A Ring That Delivers Personalized Health and Wellness

that we follow a lot. The current issue Bloomberg Business Week magazine, the Pursuit section, it's one of the sleeptrackers profiled as part of a deep dive into the business of sleep, which we know tim is big business. But we know this Ring does a lot more than that. Yeah, it does. Let's start numbers here though. Um just last week last year, the market for sleep tracking devices society at fourteen point five billion. It's projected to reach sixty

one two billion by the year. It's a lot of stuff, all right. So let's get to our guest, Tom Hale. He was named CEO of or Ring last April. He was former chief operating officer at home Away. They were acquired by Expedia. He's an a lump to Adobe Macromedia. He is in our Bloomberg Interactive Broker studio. Welcome, Welcome, Nice to have you here. Thank you so much. It's great to be here. So what's it been like? Wow,

it's been an incredible joy to learn. I mean, you think about sort of this particular product being the intersection of health, physiology, physics, fashion right. I never saw myself as a purveyor of jewel, right now I am. And in technology, you think about what's going on in technology where you've got a I processing huge amounts of data and the intersection between health and technology is super interesting. So I've been climbing a huge learning curve. But that's

been incredibly thrilling. What have you learned the most? Is it that the size of the market, or the size of the interest or what you know? I think it really is that there's a change under way which is about how people are approaching health. I think COVID kind of took the covers off. Everyone felt a little bit secure about their health, and then COVID came along and reminded everybody that health is fragile and you need to monitor it and manage it, and everyone started thinking about

it very differently. And so that change that's a societal maybe even a global change, and in some sense, health wearable steers right into it. Okay, So or a monitor's health through the finger. It's a ring that you wear on your finger at tracks sleep, tracks activity throughout the day. They're a handful of sensors on it. Um. I'm wondering about the technology that goes into the ring, the hardware, but also what happens on the app and sort of

which one is. I don't know where you're investing. Well, you have to invest in both, of course. I mean. Being the only smart ring on the market, we've actually got a lot of huge technical challenges that we have to manage, right. We have to make sure that the quality of the signal that we get is the highest and most accurate that is possible. Frankly, we are medical grade, you know, in terms of the accuracy of the of

the device itself. Partially that has to do with just the location of where you are measuring on the human bodies. You said, doctors measure your pulse on your heartbeat and SPO two from the finger. They don't measure on the outside of your wrist. So we are just structurally advantaged in terms of accuracy. Now that being said, where a science driven organization, so we take that super super seriously. We validate everything, not just across like some small population,

but across men, women, different ethnicities, different skin tones. A lot of the technology that are is used for these kinds of wearable sensors is light based. We shine lights into your body and based on the signal that comes back, the refraction, the absorption, we're making conclusions about your heart rate, your respiration, your heart rate variability, these metrics that come

back to you. Guess what if you don't have the same tone in terms of skin color, The melanin in your skin absorbs that light differently, and so you have to be really thoughtful about how you measure so accuracy, the form factor, these are structural advantages and structural things that we focus on around at or that's the hardware. So how do you technologically account for a white person versus a black person versus? How do you do it well?

You have to make sure one we're we're lucky because we measure on the inside of the palm, right, and the inside of the palm generally actually is a lot narrower range. Even who have like sunburns or hair or tattoos or darker skin on the outside, they tend not to have sunburns or tattoos or hair on their palms. Maybe some people do, but you know, most don't, So

that's actually a structural advantage. But we do things like we monitor when the light signal goes in what comes back, and we start to learn a little bit about like do we have to increase the amplitude to get a good signal? Do we have to decrease the amplitude, Because we're getting to like we're we're very intelligent about that. In fact, we did a m One of our big features last year was workout heart. Right. You guys might have I don't know, experienced, so it's basically different things

that you can use it for. It's super accurate in terms of like measuring your heart rate during a workout. It's as accurate as a chest strap, which is, you know, kind of the gold standard for measuring your heart all right. So when we were testing it right before we shipped it, people are like, you know what, uh where we want to make sure that we validated this across a wide range of skin tones, and so we actually did a lot of work to test on a wide range of

skin tones and we felt pretty good about it. We've made some tweaks in terms of the power of the signal, the light signal that we send into the body, but that kind of scientific validation is the key. And that's the hardware side. The software side, though, gets a lot of updates. The app gets a lot of updates. And the reason I ask is is because oftentimes with hardware, you see a brand new version each year. If that, if that this year, you didn't see a new version

of of a ring with different sensors. You saw a different version in the you know, in a superficial sense. And I use the term superficial not in a project pejorative way, but you know, the idea that the sensors inside didn't change. Correct me if I'm wrong, but that's correct. The sensor platform is the same. By the way, we have two versions of the ring, right, yeah, the heritage and the horizon. That's what you're talking about, exactly, Um, do you which sensors would you add right now if

