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The financial struggles of a breast pump startup

103 points by fmihaila 9y ago

swalsh 9y ago
My wife's pump was covered by her insurance company. Do you think this might be covered too? If so, I can't imagine why a VC wouldn't want to get into a business where consumers WANT the product and don't even have to make a financial decision about it.
- swsieber 9y ago
  I believe it's covered up to $200 dollars. But I could be wrong.
- WalterSear 9y ago
  I'm guessing that that would require FDA approval, making it unattractive as the initial market.
  - BDGC 9y ago
    If you read the article, you'd see that the pump in question already has FDA approval.
  - defap 9y ago
    They have FDA approval. It’s stated in the first paragraph of the article.
- acranox 9y ago
  The insurance only covers the pump up to a certain dollar value. The fancier pumps, you have to pay for, but I think you get a rebate from insurance. So a $200 pump is probably free, but this $1000 pump, is probably still going to cost you $800.
s17n 9y ago
My first reaction: maybe investors just don't want to fund an overpriced piece of hardware that provides dubious value compared to existing solutions. My second reaction: well they gave $120M to Juicero.
- SerLava 9y ago
  Perhaps they missed the mark with VCs by not calling it "Juiceyourmom".
  - dang 9y ago
    Please don't do this here.
    - SerLava 9y ago
      apologies.
- dv_dt 9y ago
  Well that would be part of serious diligence in looking to invest. Is the price high because of low-volume? If the product is shipping in low volume and what the business needs is an injection of money to do a risk commitment for higher volume in manufacturing in combination with marketing to get it out to an audience - that would seem like it could be within the realm of VC funding.
- petra 9y ago
  My first reaction: this story appears so very close to their kickstarter, and it fits well with their target market.
  - s17n 9y ago
    Hey man just cause its PR don't make it not true
    - horsecaptin 9y ago
mikeash 9y ago
"Others said they were too grossed out to touch her product" What the hell? These were grown men?
- alexanderstears 9y ago
  A grown woman at CNN recently went off the rails because her guest said "boobs". Mammary glands are apparently highly upsetting and I think we should respect people's sensitivities. However, it'd be even better to find people built of tougher stuff and put them in economically relevant positions.
  - lovich 9y ago
    To be fair, that guest threw it out into the middle of a conversation that had nothing to do with it just to rile people up. The exact quote was "I’m a first amendment absolutist. I believe in only two things completely, the First Amendment and boobs"[1] while talking about ESPN mixing politics into their sports coverage [1]http://www.dailywire.com/news/21140/meltdown-sports-analyst-triggers-cnn-i-believe-1st-ryan-saavedra# http://www.dailywire.com/news/21140/meltdown-sports-analyst-...
    - eropple 9y ago
      I'm glad you got here before I did, because the post to which you are replying is disingenously mischaracterizing it as "oh, someone said boobs." That dude was rolling in some openly sexist garbage, smugging about it, and looked shocked that the female refused to take it. It wasn't about any particular body part being referred to at all, and that poster knew it when making that post. (And I'm saying this despite looking at the prices in the article at the root of this thread and having my eyeballs roll out of their sockets and bounce down the road.)
      - stevehawk 9y ago
        Apparently I'm the only person who thinks the host blew it in regards to that. The guy who said "boobs" in a bad effort to be shocking and funny actually tried to keep the conversation on topic.. going so far as to talk over the host when she kept trying to get him to clarify what he said. Yea he's an asshat but she blew that entire bit. And she wasn't helped by the apologist who couldn't move past it either. She should have just moved on and then at the end of it informed him he's a mysognist and wouldn't be allowed back on the show.. not just declare she's cutting the mics because she's so fragile and mind blown. (Disregard if this isn't about the blonde lady, white guy, and black guy discussing why Trump's people won't quit trying to get the ESPN commentator fired)
sulam 9y ago
VCs are prone to the same sort of investment "analysis" that regular schmoes are. "Do I like the product?" "Do the people I hang out with use it?" Needless to say, the answers for a breast pump aren't great when you're a 30-45 yr old man who mostly hangs out with other men and, if you're married with children, likely has a wife that didn't need to pump.
rayuela 9y ago
Right, nobody wants to invest in a company making a $1,000 breast pump because boobs are gross and not because they think this is another Juicero...
- derefr 9y ago
  The impression I got from the article is that the investors never got to the point in the conversation where they found out how much the thing cost. They were put off before any sort of ROI considerations were on the table.
- erdojo 9y ago
  There's no comparison to Juicero. It's not beautifully-designed-but-has-no-value-prop brick. It's extremely useful, albeit for a pretty small market given its price point.
joelrunyon 9y ago
> She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013. But they’ve recently hit a wall. With few VCs willing to fund the product, they’re turning to Kickstarter in the hopes of keeping their company running. The campaign, with an initial goal of $100,000, is expected to start Thursday. “If VCs don’t want this, then we know parents and mothers do,” Alvarez said. 1. This sounds like there's more of an issue of money drying up for hardware products. 2. This also seems conveniently timed for their KS launch :) Well played.
jasonmaydie 9y ago
I'll say it. Maybe it's a mediocre product that isn't attracting lots of investments? I think VCs are primarily driven by greed and their ROI values rather than sexism.
AndrewKemendo 9y ago
