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XR Health’s Eran Orr Talks about Clearing a Path for VR in the Future of Healthcare

Startup founder shares his entrepreneurial journey through funding, advice for startups, and the future of virtual healthcare
June 2024

About the Episode

What would it look like if healthcare evaluations took place through virtual reality goggles? XR Health’s Founder and CEO, Eran Orr, predicts that the future of the healthcare industry is transitioning to a 3D virtual reality interface. He also explains how XR Health’s technology will transform rehabilitation and mental health practices. In this interview with Tanya Perkins, Chief Operating Officer of Tembo Health, Eran begins by evaluating VR’s impact on human interaction in relation to technology adoption by seniors. He then shares his personal journey through the funding stage while recounting his first experience with AgeTech Collaborative from AARP. Eran signs off with advice for curious entrepreneurs wondering how to get started in the industry.

 

Transcript

Tanya Perkins, Host:        Welcome to AgeTech Talks, conversations about age tech, powered by Age Tech Collaborative from AARP leading a global mission to drive innovation at the nexus of longevity and technology. You are tuning in to a series of discussions recorded live at CES 2024 that highlight the dynamic startup founders who are making aging easier for everyone by pioneering innovative AgeTech solutions. In conversation with fellow startup founders, Kyle Rand and Tanya Perkins. Each episode invites an Age Tech Collaborative startup founder to discuss their journey and share the invaluable lessons they’ve learned along the way. Today we’re thrilled to have Eran Orr, CEO, and founder of XR Health to share their story. Hello everybody. My guest right now is Eran for XR Health. Tell us what your role is at your company and what in the world does your company do?

Eran Orr:        So my name is Eran Orr, as you can hear from the accent, originally from Israel. About eight years ago, I was diagnosed as suffering from whiplash injury due to the active flight and the G forces. I’m a former F 16 pilot in the Israeli force and during my own rehab process, the idea came about to combine a virtual reality in the rehab. That’s how we got started. Today the company is developing multiple virtual reality applications for a variety of use cases, physical therapy, occupational therapy, mental health, pain management, and we have two lines of businesses. One is we are selling the technology to hospitals and rehab centers and clinics, but we also have our own clinics and our own clinicians.

Tanya:        What makes Eran tick, how do you move in the world? What motivates you?

Eran:        I truly believe that in the next few years we will shift from a 2D interface computing platform to a 3D interface type of platform. We weren’t meant to interact using our thumb. I know that looks there for a lot of people this is the main way to interact with computers, but people forget that about 20 years ago, the only way to interact with a computer was to punch cards and plug those in into different types of big machines. And I think that in the next few years we’ll see how we’re shifting from a 2D interface to a 3D interface. And that’s one element. The second element is obviously what everyone experiences all the AI wave that we are now experiencing. Now, the combination of those two will create a whole new type of interactions with computers like we have never seen before. And within the healthcare space, there are a lot of problems that you can solve today by harnessing those technologies, both lack of access, lack of measurable outcomes, fun and engaging experience compared to something that is very not pleasant, let’s call it this way. And we have the potential to disrupt the healthcare market, reduce costs dramatically for everyone and provide far better care to patients and help a lot of patients around the world. So that’s what we’re trying to do.

Tanya:        Let’s go into why you think we’re going into a 3D space.

Eran:        So we as human beings are interacting in a 3D. This is how we are supposed to interact and we were limited by the 2D interfaces for the last decade or so. But I want to give you an example. At some point we did multiple user testing with the senior population. And in one of the use cases that we did, we handed off VR headsets to seniors and wanted to see if they can operate the VR by themselves. And then we asked them to fill a survey in a tablet. And what we saw was actually pretty surprising. Most of the people had no issue operating and interact with the VR in the VR, but then we asked them to fill a survey in the tablet and they were holding their tablets like it’s not working. And the reason why this is the case is because once you’re inside a virtual reality environment, you’re interacting like you’re interacting in real life.

Eran:        You can touch elements, you can move in the environment, you can interact and a 2D is not a natural way to interact. So once the technology is good enough and it’s easy to use and easy to get into VR, then I do believe a lot of the interaction that we’ll have on a day-to-day basis will be in those types of environments. It’s up to us as an industry to make sure that the environment is as similar as possible to what people are experiencing in real life. We’ve been taught or educated to use a mouse. We’ve been taught and educated to use a keyboard. We’ve been taught and educated to use a touchscreen VR shouldn’t be that. It should be I’m interacting, like I’m interacting now with you. That’s where we need to go. Just the only difference is instead of physical object, you have visual objects that you can place and put in different locations and interact like you are interacting in real life and we will get there. That was just a question of when and who will be the one developing it. Probably a lot of companies, it’s not one, but I think that once we’ll get to that level, you don’t need any other interactions with 2D interface or mouse because it’ll become natural to anyone to interact in that way.

Tanya:        Another message that you had was around where AI actually plays in all of this.

