How Oura Ring is redefining health tech

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

TOM HALE: The ring looked like something a Roman might wear to a Coliseum. It was very Gucci, and it resembled a rocket ship. Gucci put it into their stores and priced it at about 1,000 euros.

JEFF BERMAN: So two and a half times…

HALE: Roughly, yeah. It was more expensive.

BERMAN: New CEO of Ōura, Tom Hale, was eager to experiment with partnerships for the health tracker brand. But even he was surprised that the luxury model of their wearable tech did so well — they flew off the shelves.

HALE: My jaw dropped to the floor because I couldn’t believe it, maybe triple the price and it goes faster. How does that work? By the way, the thing about Gucci that was so surprising was that we learned people wanted to touch the ring. They wanted to put it on, see it against their skin, and how it looked on their hand, because it’s a very physical and intimate product.

BERMAN: Since joining Ōura in 2022, CEO Tom Hale has led the company to double the number of rings sold — up to more than 2.5 million now. This unicorn wearable tech business is a stunning example of scale.

Hi, I’m your host, Jeff Berman. Tom Hale’s history of success in the software industry has informed how he’s scaling Ōura to new heights now, but it took some convincing for the company to let someone like Tom, with virtually no experience in hardware, take the helm.

Tom, welcome to Masters of Scale.

HALE: Thank you, Jeff.

BERMAN: I’m thrilled to have you for lots of reasons, not least of which is having my Oura Ring with me.

HALE: You’re representing. Thank you.

BERMAN: I’m representing. It is circa 2020.

HALE: Wow. Gen Two or Gen Three?

BERMAN: Gen Two.

HALE: Wow, old school.

Copy LinkWhat is the Oura Ring?

BERMAN: So I am due for an upgrade, and I’m keen to hear about the Gen Four and how my life is going to change. But before we get there, Tom, for those who haven’t yet worn an Oura Ring—what is the ring?

HALE: So the Oura Ring is a very small device. It’s very light, weighing just a couple of grams—a kind of miracle of modern technology. There’s a ton of technology packed in here, including a small battery, much smaller than the battery on your Apple Watch.

It’s a wearable you put on your body, which turns out to be a really good place for measuring some core biometrics. If you think about it, you ever been to a hospital and they put a clamp on your finger? That’s because they’re shining light into your body to determine your pulse ox, which is your blood oxygenation. They’re also determining your pulse and other things.

That’s why they do it there. And it doesn’t beep, bloop, or talk to you. It doesn’t have a screen. It’s not trying to notify you about someone talking about you on Twitter or LinkedIn. It’s just very silently, calmly, passively tracking your body in the background.

It’s coupled with an app on your mobile phone, and the device syncs your biometrics data to the mobile phone. On the phone, there’s a lot of computing that generates insights about your health. Every day, it gives you three basic scores. It tells you about how you slept, how much activity you had, and what your readiness for the coming day is.

The whole idea is to give you insights about how to make healthy choices and habits without being too much of a burden.

Copy LinkBecoming a super fan of the Oura Ring

BERMAN: You joined the company just a few years ago. So when did you first encounter the product?

HALE: I first bumped into it, I guess it was the fall of 2022. Okay, there’s a little bit of a story here. I had just been part of a company that we had sold to Zendesk — a company called Momentum, but it was really SurveyMonkey that was the main product.

We had sold it, and we were high-fiving all around. Then it was in the process of getting unsold — basically, the shareholders of Zendesk rejected the deal. It was a very stressful time, not an easy moment. A very difficult moment.

During that timeframe, I had some challenges with my family. I was getting older; there were all these things going on. And for the first time in my life, I lost sleep. I don’t know if you’ve ever had this experience.

I’m a championship sleeper. I mean, my entire life, I could probably fall asleep in five seconds and stay asleep for 12 hours.

BERMAN: I long for those days.

HALE: Well, yeah — this was the moment when those days ended. I was like, “I’ve never had a hard time sleeping.” This was real. I thought, “I should really pay attention to this.”

