She raised $1.3M, delivered real value—but still failed. Here’s what happened. | Mary Beth Snodgrass, Founder of Healthiby

Mary Beth Snodgrass shares the raw and real story behind Healthiby—an innovative healthcare startup that succeeded in delivering measurable health outcomes but ultimately failed commercially. Hear firsthand what went wrong, from unclear payer dynamics and sales friction, to macroeconomic shifts and storytelling gaps. This episode pulls back the curtain on why having a working product isn’t enough and why mastering the market dynamics is crucial to your startup’s survival.

Why You Should Listen

• Learn why even successful products can fail if the payer isn’t clearly defined.
• Understand the hidden hurdles in long sales cycles.
• Discover why storytelling and personal founder journeys are key.
• See how market timing and macro changes can dramatically impact your startup’s trajectory.
• Avoid the pitfalls of focusing solely on solving problems without a robust go-to-market strategy.

Keywords

product market fit, healthcare startups, startup failure, go-to-market strategy, founder advice, chronic conditions, startup storytelling, B2B sales, health tech, behavior change

00:00:00 Intro

00:03:04 Pivoting Fast

00:06:16 Finding Initial Users

00:08:53 Building a Behavior Change Product

00:13:55 Why We Failed

00:17:48 Navigating Complex Sales Models

00:19:56 Key Lessons

00:22:45 Final Advice for Early Stage Founders

Chapters

• 0:00 Intro
• 3:04 Pivoting Fast
• 6:16 Finding Initial Users
• 8:53 Building a Behavior Change Product
• 13:55 Why We Failed
• 17:48 Navigating Complex Sales Models
• 19:56 Key Lessons
• 22:45 Final Advice for Early Stage Founders

Transcript

Mary Beth Snodgrass (00:00:00):
There were too many legal issues or even perceptions of legal issues with employers incentivizing their employees to not have diabetes anymore. You know, something that I didn't do as a founder that, I should have done is figure out a way to tell my story better.

Previous Guests (00:00:22):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is product market fit.

Pablo Srugo (00:00:35):
Do you think the product market fit show has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and, it lets us get better guests. Thank you. Mary Beth, welcome to the show.

Mary Beth Snodgrass (00:00:50):
Thanks. Thanks for having me.

Pablo Srugo (00:00:51):
So you started a company called Healthiby back in, like, 2018/2019. You ran it for four or five years. You raised $1.3 million. It was, like, coming in the health tech space and you actually were driving real patient outcomes. I mean, things were working in a sense from in terms of what the product was supposed to do. But ultimately you had to wrap it up and, you know, you can describe it as let's say a failed experiment. Just like my old startup. I guess, well, you know, you mentioned you had seven reasons that you went through as you kind of thought through. What happened as to why it didn't work. So we're going to go through that. But maybe as a starting point, tell us a bit more about what Healthiby was and kind of why you started it in the first place.

Mary Beth Snodgrass (00:01:33):
So Healthiby was a peer-powered, incentives-driven behavior change solution. That enabled people to measurably improve their health outcomes. And when I say people, I'm talking about people who are at risk of or diagnosed with type 2 diabetes, hypertension, or high cholesterol. So those are the cardiometabolic conditions that are very prevalent in the US. So, it's estimated that about 60% of Americans have chronic conditions. That figure has been around a while, so I'm sure it's higher at this point. But, these are also really costly conditions for individuals who have them, for their employers, for insurance companies, for our health care system. And so we set out to really solve both the problem of our health. You know, how we can improve our health through lifestyle and behavior change. As well as this financial problem. Like, I said, it's at multiple levels too. And so, we utilized a combination of health sciences, social behavioral sciences, and behavioral economics. To design our really comprehensive, robust solution. To help people do this, and so I could go on about behavior change all day, probably.

Pablo Srugo (00:02:56):
How did you get into this space? I mean, I think. Like, you know, the fact that there's a lot of chronic problems is, let's say, well known. Why did you decide to dive into this area?

