Ryan Eder - Founder & CEO of IncludeHealth: Selling Your Vision, Big Pivots, and Design Thinking

Ryan Eder 00:00
COVID hits, and all of a sudden, the idea of having smart machines in a clinic was irrelevant because I didn’t have patients in the clinic. So, I made the really tough decision. I proposed it to the board—I think no one thought I would do this—I was like, "Guys, I think for us to survive, we have to kill the machine side of the business and shut it down."

Callan Harrington 00:20
You're listening to That Worked, a show that breaks down the careers of top founders and executives and pulls out those key items that led to their success. I'm your host, Callan Harrington, founder of Flashgrowth, and I couldn't be more excited that you're here. Welcome back, everyone, to another episode of That Worked. This week, I'm joined by Ryan Eder. Ryan is the founder and CEO of IncludeHealth. IncludeHealth is an innovative healthcare technology company focused on delivering virtual physical therapy and patient data collection. Ryan has a deep design background, having previously served clients such as Nike and GE. He has also twice won Best in Show at the International Design Excellence Awards. This was a really fun conversation because Ryan gave the raw story—the ups, the downs, the challenges he experienced along the way. We talked about how Ryan uses design thinking to solve complex problems. We also talked about how winning strategic awards was critical to the success of IncludeHealth. I have to say, this might actually be my favorite episode regarding pivots. Ryan has a really unique way of looking at pivots that I think is incredibly valuable for any founder. That said, I love talking most about Ryan's process for selling a vision. Often, founders have a very clear picture of what their vision is in their head, but they struggle to get everyone else to see it in the same way. Ryan walked us through his process, which gets back to design thinking and how you can apply many of those principles. I thought it was an excellent playbook on how to do this, so much so that this is something that I'm looking to adopt personally. So, with that, let's get to the show.

Callan Harrington 02:24
Tell me about driving around the mobile showroom. What does that mean?

Ryan Eder 02:29
Sure. So, we've had multiple iterations of our company, but the earliest one was that we had digitized machines that we produced. This is a 900-pound smart machine and strength trainer and all this kind of deal connected to the cloud, and it was not practical to get everybody to come visit us to see it. So, we built a custom mobile showroom to drive it around the country and demo it to sales prospects and customers, right? The showroom was custom built, just about as big as a semi, but as wide as it can possibly be legally to not require a certified driver's license, right? You had to put an F-250 up to it, or it would bottom out. We originally hooked up an F-150, and it just bottomed out. But this is early scrappy days of startup, and I'm the one driving it around town. There was one time when I was trying to get set up for a demo, and the highway was jammed. I said, "All right, I'm going to take the back roads. I kind of know these things." It turns out, the back roads go on a windy road, and I need 13-foot clearance to go under a bridge. This bridge comes up, and it's an arch, right? I look at it, and I'm like, "There's no way in hell I'm making it through here." So, I had to slam on my brakes, but in this semi, right, this is in rush hour, and I have cars from both ends kind of jammed up and trying to fly around me. It looks like accidents are going to happen. The only thing I could do was call the cops. They had to come out and stop traffic. They thought about lowering the air in my tires to get through, but instead, they just stopped it all and slowly, inch by inch, went underneath this bridge, all the while we were called Include Fitness at the time, just with my logo blasted on there, right? It was just ridiculous. That's just one of many times we drove that around the entire country, just trying to sell those machines back then.

Callan Harrington 04:15
I love that because those are the stories that stick with you, right? When you think about, like, if that went perfectly, who cares? You know what I mean? You look back on it, and now you've got these amazing stories. Here's what I'm curious about. Were you comfortable driving this situation previous to this, or was it nobody else is going to do it, so I've got to do it?

Ryan Eder 04:35
We first built it in 2013, and I actually had one of my old neighbors who was a retired semi-truck driver, and he drove it around. We did this tour around the eastern half of the U.S. But then he was unavailable, and I had no other options. So, I was like, "All right, I'm going to learn how to drive it." I drove it down to Florida for conferences, to hospitals, and almost took out their barriers in between lanes and all that. It really is really hard to park. I jackknifed it at the University of Cincinnati and almost couldn't get it out. It was painful.

Callan Harrington 05:11
I just think, like, if I've got a U-Haul, it's a mess. Like, it's going to be a bad day if I just have to drive a regular U-Haul, so much respect for that. I want to talk a little bit about this, as I understand that this company was founded off of a senior thesis. Is that right?

