April 11, 2019

DynamiCare Health Adds Positive Reinforcement and Accountability to the Recovery Process

DynamiCare Health is a digital health startup combating the opioid epidemic by helping out people with Substance Use Disorders and healthcare providers. By utilizing some hardware accessories and a smartphone camera, DynamiCare members can take sobriety tests from their own home, while also giving them an opportunity to earn rewards. The company recently closed their seed round with $4.1M raised courtesy of Hyperplane Capital.

We connected with Eric Gastfriend, DynamiCare’s Co-Founder and CEO, to learn more about how their technology is assisting people in recovery. Gastfriend also shared some tips to other entrepreneurs in the digital health space on how to raise capital.

Colin Barry [CB]: What is the origin story behind DynamiCare Health? How and why did the company come together?

Eric Gastfriend [EG]: I graduated from Harvard Business School in 2015. I had experience as a tech entrepreneur and I wanted to work in that field again. However, this time around the most important criteria was to work on something that could impact a lot of lives. There is this idea in Silicon Valley of the “billion-dollar startup,” but I was setting out to create the “million-life startup” which is a startup that improves a million people’s lives.

Eric Gastfriend and David Gastfriend
Eric Gastfriend (left) and Dr. David Gastfriend (right), Co-Founders of DynamiCare Health. Here they are after pitching at HBS' New Business Venture Competition.

My father, Dr. David Gastfriend, is a national expert in addiction psychiatry. I had a lot of conversations with him about the opioid epidemic, like what the causes are of it and what treatments are being used. Around this time, I had a cousin who was going into rehab for alcohol addiction, and I was frustrated and upset by what she was going through. I asked my dad why people go in and out of rehab and what can be done to make the treatment more effective. He told me that there are very effective treatments in scientific literature, but some don’t get used at all.

He told me about this one methodology using positive reinforcement to reward people for staying sober and staying in treatment, but not a whole lot of centers will use it. And that blew my mind. I started doing more research on it and it turns out there are over 100 randomized controlled trials demonstrating the effectiveness of this method, and then I began to think of ways to automate the methodology for patients in order to help them overcome their addictions.

One way I thought about was doing it through the phone, and more specifically, through an app. Like, have a way to schedule therapy sessions, AA meetings, and other appointments, but also reward them (the positive reinforcement piece) through a smart debit card that will block purchases from liquor stores, bars, and cash withdrawals.

I presented this idea to my father, and he became really excited by it and saw it as something that could transform the industry. Of course, a father is going to love his son’s ideas, but that wasn’t enough to fully convince me. So, he took me to an addiction conference where we pitched for the first time. Afterward, I had a few people come up and ask me questions like “Can we be an investor, advisor, or your pilot site?” After receiving that kind of feedback, that was more than enough to make me decide to commit to this full-time.

CB: What is it like working as a father-and-son team?

EG: I love it and I think he loves it too! My dad and I share a similar cognitive style, in the sense that we tend to think the same way when it comes to solving problems. But, we have very different domains of expertise; I am the business and tech guy and he is the science guy. We don’t step on each other’s toes, because we have that level of respect for one another.

Of course, sometimes we will disagree, but because we have such a similar way of thinking, it makes it very quick and easy to make decisions. Since we both align with the mission of the company there’s never any doubt of us misaligning the end goals.

CB: I’m from southern New Hampshire, so I’ve unfortunately seen the effects of drug addiction on former classmates. DynamiCare Health’s mission is an admirable one. How does the technology work to accomplish this goal?

EG: There are two main components to it. There’s the monitoring recovery part and the rewarding recovery part.

On the monitoring side, people are always curious about how substance testing can be done through the phone. We give our members a breathalyzer and saliva testing cups, and within the app, their healthcare provider can set a schedule to receive test requests. Members can have tests done once a day, a week, or a month. Then, the member will get an alert on their phone to take the test. They will open the app and take a selfie video of themselves taking the test through the breathalyzer, which is Bluetooth connected, or perform a saliva test. The breathalyzer’s readings can be recorded onto the app, and the saliva test cup will change color to show if they are sober or not. The idea is to create more accountability between the patient and the healthcare provider, but also allow them to complete these tests from the comfort of their own home.

On the reward side of things, this is where the smart debit card comes in. It blocks off cash withdrawals, purchases from bars and liquor stores, and casinos. I think it gives a lot of families some peace of mind knowing they won’t be spending it in places where they may relapse.

CB: How long was the development process of your technology?

EG: I think it took us about a year and a half to get to an MVP that really worked. Of course, we were beta testing different iterations, but the original concept of using selfie videos for the tests and having a smart debit card for rewards has remained the same.

CB: What would be a common use case for DynamiCare Health’s app? Have there been any use cases that have stood out to you?

EG: The strongest and most powerful aspect of DynamiCare isn’t the rewards, it's the accountability.

We had one member using the app who was living with his grandmother. He was in outpatient treatment, doing very well but his grandmother still wasn’t trusting him. Despite him reassuring her that he was sober, there was a lot of strain and stress on the relationship. But once he started using DynamiCare, he was able to show her all of the test results and proved to her that he has been staying sober. Through that, the patient and his grandmother were able to repair their relationship.

CB: Congratulations on your recent seed round! Could you share any tips with our readers on how to pitch a digital health startup to investors and/or how to get in touch with the right investors?

EG: Where to start...there are so many different aspects of funding.

Even the best ideas and teams aren’t going to have every investor they pitch to invest in them. There are a lot of things that can deter investors, such as having a competitive company in their portfolio or maybe the timing just isn’t right. Sometimes an investor may not invest in a certain space or just not fully understand what your company is all about.

I think if you close one in ten investors that you’ve pitched to, then you’re doing really well. And some of them might only put in small checks. In order to get those dozen or so investors that you need, you might have to pitch to 120 investors...and that’s with a 10% success rate, which is still considered high.

Also, don’t get discouraged by a lot of rejection, as that is just going to happen, but track investors that you’ve previously spoken to. I’ve spoken to over 100 investors in order to complete our $4.1M round.

CB: Are there any other additional comments you’d like to make?

EG: The nation, as a whole, is struggling with addiction. Smoking is still one of the leading causes of preventable death in the US and there is a lot of human suffering that goes along with this. But, there is a need for solutions in order to combat these ongoing problems.

There is a wealth of research and knowledge in this space to the extent that healthcare systems, entrepreneurs, and families can try to find new ways of addressing this crisis, but stay rooted in scientific evidence, that is our best hope of finding our way out of it.

Colin Barry is the Content Manager to VentureFizz. Follow him on Twitter @ColinKrash.

Images courtesy of DynamiCare Health