Welcome to On The Mind, a collection of stories, news, and analyses on the startups, investors, and thought leaders in mental health and wellness.
Here’s what’s included in issue No. 3:
Improving mental health for the treatment-resistant population
Two neuromodulation treatments when antidepressants don’t work
How to reduce stress with targeted breathing exercises
Cover Story| Clinical | Investments | Reads | Mindfulness
🎙️ Interview with Lucia Huang, Founder of Osmind
Conversations with founders, investors, and thought leaders in mental health and wellness.
The mental health treatments available today don’t work for everyone. About a third of mental health patients deal with treatment-resistant symptoms that existing approaches fail to alleviate.
There are a variety of novel treatments that have grown in prominence for the treatment-resistant population, from neuromodulation techniques like transcranial magnetic stimulation (TMS) and electroconvulsive therapy (ECT), to a growing portfolio of psychedelic therapeutics (ketamine clinics already legally operate in the US, and other psychedelics such as MDMA and psilocybin are in ongoing trials through the FDA’s regulatory process).
Osmind has built an electronic health record (EHR) software for providers that serve the treatment-resistant population. In late August, TechCrunch reported on Osmind, outlining the company’s milestone of reaching a network of 30 practices serving over 3,000 patients.
Today, just four months later, Osmind has expanded that reach to over 125 practices across 30 states, serving 20,000+ patients. That aggressive growth is largely due to the work of Lucia Huang, one of the co-founders and the CEO of Osmind.
You started Osmind at the beginning of 2020 and officially launched in June. Now we’re at the end of the same year, and you’re a Y Combinator (YC) alumni with over $2M in Seed funding. How’d you get here?
It’s been a rollercoaster. We had a unique opportunity where we actually acquired a company called MoodMonitor a couple of months ago. A little less than half of our clinics were inorganically acquired through that. I think our YC partners told us we were the earliest stage company to ever make an acquisition in YC. We closed the deal about 10 days before our Seed funding round. It was a strong vote of confidence to have the MoodMonitor founders choose us, since they were fielding other offers from pharma and software businesses – we’re just really honored to have them on board as advisors.
We acquired the rest of our clinics organically, but the crazy thing is we really haven’t done any paid marketing and essentially have zero ad spend. I think the pace of our growth speaks more to the demand for a better solution in this space.
You’re the CEO, but Osmind actually has two co-founders, you and Jimmy Qian. What do you each bring to the team?
I feel really lucky to be working with Jimmy – he’s awesome and one of my closest friends. We’re very aware that a big reason many companies fail comes down to team dynamics, and I think we’ve split up responsibilities well to play to our strengths.
Jimmy was an MD Candidate at Stanford. He’s our COO, and the default product manager. He also handles all of the customer success work, as well as everything on the science and innovation strategy side.
I got my MBA from Stanford and cover everything finance, top of funnel sales, business development, and fundraising. It was actually really awesome to be able to put my finance background to use with the MoodMonitor acquisition. We were able to structure the deal pretty creatively where we didn’t have to pay any cash upfront – we set up a revenue share agreement for a year, along with a small amount of equity, which worked out pretty well for us.
Can you talk a bit about your journey through YC and raising your Seed round?
The YC experience in the Fall was pretty crazy, especially since it was virtual. We were really happy we did it. With early-stage startups, VCs almost always have more leverage. With the YC demo day, investors are racing to get into the best companies, so the leverage shifts to the founders.
The whole fundraising process was quick. We had started talking to investors a couple of weeks before the YC demo day. General Catalyst (GC), who led our Seed round, was one of the earliest firms we spoke with. When we were evaluating lead investors, it largely came down to the individual. Katherine Boyle at GC was also a former Stanford GSB graduate, and I had actually met her a while back during an entrepreneurship class. I had pitched Osmind when it was just coming together as an idea (looking back it was a pretty cringeworthy version at the time). Kathryn saw the growth from those earliest stages to what we had built by the end of YC. Having that personal relationship, as well as GC’s healthcare expertise (they’ve invested in companies like Mindstrong, Sondermind, and Ophelia), made the decision easy for us.
You’re largely focused on treatment-resistant mental health issues. Why did you build something around the treatment-resistant population?
Mental health, and a lot of our healthcare system, is very broken. The treatment-resistant population in particular is really underserved.
One major piece of the mental health system that companies focus a lot on is the lack of access. The demand for therapy is just much higher than the supply of therapists, which is why we’ve seen an influx of telemedicine companies. Access is essential, but it seemed like there were enough people tackling that already.
We saw a big need from the treatment-resistant population, and fewer companies seemed to be focusing on those individuals. That population also drives the majority of mental health costs – payers spend double the amount on the treatment-resistant population than they do on more “conventional” mental health care. There are incentives across the healthcare system to help this population.
How do you think about product design and creating software that’s flexible enough to accommodate the variety of novel therapeutics we’re seeing gain traction?
