Hi friends,

ieso is pivoting its GTM strategy. I had a chat with Kent Tangen (their CEO) to talk about why. 

Over the past 25 years, ieso has delivered over 815,000 hours of text-based therapy to more than 145,000 patients with anxiety and depression. The business has also raised over $70M and has been adopted by some of the largest health systems in the world.

With this capital and traction, they built a large and rigorous clinical mental health dataset. A dataset which has powered their text-based interventions. 

For most of their long history, these text-based interventions were delivered through a mobile app. 

But that’s changing…

ieso are going all-in on an API-first model that white-labels their clinical AI product, Velora, directly into partner platforms. Virtual care companies, chronic condition management platforms, and anyone with an existing user base who wants to add mental health AI capabilities (without building the product and associated evidence base) can do so.

I wanted to learn more about this new GTM approach, but also to hear Kent’s views on the market, the thinking behind his strategic choices, and the advice he has for other leaders in this space. 

So we sat down and talked about his decision-making process, what's working with partners, what investors are asking about, and his approach to AI regulation.

I hope you find it as valuable as I did.

Let’s get into it…

Remember, the Inside The Lab event is next week. So if you’ve been thinking about going, it’s pretty much your last chance to sign up. I know lots of great folks who will be there, the scheduling looks awesome, and there’ll even be a startup pitch showcase on the final day. In short, I’d highly recommend it.

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Steve:  Kent, how are things? You've made a lot of big strategic changes with ieso over the past year. What were you seeing in the market that led to these changes?

Kent: When I was having conversations with payers and health systems over the past year, something became clear: people really did not want a single solution anymore. One-off mental health apps weren’t gaining traction. People don’t stick with them. Everyone I spoke with was aware that activation and engagement of digital mental health interventions are some of the hardest problems in this market. And point solutions weren't fitting the bill.

So we decided to focus on integration over isolation. I said, let's find a way to fold our product, Velora, into existing digital care solutions. Let’s meet people where they are instead of asking them to download and log into yet another app.

Steve: Tell me a bit more about Velora and the thinking behind this new GTM approach.

Kent: Velora is a generative AI program that’s intentionally modular and time-limited by design.

And we take safety and evidence seriously. That’s imperative in this field. We just released a new study preprint (not yet peer-reviewed) that found zero AI-induced safety incidents across both simulated and real U.S. users and measurable improvements in anxiety and depression scores. We also have a peer-reviewed study with an earlier version of our product that shows outcomes on par with human-delivered care.

And we have a powerful dataset that is linked to outcomes that underpin our product. Those are our true capabilities and what we’re known for at ieso (not necessarily for having the coolest mobile app). So we took that product and exposed the APIs. 

We saw this as an opportunity to unlock a new GTM approach, with new customers, while doubling down on what we do best. The divestiture of our UK telecare business was part of that strategy: simplifying the business to concentrate fully on our evidence-based mental health AI platform.

Steve: OK, fascinating. Walk me through the mechanics here. Who are you providing this to, and how does it work?

Kent: We're talking about partners who have a virtual healthcare platform and want to add clinical AI capabilities for mental health. These might be mental healthcare providers who want to expand their service offering, or folks from other areas of healthcare (like chronic condition companies) wanting to add on mental health support.

By exposing our APIs, we allow these partners to integrate safe, evidence-based clinical AI into their platforms. Partners can integrate our capability as they see fit into their product to best serve their users. So one of their users could log in, be offered support for their mental health, and then, within that app (with the app’s branding, etc.) be offered our text-based mental health AI offering. 

Me: And you're surfacing the full ieso conversational product, Velora, through the API at that point?

Kent: Yes. What was previously the mobile app being served by APIs underneath is now integrated directly into a partner's existing solution.

Here’s another potential use case… imagine a patient coming to a mental health organisation’s website and trying to find a therapist. Well, if that organisation was using the Velora API, they could decide to offer our clinical AI to the patient at that point, while they are waiting for a therapist, for example. 

Steve: I guess this strategy is based on solving problems for these partners, then. So what problems do these organisations have that a white labeled ieso product will solve?

Kent: Two things. First, they are thinking about how they can grow. They know there is consumer demand for conversational AI products in mental health and believe that adding these capabilities may support their client acquisition. Second, they’re thinking about how they can identify savings.

Steve: So, meeting consumer preferences to drive growth while potentially reducing cost to serve.

Kent: Right. And we want to help them achieve both of those things.

Steve: Are the economics significantly different for you with this model?

Kent: Not significantly. We still think about the same value proposition. Previously, it was clinical APIs in a mobile app. Now it's just the APIs in someone else's solution. We're still making the same outcome statements. The economics are very similar.