Ryan Eder 05:36
Yeah, correct.

Callan Harrington 05:36
So, how did you turn a senior thesis into a full-blown company?

Ryan Eder 05:39
It was a long road. So, my background is in design and product design. I went to UC in Cincinnati and studied industrial design. My senior thesis was a piece of accessible fitness equipment. It was all inspired after seeing a guy in a wheelchair just struggle at a gym. At that time, I had this concept for the equipment. It didn’t have any technology outside of the mechanics inside of it to make it more physically accessible. But what happened was, I graduated, moved up to Columbus, started working as a product designer, and I entered it into this design competition. It's called the International Design Excellence Awards, and it ended up winning Gold, Best in Show, and People’s Choice. That got a lot of eyes on it and created an opportunity to push it further. So, I spent six or seven years moonlighting, just trying to get some grants and other things to see if I could turn this into a business. It wasn’t until I raised the first dollars in 2012—so six years went by until I raised the first amount of money to start pursuing that as a business.

Callan Harrington 06:37
I mean, you were a designer for a solid seven years. Was this something that you were constantly working on in the background, like a nights and weekends type of thing? Or was it five years in, and you said, "I'm going for this"? What did that look like?

Ryan Eder 06:49
No, the awards happened six months after graduation, and then there were opportunities to push it further, but not enough to do it full-time. So, it was nights and weekends. I did all the original patent drawings to save a few thousand dollars on filing for that first patent. Then, I was fortunate enough to get some grants based out of Cincinnati, some grants from P&G as well as CincyTech, that got it going. But it was nights and weekends for a very long time, and my wife, bless her heart, I just grinded on it. So, it was kind of working around the clock. Part of me felt like I had a responsibility to do that because I felt like it got these awards, and I should push it further. And, of course, it was just a passion of mine, so I kept cranking at it.

Callan Harrington 07:33
You're getting these awards, so I have to assume that would propel your career as an industrial designer. Is that fair to say?

Ryan Eder 07:37
Yes.

Callan Harrington 07:48
Why not pursue that? Is this something that you've always wanted to do? You've always wanted to be an entrepreneur, or was it that you just had to build this product?

Ryan Eder 07:48
Looking back, I have always wanted to be an entrepreneur, and I had some businesses in high school and stuff. For me, if you're designing, I mean, you're building stuff. So, in my mind, this didn’t view any differently. It's like, while I'm building things, I'm able to build exactly what I want to build. In my mind, if I'm going to be creating things, I want to create things of value, and how I define value is if it can help other people. So, this was a way to do that. I mean, I love working on golf clubs for Nike and TaylorMade and medical equipment and vending machines for Coca-Cola and stuff. I love the design process, but if I could do something in healthcare and truly help someone, that’s where I want to focus, and this was an opportunity to do that.

Callan Harrington 08:27
So, you launched IncludeHealth, you had been building on this on the side. What was the moment that was the, "Okay, I'm at least getting some sort of traction," or was it, "I'm not getting any traction. If I don't quit my job, I’ve got to go do this"? What did that look like?

Ryan Eder 08:44
It was a process. So, after we got a few grants, I got maybe $75,000 in grants that kept it going nights and weekends for a while. We had to raise the first round of money, which looked like around $300,000, and we reached out to local angel groups and entered diligence. We got further along and thought we had one teed up all the way until the end, and it dropped out at the 11th hour. I thought it was done. Literally, it's cliché, like, we were like, "Look, if we can’t figure this out by this date, it's over." I actually thought it was over so much that I needed to get out of Columbus. I needed something fresh; I was like, "I’m just toast on this." So, I ended up getting a job lined up in Chicago. We had an apartment picked out and stuff. I told the design firm, "Look, there’s a chance I’ve got one group with a line in the water. If they say yes, I’ll know in two weeks. I’m going to have to stay." Sure enough, they did. So, we got out of the lease, I canceled the job in Chicago, and said, "All right, I got the first amount of money." Even then, I couldn’t go full-time for the company, so I became a client of the design firm I was working for. So, I was working for myself as a consultant for myself as a client, right? So, it was kind of funding this project where we developed the first version of the machine. Then, we took it on tour in '13, and on that tour, I had an idea for the machine, not just to be physically accessible, but also, I would call it cognitively accessible, which is what made it smart with the technology. It wasn’t until then that we raised that round, and that ultimately ended up, I think it was in '14 or '15 that I was able to jump over full-time.

