
The financial struggles of a breast pump startup - fmihaila
https://www.bloomberg.com/news/articles/2017-09-21/a-smart-breast-pump-mothers-love-it-vcs-don-t
======
silencio
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.

~~~
juulsim
I had mixed reactions to this article. On the one hand, as a parent I've often
thought about neglected business opportunities to meet certain fertility,
pregnancy, and parenting needs, and this article resonated with that for me.

But on the other hand, as you're mentioning, this area is a lot more complex
than the article is letting on.

My wife pumped exclusively until our child was about 1.5 years old, and one
thing I noticed was that as she went on, she went from various hand pumps to
various electric pumps, and then back to hand pumps for several months because
the paraphernalia and power requirements involved were more troublesome than
they were worth.

I remember reading about this pump in early stages, and it sounded wonderful,
and still sounds nice. But I'm not sure my wife would have actually been
interested in it after a certain point in time, because it's still bulkier
than a basic hand pump. At that big of price, they'd actually be losing out on
two points, the extreme price and the bulk. Maybe going into pumping at the
beginning, she would have purchased it if it had been available, but it's
difficult for me to say. It's very expensive for what you'd be getting
relative to the alternatives.

~~~
silencio
Yes. We had fertility issues too (so hard to find apps that support that!) and
as a mostly-SAHP here I feel out of place in SF and struggle to find resources
beyond facebook groups. Resources like Winnie
([https://winnie.com/](https://winnie.com/)), in fact, which reduces a lot of
my stress over taking a baby to a restaurant. I can definitely get on the
rage-train about these things not getting funding while Juicero and Theranos
throw away $$$$$$$.

I think there's even more that I haven't delved into in my comment that might
be a concern. As you point out, yup, experiences and preferences are all over
the map. I'm sure these companies did their market research, and all three of
the ones I mentioned definitely target pain points for pumpers (comfort, milk
amount, and ease-of-use). I'm sure cost will become less of an issue once
insurances start partially covering the pumps. Just, who knows if it will work
out, it's complex for sure. And I say this as one of the few(er) parents that
would not hesitate to drop $1k on a new pump if I could.

Hell, there is even a video making the rounds in my EP groups of someone
demonstrating hand-expressing 6 ounces (a lot!) of milk, for underproducers
and for people stuck in hurricane-stricken-no-power areas to learn from. Too
bad Facebook keeps removing the videos for explicit content. But the half hour
of wringing out a boob just to feed your baby... many parents will definitely
do whatever it takes!

Your wife is a saint. I am so sick of looking at pumps (all four of my
pumps...) and pump parts. I am quitting cold turkey on day 366 of pumping. No
pump design for no amount of money will help me with that, hah.

------
s17n
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.

~~~
lallysingh
Pumping is painful, and women who pump are often working moms, so they'll have
money. Getting rid of daily physical pain is worth a lot of money. I'm
flabbergasted why this isn't a "shut up and take my money" situation.

~~~
maxerickson
Maybe market size? There are ~4 million births per year in the US. What
percentage of women buy a pump?

~~~
sidlls
The market is not just women. Hospitals purchase hospital grade pumps for
rental.

And the percentage of women who purchase pumps might increase with more and
better options and affordability through insurance, etc.

~~~
maxerickson
The demand is still limited by the number of births. Rentals just make them
more available.

Anyway, my question isn't meant to be dismissive, the rough percentage of
recent mothers that choose to use a pump is important information in trying to
figure out the potential market size.

------
Normal_gaussian
> “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.

------
prostoalex
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?

~~~
lallysingh
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
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.

------
ynniv
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
Unless you have data backing up your assertions, you're comments are from the
armchair too.

~~~
grzm
I think 'ynniv made it pretty clear that they're aware that their input is
cheap (or at least that's my 2¢).

------
dchmiel
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.

------
bogomipz
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.

------
swalsh
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.

~~~
WalterSear
I'm guessing that that would require FDA approval, making it unattractive as
the initial market.

~~~
BDGC
If you read the article, you'd see that the pump in question already has FDA
approval.

------
sulam
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.

------
erdojo
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.

------
joelrunyon
> 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.

------
lingua
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
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.

------
bkohlmann
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.

