ONESOFTDIGM (OSD) CEO and Co-Founder Chang Hun (Douglass) Lee reached out to MetroHartford Alliance Content Manager Nan Price to share his startup story and talk about why his company decided to create a presence in Hartford, CT.
NAN PRICE: How did you come up with the idea for your startup?
DOUGLASS LEE: I was an obese kid and was diagnosed as pre-diabetic when I was 16-years old. I came from Korea to the United Kingdom for treatment using a device that cost around $6,000. It helped and I lost weight and have maintained a healthy lifestyle.
After high school, I attended the University of Illinois. I had to take a two-year hiatus to serve in the Republic of Korea Marine Corps. While I was away, I began thinking about starting my own business. During my junior year at university, I thought: I’m going to use my childhood problem to make this world a better place. So, I invented a pocket-sized device that measures body fat, skeletal muscle mass, basal metabolic rate, body mass index, body water, heart rate, body temperature, stress index, calorie intake, and daily activity—all critical information that can be used to maintain good health.
NAN: Tell us about the process of funding and building the company.
DOUGLASS: I started with pitch competitions when I was still in college. I used the first $20,000 I won to move to Silicon Valley because I thought I could meet a lot of investors and developers there.
When I lived there for a year and a half, I applied for dozens of pitch competitions. It took 49 pitches before I connected with an investor who saw my passion and invested $200,000 for me to make a prototype. He wanted to give me a chance to prove that my business concept could actually work. I used the investment to make a prototype for OneSmartDiet and launch our first crowdfunding campaign.
With the crowdfunding, we raised an additional $200,000 and, more importantly, we saw the market need. People wanted this to be a live product. We used our funding to manufacture the device in Korea. We incorporated a subsidiary in Korea to take advantage of some of the country’s startup funding incentives.
NAN: Why Hartford?
DOUGLASS: We were doing well with business to consumer (B2C) sales, but we saw limits in scaling and wanted to raise Series A funding. We realized we needed to tackle the B2B market, so we switched our revenue model from B2C to recurring software revenue. This meant adding new data to our mobile app.
Where I was living in San Jose was very IT-centric. Most of the healthcare, bioscience, and pharma is here in the East. We came to into Connecticut after we made a memorandum of understanding (MOU) with AXA Life Insurance, which has several locations in Connecticut.
We also recently signed an MOU with Priority Life Care to pilot an employee wellness program. We’ll provide the overall statistics for 500 employees, which will help them apply for an insurance discount. OSD will receive 10% of that discount. So, it’s a form of profit sharing.
NAN: Was part of the draw to come to Connecticut because it’s known as The Insurance Capital of The World?
DOUGLASS: Yes, because at the end of the day, our focus is not selling devices, the core value of our company is the data we collect from our device. That data provides real value for insurance companies because it enhances the traditional data they receive. That’s where our company’s valuation will increase.
NAN: How did you become involved with Upward Hartford?
DOUGLASS: We were accepted into the second cohort at Upward Labs. One of the reasons we were able to conduct a pilot was through funding we received from Upward Labs. They’re also providing housing in Hartford through Upward Living and helping connect us with corporate partners and different potential companies where we can pilot our program.
NAN: Let’s talk about your company’s growth. How many employees do you have and how many are here in Hartford?
DOUGLASS: We currently have 16 full-time employees. Three are here in Hartford, four are in San Jose, and nine are in Korea.
NAN: What’s the biggest lesson you’ve learned in your entrepreneurial journey so far?
DOUGLASS: Looking back, when people ask me how my company made $1 million within two years, I always say it’s all because of our team. I realize my strength is not in engineering or marketing, it was about the idea and having knowledge to bring people into a team. I’ve learned the CEO’s role is about not just leading the team, it’s about finding the right talent to create a team to make everything happen.
NAN: What’s next?
DOUGLASS: After conducting this employee wellness program, our next step is to switch our pilots into a subscription model. We’ll continue to stay in Hartford to look for new partners and we’re going to start raising our Series A funding.