the goal is to string what you've learned together.

1:00:43into metabolic optimization, so shoot for your high scores. After that one month period, people have developed metabolic awareness. For the first time, they've closed the loop between the actions they're taking and the reactions their bodies are experiencing. They've sort of been in communication between body and mind in a way that previously wasn't possible because we don't have a sensory feedback mechanism for the quality of our nutrition.

1:01:12that metabolic awareness, you know, they've only been practicing optimization for a week, but the lessons learned are quickly turned into habits. So you kind of when you first see that a 10, 15 minute walk after an indulgent meal can completely modify your body's ability to process that sugar, that lesson sticks with you in a way that, hey, you should walk after meals as general advice doesn't. It's specific to you. It's grounded in objective data. And so those are the Those are the little magic moments that we're looking to uncover as often as possible in the one month program we've built. Cool. The one month program is a beta, but what I think is so interesting is the price to participate in the program is $395, right? $399. This is what's so fascinating. This unlocks so much on the one hand for a consumer product that's a lot of money. On the other hand, there's no other way you're going to get access to this.

1:02:10and is the value of learning that worth $400, well, it's up to an individual person. But you guys, how many, you have thousands of people that have done it, 20,000, 30,000 people on a wait list? It turns out there's a large population of people out there that are willing to do this, right? Yeah, so thus far we've had about 7,000 people go through the beta program and we actually have about 105,000 people on a wait list right now trying to get in.

1:02:38And this is largely, again, we're in beta mode. We're really putting no effort into marketing. We're doing a lot of educational effort. So podcasts and our content platform is a prime driver of attention. But the company is currently designed. We have our product effort, our content effort, and our research effort. And one of the core issues we're facing is that metabolism as a word is not common. Like nobody is thinking about metabolism, let alone metabolic fitness. We need to inform the world that this is something you should care about. And to do that, we can't rely on osmosis from product experience, especially if we're in invitation only mode right now. So the education effort is to build a world class content platform that helps people understand what it means to be metabolically fit and why that matters. So, you know, your your brain, your body, all the

1:03:37cells in all of the tissues in you need energy to survive and to function. And if your energetic production systems are failing, you cannot experience mental health. You cannot experience physical health. So it's truly the situation where metabolic fitness underlies physical fitness and underlies mental fitness. And we talk about the other two, but we don't talk about the foundation. And so the content effort is in and of itself intended to be the leading source of education about Yeah, why you should care about metabolism and then our research effort is then kind of Going to pair with our direct consumer product to look deeper into mechanisms into efficacy into effectiveness and so we'll take the large data sets the trends from those from our direct consumer group We'll take the research findings and looking ahead in the road map Combine that information, you know about how people who don't yet have a metabolic condition to concern themselves with

1:04:34are still improving the markers of long-term risk through just simple behavior change in their daily lifestyle. And that I think is how we get to the point where eventually the consumer product is covered for insurance, self-insured, employee programs, et cetera. So it's sort of working backwards. So you think you can get to a point where payers, not consumers, will also be paying for levels. Yeah, I think So, the way we're going about it is we're definitely, you know, we're starting off with the direct consumer play very deliberately. And, you know, a big part of that is that, A, we're going cash pay. We need to unlock the traditional market forces. We need, like, get out of the situation where the product is forced into conformity. And then, you know, that will allow us to open those economies of scale and drive price down. That's necessary. We can get to the socioeconomic considerations. But,

1:05:31The second thing is like, if we can please a discerning audience for a premium product, we can build an exceptional experience. It's table stakes here. Then I think that will ensure that the enterprise offering is well received. If we just design something for B2B, reimbursal, we fall into the same trap that so many other products have that user experience doesn't matter. What matters is selling an organizational decision maker that this is something they should add to their offering. By working backwards, not only will we be able to demonstrate with the data we're generating from our paying customers, that this is important and that it is helpful, will also, I think, achieve a quality of experience that we wouldn't get if we worked in the other direction, you know, going from enterprise product to consumer product. It's almost like to just completely beat the Elon analogy to death. It's like, level's current iteration is the Model S. Very expensive, but, you know, you guys have double digit.

1:06:28millions of revenue on your weightless sitting there right now. You can use that to make the Model 3 to bring the price down. And then you can use that to launch the Robo Taxi Fleet of get, you know, vastly expand access. Yeah, I actually think we're even earlier. We're kind of we're in the roadster phase. It's expensive. It's hard to get up there. We don't have, you know, huge scale. We know very well that this is the mode we're in.