As much as I agree and have seen first person that VC (and all of finance by the way) is an old-boy male dominated world, this story smells like it's spinning the yarn that it's not Icarus. She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013...Precursor Ventures, said he decided to make a seed investment in Naya Oh ok, so VC's do like it [1][2]. Despite what you hear it's a tiny subsection of startups that ever raise any money. Even harder for hardware startups. The company was selling the Naya for $999 until Thursday, when it lowered the price temporarily to $649. A typical Medela pump is about $250...There’s a dedicated fan base among mothers who can afford it Ah, got it. Their product is too expensive for too small of a market. Today, Naya Health opened up the possibility for customers to register to buy one at least — no deposit required Wait, they don't even have sales yet? If you go to the site you can buy one... Look, the VC's that were acting like teenagers are slimeballs and anyone, regardless of your gender, race whatever has run into slimeball investors. I'm male and I've been sexually harassed or had a casually racist comment lobbed past me more times than I can count by a potential investor. It sucks. It is not however why it's proving hard to close a massively risky, and I assume hugely expensive A round. This looks like submarine PR wrapped in an outrage sandwich. [1]https://www.crunchbase.com/organization/naia-health/investors https://www.crunchbase.com/organization/naia-health/investor... [2]https://techcrunch.com/2016/04/25/naya-health-raises-3-9-million-to-build-a-better-breast-pump/ https://techcrunch.com/2016/04/25/naya-health-raises-3-9-mil...
- eridius 9y ago
  You don't know the market, you don't know the product, and you're making a lot of assumptions. EDIT: Knowing HN's audience, I expected the downvotes. What I don't get is why my comments are being flagged. Please stop abusing HN's tools to silence dissenting opinions.
  - iamdave 9y ago
    I'm keen to hear your counterpoints?
    - 9y ago
bkohlmann 9y ago
My wife recently found this on kickstarter, and spent about 2 hours digging into it, raving about it the whole time. We have two small kids, and finding a suitable breast pump is a source of consistent challenge. Who ever cracks the code -and this firm might - will have a huge market. Being "non-consensus" and "right" is how the great investor Howard Marks determines opportunity. Seems like this is as non-consensus as it gets...with a huge opportunity.
prostoalex 9y ago
1) The total addressable market for a $1,000 breast pump might be outside of VC spectrum and more up small business financing or "Shark Tank" alley. 2) Women don't breastfeed their entire lives, so the units hit the used market pretty quickly, generating pricing pressure. Sales figures might look spectacular year 1, but what about year 5? VCs have access to market research data and executives at medical device companies who can probably provide them with better statistics. 3) Typical setup involves a hospital or a medical group buying a bunch of high-end pumps and renting them on a monthly basis (PSA for those who might need it: Kaiser Permanente will rent a breast pump to non-members). 4) Their main innovation seems to involve a different suction cup design that performed better for the target group they chose. How much a competitive moat is there? What's stopping Medela or a third-party parts supplier from building similar suction cups for a variety of breast pumps that's already out there?
- mc32 9y ago
  I think this has a similar potential as $1000 strollers. Most people will opt for something diff, but there'd defo be _some_ market for the devices.
  - prostoalex 9y ago
    Yep. Which is why Stocke AS history page boasts "3 generations of the Stokke family owned and operated the company", not "backed by prime Silicon Valley venture capital firms".
- lallysingh 9y ago
  A $500 pump is listed too. And people often have more than 1 kid. And this looks like a great baby shower gift. Or wedding present from pushy parents.
  - prostoalex 9y ago
    All valid points, but customer acquisition in that market is not zero. Amazon search results for electric breast pumps are 7 pages, many with 5-star reviews from verified purchasers.
Normal_gaussian 9y ago
> “Investors would say, ‘Let me go talk to my sister; let me go talk to my wife,’” Alvarez said. Well yes. I would be thoroughly disappointed in any investor that doesn't check for suitability with somebody they trust that has a high likelihood of deeper knowledge in the area. I expect their 4x current model price is a huge factor in failing to attract investment, the NHS and ObamaCare are unlikely to cover these in the vast majority of situations. But I also don't doubt she is having a hard time and that the disgusting things she is quoting occurred; I have overheard and been present for many less than desirable comments - both from men and women - in professional settings. EDIT: Just took a look at pumps available in the UK, for £50-150 I get lots of pumps advertising comfort etc. I would need to have an independent doctor or trusted woman with first-hand experience of these not being suitable to be convinced of any kind of mass market appeal.
usaphp 9y ago
Sure the problem is in women founder and not the fact that it costs 4x what an Avent or Medela pump do, even tho there is no much difference between. > “Manufacturers use hard plastic unlike this pump...” No they don’t, we have an avent pump for $200 and it has very soft suction cups.
ringaroundthetx 9y ago
Emily Chang is trying so hard to make this about the male dominated VCs for the founder's short comings instead of the apt criticism of the team and execution. Really, Emily Chang of Bloomberg West/Technology? She could have at least offered another perspective to the article, while still being able to connect the dots about the scrutiny that Silicon Valley faces. A husband and wife co-founder duo, a literal mom and pop with 3 children, trying to scale up their hardware production business which hasn't proven itself after 6.5m in capital. Yeah there are a lot of valid criticisms that would be made to any team, and a couple unique to that team. Making it just about the mom's experience with "male dominated VCs" is disingenuous. I'm not going to be an apologist for off-comments made by VCs, I do know that you can make a conclusion on business plans in like 30 seconds to 5 minutes, and then you have to spend the rest of the hour in small talk. There is also the recurring trope of being included in a VCs portfolio becoming validation. If you are able to self fund an idea, you can make more money than you would with the VCs, in many scenarios. Yes everyone wants the publicity, but VC business models simply don't work with MOST business models. That has nothing to do with the efficacy of your business. So maybe, good luck with the kickstarter.