Mary Beth Snodgrass (00:03:04):
Yeah. So, I had just started consulting entrepreneurs. After my first startup and I connected with a physician. Who initially just wanted some feedback on his pitch deck, and that snowballed. And it became me working part-time with him for nine months, almost a year as a consultant. To do market research and, competitive research and, understand the legal regulatory context. As well as identify early customers and build out an MVP. And, what actually became really apparent in the first few weeks is that. What he was setting out to do was to improve health outcomes by financially rewarding people for doing that. That was a simple concept. And his story actually was that he would have patients come in, and it would not be for these particular conditions. They were just the most common ones. And they would talk about going to the casinos. They would talk about going to sporting games and betting, and all this stuff. But eating healthy, exercising, those were nearly impossible things to do. And so he thought, why can't we make this as fun as, you know, betting on a game or whatever it is that people do enjoy doing?

Pablo Srugo (00:04:33):
And where was the money supposed to come from? Like, insurance companies? Or who was supposed to fund it?

Mary Beth Snodgrass (00:04:37):
Yeah, so that was what we were trying to figure out. He had this idea that it would be employers at first, and we did explore that space. He also, when we connected. He had a company in mind where he had relationships. And, when we looked at that space. There were a lot of wellness solutions. Doing different things around diet and exercise, but nobody was really focused on improving health outcomes in a measurable way and also tying money to it. So, we saw a really big opportunity to take this more evidence-based or clinical. It wasn't a more clinical approach, but a science-based approach to this employer wellness space. And what it turned out is that there were too many legal issues or even perceptions of legal issues with employers incentivizing their employees to not have diabetes anymore. And so we looked at a bunch of things, but just even the perception of it was adding too much friction to us being able to get on that route. So what we ended up doing is midway through developing the MVP and having all this kind of employer focus. We pivoted to B2C and we decided our goal would be to just prove that we can measurably prove these health outcomes. And we had low financial rewards, you know, from both bootstrapped. He put in some money and some angel investment and just do that.

Pablo Srugo (00:06:16):
So you just wanted to see if that was a real thing. Like, you guys would fund it. You would fund the rewards yourself just to see if that would actually drive real behavior changes.

Mary Beth Snodgrass (00:06:24):
Exactly. Because that was one of the things we were told, you know, that's going to be too hard.

Pablo Srugo (00:06:29):
And how do you get. So, how do you go out and get the initial patients to sign up? How much money are you offering? What's the draw for people to decide, you know, okay, I'm going to. I mean, a lot of people are thinking about dieting, but to choose doing it through you.

Mary Beth Snodgrass (00:06:42):
Right. So in the early days. I was living in Texas at the time, in Houston. And so I went out looking for partners who already had populations of people who were at risk of or diagnosed with these conditions. Well, actually, we initially focused on type 2 diabetes. We added in other conditions later, and so in the early days of Walmart. Walmart pharmacies, local clinics, and then we also started focusing on Facebook once we had outcomes and very compelling participant stories.

Pablo Srugo (00:07:20):
So what would you do? Take me, like Walmart. You partner with them or what would you do with Walmart?

Mary Beth Snodgrass (00:07:24):
Yeah, it started out very, I would say, unofficially. We didn't have a corporate contract with Walmart, but they were doing these quarterly wellness events. So, they would set up a stand and do hemoglobin A1c tests, blood pressure tests. I think their pharmacist would offer some advice, you know, and maybe give away some free things. And, what ended up happening is I developed a relationship with a pharmacist who was over. He was, I think, the head pharmacist at one store and then he became a regional manager. And he just really loved what we were doing, and what's great about pharmacists is they develop a relationship with people when they're picking up their prescriptions. And they have more time, in a sense, than providers. And so it was interesting to me. They really cared to get good information to people about healthy eating choices and different programs. So we ended up going with them. Going to some of their events. We sponsored some of the hemoglobin A1c testing and we promote what we were doing and, you know, initially signed up a small cohort and just kind of went from there.