I started researching, looking for things to do, and trying to educate myself about sleep. That’s when I bumped into the Oura Ring. I thought, “Well, I’ll give it a try.”

I had worn wearables before. I’m kind of fitness-adjacent, so I like to try to get two or three workouts in. I like to drive by the gym, and I do my best.

But I’m a busy person, and it’s hard to fit it in. I kind of knew what the deal was with wearables. So I put this thing on, and within the space of about three or four weeks, I learned a ton.

I learned a lot about what was going on for me when I did certain behaviors — when I drank alcohol, when I had too much coffee, when I didn’t take a walk or work out. I could see all these things happening in my body.

And secondly, I learned a lot about sleep. I learned how sleep can really improve your life because within three or four weeks, I improved my sleep. It was like night and day.

BERMAN: Fascinating. The three biggest Oura insights for me were: alcohol kills my sleep — it’s a massive disruptor; high-intensity workouts late in the day are bad news, brutal for me; and caffeine after about 2 p.m. — it’s a no-go. Those three changes have completely changed my sleep profile.

HALE: For me, it was like I was living in a black-and-white movie, basically since the time I’d had my kids. I had them in my 30s, and I’d been sleep-deprived more or less up until that moment.

Then I made a few key behavior changes, and it was like walking into a 4K Technicolor movie. I was like, “Whoa. This is what life could be like. Where has this been?”

BERMAN: One of the great things about Oura is that you get all this insight from the data, but that doesn’t necessarily make it actionable. How does Oura help the customer close the loop and actually act on the data to improve their health?

HALE: There are three ways.

The first way is the daily insights we give you, which contain kernels of behaviors that might be healthy for you. For example, your heart rate lowered late last night — did you eat a late meal? That’s reinforcing and educating you: “Hey, you should eat three hours before you go to bed.”

If you go to bed while your body’s still digesting, your deep sleep will be reduced and less effective. And deep sleep is how your body repairs and grows. If you want to give as much value to each minute of sleep as possible, don’t eat too late.

So, insights like that come up. They appear a couple of times a day or within the experience in a really subtle way. That’s the first way.

The second way is the advisor. The advisor is an AI chat coach that knows all about you. It makes recommendations, does education, gives you visibility to trends, and helps you put context around your data. It makes suggestions for things that would be better for your health.

The third way, and this is probably the earliest but could be the most compelling, is something called experiments. An experiment is basically a protocol, like: try doing this for two weeks, and then see what the impact on your metrics is.

We’ll show you how you compare to everyone else, and we’ll also show you the impact on you. The classic one is the “stop drinking coffee” experiment. Stop drinking coffee for two weeks, and we’ll show you what happens.

Those three things are really potent. What’s measured is managed, but you also need context and instruction.

BERMAN: Well, and that lets you isolate variables.

HALE: That’s right. You do one experiment at a time, as you’re recommending, and when everything else is largely consistent, you’re able to see, “Oh, this is the impact from that.”

Copy LinkHow Tom Hale became the CEO of Ōura

BERMAN: So the leadership position at Oura came open, and you didn’t get a call out of the blue from a recruiter, did you?

HALE: Yeah. Actually, when I learned there was a search going on, I might have said something like, “Hey, this seems really interesting.” And they were like, “Yeah, no, it’s a little out of your range.”

BERMAN: You’d been a serial tech executor. You had a lot of experience in Silicon Valley.

HALE: I am probably what you would call kind of a software person by training. I’ve come up the ranks in various software companies and worked almost exclusively in software. I have a couple of investments in hardware, but mostly in software.

I think the board had this view that they were looking for a CPG (consumer product goods) person, maybe with a sports background — someone with a significant profile. And there were certainly candidates in the mix.

I didn’t fit the profile, and they kind of told me that. But I did something very uncharacteristic for me. I basically said, “You guys really need to hire me. I love this product. This product has changed my life. I can see the impact it can have on other people’s lives.

