Russell Glass (CEO, Headspace Health)
A chat about mindfulness, the Ginger/Headspace Merger, selling to employers and more
If you are interested in reading more interviews, just like this one, with founders, operators, and investors from today’s leading companies/startups, feel free to subscribe below!
Interview Guest: Russell Glass
Role: CEO at Headspace Health
Previous: Prior to joining Headspace as CEO, Russ was the Founder & CEO at Bizo, a B2B audience marketing and data platform. Bizo was acquired by LinkedIn in 2014. Russ then joined the LinkedIn team as VP of Products.
Quick Note: This interview was recorded back in August 2021. Please excuse any parts that feel outdated.
Interview Highlights:
Meditation has helped de-stigmatize mental health by removing barriers to access and reframing the problem.
The synergies between Headspace and Ginger…
30% of enterprise employees engage with Headspace (compared to ~5% for other mental health solutions).
Headspace is an effective customer acquisition engine for Ginger.
Headspace Health has partnered with Cigna nationwide, expanded their Kaiser Permanente relationships in 5 regions, and partnered with AmeriHealth Caritas as their first Medicaid plan.
Lukas: Why is meditation such a great meditation entry point to therapy?
Russ: Anytime Ginger sends communications out to our employer customers. Anytime you mention the word mental health or words mental health, you have an automatic drop off in response rates. Because most people don't look at themselves as having mental health issues or mental health needs. Those who do are already getting help. The vast majority of people are going through life not really thinking they have mental health needs.
And so what Ginger has learned over time is you've got to communicate differently with those people. You've got to say, for instance, being a new parent is hard. Ginger can help. Not sleeping well at night can lead to struggles with stress and anxiety. Ginger can help.
And what you're doing there is you're destigmatizing through narrative. You're helping people say, “oh, yeah,” being a new parent is hard. They don't think of it as a mental health thing. But it is, right? The anxiety, the stress, the depression that comes along with new children. At times there are mental health issues, but you think about it very differently.
What I think Headspace has done beautifully is, first of all, created an incredible experience that people are attracted to, that they try for the first time. It's easy to get started. It doesn't take any heavy lifting. And the experience itself teaches people about the power of mindfulness and meditation, about how to do it, even if you only have a few minutes a day. And it helps people really understand the power of developing a practice and developing a habit that can really solve mental health issues before they become mental health issues. And I think that's what has made Headspace so successful.
Lukas: Behavioral health and mental health are different terms, but in a lot of ways the term behavioral health and even meditation destigmatizes the problem. I think back to mental health branding back like 5-10 years ago with the sad man or woman looking out a window in a Sepia tone. Now, it's totally changed. It's more vibrant.
Russ: We felt like that was really important. And so when we rebranded, we've done a lot of work on exactly that. And how do you create experiences that people actually get drawn into and want to experience?
Headspace has taken it to a whole other level of really changing the societal norms of what this means. And thinking about your headspace and thinking about how to change the way you approach certain situations to really develop true mindfulness. They've done that in a number of different ways.
One is just some of the plugging into Netflix, for instance. Or we just launched today, actually a partnership with Waze so that you can turn on the Headspace experience in Waze, and it's mindfulness while you're driving and lowers the tension and anxiety. And Eve, one of our wonderful health coaches, can give you directions as part of this experience. It's awesome. If you take a step back, what is that doing? It's just normalizing people's thinking about mental health. It's normalizing how this just fits in day-to-day life.
Lukas: I remember some of the advice that you gave on taking care of your mental health last time. And you spoke about meditation, how even if it's not a formal meditation, you can take 10 seconds, 30 seconds in the shower to be present. And it’s the same thing with driving.
Russ: It's awareness. It's just being aware. What are you feeling? What are the emotions that you're experiencing? And don't judge them, just be aware of them. Just note that this is what you're experiencing. Breathing is obviously a very important part of it. We've evolved to have mechanisms for reducing stress and for managing cortisol levels and managing anxiety. And tapping into that is something people have done for literally thousands of years. Right. So it's pretty proven. It's like the ultimate original approach to managing health. And bringing that back into today's society, I think, is pretty awesome.
