WHOOP Founder Will Ahmed: The Body as Data, Sleep Science & the Future of Healthcare

0:13 The headlines, They tell you what happened. Inside Blackstone helps you see what may be coming next. I'm Christine Anderson, Global Head of Corporate Affairs. And this is Inside Blackstone, our new weekly podcast. Jon Gray, Blackstone's President and COO, is going to take us inside our morning meetings, or MMMs, as we call them, and tell us what has everyone talking this week. Hint: big conference for our biggest investors. Then I'll introduce you to my friend Winfield and his Economic Weather Report.

0:41 After that I'll sit down with WHOOP Founder and CEO Will Ahmed who started the company in his Harvard dorm room and has built it into a $10.1 billion business. We'll talk about the pivot that saved the company, why he believes sleep may be the closest thing we have to a magic pill, and where healthcare is headed. And finally, Jon will come back for a quick debrief to help us make sense of it all. Welcome Inside Blackstone.

1:11 I'm joined by my very first guest, Jon Gray. Jon, thanks so much. Episode one. We're excited to have you. I'm honored to be here. Our goal is to take our listeners inside Blackstone to give them a flavor of what's driving the conversation. And a lot of times, those insights come out of our Monday morning meetings. So we're going to be talking a lot about those meetings. Tell me a little bit about why they're so important to our investment process and culture.

1:31 Well, if you think about investing as pattern recognition, you're connecting dots, different things you see around the world. What you want to do is share those insights with your colleagues. Hey, I'm seeing this emerge. There's much more demand for electricity today. Those are the conversations that lead to new investment ideas. Or it could be a cautionary tale and something that's changing in capital markets. So we bring our investment groups together, and all the people in those business groups get to hear how we're thinking, some of the most senior leaders in the firm, and that leads to better decision making, leads to better investment returns, which is what this is all about for us.

2:09 This week, you'll be in a room with investors representing about $39 trillion in capital. You're going to give a big talk to them. There's a crazy title, I'm told. Tell me a little bit about that. I don't know how crazy the title is. What's the title? The title is Where's the Beef? After that famous 1984 Wendy's ad. And I think what we're getting at is this idea is trillions of dollars of capital is going in the ground, building out AI infrastructure.

2:34 And a lot of investors rightfully are saying, hey, where's the beef? What's the return going to be? And we think there is a compelling return. I mean, we have been really the leader in AI infrastructure here for a number of years, and we think there's a lot of opportunity to returns in terms of productivity on this AI are going to drive demand. The real challenge is building new supply to meet that demand, building that compute. And that's what the focus is.

3:00 "Where's the beef?" is an interesting choice. We're looking forward to that and we'll be posting it. So stay tuned for that. Thank you so much for joining us. Now we're going to turn it over to Winfield Sickles at our Economic Weather report. Thank you, Christine. It's Tuesday, September 15th. Here's your Economic Weather Report, and there is plenty of fun macro stuff to unpack this week. Inflation, oil, and interest rates dominated markets ahead of this week's Fed meeting. Last week's CPI print was slightly above expectations, with markets now pricing a roughly 90% chance of a Fed hike this week.

3:39 Energy remains a near-term pressure, with renewed tensions in the Middle East driving Brent well above $100 a barrel, its highest level since May, and the ten-year US Treasury yield jumped to nearly 5%, its highest level since 2023, driven by a strong economic growth backdrop combined with government spending and inflation concerns created by the war and tariff issues, including with Canada. We're seeing similar dynamics globally, with 30-year yields hitting multi-decade highs in Europe and all-time highs in Japan, with the ECB raising rates 25 basis points last week.

4:14 At the same time, underlying economic data continues to point to broad-based growth. As noted, the higher cost of capital is partly a reflection of a stronger economy and record demand for capital. US earnings estimates have been revised higher for 21 straight weeks, the longest run of upgrades in five years, and following strong cloud revenue growth from peers, Oracle was the latest example of corporate strength, delivering a record quarter as cloud infrastructure revenue surged over 120% year over year.

