Audicus Thinks It Can Be the Warby Parker of Hearing Aids E-tailing

Devices that could improve sound for the hearing impaired are a few mouse-clicks away.

New York-based startup Audicus wants to cut out the middleman and position itself as the Warby Parker for hearing aid sales online.

Audicus founder Patrick Freuler says a pair of hearing aids can cost as much as $7,000 and might not be covered by insurance. “It ends up being a very expensive thing to buy, largely paid out of pocket,” he says.

Those prices, Freuler says, may have less to do about the hardware and technology and more about paying the intermediaries between the consumer and the product. That’s why Audicus offers a delivery model that circumvents such middlemen, he says, dropping that price from the thousands of dollars to about $600 per ear. “It is analogous to what you see in the eyewear space with Warby Parker, and in the contacts industry with 1-800 Contacts,” he says.

Freuler believes offering an online way to buy hearing aids, at lower cost, could increase their appeal among the people who need them. “There’s approximately 40 million people living with hearing loss in the U.S.,” but only 10 million have hearing aids, he says. “There’s 30 million people roaming around with hearing loss but without any assistance.”

Many of Audicus’ customers are aged 55 and older, when people frequently first begin noticing hearing impairments. Freuler says many of these folks are baby boomers who are rather tech savvy. “That demographic is a very active user on the Web,” he says.

Looking to cater to such consumers, Freuler founded Audicus in 2012. He bootstrapped operations until this past spring when the startup raised $1.6 million in convertible notes from Middleland Capital, Howzat Partners, and other investors. Audicus is generating revenue, Freuler says, with a run rate of about $1.5 million to $2 million at the time of the funding round.

The hearing device market is highly fragmented, he says, with patients typically visiting Mom-and-Pop type audiologist clinics for exams and to order hearing aids.

Patients with hearing loss choose aids that either are worn behind the ear or go in the ear canal itself. The latter tends to be for more severe cases. Audicus sells devices for people who suffer from mild to profound hearing loss.

Surprisingly, Freuler asserts that audiologists have not pushed back much against online sellers of hearing technology, as they seem to serve different demographics of users—for now.

Much of Audicus’ client base is made up of first-time hearing aid buyers, he says, who may be more inclined to shop online. (Patients still must get diagnosed by a doctor or audiologist to assess what type of hearing aid they might need.)

Freuler compares his company’s service to the disruption that came to the travel industry—bypassing middlemen to directly connect consumers with the products they want. “Anyone with an Internet connection and e-mail can purchase hearing aids from us,” he says.

Audicus does have some competition for this market, though, from sites such as Clearly Hearing and Embrace Hearing, which also promise affordable prices to their customers.

Freuler, a graduate of the Massachusetts Institute of Technology with a master’s in engineering, says he spent a few years investing in health care companies in Europe. That led him to the medical devices space and the hearing industry. The rise of wearable devices over the last 18 months, he says, has helped advance the development of smaller form factors for some hearing aids. “With the advent of low-energy Bluetooth, you started seeing far more interesting features you can start implementing,” he says.

That has opened the door for more customization and more manufacturers producing hearing technology, Freuler says, which he believes could mean more diversity in hearing aids available online..

Looking ahead to 2015, Freuler says Audicus is working with partner companies to develop software for hearing rehabilitation training.

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  • From the Audicus website:

    “Everyone’s hearing loss is different. Without a recent copy of your hearing test, we can’t program a hearing aid specifically for your hearing profile.”

    Audicus will have a hard time establishing a Warby Parker style deliver model in the hearing space. The fundamental problem is that hearing prescriptions are not the same as vision prescriptions. Once a prescription for lenses has been formulated, anyone with the prescription can produce a pair of glasses that will work. However, in hearing care, diagnostic measurements are made to formulate the prescription and, once the hearing prescription is created, further measurements are taken during the fitting procedure to ensure that the prescribed level of sound is being delivered to the consumers ear canal.

    This second process (known as Real Ear Measurement) is a fundamental part of a hearing aid fitting, and one that is known to maximize user benefit and satisfaction with the device(s). Due to this added complexity, there will be no Warby Parker for hearing aids… that is not until hearing aids become sophisticated enough to measure the sound in the ear canal on their own, and check that against the hearing prescription. Due to individual differences in ear canal size and resonance (as well as many other factors), there is no way to pre-fit a hearing aid based on someone’s diagnostic results or hearing prescription.

    • Annie

      I am not sure why you selected THAT quote to attempt to disprove Audicus on– hearing loss DOES different from person to person, and I think the fact that they’re being up front about that is key. I do not think that Audicus is denying the fact that their business model does seem slightly tricky at first– rather, they are providing inexpensive hearing aids in the only way they know how! Additionally, I’ve been told by actual audiologists that ‘fitting’ is becoming increasingly unnecessary, especially with the advent of silicone end-pieces (Audicus and others refer to them as domes, though I’m not sure if the terminology changes more than that). Again, I don’t think Audicus is claiming to be able to pre-fit a hearing aid; instead, they include different sized end-pieces, and because these are made of silicone/ soft rubbery material, they mold to someone’s ear canal. Furthermore, if the person’s first end-piece size does not work, Audicus provides a variety of additional end-pieces, allowing the user to try different sizes until one works.

      Anyway, while I do agree– don’t get me wrong– that fit is an important part of optimizing the use of one’s hearing aid, I do think that you are slightly missing the point as to how Audicus and other online guys are finagling this to work with their business model. The fact that they’ve been around for almost 3 years and have a boatload of happy customers is not for nothin,’ as they say.