you could? Or is it? Is it kind of like where it needs to be and the work needs to be done on the app side, the analysis side, well, we're always looking at new technologies as as they're emerging, and new capabilities as they're emerging. You know, a lot of people have have have sort of hypothesized that there are lots of things that you can do with new

sensor technology. Um, really, I think the reality is that a lot of the ambitions here, like we can test your blood glucose, you know, non invasively, are possible, but definitely further away than most people are willing to admit. Elizabeth Holmes could do No, she's she's all over. I think that's her next process. I don't know, but but but you you know, the thing is is that you want to make sure that those things are validated accurate. The technology that goes into our ring today, some of

it's very very recent, very very new. Some of it has been established, there's lots of science around it. So the reality is, I don't know that we need to see huge updates in it. I think what's what's really important about the ring from a maybe different from your your wrist, is that it's also comfortable and non battery consumptive. I don't know if this has been your experience. Every five days or so, I give it a charge and you don't have to think about it. You just don't

have to think about it. It's just they're sort of silently in the background keeping track your metrics. The data is being processed, the algorithms are running, the recommendations and insights are coming through. And that's the software, right. The software is your health condition is different from your health condition. Let's understand that and give you the appropriate messages. That's personalization, that's machine learning, that's that's very different. I think the

pace of software innovation incredibly rapid. Right, we're releasing two three features a month, because that's the pace of software hardware. You kind of wanted to be stable because you don't want to change it all the time. I agree, Um, who is your typical consumer? Well, what would you guess?

What would you guess? I'm thinking like a guy in his thirties, guy in his thirties Kendall Roy from Succession, Well, yeah, or yeah, that was that was also yeah the Billions where well did can I just ask you before we get into this series, what does that stuff do for you? First? Of all, it's great recognition, but what does it do the needle it well, you know, funnily enough, when when it used to be airtime, it would actually you can see it, but but it's not airtimes now it's all

streaming on demand, right. But I think it just puts us in people's consideration. They now understand there is a smart ring category and you can wear it. And if if you're like the cast member of Billions, like maybe maybe you want to be a little careful. That's I was going to say is sometimes, you know, sometimes it's worn by somebody who's not necessarily a fan favorite, right, you're not really sympathetic to Kendall Roy? Does that? Does that bother you? No? Look, I mean what do they say?

No bad, no bad pr um? You know when what is it when the Mr Big does he die on a Palozon? I can't remember? Maybe that's maybe that's a bad example. Let's not go there. It was not great Palozon hasn't been doing that. Yeah, let's hope you know when when the next one doesn't die. And my point is all that stuff is positive and all all the you know, halo around influencers, media personality, CEO Davos was crazy. It was, you know, lousy with or a rings. You know,

it's crazy. So that's really powerful for us. But the reality is, I think most people, you know, how they learned about it. They learned about it from my friend. Well we talk about I feel like there's bonding, like when you see somebody's on it's like, yeah, it's just really the term you can use, but I won't say it on air, but I can't say it. Yeah, we'll have to talk about later. I'm not sure where you refering to know. Okay, okay, all right, we're gonna come

back with Tom Hale. Still got a ton of questions to ask. If I want to get back to is it tim is see the typical demo? Well, actually, you know what's interesting is the typical demo is a perfect bell curve around the age thirty five and equal male to female. Yeah, we're gonna talk more about this, and we wanna talk about growth in the business and where it's all going. Tom Hale, Chief Executive Officers or in our Bloomberg Interactive Broker studio. Our conversation will continue in

just a moment. Tom Hale still with US, Chief Executive officer of or still in our interactive broker's studio. So we're talking about your demo. So just let's go back there. So your your typical buyer, I hate to say that, your average buyer of an horror ring is who. Yeah, it's um it's actually a perfect bell curve on on either side of age thirty five. And so you see, you know, folks are aging in place who want to manage their health, people who have chronic illnesses who are

trying to make sure they don't get sick. You have thirty year old athletes who are training for their marathon or their ten k. You have twenty year olds who are women who are just coming to maturity and want to manage their contraception using you know, non hormonal contraception. You've got young kids, fifteen year olds who are training for the first time and thinking about recovery and how to do it. So it's a pretty broad span. Health, of course, is a money killered beast. People are having

different health situations as they move through their life. Is that what's really driving people to ultimately get it? It's about sleep and health. So some people people who are you know, I mean honestly I think as you get older, sleep becomes this thing. And if you're a woman or a man in a certain age, like sleep becomes really important. Fads are out of the nest. So sleep is really

a big driver. And the thing is as like sleep is this habit that everybody does, but no one's particularly good at, right, And when you lose sleep, wow, you feel it right, taching to acquire looking at Carol right there? Ye, sleep as sleep is this? I was just reading that. They say there's something that goes on with your brain as you get older that affects your ability to kind

of stay asleep throughout. Lots of things change, right, pressures of life, stress, you know, all sorts of things asleep. So okay, talk about the scores here because that's mainly what I look at ye on the app when I wake up in the morning to see how I slept. What what do you aim for? What should people be sleeping? Like? I think this is the things that everybody's health situation is a little bit different. Really, what you're looking at

is your baseline. Again, medicine has been practiced for years on the averages, and the truth is that we're all different. In fact, not only are we different, but we're also constantly changing. So the metrics that go into those three scores, and the three scores for for clarity are sleep, activity, and readiness. And sleep is really like how well did

you sleep, and it really understands a lot. How quickly did you fall asleep, how much disturbances did you have, how many how many times did you move around, how many times did you wake up? Did you fall asleep quickly? Did you fall asleep within your normal bedtime? All these things are factors and we come up with one score, and that score is like somewhere between zero and a hundred.