4:48 The labor market remains balanced, with strong August payrolls, the highest since March, while wage growth has slowed to its lowest year over year increase since 2021. Meanwhile, we're seeing some really encouraging signs among lower income consumers with improved foot traffic at Blackstone Leisure and hospitality locations. And economic strength and generational AI investment are powering robust capital markets activity, with US IPO volumes up five times year over year through August. Now, a key risk to watch on the horizon is growing concern around AI and how the legislative response could impact this investment boom.

5:26 Now that's it for this week's Economic Weather Report. Back to Christine for her interview with Will. Do you enjoy the social, the like, having to be out there? I think you kind of have to. You kind of have to get into it. I like, I like, I like that color one. It's really good. Hey, Will, welcome to inside Blackstone. Thanks for having me, Christine. So we always start with some sort of sporty questions at the beginning where we just try to get to know each other a little bit and warm up.

5:53 It's probably like stretching podcast style, using your language. I like that. Let's do it. Okay, so we're going to do a fitness trend with you today, given that that is your space. These are some concepts that are a little new to me, but I figured you could help us with a thumbs up / thumbs down on some of these. Okay. All right. So protein maxing. I think for most people is neutral. You know, if anything, it's probably slightly thumbs down.

6:15 Thumbs down. GLP-1 microdosing. You've got a huge problem in the United States with obesity. So I'm going to say thumbs up. Okay. Supplement stacking. I think is a negative. Okay. Creatine. I think creatine's a huge positive. It's one of the most studied supplements actually in history. I started taking it recently. I'm told it's a thing. NAD. I would say neutral. Okay. Peptides. I think also neutral just because it's early, it's early days on the data side of what these things are going to do to your body long term.

6:47 Red light therapy. Red light therapy, Positive. Full-body MRIs. Also positive. Hot cold therapy. Love it. All right. So, and what about the most overhyped trend in wellness right now. Well it's funny because I love doing it but cold plunging. So the challenge with cold plunging is people get obsessed with it. And what we've seen in our WHOOP data, because we have a huge data set on this, is that you really only want to do cold plunging like three times a week, if you want to actually bolster your body's recovery.

7:19 And there is some evidence, actually to show that if you cold plunge right after weightlifting, it'll stunt to the benefit of weightlifting. Oh, we don't want that. So much has been written about WHOOP and about you. So you are the son of immigrants, you're an only child, and you're probably the only person I've ever met who puts that in their official bio. You grew up on Long Island, playing a ton of sports that led you to be a college athlete at Harvard, no less, and you got into this bad habit of overtraining and then sort of crashing.

7:47 And this leads you to sort of a fascination or maybe even obsession with personal health data. By 22, you're starting a company. That company today is worth $10.1 billion, which is pretty amazing. but that's not really why I wanted you to come on. I think what's so interesting about you is that you really sit at the epicenter of what's happening in public health, and I think there's probably not too many people better seated to kind of tell us about where the world is moving in terms of this AI-enabled future.

8:15 So we're so excited to have you on the podcast. Thank you. Excited to be here. All right. First, for those less familiar, tell us like what is WHOOP? So WHOOP is a wearable device that is continuously measuring everything about your sleep and your recovery, your exercise, your overall health. and it's really designed to help you improve your performance for life. When you start founding this company and you start conceiving what it's going to be, you decide that you're going to enter this market.

8:41 You're going to be competing against these giants like Fitbit and the Apple Watch, you're a college kid. How did you do that? Well, I'll caveat by saying that it was helpful being young and naive. You know, I didn't know any better, so to speak. But I did have this really strong feeling that computers were moving from just in my relatively short life span at that point, from being on your desk to being on your lap to being in your pocket.

9:06 And I thought eventually they would be on your body. And I thought that would coincide with meaningfully better health monitoring and meaningfully better data associated with performance. And I was a college athlete who had overtrained. And so to me, it seemed obvious that other athletes would want this data for their bodies. And the insight that I had was it wasn't just the two hours you're exercising or the four hours you're playing a game or whatever, it was the other 20 hours of the day.

9:36 And so I felt like there was this huge gap between what the market thought it wanted and what the market needed. And there's an insight there, I think, for entrepreneurs, which is customers tend to be better at explaining problems than explaining solutions. Our observation was the problem was around understanding the body. 24/7. Tell me, you go and you meet LeBron James and you're explaining this tech to him. In order to work with pro athletes or really anyone, we felt like we needed to measure the body accurately.

