Who is The Diabetes App?

Note: Beta Cell is an audio podcast and includes emotion that is not reflected in text. Transcripts are generated by human transcribers and may contain errors. Please check the corresponding audio before quoting.

To celebrate the launch of our new show, The Bolus, we're releasing some podcast versions of classic Beta Cell blog posts. This one originally went up back on October 1st, 2021.

There are lots of links and pictures in this, so check it out on our website if you want to see more. Here we go.

Turns out The Diabetes App (the same one that copies the work of artists with type 1 diabetes) is getting ready to launch an IPO. Do you want to use a for profit diabetes social network? It's like Facebook but people's physical and mental health depend on it.

I'm delving deep into this because, as followers know, I love the intersection of data and shady T1D organizations and looking ahead at how this will affect people with diabetes in the future. Here is their valuation report with highlights below.

They expect $1m in revenue this year and forecast revenue to grow to $30m in the next 4 years. They anticipate being $75k in the hole at end of the year, which is probably why they decided to copy Miss Diabetes' artwork instead of paying her for it (and then asking her to buy an ad).

So how are they going to make money? Clearly Miss Diabetes isn't going to buy 100,000 ads: "TDA’s primary revenue driver will be the e-commerce platform...Ads will be a secondary driver, from companies seeking to promote their products to a specific targeted diabetic audience."

Their primary revenue will be from selling diabetes supplies at a 20% - 40% margin. "We note that Amazon’s fee for Health & Personal Care third-party items is 15%. We believe TDA could potentially charge a higher margin as it gives sellers access to a more concentrated audience." And ads: "using its niche userbase, the company will be able to provide a focused advertising option to product sellers. Management expects 20% to 30% of total revenue to come from this segment."

So 70-80% of their revenue will be their online pharmacy.

They have other features they're adding too, basically to become a catch all forum, BG/insulin log, carb counter, telehealth, pharmacy solution. Your one stop shop (emphasis on shop) for managing diabetes. Hence the name "The Diabetes App".

Getting users: "we believe large online pharmacies and e-commerce companies will find TDA a viable target if it can attract 350k+ users (1% of the North American market; $7M in revenue per year). Using a US$10 user acquisition cost, TDA needs to spend $3.5M to reach 350k users."

Who is behind The Diabetes App? "100% of the equity is owned by Sean Zaboroski, Founder and CEO. Since inception, the CEO has been personally funding the company, and has invested $560k to date. The company has 12 full-time, and four part-time employees." Sean Zaboroski is a "Toronto based entrepreneur" and has gone from start-up to start-up: cannabis, mining, sports information, and nutritional supplement industries. Then he started making "niche social media platforms" (like TDA). His bio does not say if he has diabetes.

I've wondered how many users they have since their Instagram has 20k followers (and low engagement for that many followers). Luckily they told me: "Current userbase is 7k, with 4.9 rating from 114 reviews on the App Store".

Wrapping up: The Diabetes App is a for profit social network that wants to become an online pharmacy with a 20-40% margin and ads targeted at people with diabetes. Their founder doesn't seem to have diabetes, just sees the potential market in going after niche groups. It doesn't seem very genuine for TDA to say that they want to build a community when their end goal is just building an online pharmacy that keeps you buying stuff from them and from their advertisers through social media posts. It's like Amazon+Facebook.

When half of people with diabetes are rationing their insulin due to costs and who rely on empathetic advice from each other to manage diabetes, trusting your care to a for profit company is worrisome. I mean, even nonprofit orgs in the T1D space don't have a good track record.

And a little postscript. The Diabetes App is still around. And I hope you're not on it.

I'll be delving more into the overlap of diabetes and capitalism more on The Bolus.