Why it matters:
- When the pandemic shifted in-person doctor visits online, telemedicine usage among U.S. consumers soared 38% amid the public health crisis.
- As telehealth moved from the margins to the mainstream, digital health, fitness and therapy startups gained consumer appeal, contributing to growth of the $4.5 trillion global wellness economy.
- In turn, therapy app Talkspace saw its member base surge, as homebound consumers sought out virtual treatment for their mental health issues.
When gymnast Simone Biles skipped the team finals competition at the Tokyo Olympics, putting her emotional well-being ahead of gold medal dreams, she stirred a groundswell of public support that captured the nation’s changing attitudes on mental health issues.
The “outpouring of empathy” for Biles’ candid nod to self-care signaled a culture shift that had been bubbling since the pandemic upended everyday life in unforeseeable ways, Mark Hirschhorn, president and chief operating officer of therapy app Talkspace, told CO—.
“It was a pivotal moment within the growing national conversation that’s been propelled by COVID,” he said. “The growth we’re seeing at Talkspace reflects the ongoing acceptance of therapy as a significant part of managing our overall well-being.”
As doctor visits and therapy sessions moved to Zoom while the pandemic stoked our shared collective grief, Talkspace saw its user base soar.
The app boasts 61,500 active members today, up 40% from a year ago.
Talkspace, which offers text and video messaging, as well as live video sessions with therapists, is on a mission to democratize access to affordable therapy in the U.S., where 75% of mental health providers are cash-only businesses that don’t accept insurance, Hirschhorn said.
Now merged with SPAC Hudson Executive Investment Group and flush with $250 million in growth capital, the startup is building a base of full-time clinicians to boost member retention; launching new services like treatment for workplace issues and substance abuse; and expanding its B2B arm to add to the list of employers and health plans from Google to Cigna that offer Talkspace as a mental health benefit.
Pandemic-fueled telehealth revolution propels digital therapy
The app ranks among a growing list of startups contributing to the $4.5 trillion global wellness economy, ranging from telemedicine disruptors like Teladoc and digital fitness platforms such as Cure.Fit to mental health geared apps like Calm.
Investors have lavished attention on the telehealth space, which garnered a $500 billion funding windfall in the second quarter of 2021 alone, according to a CB Insights report. Teletherapy startups attracted 40% of those investor dollars.
The key driver we’re finding today is that people are getting more comfortable talking about the issues they’re facing and their discomfort and anxiety as a result of the pandemic, and are more comfortable acknowledging that they’re interested in pursuing therapy.
Mark Hirschhorn, president and chief operating officer, Talkspace
Founded in 2012, Talkspace’s recent ascent would have been inconceivable had COVID-19 not pushed telehealth — whose usage surged 38% since the pandemic — from the margins to the mainstream, Hirschhorn said.
“COVID ended up being the great educator” on telemedicine, Hirschhorn told CO—. “These companies emerged with a brand-new narrative: You can in fact receive high-quality care through their services, leveraging tech to bring greater access to medical professionals.” In turn, these digital health providers began to educate the market, he said. “It forced people to change their behavior, which is one way to accelerate adoption.”
And just as digital interactions replaced physical ones, Talkspace’s business model matched homebound consumers’ DoorDash-ordering, Netflix-streaming lifestyles and tapped into their mood.
“The key driver we’re finding today is that people are getting more comfortable talking about the issues they’re facing and their discomfort and anxiety as a result of the pandemic, and are more comfortable acknowledging that they’re interested in pursuing therapy,” he said.
The platform — for which another Olympian, Michael Phelps, who’s battled his own mental health challenges, serves as its public face — has struck a resonant chord with consumers, in part because it addresses common pain points therapy patients encounter that can hinder treatment outcomes, he said.
In the U.S., patients seeking access to mental health services face “geographic barriers” akin to therapy deserts; a dearth of available clinicians (first-time patients can wait months to land an appointment with a therapist); steep session costs; and the lingering stigma surrounding therapy that deters folks from seeking the help they need, said Hirschhorn, who is himself a therapist.
Talkspace has set out to topple those roadblocks, offering psychotherapy, psychiatry and prescription services via an app that boasts a growing network of 3,000 licensed therapists. It’s available as an in-network behavioral health and an EAP benefit via 11 insurance carriers and counting.
While traditional in-person therapy can range from an estimated $175 to $500 per session, a typical Talkspace plan ranges from about $60 to $119 per week.