Lukas: Yeah, I think we lost it there for a while.
Russ: There were a few moments where we got sidetracked. Although, to be fair, Western culture has lost it. There are many cultures around the world where it's been continuous. It's been part of their religion or part of their experience. For all the millennia, Western culture has gotten separated from it somewhat, and now it's kind of, how do we bring that back into day-to-day psyche?
And I gotta tell you, though, I sound like that guy who's like, I love this razor so much, I bought the company. But I have to say, mindfulness and meditation has changed my life. My marriage, my ability to relate to my children. My whole just sort of day-to-day worldview is so much I believe, improved by being able to bring mindfulness to everything I do. And I'm not somebody who ever has really had mental health needs as you traditionally would define them. I've been fortunate to have a pretty steady state throughout my life. I've been pretty healthy, knock on wood, throughout my life. So if it can help someone like me who's been fortunate enough to be pretty healthy and not had serious issues, it can help anyone.
It can help anybody that thinks upstream. And I view it as protective because we're all going to face things throughout life. And so the fact that I've built a practice means that when I do have health issues or when I do have loss issues or I do have the things that happen as part of life, I feel like I have some protective capabilities to manage through those.
Lukas: Are there any other benefits of Headspace from the business side other than the lowering of the cost of customer acquisition and bringing customers closer to the brand at all stages of their life?
Russ: I think there are a few areas certainly you've touched on what I would call a positive reinforcing flywheel, which is that when you've got millions of users and a brand as powerful as Headspace has, employees are also consumers. So as an enterprise, the ability to put Headspace as a benefit in place becomes a lot easier because your employees already know about it and you see very high activation rates of those employees. Most digital health companies have to do a ton of work, including Ginger by the way, have to do a ton of work to get people to use their products because for the most part employees have never heard of their products.
So there's constant lifecycle marketing that has to get done. Headspace has to do very little of that because the awareness is already there. And so you see these enormous engagement rates, 30% plus of an enterprise population will engage in headspace when it's placed by the enterprise. So you've got that positive flywheel there, but then you've got this next industrial logic component, which is that employers don't love a bunch of point solutions.
It's hard to manage a bunch of different solutions. One of the reasons is that what I just talked about, which is you have to communicate all these different things out to people and let them know that they're available. Two is just like all the contracts, all the management of those different vendors. It's complicated. And so the more of an end to end experience you can create, the more of a platform approach, the more an enterprise, the easier it is for an enterprise to buy. So by bringing these two things together, this is sort of part two of the logic, where you now have this full experience from those who are actually doing quite well and thriving, but can get some value out of mindfulness and meditation all the way to those now that Ginger can pick up that need a little more.
They need support, they need coaching to help create those new routines, help understand what's going on and build a plan to solve for it. And then for those who need more therapy, medication, management, psychiatry, we're there for them. That end to end platform is very valuable to an employer. So that's part two. Part three, then, is the ROI or the return on investment in economics of a Ginger/Headspace bundle that Headspace Health can bring to the table. If you think about it, Ginger today for not that much more, can bundle headspace. And now you have a product that for, again, not too much more cost will drive 3x the engagement, and thus will drive at least 3x the return on investment. So that kind of return and that kind of economic principle is really part three. So when you look at those three things, I would say that's the core industrial logic of this.
There's one more piece which is super important, but it's a little farther out. And that is all of the data that we now have access to that is used in a safe way, in a privacy centric way. It allows us to be predictive. So it allows us to say, based on what we're seeing, usage patterns to look like, based on what we're seeing this person say to their coaches and the experiences they're having, we can predict what care and what personalized pathway should this person be in, which just improves outcomes over time. And as you create feedback loops there. These two companies have the largest mental health data set in the world. There's not even a close second. So by using this effectively and using all the IP we've already developed around personalization of care, we think we can have an outsized impact on effectiveness and outcomes also.
Lukas: You also launched a big deal with Cigna back in the spring, and I remember you saying that insurance plans were on your horizon last spring, and I'm very happy to see that materialize. Are you also looking to expand this part of the business as well as the B2B side? And how is Headspace helping there?