Pablo Srugo (00:08:44):
And then how did it work? So you're going to, let's say, Walmart pharmacy events. A few other places to find these patients and they're like, "Okay, cool, I want to do this." What is the what is the experience afterwards?

Mary Beth Snodgrass (00:08:53):
Our program evolved over time because, you know, we took this very experimental approach. The very first cohort we had, we did not have what I would call a program. We had a dietician, and we initially thought we could host quote unquote sessions over WhatsApp. And that didn't work. We realized people need more engagement. Engagement is really important, building relationships, supportive, as well as collaborative and competitive. And so then we moved to Zoom. And, basically, I would take. So I had done a lot of research and I, ultimately ended up synthesizing findings from hundreds of different studies and guidelines. Best practices to create the content. But I would create the content, in the week before a session and then train the dietician on how to deliver it. And the dietician, she comes in with her own knowledge, right? But dieticians aren't trained on engaging people in a cohort virtually or necessarily to use chronic conditions. So our initial dietician, she had really little experience with people who have these conditions and what their challenges were. So anyways, we did these kind of, I'd say, sessions that we were building the plane while we were flying it, right? And, we would get feedback. I mean, I would sit in on the sessions, and I would see how people were responding. And we would adjust based on what was working, what wasn't. We were getting their, so, in our MVP. Because we designed it to be HIPAA conferment. It had good privacy and security from the beginning. People would share their weight and other progress along the way. And we would use all of that to iteratively improve. And so, eventually what we had was this, series of programs. I say series of programs because there's like core information that's behind it that's all the same. But one program was CDC approved and for people who had pre-diabetes. And then another program was for Spanish speakers who, you know, were managing chronic conditions. And another one was for, you know, just type 2 diabetes. So we have these programs and we had it supported by our TAC. Which was a participant product that enabled people. That really incentivized people with 20 healthy actions. That were all associated with healthy bucks and healthy cents. So they would be rewarded with this virtual money for both individual and group achievements. And then, you know, we were collecting data both what I would call manually and automatically. So, you know, we had integrations with things like, you know, fitness trackers and then manual would be like they're uploading, you know, a photo of their meal.

Pablo Srugo (00:12:05):
I mean, those are like rewards that could be exchanged for cash or prizes later?

Mary Beth Snodgrass (00:12:10):
Yeah, so I think the thing that's interesting about it is that most people didn't realize, or I've never talked about it. Is that while we had this incentive system that was participant facing. And so they could see, okay, I get a healthy bet for this, healthy sense for that, and then this is what my ultimate payout will be by the end of a program, right? What we had also done is we'd made some intentional decisions early on that, we want this to be sustainable over time. So this is one of the reasons why we ended up developing a lot of relationships in the life insurance space and talking to a lot of life insurers about building a 401k for your health. Because in our back end, the way that it was developed. These programs, while, you know, they eventually became 4 month and 12 month programs in the healthcare space. It could have been 20 to 30 year programs where you're building up an account, essentially, right? Maybe you're earning a few hundred dollars a year, and then over 10 or 20 years. You've got tens of thousands of dollars in a healthy box. And, you know, that's reducing the cost of your life insurance. There's various ways that it, you know, would have paid off. But anyways, the idea was that it wasn't just going to be a reward for the medium to near term.

Pablo Srugo (00:13:40):
Got it. Okay, so so that all makes sense. Then let's get to the to the reasons. You mentioned, you had seven reasons why ultimately it didn't work out. It did work in the sense that you were driving outcomes. So that wasn't it. But what are some of those seven reasons why the company ultimately failed, as you said.

