"That gave Matthew Gallagher breathing room to fix some shortcuts he had initially taken, like swapping out the before-and-after weight-loss photos for ones from real customers. Some photos on Medvi’s homepage remain A.I.-generated."
Cool, another scammy internet company preying on people's insecurities. Glad the NY Times spent the effort to tell us about it and didn't spend any time questioning this company [1].
Most of us should be honest and admit we're jealous of this guy.
He basically chose a sector where customers are desperate (weight-loss drugs), slapped a website and an interface for connecting with a drug prescription provider together, did effective marketing, and now his business generates millions a month in profit.
Like, there are a half dozen companies like his running around that essentially offer the same product and prices because they are all customer interfaces stop the same provider.
Just the other day I was downvoted and called out for suggesting that perverse incentives are hard to resist, yet here we are with the Times (apparently) showcasing another such instance.
In this case GLP1's clinical effects are widely understood though, so it is immaterial if an "artist's depiction" (artificial agent's depiction) is of a real person or purely hallucinated.
This is just like when Paypal got started and was basically operating their own bank. Good luck doing that without getting in trouble. This is selling pharmaceutical drugs over the internet. You're playing chicken with going to jail they just happened to get lucky.
I had a few people from my life send me this article because they know I've been a software engineer for 20 years and were thinking "wow, see you could do this too!". None of them noticed they were misleading customers. None of them knew the FDA sent them a warning. All of them thought this person was really smart for using AI to create a company on his own, no other humans involved.
So maybe the NY Times thought it was enough to make people question the ethics of the company to add a sentence or two of "AI-generated images/website", but in reality I think people read this as a positive solo entrepreneurship story and missed the ethical grey area and the fact that this indeed took thousands of unseen humans to build.
The opposite of an “A.I” company, he is reselling the services of another filled with humans. A great, profitable business, sure, a notable success, yes, but a 2-man billion dollar company made possible by A.I? No. Businesses like this have existed for decades and are vulnerable to their service providers stealing the business out from under them.
While the service providers are experiencing massive growth they are happy to share. When growth plateaus they will go after every cost reduction, including squeezing out non-value added resellers. Especially those with warning letters from the FDA for making false claims, as noted below.
As a distributor your value add was always making me markets. Once made, those markets are now trivial to take direct unless there is some advantage to having a local take a risk on stock- holding. I have worked in distribution and seen Amazon refuse to deal with the distributor and go direct as soon as they see decent sales, for instance.
he's making 400M+, so not a big deal, the distribution leverage is massive and now it's time to pivot and add real value appart from the huge brand he has now, i.e. through a unique customer support or who knows what. anyways, after 400M, one can say he already won the game
but this is the opposite right? they own the customer relationship. Amazon does the opposite. They control the customer relationship. Can the supplier raise prices possibly but so can they middle man. if they turn over the relationship to the provider then use bad business.
Well, this guy isn't training models in his basement—if that's what you're looking for?
I think the point of this article is that AI enables people to do so much more? Much of marketing is creating engaging content and AI allows people to create more than ever.
I’m struggling to see how anything he did is AI at all. Literally everything about his company is outsourced to an army of contracting firms. All this guy did was generate a marketing site that was filled with fraud.
So if I understand this correctly, Medvi is basically a frontend to white label telehealth services, with wildly successful targeting on an exact niche (GLP-1 served online).
So the 1.8B is effectively sales on a lead-generation opportunity where he gets to capture 20% of the sale (assuming that since his net profits are 16%), and then the backend guys do all the work and probably profit the remaining bit, assuming this line of business has ~50% margins, to these companies doing the actual work they're basically spending 20% on sales and marketing to Medvi. Because this is subscription-based, most of the costs are acquisition, and preventing churn (which is why he hired 7 contractors).
As another poster mentioned - basically this guy is dropshipping GLP1 with no moat, and my guess is that he was keeping quiet and making money till the market got saturated and now he gets to use his success as a puff piece to parlay into a bunch of other verticals like supplements, mealprep, and all that.
