The most frequently asked questions and our answers. Click on a question to jump to the answer.
Top 5 Investor Questions
1. Why is eargym crowdfunding, and why now?
eargym is a first mover in the market of digital hearing fitness platforms. One of the biggest challenges all entities have in seeking to address hearing (whether private companies or public health bodies) is (1) a lack of awareness of the importance of hearing health for our overall health and well-being, and (2) even greater lack of awareness that you can do anything about it. eargym is crowdfunding specifically because we want to make as many people as possible aware of the risks of not caring for your hearing. We see crowdfunding as a really valuable way of building a large community of investors who are ambassadors for loving your hearing / hearing health; when people are aware of the risk they are motivated to take action.
Globally 1.5 billion people suffer hearing loss and this is estimated to grow by 63% by 2050. The only current solution is hearing aids which, evidence shows, people tend to first wear in their 70s despite their hearing starting to decline decades earlier. The economic case for the world’s growing and ageing population needing to work longer is widely evidenced. However, it’s less well known that people with hearing loss tend to retire 7-9 years earlier than their hearing counterparts, negatively impacting not only their employers but also their own economic well-being. In addition to the impact of wear and tear from ageing, the problem is increasing with 1bn younger people aged 12-35 at risk from headphone mis-use.
When we marry the size and scale of this relatively under-served market with our knowledge of who downloads and plays games like CandyCrush or Words with Friends, and of health and well-being apps like Strava, MyFitnessPal, Headspace and Calm, we believe the time is absolutely right to establish a proactive, preventative, engaging approach to hearing health and well-being. Health and well-being benefits are also a hot topic with HR departments at the moment driven by the pandemic and unfortunately hearing loss is a source of anxiety and depression in the workplace.
Capital at risk
2. Simply, how does eargym work?
There are two sides to your hearing: the ear and the brain. The ear processes sound waves and sends them into the brain to be processed. Over time the hair cells in the ear can degrade or die due to wear and tear from ageing or exposure to loud sounds. We cannot fix those hair cells but we can train the brain to adapt to the fact that it is receiving poorer quality signals ie to adapt to your hearing loss. There is a concept called neural plasticity which is the brain's ability to reorganise and reapply itself in response to stimuli. Our training is designed to be like a software upgrade for your auditory system and works by challenging and stimulating the key hearing skills namely detection, discrimination, intelligibility in noise and localisation, which also trains key cognitive skills linked to listening and gaming such as paying attention, memory, problem solving and strategic reasoning. Our methodology is patent pending and many of our users report feeling that they have become better, more confident listeners since training. In the same group that reported the 14% improvement, 75% reported noticing that they are better able to locate sounds and 55% noticed improvement at paying attention.
When we started to develop eargym we were planning to undertake Randomised Control Trials and lab-based testing with the support of our academic advisors. Unfortunately, Covid came along almost immediately and meant we had to place those original plans on hold. We therefore researched on-line tests that people could do at home, and selected the Amsterdam Inventory for Auditory Disability and Handicap (AIADH), so that people could consider the impact of their hearing health on their daily activities, and the World Health Organisation's HearWHO speech in noise test for measurable change over time. In our eargym user-testing, a total of 27 people started testing, and of those 24 completed the 4 weeks long user-test. 71% of those who completed gained an improvement on their before/after HearWHO tests averaging 14%.We asked out user-testers to take the HearWHO test just twice - once when they signed on to the app to start testing, and once at the end - several weeks later. Even so, we recognise the risk of procedural learning, i.e. becoming better at a test itself, which you highlight, so in our next phase we will be developing better hearing skills evaluation to mitigate this risk
We have not published this as a scientific paper; instead we look forward - when Covid allows - to reinstating our plans for more robust evaluation with randomised control trials conducted with the support and guidance of our academic and clinical expert advisors, and we expect to publish papers thereafter.
Capital at risk
3. Why is eargym's preferred route to market employee benefits & what is the status of discussions with corporates?
Focusing at first on employee benefits is a more cost effective way to reach higher numbers and prove commercial feasibility. We can also sell annual subscriptions with 3 year agreements. The advertising costs to reach scale for a B2C model are high for our stage of business and the app stores themselves take 15-30% of the revenue which is a significant hit, especially further down the line when we reach high numbers. However, we do plan to make the app available to consumers on the app stores as part of our 3 revenue pillars: employee benefits; individual subscriptions; and licensing partnerships.