Callan Harrington 10:31
Was that when you had officially left the design firm that you were at, and they became a client of yours to help sustain? What did that look like?

Ryan Eder 10:40
No, IncludeHealth was actually named IncludeFitness at that time. IncludeFitness became a client of Priority Designs, which is where I worked. So, I was simultaneously the client and the consultant, right? I basically went to the design firm and was like, "Hey, I’ve got this money. I want to spend it here to develop and build this machine," because they have a world-class prototyping facility and engineers and all that. So, I was like, "Can I become a client while still working here?" We figured it out, and that’s what we did.

Callan Harrington 11:09
That had to have been just an amazing leadership team at the firm to be so supportive. Was that the case?

Ryan Eder 11:15
Yes. Shout out to Paul and Lois Kolada. They are the ones who founded Priority Designs, and without their belief in me and the vision of this, none of this happens. Even before that, they sent me out to San Francisco for the awards. They helped me build a little scale model of it and then all these things that really helped create the opportunity to push it forward. So, I’m just eternally thankful for them.

Callan Harrington 11:41
Yeah. I mean, that sounds like an amazing setup, and you see that, right? You see the opposite side too, right? The people that do support it should get all the credit in the world. I think that’s amazing. You mentioned a couple of times that this was IncludeFitness, because, as I understand it, this was a hardware product first, right? Like, this was an actual physical product. Well, raising capital on a hardware product is not the easiest thing. What challenges did you have launching that part of the business?

Ryan Eder 12:07
Everything. It was all centered around my thesis, which was a machine. So, it was like, "Okay, how are you going to manufacture this machine?" We ended up manufacturing in Cincinnati, building the supply chain from scratch with 35 suppliers and 1,000 parts in the machine. It ended up being $6 million raised before we got the machine out, and just a tremendous amount of R&D and development with that. If it weren’t for the awards that kind of put it on a global visibility scale, I probably never would have been able to do it. Those awards in '07 were like the equivalent of winning the Oscars in the industry, and it was the first time a student beat out the whole industry. It was a big deal then, and that’s probably the only reason why people leaned in the way they did on such a hardware-centric product.

Callan Harrington 12:57
I was at a company in a similar situation. We raised a good amount of money pre-revenue, and we were getting a ton of press. There was national press, global press, because we were doing a lot of cool things. But it got to a point where the press wasn’t enough to continue to sustain the momentum, the capital that we were raising, and things like that. Did you run into that?

Ryan Eder 13:23
Oh yeah. We hit a couple of speed bumps along the way, and pretty gnarly ones on the machine side. I remember this very clearly. This was in '16, and we were preparing for manufacturing, and we were trying to get, again, like 35 suppliers, 1,000 parts. You’re getting all these quotes coming in, and you have a whole business model that revolves around the cost of goods to build this machine. I remember getting emails on Halloween Eve, Thanksgiving Eve, and Christmas Eve that totally blew up our entire model. Each one was like, "Okay, I don’t know how we’re going to do this," and then it was like, "Okay, we just got this," and, "Okay, now here’s the haymaker." So, I spent Christmas vacation at my in-laws' down in Florida doing nothing but sending out shareholder and board communications about how the entire model blew up, how we were going to have to shut down the business and figure this out, and pause manufacturing. Our mobile showroom was inside of the manufacturing facility that we were using, and we were worried if we were going to close down production, that they were going to lock it up and keep it. We had a great relationship with them—I had a key to their facility—but we went in at midnight the night before, and got the machine and trailer out of there before 7 AM when we said we were pausing manufacturing. The company went on pause for 18 months.

Callan Harrington 14:45
18 months? What was that 18 months like?

Ryan Eder 14:49
Brutal. It was the, "Okay, I'm out. We’ve got to refigure if there’s anything here." The business model completely just went upside down. So, we were developing the software, and I started to put pen to paper around a business model to where, you know, software as a service or as a subscription. This was kind of like a platform. It was like the hardware and software all looped together—monthly payments over a three-year term. I was able to pull together about $700,000 to kind of just keep the lights on during this time. Then, I pulled in someone that would finance the equipment for these organizations, I pulled together pre-orders of people that would buy it for that price, and I got enough pulled together over that time to justify new financing to actually commence manufacturing. We installed our first machine—our first customer was the VA up in Cleveland in January of '18.

