Oura's $11B Bet, What a Gaming Exec Learned Building in Healthcare

My career started in consumer tech — first social networks, then mobile gaming. At the very launch of the Apple App Store I was on the leadership team at one of the first mobile gaming companies, and we became one of the largest. They were really fun industries to work in. The possibilities felt limitless — making great new experiences for people, bringing people more closely together from many parts of the world.

I came to realize that one of the most important skills I'd developed in those industries was understanding how to build highly engaging consumer products — especially products that captured and held the attention of mainstream consumers for really long periods of time. And it was becoming so clear that the most pressing challenges in healthcare around the world were shifting from infectious disease management to chronic condition management, and that finding new ways to educate and empower consumers would be critical to making an impact on health outcomes. Especially for chronic diseases, which — as you know well — are so often asymptomatic at first. An individual's motivation to comply with treatment might not be that strong as a result.

So with all that in mind, I founded one of the very early mobile health companies: Mango Health, backed by Kleiner Perkins. The mission was to take everything we'd learned about consumer engagement over the years and apply it to the, frankly, really hard problem of inspiring people to think differently about how they manage their health every day. The idea was to take the behavioral loops that make people play Candy Crush 40 times a day and use them to get people to take their medication.

Step one was just getting your medications in one place — even, frankly, just having an accurate list. As a physician, you can probably appreciate that med reconciliation is not trivial for a care team: you may be seeing doctors in different health systems, using different EHRs, with no single record of what you're taking. Step two was scheduling them and taking them correctly — not taking things together that you shouldn't. We focused on all that nuts-and-bolts stuff first. And this is super important — it's what makes healthcare so much harder than social and gaming: before Mango could provide any value, it needed to create the data pipelines so everything was even there.

That's before you get to any of the fun stuff. Then there was a lot we did around incentivizing people to stay on track — an earned currency system, the kind they were used to seeing in social games like Candy Crush. Classic behavioral psychology: catching people doing things right, recognizing them on streaks, showing them how their adherence compared to everybody else in the community taking that medication. In a truly cooperative sense, it raised everybody in the community to do better — really effective.

One important lesson we had to evolve over time was the value of intrinsic versus extrinsic motivators. Obviously the goal is to create an experience that's intrinsically valuable to people, but extrinsic motivation can play an important role too — and what role it plays is a very nuanced design decision. Our system, first and foremost, recognized people for completing a day successfully, every day. We layered extrinsic rewards on top, but very indirectly — people weren't in the app on the promise of any material gain. It was essentially a leveling system, the way you'd see in a game, and each week we'd randomly draw winners at each level for higher-level rewards. It was a really effective tool for word of mouth without creating the wrong incentive, where people were in the app just for the chance of material gain.

We used some game design, but we were very intentional about not overly gamifying the experience — no avatars, just a light leveling system, things like that. I worked very closely for a long time with Mark Pincus, the founder of Zynga, and we used to talk about this a lot: some of the best, most successful games don't even feel like games to people. They're just a mechanism to something else — a way to keep in touch with your grandchildren or your friends from college. They're more universally appealing than niche.

The challenge for a lot of digital health companies working in enterprise healthcare is that it's hard when you want a partner for more than one of three things: distribution, clinical evidence, and revenue. If you're only looking for one of the three, it's a lot easier to negotiate on good terms. When you need all three from one partner, it gets very difficult very quickly. That's one of my lessons from early digital health. Maybe it's such a fundamental lesson everyone already knows it, but it was certainly one of my takeaways.

I absolutely agree with you, and I've said this before. I'd argue that for the first decade or so of wearables, in as many cases — and maybe even more — they were a liability more so than an asset to a care team, for multiple reasons. The data wasn't as accurate, it was inconsistent, clinicians weren't trained on it, and — most importantly — it was impossible for them to find signal in the noise.

I'm really optimistic that we've now addressed many of those things and are on a path to addressing the rest. AI is putting the industry in a place where we can change this in a meaningful way. As a physician, you shouldn't have to be an expert in wearable technology or its underlying components — heart rate variability, how it's calculated, which methodology is used. You should have systems that tell you, inside your existing clinical workflows, when something is happening that you should pay attention to. I truly believe we're getting to that point now, and it's going to be a profound shift for the industry.

The other thing that's interesting about Oura — and it isn't readily apparent, because we're such an innovative consumer technology company and people always think of us that way — is that there's been a very strong culture of science at the company from day one. We now have over 30 PhDs on staff focused on validating the accuracy of our algorithms, our sensing, all of that. That's created the dynamic you're describing — and other wearables are like this too — where we're reaching near-concordance with gold-standard clinical devices.