There will be a day when a patient can go to a provider and choose from a whole suite of options to find the best treatment for their specific mental health needs. Ketamine, psilocybin, MDMA – most clinics administering ketamine at the moment are interested in adopting all of these modalities once it’s legal to do so, and we want to be the go-to software for providers offering these therapies.
While US-based clinics that we serve today are limited to neuromodulation techniques or ketamine, the pain points for providers will be similar regardless of which treatments they administer. There are huge administrative burdens that we look to help with, such as insurance coverage and compliance with certain REMS requirements like enrollment of patients and outcomes monitoring.
More broadly, we think about designing the product for different stakeholders - we’re excited about working with pharma companies and academic and research institutions in addition to providers. We’ll be unveiling some exciting academic partnerships in the coming months – the end product for these types of partnerships is less about the medical records and more of an aggregated, anonymized data platform. This type of data can help researchers understand things like how ketamine is improving outcomes across the country and can aid in the development of new therapies moving forward. For academic researchers, we’re able to offer the platform for free because we’re a public benefit corporation.
Why did you choose to incorporate as a public benefit corporation?
As a public benefit corporation, maximizing shareholder value isn’t the sole focus. We have more flexibility to incorporate other important objectives such as increasing patient access to care.
In addition, because of the business we’re in, it’s important to recognize the cultural and historical context of all of this. Psychedelic and plant medicines have been around for millennia, and for us, it felt like explicitly including public benefit was necessary.
Overall, healthcare as a whole hasn’t adopted this model too much. It’s largely been consumer-facing companies focused on balancing profits and environmental concerns. I think anywhere there is a conflict between profit and helping people, companies should consider whether the public benefit corporation model makes sense.
You recently put out a statement with Maya Health that talked about the idea of “co-opetition.” Could you elaborate on what that means, and more broadly how you think about competitors?
I definitely can’t take all of the credit for that – David from Maya Health approached us with the idea. The overall concept relates back to public benefit – essentially, “co-opetition” is the idea that when public benefit is brought into the equation, and you’re now maximizing for collective utility, it makes sense to form collaborations that best meet the needs of the populations being served.
We are a business at the end of the day and do have confidential information and a strategy, but there’s a lot of room to collaborate and bring in different learnings and backgrounds. I’m glad we’ve been able to do that with Maya to set a precedent for the field.
When I think of the larger competitive landscape, there are definitely other mental health EHR solutions, but they’re largely focused on the sub-clinical wellness population, working with therapists to capture their notes. There’s not really one psychiatry EHR that dominates the market.
You do have dominant legacy players in the general medical EHR space such as Epic, but they’re really more of a billing machine, helping providers type in the right codes and bill insurance companies. In mental health, a lot of it is cash pay, so if you have a system that’s just built for billing, you’re not going to be delivering the best solution for patients.
What does the future hold for Osmind?
Now that we’re past the whirlwind of fundraising, we’re really heads down on scaling the business as much as possible. We’ve got about 1.5 years of runway, so between now and our next raise we’re focused on our existing providers and scaling to new ones, with the goal of eventually serving life sciences companies as well. We’re lucky to already be the largest EHR software in the ketamine and psychedelics space, so this next year we’ll be focused on cementing that position. We’re looking to work with pharma companies to help advance clinical trials, and we’re advocating for work on the insurance side to enable reimbursement for ketamine treatments.
Beyond scaling and building out that provider infrastructure, I’m also personally focused on building an amazing culture and place to work. It’s often overlooked as a growing company when you want to focus your energy on growth.
Cover Story |
| Investments | Reads | Mindfulness
🩺 Clinical Coverage
Discussion of clinical concepts, studies, or perspectives on mental health and wellbeing.
You heard a bit about neuromodulation - let’s dive a little deeper into the two treatments mentioned above.
Transcranial magnetic stimulation (TMS): TMS is a non-invasive form of brain stimulation that works by applying powerful magnetic fields to specific areas of the brain that we know are involved in depression. Each session lasts between 20 to 50 minutes, and sessions are typically five days a week for several weeks. About 50% to 60% of people with depression who have tried and failed to receive benefit from medications experience a clinically meaningful response with TMS. Results from TMS aren’t permanent, but the average TMS patient feels better for a little over a year after treatment stops.
Electroconvulsive therapy (ECT): For patients who don’t respond to TMS, ECT may still be effective. ECT is a procedure, done under general anesthesia, in which small electric currents are passed through the brain, intentionally triggering a brief seizure. ECT seems to cause changes in brain chemistry that can quickly reverse symptoms of certain mental health conditions. The procedure takes 5 to 10 minutes and is typically done 2 to 3 times per week for 3 to 4 weeks. Many people begin to notice an improvement in their symptoms after about six sessions, but ongoing treatments (either of ECT or antidepressants) are typically needed to prevent a recurrence.
Cover Story | Clinical |
| Reads | Mindfulness
💰 Recent Investments and IPOs
Rundown of recent investment news in mental health and wellness companies.