10:04 And today that sounds like sort of an obvious concept. But 14 years ago, the only way really to measure the body was with medical technology, an ECG the machine, which is an electrocardiogram, and it's in the hospital and it's got all these nodes on it, and it's ugly and it's antiquated and it's expensive. And the chest strap, which was really the gold standard for a long time for measuring heart rate during exercise like that, was invented in the 80s.

10:30 The PSG, which is really the gold standard for sleep monitoring. You have to go to a sleep laboratory. You get all these things put on your body. It's a horrible night's sleep. You've got two human beings watching you sleep on videotape. Yeah, it's kind of crazy. So my naive point of view was, can we take this medical grade technology, put it in a small form factor that consumers will want to wear and measure the body 24/7.

10:56 And we're going to start with the world's best athletes, and then we're going to get consumers. And then eventually it'll be in the medical community. And we're somewhere on that on that journey, on that arc today. You have a line that I think is so great, which is like fall in love with the problem, right? Not the idea. Well, I think that's right. You want to you want to obsess over the problem. and especially as an entrepreneur, you don't want to focus too much on the outcome.

11:18 You know, I think there's a there's sort of a misguided point of view of like, you want to start a business to make a lot of money. Whereas for me, it didn't even really occur to me that that was down the road. It was really all about, okay, if we can solve this problem, how impactful can that be? And where is that going to take us from a technology standpoint. Coming back to a little bit your early days of the company and you start to try to raise money?

11:41 Yeah. I've read you did 143 meetings and no one's saying yes, and you're getting on the brink of bankruptcy because you're trying to sell this sort of screenless device, of which there are major competitors, and yet you somehow prevail. Was there a turning point moment for you when all of a sudden it started to click and investors started to be more receptive? Well, I'll say this. I do think fundraising is a skill and like any skill, you have to get better at it.

12:06 And so it's easy to get, I think, kind of down on yourself over a lot of rejection. Now, to be fair, it was probably part I wasn't that good at raising capital, and it was also part that the business was pretty immature. And it was also part that we had these huge, gargantuan competitors, the likes of Nike and Apple and Google and so on. And then it was also like I was a kid, you know, all of those things, for varying reasons, may have made investors less confident in the opportunity.

12:38 But fundraising is a game of finding believers. It's a game of picking yourself back up. The only thing you can do as an entrepreneur is just keep moving forwards and keep going. There were a couple of moments in the journey that I think were important inflections for the company. One was in 2018, so the company is now six years old. We had now moved into the consumer market and people were buying it and they were wearing it for a long time.

13:03 So we had great engagement, but we had a huge problem, which was not enough people were buying it, so our sales were still low. Investors were wondering if this thing's a dead end. Is it a flop? Sometimes when things are really broken, it allows you to just reinvent it. And so that's when we came up with this idea of WHOOP as a membership. We now became obsessed with retention and engagement and really serving the member. And it created a whole new growth spurt.

13:33 And it gave us recurring revenue, which was more attractive to investors too. And so for all those reasons, we were able to get to sort of the next chapter in the company's history. So you had some big news out where Medicare is now going to cover WHOOP subscriptions for older Americans. This seems to me like a big game changer for WHOOP. Is it? Yeah. So Whoop is now available through Medicare for eligible Medicare beneficiaries. You can literally sign up for free.

14:02 And this is a program from Medicare that's incentivizing companies like WHOOP that are innovative to drive health outcomes, whether that's being reminded to take blood pressure meds, whether that's taking the cuff readings, whether that's additionally getting more sleep, walking more, again learning from WHOOP. Remarkably, our population today on WHOOP that's over 65, 93% of them open the app every day. Which if you think about it, is like pretty amazing because there's this sort of like perception of older folks aren't using tech.

14:37 Yeah, they're not as interested. It's like we've seen totally the opposite. They're like our most engaged population. So interesting. Okay, so you recently had a dispute with the FDA, which again, kind of gets to this idea that you are becoming more of a sort of secret medtech company more than you are a fintech company. And I know you're good at this because you're gently weaving in all of these controversies. No, but they're so interesting. They speak to the fact that people are catching on to the fact that this is something so much bigger.