The impact of hearing on the workplace is significant. Hearing loss costs the UK economy £25bn a year ($981bn global impact) in lost productivity and unemployment so businesses have a financial interest in addressing it. 1 in 6 people of working age in the UK have hearing loss, that’s 7 million people. On average, employees with hearing loss retire 7-9 years earlier so companies with an ageing workforce can help retain experienced staff for longer by addressing and supporting hearing loss. Health and well-being benefits are also a hot topic with HR departments at the moment driven by the pandemic and unfortunately hearing loss is a source of anxiety and depression in the workplace. More than 2 million workers in Great Britain are exposed to unacceptable levels of noise at work. Noise-induced hearing loss is the second most common reason for employers' liability insurance claims for occupational health so reducing risk of litigation is also a motivator for many businesses. The benefits of working with an employer health platform (like Heka, that we are working with already) is that they promote and make eargym available to multiple businesses of different types and scale, with little effort beyond the setup for eargym, maximising our reach.
We will use the B2C channel as an organic way to generate revenue from word of mouth, PR and very targeted advertising campaigns capturing the early adopter demographics we are seeing in our user base. Further down the line we plan to scale through licensing partnerships with complementary industries like headphone manufacturers and large scale health providers where bulk licenses are purchased in a single sale. B2C will also come more into play as awareness increases so it is an important channel for us in our long term plans.
We have already run two industry pilots and have another scheduled for this month. We have been testing interest with HR Directors/Chief People Officers and have built up a database of ~200 leads. The CFO of our last pilot has invested in eargym.
Feedback so far means we are confident we will secure our first purchase orders in Q1 this year ready for launch of our paid product in Q2. We are finalising our commercial strategy so will be implementing this plan as a key business activity as soon as we close this funding round.
Capital at risk
4. Who/what are eargym's major sources of competition & threat?
Regarding competitors, the main option available to people with hearing loss currently is hearing aids, which enhance people’s sensorineural hearing capacity. For a variety of reasons including fear of being considered frail, cost (average £2,500 per pair) and accessibility, even in the well served UK market hearing aids are only worn by one third of people who would benefit from using them, and they tend to be first worn by people in their mid-70s at a relatively severe level of hearing loss. eargym is aimed at people with an earlier stage of mild / moderate hearing loss, and in fact our immersive auditory training should complement the benefits of hearing aids.
Aside from hearing aids, there are a range of hearing test apps on the app stores; most test for Pure Tone Audiometry (i.e. sensorineural capacity) and tend to be lead generators for hearing aid companies rather than offering any kind of practical in-app support.
There are two hearing apps which we consider to be our closest competitors; 'Audio Cardio' is an app that seeks to stimulate the hair cells in our ears whilst the user passively listens through headphones for an hour a day whilst doing something else. This is a markedly different approach to eargym’s engaging and fun training. 'Amptify' is a US based auditory training app which currently costs c.12x eargym’s proposed subscription price and is aimed at patients under the care of audiology professionals.
eargym predominantly serves those people experiencing levels of hearing loss before they need hearing aids. We offer advice and education on hearing health and a way to improve hearing skills before you need a hearing aid. eargym will also provide a way to keep a record of your hearing over time to see if it really is changing, and if so how. eargym also offers a proactive, enjoyable experience in a world more often focussed on hearing disability. Our future product plans are to extend our range of fun, immersive auditory training games, add more education and personalised advice and provide enjoyable audio content to help you focus or relax.
In terms of non-financial threats, our main focus is around demonstrating the impact of our training; as a first mover, we need to build credible scientific evidence of the effectiveness of the training in order to appeal to large national health providers which will help us secure the scale we plan to achieve. As you'll have read, we have set a goal of having the world’s largest hearing and cognition data set in the world to contribute to vital research on how hearing and dementia are linked. We have mentioned above about the impact of Covid on our plans for randomised control trials and how we plan to address this. We have been actively applying for research grants, and we are working with our academic and clinical advisors and other institutions to develop in-house robust and credible testing.
Capital at risk
5. What are eargym's future plans for the app and where does eargym see itself in 5 years?
Our next wave of development will cover the following to support better hearing health personally and in the workplace;
Thorough regular hearing skills, cognitive health and emotional well-being tests
Faster and easier hearing skill improvement evaluation
5 immersive auditory training games
Gamified hearing and cognitive health education
Sensory audio - focus, relaxation and meditation
In five years time we aim to be providing hearing health as a workplace benefit all around the world with 10m users, translation in product development will enable us to reach more countries. We also aim to be partnering with world renowned brands in complementary industries eg an eargym offer with your new headphone purchase. We are also driven to have real impact in the hearing health space working with academic partners to identify exactly how hearing training benefits people in the real world and why hearing loss leads to dementia. This will help us generate greater competitive advantage and be able to work with national health providers at a real scale. Longer term we would like to make sensory training even more entertaining and enable content producers to turn their digital assets into training experiences through software, e.g. audiobooks, gaming and video content. Eargym would enable the content adaptation and own the marketplace to deliver a huge array of content to a wider audience, the Netflix of sensory content.