Very few people get a hundred. Some people do. Most people, if you look at the bell curve, probably distributed between seventy and eighty five. So if you're in that, you're pretty good, right and I go for a I go for seventy five? Are up? Yeah? Um, But it's not easy. And duration, by the way, is a really important right, but it's not the only factor when it comes to the data dump. If you will, there is a point

where you know it gets to be a lot. How do you make sure that you're giving people smarter information, enough information? Like what's the balance? So well, I think we think about it as most people just want to check how they deviated from their baseline. And that's actually one of the things that the software does. It learns you kind of learns your patterns and then say, well, this is a deviation from that pattern, so maybe something's going on, and that the software kind of says, maybe

you should take a rest. You're gonna look, it's so good today. Did you have a drink last night? You know, it's like and and that that kind of like supportive approach is really difference, really unique in the in the wearable space, because we're not saying get your ten thousand steps whether you like it or not, or whether you feel up to it or not. It's like we actually our activity score adjusts, you know, we we actually the activity goal we set at just based on your readiness

or honestly, okay, let's talk numbers here. Yeah, let's talk about the business. Yeah, I want to hear about the business. So you know, you can buy one of these rings bucks bucks. That's a one time revenue hit for you guys. But then there's the membership six bucks a month. Do you need to have the membership in order to get to use the ring. Um No is the answer. Um. But I think one of the things that we think a lot about is that your health really is priceless.

And actually the algorithms and the processing and the R and D that we do that looks at your data, it becomes more valuable over time. Right. It's not just did you get your steps in today? And by the way, once you figured out what ten thou steps looks like, do you really need to be told you got The other thing that I'm curious about is, um, how many people like churn people who buy them and keep them because wearables are just known for people throwing them in

a drawer. So I can't give you all fatigue e device fatigue. And I think that's where the software comes in because we think about not only is your data changing, right, because let's put it for example, a lot of people get sick and the ring tells them, hey, listen, you look like you might want to go into rest mode, and the app reconfigures itself around you being sick. The activity score go away, the advice changes, the tone changes.

It goes from being like go for it to be like take a break, And that customization, that experience is different because your health condition has changed, all right, So that idea that your health condition is changing all the time, and the way the app can figures that's value over time. It did this to me when I got COVID. It realized that I had COVID, right, you know, it was like crazy sleep and stuff, televated body temperature and it's you know, asked if I wanted to switch in the

rest mode. You didn't answer my question about how many people keep their ring on? Yeah, So two facts that I could share. So one is the average war time. So if you look at the mean wear time over twenty four hour period, the average mean about twenty two hours and thirty minutes. Okay, that's the mean. When you look at the median, it's actually twenty three hours and thirty minutes. So what does that mean. It means half above half a exactly. So that means most people are

wearing it more than twenty three hours. But I guess when somebody puts the ring on, do they keep it on for twelve months? Do they keep it on? The second stat the second stat is after twenty sorry, after fifty two weeks, we have eight percent of the people still engaged with the That is shocking because, as you said, in the wearable world, the typical thing is you get the wearable, you try it on, you get some value, and you throw it in the drawer because you figured

it out, or you have to charge it. All right, So how much is the business growing? Your private but give us some metrics can tell you. Are you growing? I think, oh, we're in hyper growth. That would that would be the phrase that year. Every year I'm making a face. You can't see it on well maybe you can. But we're growing incredibly quickly and are profiting in a down market. We're investing, you're investing. Will you go public? Um? I think we're building the business and we want to

build a big business. And um, Honestly, having been in public companies, I'm not in any rush to go public. I want to make sure we're set up right. You need to raise any more money? Um No, we're probably set maybe even to a public event. We might we might see one more round, even to a public event. Yea, oh so it could be a consideration. But you never you did not hear it here actually did and going it alone, have no plans. Let me put it this way. To be explosit we have no plans to go public.

I mean, could an Apple like has Apple come out? This was also recently, I think maybe by a colleague of yours, And I said, when when when Tim calls? Like I'm gonna pick up the phone, but he hasn't called yet. All right, this was a lot of fun. Come back soon, it okay, Tom Tom Hale, Chief executive Officer of Or of course. Uh here in our Interactive Broker studio, you're listening in watching Bloomberg Business Week, Carol Master, Tim Stanovic, and this is Bloomberg