Mental health is an exploding market, especially in the U.S., but there are many conditions, such as Depression and PTSD, that do not respond to existing treatments. The idea was to build a product specifically for psychedelic therapy that would enhance the therupitic process, which requires high  engagement from the therapist as well as the patient. 

A friend set me up with my co-founder who was a doctor interested in mental health and with expertise in psychedelics. Since he came with the idea, the work was market research rather than ideation: Understand the issue, the product, the Go To Market. After analyzing the market we decided that Ketamine clinics in the U.S. were the best entry point since they are legal/above ground and similar to what it would look like with psychedelics. 

The idea was to bootstrap until $500K-$1M and then talk to investors, since a lot of investors aren’t open to the idea of psychedelics given concerns about regulation and the fact that digital therapeutics haven’t worked as well as hoped.

Why the idea didn’t progress 

Lack of alignment with co-founder. 

We worked well together and liked each other personally, but there was a gap in our level of commitment, mostly around deciding when we both moved into fall time work for the company. 

This came up in the discussions around our founder agreement. Initially I was fine with his lesser involvement if it was reflected in equity, but ultimately realized the bigger issue for me was a gap in our understanding of what it takes to build a company, in terms of effort and time. 

We tried to do a process to make it work with people from the outside, but ultimately realized it wasn’t going to work and we stopped the MVP. Happily, we hadn’t incorporated the company yet. 

Validation 

We interviewed experts – academics, doctors, experts. The most important conversations were with therapists at Ketamine clinics, who we reached via cold calls.Those conversations gave us a lot of momentum and focus. 

With the help of a technologist friend (who wasn’t interested in becoming a co-founder) we built an MVP.  We also built a relationship with two partners/customers who we met as part of the validation process and were excited about the idea. 

Research

• Online research to understand the macro environment – size of market, problems, where the research community is, what’s happening with regulation. 
• We then sent emails to people (from a list we got) and it was interesting that people were willing to talk, and it was clear who was interested.  It gave a very clear signal. 
• The Mom Test
• The Human Founder Podcast

Insights

1. Psychedelics treatments are very interesting and have a lot of potential, but you need expertise and connections. 

2. Market dynamics are complex. Regulation hasn’t changed yet, so you can’t use psychedelics legally, and since it’s not in the interest of pharma companies it won’t change very quickly. That might well have made it hard to raise money. 

3. Distribution might have also been a problem, since some companies are both selling the psychedelics and building platforms, which would give them an advantage in distribution. 

4. I don’t know if doing a founder agreement earlier might have helped. It’s like doing a prenup before a first date, so talking about equity division didn’t make sense that early. The only thing to talk about early on is the division of responsibility and alignment on the level of involvement, other commitments, ext . 

5. In Dec-Jan things got real because of the potential customers. Once things are real, you don’t want to be as vague about equity and how things are going to run vs. when things are theoretical. Maybe there should be an ongoing conversation to identify the gaps.

6. Lawyers will push you to incorporate early. I’m happy we didn’t, and it’s something to think about. 

7. It’s important to have a framework for you to run the process: how many customers to talk to, what to do redesign. I happen to like Disciplined Entrepreneurship: 24 Steps to a Successful Startup, but the idea is to have a process you follow from ideation to product. It’s a blueprint of what to do at each stage, what questions to ask, etc.  

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