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Growing up in the suburbs of Philadelphia, David Stein experienced his share of homophobia. The 30-year-old recalls a conversation in his sixth-grade history class about “Don’t Ask, Don’t Tell.” Under the U.S. military policy enacted in the early ’90s, service members were not required to disclose their sexual orientation. But if it was discovered they were gay, they could be legally discharged.
The discussion in Stein’s class was about whether or not the policy should be repealed. Kids were basically “discussing if it’s okay for people to be who they are,” he says, whether or not it’s OK for people to be in the LGBTQ community. The policy is now widely considered to be discriminatory and was officially repealed in 2011.
Stein believes that on some level, he always knew he was gay. But having soaked up negative messaging about his identity, it took until about his mid-20s to finally come out. As he got to know the LGBTQ community better, Stein realized many in it still face challenges with sexual health and wellness and that greater ease in getting tested for sexually transmitted diseases could make a huge difference.
In 2019, he co-founded Ash Wellness, which now offers at-home diagnostic testing for “everything from HIV, cholesterol, lipids,” he says, and more. Thus far, the company has raised $6.6 million in funding, according to Crunchbase. He’s now serving as its CEO.
Here’s how he turned challenges he faced as a gay man into a full-fledged business.
‘They start to give me a lecture on safe sex’
Stein attended George Washington University and worked in D.C. for several years after graduation. Still closeted, he started dating men. One of them suggested he get tested for any sexually transmitted diseases, and the experience left a mark.
People at the facility where he was getting tested “start to give me a lecture on safe sex,” he says. “I was like, ‘you don’t know I didn’t have safe sex.'” They then asked, do you have sex with men, women or both? How many times have you had unprotected sex? Who have you slept with?
While this is the typical line of questioning for an STD test, as he was still closeted, it made Stein deeply uncomfortable. The experience made him realize, “if there’s the ability to do this from home,” more people would probably do it, he says. And more people could avoid contracting STDs.
After a stint working in startups in San Francisco, Stein decided he wanted to found his own company, one focused on solving this very problem by selling at-home STI tests.
‘We raised $3.3 million kind of overnight’
Stein got accepted into Cornell Tech’s one-year MBA program where he met his three co-founders Kyle Waters, Mio Akasako and Nick Sempere. They won the school’s startup award of $100,000 at the end of their degree program in 2020 and ended up getting into an accelerator program called 500, which awarded them another $250,000.
Ash Wellness kit.
Photo courtesy David Stein
Originally, the idea was to sell at-home STI kits directly to consumers. Drawing from their own experience with STD tests, the kits competitors were selling and the help of medical advisors, they bought the supplies they needed and ended up “packing and shipping testing kits out of our dorm-style apartments,” Stein says. They also found a lab partner where patients could send their samples and built the online infrastructure for them to get their results.
But by the time the entered the accelerator, the four realized the model wasn’t sustainable. “We just could not make the economics work out,” says Stein. “It cost us $150 to acquire a patient and our testing kits sold for just under $150.”
Instead, they tried shifting their model to business-to-business, selling the kits en masse to organizations who’d order them from fulfillment centers working with Ash Wellness. “The first project we sold was to a sorority at Villanova [University],” he says. They sold them about 250 testing kits and over the next month sold kits to three more B2B clients. The revenue was considerably higher.
“This is a no brainer,” Stein says the four realized. “We have to pivot to a B2B site.”
At the end of their accelerator in early 2021, startups had an opportunity to pitch their products to investors. “And we raised $3.3 million kind of overnight,” says Stein. A year later, they raised another $3 million from the same investors.
‘70% of the tests we run are STIs for PrEP’
Today, Ash Wellness serves 30 different organizations with about 25,000 testing kits per month, says Stein. “I’d say about 70% of the tests we run are STIs for PrEP,” he says. PrEP is a medicine taken in pill or shot form which reduces the chances of getting HIV. Those on it have to get tested for STDs regularly.
Shifting to B2B was not only beneficial for Ash Wellness’s margins but also their users. “Ninety-nine percent of the work we do is either covered by public health funding or 340B drug subsidy funding,” says Stein. The latter allows qualifying hospitals and clinics to buy medical needs like prescription drugs at a discount.
That’s meant many people who need the company’s testing kits can get them for free. Though rates of poverty in the LGBTQ community have recently dropped, 17% of those in the community still lived in poverty in 2021, according to UCLA. For them, this kind of service is critical.
Ash Wellness is currently doing another round of fundraising. “We’d like to raise between $10 and $15 million,” says Stein, adding that they’re also in talks with some of the world’s biggest retailers to see if they can sell their kits in stores as well. That kind of contract would mean an additional 500,000 to a million kits per year.
Whatever happens, Stein’s not worried. “Should that money not come in, we do have the pathway to sustain and be a profitable company” regardless.
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