Interesting baseline of how much AI can help with the profitability of a business:
> By the end of last year, Medvi had reached $401 million in annual sales and amassed 250,000 customers. It produced 16.2 percent in net profit, or $65 million, with spending going to the fees for telehealth platforms, marketing and then software. Hims, by contrast, had a net profit of 5.5 percent last year.
The opposite of an “A.I” company, he is reselling the services of another filled with humans. A great, profitable business, sure, a notable success, yes, but a 2-man billion dollar company made possible by A.I? No. Businesses like this have existed for decades and are vulnerable to their service providers stealing the business out from under them.
Amazing - an acquaintance of ours when we lived in Germany a couple of years ago had a similar idea. But she found that telemedicine + prescription drugs (and possibly advertising law) are among the most regulated areas in a country already known for its red tape.
I didn't follow up what became of her startup idea, but there's no way she could have ever gotten it off the ground in just two months, like the guy from the article and his brother. More like two years...
On one hand this is so impressive. On the other it seems like a company selling drugs or medical services using misleading/generated photos and reviews is not great and extremely risky.
This must largely be going into testing and generating marketing content? I am extremely curious about his processes.
"That gave Matthew Gallagher breathing room to fix some shortcuts he had initially taken, like swapping out the before-and-after weight-loss photos for ones from real customers. Some photos on Medvi’s homepage remain A.I.-generated."
Cool, another scammy internet company preying on people's insecurities. Glad the NY Times spent the effort to tell us about it and didn't spend any time questioning this company [1].
help me understand this. This guy is dropshipping glp-1's from a company that has a network(?) of trusted vendors which they get from the big pharma companies. And now he's doing the dropshipping thing of building a brand
I'm highly suspicious of these revenue claims because how is he doing any of the marketing? Tiktok bans you if you post ugc content saying anything about peptides. FB doesn't allow medicine to be marketed nor does google. If he's dropshipping how is he doing the marketing?
So if I understand this correctly, Medvi is basically a frontend to white label telehealth services, with wildly successful targeting on an exact niche (GLP-1 served online).
So the 1.8B is effectively sales on a lead-generation opportunity where he gets to capture 20% of the sale (assuming that since his net profits are 16%), and then the backend guys do all the work and probably profit the remaining bit, assuming this line of business has ~50% margins, to these companies doing the actual work they're basically spending 20% on sales and marketing to Medvi. Because this is subscription-based, most of the costs are acquisition, and preventing churn (which is why he hired 7 contractors).
As another poster mentioned - basically this guy is dropshipping GLP1 with no moat, and my guess is that he was keeping quiet and making money till the market got saturated and now he gets to use his success as a puff piece to parlay into a bunch of other verticals like supplements, mealprep, and all that.
This guy's success is basically predicated upon him managing the branding and experience -- so good for him, but this is a middleman opportunity that is likely already going away due to me-toos (and that's why he's milking it one last time on NYT).
20 comments
[ 4.0 ms ] story [ 42.9 ms ] thread> By the end of last year, Medvi had reached $401 million in annual sales and amassed 250,000 customers. It produced 16.2 percent in net profit, or $65 million, with spending going to the fees for telehealth platforms, marketing and then software. Hims, by contrast, had a net profit of 5.5 percent last year.
This is borderline illegal.
I didn't follow up what became of her startup idea, but there's no way she could have ever gotten it off the ground in just two months, like the guy from the article and his brother. More like two years...
So not one person, not two, but many.
This must largely be going into testing and generating marketing content? I am extremely curious about his processes.
Cool, another scammy internet company preying on people's insecurities. Glad the NY Times spent the effort to tell us about it and didn't spend any time questioning this company [1].
[1] https://www.fda.gov/inspections-compliance-enforcement-and-c...
Truly, if you look over his website, you would not think this is a company that generates millions in profit a year.
He claims he has switched over from using AI-generated profits to real customer testimonials. That's a misrepresentation, if not a lie.
Most of the images still look like they have the unnatural fuzziness of AI images.
Website is also coded as one long-scrolling page, again suggesting this is a company who does not offer a unique product with value proposition.
Honestly, this is a company that looks like it succeeded only by optimizing employee head count and customer acquisition cost
And if that's what it takes to succeed, fair play.
Even the quiz flow to check eligibility is using old icons and just feels super spammy.
His ads must be crushing it, I guess?
I'm highly suspicious of these revenue claims because how is he doing any of the marketing? Tiktok bans you if you post ugc content saying anything about peptides. FB doesn't allow medicine to be marketed nor does google. If he's dropshipping how is he doing the marketing?
So the 1.8B is effectively sales on a lead-generation opportunity where he gets to capture 20% of the sale (assuming that since his net profits are 16%), and then the backend guys do all the work and probably profit the remaining bit, assuming this line of business has ~50% margins, to these companies doing the actual work they're basically spending 20% on sales and marketing to Medvi. Because this is subscription-based, most of the costs are acquisition, and preventing churn (which is why he hired 7 contractors).
As another poster mentioned - basically this guy is dropshipping GLP1 with no moat, and my guess is that he was keeping quiet and making money till the market got saturated and now he gets to use his success as a puff piece to parlay into a bunch of other verticals like supplements, mealprep, and all that.
This guy's success is basically predicated upon him managing the branding and experience -- so good for him, but this is a middleman opportunity that is likely already going away due to me-toos (and that's why he's milking it one last time on NYT).