Cary Breese, Founder and CEO, NowRx
 

Cary Breese is the Founder and CEO of NowRx, which is currently raising a $7mm Series A round on SeedInvest under Regulation A+. In this post, the latest in our founder profile series, we explore the exciting healthtech space in which NowRx operates, and how Cary has positioned the company for future growth.

Why did you start NowRx?

“I’ve always been passionate about innovation! Many of my family members are engineers, [including my] dad, uncles, cousins, and growing up we were always trying to solve problems and find better ways of doing everyday things. When my youngest child was born with severe congenital heart defects I was struck by how time-consuming and inefficient the pharmacy experience is typically.

A few years later when getting my own prescription to treat a sore knee, I found myself frustrated again by the pharmacy experience and all those previous bad memories came rushing back – I became determined to create a better model.

The problem I see with retail pharmacy is that the industry has evolved into a model designed to attract customers into stores so the pharmacy can upsell them on all the other products in the store. This is the reason why in a typical Walgreens or CVS you see thousands of square feet dedicated to vitamins, beauty products, back to school supplies, etc. while the pharmacy itself is contained to a small area in the back of the store. The reality is that the large chains don’t really care if you are waiting in line because they are counting on you wandering around the store while you wait for your prescription, filling up your basket with other products.

The idea for NowRx came to me in an instant: use an app to capture the image of the prescription and send it to the pharmacy so you wouldn’t have to drop it off, and then provide free same day delivery so you never have to go to the pharmacy again. The basic concept sounds easy, but is actually very difficult to do it well and be efficient enough to make the model work financially. Consequently, we are developing technologies across a wide array of pharmacy processes including: fully end-to-end robotic dispensing, advanced delivery logistics layer, two-way electronic communication with physicians, automated chatbots for seamless refills, automated system for wholesale purchasing, HIPAA-compliant texting, and integration with voice-activated assistants.”

This is the second time NowRx has raised money on SeedInvest. What have you liked the most about equity crowdfunding and what do you find most challenging?

“Equity crowdfunding is itself a great innovation, as it bridges the gap between traditional VC funding and traditional [rewards-based] crowdfunding campaigns like Kickstarter. With a Regulation A+ crowdfunding campaign, for example, companies are able to raise millions in preferred equity from both unaccredited and accredited investors, without many of the negative experiences that sometimes occur with traditional VC fund raising, such as onerous terms, long raise cycles, and loss of control. That being said, Regulation A+ rounds on SeedInvest are open to both individual investors as well as institutional investors and family offices, so it is actually a hybrid arrangement incorporating the best of both worlds. At the same time, through marketing our campaign to potential investors — the benefit is twofold. We are getting the NowRx message out to thousands of people while adding a strong brand ambassador with each new investor.”

You get a lot of questions surrounding the potential of Amazon entering the pharmacy arena. Do you view them as a threat?

“We believe Amazon is a longer-term threat, but not in the near term. In other words, we think they have lower hanging fruit to pursue first, before pharmacy. Pharmacy has several features that we believe are not a good fit for Amazon, who typically gains an advantage by providing the lowest price to the customer and offering the widest selection. In pharmacy, the “price” to the customer is the co-pay amount, typically $10 or $20. The remainder of the cost of the medication is paid by the insurance health plans. The amount of the co-pay is set by insurance health plans, not by the pharmacy, so Amazon does not have the ability to be a lowest cost to the customer like in other businesses. Also, the selection of a typical drug store is about 500 items. NowRx stocks about 550 items. In most businesses in which Amazon competes, offering as many brands as possible is a distinct advantage. Consider offering 30 brands of paper towels, for example. However, in pharmacy there is little advantage to be gained by offering more than the typical pharmacy inventory—which NowRx does!

