It’s Israeli entrepreneurs who make the startup nation The Startup Nation. |v| is interviewing 12 outstanding founders on their current successes and past mistakes.
Dana Chanan/ Photo: Lisa Avsiyan
Dana Chanan, the CEO and co-founder of “Sweetch” on how her habit-forming skills from gaming industry now help people win back their health
There are currently almost 90 million pre-diabetic patients, in the United States and more than 60 million in Europe. Without intervention, every year one out of every ten patients will become diabetic. However, only 150 minutes of physical activity per week and 5-7% of weight reduction could suffice to lower the risk of becoming diabetic by a whopping 58%. Diabetes prevention through life habits modification has been proven in a large number of clinical studies. While this does not sound like too much exercise, we all know that incorporating it into one’s daily routine can be challenging. In fact, it is estimated that four out of five pre-diabetic patients do not comply with these recommendations.
The “Sweetch” team has invented an innovative and fun way to help patients exercise. It focuses on real world activities instead of sport and does not require human supervision which will allow the problem to scale to the target market size.
Lisa Avsiyan and Katya Rozenoer spoke with Dana on her entrepreneurship experience.
– Dana, you just recently closed an A round with OurCrowd and Phillips, which I imagine was not easy. Now you’ve entered clinical Beta with the famous Johns Hopkins Hospital, which is also a huge accomplishment, given their reputation. How exactly does Sweetch work?
We take the psychology behind human coaching and make it digital in a way that is personalized and adaptive to each user. We use predictive analytics and machine learning to calculate the probability of a pre-diabetic patient to become diabetic within 1-3 years. This enables health providers to focus on their most risky patients, and supports user’s motivation as he or she understands exactly where they stand with regards to their personal risk.
The platform learns the user’s daily behavior, habits and whereabouts, and then using our behavioral analytic engine, we build each individual his own comprehensive intervention program, which provides just-in-time personalized recommendations that help motivate users to achieve their physical activity goals: 150 minutes of exercising per week. Basically, Sweetch serves as a personal digital health coach with an emphasis on long-term adherence and engagement.
We start with baby steps to make users feels like they are succeeding, so we can celebrate their success. We then gradually increase the goal until they achieve the 150 minutes of activity, and after that our main challenge is to help them maintain it.
– How is Sweetch different from other Diabetes Prevention Programs, plenty of which are out there?
There are several programs aiming to prevent diabetes in the market, but most of them are based on human coaching, which dooms them to be expensive and unscalable. Sweetch behavioral analytics engine acts as a digital personal coach, without the need of any human intervention, which is both affordable and scalable.
In addition, Sweetch has the ability to calculate the risk of a patient to become diabetic, which enable us to focus on the most cost effective patients, which none of the existing programs have.
– Is fear of getting diabetes not a good enough motivation?
Fear is indeed an incentive, but cannot by itself create and sustain long-term motivation. More than half of diabetic patient don’t take their medications, though they understand diabetes has serious consequences if not managed. We need to analyze and combine many elements in order to create motivation and translate it into behavioral change.
– So you know a lot about your users.
Yes, with their permission, we collect the required data from the mobile device. We know when they wake up in the morning, when they go to sleep, where do they work and live. What kind of activity they do along the way and what their calendar looks like, what’s the weather outside, where are the nearest parks etc.
Sweetch doesn’t force people to gyms, it allows to exercise anywhere/Pic: Georgie Pauwels, Colors, Flickr, CC
– This is scary.
Not at all, all this information is available to other platforms such as Google and Facebook too, we simply use the data in a very different way – instead of advertising something to users, we help people get healthier.
Our platform learns our users’ behaviors and fine tunes itself all the time: if we see that someone is not following his/her recommendation to take the stairs and not the elevator, we stop recommending it. Maybe they have 10 floors to go up, so it’s not relevant. Instead, we will start recommending getting out of the elevator one floor below their floor. Every step counts. In addition, our machine learning algorithms apply what they’ve learned from some users to other users. The platform learns and adapts, learns and adapts.
– You really put users in the center.
Users are my passion. Throughout my career in tech I’ve always been looking for ways to make their life easier. It started in the army. I served in the Israeli Airforce in a division that focused on processes improvements and resources management and as I was released, I knew what I want to do and what is my path.
I worked in banking, managing Bank Leumi’s online banking. The challenge back then was to make the experience of banking more accessible, so people wouldn’t be afraid anymore and instead of calling to the bank or going there, they would do their activity online, on the website.
The place where I finally enhanced my product skills is the gaming industry. Until a couple of years ago it was the only industry in which they were truly putting the user in the center. In gaming they analyze the user data to make people do what they want them to do. And of course once you know how to do it in one industry you know how to apply it to another. This is why I knew that we will do it with Sweetch.
– So how did it all start for you with Sweetch?
The person behind the initial idea is my partner, Yossi Bahagon, a physician, who sees pre-diabetic patients on a regular basis. We met about 3 years ago when I was leaving a job in a gaming company and was thinking about what to do next. Once he told me about this idea, I said “We have to make it happen.” And I realized that the only way to make it happen was by taking the responsibility — and this is what I actually did.
– Could you afford live without a salary at the time?