Eran:        I think that the power of AI is not just through chat bots. The real power of AI is when we will put a VR headset on and you’ll see an image of a person or of a clinician or anyone that will look will have the look and feel of a real human being and you’ll interact with him like a real human being. But all the interactions on the other side won’t be a real human being. And I do think that the XR devices will become the interface of the AI because there are complimentary in a very, very impressive way to a point that we will find ourself in the future in those environments with those AI type of systems. And it’ll be very hard to tell who’s a real human being and who is AI. And in some cases, to go back to what we’re trying to do, imagine how a psychology treatment will look like 20 years from now.

Eran:        So at psychology treatment today is basically talk therapy. That’s basically type of interaction in 20 years from now. First you won’t tell the difference if it’s a real psychologist or an AI psychologist, you’ll do those types of treatments inside a virtual reality environment. In a press of a button, you’ll be able to be transported to any type of environment that you want. You’ll be able to bring to that environment any type of elements that help your recovery. You’ll be able to relive moments that you took with your camera or phone and go back to those events. What’s the psychologist will want to, and again, I think the combination of those two technologies will have a very big impact on the healthcare market, but not just.

Tanya:        What in your personal experience got you to this space to be able to appreciate these movements in technology?

Eran:        I remember that the first time I was putting the VR headset on, I was certain that this is how we will interact. By the way, ideas is not the issue. It’s never the issue. Every person here at CES, I’ll ask him about an idea about a startup that can actually solve something. They probably can come up with something. The difference is that not a lot of people are willing to take that step and actually take action. And take action usually is hard. You need to quit your job. You need to understand how you raise money for your startup. And that’s probably the hardest part when starting a startup. At the beginning, 99% will tell you, you are dumb, it would never work. But every time you are hitting a milestone and making progress, then suddenly more and more people think, you know what? Maybe you have something there, but there’s a reason why there are not a lot of people that are willing to take that leap of faith. It’s very hard. When I tried to raise the initial money for starting XR Health, I think I pitched more than 200 people. And think about 200 times you get into a meeting said, you look like a great guy, but this is a dumb idea. It would never work. And then another meeting and then another meeting and you need to still get into the next meeting. You just got 199 nos. I think that’s the hardest part in entrepreneurship.

Tanya:        How did you come to you deciding, you know what, I’m going to go ahead and start a company around this problem.

Eran:        So I served as an F 16 for 15 years, and then I was diagnosed with suffering from whiplash due to the active flight and the G-Force. And while I was doing my own rehab, at some point I went to my physical therapist asking him, am I getting better? And he said that he doesn’t have a clue basically. And also the second thing that by the way troubled me is that I wasn’t able to keep up with the actual treatment. Like every time I left to do my home rehab, he gave me a piece of paper and said, go and do this. And every time I never did that type of exercise. And by the way, when I came back, I always lied to him that I did. And then I thought to myself, okay, this is not how it should work. And then at the same time, my wife got an offer to come and do her postdoc in Boston and I knew that no one would hire me as an F 16 pilot.

Eran:        So I said, okay, let me try to solve this by using virtual reality. And when I came up with it, I said, okay, I’ll go and fundraise. I have an amazing idea. I know what the market is, I know what the problem is. Here’s the unit economics. Everything looks great on Excel business model. I was pitching multiple investors. Everyone told me no, everyone told me it was a dumb idea. And then at the same point in time, crowdfunding just started in Israel equity crowdfunding. I said, you know what? I’ll try to do crowdfunding. And then my grandma decided to invest $10,000. I said, you know what? Here’s 10,000 dollars. So she was my first investor. And then from that point on, I’ll just raised more money from family and friends and some more other people that just thought that I might work it out. And then we started the company and we moved to Boston immediately after.

Eran:        So it was a month after I moved to Boston, basically a foreigner, don’t know anyone here. And I decided to apply to Mass Challenge Health Tech. Mass Challenge is probably the biggest accelerator in the Boston area. And they just launched their Health Tech Vertical. And that was the first cohort. In order to get into that program, they matched you up with three different organizations based on your application and you needed to go and pitch those organization. And it was good enough that at least one of them will offer you some kind of a partnership or a pilot program. And then you get in with that organization to create that pilot program. So I went in, they matched me up with three organizations. I don’t even remember who they were, none of them want anything to do with me. And then when I completed the failed third pitch, I went back to the Mass Challenge people.

Eran:        I told ’em, look, I have nothing to do. I have no office. I’ll sit here and if you have any open slot, no matter which company, I’ll go and pitch. And they’re like, okay, sit here. So at the end of the second day, they’re calling me and say, Hey, we have an open slot with AARP. And I was like, who is AARP? And they were like, what do you mean who is AARP? It’s like the biggest consumer group for seniors in the US. I have no idea who’s AARP. So they opened a Wikipedia page and while walking to the pitch room for AARP, I’m reading from their phone, who is AARP? And I was like, at some point I’m seeing seniors. I was saying seniors. And then I remember that I had a video that I saved on my computer of a 90 years old woman putting a VR headset on and getting very excited.