Chris2048 9y ago
I dislike this line: > It’s hard when you’re told you can’t be yourself because you have to play the game This plays on "don't ask don't tell" themes of not being able to freely express yourself; But this is the norm for the environment, you might not normally wear a suit, or cover your tattoos, but you are often expected to do these things in a business meeting.
- danharaj 9y ago
  > During one pitch meeting, Alvarez recalled one guy saying, “I’m not touching that; that’s disgusting.” In another meeting, investors Googled the product and ended up on a porn site. They lingered on the page and started cracking jokes, she said. “I felt like I was in the middle of a fraternity,” Alvarez said. “I expect more from grown men.” I guess that's fair game at a business meeting though.
  - Chris2048 9y ago
    I highlighted a specific line, not this one, that I had a problem with. The line I did reference refers to the following: "Only wear black and gray; don’t use nail polish; don’t smile or laugh too much; and keep your hair back in a pony tail"
ynniv 9y ago
There are a lot of armchair comments here, so let me throw in my 2¢: the market is bigger than you think, customers will place a heavy premium on new over used, they are willing to spend more than you think, and they aren't especially happy with the existing offerings. Making hardware is difficult, but that isn't news, and moderate success could end in a quick sale to an established player. Yes this is timed to be good PR, but isn't that how you play the game?
- erdojo 9y ago
  Unless you have data backing up your assertions, you're comments are from the armchair too.
  - grzm 9y ago
    I think 'ynniv made it pretty clear that they're aware that their input is cheap (or at least that's my 2¢).
lingua 9y ago
Some VCs liked it and invested. Others weren't willing to take the risk. Others acted deplorably. When a Naya pitch meeting turned into a porn-fest, what did the Naya reps do? Did they try to laugh it off and humour the offenders because they wanted the money? Or did they realize that they didn't want to be in business with these people, shutdown and walk out? If they didn't walk away, they are culpable. They clearly communicated that bad behaviour is tolerable depending on the money.
- erdojo 9y ago
  Stop victim shaming. When you're trying to make payroll for people you care about you'll put up with a lot. It's not so easy to make principled stands when people are depending on you.
kentt 9y ago
I am the target market for this. We have a Medela and it's doesn't work that well. We can easily afford Naya's $1000 version, but I don't think we'd pay 4x as much. In general, before saying the the situation is because of sexism, racism, etc., check if the other criticisms are valid. In this case, they sound very reasonable to me.
gumby 9y ago
Appalling. Economic doctrine/ideology says that this should create opportunities for someone to swoop in and do a good deal. I think we all know that reality rarely matches theory, especially in economics. It’s possible the business itself has structural problems (cost, channel) — we don’t know those details. But these stories are dreadful, and dreadfully common.
dchmiel 9y ago
Something in the article that jumped out at me was: "But the couple still couldn’t raise money. As cash got tight, the founders asked their eight full-time employees, who are mostly in the San Francisco Bay area, to work for minimum wage, which would buy the company a few months of extra runway. The staff agreed." The 8 employees must have drastically reduced the cash flow requirements by just being paid minimum wage. My question is, is that any different than directly investing into the company and giving the company cash outright like a VC? The employees made an investment into the company like a VC would by giving extra runway to the company. I wonder if the employees received any equity compensation for doing so under the same terms that the Alvarez's are trying to raise financing under. Getting paid higher than minimum wage and needing financing which dilutes you or taking minimum wage reducing the need for financing but getting no equity for it seems unfair to the employees. They never mentioned that detail in the article but it's something I always think about when founders and executives ask employees to make these sacrifices and take on added risk but without ever compensating employees like they would compensate other capital with equity for the risk they take.
silencio 9y ago
I'm an exclusively pumping parent right now. Naya isn't the first company to try to do something like this. Willow and Anabella are two other companies/devices trying to sell people on a better pump. Anabella's indiegogo campaign has made the rounds in all my pumping groups like 100 times on its promise of getting 100% milk out (it's a common idea that pumps right now can't get all available milk out like babies' mouths can). Willow is being sold on the idea that it fits in your bra without any tubes or hassle, which is a big deal for people wishing to discreetly pump in workplaces and such. But having used the top-of-the-line (Symphony and Ameda hospital grade pumps) all the way down to home-grade and manual pumps (Spectra S2, Freestyle, etc.) in the past 6 months - pretty sure it doesn't matter how effective the pump is or how comfortable it ends up being. The act of pumping itself is very difficult for many people and time consuming, and when you have employers, coworkers, and family/friends that don't respect your need to pump, you end up not pumping rather than doubling down with your $1k pump. Especially in the face of the fact that most parents in the US will qualify to get a free home-grade pump through insurance (including through WIC etc.) and that without insurance the average pump is only $100-200 plus supplies another $50-100 - along with an expectation to replace the pump every time you have a new child (the pump itself does wear out - I wear them out prematurely due to EPing :) )... I think these companies face a lot more problems than they're willing to acknowledge. VCs may be frustrating to work with here, but a lot of questions remain. I still wish these companies the best of luck though, as all technology has to start somewhere and then maybe becomes cheaper and more accessible over time :) Breast pumps decades ago look like torture devices in comparison to what's available now. edit to add: full disclosure, I haven't purchased or preordered any of the crop of new pumps. pretty much none of them support my (large) nipple size, and none of them seem to have worked closely with EPers as it is difficult to near impossible to find a pump that also promises that they'll have parts available for replacement. due to pumping all the damn time, I have to replace parts fairly frequently.
