Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
This Week's interview is a story about a serial entrepreneur who partnered with an eye doctor to fundamentally change the eye care industry.
They created a SaaS product to let you get reliable and accurate eye tests at home, combining just your computer and a smartphone.
And the eye test is free.
You just pay to get a prescription for your glasses or contact lenses, which is reviewed by a doctor and sent to you.
In addition to making eye care more affordable, the founders also have a vision to reach the two and a half billion people around the world who don't have access to vision care.
A few years ago, no one thought something like this was possible, but it just reminds us what entrepreneurs can do and how we're able to solve real world problems using technology and a little innovation.
In this episode, you'll learn how the co founders came up with the idea for their startup, how they recruited early users to help validate their prototype, the challenges they went through in terms of being able to provide reliable and accurate eye exams in your home, the innovative solution the team developed using everyday technology.
We'll also look at why the eye care industry, in the one hand, is partnering with this startup and on the other hand, is trying to shut it down.
And my guest will also share the most important lesson that he's learned as a successful serial entrepreneur.
All right, today's guest is a serial entrepreneur who started his first business at the age of 14.
He's currently the co founder and CEO of Opternative, an online service that gives you a convenient way to get a prescription for glasses or contacts.
With Opternative, you complete an eye exam on your computer or tablet and get a prescription signed by a doctor without ever having to go to a doctor's office.
The company was founded in 2012 and to date has raised $9.5 million in funding.
So today I'd like to welcome Aaron Dallek.
Aaron, welcome to the show.
Aaron Dallek (02:35.790)
Thanks for having me.
Omer (02:36.990)
Now, I always like to start by asking my guests what drives or motivates them to do what they do.
So in terms of your own business and being a serial entrepreneur, what is it that keeps you going?
What is it that gets you out of bed and gets you working on these businesses one after another?
Aaron Dallek (02:53.510)
Yeah, I love solving tough problems that help make the world a better place and help people live Better lives.
That's what I've always wanted to do with my life, what I've wanted to do in my professional life.
And that's what I'm doing with Opternative.
And if I am solving problems that people didn't think could be solved or problems that are challenging me on a personal and professional level, then I'm doing something worthwhile.
Omer (03:22.900)
You know, you started your first business at the age of 14 and you've been building and growing startups for I guess over the last 17 years.
So before we talk about Opternative, tell us a little bit about the businesses that you've worked on in the past.
Aaron Dallek (03:38.100)
Yeah, so I've worked on a number of businesses ranging from just small size, small business style businesses to a few things that would be more considered startups.
My first company was a computer consulting company at 14.
The second company was a printer cartridge recycling company.
And then when I was in college I started a company that was doing was called Planet Metrics and it focused on doing carbon information management and so that was funded by DFJ and it was at a time when a lot of people were focused on carbon footprinting and it was really exciting time in that industry.
So I kind of got my first taste in the, in the true startup world.
Along the way I ran Cheap Ink, which is a printer cartridge recycling company for 12 years.
It was on the Inc 5000 was the 544th fastest growing company the Inc 5000.
In 2011 I started a number of other companies until I started a company that was focused on helping other people with their ideas create what I would call an MVP.
And that's where I met Dr. Steven Lee, who's my co founder and he was one of a few people that I was helping out.
And it was at that time that I decided to move away from helping multiple people to focusing just on alternative.
Omer (05:22.410)
What was it about the alternative idea that kind of persuaded you to jump in with both feet on this particular venture?
Aaron Dallek (05:34.180)
I was a lifetime glasses in contact wearer and when Steve said online eye exams it was a no brainer.
We saw eye to eye you might say.
And it was just so obvious that if we can solve this problem for people using just their computer and their smartphone, allowing people to get that exam from the comfort of home, then I knew that this would be a huge opportunity and we succeeded.
We created a program that solved that problem and did it just like the way we planned.
And so I think that now it's about getting the word out and helping those people, Those partners like 1-800-contacts or who sell glass and contacts to help their customers hear about Opternative and start using it.
Omer (06:34.530)
Opternative solves two problems.
It helps you do the eye exam, and it gets you a prescription which is reviewed and signed by a doctor.
And then people can go and take that prescription anywhere that they want to go and get their glasses or contacts, right?