This guy's success is basically predicated upon him managing the branding and experience -- so good for him, but this is a middleman opportunity that is likely already going away due to me-toos (and that's why he's milking it one last time on NYT).
Isn't it capitalism? Adobe fucks you, Microsoft will "upgrade" your Office^W Copilot 365 license to 25-seats(1) if you don't notice, Tesla promises self-driving but drives you into the back of the trucks (what, you didn't read the disclaimer?), even the "leader of the free world" is now a crypto-huckster selling you bibles with his name on it... and is killing civilians in the Middle East and making profit by saying "Oh I'll stop soon!".
at least the 3-card Monty guy is dealing with you one on one. These companies hire lobbyist to make the illegal, immoral sh*t legal. Easy to keep winning the game when you write the rules.
Just because a law is bad doesn't mean breaking it is a good thing. The laws against gambling are bad, but that's because they're too loose, not because they're too strict. Breaking those laws to gamble doesn't make gambling a good thing.
It has become a bit of a pest in Germany since weed was legalized. Every other method of distribution is either inconvenient, like growing it yourself, or borderline difficult to establish, like the social clubs. Now, you just pay 10 euros, fill out an online form, and receive a prescription.
I’m not against legalization, quite the opposite but these empty promises that weed is a "cure" for anxiety, depression, and other mental illnesses are dangerous. Advertising it this way without a proper medical examination or proper follow ups is wrong. People are going to get hurt because of it and like this fellow here they started to do other drugs like GLP-1, Viagra and ofc peptides as well.
It seems Nowadays for new businesses, lawsuits, maybe even a stint in prison with a 1 million presidential pardon at the end, is all incorporated into a business cost line, in a VC investment funds planning...
The in person businesses selling them don't do much more thorough consultations in my experience, although at least they try to track your muscle mass and be sure you're not losing too much there.
The whole business model probably just comes down to high demand over supply and traditional primary care doctors not being ready to keep up with prescribing it, though? It's a temporary gap being filled in. I wonder how long it can last.
On one hand this is so impressive. On the other it seems like a company selling drugs or medical services using misleading/generated photos and reviews is not great and extremely risky.
This must largely be going into testing and generating marketing content? I am extremely curious about his processes.
Amazing - an acquaintance of ours when we lived in Germany a couple of years ago had a similar idea. But she found that telemedicine + prescription drugs (and possibly advertising law) are among the most regulated areas in a country already known for its red tape.
I didn't follow up what became of her startup idea, but there's no way she could have ever gotten it off the ground in just two months, like the guy from the article and his brother. More like two years...
Interesting baseline of how much AI can help with the profitability of a business:
> By the end of last year, Medvi had reached $401 million in annual sales and amassed 250,000 customers. It produced 16.2 percent in net profit, or $65 million, with spending going to the fees for telehealth platforms, marketing and then software. Hims, by contrast, had a net profit of 5.5 percent last year.
help me understand this. This guy is dropshipping glp-1's from a company that has a network(?) of trusted vendors which they get from the big pharma companies. And now he's doing the dropshipping thing of building a brand
I'm highly suspicious of these revenue claims because how is he doing any of the marketing? Tiktok bans you if you post ugc content saying anything about peptides. FB doesn't allow medicine to be marketed nor does google. If he's dropshipping how is he doing the marketing?
84 comments
Cool, another scammy internet company preying on people's insecurities. Glad the NY Times spent the effort to tell us about it and didn't spend any time questioning this company [1].
[1] https://www.fda.gov/inspections-compliance-enforcement-and-c...
He basically chose a sector where customers are desperate (weight-loss drugs), slapped a website and an interface for connecting with a drug prescription provider together, did effective marketing, and now his business generates millions a month in profit.
Like, there are a half dozen companies like his running around that essentially offer the same product and prices because they are all customer interfaces stop the same provider.