What's so exciting to me is that this democratizes access. Sleep is the perfect example: historically, for polysomnography, you had to be near a sleep lab, have access to it, and have your insurer funding the study — incredibly inconvenient. It moved to at-home studies, which got a little better, a little cheaper, a little more convenient, but still really expensive and out of reach for a lot of people. Now you can put on a device like an Oura ring and get near-concordant sleep study data that you or your care team can use to make better care decisions.

One general area I'm really excited about — and there are a lot of underlying answers to your question within it — is primary care. If you look at the research, primary care represents a fraction of healthcare spend in the US — maybe just two to four percent — yet you can trace the vast majority of adverse events and expense in the system back to a lack of adequate primary care. A big reason is staffing: there just aren't enough primary care teams, and that's only getting worse. Post-COVID there's a backlog of people coming back for preventative services, the aging population is putting extra pressure on the system, and there are staffing shortages everywhere.

I really believe technologies like Oura can make a meaningful difference to both the quality and the efficiency of primary care — and the way I think about it, any innovation brought to healthcare has to address both. Our work in Medicare Advantage is a great example: Oura is truly augmenting primary care to provide a better experience for the individuals in the plans we work with, and for their care teams.

When we went into this program, frankly, I was concerned — okay, we've got an MA program, are our over-65-year-olds actually going to wear this technology? And the MA programs we're working in are very classic middle-America markets — Arkansas, Missouri, Illinois. These are not coastal elite programs, which makes the bar even higher. What's remarkable to me, Mustafa, is that we're seeing levels of engagement in those populations equal to — and in some cases greater than — our population overall, which you'd expect to be much younger.

We're doing a bunch of research to better understand why, but my central theory is that a big part of it is simply that sleep gets harder as you get older. We do an amazing job helping people understand their sleep and make small decisions every day, week over week, that help them improve it. That's really compelling to a lot of people.

I probably will, but I'll try.

That one's easier, because — you may have seen this; I know you're new to Oura — we have a Labs area where we're constantly testing and innovating things. We have a blood pressure study going right now, a research program you can sign up for and participate in, and feedback so far has been really good. I'm really excited about it. Blood pressure goes back to the point about asymptomatic chronic conditions leading to a bunch of adverse events — it's a perfect example. So that one's in place today in a research capacity, and I think you'll see it expand to general availability.

It's a really hard problem. I'm optimistic it can be solved, but it's a very hard problem that very smart people have been working on — and I'm not speaking about Oura specifically; I know lots of people working on this. I'm optimistic there will be solutions.

What we've done in the meantime is work with the technology that's available to create an experience that's meaningful and actionable. We did a partnership with Dexcom — you may know — over a year ago, where, as Dexcom was launching their over-the-counter CGM device, the Stelo, we integrated that information. It's an example of a great partnership, because metabolic health is so much more than CGM readings. CGM readings are incredibly valuable for learning your body and keeping yourself accountable, but being able to see them in the broader context of sleep quality and daily activity is so impactful. We bring all of that together in a really comprehensive experience, and we're hearing over and over how valuable it is for our members.

It's an area we've been working on for a while, and there's always more we can do. I think it's a good case study on the evolution of a digital health offering in general. We started with a really specific focus: our first foray into women's health was with a partner, Natural Cycles. They have a great platform for non-hormonal contraception, and, as you might expect, body temperature is a really important part of that. It was such an obvious complement to create an Oura–Natural Cycles offering — the ability to share your Oura temperature data, which is super accurate, with the Natural Cycles platform. It was just a much better experience, and as a result we solved a meaningful problem for a large consumer population interested in that approach to contraception. Along the way, we created a lot of value for both companies — we refer a lot of people to Natural Cycles, they refer a lot of people to us. It's been a really great partnership.

We started there, then followed the stages of a woman's life: fertility insights, then pregnancy insights, and more recently perimenopause and menopause support — helping women better understand that stage of life, and helping the care teams who support women through it. There's always more, and we'll be doing a lot more in women's health. You'll see more coming. It's been a good area for us so far — it's really shown Oura's potential in healthcare, I think.

I'm glad to hear you say that, especially given your background — I agree. One of the things we think about a lot at Oura is that to be an impactful company in healthcare — a company of consequence in a positive way — we're really working on a two-sided marketplace. We have to create an experience for the individual that's compelling and valuable, and a lot of what you described so eloquently is very much in that spirit. At the same time, what a care team is looking for may be a different version of that, or an entirely different part of it. We have to solve both sides of the equation, and recognize that clinicians come to this area with very different — and justifiably different — levels of education and skepticism. Some have been burned by wearables before, for very good reason. Others grew up with a wearable and understand it — the best doctors coming out of med school now are much more naturally intuitive about the potential. We have to solve for all of that.