Furthermore, the regulatory environment is difficult to navigate. There was news just last week, in fact, that Amazon is pulling back from pharmaceutical sales to hospitals. I believe there is a fairly long window of opportunity to go after market share for now. If Amazon does eventually come into the space, it will represent an existential threat to CVS, Walgreens, RiteAid, etc., and so startups that have built the technology necessary for same-day or same-hour prescription delivery, along with patient analytics capabilities for improved medication management, etc., will be likely targets for strategic acquisition.”

There are other players in the space, perhaps most notably NY-based Capsule. What do you think differentiates NowRx?

“We believe we are differentiated from the direct competitors in the following ways:

1) NowRx offers one-hour, expedited delivery for urgent medications — we feel this is a low frequency but very high value feature,

2) NowRx is the first HIPAA-compliant app approved to fill prescriptions on Google Home,

3) We have recently filed a provisional patent that covers several aspects of our technology backbone and which we believe will provide sustainable defensibility.

Ultimately, we believe the best customer experience will win the most market share. All of our technology is being developed with a focus on creating the most convenient and efficient customer experience in the industry. This is the very essence of our brand and our ‘true north’. All of our processes also are highly optimized for customer experience, from how many rings it takes before a customer service person answers the phone (2 rings or less) to how often we have an item in inventory, to the dependability of our delivery time-slots. We designed all of these experiences to create a brand known for convenience, dependability, and quality of service. It is this NowRx customer experience that ultimately will win and retain the most market share over time.”

What advice do you have for entrepreneurs entering the health-tech and healthcare market?

“Healthcare customers are highly sensitive to service failures, even relatively small ones. The mistake we see healthcare startups and their investors make is treating healthcare like any other industry where the priority becomes rapid scale-up at all costs. In healthcare, cutting corners can quickly damage your brand and limit, or kill, adoption. Instead, customer service is absolutely paramount — unlike in other industries, this industry relates to the health of customers and their loved ones. At NowRx, ‘proof is in the pudding’. We are very proud of our 5-star Yelp reviews! This is something instilled in the NowRx culture and is something we work on every hour of every day.”
Ultimately, we believe the best customer experience will win the most market share. All of our technology is being developed with a focus on creating the most convenient and efficient customer experience in the industry. This is the very essence of our brand and our ‘true north’. All of our processes also are highly optimized for customer experience, from how many rings it takes before a customer service person answers the phone (2 rings or less) to how often we have an item in inventory, to the dependability of our delivery time-slots. We designed all of these experiences to create a brand known for convenience, dependability, and quality of service. It is this NowRx customer experience that ultimately will win and retain the most market share over time.”

What is the future of retail pharmacy? Do you envision NowRx delivering that future?

Retail pharmacy is undergoing a rapid transformation, and it is really exciting to be on the front lines while it is happening in real time. Future innovations including autonomous delivery vehicles and delivery via drones! If you think about it, pharmacy is a great product for drone delivery, as it is mostly recurring orders (monthly refills), there is a highly standardized package size (pill bottles) and there is a very high value per ounce of weight, all ideally suited for commercial drone delivery. We have had some very interesting conversations with companies at the forefront of drone delivery. Stay tuned!

NowRx is currently raising its $7mm Series A round in preferred equity. If you are interested in learning more about this investment opportunity, you may view the company’s profile here: www.seedinvest.com/nowrx

NowRx is offering securities through the use of an offering statement that has been qualified by the Securities and Exchange Commission under Tier II of Regulation A. A copy of the final Offering Circular that forms a part of the offering statement may be obtained from NowRx: www.seedinvest.com/nowrx

This article may contain forward-looking statements and information relating to, among other things, the Company, its business plan and strategy, and its industry. These statements reflect management’s current views with respect to future events based on information currently available and are subject to risks and uncertainties that could cause the Company’s actual results to differ materially. Investors are cautioned not to place undue reliance on these forward-looking statements as they are meant for illustrative purposes and they do not represent guarantees of future results, levels of activity, performance, or achievements, all of which cannot be made. The company does not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.

This post was written by Nicholas Pinto on May 8, 2018

Founder Profile Series: Cary Breese of NowRx


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