15:05 Yeah. So the challenges with the FDA, in a sense, they began four years ago. We built Blood Pressure Insights, which was a wellness feature. We launched it alongside our WHOOP 5.0 and our WHOOP MG products. And, you know, immediately the FDA reached out with some concerns around it, citing that if a product is measuring blood pressure, it needs to be a medical device. Now, just to zoom out for a second, the way that the FDA operates is their mandate is to regulate medical devices that provide some kind of a medical diagnosis.

15:44 And if a product is not providing a medical diagnosis, the FDA actually should not be regulating it as a medical device. So let's take heart rate, for example, if you're using heart rate monitoring for exercise, that's considered wellness. So the FDA is not going to regulate that. If you're going to do heart rate monitoring like ECG monitoring and tell someone they have AFib, okay, that's a medical diagnosis. The FDA is going to regulate that. And by the way, for WHOOP, we actually did both of those things.

16:15 We did heart rate monitoring for exercise as wellness. And we actually worked with the FDA. And we have a medically cleared feature within WHOOP to do ECG monitoring that detects AFib. So we actually understand this framework really well. And so that was what we put out into the world. That's what we fought for. The FDA disagreed for a long time. They issued a warning letter. We disagreed with the warning letter. There was a lot of back and forth.

16:37 There was some positive and negative media frenzy. And ultimately we won. And the FDA has since changed their guidelines, and I compliment them as well, because they recognize that technology is evolving, the world's evolving. Some of the guidelines may have made sense two decades ago, and they don't make sense today. Right. So what do you see from where you sit about where the world is going, just in terms of of an AI-enabled healthcare future? So now you've got all these different types of data sets that previously didn't talk to each other at all.

17:10 And these are patterns that maybe, you know, some of the best doctors can see and eyeball quickly. But for the most part, an AI is going to do better than a human being because there's just so much data to look at, and there's going to be population trends where if we see this biomarker and this heart rate signal and this medical record note, these three things signal blank. And all of a sudden you just you're going to have this like avalanche, I think of insights that are that are coming out that I think are going to be really profound.

17:45 For our audience members that are investors, how do you think, how would you be investing into this new AI- enabled healthcare world? Well, I'll caveat by saying that I think Blackstone has thought a lot more about this than I have. One of the most interesting things with AI in general, but I think is particularly true of healthcare, is who has the data. It's all about the data because the AI piece is going to largely take care of itself.

18:13 You've got the ability for large language models to explain information. You've got companies like WHOOP developing frontier AI that's, you know, able to actually train on top of the data and create future insights. But there it is again, data, like you got to have the data. And when you pull this data together, that's where the magic happens. A lot of people do talk about the trade-offs between having, giving up some personal privacy when they give up data like this, but it feels like that's sort of the path of travel if we're going to really see health outcomes improve.

18:50 How do you think about that, that trade-off? I don't necessarily think that you should have to give up privacy and drive towards health outcomes. At WHOOP we're certainly trying to avoid that at all costs. We've also taken the steps to become HIPAA compliant, which is a big step as it relates to data privacy and security. We really don't want consumers to have to decide, oh, do I want to have great health outcomes or do I want to have privacy?

19:18 So curious to have you tell us a little bit about why continuous monitoring versus, you know, sort of let's say you go to your your doctor once a year and you get your blood taken and you get your blood pressure, and that's your marker for a whole year versus what you're doing here, what I'm doing here. First of all, it's just the general well-being of the population. 50% of America is hypertensive. Another 25% is pre-hypertensive. You've got 1 in 3 Americans will be diabetic.

19:50 You've got healthcare costs for the United States, $4.9 trillion. A member of Congress described the United States to me as a health care company with a military. When you actually look at the spending, that kind of woke me up, when a Congressman says that, and something needs to change. What have you seen that's most fascinating in the data from your users? Anything that surprised you? There's some funny trends around like different countries and their bedtimes and things like that.