- ryanmarsh 9y ago
  It’s refreshing to have a voice like yours added to the conversation.
  - 9y ago
bogomipz 9y ago
I am confused by this article. They were able to raise 6.5 million initially, which is not insignificant. But when they weren't able to raise more money anecdotes about sexism are mentioned? I don't doubt for a minute that there is rampant sexism in the Valley but they were able to raise money just not a second round. This is not uncommon.
koolba 9y ago
> She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013. But they’ve recently hit a wall. With few VCs willing to fund the product, they’re turning to Kickstarter in the hopes of keeping their company running. The campaign, with an initial goal of $100,000, is expected to start Thursday. “If VCs don’t want this, then we know parents and mothers do,” Alvarez said. Is the $100K purely to demonstrate potential demand? Seems like a drop in the bucket compared to the $6.5M they've already received. > The breast pump market is dominated by Swiss manufacturer Medela LLC, which got a boost in the U.S. from an Obamacare mandate that insurance companies must cover the cost of pumps for new moms. Most devices use hard plastic cups and an air suction system. They’re often loud and sometimes painful. > The Naya’s soft suction cup mimics the feel of a baby’s mouth and distributes the suction over a broader area of a woman’s breast. I'm hardly an expert on this but mimicking a baby mouth doesn't mean it's not going to be painful. Soft suction cups seems interesting though it's also something that could be added to a regular pump. > Alvarez said the Naya delivers 30 percent more breast milk and is 20 percent faster than alternatives, thanks to a unique water-based system. Now we're getting to something worthwhile. 20% of 45-120 minutes per day is quite a savings to the right person. I'd imagine it'd be particularly important to women that pump at the office. > The company is also planning to sell a smart bottle that will be able to track the volume, calorie count and fat content of breast milk and inputs them into an app. Mothers would be able to use the software to monitor how much they’re pumping, how much the baby is eating and how much milk is left in storage. This is utterly useless. I'm sure some idiots (particularly first time parents) will want these type of tracking features because they think they're important. But sensible people and anyone with more than one child will realize how pointless they are. > Customers are asked to pay a serious premium for those features. The company was selling the Naya for $999 until Thursday, when it lowered the price temporarily to $649. A typical Medela pump is about $250. Naya is now pitching a lower-end model without a rechargeable battery or certain accessories for $399, though the price will go up by $100 eventually. That's an obscene amount of money for a breast pump. > [... truncated ...] But the couple still couldn’t raise money. Bias deterring funding aside, I don't see how this company succeeds given their pricing and lack of true improvements over the status quo.
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otto_ortega 9y ago
Please stop pretending there are gender discrimination issues on places there is none... It only takes relevance from real gender discrimination cases. The title displayed for the article on facebook is even worse "A Smart Breast Pump: Mothers Love It. VCs Don’t" This company is not struggling because evil VCs are not willing to fund companies run by women that offer products for women as the article wants to portray it... It is struggling because it wants to sell a product that provides 0.3 more efficiency and 0.2 more speed at 4 times the cost of the alternatives! Not to mention the fact that the company DID get $6.5M on funding! If it is struggling at this point is more likely due to market fitment issues or mismanagement issues. So, please get real.... The owner is just playing the gender discrimination card to milk (not pun intended) some attention from the media towards the kickstarter campaign....
erdojo 9y ago
I'm not sure what this story accomplished. Did it convince us that... ...Male VCs can act like jerks? Yes. ...Male VCs don't get the female market? This shouldn't surprise anyone. It's sad but this is why we need more female VCs. ...That the company is not getting funding because it's women-oriented and run by a woman? Unfortunately no. Because the story didn't prove the company deserved to be funded. It left me with BIG open questions instead. There wasn't any mention of market data or past sales/momentum data to validate market size and demand. Especially for a company that has burned through $6.5M in 3-4 years. If your go-to-market strategy is to launch at 3-4x the price of your biggest competitors, you've got to have a value prop that totally invalidates and obliterates price comparisons. Better comfort and "smart" features are nice-to-haves, not can't-live-withouts. All of this means they have a product with an audience that quickly narrows down: - Women ---In childbearing years -----Who are are pregnant, or recently had a child -------Who are nursing/planning to nurse ---------Who are committed to pumping vs supplementing with formula -----------Who have enough disposable income to pay a 3-4x premium -------------Who care about these specific features Then, as another commenter mentioned, there are other premium pumps coming to market, so they will inevitably be splitting market share. I'm a woman and I get this product and market (mostly, I have not had children). I hope they succeed, but my guess is this only works if it's a market-entry product that is quickly followed up by a broader line of "smart" products for moms and moms-to-be. To put my money in, I'd first need to be convinced that this is the right market-entry product (and can give you that high-end brand recognition), then I'd need to be convinced you've got other stuff in R&D that will deliver the big profits.