I’m aligned with this mission. And by the way, I think I know what we need to do to take it to the next level.”

BERMAN: How did you do that? What was the format for that?

HALE: Somebody advised me to write a letter. They told me to put my thoughts down and make the case for why I thought it was a good fit and what we should do.

That’s very uncharacteristic of me. I tend to be someone who is happier being pursued than pursuing. But I wrote this letter that said, “Listen, I think this is a software problem and a data problem. It’s data at scale, which is something I know because of my days at SurveyMonkey and Momentum.

It’s a user experience problem. It’s about transforming people’s lives and behavior. I’ve spent my entire life thinking about how much the product experience matters for people.

Here’s the case: You should have a software person leading this company.”

BERMAN: Every company is a covered dish. You think you know what it is. You come in, you lift the top off, and it’s something different. How did you have such confidence?

HALE: For me, the foundational belief was that wearables are going to be a thing. Everyone’s going to have one.

A wearable that tracks your health and continuously monitors it, which is what the Oura Ring kind of does, is going to be something everyone has.

What was different about the Oura Ring — and I knew this because I’d worn a bunch of other wearables — was its seven-day battery life. It’s unobtrusive; it’s just on your body, producing a stream of data and then making sense of it.

That’s something software, data analytics, and machine learning are going to have to do. And by the way, the whole point of this is that, on average, it’s personalized to you.

So this vision of an AI intelligence tuned to your needs, that understands everything about you and your context and makes recommendations about your health — whether it’s intervention or prevention — that’s an incredibly powerful idea.

At its heart, that’s a software and data problem, and that’s what convinced the board.

BERMAN: And your winning personality, maybe?

HALE: Maybe, I don’t know.

Copy LinkThe power of directly engaging your customers

BERMAN: Naturally. When you came into the company, I believe the company had sold about a million rings to date. You’re now at two and a half million, right?

HALE: That’s right.

BERMAN: So, you’ve had this significant jump in a very short period of time on the hardware side, which still accounts for, what, like 80-plus percent of your revenue?

HALE: Right.

BERMAN: So what did you do? What did you bring to the company? What did your team bring that accelerated this growth so extraordinarily?

HALE: Yeah, well, let’s set the scene.

BERMAN: Please.

HALE: It’s early 2023. There’s still kind of a “growth at all costs” mindset going on — like, “Keep spending money, keep hiring people, spend more on marketing.” The thinking was, “You’ve just got to break through.”

At the same time, we had just introduced this subscription business model. Quite frankly, it was a change in the bargain with our customers.

BERMAN: Six bucks a month.

HALE: Six bucks a month. Yeah, barely a cup of coffee and a half.

BERMAN: Depending on where you shop.

HALE: Exactly, exactly. It’s a nominal fee. The idea was that this should be a subscription product and deliver enough value — more than enough value — to justify that.

I think that’s true. We’ve seen that in the last two years. People see the value, renew, and pay us every month. But making that transition was pretty rough.

So, I came in during that post-transition moment. There was a lot of upset.

This is a classic lesson for me in my career: You’ve got to engage with customers directly. You’ve got to be present, especially in early businesses that are still building up.

The people who evangelize your product in its early days feel like they own you.

BERMAN: Sure.

HALE: And in some ways, they kind of do. They’re your best marketers, for sure.

The first thing we did was engage. We went out there. I wrote a blog post explaining what I thought about the subscription business model, why I believed it was a great value, and why we were doing it.

Having some level of transparency and engagement made a big difference.

Copy LinkThe three levers to scaling Ōura

At the same time, the economy had gone a little south. We were asking ourselves, “What are we going to do here? How are we going to navigate this?”

We identified two or three things that really mattered.

First was women. Women love the product. They retain better. It’s a ring—a form factor with no substitute. It fits with every fancy outfit you’ve got.

Second was retail. We learned this by launching with Gucci. I don’t know if you remember, but there was a Gucci ring.

BERMAN: I do.