Russ: The strategy here of starting with employers and expanding into health plans next continues to be an important strategy. And what we've seen is a huge amount of health care obviously gets consumed through the payers. So the payers are really driving a lot of the awareness of these solutions and the consumption of these solutions. And so because we don't just want to provide services to those who have great employee benefits, and we want to get into those who are underserved underprivileged and have less access, it's important that we expand into the payer side of the world. We've launched Cigna now nationwide, which is very exciting. We have expanded our Kaiser Permanente relationships. So now we're in five different regions around the country with Kaiser Permanente.
A few months ago, we launched Ameritas Health Caritas in the Mid-Atlantic, which is our first Medicaid plan. So, again, continuing to expand into these new audiences and learning what does it take to serve a Medicaid plan members that is generally going to be significantly underserved in the mental health space.
Lukas: Yeah, there are obviously a lot of obstacles there. And there are reasons why companies, not just Ginger, take the direct-to-employer approach. The first part of it is selling to employers takes less time. There aren’t those long sales cycles. And once you refine that, you can go to the bigger health plans. What are the other obstacles in terms of selling into health plans?
Russ: They're large, complicated entities. So cutting your teeth in the enterprise is important for a few reasons. One is there's fewer decision makers to get an enterprise up and running. Two is the incentives are much more well aligned in an enterprise where the enterprise in the mental health space, obviously employees are their most valuable asset and generally speaking, their most expensive cost is their employee base. Some of the stats right now is that one in five employees over the last two years have left their job due to mental health issues.
That alone is a staggering number. So if you're an employer and you're seeing the significant incidence rates of people that are having mental health issues, they're missing multiple hours per day, multiple days per year due to mental health issues, they're turning over, and they're leaving because of mental health issues.
It's a business continuity issue and so the incentives are there for them to spend some money on this. And that's one of the reasons why you see employers being a great place to start now the plans are aggregating tens of millions of lives of members. And so once you prove that this works and you have data that demonstrates the kind of return on investment, that's when you can go to the plans and they get very interested because ultimately they're looking at what are the ways to reduce the cost of care and provide services that people want to purchase.
Because insurance basically has two sells. They've got to sell the employer, or at least commercial insurance. They've got to sell the employer and then they have a secondary sell. They have to sell the employee on the benefits that they're providing at the price points they're providing them. So they both have to be competitive from a price standpoint, but they also have to have services that employees are excited about.
Lukas: And my last question, my favorite question that I asked you before, and I'll ask you again are there any new life habits that you've added into your daily routine to improve your own mental health since the pandemic?
Russ: I'd say the single most important one for my mental health is sleep. And my first startup, which not ashamed to admit was sort of an unabashed disaster, was complicated by terrible sleep habits. And I would go to bed thinking about all the problems that were going on at the company, and I would ruminate on it all night. I'd be up all night. I go to work in the morning and I have no patience.
I have no ability to function and cope effectively and make good decisions. The biggest change I made going into the next company was I never think about work when I'm going to sleep, ever. So I read; I'm okay watching a TV show. It doesn't affect my sleep, so I'll watch a TV show. Anything to get my mind off the day to day stresses of work. And so it's worked wonders for me and given me better sleep.
I also prioritize 7 hours minimum a night, so I will always get 7 hours. That's one, and two we've talked about. Mindfulness practice has worked wonders for me, not just for work, but for life and my relationships with my kids, with my wife, with my friends, but certainly my colleagues as well.
I do a lot of walking one on ones, so I get off of zoom, I get off my screen and at least three or four meetings during the day. I mean, I'm somebody who has probably ten to 15 meetings a day on average. So at least three or four of those I'm out in the sun walking with fresh air and then prioritizing some sort of cardio. So just getting heart rate up at least a few times a week.
About Me: I’m a co-founder at The Takeoff and formerly at Elion, SteadyMD, GreyMatter Capital, and Washington University in St. Louis.
I’m on Twitter @lukassteinbock and @_TheTakeoff 👋
About Me: I’m a co-founder at The Takeoff and formerly at Elion, SteadyMD, GreyMatter Capital, and Washington University in St. Louis.
I’m on Twitter @lukassteinbock and @_TheTakeoff 👋