Mary Beth Snodgrass (00:13:55):
Shifting budget priorities were a big problem, and in this particular situation. It became more problematic that an investor who made a verbal commitment to invest in Healthiby, and also specifically any commercial pilots that we closed. This investor insisted on speaking with the CEO, and we had a meeting. And it was turned into this whole circus that I've actually never seen before. He ended up pressuring the CEO in a way that I really never would have wanted him to be pressured. And I think, you know, pressuring an executive already has budget issues that he's trying to resolve, I just don't think is a good strategy. And unfortunately, it's the one that the investor took. And the investor then backed out because he didn't successfully pressure the CEO into paying in advance.

Pablo Srugo (00:14:55):
What are some of the other reasons on the list?

Mary Beth Snodgrass (00:14:57):
Okay. So, behavior change. While we're a behavior change solution. There are behavior changes that have to happen at multiple levels, like in the systems we're in. So, my perhaps controversial take, I don't know if this is controversial or not. Is that innovation in companies, and I believe this is true for all size companies. But especially enterprise companies, fundamentally it's behavior change. Now there's exceptions when it's, like, ambient technology in healthcare and it's just listening and you don't have to do anything. But if there are end users involved and there's innovation. You need people willing, ready, and able to change behaviors. And so there are just too many different, I think, systems involved. So the healthcare system is one. But also there's another story about, I guess, I would call it behavior change and venture capital. Which I think only can be facilitated by a policy intervention, so that's a whole other conversation. But, anyways, those things we didn't set out to address. But they had significant impact on our trajectory.

Pablo Srugo (00:16:08):
You know, macro changing is also a real thing. Enterprise sales cycles shifting priorities is a real problem. But what about the fundamental piece of the core business?

Mary Beth Snodgrass (00:16:16):
Well, okay, the core business. I actually don't think there was anything wrong with our core business. No, there's nothing that I. What I can tell you is sales. So, we know sales cycles in healthcare are long. Bessemer Capital says like 12 to 24 months, but I think that was a pre-COVID estimate. So, I don't really know what the estimate is now. Combined with that, on a personal level. I'm someone who likes to solve problems and that's what I prioritized more than sales. We didn't have somebody who just loved sales and was just.

Pablo Srugo (00:16:52):
Because this would have been sales to who?

Mary Beth Snodgrass (00:16:54):
It would have been sales to health systems, payers.

Pablo Srugo (00:17:00):
That's part of the equation that I'm trying to dig into.

Speaker 01: (00:17:02)
Yeah.

Pablo Srugo (00:17:03):
Fundamentally, yes. You need people to use the thing and make changes. But there's no dollars and cents there. Like, you know, what I mean? Who's actually paying you as a customer is not the patient, right? It's whoever's funding the box and all this stuff. So that's the part of the equation that I'm still super unclear on is like, Okay, the patient gets value if they change their behavior. Great, but they're not paying. So, who would be paying when you say sales? That's why I'm asking. Who would actually be paying to fund this thing and therefore get value? And is that part of the thing that, you know, never found a true loop. Where somebody was willing to pay for somebody else to get healthy and then they would get value as a result indirectly.

Mary Beth Snodgrass (00:17:48):
Yeah, so okay I'm just gonna bring up some things. So, that you can see this as I'm talking about it. So, you've probably heard from entrepreneurs in healthcare that it's complicated. There's revenue cycle issues. That is another real issue. But in our case, what we were doing is we were approaching companies about both fee-for-service and value-based care models. And the reason I say that is in a value-based care like Medicare. We would be paid based on outcomes and lives. Whereas in fee-for-service, you're paid. So, there's different codes that systems get reimbursed for. We didn't go down the path of becoming a provider ourselves, and that's another conversation. But we had all these different codes that we could be reimbursed on, and the issue was . 

Pablo Srugo (00:18:49):
By, for example, Medicare. Is that right?

Mary Beth Snodgrass (00:18:51):
Well, it could be a health system that has a population of Medicare patients.

Pablo Srugo (00:18:58):
Okay. That makes sense.