1:06:56But if we can satisfy the roadster crowd, we can then take that success and the economic foundation that we build through a secure higher margin business model and start to work down market. And we need to get to the model two stage. Model three is even too expensive for most people. So looking at the environment or really the landscape of metabolic dysfunction.

1:07:20It essentially focuses on lowest socioeconomic groups. It's the people who have the least ability to access the levels program, who need it the most right now, and we're well aware of that. It's going to be a process in order to get to that mass market option where you have real-time data informing your decisions every day. We need many things to change. It's got to be hardware innovation, it's got to be software intelligence, it's got to be regulatory improvement. Tons of different very complex systems have to adapt for this to happen.

1:07:49But similar to what you've seen Tesla do, the entire market's adapted. I mean, the whole automotive industry is different now. And that is all sort of building inertia towards the zero pollution future for electric vehicles. And I think that's what levels hopes to do is trigger this new market, trigger innovation, make people aware that real-time data, biometric data, health data being used in our daily lives is the key to turning around the sort of frustrating, complex, and failing medical outcomes we're seeing. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part. Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like the risks are real.

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1:09:35billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates. And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

1:09:58So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. So just to play devil's advocate here a little bit like Tesla didn't just make really good software that they got shipped to a bunch of GM and Toyota cars. They read the whole thing from scratch. So sort of a two headed question here like why isn't Abbott and the device manufacturers building the insights layer and building the consumer platform?

1:10:27And then two, do you think eventually you also need to become a hardware company to really apply best in class research and push the consumer experience that you want to create? Yeah, I mean, it's a great question. Like Tesla kind of did start off with focusing on taking the concept was we'll take AC propulsion batteries and software. We'll combine them with Lotus. Yeah. Yeah. That didn't pan out. And I think for a number of reasons, but we're in a better situation where The hardware is really convenient. It's really good. I mean, I've been wearing a CGM from Abbott and or Dexcom for going on three years now continuously. And the biggest issue remains the insightfulness and actionability of the data. So that's where our core competency, our core focus is centered is improving the delta between raw data coming out of a device and behavior change that needs to happen. So for right now, although there is ground to be covered on the hardware, no doubt. And I'm also looking to the future where

1:11:25sensors are not just measuring one analyte. They're measuring multiple and they're doing it seamlessly and in combination with say superficial metrics like pulse and body temperature, et cetera. You know, that is the direction we're moving. And I think we will evaluate all of the options necessary to make sure that that future comes true. So we're not going to stand by and just like, hey, we've got great software. Like anyone want to give us great sensors too. It'll be a situation where we're going to joint develop and or, you know, I think create the attention necessary that there is a market here, but innovation has to happen to feed it. And certainly being hardware systems background myself, I'm more than happy to get my hands dirty if necessary. I bet. And from a value capture perspective, then, as I think through the value chain of you're providing the insights layer and the software and the consumer experience, you're relying on other people to provide the hardware. This hardware has been in development for a really long time.

1:12:20How much of what the consumer ultimately ends up paying, do you get to capture versus having to pass along to the device manufacturers? As I touched on our program includes access and fulfillment of the CGM sensors, and it's kind of an all-inclusive product experience right now. We have pretty good margins on the order of 50 to 60% depending on the specific for the one month program. We are also introducing a subscription model, which of course has lower margins driven primarily by price point driven primarily by the censored cost. And these devices are still fairly expensive. And so our subscription model, we don't make any money right now. It's kind of a second tier of product offering to our one month experience. And one of the reasons is that in development mode, we want to get maximum throughput, we want maximum fresh perspectives for feedback reasons. And so we've been biasing towards the one month experience solely.

1:13:17We have been slowly but surely trickling in a subscription offering. And again, not making really much on that product, but it does really down select for the most intent of our members. So people who are like, I absolutely cannot stop using this. I need to subscribe. They're the ones that find the subscription offering and get in there. And so for that user group, we're getting such high value information about who they are, why they are subscribing continually, that will inform us about what a subscription has to be to really have staying power and we'll be starting to shift in that direction sort of simultaneously with I expect some improvements in unit economics for the hardware which I think are coming in in the next 12-18 months and I would amend into the subscription part of levels will become so important over time for for lots of reasons you know one just simply from a

1:14:14ongoing value to your customers, but also, defensibility and, you know, mode for you guys, you know, if all of my data and all of my insights around that over a long period of time are in levels. Well, of course, I'm going to keep using levels, but also it's reminding me of our big episode on Maytwan, the Chinese super app. And, you know, one of the most critical factors for Maytwan in surviving war on so many fronts against thousands of other companies in China was the DNPing their reviews database. The data from all of the reviews allows them to drive recommendations and insights of what to order for dinner, where to travel, or where to book so much better than just a flat system. I'd imagine for you guys to the more data, the more ongoing data you have, the better your insights layer becomes.