Callan Harrington 16:44
What was that feeling like?

Ryan Eder 16:44
Wild, scary. At that time, the only FTEs were myself and my brother full-time, and we installed it with one of the engineers at Priority Designs who helped build it. We showed up to the VA with this truck, and I remember the guy was like, "Do you have a BOL?" I was like, "What are you talking about?" He said, "BOL—a bill of lading." I looked at my brother like, "Yeah, who loves boxes?" Sorry. We were rolling this machine in and installing it in a spinal cord injury clinic. So, it was very high stakes. These are paraplegic and quadriplegic veterans from serving our country who are in this state, and this machine can help. You’re getting it set up, and literally, the first time you walk away and you get back in your car, that’s the first time you’ve ever left the machine by itself. You’re just like, "Okay, all right, let's see if we get a phone call and what happens." It’s still there to this day.

Callan Harrington 16:44
When they started using it, I'm curious, what was the feedback?

Ryan Eder 16:49
Again, the whole thing was inspired by seeing a guy in a wheelchair struggle while exercising. We had a quadriplegic veteran who was the first to use this. He had dexterity impairments and all, so he was able to adjust everything with a closed fist and do the first reps. We’ve got video and photos of it and stuff. It was that dream-realized moment. Holy shit, we got it here. This is exactly what we wanted to do, who we wanted to help, and now it’s there. It’s not just like, "Here’s a demo. We’re going to drive the showroom away. Okay, see you next time." It’s like, no, you have it now. It was awesome, and it was also terrifying because you just don’t know what could go wrong mechanically on it. We did a ton of testing. There’s a whole story about how we ripped an arm off of the machine on Christmas Eve, like, three weeks earlier, kind of deal from testing. But it was empowering, and it was inspiring to be like, okay, we can do this.

Ryan Eder 17:44
Did the machine rip the arms off one guy?

Ryan Eder 17:44
No, no, thank God, no. We did extreme testing. The engineers at Priority are really great. We were testing it to its max failure. It had arms that waved, and we did the full weight stack arms in their weakest position. We set up this testing rig, and we had cameras viewing it. This was Christmas Eve. My brother stopped by the office before going down to our parents for Christmas. He calls at 11 o’clock at night. He goes, "Ryan, it’s bad. It’s bad." I'm like, "What are you talking about?" He’s like, "Look at the camera." The arms are ripped off, and the arms of the machine just ripped off, and the thing’s just destroying itself on this hydraulic tester. This is two weeks before it’s supposed to be installed. So, you're just like, holy shit. December 26, I was able to convince a few of the engineers to come to Priority, and we spent the next two weeks just figuring out exactly what went wrong, making sure that this installation at the VA was going to be safe. Sure enough, it was, and we had installed volatile machines, and there were no issues there, but it was intense.

Callan Harrington 18:54
I love that story because I think anybody that’s ever started a business can relate to that. Man, this is not going how we think it’s going, and it’s just all-nighters for the next couple of weeks, however long that might be. One of the things I'd love to fast forward to is IncludeHealth now as a software company. What was the moment when that changed?

Ryan Eder 19:15
We got the first machines out at the beginning of '18. We built four batches of these and installed them in various hospitals, senior care facilities, and the VA. Our largest investor, CincyTech, has a relationship with Cincinnati Children's, and they were developing biofeedback technology fueled by computer vision. Now, it was in a human performance lab with mo-cap cameras, like in video game studios or movie studios. They were developing this technology and considering spinning it out, but they were like, "Okay, if we do, we’ve got to build a lot of the core infrastructure that Include has already built and spent all this time and money on. Maybe it makes sense to license it to us." So, we did that deal in late '19. We were like, "All right, we’re going to have machines, and then we’re going to have the ability to track movement alongside these machines in clinics." Then, COVID hit, and all of a sudden, the idea of having smart machines in a clinic was irrelevant because I didn’t have patients in the clinic. So, I made the really tough decision. I proposed it to the board—I think no one thought I would do this—I was like, "Guys, I think for us to survive, we have to kill the machine side of the business and shut it down." I said, "I have an idea of taking this computer vision and being able to deliver care in patients' homes," and laid out what I thought that looked like. They supported it. So, after all these years, from starting in '06 with the idea, to 2020, the machines are done. Then starts the computer vision era, and that’s a whole other era that we can unpack. But that was the inflection point.