103 points by fmihaila 9y ago

My wife's pump was covered by her insurance company. Do you think this might be covered too? If so, I can't imagine why a VC wouldn't want to get into a business where consumers WANT the product and don't even have to make a financial decision about it.

swsieber 9y ago
I believe it's covered up to $200 dollars. But I could be wrong.
WalterSear 9y ago
I'm guessing that that would require FDA approval, making it unattractive as the initial market.
- BDGC 9y ago
  If you read the article, you'd see that the pump in question already has FDA approval.
- defap 9y ago
  They have FDA approval. It’s stated in the first paragraph of the article.
acranox 9y ago
The insurance only covers the pump up to a certain dollar value. The fancier pumps, you have to pay for, but I think you get a rebate from insurance. So a $200 pump is probably free, but this $1000 pump, is probably still going to cost you $800.

s17n 9y ago

My first reaction: maybe investors just don't want to fund an overpriced piece of hardware that provides dubious value compared to existing solutions. My second reaction: well they gave $120M to Juicero.

SerLava 9y ago
Perhaps they missed the mark with VCs by not calling it "Juiceyourmom".
- dang 9y ago
  Please don't do this here.
  - SerLava 9y ago
    apologies.
dv_dt 9y ago
Well that would be part of serious diligence in looking to invest. Is the price high because of low-volume? If the product is shipping in low volume and what the business needs is an injection of money to do a risk commitment for higher volume in manufacturing in combination with marketing to get it out to an audience - that would seem like it could be within the realm of VC funding.
petra 9y ago
My first reaction: this story appears so very close to their kickstarter, and it fits well with their target market.
- s17n 9y ago
  Hey man just cause its PR don't make it not true
  - horsecaptin 9y ago

mikeash 9y ago

"Others said they were too grossed out to touch her product" What the hell? These were grown men?

alexanderstears 9y ago
A grown woman at CNN recently went off the rails because her guest said "boobs". Mammary glands are apparently highly upsetting and I think we should respect people's sensitivities. However, it'd be even better to find people built of tougher stuff and put them in economically relevant positions.
- lovich 9y ago
  To be fair, that guest threw it out into the middle of a conversation that had nothing to do with it just to rile people up. The exact quote was "I’m a first amendment absolutist. I believe in only two things completely, the First Amendment and boobs"[1] while talking about ESPN mixing politics into their sports coverage [1]http://www.dailywire.com/news/21140/meltdown-sports-analyst-triggers-cnn-i-believe-1st-ryan-saavedra# http://www.dailywire.com/news/21140/meltdown-sports-analyst-...
  - eropple 9y ago
    I'm glad you got here before I did, because the post to which you are replying is disingenously mischaracterizing it as "oh, someone said boobs." That dude was rolling in some openly sexist garbage, smugging about it, and looked shocked that the female refused to take it. It wasn't about any particular body part being referred to at all, and that poster knew it when making that post. (And I'm saying this despite looking at the prices in the article at the root of this thread and having my eyeballs roll out of their sockets and bounce down the road.)
    - stevehawk 9y ago
      Apparently I'm the only person who thinks the host blew it in regards to that. The guy who said "boobs" in a bad effort to be shocking and funny actually tried to keep the conversation on topic.. going so far as to talk over the host when she kept trying to get him to clarify what he said. Yea he's an asshat but she blew that entire bit. And she wasn't helped by the apologist who couldn't move past it either. She should have just moved on and then at the end of it informed him he's a mysognist and wouldn't be allowed back on the show.. not just declare she's cutting the mics because she's so fragile and mind blown. (Disregard if this isn't about the blonde lady, white guy, and black guy discussing why Trump's people won't quit trying to get the ESPN commentator fired)

sulam 9y ago

VCs are prone to the same sort of investment "analysis" that regular schmoes are. "Do I like the product?" "Do the people I hang out with use it?" Needless to say, the answers for a breast pump aren't great when you're a 30-45 yr old man who mostly hangs out with other men and, if you're married with children, likely has a wife that didn't need to pump.

rayuela 9y ago

Right, nobody wants to invest in a company making a $1,000 breast pump because boobs are gross and not because they think this is another Juicero...

derefr 9y ago
The impression I got from the article is that the investors never got to the point in the conversation where they found out how much the thing cost. They were put off before any sort of ROI considerations were on the table.
erdojo 9y ago
There's no comparison to Juicero. It's not beautifully-designed-but-has-no-value-prop brick. It's extremely useful, albeit for a pretty small market given its price point.

joelrunyon 9y ago

jasonmaydie 9y ago

I'll say it. Maybe it's a mediocre product that isn't attracting lots of investments? I think VCs are primarily driven by greed and their ROI values rather than sexism.