Eran:        So I’m walking into the room, Andy was there, was leading the entire activity, and then the team, and I’m entering the room and I’m hitting the play button on that video. And then the video end and I’m telling them VR will change seniors lives forever. It’ll improve engagement. They will be able to do physical therapy, occupational therapy and mental health from their home in a fun and an interactive way, not in a 2D interface. And then he was like, I want to work with you. Even now within our virtual clinics in the US, most of our patients are seniors, which is very unique if you think about it. We are shipping headsets to senior’s home. They’re setting the headsets by themselves, they’re matched with a clinician remotely and doing a VR treatment remotely between once a week or twice a week depends on their needs, addressing chronic conditions mainly. And again, it goes back to what I said at the beginning, it’s because this technology is better for this specific audience and for this population group than any 2D interface.

Tanya:        What are some of the conversations that you’ve had that’s helped move the company along?

Eran:        We were, as far as I know, the first company that AARP partner up with. So at the early days, that helped us a lot, right? Because now you have the AARP brand associated with you. It’s helpful with investors and partners. And that was our way to get into the ecosystem in Boston and in the US now regardless, we were able to fine tune our product to the senior population as part of our collaboration with AARP over the last seven years, now six and a half, and it’s an ongoing process. Every time I’m attending any type of event with AARP, it’s bigger and bigger and more partners and more. And I think the collaborative is now becoming basically a hub that if you want a solution for the senior population, that’s probably the best place to go. Worldwide probably by the way, I don’t know of any other models that are the same in any other places.

Eran:        And if it’s not clear, the population is getting older and we know where this is heading, all of us hopefully will live longer. So we need technology to actually keep ourselves healthy, our family members healthy. The only solution is using technology. I think that’s the power of the collaborative. And I think really amazing job on the AARP side for setting everything up. If we can get the population more engaged, especially the senior population, we will reduce the amount of injuries and falls and the quality of life will improve dramatically. That’s by the way, why we believe VR as a technology is a unique one because the VR experience allow you to escape for a short period of time and be someone else while actually engaged with your recovery. And it’s not just for physical therapy, we’re seeing the same in mental health. But I think that’s why I’m very excited about this combination of healthcare and this technology.

Eran:        I’m probably more excited this year than when I started the company seven years ago where this is heading, AI is becoming an integral part of everything that we are doing, and I do believe XR will be the interface for this type of technology. And I think we got to a maturity in the market for a long period of time. When I pitched customers, the conversation started with what is VR? And now the conversation is not that anymore. The conversation is how your product in VR can help my patients, which is a completely different type of conversation. And I’m sensing that the market has shifted in the last two years to that type of maturity. And I hope that now we can shift from market education to actually marketing and sales in a higher volume.

Tanya:        So many folks who might want to be an entrepreneur or are an entrepreneur and are creating technology might go, how do I maneuver in that space and still be someone who’s adding value, even though my teammate consists of one person or 10 people, and definitely not the thousands of engineers that might be at some of these tech giants. What do you say to an entrepreneur who’s sort of on that ladder side about how to navigate or how to even think about being in that space?

Eran:        So you know why startup actually eventually wins? Think about it. All the big companies, they have better access to capital. They have the same technology, but somehow every few years there’s a startup that is disrupting an industry. How can that be? And one of my angel investors like to give the following example to explain why this is happening. So imagine that both of us are playing chess. I’m the startup and you are the big company, but I can move twice for every one of your move. Doesn’t matter that you’ll be the best chess player ever. I’ll always do two moves before you’ll do your second move. Eventually I will win. Even though you have all the resources in the world. And that’s why I think entrepreneurs win. We can move fast and we can make decisions and we can adopt to anything that is happening in the market. And by the time the big companies is figuring that out, we’re in a completely different place. And when you are creating a new market, and always that’s the idea behind the startup, you are creating something that was never been done before. Speed is more important than anything else. And that’s why if you are an entrepreneur thinking about being an entrepreneur, you should be excited about that and not be concerned about the big companies because history tells that innovations are not coming from those companies. And if they are, they’re usually late to the game.

Tanya:        I love that. That is such a healthy look on just being in a market. Competition isn’t necessarily a bad thing. It’s actually perhaps proof that you have a market. It’s moreover, perhaps lowers the bar in terms of what you need to do out there to acquire a customer because you don’t have to do all the education. It’s already out there. Exactly. So interesting. So we’re going to go ahead and wrap this up. Again, thank you so much for joining us.

Eran:        Thanks for having me it was a pleasure.

Tanya:        Thanks for listening to AgeTech Talks from AgeTech Collaborative from AARP. You can learn more about today’s guests and all the innovative startups in the AgeTech Collaborative by visiting the startup directory on agetechcollaborative.org.