Callan Harrington 20:51
What is going through your mind on this one? You already resuscitated it, like you brought the company back, finally got the machines to work, and now you're here. What is going on in your mind at that time?

Ryan Eder 21:03
A lot. But some of the early feedback we got from the machines was people saying, "Hey, we really like the machine, but we like the software more. How can we get more things on the software?" In my mind, I was like, I’m never building another damn machine again. That was horrible. We actually took the brains of our machine and put them into little sensors that we made other machines smart, and we connected them all on a network. We developed that within a year. We piloted it with the Air Force even, and then we debuted it at a physical therapy conference in February of 2020, right before lockdown. All of that—the machines, sensors included—just went away. My mind was like, "Okay, we were very fortunate that we did that deal with Cincinnati Children’s. We had fresh capital." A lot of companies were like, "We're dead. There’s nothing." We fortunately at least had that, and I was like, "If we’re going to survive this unknown duration of the pandemic, let's place some bets on computer vision and make it as scalable and accessible as possible." In my mind, that still served the original goal of the company, which was making care more accessible. People would always talk about pivoting. I always joked that I kind of viewed it as like a fan, meaning that we started at one point, and we're still pursuing the same trajectory. It’s just expanding how we're doing it. Maybe that's just how I convinced myself to keep going, but I’m really glad we did, because what has come from that has been really exciting and much more scalable than what we did with the machines.

Callan Harrington 22:38
So, if I’m hearing you correctly, you were in a situation where it sounds like you were pretty excited about this software opportunity, and it was more, using your words, like, "If I never build a machine again, I’ll be super happy," more or less. So, when this time came, it was almost kind of opportunistic to say, "Hey, we're going to drop the machines and go all the way on software." Is that right? Did I hear that correctly?

Ryan Eder 22:59
Yeah, in a really kind of twisted way. I mean, like you could argue, COVID saved the company through that process, and it forced us into being the company we are today.

Callan Harrington 23:15
How did you capitalize on that? Was that a full company restructure? What did that look like?

Ryan Eder 23:21
Every one of these financings is challenging. When you're kind of living through these iterations of a company, some will argue you're carrying the sins of your past, and I mean, that goes all the way to even the current day of the current version of this, but you're just kind of walking people through my thought logic, and like, "Okay, here are the steps. Here are the opportunities we have. Here's why we think this makes sense. Here's why we think this doesn’t make sense. Do you support it? Do you not?" We've had people come and go that did not like the machines. They came in on computer vision, and vice versa. As a designer, you are trained to communicate a vision, and that has served me really well in building Include, where I can lay out what I see and determine if people see the same thing and whether they’re willing to support it or not.

Callan Harrington 24:15
Can you get a little bit more granular in that? What are the steps to selling a vision?

Ryan Eder 24:22
For me, it’s always making things tangible. It’s one thing to be on here, waving hands and saying, "I see the world as a future place." But everyone’s going to interpret that in their own way, in their own mind, right? Some may interpret it in a way that makes them more excited, some less. As a designer, you’re trained to visualize thoughts and concepts. So, I’m able to put together all these different visualizations of how I see this playing out and what I think this could look like, and these renderings that look real so people understand, "Okay, this is where he wants to go. I get it." It’s not only just the visuals. You learn how to create a narrative and a presentation that’s easy to follow, for people to understand. It’s easy to overwhelm people with a lot of technical jargon that ultimately just confuses people. So, how do you kind of step away from that and talk about the bigger picture vision and lay out a simple path of how you think you can get there?

Callan Harrington 25:19
Are you using a story structure format for that?

Ryan Eder 25:23
It’s more traditional, whether it’s 3D modeling or Adobe Photoshop, and creating visuals. Some of them can be animated; some of them can be stills, but you’re just really kind of painting this picture so they can see exactly what you’re seeing. We're very fortunate that in design, you have all those tools in your toolbox to do that pretty quickly.

Callan Harrington 25:45
Are you building these yourself?

Ryan Eder 25:45
Yeah.

Callan Harrington 25:45
I had a feeling so. But I think what I hear you saying is that you're not showing a slide with a bunch of bullet points; you're actually creating images of what this is going to look like in the future. Is that right?

Ryan Eder 25:45
Absolutely.