AndrewKemendo 9y ago

As much as I agree and have seen first person that VC (and all of finance by the way) is an old-boy male dominated world, this story smells like it's spinning the yarn that it's not Icarus. She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013...Precursor Ventures, said he decided to make a seed investment in Naya Oh ok, so VC's do like it [1][2]. Despite what you hear it's a tiny subsection of startups that ever raise any money. Even harder for hardware startups. The company was selling the Naya for $999 until Thursday, when it lowered the price temporarily to $649. A typical Medela pump is about $250...There’s a dedicated fan base among mothers who can afford it Ah, got it. Their product is too expensive for too small of a market. Today, Naya Health opened up the possibility for customers to register to buy one at least — no deposit required Wait, they don't even have sales yet? If you go to the site you can buy one... Look, the VC's that were acting like teenagers are slimeballs and anyone, regardless of your gender, race whatever has run into slimeball investors. I'm male and I've been sexually harassed or had a casually racist comment lobbed past me more times than I can count by a potential investor. It sucks. It is not however why it's proving hard to close a massively risky, and I assume hugely expensive A round. This looks like submarine PR wrapped in an outrage sandwich. [1]https://www.crunchbase.com/organization/naia-health/investors https://www.crunchbase.com/organization/naia-health/investor... [2]https://techcrunch.com/2016/04/25/naya-health-raises-3-9-million-to-build-a-better-breast-pump/ https://techcrunch.com/2016/04/25/naya-health-raises-3-9-mil...

eridius 9y ago
You don't know the market, you don't know the product, and you're making a lot of assumptions. EDIT: Knowing HN's audience, I expected the downvotes. What I don't get is why my comments are being flagged. Please stop abusing HN's tools to silence dissenting opinions.
- iamdave 9y ago
  I'm keen to hear your counterpoints?
  - 9y ago

bkohlmann 9y ago

My wife recently found this on kickstarter, and spent about 2 hours digging into it, raving about it the whole time. We have two small kids, and finding a suitable breast pump is a source of consistent challenge. Who ever cracks the code -and this firm might - will have a huge market. Being "non-consensus" and "right" is how the great investor Howard Marks determines opportunity. Seems like this is as non-consensus as it gets...with a huge opportunity.

prostoalex 9y ago

1) The total addressable market for a $1,000 breast pump might be outside of VC spectrum and more up small business financing or "Shark Tank" alley. 2) Women don't breastfeed their entire lives, so the units hit the used market pretty quickly, generating pricing pressure. Sales figures might look spectacular year 1, but what about year 5? VCs have access to market research data and executives at medical device companies who can probably provide them with better statistics. 3) Typical setup involves a hospital or a medical group buying a bunch of high-end pumps and renting them on a monthly basis (PSA for those who might need it: Kaiser Permanente will rent a breast pump to non-members). 4) Their main innovation seems to involve a different suction cup design that performed better for the target group they chose. How much a competitive moat is there? What's stopping Medela or a third-party parts supplier from building similar suction cups for a variety of breast pumps that's already out there?

mc32 9y ago
I think this has a similar potential as $1000 strollers. Most people will opt for something diff, but there'd defo be _some_ market for the devices.
- prostoalex 9y ago
  Yep. Which is why Stocke AS history page boasts "3 generations of the Stokke family owned and operated the company", not "backed by prime Silicon Valley venture capital firms".
lallysingh 9y ago
A $500 pump is listed too. And people often have more than 1 kid. And this looks like a great baby shower gift. Or wedding present from pushy parents.
- prostoalex 9y ago
  All valid points, but customer acquisition in that market is not zero. Amazon search results for electric breast pumps are 7 pages, many with 5-star reviews from verified purchasers.

Normal_gaussian 9y ago

> “Investors would say, ‘Let me go talk to my sister; let me go talk to my wife,’” Alvarez said. Well yes. I would be thoroughly disappointed in any investor that doesn't check for suitability with somebody they trust that has a high likelihood of deeper knowledge in the area. I expect their 4x current model price is a huge factor in failing to attract investment, the NHS and ObamaCare are unlikely to cover these in the vast majority of situations. But I also don't doubt she is having a hard time and that the disgusting things she is quoting occurred; I have overheard and been present for many less than desirable comments - both from men and women - in professional settings. EDIT: Just took a look at pumps available in the UK, for £50-150 I get lots of pumps advertising comfort etc. I would need to have an independent doctor or trusted woman with first-hand experience of these not being suitable to be convinced of any kind of mass market appeal.

usaphp 9y ago

Sure the problem is in women founder and not the fact that it costs 4x what an Avent or Medela pump do, even tho there is no much difference between. > “Manufacturers use hard plastic unlike this pump...” No they don’t, we have an avent pump for $200 and it has very soft suction cups.

ringaroundthetx 9y ago

Emily Chang is trying so hard to make this about the male dominated VCs for the founder's short comings instead of the apt criticism of the team and execution. Really, Emily Chang of Bloomberg West/Technology? She could have at least offered another perspective to the article, while still being able to connect the dots about the scrutiny that Silicon Valley faces. A husband and wife co-founder duo, a literal mom and pop with 3 children, trying to scale up their hardware production business which hasn't proven itself after 6.5m in capital. Yeah there are a lot of valid criticisms that would be made to any team, and a couple unique to that team. Making it just about the mom's experience with "male dominated VCs" is disingenuous. I'm not going to be an apologist for off-comments made by VCs, I do know that you can make a conclusion on business plans in like 30 seconds to 5 minutes, and then you have to spend the rest of the hour in small talk. There is also the recurring trope of being included in a VCs portfolio becoming validation. If you are able to self fund an idea, you can make more money than you would with the VCs, in many scenarios. Yes everyone wants the publicity, but VC business models simply don't work with MOST business models. That has nothing to do with the efficacy of your business. So maybe, good luck with the kickstarter.