Steve: I’m keen to get your advice on GTM approaches in general. There are a lot of people building in this space right now, especially with generative AI. When it comes to product and GTM decisions, what have you learned from your time at ieso that you would want them to know?

Kent: Always think about the patient first. Your patient and then your customer - and of course, the challenge in healthcare is that they are usually different people. But you should deeply understand the patient needs and the customer needs that you are going to solve. It's easy to lose sight of that. Don't.

The other thing is, you've got to meet people where they are. Activation and engagement cannot be an afterthought in digital mental health. You have to start with the patient and work your way back from that. Too many people start with "I've got this really great solution, do you see what it does?" without thinking about how people will actually use it in clinical settings. 

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Steve: A big question people have is around choosing who that customer should be. What advice do you have there?

Kent: Your customer needs to align with your strengths. Be clear on what you're good at and what your superpower is. If you're aligning with a customer making demands outside of those capabilities, it can get squirrely.

For instance, if you serve moderate to severe depression and anxiety, and a customer asks, "Can you help my substance abuse population?" - it's easy to say yes. But that's not trivial. If you're making outcome claims and trying to stand behind your data, your quality will be questioned if you're not being the authoritative source of impact.

Steve: This is interesting. I think it’s been hard for companies to stay focused on specific capabilities and niches. One reason is that mental health businesses seem to need significant scale to survive, and that’s because you need the distribution advantage that comes with scale.

But perhaps, if people are finding new ways to distribute their product (through APIs for example), then they can stay more focused on their core capabilities and let other companies manage the patient relationship. Thoughts?

Kent: Exactly. I think we'll see more of those pathways occurring. For example, if you're working with a patient and after three sessions you acknowledge an opioid or alcohol addiction, you should recognize that and be able to offer them a relevant third-party solution that is better suited to meet their needs. 

Steve: Let’s chat regulation… Regulatory strategy is top of everyone’s mind right now. There’s a lot of uncertainty, and people are worried their product strategy could become defunct in six months if new state and federal regulations are passed. What's your take on how to build AI products given the current regulatory environment?

Kent: Well, I would not do "wait and see." I think you need to pick a path pretty early and commit. Part of the reason is that there's a long runway for building these kinds of products. So if you do want to go down certain paths, waiting and seeing could be problematic.

What I would say is: consider the regulatory path that would be most constraining to your business and start planning for that. “OK, this is what it's going to look like, this is what we're going to do, this is what it means for our product development cycle, this is what it means for reimbursement opportunities.” Role-play all of that and understand the impact that would have on your business. 

At the same time, keep a careful eye on how the environment evolves – both the regulatory side and the technology itself, which is moving faster than the policies meant to govern it. That pace of change is exactly why “wait and see” isn’t a strategy. 

Steve: So, assume the most constraining regulatory scenario and understand what that would require. Then look at it and say, "well, we can't pursue this", or "we have to make this work"?

Kent: It depends on the opportunities in your business. You have to do the modelling of what your business would look like one or two years out, after that is completed, and what would that actually open up.

If you're an early-stage company, you're going to say, "Whoa, I’m gonna need a lot of capital, it's going to be a long runway, and I'm not sure what that's going to look like." But it's also going to open up opportunities. You need to consider what those opportunities are going to look like.

Steve: What are you hearing from investors in 2025?

Kent: The investor conversations I've had over the last year have changed. There is much more of a harder drive on regulatory strategy than there was a year ago. What is your regulatory plan? What's your strategy? How are you thinking about it? What are the implications of doing it versus not doing it?

There's also more belief that there will be greater go-to-market opportunities than there were previously. There is so much focus on digital mental health and so many conversations happening. Even though they're confusing at times, they're happening because there's a lot going on in this space and a lot of appetite for safe, high-quality solutions that can help more people. 

Steve: Looking ahead, what do you think you have to get right to succeed in this space?

Kent: Outcomes. Everyone talks about them, everyone wants them, but proving them is what counts. The ability to appropriately demonstrate the impact on greater access to high-quality mental healthcare and what that does to overall healthcare costs – whether in a generalised behavioural telehealth partner or in a chronic condition partner, is critical.

Also, demonstrating that mental health actually does impact the top and bottom lines and makes people healthier.

When mental health improves, everything improves. People do better, organizations do better, systems do better. Society does better.

At the end of the day, that's what we're all here focusing on. We at ieso have a strong belief and evidence that if we do that, the outcomes will follow – and we'll be making people better.

Steve: Kent, it’s been a pleasure. Thank you for sharing these insights with me and the Hemingway readers. I really appreciate it.

That’s all for this week. As always, reply to this email and let me know what you found helpful.

Keep fighting the good fight!

Steve

Founder of The Hemingway Group