Callan Harrington 26:07
If you're a founder and have no design skills—let's use me because I’m a great example of this—how do I work with a designer to paint that vision?

Ryan Eder 26:07
You’ve got a few different options. Nowadays, there are a lot of designers you can get, like freelance designers on sites like Behance and these other ones that you could link up with and say, "Here’s what I’m thinking about. Can I hire you on an hourly basis to help visualize this?" Now, with all the AI tools out there, you can also just start that way and start prompting some things to get some initial visualizations. It’s harder to fine-tune those things, but you could even use those to start and kick-start your relationship and engagement with a designer, like, "Hey, here’s kind of what I’m thinking. These are the vibes I like and how I’m thinking about this. Can you help turn this into a cohesive vision for me?" But, since day one, my awards were based on conceptual renderings of a machine. I had no machine, right? So, every step along the way, I’ve been able to leverage those tools to help navigate the path.

Callan Harrington 26:57
So now coming back to this we were talking about in the beginning, it seems like you used a lot of this creative side that you have and this visionary side. How do you balance that with the execution and the operation side? Let me ask, I guess, a question on that. I don’t want to say necessarily, because you could have had that skill set to begin with, or you didn’t. Did you hire for that? Did you have a co-founder that had that side? What did that look like?

Ryan Eder 27:24
I did not have a co-founder. If I were to do it again, I would have a co-founder because it’s very lonely just doing it anyway. I did at one point have someone come in for a couple of years in the very early days as CEO to help me put together a business plan and all. Ultimately, I became CEO and kind of a subsequent financing on that. But when that transition happened, I just got thrown into the fire. I mean, I remember someone saying, "Put together your financial model," and I’m just staring at them, like, I don’t even know where to start. I remember going into an entrepreneurial boot camp, and it was like a four-day boot camp, and they gave me a binder this thick of all the things—just the legal side of stuff, right? And the formation—and I remember calling my wife—my girlfriend at the time—and I was like, "I’m done. There’s no way I can figure all this out. I’m a designer. I can’t do all this." You just chunk by chunk, right? Over the years, you just build the experience. Design thinking is another term where you take these complex, hairy problems, however you want to view them, and learn how to dissect them, bite them off in digestible chunks, and then rearrange them. So, I took that mindset, that type of thinking, and applied it to the business plan, applied it to the financial model, applied it to all these other pieces, and it served me really well, and I was able to get where I needed to go.

Callan Harrington 28:50
I’m curious, in your role now, is it that you hired the right people in there, or are you still doing a lot of those pieces?

Ryan Eder 28:56
Oh, no, I definitely have help now.

Callan Harrington 28:58
Did you make it a point to hire into those positions so you could free up your time to focus more on the vision and the creative side, or was it when the pain got big enough that’s when you hired them?

Ryan Eder 29:10
It’s more when the pain got big enough. Anytime you’re a young company, you're still just trying to maximize the resources you have. A cardinal sin that you see so many do is just overhire too quickly, and then you’re just burning through cash that maybe you shouldn’t have done, and then you find yourself in a really tough spot. So, you're just trying to hire carefully, slowly. You're carrying a lot just trying to figure things out, but you’re also able to build off of your previous iterations of things. So, it doesn’t become as big of a lift as the zero-to-one lift, if you will. So, as Include has evolved over the years, you’re still leveraging a lot of the work and infrastructure of the previous iterations versus a complete rebuild.

Callan Harrington 29:53
You make this transition to software, and essentially, not starting from scratch because you've got a very reputable, big client with Cincinnati Children's. I mean, of course, it's a very difficult decision. You’re cutting the core of what the business had been. But what was that moment where it was, "We made the right move"?

Ryan Eder 30:13
It didn’t come for a long time. At that time, again, computer vision was very hardware dependent. We wanted to free it from that. So, in 2020, we placed some very early bets on what was called 2D pose estimation—being able to track movement just with whatever camera, like your webcam kind of deal. There were some SDKs out there. Apple had some stuff in their dev kit. Google had some stuff in their dev kit that we thought we could maybe utilize. Apple’s had a little bit more accuracy at that time, but it was locked to Apple devices. So, we actually started working with the Air Force through Small Business Innovation Research grants in '18. The Air Force was the first to get a version of this in late '20. While the models were more accurate, they were locked to Apple devices. I want to go into healthcare, and there’s no way I can say only the Apple users can benefit from this, right? So, I did a side-by-side of Apple’s models and Google’s models and sent it to Google and said, "Hey, is there any way we can collaborate? This is what I’m trying to do." You don’t send something over the fence to Google and think they’re going to respond. They responded. We worked with them for two years training their models to be accurate enough to measure physical therapy movements. We were featured in their I/O conference in '21 as the case study for their new body tracking models and all that, and just caught them at the right time. Shout out to Jason Mays; he’s just been a fantastic advocate from day one in that collaboration. Then, we were able to have something that ran on anything, and we were able to give it to the healthcare industry starting in '22.