Chris2048 9y ago

I dislike this line: > It’s hard when you’re told you can’t be yourself because you have to play the game This plays on "don't ask don't tell" themes of not being able to freely express yourself; But this is the norm for the environment, you might not normally wear a suit, or cover your tattoos, but you are often expected to do these things in a business meeting.

danharaj 9y ago
> During one pitch meeting, Alvarez recalled one guy saying, “I’m not touching that; that’s disgusting.” In another meeting, investors Googled the product and ended up on a porn site. They lingered on the page and started cracking jokes, she said. “I felt like I was in the middle of a fraternity,” Alvarez said. “I expect more from grown men.” I guess that's fair game at a business meeting though.
- Chris2048 9y ago
  I highlighted a specific line, not this one, that I had a problem with. The line I did reference refers to the following: "Only wear black and gray; don’t use nail polish; don’t smile or laugh too much; and keep your hair back in a pony tail"

ynniv 9y ago

There are a lot of armchair comments here, so let me throw in my 2¢: the market is bigger than you think, customers will place a heavy premium on new over used, they are willing to spend more than you think, and they aren't especially happy with the existing offerings. Making hardware is difficult, but that isn't news, and moderate success could end in a quick sale to an established player. Yes this is timed to be good PR, but isn't that how you play the game?

erdojo 9y ago
Unless you have data backing up your assertions, you're comments are from the armchair too.
- grzm 9y ago
  I think 'ynniv made it pretty clear that they're aware that their input is cheap (or at least that's my 2¢).

lingua 9y ago

Some VCs liked it and invested. Others weren't willing to take the risk. Others acted deplorably. When a Naya pitch meeting turned into a porn-fest, what did the Naya reps do? Did they try to laugh it off and humour the offenders because they wanted the money? Or did they realize that they didn't want to be in business with these people, shutdown and walk out? If they didn't walk away, they are culpable. They clearly communicated that bad behaviour is tolerable depending on the money.

erdojo 9y ago
Stop victim shaming. When you're trying to make payroll for people you care about you'll put up with a lot. It's not so easy to make principled stands when people are depending on you.

kentt 9y ago

I am the target market for this. We have a Medela and it's doesn't work that well. We can easily afford Naya's $1000 version, but I don't think we'd pay 4x as much. In general, before saying the the situation is because of sexism, racism, etc., check if the other criticisms are valid. In this case, they sound very reasonable to me.

gumby 9y ago

Appalling. Economic doctrine/ideology says that this should create opportunities for someone to swoop in and do a good deal. I think we all know that reality rarely matches theory, especially in economics. It’s possible the business itself has structural problems (cost, channel) — we don’t know those details. But these stories are dreadful, and dreadfully common.

dchmiel 9y ago

Something in the article that jumped out at me was: "But the couple still couldn’t raise money. As cash got tight, the founders asked their eight full-time employees, who are mostly in the San Francisco Bay area, to work for minimum wage, which would buy the company a few months of extra runway. The staff agreed." The 8 employees must have drastically reduced the cash flow requirements by just being paid minimum wage. My question is, is that any different than directly investing into the company and giving the company cash outright like a VC? The employees made an investment into the company like a VC would by giving extra runway to the company. I wonder if the employees received any equity compensation for doing so under the same terms that the Alvarez's are trying to raise financing under. Getting paid higher than minimum wage and needing financing which dilutes you or taking minimum wage reducing the need for financing but getting no equity for it seems unfair to the employees. They never mentioned that detail in the article but it's something I always think about when founders and executives ask employees to make these sacrifices and take on added risk but without ever compensating employees like they would compensate other capital with equity for the risk they take.

silencio 9y ago

I'm an exclusively pumping parent right now. Naya isn't the first company to try to do something like this. Willow and Anabella are two other companies/devices trying to sell people on a better pump. Anabella's indiegogo campaign has made the rounds in all my pumping groups like 100 times on its promise of getting 100% milk out (it's a common idea that pumps right now can't get all available milk out like babies' mouths can). Willow is being sold on the idea that it fits in your bra without any tubes or hassle, which is a big deal for people wishing to discreetly pump in workplaces and such. But having used the top-of-the-line (Symphony and Ameda hospital grade pumps) all the way down to home-grade and manual pumps (Spectra S2, Freestyle, etc.) in the past 6 months - pretty sure it doesn't matter how effective the pump is or how comfortable it ends up being. The act of pumping itself is very difficult for many people and time consuming, and when you have employers, coworkers, and family/friends that don't respect your need to pump, you end up not pumping rather than doubling down with your $1k pump. Especially in the face of the fact that most parents in the US will qualify to get a free home-grade pump through insurance (including through WIC etc.) and that without insurance the average pump is only $100-200 plus supplies another $50-100 - along with an expectation to replace the pump every time you have a new child (the pump itself does wear out - I wear them out prematurely due to EPing :) )... I think these companies face a lot more problems than they're willing to acknowledge. VCs may be frustrating to work with here, but a lot of questions remain. I still wish these companies the best of luck though, as all technology has to start somewhere and then maybe becomes cheaper and more accessible over time :) Breast pumps decades ago look like torture devices in comparison to what's available now. edit to add: full disclosure, I haven't purchased or preordered any of the crop of new pumps. pretty much none of them support my (large) nipple size, and none of them seem to have worked closely with EPers as it is difficult to near impossible to find a pump that also promises that they'll have parts available for replacement. due to pumping all the damn time, I have to replace parts fairly frequently.