      • Let me be clear. I do think there is a place for this business model in the context of affordable hearing access. However, I just wanted to caution readers who are familiar with the Warby Parker model, so that they understand the limitations of mail order hearing aids over professionally fitted devices. The disconnect in the analogy is that Warby Parker will create the exact same lenses as the optometrist, whereas Audicus cannot possibly provide the exact same audio tuning as the audiologist, without being in the same room as the customer.

      • Patricia Johnson

        As an audiologist, I’m horrified by the audiologists who told you “‘fitting’ is becoming increasingly unnecessary.” Just to be clear, there is a difference between the physical fit of a hearing aid in someone’s ear and the programming of the device, sometimes called the “fitting”. Yes, non-custom ear pieces likes domes are widening the choices for the physical fit of devices, but verification during the programming CANNOT be replaced with a computer program’s best guess. Hearing aid software dumps out a best guess of how a hearing aid should be programmed based on algorithms and the patient’s audiogram. Without real-ear verification, actually using a microphone to measure the output of the hearing aid at the level of the eardrum, the hearing aids will be less effective and possibly even harmful. What is the goal here? To get lots of barely effective devices on more people or improve hearing and quality of life by providing appropriate and validated care through an audiologist? I’m afraid that individuals who try online hearing aids first and then get burned when they don’t help very much won’t pursue real treatment. It’s not just about the device. Hearing aids are only one part of an aural rehabilitation plan. Making it all about getting the cheapest device is negligent and wrong.

        • Philyr

          I have just received my first pair of Audicus Canto hearing aids after using two different sets of ITC devices over the past seven years. In my experience not all audiologists have the expertise to adjust (fit) the hearing aids to meet individual needs. As a result I used my ITC devices on the first program because the other programs either caused white noise (hissing), reduced the volume level or muffled the audio. Spending the additional 2-3 thousand dollars and hoping for a fully capable audiologist just isn’t cost effective in my experience. I will trust the computer algorithms to adjust to my audiogram sufficiently for 95% of my hearing needs.

          • Lynn Zorzetto

            So do you recommend Audicus?

  • Janice Schacter Lintz

    Please sign our petition to have Medicare cover hearing aids under HR 3150. http://petitions.moveon.org/sign/to-pass-hr-3150.fb73?source=c.fb&r_by=6379786

    Please repost to all social media and write your Congressmember. We need this to go viral so Congress hears our voices.

    Janice Schacter Lintz, Chair, Hearing Access Program

  • Will

    “You don’t know what you don’t know” – never have truer words been spoken. It is apparent to me after reading this article and subsequent comments that there is a need for education. As an audiologist, I can assure you that the human auditory system is MUCH more complex that what most people think and believe. It’s not about the ear… It is about the brain and stimulating the auditory system in a way that navigates meaningful information about speech around and through the damaged peripheral structures in the ear to the cortex. If you aren’t able to document that meaningful information about speech is getting to the brain, what is the point? Patrick Freuler evidently doesn’t understand this, or his motivations are simply profit driven. Even someone with cursory knowledge into hearing impairment and appropriate treatment options would be steered away from his proposed delivery model. Patricia Johnson, another audiologist and commentator here, is spot on.

    It is also obvious that Mr. Freuler didn’t do his homework was when he was quoted as saying, “…audiologists have not pushed back much against online sellers of hearing technology, as they seem to serve different demographics of users.” How absurd! Why then have state audiology associations around
    the country appealed to their respective state legislatures to stop this predatory practice of distribution. Many states already have laws on the books against this because of the audiologists’ efforts. Let me be clear, in the long run, online sales of hearing aids do NOT take patients away from the
    audiologists… Where do they go for follow-up care after they are fed up with
    some ineffective online/mail order amplification system? I’ll tell you where… to an audiologist. This is a consumer protection issue and not a territory battle. They will end up at the audiologist eventually… We just want to make sure they don’t get tripped up along the way.

    “You don’t know what you don’t know” – Well, and audiologist does know what the consumer doesn’t, and apparently we know a lot more about the human auditory system than Mr. Patrick Freuler.

    • Lynn Zorzetto

      Why are hearing aids made so expensive that people just can’t afford to buy them? Insurance covers $500 but the hearing aid is anywhere from $1500 to $ 4000 a piece. I am 85% deaf and wearing a hearing aid for the last 35 years. I used to get help though OVR, but now I am on disability and they will no longer help me because I’m not working anymore. With Audicus Canto I might be able to afford it and am thinking of trying them. I have seen some good reviews and you are given a 45 day trial. I can know in 1 day if it’s going to help or not. People comment that they were very helpful and if you don’t like it there is no problem getting your money back. To me it is worth a try!

  • Rich Persoff

    Audiologist friends,

    Consultations with many members of your profession have combined to turn me off your services. I have not been able to find the help I need at a price which I consider reasonable: No discussion of the real difference between aids — only listing “features” and how they will protect my ‘image’ — huge markups, and not offering reasonable fitting and consultation fees — $ 100/hr sounds about right, enough to put kids through college on.

    I know you have to make a living, but your way of doing business causes me not to trust you. It’s too bad, but we need your help. And lobbying state legislatures against on-line providers is entirely too self-serving to be believed.

  • Joe Smith

    Audicus is also branching out into more fashion conscious hearing aid products as well. Check them out here: http://bit.ly/1FXzQCp