Callan Harrington 31:51
You hit this Hail Mary with Google, another Hail Mary. Now you take this to the healthcare industry. How has that changed? Because now you're essentially in the zero-to-one phase of getting this thing together, and now you're taking it to the market as a whole. What were the challenges that you experienced as you started to do that?

Ryan Eder 32:09
Brandon and more roadblocks. Our original model was to use this technology with third-party clinicians—hospital systems, physical therapy networks—and help them deliver hybrid care. There was a new reimbursement model coming through that launched in January of '22 called Remote Therapeutic Monitoring. So, anytime you’re doing technology in healthcare, it’s always about how money flows through this. We live in a fee-for-service world, predominantly. It was like, "Okay, how can you help generate additional revenue for your customers?" This model came through, and we thought it was the godsend of all this. So, we were working with all these different institutions trying to operationalize it and just got roadblock after roadblock in terms of clinical workflow disruption. These clinicians are used to a very specific way that they’ve been treating patients, and deviations from that are really hard. The payers were also fragmented, so not all of them supported RTM, and if they did, they had different rules around it that made it really challenging for these providers to navigate. I mean, we fought a year and a half. We raised a big round. This is where we’re going to go, and then it just hit a wall. We made another tough decision and said, "Okay, this isn’t going anywhere. If it is, it’s not going to go on the timelines we need it to." Along the way, we got looped into a couple of value-based care arrangements, which is where you’ll have a group that’s kind of managing the overall costs and outcomes of a population. Sometimes it’s employer-based; sometimes it’s Medicare Advantage-based. We were originally supposed to be just a technology layer in this. They ran into the same issues of getting traditional providers to adopt new ways of delivering care. So, they came to us and said, "Is there a way you would treat these patients directly?" That was an inflection point of us then becoming a virtual physical therapy provider ourselves and a medical practice. At that time, I was like, "I know what our software can do. I know how we would do it," and I did have clinicians on staff. So, I said, "All right, let’s give it a try, just with one account." Tried it. It went really well, got a second account, then a third, a fourth, and all of a sudden, you start seeing patients being referred to us from, again, Medicare Advantage plans, employer-based groups, orthopedic groups, and we're treating these patients using our own proprietary platform that we built with our own clinicians, but in a way that makes care tremendously more accessible both logistically—so patients are doing it in their own homes—but also economically, where we’re offering care at a fraction of the cost of traditional care. Over the last six to eight months, it really feels like, okay, this is where this technology is meant to be, and the traction just continues to grow.

Callan Harrington 35:05
How do you make sure you maximize that? What is going on in your mind as you think about that?

Ryan Eder 35:10
It’s always about building proof points and then making people aware of that. Early on, you're testing this out, you're like, "Okay, what are the key metrics I need to measure that I can, on the other side of this, tell you, 'Look, this works,' and you can’t refute that if I can give you these metrics." So, we built it all out to say, "All right, if I can achieve these, I can then repurpose that to get new accounts." Those new accounts do this. If you can repeat that success, it starts to build on itself, right? Then, you start to have partnerships that you’re able to share publicly with folks. Just last month, we announced our partnership with Ortho Forum Value Network—150 orthopedic practices across 45 states—as their virtual PT partner. That also generates awareness within more people coming, and it starts to build itself.

Callan Harrington 35:55
I'm curious, when you look back at this, what were those things that were present that caused these pivots to be successful? What I mean by that is you seem to have a very good process for knowing when not to proceed forward on something and when you do make that pivot. This might go back to the design thinking of how to break this down into what we need to do today to tackle that, and then being able to sell that vision of where we're going. I mean, that’s what I'm hearing. I'm curious, in your own words, what do you think are those things that Include did that allowed you to pivot and be successful with that pivot?

