Episode 6: From Zero to IPO: Lessons from Hinge Health’s Journey

How Hinge Health Went From Two PhD Dropouts to a $7B+ Public Company

In this episode of The Five Mile Difference, Daniel Perez, Co-Founder and CEO of Hinge Health, shares the journey of building one of the most successful digital health companies of the last decade.

The conversation traces Daniel’s path from early experimentation and clinical research to scaling Hinge Health across enterprise employers, navigating healthcare’s regulatory and commercial complexity, and ultimately taking the company public. Daniel and Joe explore how Hinge Health found product market fit in musculoskeletal care, built early clinical proof, scaled go to market, and positioned itself as the category leader in a highly competitive market.

Watch the conversation on YouTube, or listen on your podcast platform of choice: Spotify | YouTube | Apple Podcasts.

Episode Takeaways

Why healthcare is one of the hardest, but most meaningful, industries to build in

Daniel and his co-founder Gabriel met while doing PhDs in the medical sciences at Oxford, and both had personal stakes in the problem, and their research showed that strong clinical evidence already existed for musculoskeletal (MSK) care. The problem was delivery: it was inefficient, hard to scale, and patients often didn't stick with it because of cost and inconvenience. That gap became the opportunity.

“It's hard to throw a dart at a healthcare dartboard and not hit a multi-billion dollar market,” Daniel Perez, Co-Founder & CEO, Hinge Health

If technology could automate outpatient physical therapy, the first-line treatment for many chronic MSK conditions, it could eventually automate other parts of healthcare too.

Takeaway: The best healthcare companies start where evidence is strong and delivery is broken.

Going zero to one: shipping early prototypes and learning through failure

Hinge Health was the founders' third company together. The first two taught them a hard lesson: get a prototype out as fast as possible. They set a deadline of eight weeks to have a prototype in the market, no matter how it looked. They chose knee arthritis partly because it was a relatively low-risk condition where an imperfect first product wouldn't hurt anyone.

Their recruiting was scrappy. They emailed university listservs and asked reception desk staff to forward the message. The reception desk staff themselves were the first ones who responded, and one even became patient zero. She got a Tupperware box with a tablet and two hand-built sensors. A few weeks later, her pain had dropped 35 to 45% from baseline, enough proof to keep going.

His broader advice: to have a great idea, have many ideas. Start companies, because every failure (wrong hire, no product-market fit, slow early sales) is a lesson, as long as you don't harm people or break the law.

Takeaway: Set an aggressive ship date, pick a low-risk starting point, and let real users tell you if you're onto something.

Establishing clinical proof and credibility in digital health

The team's academic background shaped their approach: publish the research and demonstrate real clinical outcomes. They also wanted an intellectually honest path to saving costs, because a solution that saves money is a much easier sale than a "vitamin or wellness solution."

Cutting costs by denying care wasn't interesting to them. They wanted the member and the enterprise both to win. Early on, they kept recruiting patients with knee pain (the founders were too young to test it themselves, and Hinge's average member age is about 46) so they could collect clinical data and keep refining the experience. That data then became the proof point for enterprise buyers.

Takeaway: In healthcare, credibility comes from validated outcomes, and cost savings only count if they come from better care.

Discovering the right business model and customer segments

The founders knew that even if you improve someone's health, it doesn't mean anybody will pay for it. Their breakthrough came from asking where in the patient journey you could save the most money. Post-surgical rehab improves range of motion, but no payer pays for that. Pre-surgical rehab that helps a patient avoid surgery entirely is worth a lot, especially in the US, where surgeries are expensive and utilization is high.

Next, they asked who bears the risk. Self-insured employers pay 100% of the cost, so avoiding a surgery saves them the full amount. After reading a white paper on the self-insured market, they went laser-focused on the US.

Takeaway: Find the moment in the care journey where you create the most financial value, then find the buyer who keeps all of it.

Landing the first enterprise customers

Perez's advice here is to sell while you build. Selling in the UK, even without closing, helped them understand what end users cared about and fed back into the product. His nuance: don't just build what customers tell you to build, but use them to surface the problem.

The first customer came through persistence at benefits conferences. After a talk by a benefits leader, Daniel followed him through a Vegas casino, down an escalator, and almost into his taxi before getting a "we'll be in touch." They did get in touch. The pilot ended early because results were so strong, followed by a wider deployment. The team of six moved to Denver for a month to make sure the pilot went well.

His three rules for early customers:

1. Be charmingly persistent.
2. Treat early customers like royalty. With few customers, you know everyone by name and can offer concierge service.
3. Make them referenceable, and repeat this for the next 5 to 10 customers.

Takeaway: Your first customers are betting on you as a person, so over-deliver and turn them into references.

Scaling GTM and hiring the first sales leader

Daniel recommends that founders close their first 10 to 20 deals themselves, because early buyers are taking a risk on the founder. The first deal closed with no founder involvement, around logo 12 to 15, was a major maturity milestone.

Hiring the first sales leader was deliberate, because enterprise sales cycles of 12 to 24 months mean you won't know for a long time if you got it wrong. Their hire came from outside the industry and is still with the company eight years later. Daniel found the blank slate helpful. Experienced digital-benefits sellers were often set in their ways, while the ground was shifting under the market.

Daniel also stayed close to the details. At first, sales, marketing, client success, and partnerships all reported to him. They standardized the pitch, discovery questions, follow-up emails, and even drip campaigns, since you can't learn what works if ten people are doing ten different things. He interviewed every go-to-market hire. What he looked for was smart, serious people with long tenures at past jobs (a proxy for delivering value) who were open to feedback and willing to buy into the model. He credits this for the company's 97%+ logo retention.

Takeaway: Treat the sales process like a product: keep it consistent, instrument it, and hire for tenure and coachability over pedigree.

Competing at scale and positioning as the category winner

Daniel said what gets you from 0 to 10, or 20 to 100, differs from what gets you from 100 to 500. The customer profile shifts from founder-relationship accounts to the 2,000th customer, and the category matures. New entrants cause what he called a competitive blur, where buyers see products A, B, and C as similar and pick the cheapest.

His playbook for beating the blur:

• Expand the product: Hinge started with the knee, then added hip, back, shoulder, neck, hand, wrist, foot, ankle, and elbow.
• Expand the customer base: Hinge moved from large self-insured employers to smaller employers, fully insured, and Medicare Advantage.
• Build channel partnerships: health plans became a channel because Hinge invested so heavily in outcomes. This gave them preferential access to employers and made them the easiest to buy, with less security review and legal friction for the buyer.
• Crown yourself the winner: later customers prefer the market leader. At some point on the path from 10 to 100, Hinge stopped selling and started being bought.

Lessons for founders building healthcare companies that last

• Move fast where risk is low. Ship a prototype in weeks, not months.
• Know who pays. Improving outcomes isn't enough; align with the buyer who captures the savings.
• Prove it. Validated clinical outcomes and honest cost savings are your moat against snake oil.
• Sell while you build. Customer conversations shape the product long before it's finished.
• Founders sell first. Close your first 10 to 20 deals yourself, then be deliberate about your first sales leader.
• Make it easy to buy. Channels and reduced administrative burden can matter as much as the product.
• Hire carefully for trust-based roles. In healthcare, customer-facing quality is critical.
• Never stop learning. Daniel said he and his Co-founder still read constantly, and that AI is changing how they run the business.