Startup Review: Behaivior
Behaivior is a startup currently in the Alpha Lab accelerator headquartered in Pittsburgh, PA. The Company is an AI startup mixed with a wearables producer. They are creating a technology to better predict and prevent addiction-related (mostly-opioid) relapses using wearable devices and pattern-detection machine learning algorithms. They are in the process of creating software that can take real-time data streams from wearable devices that detect heart rate, heart rate variability, skin temperature, motion, and galvanic skin response. This data is then paired with other real-time data involving behavior to determine whether wearers are potentially in a pre-relapse craving state, and therefore at higher risk of relapsing in the near future. If the predictive model and software from the Company determines that the person wearing the device is at a high risk for relapse, a message would be sent for human intervention.
The problem that this addresses is currently at the forefront of the national conversation: the opioid epidemic. Due to the extremely addictive nature of the drug, over 90% of heroin users relapse. Nearly half of all opioid overdose deaths in 2016 involved prescription opioids. In 2016, 64,000 Americans died from overdoses, 19 percent more than in 2015. By comparison, the figure was 16,000 in 2010, and 4,000 in 1999. Public health experts predict that nearly 500,000 people could die from opioid-related overdoses in the next ten years, if trends persist. The crisis cost the United States more than $500 billion in 2015 alone. Most of this is due to healthcare costs, lost productivity, and legal expenses. Reducing addiction relapses not only saves lives, but it also saves significant amounts of money by reducing re-arrests, re-incarcerations, and re-hospitalizations.
The market for this product are not as straightforward as addressing all opioid abusers. Intuitively, it seems hard to imagine a drug-abuser who is willing to wear the device at all times, however, a conceit must be made that this is entirely possible. It is reasonable to assume that of the ~2.6 million people in the United States that are/have been addicted to painkillers or heroin, a percentage of them are definitely seeking help. Only 22 percent of addicts received any kind of treatment during a 2013 study. Because of a lack of capacity, there are nearly a million opioid addicts who would not be able to access treatment, even if they wanted to.
Generally speaking, most of the tools currently in place that are fighting the opioid epidemic are reactive and are put into use after the fact. Opioid treatments include the drugs Naxalone, Methadone, and Buprenorphine. Naxalone is typically used as a rescue medication for opioid overdose. Methadone is a synthetic, long-acting opioid that reduces withdrawal symptoms, allowing an addict to slowly taper off the drug in a controlled setting and manner. Buprenorphine acts similarly to Methadone. Although all of these solutions are helpful, they don’t serve the same purpose as the Company. In fact, all of these drugs could be additive to the Company’s response process.
Because there are no comparable solutions in the market and because behavior of drug addicts are difficult to predict, it seems impossible to really nail down a solid market size for the Company. The Company estimates that the US Rehab addiction market is more that $35 billion. Behaivior does make mention that they can envision uses for their technology beyond opioid addiction, however, it might be a while before they can achieve multiple addiction frontiers. A study was performed in 2013 that claimed that the Opioid addiction market was $1.3 billion in size. A study in early 2017 by Transparency Market Research found that the current market for substance abuse treatment was $4.42 billion and could grow to over $12 billion by 2024. Orexo, a pharmaceutical company that focuses on opioid abusers, estimates that the market for treating opioid abuse with Naxalone/Buprenoprhine is approximately $2.4 billion. Assuming that the market for preventing opioid relapses and overdoses is roughly half of the market for treating opioid addiction, a safe estimate would be that this market is approximately $1.2 billion in size.
The Company is currently part of the Alpha Lab accelerator, which is based in Pittsburgh and focuses on Midwestern startups. Alpha Lab has a solid reputation in the startup community and has a strong list of mentors on staff to help out. Alpha Lab’s initial investment size is typically between $25,000 and $50,000. The Company is just working with that initial seed money at this point.
They are currently competing for the $5 million IBM Watson AI XPRIZE and have a letter of intent from a “large substance abuse treatment facility”. This contest is focused on finding ways for humans to use artificial intelligence to solve big problems. The Competition lasts four years, with the top three competitors earning a chance to compete at TED 2020. The winner receives to mentors at IBM and many other helpful resources.
Behaivior was founded by Jeremy Guttman, Ellie Gordon, and Ryan O’Shea. The rest of the team consists of bioethicists, designers, programmers, addiction specialists, and technologists. Jeremy Guttman has degrees in economics and bioethics, Ellie Gordon has a design background, and Ryan O’Shea is a freelance video producer. The Company clearly has a decent background, but none of the current team has startup/founder experience.
At this point, the Company’s potential seems boundless and they are solving a very legitimate and severe problem. The market definitely exists and it is likely that many investors would be crawling all over this opportunity. There is plenty of room for the Company to grow and the management team definitely lacks experience. The wearable space is also pretty difficult to predict. Wearables in the market have not been as successful as many predicted several years ago. Overall it is a solid idea with a long way to go before it can acquire more significant investors.