Aaron Dallek (06:48.540)
Correct.
Omer (06:48.940)
Okay.
So when you guys were talking about this idea, you kind of said, you obviously saw a need for that yourself personally, but did you go out and start to validate that idea in the marketplace?
Aaron Dallek (07:06.140)
Well, Steve was an optometrist, and he's done 20,000 refractions, so he validated every day in his career.
And he started the idea from a patient who asked him a simple question, which is, why can't we do this at home?
And so he knew the pain point from just being an optometrist and seeing what people really wanted.
And so it was built on the foundation of validation from real customers.
We did do validation from that perspective, and we built the technology off of doing over 1500 refractions, both using our technology and the traditional refraction.
And that was.
That was both how we built the technology as well as learned a lot about the market itself.
Omer (08:03.230)
I'm sure the product has evolved quite a bit since 2012.
What did the first version of the product look like?
Aaron Dallek (08:14.920)
The first version of the product was very rough.
You can actually see some of the sketches of it, essentially in our patents and the diagrams that we had in our patents.
And it really just was a proof of concept more than anything else.
I wouldn't even say it was a product that spit out a prescription, but rather something that showed that we can produce a prescription from a digital screen.
And that's really what the goal was, really showing that it was possible, both from an intellectual property standpoint as well as for investors, and.
And then beginning the journey of getting to a product that you could use at home on your own, without anyone there that ultimately would get you a prescription that worked.
And it ended up taking us two and a half years from start to completion to get to a point where we had a clinical trial that proved that we were statistically equivalent to the refraction done in the doctor's office.
Omer (09:30.640)
What were some of the technical challenges about building a product like this?
I mean, I kind of haven't obviously thought about it as much as you guys have, but just, you know, obvious things like, if somebody's doing this at home, are they standing the right distance from their computer?
You Know what, what other factors could come into play which might result in a, in the wrong prescription being given to somebody?
So what were some of those technical challenges that you guys had to overcome?
Aaron Dallek (10:03.150)
Oh, there was all kinds of technical challenges that we had to overcome.
User experience challenges.
We had to make a totally new experience that most people have never seen before, which is an interaction where a computer and a smartphone are working in tandem with one another seamlessly and stably without an app.
And so when you go to our experience, you're just getting a link to a website on your smartphone that's seamlessly working and responding to a website on your computer and answering questions based on what you see and just working through that experience and building that was something that I would say, I don't know if I'd say has never been done, but definitely has never been done in the way that we've created it.
And getting people to the correct distance, getting people to just scientifically building out something that tested the refractive error in an accurate manner, using a flat screen without putting lenses in front of the eye.
That alone was something that most people didn't even think was possible, let alone doing it and doing it accurately.
And so, I mean, the list goes on with the number of problems we had to solve to make this thing work.
And it was not easy, but we did it.
And we're continually improving the experience for patients, making it easier, making it faster, and making it more accurate.
Omer (11:49.360)
So just kind of explain what are the steps that if somebody was taking an eye exam, what are the steps they need to go through to complete that exam?
With Opternative?
Aaron Dallek (12:00.480)
Yeah.
So you go on the website, you answer some qualification questions to make sure that you're in the right age group, you're in a state that qualifies that we have doctors in so that we can service you as a patient.
We service patients who are 18 to 50 currently, although we're working on expanding that age group.
And you don't have certain conditions like diabetes or hypertension that would make it so that online refraction is maybe not right for you.
And so we go through that.
We then help you set up your computer in your room, turn down your lights, calibrate your screen, making sure that all the images on the screen are the correct size.
And then we send you a text message that turns your smartphone into a remote control.
Once we've done that, we've asked you your shoe size and we have you kick off your shoes and walk a certain number of heel to toe steps away from the screen.
And this gets you to 10ft from the screen, or for some people, 5ft.
And this allows you to take the test in the right distance.
And we'll have you cover one eye and answer questions based on the images that you see.
And so there might be three O's and an X on the screen.
And we'd ask you which character looks different, for example.
Then once you've gone through the visual exam, we'd have you do a medical history.
And then if you want to have a doctor review your exam and ultimately get a prescription, you'd pay $40 for the glasses or contact prescription, and 60 for both.