A good example: our features are always backed by really strong science, along the lines of what we discussed earlier, but some are designed as consumer-first features, versus other data types that are really valuable for a care team in a specific clinical application, integrated properly into a clinical workflow. On the consumer side, there's a lot more we're doing around heart health right now. We have a feature in the app — I don't know if you've seen it — called cardiovascular age.

Well, the good news — and this goes to the point — is we intentionally wanted a member-facing feature that can be impacted relatively easily. You can change your cardiovascular age by doing the things I'm sure you know you should do: some low-zone cardio, take your calls outside on walks, maybe throw in some HIIT once in a while. It's a great example of a feature that's a hundred percent backed by very sophisticated science — it's based on pulse wave velocity, a long-established, proven principle, which our science team worked hard to implement in a highly accurate way. But at the end of the day, it's a consumer-facing feature — we recognize that your average cardiologist or primary care doc probably isn't familiar with pulse wave velocity. For the member, the feature motivates you to do things differently every day, to bring your cardiovascular age down relative to your biological age — and it's very effective at that. But for the cardiologist, we might just be sending resting heart rate — the simplest measure, which they likely already understand well. We're just measuring it continuously overnight, in a highly accurate way. So we're trying to solve for these two very different markets all the time, and find the synergy between them.

But it's another great example of that dynamic. I have a morning habit of looking at the three scores — and if I could have only one all day long, it would be the readiness score. That's the one I'd look at. It's a very similar construct: the underlying measures that contribute to it are ones care teams often understand — overnight body temperature, resting heart rate, overnight respiratory rate. Those all heavily drive the readiness score, and many physicians are aware of and interested in them. For us, that's a perfect example: a consumer experience that helps and motivates people, and components of that experience we make available to care teams — ones they can understand, have confidence in, and act on.

Could not agree more. And it's emblematic of a broader shift in the industry I'm really excited about: from retrospective information to real-time, forward-looking information. Claims data has always been retrospective, with long lags — really important for clinical research, but a retrospective measure. Even a lot of the gold-standard patient measures, like A1C, are retrospective — and A1C is a good one, really important. But imagine pairing that with a real-time view, or even a forward-looking view, of heart health or metabolic health. To me, that's incredibly exciting.

That I definitely can't comment on — but as a consumer, I'm certainly excited about the idea of payments and many other things like that. I think we're in an incredible era: battery life is getting better and better in smaller and smaller packages, which in a lot of cases has been the limitation for devices as small as Oura can be. Between the processing capabilities and the battery life capabilities, what our teams are able to do now is truly remarkable. I came back from Finland recently, where I was looking at a lot of our work in development — it's amazing what's possible these days. So yes, without being specific at all on any of that, I'm quite excited about what the future holds for this category.

That's a really good question. My goal is that, if we're successful, we'll make care both higher quality and more efficient — so let me come back to that principle to answer this. If you're innovative and succeed at both of those things, you actually become very valuable in both frameworks for healthcare. To oversimplify: there's the value-based care side — still very small in the US, still very much emergent, but growing, and I think it'll have no choice but to continue to grow — and then there's the fee-for-service side.

A technology that's truly helping patients and care teams will lead, if it's built correctly, to more efficient care — which is certainly valuable in a value-based care world. We're already seeing that play out with some of our work in MA, and many others are doing similar work in other pockets of value-based care. But I also think we can be very impactful in the fee-for-service world, because we're creating a more efficient and effective relationship between the patient and the care team. Fee-for-service healthcare — and this is a gross oversimplification — is in a lot of ways a free market system. If you care about your Oura data and it's important to many of your health goals — which I think is very often the case for people who wear an Oura ring — then being able to share that data with a physician, even a traditional fee-for-service doc in a traditional care system, means you're going to have a deeper relationship with that physician and that system. You're going to be more motivated to stay with that system, and ideally — hopefully, certainly — you're starting to receive higher-quality, more efficient care as a result. All of those things matter in a fee-for-service system too.

So I'm really optimistic: if we do our work right, we're going to make significant impacts across the board in healthcare. The last thing I want is to be pigeonholed as only part of a value-based care offering or something like that. I truly don't believe that'll be the case — I think these technologies will be uniformly appealing across models of healthcare.

It is. I agree. The companies that succeed here — the ones new to the space — take the long view, and that's going to be really important in our strategy. I've really appreciated Tom's view on some of these things, and he's not the only one at the company like this — our entire leadership team is unified around it. As you well know, this is hard work. It takes a long time to be a company of consequence in healthcare. You really need a long view, the capital structure that supports it, and alignment across a fast-growing company. I'm very grateful we have that at Oura.

So hard. I can't believe I'm still doing it — I'm not even going to say how long it's been, but you probably have a sense from everything we've covered. It's incredibly gratifying work. Obviously it's challenging, and there are harder days than others, for sure, but it is incredibly gratifying.