|
Eargo Inc. |
|
|
August 14, 2017 Issue |
||
|
CEOCFO MAGAZINE |
||
|
|
||
|
Revolutionary Invisible Hearing Aids Designed to Eliminate the Stigma Associated with Traditional Hearing Aids |
||
|
Chief Executive Officer
Eargo Inc.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – August 14, 2017
CEOCFO: Mr. Gormsen, what is the concept behind Eargo? Mr. Gormsen: Eargo is in the business of hearing health. Hearing health is one of the largest health issues that the world actually faces. There are now more than 360 million people across the world suffering from some level of hearing impairment. It is actually quite common and it comes with age, so it is classic age related hearing loss, to be a little bit more specific and relevant. When we look at the US market, there are forty-eight million people who have some level of hearing impairment and would benefit from some hearing support. What makes this industry interesting and the reason why we started Eargo is that although there are forty-eight million people experiencing hearing loss, only about nine point five million are actually doing something about it. The number is staggering. Many people talk about your senior years as being your golden years. Unfortunately, not hearing very well can quickly make your golden years your lonely years, which is a real challenge. Most don’t seek hearing improvements due to stigma and price. Eargo was invented to address both these issues
CEOCFO: Why do you think hearing somewhat of a stepchild and has not gotten the attention it should? Mr. Gormsen: I have spent probably the better half of one and a half decades in the hearing aid industry prior to joining Eargo and I can honestly say that this has always been a challenge that people have talked about, this stepchild analogy that you are using here. Why is there such stigma around hearing aids? I think it has to do with when you wear a hearing aid you begin to feel old or feel handicapped. As a result, people are trying to avoid getting into them. There is very little awareness around what a hearing aid actually is and what you can actually do with them. First of all, it is typical for males over 60, up to sixty percent will suffer from some level of hearing loss. This is actually completely normal. It is not a disease. It is not a deficiency. However, I think the stigma is very much tied to the perception around what hearing aids were and those were back in the days when you would see in church or at family reunions, someone would have one behind your ear, the kind that squeals and the wearer does not hear it because of the hearing loss, but everyone else hears it. Unfortunately, that is something that has stuck with the industry and I also think that has very much to do with what people see. Nobody is really communicating around what kind of solutions are out there and how far the technology has come.
CEOCFO: What attracted you to the company? What has Eargo offered to solve the problem? Mr. Gormsen: I was introduced to the founders through an early stage investor given my industry experience. What attracted me personally to Eargo was that the two founders had come up with an innovative concept in terms of how to package hearing amplification technology in a way that it becomes invisible because it is completely inside the ear. Plus it is comfortable, because typically when you have things in your ear they are not very comfortable. However, Eargo developed a fiber system that holds electronics in the ear, making it actually comfortable and allowing natural air to pass through. They had also really focused on making the experience as user friendly as possible. What they ended up with was a new type of hearing aid that was invisible, comfortable and easy to use. In addition, taking that product to market and working with users in a way that makes it easy to use and easy to try and ultimately easy to buy, which was one of the things that we have been looking at and that was very different. Traditionally the industry, as it is today in the US, all hearing aids are dispensed through audiologists and dispensers; professionals typically scattered all over. There are more than twelve thousand independent dispensers around in the US. Eargo seeks to make hearing aids available through ecommerce. By channeling the power of the Internet, Eargo seeks to empower the user in the decision and educating them about what hearing is. Furthermore, we give them the opportunity to actually buy it from their home, receive it in their home and try it in their home. No endless visits to a doctor’s office. Eargo is easy, fast and it works!
CEOCFO: Are people leery about putting something in their ear? It seems to be you are always told never to put anything inside your ear. Is there trepidation from potential customers? Mr. Gormsen: That is a great observation! I think, absolutely, that is why one of the things we are trying to do to help people with this is, as part of our process of getting people to try Eargo, we have what we call a non-working sample that allows them to feel what it’s like in your ear. Also, the product is designed in such a way that it cannot get lost in the ear. The ear canals bends and it cannot go beyond those bends. Secondly, there is also what is called a “fish line” pull thread that is invisible, so it is made out of transparent material, allowing you to easily withdraw the device from your ear. People who actually experience it say, “This is easy to insert.” It is also easy to extract again, because you are right, this is something that people always feel leery about.