And usually within 24 hours, you get a prescription.
And you could use that at any retailer you choose.
Omer (13:48.410)
I mean, it's just so smart what you guys have created here.
And I think that I came across you, maybe it was on an NPR story that maybe talked about alternative.
Yeah, and it was that exactly.
Kind of, you know, being a bit of a geek, just started thinking about, okay, what, what actually had to happen to be able to execute on something like this, and does it actually work and how reliable is it?
So what is the kind of reliability or customer satisfaction kind of number that you can kind of share with us on how well it's actually doing?
Aaron Dallek (14:27.770)
It's extremely accurate.
And we've 100% money back guarantee.
We've only had, since we launched, We've only had 0.24% of people ask for their money back because we're dissatisfied with the prescription.
And just this year, where actually most prescriptions have been dispensed, we've had 0.06%.
So, I mean, it is such a small number of people who have had any issues with the prescription.
And so when you compare that to the clinic, that number is actually much higher because when you.
It's just, it's just the nature of our industry that you don't always get it right the first time.
And so we do feel that in our next clinical trial, we're going to continue to prove clinical, statistical equivalency or even better in our next clinical trial, which we proved in our first clinical trial.
So we're very happy with the satisfaction.
All of our patients are very happy with their prescriptions.
And.
And we know we'll continue to improve and hopefully at some point even prove that we are potentially even better than how it's done today.
Omer (15:54.220)
How did you go about getting your first 10 customers?
Aaron Dallek (16:00.140)
Well, it's hard to say because we did 1,500 customers while we were testing the technology, and then we did beta testing.
So we've had so many, so many people come into our office as well as take the exam online.
So it's hard to say who exactly our first 10 customers were, but we just hit the pavement.
We just begged, borrowed, and steal anyone who would come into our office to be a user tester.
We then really just got the word out here in Chicago and then continued to get the word out.
And then we had a long pilot with 1, 800 contacts, which got a lot of customers through that pilot.
And the word has been spreading organically, direct to consumer, as well as through our partnership with 1-800contacts, and we're looking to expand that partnership to other online retailers.
Omer (17:01.400)
So you said it took you about two and a half years to go from idea to getting the product right.
Is there kind of one maybe example you can share of something surprising that you learned when you started actually having these beta testers and people coming in and trying to use the product?
Aaron Dallek (17:20.559)
I mean, there's always surprises of how people used it.
There are surprises of what we expected to happen when it came to the exam and which exams would work and which exams didn't work.
But there's no specific idea that came to comes to mind.
Omer (17:42.650)
Why did it take you two and a half years?
What was the hardest part that you kind of had to get right that took you, took you those two years to kind of.
Aaron Dallek (17:53.690)
We created a fundamentally new way of testing how to.
Testing how to identify your refractive error, how bad your vision is or how good your vision is.
It was a completely fundamental shift in the paradigm of how you test for corrective vision and what your prescription for glasses and contacts is.
I mean, this has never been done before.
Since 1895, there's always been this paradigm of using lenses in front of the eye and asking the question of which lens is better, one or two.
And we've completely changed the paradigm of removing the lenses and using a digital screen and asking patients questions based on the images that they see and using that to identify a patient's refractive error or what prescription they need.
And it has taken us two and a half years to completely change that paradigm that has been used for over a century.
And that's really what took us two and a half years.
And that's why it took so long.
Omer (19:12.390)
What has been the response from the industry from.
From doctors who are not kind of involved with this?
Has there been a lot of kind of pushback or criticism?
Do they see this as a threat?
What's Kind of your experience been.
Aaron Dallek (19:29.080)
Some doctors have been very supportive.
The ophthalmology community in general has been very supportive of what we've been doing because their general belief is that ophthalmologists and doctors in general should be able to decide what technology is appropriate for patients.
And that is, they've made a white paper on, and that's their national stance.
And so we've had a lot of support from the ophthalmology community, or I should say technology in general has had a lot of support from the ophthalmology community, us included.
And the optometry community, on the other hand, has really decided in general to oppose this kind of technology.
And they have done everything they can and gone as far as trying to pass and sometimes succeeding in passing legislation to restrict or completely ban innovative technology that brings accessible and affordable eye care to patients around this country.