HALE: It was like a rocket ship. Gucci put it in their stores, online, and around the world. We made a lot and priced it at about 1,000 euros—

BERMAN: So, two and a half times.

HALE: Roughly, yeah. It was more expensive.

They flew off the shelves. My jaw dropped to the floor. I was like, “Wait, you triple the price, and it goes faster? How does that work?”

I think it shows the power of a brand like Gucci, but also the power of jewelry. We learned that people wanted to touch the ring, put it on, and see it against their skin.

It’s a very physical and intimate product. They care how it looks.

The ring looked like something a Roman emperor might wear to a Coliseum — black with gold, very Gucci. For a certain set of people, that kind of statement was exactly what they wanted.

BERMAN: This growth through non-obvious partnerships is fascinating. You’ve done whole-thread partnerships. Was that something that changed when you came in? Did you empower the team? Did you bring in a new team? Or was this something latent that people were dying to try?

HALE: I think we’d always believed in brand partnerships like Gucci.

What we hadn’t thought about, until I came in, was the platform. How do you enable other partners? By enabling partners, they become your salespeople, your distribution channel, and your referral network.

BERMAN: What’s an example of that?

HALE: Beyond Gucci, examples include Natural Cycles, Strava, Chronometer, and CGM apps. There’s a set of apps for health and wellness.

In many ways, we power them with our data. Natural Cycles, in particular, has been very successful.

So, partnerships became a clear catalyst.

We saw three key things: Women, retail from Gucci, and the idea of access.

Access came through HSA and FSA accounts — health spending accounts employers provide for pre-tax dollars.

We put the Oura Ring in HSA/FSA, giving people a way to spend money that’s already been set aside. It’s an incentive because some of these programs are “use it or lose it.”

Going into that second year, we launched with Best Buy and later with Amazon. We introduced HSA/FSA, focused on women’s health, and those three things lit the fuse on a bomb.

BERMAN: More with Tom Hale, leading Ōura through its rapid scale story, in just a minute.

[AD BREAK]

BERMAN: Welcome back to Masters of Scale. You can find this conversation and more on the Masters of Scale YouTube channel.

One of the interesting differences between software and hardware is that software you sell over and over again.

Exhibit A: sitting here as a super loyal, top-tier Net Promoter Score user and lover of the brand. By the way, Ōura is not a sponsor.

HALE: Not yet.

Copy LinkShifting to a subscription business model

BERMAN: This is just pure love for the product. But I’m sure the Gen Four will give me massive upgrades over the Gen Two.

It’s not a $1,000 or $2,000 or $10,000 purchase like a mattress or refrigerator, but it’s still hundreds of dollars. The business model is different. You don’t have the customer coming back every month or quarter or year to buy.

How did you think about approaching that part of hardware versus software?

HALE: That’s a really spot-on question. I’m guessing, since you’re a Gen Two user, you haven’t yet experienced our subscription business model.

BERMAN: Not yet.

HALE: But you’re about to.

Here’s how I looked at it. I’ve spent a lot of time around subscription business models. They’re great. Investors love them because it’s recurring revenue. It’s very predictable since you’re booking revenue before you recognize it.

But what I like about subscriptions — since I tend to think about customer needs and whether you’re serving them — is that you have to earn your money every time someone renews.

Whether they renew monthly, as most Oura users do, or annually, like in software-as-a-service models, you’ve got to deliver value. Otherwise, you don’t get the renewal.

I saw that this was a great subscription business. The reality is your health isn’t static.

Your physiology changes on a 24-hour cycle as you go to sleep. If you’re a woman, your body changes on a 28-day cycle with hormonal fluctuations. As you age, your body changes.

We realized this could be a product you’d pay for as a subscription and get value from throughout your entire life.

We imagined a young woman getting her first ring in her teens. In her 20s, it might be about contraception. By her late 20s, it could be about conception.

In her 30s, it’s pregnancy and postpartum. In her 40s, it’s perimenopause and menopause.

The idea of a product connected to you personally, that knows your history and acts like the doctor you’ve never had — a doctor who knows everything about you, has endless time to talk to you, and understands everything going on with you — is a compelling idea for a subscription business.