[Staying Healthy at Home: How COVID-19 Is Changing the Wellness Industry]
Delivering therapy on demand: ‘You don’t have to wait until next Wednesday to remember how you’re feeling; you have access to me every day’
Talkspace reimagines the talk therapy process itself, which Hirschhorn describes as flawed and ripe for disruption.
In traditional therapy, patients typically discuss their issues in weekly 45-minute sessions — “which can be ineffective for many people as it relies on their memory and cataloging their experience,” he said. Patients often struggle to capture how they felt days or even weeks ago in a single session, when those moments have long passed.
Talkspace says it solves for that limitation by serving up therapy on demand. Users can jot off an emotional trigger in the moment in a text to their therapist, or, if they prefer, send them a video or audio-only message.
Via text, audio and video messaging, as well as live video sessions with therapists, Talkspace members are guaranteed at least one response a day from a therapist, five days a week. The startup also promises that therapists will respond to patients who reach out within eight hours.
“I really appreciate having access to my clients five days a week,” said psychologist Amy Cirbus, director of clinical content for Talkspace, who also treats Talkspace patients and comes from the traditional therapy world.
“You don’t have to wait until next Wednesday to remember how you’re feeling; you have access to me everyday, in the moment that you’re feeling it,” she said.
Because Talkspace is meeting patients on their terms — some members prefer texting and audio messaging to face-to-face therapy, for example — “I am getting you in your most comfortable environment, at your must vulnerable, so there is an honesty there that really creates effective treatment because I can see what’s going on and we’re not spending time reporting on what happened for the week,” she said. “There is this ongoing conversation, as the relationship building is [also] done with the written word.”
By offering consumer-driven therapy on demand, Talkspace has unlocked an untapped market, as a hefty 60% of its members are new to therapy, while also drawing traditionally “care avoidant” people, Hirschhorn said.
To those who doubt the efficacy of therapy that’s not conducted in person, Hirschhorn and Cirbus like to point to a Journal of Telemedicine and e-Health study citing that 80% of Talkspace members surveyed said the app is as effective, or more effective, than traditional therapy, while 98% found it more convenient.
[HR Execs Reveal How the Pandemic Is Forcing Companies to Rethink Worker Needs]
Paving a path to profitability
analyst Vikram Kesavabholta projects Talkspace will generate revenue growth of 66%, 63% and 39%, respectively, during fiscal years 2021 to 2023. “We continue to view mental health as a pocket of the telehealth industry that still has significant room for growth,” he said in a research note. “Within the space, we think Talkspace is well positioned as a recognizable brand supported by key sponsorships, clinical studies, and a large network of providers.”
Talkspace follows evidence-based treatment guidelines. And therapy is conducted by vetted, licensed clinicians who’ve received credentialed training, which sets it apart from competitors from Better Health to Headspace, Hirschhorn says.
Yet the teletherapy market is becoming increasingly crowded, which poses a risk for the brand, as does high customer acquisition costs, Kesavabholta cautioned, as rising digital advertising expenses, for example, have helped put Talkspace in the red: While sales in the most recent quarter leapt 73% to $31 million, its net loss swelled to $12 million from $300,000 in the year-ago period.
Investing in growth areas is critical to reversing that loss, Hirschhorn said.
“We are taking a number of steps to deepen Talkspace’s capabilities while also building and maintaining our competitive advantages, which will propel us towards profitability,” he said.
Chief among them is building a network of full-time clinicians, “which will ultimately increase member retention, engagement and satisfaction,” he said.
It’s also adding new distribution channels to drive growth, “including expanding our B2B arm by signing up more health insurance companies and employers.”
Adding treatment for workplace challenges and substance abuse
The site, which gets a bird’s-eye view of patient needs via its B2B clients, is adding group therapy and situation-specific treatment for substance abuse and workplace issues to its service mix, targeting the mental health challenges exacerbated by the pandemic.
“We have a tremendous capacity to listen to our larger clients, the health plans, and also our large employers, who are suggesting that relationship issues both those at home, and those that now exist in the workplace, are being stressed to the point that they are looking for [new] resources,” Hirschhorn said.
Treating COVID-escalated substance abuse “is one of the greatest challenges and a dominant focus of health plans,” he said. It’s why Talkspace is adding therapy for patients who are now grappling with multiple mental health challenges around addictive behavior as well as depression and anxiety.
Hirschhorn envisions a day when mental fitness is viewed as just another kind of workout.
“We should be as comfortable and confident talking to somebody about leaving work for an hour to be with our therapist, in the same way we’re confident that people don’t judge us when we’re saying we’re going to the gym or for a run,” he said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Follow us on Instagram for more expert tips & business owners’ stories.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
Published September 28, 2021