I took another job to in the meantime, so it wasn’t 100% just in this. Well, actually, no. I was 100% in this and 100% somewhere else. There are lots of hours in a day, so you can do many things. Sleeping is overrated anyways.
The initial work for us was planning. We decided to start with applying for the grant from the Israeli Office of Chief Scientist (OCS). And although we already had an idea, filing an application with the OCS required a lot of research and thinking. They don’t invest in ideas, so we had to have something concrete. We met in September and in November we already submitted our application to the OCS. And then in February 2014, our request was approved.
But OCS funds only partially. You submit the amount you need, and if it’s approved, they will require a match from other sources. The OCS approved 95% of what we asked from them, which was a great start.
We had 6 months to find the match. We approached few VCs in Israel, until we found the right partners to join us and believed in us and in our idea – Pontifax and Lionbird.
– This is all very impressive for a first-time startup founder.
Well, we’re not first time or new to the business. I wasn’t a founder before, but I come with a lot of experience in my field and we came with a solid solution that aims to help one of the worst 21st century epidemics.
Being co-funded by OCS also helped a lot: it takes half of the VC risk and does not dilute anyone’s shares. We had to raise about $1 million, with OCS providing half of that.
– Do you remember what you felt when you closed the round?
It was exciting. It was very, very exciting but then you realize that now the real challenge begins, you have to actually do it. It took us 8 months to have an up and running prototype of the product which could make a difference.
– You had the prototype. What happened next?
We needed a place to pilot our product. Finding a respectable place for piloting is also challenging. We started with a connection at John Hopkins – one of the most prestigious health systems in the US and the world, and they became enthusiastic about the concept. But while talking to them, we realized that in order to be able to really prove the solution’s effect through a clinical trial, we needed bigger funding.
About that time we met Philips International who identified our potential and decided to invest in Sweetch. It was a very long process but eventually we completed this round successfully. The round was led by Phillips and OurCrowd, and Pontifax and Lionbird joined it as well.
– It was in April 2016, did the OCS money last you that long?
From the end of the first year until we completed round A, we secured more funds from an investment banker from New York and SeedIL, which kept us moving. Still, having to balance needs and resources, I had to reduce the size of my team, which was one of the worst personal experiences I had to go through.
– But it wasn’t the first time that you fired people in your career, right?
It’s different. If somebody was not performing well or you were not getting along with them, then it’s one story. But If you wanted someone and you have to part with them because you didn’t have enough funding, you feel a bit of a failure inside. Something is breaking, like if I let them down. It’s a very bad feeling. Still it is part of being a founder.
By the time we closed the round Phillips and OurCrowd we had funding left just for a few months.
– How was the process with Philips and OurCrowd? Were they challenging?
OurCrowd did a very serious due diligence. They’re challenging your business to check your strategy and your milestones.
Phillips additionally checks your work procedures, the way you manage your company and your compatibility to their strategy. They check every single resource that you are using, every single piece of software that you are using. Everything. They want to make sure that your risks are well thought-through. Altogether it took us 8 months to secure the round and I wasn’t sleeping much during this time.
– It must have been a very stressful time.
Actually during the last mile of the investment round I was on a vacation in Zanzibar and all the time I was on the phone with either Phillips or OurCrowd. And there is no good connection or Internet in Zanzibar, so I was constantly looking for a better reception.
I remember going on a boat around the islands. Cellular reception was perfect. Everybody was having fun, nice music, food. And there I looked at my phone and saw a full reception there. So I had to use it. I said to myself, “If you have to do it, at least you have a nice view around.”
– You’re coming from the gaming industry. Which is, well… a rather evil industry. The end goal is to make a person addicted to whatever game is being sold. How does it feel switching from that to a place where your end goal is to make one healthy?
It was 2005 when I started working for 888, an online gaming company. They took their business very seriously. They had – something that I really appreciated – a person who used to work with gamblers to fight the addiction, just to make sure that we were following practices of responsible gaming.
I worked very closely with that person and our goal was to make sure that people gambled, but still were not losing everything that they have overnight. This is not how those companies generate revenues. Revenues come not from someone who loses his money in one time, but from people who pay small amounts for a long period of time. Again, this is …
– Making them addicted.
Well, you go through that and you believe that you are selling entertainment.
I wasn’t proud of being in that industry but I felt proud by being a part of a great company with great people. I learned a lot while working at 888. They put the user in the center. They focus on the user, on conversions, on predictions and data. They analyzed the data thoroughly and actually learned their users’ behavior and preferences. Today other industries do the same as well, but nobody did it back then. I met amazing people at 888: it is actually one of my biggest networks.
– Sounds almost like a sort of network people develop in the Israeli army. But tell me, now that you know how it feels to work for a company where the end goal is “making the world a better place”, how exactly does it feel?
It certainly feels different. It feels much better – making people “addicted” to living a healthier life.
Pre-diabetic to diabetic prevention is just the tip of the iceberg. The same approach would work for other chronic diseases.
We are helping people to become healthier. I couldn’t hope for more.
Education: Industry and Management Engineer, BA in Business and MBA specializing in Information Systems
Favorite book: “Circles of stone” by Joan Dahr Lambert
What would you do if you weren’t in hi-tech: Probably manage operations on a production line
Startup Count: First
Current status: Clinical Beta