From startup founder to founder blues: The growing mental health issues in the tech sector

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From startup founder to founder blues: The growing mental health issues in the tech sector

Almost half of Canadians -49 per cent to be exact- have experienced mental health issues at one point in their life, according to a new national survey by Sun Life Financial Canada.

From work-related stress to living with depression, mental illness has affected a whopping 63 per cent of millennials, 50 per cent of Gen Xers and 41 per cent of “late bloomers” Sun Life says in a news release.

It should come as no surprise that mental health issues affect a broad swath of society. However, the increase of mental illnesses has costed the Canadian economy more than $50 billion every year. For businesses that means a total of $6 billion in lost productivity, which works out to almost $1,500 per employee each year.

Unfortunately, one-quarter of Canadians have never discussed their mental health problems to a professional. And a new generation of startups are stepping up to solve that. These entrepreneurs see the issue as a chance to make a difference and lucrative opportunity to truly innovate an underserved (and oft forgotten) market.

Canadian startups — like Inkblot, WellCalm and Newtopia — are building new solutions that can prevent, diagnose and even treat mental health issues across Canada. Of course, working in the space is no easy feat. For a long time mental health was rarely discussed, often underfunded and a burden placed on our overstretched health system. Today’s health gamechangers are working to solve that.

Making a difference and making money

 
There’s no cut-and-dry solution to fixing the country’s mental health woes, but technology can help, explains Jeff Ruby, founder of Newtopia — a health and wellness company that raised $10 million in Series A funding to expand its health management and coaching offerings.

It can play a role in connecting people with the tools they need to take charge of their overall health, although it isn’t the ultimate solution most people want it to be, he emphasizes.

“Innovators who are hoping to play a bigger role in the space need to think about solutions pragmatically,” Ruby advises. “I think there’s an important role for technologies to play, but there’s also a caution. Technology alone is not the sole answer. It’s a combination of technology-enabled services that have a human component. Solutions (like wearable devices or apps) aren’t the answer alone.”

WellCalm founder Samira Ramzy couldn’t agree more. Since co-launching her wellness business that offers massages and mental health workshops in 2015 the company has seen a bevy of startups enter the health and wellness space all looking to hit it big.
“It’s not an easy money-making industry to get into,” she says. “We have to work twice as hard to educate consumers and help them understand that mental health support isn’t a weakness and then provide the services that they need. You can’t just start a business and then expect people to line up around the block to access it”

Of course, despite the hurdles Ramzy and other entrepreneurs like her experience, for those that make it there are several opportunities to grow . According to CB Insight [link], health and wellness tech startups saw a record number of investment in 2017.

Some of the biggest deals include a $40 million Series B investment for Quartet Health [link], one of the largest mental health tech deals since 2012 that featured heavyweights like Google Ventures , OAK HC/FT Partners, Polaris Partners, and F-Prime Capital. Not too far behind was a $37 million Series B deal with Headspace [link] and a whopping $35 million deal for Lyra Health.

The entrepreneur effect

 
72 per cent of entrepreneurs are dealing with mental health concerns, compared to a mere seven per cent of the general public, according to a study from the University of California. This has lead to the term “Founder Blues”.

Between 2011 and 2015 “Founder Blues” have led to several high-profile suicides in the startup world, including the death of Austen Heinz, a biotech entrepreneur and the founder of Cambrian Genomics; Aaron Swartz, the co-founder of Reddit; and Jody Sherman, the founder of Ecomom.

“Being an entrepreneur is an emotional enterprise. There’s a lot of unknowns… their companies become their identities,” say Dr. Arash Zohoor, family physician, co-founder and CEO of Inkblot, an online therapy platform. “Their level of anxiety when it comes to running out of money, meeting investor expectations, the reality of marketplace… they all are very difficult.”