20:21 Like, I think the, the latest bedtimes in the world are all in the Middle East. It's like Dubai and Riyadh and Doha. I think we're all competing for the latest bedtimes. You see interesting activity trends as well. So, Padel or Pad-el, depending on how you pronounce it, is a game that we saw actually take off internationally. And now it's one of the fastest growing activities in the United States. 2 or 3 years ago that was pickleball, but it started in the United States and then it was...

20:54 So you kind of you can start to see how the world is, is changing and evolving. I've read that at work, you sort of incentivize employees with good sleep scores where you give them a bonus if they get good sleep scores. That's right. WHOOP pays you to sleep. So okay, that has to create some tension when you need people to stay up late and work on projects and things, right? Well, it's a bonus that sort of speaks to our overall culture around the importance of sleep and the importance of taking care of yourself.

21:25 And if you have over an 85% sleep performance average for the month, you get $100 bonus in your payroll that that month. So what percentage of your employees actually achieve that? I want to say it's a little over half. Really? So, you know, pretty good. But sleep seems to be the thing, right? Well, there's no question that sleep is the it is the magic pill. You know, human beings are constantly looking for, what's the magic thing I can just take that makes me feel healthier and reduces disease states and improves all cause mortality and so on and so forth.

22:01 Like it actually is sleep, particularly sleep consistency. Which is to say, if you go to bed and wake up at the same time, even if the total hours of sleep that you're getting is shorter, just by going up and going to bed and waking up at the same time, you get a physiological boost. I mean, sleep is associated with almost every positive signal for your body. You know, you don't get stronger in the gym. You break your muscles down in the gym.

22:26 You actually get stronger during slow wave sleep, when you repair your muscles, right? You must get a lot of questions from other founders who want to start companies like you did. And I'm sure you give a lot of advice out. What are some of the, like things you wish you had known back then? Well, there's an element of starting a company where it's almost a blessing that you don't know because it is so hard. But the powerful thing about starting the company is, it's close to impossible, but it's not impossible, right?

22:54 Which is to say, like, you can do it. And so, you know, I think it's extremely difficult but possible. And if you're obsessed with a problem, if you got the right motives to solve that problem, you can do it. And by the way, there's no better country in the world to do it than the United States. What's the best advice you typically give someone who's 25 and just starting out? Keep going. You know, there's a feeling when I things are really tough.

23:22 Like, what do I do now? It's like, well, just make one good decision and then just make one more good... Like just start stacking good decisions. The times where I've gotten in trouble with WHOOP has not actually been where the business was struggling, because when the business is struggling, you get kind of maniacally focused on, okay, what can we do? How can we, how can we get this right? But the watch out is when things are going really well.

23:46 That's actually a time maybe to turn down your optimism a little bit. That's the time to be paranoid. So it's rumored that WHOOP is heading for a potential IPO at some point. But is the market potentially undervaluing how they should think of WHOOP? Should they be thinking of WHOOP more as a health care tech company rather than a fitness tracking company? Well, I think the market opportunity for continuous health monitoring and for all this data that WHOOP collects is to reshape the health care industry itself.

24:20 And I think that's a much bigger market opportunity than how many devices did you sell this year, which isn't really the endgame for the business that we're in. What's the hardest part for you personally, running a big company? It's funny, I don't think of it as a big company. And so, you know, there's pluses and minuses to that. The CEO cap, you really want to be thinking about, you know, mission and vision and putting great talent in seats.

24:48 Right. The founder though gets to dive deep into the org, you know, and be a little disruptive at times. And it allows you at times to just break all the rules and make something happen. And it's like hell or high water. We're going to figure this thing out. You know, I like I like WHOOP mean environment where people feel like their hair is blown back a little bit. And sometimes that's my doing and sometimes that's just the culture of the company.

25:12 You have a wonderful quote, high intensity, high humility that has been described to you. I love that, and I just love you to explain it. Well, in the early days of Whoop, we were trying to figure out what were the attributes of someone who worked well at WHOOP versus someone who ultimately didn't last at WHOOP. And we realized that that these people tended to have a characteristics of high intensity and high humility. High intensity is essentially this, like drive within your job to accomplish things, to push, to try to figure out how you can be better at your craft.