1:15:09Yeah, you guys got to pride my fitness pal out of the huge to have that sort of like auto completed auto macro filled in data set. Yeah, you know, right now we're definitely biasing towards low overhead for the user to log. So the goal is actually to connect the outcomes of your choices with the inputs to use. So just surfacing a picture reminds people, okay, what did I eat and what portion? What was the composition of that meal? And then giving them a score along with it.

1:15:39helps to educate them very quickly with minimal input requirement on whether or not that was positive or negative. And so, those, right now, requiring macro tracking or requiring calorie counting becomes onerous and our adherence drops off quickly, so we've done a bunch of experiments with this. But I agree, the future is to get more information from those who are willing to volunteer it. In terms of the switching cost concept here, I think this is where our competitive advantage really lies. Again, we're focusing entirely on the data science and on the action ability, the sort of behavior change platform. So the metrics that we're producing, which are composites of a number of clinically relevant data points about a blood sugar curve, how your body responds to a meal, how quickly, how high it goes, how long you stay elevated, all of this stuff is packaged into a composite that is actually quite sophisticated and getting better.

1:16:35all the time. And so that's where the metrics, they turn raw data into behavior change opportunity, and the majority of the value is there. So I do believe that as we continue to dive into the research, develop the largest data set of its kind, we currently do have, by coming up on an order of magnitude, the largest data set ever in non-diabetic.

1:16:57glucose, especially when paired with lifestyle information. And we're just, we're still in invite only beta mode, like the opportunity when we do go to market is going to be tremendous. And it will continue to allow us, like you said, you know, as the data set enlarges, our phenotyping will improve. So we'll be able to identify your like this group. And these are the recommendations and insights that we can sharpen to make it more individual, more unique and ultimately improve the outcomes for each person. That's great. Yeah, I mean, that's so.

1:17:26A, incredibly impressive speaks to you guys of building a company in a short amount of time. This incredibly complex space, getting to market, dealing with the regulatory issues, prescriptions, getting 7,000 people through the program. But it speaks even more to just the industry and how far behind. CGMs have been around for over 10 years, and that you already have the largest data set of non-diabetic the CTM data of a population out there is, that's crazy. Yeah, it is. And one thing that I like to look at is just the historic kind of bifurcation of the market. We've seen so much data generation in these, and it sounds like a drugatory term, but superficial metrics. It's like, this is your pulse count, your step count. So much of our wearable data is oriented here.

1:18:24I think the reason that things are different now and going forward is that we've had a quiet microelectronics revolution. We've had software eating the world. All this stuff's been happening. Big data analytics are getting better and better. In the meantime, we've also had more individualization and personal ownership concepts like bubbling up. All of this is coming together into a moment where people want to know more about themselves, specifically. They don't want to know about averages. There's enough awareness that you know, just looking at 23 and me where we thought that a specific gene would tell you enough to like know what to eat for lunch. That's just not the case. It's like the uniqueness of the individual is so multivariate that you really need real time continuous feedback to know whether things are improving for you. So we're seeing a moment where I think all the pieces are in place where we can decentralize the solution.

1:19:16So by building large enough data sets, obviously anonymized in order to run research and sharpen insights, you can decentralize the actor down to the minimum viable one, which is the individual. So rather than trying to solve nutrition with legislation or policy, you can instead have each person solve for themselves, multiply that by enough people, and you fix the social scale problem without having to pass them.

1:19:42complex administration. Obviously the food pyramid doesn't work. Just look at the way things have been done historically and all well intentioned. But the goal is just to brought it to try and solve for the average person. And there is no such thing as the average person. There is the individual. So before we wrap up, I at least have a one question I'm dying to ask your thoughts on. I know you don't have any.