Ryan Eder 36:32
I mean, I think you nailed it. I think it is the design thinking skills. When you're designing, you're trained early on to not design for yourself; you are designing for others. So, that also means you don’t fall in love with your ideas. It’s very easy for entrepreneurs to fall in love with their ideas blindly, and that can take them to the grave in the process. Making the cut from machines—I don’t think anyone thought I’d be willing to do that. They thought I was just enamored with these machines, but you're trained to think that way. I joke that it’s a spidey sense, but I get a feeling I can identify pieces of the equation where it's like, "I know I have enough to be able to weave this together, and it’s a viable path." It’s kind of how this has been. It makes it challenging for a lot of reasons, but what keeps me going is just the true north of that. You're going to build something of value, and if you can help people while you're doing that, that’s why you do what you do. We’re able to do that now in a way we just couldn’t have done if we didn’t go through these iterations over the years.

Callan Harrington 37:40
What comes next for IncludeHealth?

Ryan Eder 37:45
It is really about scaling access to physical therapy. So many patients can’t make it to the clinic, whether it’s logistically or economically. We all know that movement is medicine, so the trick is, how do you get people engaged and moving on a regular basis? What I get excited about is how technology can basically supercharge a clinician. If you think historically, going to physical therapy is finding time to get the PT and you together in the clinic, right? Then, you had telehealth. But it's still just trying to sync your schedule with the PT’s schedule. Well, now it's like, I just need to get you together with them once a month for an eval, and then I’m able to leverage the technology for you to do it on your own time, collect all this data back, update your plan, message you, and guide you through your progress. Then, as you have the explosion of what you can do with AI and how you can drive operational efficiencies—just in terms of how many patients a PT can effectively manage at any given time—but also how you can enhance the patient experience, how you can extract insights both individually and at aggregate to get you where you need to go as efficiently as possible from a timeline perspective as well as a cost perspective. That's what's all in front of us, and the amount of data that we’re able to pull from these sessions that you're doing in less time than it takes you to get to the clinic in the first place is pretty exciting as to where this can go as you scale it.

Callan Harrington 39:15
You went through a lot of these evolutions. You're hitting these different stages of the business and totally different skill sets and things like that. How do you stay sharp on that? How do you continue to develop yourself to make sure that you're still the best person to be leading the company?

Ryan Eder 39:30
I think the iterations are what’s sharpening it. It’s not just doing the same thing on repeat. You're constantly pushing the boundaries of what the company needs, trying to think about what's next, and trying to be ahead of that based on all the visibility that you have of what’s going on and what’s current. I fuel off that. I always need to be building something. So, I’m always looking for, how can I push this further? How can I improve that? Or how can I do this? That keeps me engaged and sharp.

Callan Harrington 40:03
Another thing that's interesting is the ideas have changed, pivots have happened, but the problem is no different than what that original senior thesis was.

Ryan Eder 40:12
No, again, that’s why I say we fanned, right? It’s the same starting point, it's the same goal we're trying to solve, we're just doing it in a broader way than we ever could have done with the machines.

Callan Harrington 40:23
Ryan, last question I have for you here: if you could have a conversation with your younger self, age totally up to you, what would that conversation be? What advice would you give them?

Ryan Eder 40:32
I think it’d be something that still rings true to this day: staying true to yourself and your true north and continuing to do right by people. It’s easy in this space to get blinded by a variety of different incentives, motivators, and you name it, right? People get excited about articles, the startup life, all that kind of stuff. But you just boil it down: be true to yourself, true to what you're doing, and do people right, and you'll be good.

Callan Harrington 41:01
Yeah, it’s almost kind of getting back to your why and why you're doing this. You're a perfect example of that just based on what we just mentioned—that problem statement from the absolute beginning is the driving factor through all this. So, Ryan, this is great. Thank you for coming on. I really enjoyed this.

Ryan Eder 41:17
Likewise, I appreciate the opportunity.

Callan Harrington 41:19
Absolutely. I hope you enjoyed Ryan and I's conversation. I loved hearing how Ryan sells his vision, and I think it's an excellent roadmap for any founder. If you want to learn more about Ryan, you can find him on LinkedIn in the show notes. Also, if you liked this episode, you can find me on LinkedIn to let me know. If you really want to support the show, a review on Apple Podcasts or Spotify is very much appreciated. Thanks for listening, everybody, and I'll see you next week.