If we meet our customers where they are and deliver value, it’s a great opportunity.

Copy LinkInside Ōura’s mission and culture

Zooming out a bit, let’s think about that founding moment and the culture of the product. Ōura is a mission-driven product.

It’s about moving the world from sick care — getting care only at the end of your life — to preventative care. It’s about making you the CEO of your health journey.

It does this in a way that’s supportive, helping you find balance. That’s the culture of the product and the company. Everyone at Oura is driven to help people.

That culture was intoxicating to me. My strength is scaling companies from about 200 people to 2,000 people. That’s where I live.

BERMAN: People, not dollars.

HALE: People, yes. Just for clarity, from 200 people to 2,000 people.

When you’re at 200 people, there are things that aren’t working well. You haven’t solved certain problems effectively. Maybe you don’t have a system for some things.

It’s like popsicle sticks and rubber bands holding it all together. By the time you get to 2,000 people, you’re a real company with scalability. I’ve done that ride three or four times.

BERMAN: You’ve got some real pattern recognition.

HALE: Exactly. That’s a strength of mine.

Looking at this incredible product and culture, with people so invested in the craft of making it great, I thought, “How do we inject a note of performance into this culture?”

First, you need to build trust. You articulate where you want to go in a way that’s compelling, simple, and easy to understand.

We built our strategic plan and vision around improving the world of healthcare. We believe healthcare can evolve, and we can play a role in that — not by becoming a hospital, but by empowering people in their health journeys.

We provide information and insights from a wearable device worn 24/7. The data it generates helps people optimize their performance, health, or manage chronic diseases.

That’s what the product does. Guess what? That’s what we do as a company. We monitor data, optimize it, and help people.

That noble mission — paired with practical, tactical optimization — resonated with people. Coupled with our focus on listening to customers, it gave us the opportunity to ask, “How do we take this to the next level?”

Copy LinkHow Tom Hale built trust at Ōura

BERMAN: It sounds like you really invested in building trust with the existing team before pushing forward with new initiatives. You got their buy-in before moving ahead. Is that fair to say?

HALE: That’s absolutely true. By the way, I think this is the best advice for anyone joining a new group of people: You have to earn trust.

In fact, trust is one of the five core values at Ōura. Our users entrust us with their most sensitive healthcare data.

We take that responsibility very seriously — protecting data, ensuring no one can see it, and making sure it’s not used for advertising. We have no incentive to do anything other than protect our users’ data.

Earning trust is a foundational element of our company culture, the people who work here, and me personally. I don’t know how to lead if I don’t have someone’s trust and confidence.

The only way I know how to build trust is by being vulnerable and open, saying, “Here’s what’s going on, here’s what I think about it, and here’s what I think we ought to do.”

I’m more of a servant leader — maybe a lead-from-the-front kind of person — than a dictator who leads from the back. That’s the approach I take, and I think it resonated with the team.

BERMAN: Was there a particular experience earlier in your career that shaped how you came in and led this change?

HALE: I’ve been part of companies that had moments where you could feel the momentum pick up. You could feel the “bit rate” — the clock speed of the company — accelerate.

How quickly are decisions being made? How quickly are actions being taken? What’s that doing to the business?

I’ve seen that happen four or five times, so I know how to recognize it. I also know it starts with trust.

So I kind of know a little bit. I know how to do it. And I think it does start with trust, but it also starts with — you watch “The Bear,” right?

BERMAN: I love “The Bear.”

HALE: Who doesn’t love “The Bear”? The show is amazing.

Oh my God. It’s filled with all these leadership lessons.

BERMAN: It is, yeah. It’s just—

HALE: It’s such a great study of a small group of people trying to do something hard. Oh my God. And, so I started saying, “Hey, every second counts,” and things like that. There are periods in my life where you have to take a moment to go slow to go fast.

Sometimes, though, you have to slow down to speed up. You take a moment to think about what you want to do, but once you know, you run like hell.