1:20:10insight information on this front. You know, the rumor in this space has been for years that Apple is working on bringing this technology, CGM technology, not invasively to the Apple watch. Do you think that's going to happen anytime soon? If it does, I imagine it's a huge unlock for levels as the insight layer for this. Yeah, I spend a lot of time diving into the future of the tech and thinking about, you know, how do we, how do we set up the chess board so that the innovations happen that need to happen. So Apple is dealing with a situation where they can't break the skin. It will destroy the image of what an Apple product is, frankly. So they have the toughest go at it. We can work with the hardware that exists, which does go below the skin, and it gives you direct interact. That filament is interacting with molecules of glucose in your skin. It's the gold standard for measurement in real time. Apple needs to solve

1:21:05what I consider a mechanical miracle which is non-invasive measurement of a colorless small water soluble molecule in a fluid which is primarily water and they have to be able to do it in concentrations and resolution that is useful for people that don't have diabetes so the fluctuations are smaller concentrations are tight accuracy is important I'm hopeful it's called ramen spectroscopy is what I think the technique they're working on is and it's a light scattering technique it's complicated and I I've heard the rumors that the next generation of the Apple Watch will have it if they do I'm going to absolutely be blown away and I'm going to be excited because if you look historically I mean the Apple Watch is one of the best selling products of all time and yet Apple typically delivers the hardware before the software solution so it gives levels like you said the opportunity to leverage a prolific non-invasive option and build the insights layer on top of it to help people contextualize and it's something like you know apples had the hardware

1:22:03necessary to do exceptional sleep tracking for a long time, but they haven't. You know, they put the hardware out there and other companies fill in the gap for sleep context. And so I think we would take the opportunity and very quickly leverage that. So I think we're in a good position to benefit from really any innovation in the hardware space today. Well, just I mean, historically, you know, I would think it is a best like every time.

1:22:30these events now come with much less frequency. But back in the day, every time there was an Apple keynote for a new version of the iPhone with new hardware sensors, that just launched an opportunity for so many companies. I mean, Apple adds great cameras to the iPhone. It's like, well, that enables Instagram. Yeah, Apple has the camera app, but like other companies are going to be the ones that, you know, Apple's not going to build networks on top of this. Apple's not going to build, you know, great dedicated consumer.

1:22:59software services on top of this. That would be a massive opportunity. Yeah, I tend to agree. Not to mention the non-invasive measurement of a molecule in that concentration, just like it opens up the space for future analytes tremendously so that that will strictly be a benefit for what we're trying to achieve, which is to solve the metabolic health crisis and it requires. We didn't really touch on the global implications, but estimates are that 30% of the global population is prediabetic, and 70% of those will progress to type 2 diabetes in their lifetime. So, you know, we're talking about billions of people today who are on a path towards unhealth and really dramatic degeneration of their bodies over the next, you know, 10, 20 years. So, something has to change. It's got to change soon. And, you know, it's not a situation where levels want to, like,

1:23:50own every piece of that process. It's really a situation similar to the energy crisis where everyone's got to go all hands on deck on this thing and I would welcome Apple cracking this one because I think we can always refine the insights they provide at scale to better the outcomes for specific use cases. Totally. Well, Josh, this has been awesome. Thank you so much for joining us.

1:24:17For listeners, how can they get in touch with you? How can they interact with levels? How can they get on the wait list? Yeah. First off, thanks so much for diving into this stuff with me. This is a really exciting conversation. It gets the wheel spinning to dive into the tricky questions. I love it. Anyone that's interested in levels should definitely jump to the website levelshealth.com. You can sign up for the wait list right there and also access the blog, which is that educational opportunity to discover what metabolic awareness is, why it's relevant, and kind of follow along as we introduce more, I think, insight into how the product is affecting people today and how it's helping them understand themselves better. And then check us out on Twitter and Instagram at levels. And you can follow along in real time as people roll out their personal insights. Cool. What about for members of the acquired community?

1:25:13like Ben and Miz and others who might want to come work with you guys. Well, I would love to be in touch with anyone who is who here's this conversation and gets excited. We do have a careers page at levels.link-forwards-lash-careers, but you know, I'll also just reach out to us through either through the acquired community to Miz or Ben Grinnell.

1:25:34I'd love to provide my contact info directly to you guys to distribute to your community. So you'll end up with my email address and anyone that's interested, reach out directly to myself or Sam and we'd love to talk about the scaling opportunities that we have. A lot of challenges to be solved. Great. That's awesome. That sounds awesome. All right, listeners.

1:25:56Now is a great time to talk about one of our favorite companies, Statsig. Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers. And how fast you can use that signal to guide what you shipped next. This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved. So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to Statsig.com slash acquired to get started.

1:26:55Well, listeners, thank you for coming on this health journey with us. We're excited to be diving into these new sort of areas on a quiet and we hope to do more of it coming up soon. Thank you guys. Listeners, we will see you next time. We'll see you next time.