So how would an entrepreneur know when it’s time to seek help with their mental health? Are these online mental wellness platforms the answer to the stigma found in the startup ecosystem? And how does Dr. Arash balance the stress of being an entrepreneur while helping treat mental health issues in his patients? Take a listen to Robert Gold, host of BusinessCast, interview Dr. Arash Zohoor, family physician, co-founder and CEO of Inkblot.

Make sure to also visit our official iTunes page.

Why e-commerce stores are going from click to brick

Warby Parker. Alibaba. Frank and Oak.

All three e-businesses are based in different countries and target very different markets yet have one big thing in common: They’re transforming the retail industry one brick-and-mortar store at a time.

For a long time e-commerce was seen as the more attractive option for businesses selling consumer goods. These internet-first companies favoured the internet because it was cheaper than physical spaces that often came with high overhead costs (think: expensive leases, paid on-site staff and more).

But, that’s all changing now. The biggest trend in the tech e-retail space is now offline stores. Big names that cut their teeth online are opening up flagship locations. What started as test pop-up shops lead to an unprecedented surge in physical stores.

For example, in 2017 womenswear e-retailer Everlane launched its first store despite for years vehemently claiming it would never open one. Meanwhile, last year bed-in-a-box startup Casper unveiled its first retail outlet with plans for more to come. More impressively last month Chinese e-giant Alibaba announced a $2.6 billion plan to open a series of brick-and-mortar stores across China.

So why are so many internet-first companies suddenly pursuing offline spaces? Easy: Experts are finding for the few that run physical stores right there’s a lot of money to be made.

The death of (offline) retail has been greatly exaggerated

 
Amazon first started the offline trend back in 2015 when it opened its first bookstore. Since then the internet juggernaut has made $1.3 billion from its in-person stores. It makes sense considering a majority of retail spending still takes place in brick-and-mortar stores.

A 2017 study by the Retail Council of Canada, Microsoft and research tool WisePlum found that shoppers prefer physical retail store experiences. Why? Offline stores offer instant gratification, the ability to compare prices and inspect products up close all at once.

These facts don’t surprise Jen Koss, co-founder of Brika — a retail store that sells artisan crafts from indie designers. The company launched its first brick-and-mortar store on Queen Street West five years ago and hasn’t looked back.

“I was surprised by how a physical store can have a very deep connection with the customer,” she explains. “[My co-founder and I] have seen how customers will remember the smell of candle, how the store is organized, the people working when they walk in,” she explains about how the little things often to bigger sales and create long-term customers.

Entrepreneurs should also understand is that customer service really matters with physical stores, she says. “A lot of it comes down to investing in the best quality store staff,” the Harvard graduate explains. “It comes down to personal relationships that you create in the store. Focus on who you hire, how you train your ambassadors and how they become part of the brand.”

IRL: Location, location, location

 
Another critical point to remember is to always choose the right location. Physical spaces can easily be judged based on their surroundings and how accessible it is for customers. If you have the best products, but it’s incredibly hard for the public to get to your store you’re doing your company a disservice.

One popular way for startups to dip their toe in the real-to-touch store market is to experiment with pop-up shops. This allows companies to visit unique locations and get to know their customers before signing anything long-term. This middle-of-the-road approach can also help generate brand awareness, take entrepreneurs to where their customers often work or live and a simple way to reach a whole new demographic. For looking for on-the-ground advice Shopify has created a guide that outlines everything from location to pricing includes everything an entrepreneur needs to know.

Choose your own adventure

 
Of course, e-stores don’t always need to invest in the physical real estate to stay profitable. Companies like Etsy rely solely on partnering with existing space-focused companies like Hudson’s Bay or Macy’s for short-term leases or “stores within stores.” These special arrangements can end up lowering the financial burden for emerging entrepreneurs while providing a lot of the same retail benefits.

Another unexpected bonus of this approach is that it can easily position an e-commerce company among other quality brands. For retailers looking to emulate an offline store success they should focus on finding one location (i.e. a store) that customers can associate with their brand, but for everyone else complementary company to work with can work just as well.