ryanmarsh 9y ago
It’s refreshing to have a voice like yours added to the conversation.
- 9y ago

bogomipz 9y ago

I am confused by this article. They were able to raise 6.5 million initially, which is not insignificant. But when they weren't able to raise more money anecdotes about sexism are mentioned? I don't doubt for a minute that there is rampant sexism in the Valley but they were able to raise money just not a second round. This is not uncommon.

koolba 9y ago

> She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013. But they’ve recently hit a wall. With few VCs willing to fund the product, they’re turning to Kickstarter in the hopes of keeping their company running. The campaign, with an initial goal of $100,000, is expected to start Thursday. “If VCs don’t want this, then we know parents and mothers do,” Alvarez said. Is the $100K purely to demonstrate potential demand? Seems like a drop in the bucket compared to the $6.5M they've already received. > The breast pump market is dominated by Swiss manufacturer Medela LLC, which got a boost in the U.S. from an Obamacare mandate that insurance companies must cover the cost of pumps for new moms. Most devices use hard plastic cups and an air suction system. They’re often loud and sometimes painful. > The Naya’s soft suction cup mimics the feel of a baby’s mouth and distributes the suction over a broader area of a woman’s breast. I'm hardly an expert on this but mimicking a baby mouth doesn't mean it's not going to be painful. Soft suction cups seems interesting though it's also something that could be added to a regular pump. > Alvarez said the Naya delivers 30 percent more breast milk and is 20 percent faster than alternatives, thanks to a unique water-based system. Now we're getting to something worthwhile. 20% of 45-120 minutes per day is quite a savings to the right person. I'd imagine it'd be particularly important to women that pump at the office. > The company is also planning to sell a smart bottle that will be able to track the volume, calorie count and fat content of breast milk and inputs them into an app. Mothers would be able to use the software to monitor how much they’re pumping, how much the baby is eating and how much milk is left in storage. This is utterly useless. I'm sure some idiots (particularly first time parents) will want these type of tracking features because they think they're important. But sensible people and anyone with more than one child will realize how pointless they are. > Customers are asked to pay a serious premium for those features. The company was selling the Naya for $999 until Thursday, when it lowered the price temporarily to $649. A typical Medela pump is about $250. Naya is now pitching a lower-end model without a rechargeable battery or certain accessories for $399, though the price will go up by $100 eventually. That's an obscene amount of money for a breast pump. > [... truncated ...] But the couple still couldn’t raise money. Bias deterring funding aside, I don't see how this company succeeds given their pricing and lack of true improvements over the status quo.

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otto_ortega 9y ago

Please stop pretending there are gender discrimination issues on places there is none... It only takes relevance from real gender discrimination cases. The title displayed for the article on facebook is even worse "A Smart Breast Pump: Mothers Love It. VCs Don’t" This company is not struggling because evil VCs are not willing to fund companies run by women that offer products for women as the article wants to portray it... It is struggling because it wants to sell a product that provides 0.3 more efficiency and 0.2 more speed at 4 times the cost of the alternatives! Not to mention the fact that the company DID get $6.5M on funding! If it is struggling at this point is more likely due to market fitment issues or mismanagement issues. So, please get real.... The owner is just playing the gender discrimination card to milk (not pun intended) some attention from the media towards the kickstarter campaign....

erdojo 9y ago

I'm not sure what this story accomplished. Did it convince us that... ...Male VCs can act like jerks? Yes. ...Male VCs don't get the female market? This shouldn't surprise anyone. It's sad but this is why we need more female VCs. ...That the company is not getting funding because it's women-oriented and run by a woman? Unfortunately no. Because the story didn't prove the company deserved to be funded. It left me with BIG open questions instead. There wasn't any mention of market data or past sales/momentum data to validate market size and demand. Especially for a company that has burned through $6.5M in 3-4 years. If your go-to-market strategy is to launch at 3-4x the price of your biggest competitors, you've got to have a value prop that totally invalidates and obliterates price comparisons. Better comfort and "smart" features are nice-to-haves, not can't-live-withouts. All of this means they have a product with an audience that quickly narrows down: - Women ---In childbearing years -----Who are are pregnant, or recently had a child -------Who are nursing/planning to nurse ---------Who are committed to pumping vs supplementing with formula -----------Who have enough disposable income to pay a 3-4x premium -------------Who care about these specific features Then, as another commenter mentioned, there are other premium pumps coming to market, so they will inevitably be splitting market share. I'm a woman and I get this product and market (mostly, I have not had children). I hope they succeed, but my guess is this only works if it's a market-entry product that is quickly followed up by a broader line of "smart" products for moms and moms-to-be. To put my money in, I'd first need to be convinced that this is the right market-entry product (and can give you that high-end brand recognition), then I'd need to be convinced you've got other stuff in R&D that will deliver the big profits.