------
kentt
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.

------
usaphp
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.

------
otto_ortega
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....

------
jasonmaydie
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.

------
rayuela
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
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.

------
Chris2048
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
> 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
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"

------
gumby
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.

------
koolba
> 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.

------
AndrewKemendo
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/investor...](https://www.crunchbase.com/organization/naia-
health/investors)

[2][https://techcrunch.com/2016/04/25/naya-health-
raises-3-9-mil...](https://techcrunch.com/2016/04/25/naya-health-
raises-3-9-million-to-build-a-better-breast-pump/)

~~~
eridius
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.

~~~
dang
That's not a fair description of HN's audience. The community is divided on
divisive issues, just like any sufficiently large population sample would be.
It only seems to be stacked against your view because provocative comments
stand out more. We can point to countless generalizations about HN's audience
that characterize it just the opposite way, and for the same reason.

Edit: as one illustrative example, the top two comments on this submission are
currently both by women substantively critiquing the article, one of whom
happens to be using a breast pump these days (and has amazingly detailed
things to say about it, very much in the spirit of this site). Surprising? Not
really. HN is just more diverse than many people say it is.

(I imagine users flagged your comment because it failed to be civil and
substantive as the site guidelines ask.)

~~~
eridius
HN's audience has demonstrated itself to be insensitive to women's issues in
the past, and is reasonably techbro-heavy. That's why I said I expected the
downvotes. It may be a large population, but it's not a particularly diverse
one.

And it wasn't just this comment that was flagged. It was my other one
([https://news.ycombinator.com/item?id=15305765](https://news.ycombinator.com/item?id=15305765)),
which lays out the substantive reasons why I disagreed with the parent
comment. Though that one was subsequently unflagged (and then upvoted).

~~~
dang
> _HN 's audience has demonstrated itself_

I can't agree with that. These perceptions are notoriously in the eye of the
beholder.

Let me put it this way: HN "demonstrates" a lot of things—that's how user-
generated content works. People pick the ones that stand out to them and call
that "HN", but they could just as easily have picked the opposite ones, and
indeed many others do.

> _it 's not a particularly diverse one_

That's particularly off; it's hugely diverse (or at least divided), which is
why the generalizations people make about it are contradictorily all over the
place. At some point I need to put together a big list to illustrate this. I
sometimes feel like I'm the only person who sees it, since it's my job to look
at this stuff all day.

> _And it wasn 't just this comment that was flagged. It was my other one_

It's easy to understand why it was flagged: conducting disagreement via
"Bullshit", "Cry me a river", etc. breaks the site guidelines. Changing the
subject slightly, I sometimes wonder whether this bullying, pugnacious
approach to online commenting doesn't contribute to the very exclusionary
dynamic that people on your side of the argument deplore. I deplore it too,
and can't help but notice how comments on both sides can be equally bro-ey,
douchey, and wincey. It makes HN less welcoming all around. Many people seem
to think they get a pass for being right (one doesn't, of course), and then
use that to vent what feel more like personal fumes.

In case it helps, I don't disagree with your underlying views (though mostly I
don't read comments closely for that—it's too hard, and there are too many).
Perhaps you noticed that I replied no less critically to the person you were
objecting to, who broke the site guidelines as well.

------
mikeash
"Others said they were too grossed out to touch her product"

What the hell? These were grown men?

~~~
horsecaptin
As a woman VC should I not be allowed to be grossed out without you
questioning my gender?

~~~
mikeash
No adult should get grossed out at a breast pump. Certainly no adult in such a
position of responsibility that they're considering funding such a product. I
am assuming the investors in question were men, but that's really not all that
important to the point I'm making.

~~~
horsecaptin
Yup - I totally agree with your point.

It has been entertaining watching the points on my comment slide up and down
between positive and negative territory. As you can imagine, "men" and "women"
are heavy descriptors. Heck, I can imagine someone taking issue with "grown".

~~~
mikeash
Yeah, it's fun and weird to watch what gets downvoted.

I wanted to make my comment gender-neutral, but I couldn't come up with a
phrase with the same nice sound as "grown men," and sounding good won out. The
perils of internet comments....

------
ringaroundthetx
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.