And they try to find every way they possibly can to restrict new and innovative technologies like ours.
Omer (20:52.330)
Let's talk a bit about the funding.
So you've raised $9.5 million to date.
what point did you start looking for money?
Did you initially kind of self fund and bootstrap the business, or was that when you put together that early proof of concept that was really designed to go out and start talking to investors and raising money?
Aaron Dallek (21:11.590)
Yeah, Steve and I self funded it for a number of months, I don't remember exactly how long.
And then we built the proof of concept with our own money and then we used that to raise our seed round, which was about a million dollars.
And then after we had some success there, we raised another 2.5 million, which led us to our Series A, which was about $6 million, which was a $6 million Series A.
Omer (21:42.600)
So raising your first round, how easy or difficult was that for you?
Because you're going into basically a completely new category, something that hasn't been done before potentially has a lot of upside or, or not.
So what, what was the, what was your experience kind of trying to raise that first round and, and sort of feedback from investors?
Aaron Dallek (22:05.750)
It was a, it was a good round of funding.
We had investors that were mostly already investors from the earlier rounds invest in, in the fund in the round.
They've been really excited about our company and so they wanted to continue to support it and take a deeper role in the company.
And we had gotten really far along with a lot of really great investors in the Valley and here in Chicago and on the East Coast.
It was a little bit of a challenging time.
I think there was a little bit of Concerns about where the market was at the time.
From a macro standpoint, I think it seems like those concerns have calmed down a little bit.
So it was a little bit of a tough time to raise funding, but we got a great round done, really happy with our investors, and we're looking forward to raising our next round, probably next year sometime.
Omer (23:21.770)
So I want to kind of give folks a sense of the size of the business.
So we talked about the $9.5 million.
I believe you have around 29 employees.
And I think a number you shared with me earlier was that you've had over 100,000 signups for alternative.
Aaron Dallek (23:44.400)
Correct.
Omer (23:45.280)
Okay.
And also you mentioned the, you'd kind of done some work early on for a patent.
So do you have a patent now for this specific technology?
Aaron Dallek (23:56.960)
Yeah, we have multiple patents.
We have two patents that we've received.
And then we also acquired another patent from another company that had it who tried to work on this in the early 2000s but never succeeded.
But did, did acquire a pretty well written patent that we decided we, we wanted to acquire.
Omer (24:18.550)
So could anybody else kind of go into building a product that allows people to do eye exams at home to get a prescription or the patent covers that?
Aaron Dallek (24:31.110)
No, our patents cover that.
And anyone that is is writing prescriptions using digital screens and asking questions based on the images that are on those digital screens is potentially or is likely infringing on, on our patents.
Omer (24:52.840)
Okay, so let's talk about the business model a little bit.
So the, from what I understand, you are it's free to take an eye exam.
So anybody could go to Alternative today.
So sign up and start taking an exam without paying anything.
And then if they decide to get a prescription, then they would pay $40 or I think you said $60 if they get both for glasses and contacts.
Aaron Dallek (25:21.490)
Correct.
Omer (25:22.370)
And then is that your primary revenue stream or are you also doing something?
Aaron Dallek (25:29.810)
It's our only revenue stream.
Omer (25:31.770)
Okay, got it.
And then how do you partner with the doctors who are reviewing and signing the prescriptions?
Are you kind of, are you building a sort of an in house expertise or you're partnering with doctors around the country?
What's, what's, how is that working on the back end?
Aaron Dallek (25:49.690)
We have a network of ophthalmologists who are licensed in all the states that we practice in, who are doing all the reviewing of our prescriptions for our patients.
Omer (26:02.780)
So they just run their own practice.
They'll get some kind of email notification from you saying here's kind of the results of a new exam that was done and they just have to review it.
And how do they get the prescription back to you or to the customer?
Aaron Dallek (26:20.740)
We have a HIPAA compliant platform, like every other telehealth company out there, that allows for the doctor to do the review of the patient's medical records and then ultimately make a medical clinical decision on the patient's records and then provide that prescription on our platform, which is delivered on our HIPAA compliant platform to the patient, which they can download and send to any, any retailer they choose.
Omer (26:55.940)
Got it.
So I'm curious, I mean, this is not, this is not your first rodeo.