25:49 High humility is recognizing in that process that you're not going to have all the answers. And you need to, you know, work well with a team and so on and so forth. And interestingly, high intensity can often correlate with arrogance, and high humility can sometimes also lead to people who are a little bit meek or not as driven. So in itself, high intensity, high humility naturally narrows down the field when recruiting talent. And it's certainly been helpful for us.

26:18 So where do you see this going? Like in 5 or 10 years, everyone's being issued a wearable at birth or what do you think the future of wearable continuous health monitoring looks like? I think in the near future, an enormously high percentage of the population will be continuously wearing a health device, and it will be either coaching you to be a healthier version of yourself, or it will be able to predict certain events, whether it's illness, states, disease states, heart attacks, so on and so forth, and that there'll be a notification for that and there'll be a process for that.

26:53 That's amazing, I love it. Well, so fun to have you with us. Thank you very much. Will, this is great. Thank you. Jon, thank you for being here to help us break it all down. This is like a post-game show. Yeah, I love that. All right. So we'll had a couple great lines that I think you would appreciate. He said most of WHOOP's value was created on the other side of something difficult. Does that resonate with you? It definitely does.

27:19 It's always in those hardest moments when you're coming out of a problem, a crisis where you identify an opportunity, where you recognize, wait, we're doing something wrong with this product or service. We can do it better, go to market. And then that leads to the new thing. I think so many people in their businesses get discouraged or in their lives. We always say, stay calm, stay positive, never give up. He's a great example of that. When you're starting a business, you may think it's going to be one thing.

27:47 It ends up something very different. And that's happened here at Blackstone over and over again. So as an investor, we have a Life Sciences business. How do you see this changing the equation? I think what the AI is going to do is radically accelerate the drug discovery process. It'll be the trials. But even earlier saying, you know what, this combination of drugs on this person with this DNA is likely to have a high success. Interestingly, you're still going to have to run through a trial process which is still in the physical world.

28:18 But I think the pace of innovation is going to accelerate. And if you said to me, what's the best thing about AI? It's what it's going to do to healthcare. So you and your wife, Mindy, have made transformational gifts to Brock Cancer Research. How do you see AI impacting cancer research specifically? Well, if you really think about it, so much of it, particularly genetic cancer, is about data. It's about looking at somebody, what their DNA looks like and what their risks are.

28:45 And again, human beings can only compute so much. This AI is incredibly powerful. It also has unbelievable visualization techniques. So if you think about ovarian cancer, something that's always been very hard to detect, I think the AI will be able to identify things like ovarian cancer and thus save tons of lives. Okay, now I have to ask you something a little fun. So you've become an unexpected financial fitness influencer, something we never saw coming. It's a new category.

29:14 It's a new category. I think you created. It's very niche. What do you think about that, you know, Will talked a little bit about how CEOs now, it's sort of part of their job is communicating. I just think that being able to reach people where they are in an authentic way is powerful, and they can relate to running, they can relate to traveling, and there's just a humanity about it. And so I often say, you know, it's working.

29:37 Now at some point we'll jump the shark. We'll have to find a new gig. But for now we keep running. All right. So I had, I gave Will a little fitness quiz of all these fitness trends. If I were to give you the same quiz, what would you say is something you love that you're doing in fitness right now? Well, I would say, he talked about sleep and I'm trying to be more conscious. The reason why I haven't...

29:58 What was your sleep score today? Not... Bad? Well actually I think it was, no it's not bad. It was 81%. That's good. That's not bad. But I would say I've been resistant because when I travel the globe and I get bad sleep, it looks bad. So you don't like to underperform? No. I want to be high achieving and everything I've done, so. But this will keep me disciplined. I think the sleep insight is super important. Obviously trying to do some weight training stuff as you get older, all these really basic things: eat well, stay hydrated.

30:28 I think that, you know, everyone's looking for some super drug, but it's a lot of these very basic things that will lead to higher scores. Thank you so much for joining us. That was a lot of fun. I know you've got to run. And thank you for joining us on our first episode of Inside Blackstone. We have an incredible lineup of guests this season. Remember to follow us wherever you get your podcasts.