You’ve got to go for it.

I’ve seen enough of those moments to know when that’s where we are, and when it’s time to start running.

Copy LinkRegulatory challenges & opportunities in digital health

BERMAN: One of the challenges in health broadly is that it’s a heavily regulated industry — and for good reason. But with the rise of devices like the Ōura Gen Four and generative AI, billions of people who don’t have access to primary care or quality healthcare now have tools in their hands.

Is there a change we should make to the regulatory landscape to leap forward in building a healthier country and world?

HALE: How much time do we have?

BERMAN: Take as much time as you need. What time is your flight?

HALE: Oh my gosh, that’s a subject that could overflow the banks of any conversation.

Digital health — the fact that you have a powerful computer surrounded by data and sensors, and access to wearable devices that feed that computer — is transformative.

I think the FDA is working hard to understand how digital health should evolve. But there are many incentives aligned behind fee-for-service healthcare, and it’s going to be hard for that to change.

This is a transformation that will play out over a decade or more because of the inertia of the system.

Strategically, we focus on people driving their own health journeys — not without clinical infrastructure, but independently of it.

Where I think there’s a real opportunity, and where regulatory change might help, is in those connection points where it really matters.

For example, someone going through chemotherapy might want to be at home with their family. They’d want to understand if they’re at risk for infection.

Wouldn’t it be amazing if there was a device that told you the best time for your next chemo session based on your physiology? Or warned you if you were getting sick and needed to get to the hospital for antibiotics?

That would be incredibly powerful, but it would also be heavily regulated. We don’t do that today at Ōura, but imagine the potential.

People could understand their health not on an annual check-up basis, but in a minute-to-minute way.

Copy LinkThe future of Ōura & the health/fitness sector

BERMAN: As you look ahead, you’ve had a remarkable scaling journey in a very short period of time. Scott Galloway has talked about a “fitness Rundle” (revenue bundle) for some time — where someone rolls up several companies like Peloton, Strava, and others.

You mentioned M&A earlier, which sounded like it was a bit smaller in scale. Do you see yourself as part of a much bigger fitness company? Could Ōura lead or take part in a roll-up of these bigger companies? How do you see it playing out?

HALE: I don’t think you can really predict how it’s all going to land.

That said, the idea of a health OS — a system that includes all your data, your context, your history, and maybe even your medical records — is incredibly compelling. Whether that lives in a walled garden, in distributed apps, or in a user-controlled ecosystem, I don’t know yet.

I think it’s too early to call how that will play out.

What I do know is that, as you scale to very large numbers of users, the differences between groups of people — what they need, how they use health data — become more pronounced.

This is one of the fundamental problems with medicine today. Medicine and pharmaceuticals are practiced and dispensed based on averages.

In fact, historically, those averages were often based on men. Women’s physiology wasn’t even studied in clinical trials until the last 20 years or so.

Women have been underserved by medicine for a long time because the system didn’t account for their unique physiological needs.

So, I don’t think there’s going to be one system for everybody. Maybe that’s not scalable, but it might be necessary.

The person managing chronic fatigue syndrome or long COVID is very different from someone training for a marathon.

Someone trying to lose weight is different from someone going through menopause, who may be struggling with sleep and weight gain. And those are different again from someone managing a chronic condition or trying to conceive.

It’s unlikely that one product or platform will serve everyone.

Do I think Ōura has a really important role to play in taht?

Yea, I think Ōura can play a critical role by feeding data to the people and systems solving problems in very specific, meaningful ways.

We provide the data stream that helps these solutions become personalized, actionable, and impactful.

BERMAN: Great having you here, Tom. Thanks for joining us.

HALE: Thank you.

BERMAN: From the moment Tom Hale wrote his letter to the Ōura board, asking them to give a superfan the chance to lead as CEO, he’s been focused on taking the company to the next level.

It’s thrilling to see his passion in action and the innovations he’s driving. I’m Jeff Berman. Thank you for listening.