Calm, the meditation and sleep app, followed through on the rumors and doubled its valuation to $2B. The company’s latest round took in $75M from existing backers including Lightspeed Venture Partners, TPG, and Insight Partners (Link)
Freespira, a company with an FDA-approved digital therapeutic that treats panic disorder, panic attacks, and PTSD, raised a $10M round led by Lightspeed Venture Partners, with participation from earlier backers Aphelion Capital and Medvest Capital (Link)
Lucine, a French startup offering cognitive behavioral therapy to treat chronic pain, raised $6.6M in new funds from Kurma Partners, Bpifrance's Autonomous Patient Fund, BNP Paribas Développement, Aquiti Gestion, and Irdi Soridec (Link)
Modern Health, a mental health and wellness platform for employers, announced a $51M Series C led by Battery Ventures, at a valuation north of $500M. Felicis Ventures, Kleiner Perkins, Founders Fund, 01 Advisors, Afore Capital, and Okta’s Frederic Kerrest also joined the round (Link)
Neuron23, a company using artificial intelligence to target neurodegenerative and neuroinflammatory diseases, unveiled it raised $113.5M in Series A and B rounds. The $33.5M Series A was led by Westlake Village BioPartners and Kleiner Perkins, and the $80M Series B was led by Redmile Group (Link)
Pear Therapeutics, a developer of prescription apps to treat addiction and insomnia, landed $80M in Series D funding from Softbank’s Vision Fund 2, Forth Management, Pilot House, Sarissa Capital, Shanda Group, QUAD Investment Management, Novartis, Temasek, 5AM Ventures, Arboretum Ventures, JAZZ Venture Partners, CrimsoNox, and EDBI (Link)
Sike Insights, a start-up, raised a $1M Pre-Seed (seems big for a “pre-seed”…) round from Zillow co-founder Spencer Rascoff, Amazon exec Jeff Wilke, Kleiner Perkins, The Fund, and several others (Link)
Workit Health, a digital rehab startup, raised a $12M Series B led by FirstMark Capital. Additional backers include Lux Capital, GingerBread Capital, Blue Cross and Blue Shield Venture Partners, and actor Rob Lowe (Link)
Cover Story | Clinical | Investments |
📖 Interesting Reads
Sometimes mental health-related. Sometimes just things I find interesting.
I’m all for mindfulness, but this seems excessive (Link)
I’m a big New Music Friday fan; Variety covers the humans behind the weekly Spotify playlist (Link)
Facebook activity can help to identify people with mental illness (Link)
Matte black Macbooks are coming soon (Link)
The TikTok influencer homes of Atlanta (Link)
How to make a million dollars from domain names (Link)
Japanese gift-wrapping is so clean (Link)
The NYT published pictures to tell the story of 2020… (Link)
…and Nature collected the best science pictures of the year (Link)
Future luxury amenities? Clean air (Link)
The world’s first quantum chess tournament (Link)
Strategies for employers to boost employee wellbeing and mental health (Link)
Coronavirus has at least kept these goats employed (Link)
The Observer Effect puts out some of the best interviews - the latest is with Shopify’s Tobi Lütke (Link)
Another gift guide - last-minute purchases for curious minds (Link)
The 20 most expensive homes that sold in 2020 (Link)
Cover Story | Clinical | Investments | Reads |
🧠 Mindfulness Tip of the Week
Tips to improve your mental health and wellbeing.
I’ve noticed that when I’m working on something I’m pretty deeply focused on, every so often I’ll naturally (unintentionally) take a deep breath, and it feels like a reset where I let go of some stress.
It always feels good to have that reset, but it’s also usually a reminder that I don’t pay enough attention to my breathing.
Conscious Breathing: The key is to slow your breath from the typical 10–14 breaths per minute to five to seven breaths per minute. An easy way to do this is by inhaling for a count of five, holding the breath briefly, and exhaling for a count of 10. While it’s nice to lay down to enhance your sense of relaxation, this practice can be done in any position.
Set Free the Belly: To start, get into a “table position” on all fours, with your hands parallel to your shoulders and your knees parallel to your hips. Inhale and slowly lift your head and hips, lowering your belly towards the floor. As you exhale, lower your head and hips while you lift your spine. It’s basically cat-cow or an arc down followed by an arc up. Find your own timing with your breath. Repeat as long it feels good for your belly and spine.
Say “voo”: As you breathe, slowly and evenly, think of the sound of a foghorn. Then, take a deep, full, easy breath, and on the exhale, imitate the foghorn by making the sustained sound “voooo,” directing the rumbling vibration to your gut. (It’s not necessary to make the sound loud; rather, keep the pitch as low as you can.) Once you run out of air, let the next breath come naturally, filling your belly and chest. Continue this cycle for two to four minutes or until you feel yourself shifting into calm.
On Your Mind
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Written by Daniel Tarockoff, an MBA student at UC Berkeley and former healthcare strategy consultant exploring the future of mental health. Born in Michigan. Based in Berkeley, CA.