CEOCFO: How does it work? Mr. Gormsen: Eargo is a piece of innovative high electronics or electronics that are packaged in a very discrete way. It is almost like inserting an earbud in your ear that you are used to from your cellphones. However, this one has no cord. It basically rests individually in each ear. The device turns on automatically fifteen seconds after being taken out of the carrying case, which is also a charger. You basically take it out and put it into our ear. The device will automatically turn on. The charge of the device will last up to twenty hours, so a full day. When you go to bed at night you will take them out, you will insert them into the charger, they will charge overnight and they will be ready for the next day’s use. That is really the concept here. While you are wearing them there is an opportunity for the user to shift programs through an ear tap, so a gently tap to the ear will cycle through programs to give you more or less amplification, depending on your hearing loss or the environment you are in. If you are in a very noisy area you might want to turn down the volume. If you are in a very quiet area or an area where you need to listen better, you can turn up the volume.
CEOCFO: What is the medical community’s feeling about Eargo? Mr. Gormsen: Eargo is an FDA regulated, Class I medical device. We are under the regulation of the FDA in terms of safety and efficacy, which is very important to us. Also, the product is actually developed by an ENT surgeon and we are getting a lot of support from ENT’s because they know that when people use hearing aids it helps them to interact better socially. Where conflict arises is more with the people who today dispense the products. This is a dispenser or an audiologist, in the classic distribution channel. You can say that we deliver a different level of support than they do. They will typically deal with more complicated, more severe losses. Eargo is a product for the majority of the population; mild to moderate losses and not complicated losses. If we see that people are in need of more we would always refer them to a professional channel.
CEOCFO: Would you tell us about Eargo Plus®? What is the latest and greatest that you have developed? Mr. Gormsen: Eargo Plus is the sequel to the original Eargo. The original Eargo was the first generation product that we used to prove the concept, to prove that we can actually sell through the ecommerce and direct channel. We quickly uncovered some product improvements that we could implement, that we wanted to, so we actually withdrew the original Eargo from the market. We stopped selling it because we wanted to make the best possible product. Some of the improvements are tied to earwax, which is unfortunate to talk about, but a very natural thing. We also made improvements to the durability of the device, so Eargo Plus is the right product that we believe can help a lot of people out there with their hearing loss. That is really the difference.
CEOCFO: What is happening today at Eargo? Mr. Gormsen: That is a great question. I have been asked that a lot in the last month. What I normally tell them is that it is a lot of fun being here at Eargo right now. We turned on our acquisition engine in April and we are shipping products every day. Most importantly, we are helping people hear better every day. The growth has been dramatic and we are hiring many colleagues to support the growth. Over the last three months we have actually hired thirty people. So our current focus is about building up a team that can to ensure our customers, the people who will buy Eargo, have a great experience in terms of advice and onboarding, from our professional hearing guides who guide and help customers get the most out of the device. In addition to that, as part of all the hiring that we are doing, we are now building our engineering and operational team to make sure that we can continue to innovate and stay ahead of the competition.
CEOCFO: How did you decide on the price point? What went into your decision? Mr. Gormsen: Thank you for asking. It was a lot of discussions and a lot of disagreements. I think that one of the challenges of hearing aids is that they are rather expensive. A hearing aid is an investment in your personal health. The average price point in the US market is around four thousand four hundred dollars for a pair. It was important for us to make the product available to as many people as possible. That also means lowering the price as much as possible, without compromising the support and the quality. You want the quality of the device, but also the support that we could give to people. Therefore, it was almost a calculation of how efficient to we believe we can get. We wanted to make the price of our product available to as many people as possible and that is how we ended up at the $1,999.00. At this point we definitely make it available to more people than what the industry does and we can still guarantee an FDA regulated, Class I device, high quality and also a lot of support. Of course, had we made it one thousand dollars or five hundred dollars it would have been accessible to far more, but then we would have to make compromises in terms of quality and support and that is one area that is very clear. We want to deliver people the best and not just move a lot of volume out there.
CEOCFO: Why pay attention to Eargo? Why is the company so important? Mr. Gormsen: Eargo exists to help people get more out of their life. By hearing better you become socially more engaged. You become socially more active. You get the best out of your senior years, because typically hearing loss comes from fifty upwards. Our vision and our dream is that we can get many more people to hear better and also be proud of their hearing, share it with their friends and their families, so that hearing is not something that you do not talk about, but something you talk openly about as you do with eyesight or any other parts of growing older. That is really our hope and I think that is what makes Eargo so interesting; that we have the technological knowhow to do it, as well as the marketing to create the awareness and the distribution power to make it possible. |
“Eargo Plus is the right product that we believe can help a lot of people out there with their hearing loss. That is really the difference.”- Christian Gormsen
Eargo Inc.
Contact: Christian Gormsen 800-61-EARGO
|
|
|
|
||
|
|
||
|
|
||
|
|
||
Christian
Gormsen