Mary Beth Snodgrass (00:18:59):
It's not that they weren't interested or even willing. Where we did have problems is a couple of times where people say, "Oh, you know, talk to our." I don't even remember the title, like, you know, revenue cycle. We couldn't even get to the people who had answers about, how long it would take to get reimbursement. What they expected the hurdles to be. So, what ended up happening is because so many providers have issues with reimbursements. There was just so much friction and hesitancy because doing anything new is a cost. And risk for them in terms of reimbursement.

Pablo Srugo (00:19:37):
Got it, okay. That's super helpful. My ask as a final question, like, you know, having been through this experience and now. Like, you said, you're a venture partner. You used to, and I'm sure you still do. Work with a lot of other startups. What's maybe your biggest piece of advice for early stage founders, you know, that are in that zero to one phase?

Mary Beth Snodgrass (00:19:56):
So, my biggest pieces of advice. Besides what I've already said a couple times about the venture. Is really understanding the systems and the workflows. So nowadays, in 2025. It's common to hear people say that EHR workflows are terrible for providers and it's highly problematic for adopting new technologies or integrating with new technologies. So that's commonly known. But at the time, I would just anecdotally hear these stories. And I think I would get feedback that our clinician platform was great. We collected longitudinal behavioral and biometric data. That some providers would say, Oh, this is how our EHR should be collecting displaying data. We should be able to access this type of information, but we're years away from it. I took that as, Okay, it's positive feedback. We're a little ahead of the curve. I didn't fully appreciate the extent that these current workflows and EHR issues inhibited our ability to really get in the door. And then, you know, something that I didn't do as a founder that I should have done is figure out a way to tell my story better. So I do have a personal story that I eventually started sharing that. I had to make very significant behavioral changes myself in the years leading up to Healthiby. Because I had been diagnosed with Crohn's disease and I was told there was basically no hope, it gets progressively worse, and I could take some pills that are 50% effective, if you're lucky. I opted out of the medications and went on this journey to make both dietary and lifestyle changes. And it took me years, but I did it. And it was, you know, I'm healthy. I no longer have any cytochromes according to physicians.

Mary Beth Snodgrass (00:22:06):
Wow, congrats.

Mary Beth Snodgrass (00:22:07):
So, yeah. Thanks, and so I know the journey, right? And I know how unhelpful actually healthcare can be in that process. And so I did start to tell that a bit. Because, that's why I was also so convinced about what we were doing. It wasn't just the science and it wasn't just the numbers. It's like, I've lived this. There's more to my story and I still haven't really figured out how to tell it. And so, because I've over the years seen founders who tell really difficult stories well. I wish I had invested more time in doing that.

Pablo Srugo (00:22:41):
Got it. Well, that makes total sense. Mary Beth, thanks so much for sharing your story. It's been great.

Mary Beth Snodgrass (00:22:45):
Yeah, well thanks and I'll get one more thing I won't say to founders. Because I've been there. In your early days where you're really excited about solving the problem. You have all these solutions in mind. It's easy to discount people who tell you, you know, what about this? Or especially from a founder. So, over the past year, especially. I've met with first-time new founders. And I said, well, what about this? And they're, eh, no. And I think it's really important for founders to at least hear the advice from other founders who've been further down the road. And even if you don't take their advice in that moment, 6, 12, 24 months later, you may really appreciate. What they learn the hard way.

Pablo Srugo (00:23:36):
So picture this. It's months from now, years from now, and one of your founder friends. A really close founder friends of yours, guess what? Their startup went bankrupt. And it turns out, if you had just shared the product market fit show with them. They would have learned everything they needed to, to find product market fit and to create a huge success. But instead, their startup has completely failed. You have blood on your hands. Don't let that happen. You don't want to live like that. It is terrible. So do what you need to do. Tell them about the show. Send it to them. Put it on WhatsApp. Put it on Slack. Put it where you need to put it. Just make sure they know about it and they check it out.