This is not your first business.
You've had a number over the years.
As you look back over the, I guess the last four years, is there something you wish you had done differently or do you feel like, no, you had enough experience now with previous businesses that everything pretty much went the way you expected it to?
Aaron Dallek (27:23.490)
I think that it's important to know that everything takes a lot longer than you expect.
I think maybe setting expectations a little bit differently for investors and for everyone to know that this is going to take longer than what I expected.
Um, but realizing that that's okay, I think that's probably the, the key difference is maybe setting that expectation a little bit differently.
That's.
I think that's one of the main things.
And knowing that when you're starting a new company and a new industry and you're essentially creating something from scratch, things take time.
And implementing things with things large companies and getting people to hear about new technology that they've never heard of, Even if it's 10x better than what they're currently doing, just takes.
Takes time.
Omer (28:25.500)
Yeah, that's good.
Good stuff.
All right, it's time for our lightning round.
I'm going to ask you a series of questions.
Just try and answer them as quickly as you can.
You ready?
Aaron Dallek (28:34.460)
Sure.
Omer (28:35.260)
What's the best piece of business advice that you've ever received?
Aaron Dallek (28:39.590)
Just have to take one step in front of the next, in front of the next and realize that, you know, that's the best thing you can do when you're dealing with all kinds of challenges is sometimes it's just one step at a time.
And you'll, you know, every 10,000 mile journey starts with one step.
Omer (29:06.020)
Totally.
What book would you recommend to our audience and why?
Aaron Dallek (29:11.300)
The Art of the Start by Guy Kowalski is a really good book.
I read it a long time ago and I always thought that was a great starter book for anyone getting into the startup world.
Omer (29:28.900)
What's one attribute or characteristic in your mind of a successful entrepreneur?
Aaron Dallek (29:35.440)
Tenacity, willingness to just constantly solve problems and overcome obstacles.
Omer (29:44.400)
What's your favorite personal productivity tool or habit?
Aaron Dallek (29:50.560)
I think that setting up your day with list of things to do and just going, like I said, step by step and crossing them off.
Omer (30:02.690)
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Aaron Dallek (30:08.530)
I advise a drone recovery company that's pursuing a way to help when drones fail to automatically allow them to recover and fall to the ground gently instead of damaging property and people.
Omer (30:25.250)
Very cool.
And what's an interesting or fun fact about you that most people don't know?
Aaron Dallek (30:33.320)
I have a learning disability that I've overcome.
Omer (30:37.640)
You want to elaborate on that?
Aaron Dallek (30:41.400)
It's a reading and reading comprehension close to dyslexia, but not quite.
And it was a big part of what made me as, I guess tenacious as I am and passionate and I think is a big part of why I'm an entrepreneur even where I'm just willing to overcome every obstacle because I had to do that in school at a very young age and nothing really phases me these days and ever really has.
Because you put an obstacle in front of me, it doesn't matter how big, I'm willing to overcome it because I know that I've been able to overcome anything that's been put in front of me.
Omer (31:22.510)
I love that.
That's really inspirational.
And finally, what is one of your most important passions outside of your work?
Aaron Dallek (31:30.820)
My family and my friends.
I spend a lot of time with family.
I really and you know, even though I've been quite busy with work, I try to stay connected with a lot of my friends.
But making sure that I stay connected with my family is really very important to me.
Omer (31:51.240)
Cool.
Aaron, I want to thank you for joining me today.
I appreciate you making the time and sharing your experiences and insights with our audience.
If folks want to find out more about Opternative or if you want to go and do an eye exam yourself, go to opternative.com and I'll include a link in the show notes to that as well.
If people want to get in touch with you, what's the best way for them to do that?
Aaron Dallek (32:18.950)
They can email infoopternative or and it'll get to me or people with me or they can email aaronopternative.com is another way they can get direct in touch with me.
Omer (32:36.150)
Cool.
Aaron, I wish you all the best.
Thanks for joining me and good luck with continuing to grow alternative.
As I said, I think it's fascinating.
It's game changing stuff and I really love what you guys are doing.
Aaron Dallek (32:52.290)
Great.
Thank you.
Thanks for having me.
Omer (32:53.970)
Cheers.