Do not universalize your temptation to graft
In this case GLP1's clinical effects are widely understood though, so it is immaterial if an "artist's depiction" (artificial agent's depiction) is of a real person or purely hallucinated.
https://news.ycombinator.com/item?id=47581021
> In this case GLP1's clinical effects are widely understood though
When injected. One of the products this scam company was selling is oral Tirzepatide pills, which don't do anything.
https://bsky.app/profile/masnick.com/post/3miwsjejfhk2i
"Turns out basically every aspect of that story is bullshit and the story should be retracted."
So maybe the NY Times thought it was enough to make people question the ethics of the company to add a sentence or two of "AI-generated images/website", but in reality I think people read this as a positive solo entrepreneurship story and missed the ethical grey area and the fact that this indeed took thousands of unseen humans to build.
> I’m pretty sure the writer included this and other details precisely so that readers would understand the ethics of this company.
Maybe, but it felt like this was meant to support the idea that the company is scrappy / under construction.
While the service providers are experiencing massive growth they are happy to share. When growth plateaus they will go after every cost reduction, including squeezing out non-value added resellers. Especially those with warning letters from the FDA for making false claims, as noted below.
As a distributor your value add was always making me markets. Once made, those markets are now trivial to take direct unless there is some advantage to having a local take a risk on stock- holding. I have worked in distribution and seen Amazon refuse to deal with the distributor and go direct as soon as they see decent sales, for instance.
I think the point of this article is that AI enables people to do so much more? Much of marketing is creating engaging content and AI allows people to create more than ever.
So the 1.8B is effectively sales on a lead-generation opportunity where he gets to capture 20% of the sale (assuming that since his net profits are 16%), and then the backend guys do all the work and probably profit the remaining bit, assuming this line of business has ~50% margins, to these companies doing the actual work they're basically spending 20% on sales and marketing to Medvi. Because this is subscription-based, most of the costs are acquisition, and preventing churn (which is why he hired 7 contractors).
As another poster mentioned - basically this guy is dropshipping GLP1 with no moat, and my guess is that he was keeping quiet and making money till the market got saturated and now he gets to use his success as a puff piece to parlay into a bunch of other verticals like supplements, mealprep, and all that.
This guy's success is basically predicated upon him managing the branding and experience -- so good for him, but this is a middleman opportunity that is likely already going away due to me-toos (and that's why he's milking it one last time on NYT).
This is borderline illegal.
(1) https://news.ycombinator.com/item?id=47474827
Maybe I should just stand on the street and be a 3-card-monty...
The border of legal and illegal is a good place to make money and change.
The willingess to break a bad law is a sign of a good person.
Sorry, but your implied argument is flawed.
They were already warned by the FDA: https://www.fda.gov/inspections-compliance-enforcement-and-c...
The whole business model probably just comes down to high demand over supply and traditional primary care doctors not being ready to keep up with prescribing it, though? It's a temporary gap being filled in. I wonder how long it can last.
This must largely be going into testing and generating marketing content? I am extremely curious about his processes.
I didn't follow up what became of her startup idea, but there's no way she could have ever gotten it off the ground in just two months, like the guy from the article and his brother. More like two years...
> By the end of last year, Medvi had reached $401 million in annual sales and amassed 250,000 customers. It produced 16.2 percent in net profit, or $65 million, with spending going to the fees for telehealth platforms, marketing and then software. Hims, by contrast, had a net profit of 5.5 percent last year.
Truly, if you look over his website, you would not think this is a company that generates millions in profit a year.
He claims he has switched over from using AI-generated profits to real customer testimonials. That's a misrepresentation, if not a lie.
Most of the images still look like they have the unnatural fuzziness of AI images.
Website is also coded as one long-scrolling page, again suggesting this is a company who does not offer a unique product with value proposition.
Honestly, this is a company that looks like it succeeded only by optimizing employee head count and customer acquisition cost
And if that's what it takes to succeed, fair play.
I'm highly suspicious of these revenue claims because how is he doing any of the marketing? Tiktok bans you if you post ugc content saying anything about peptides. FB doesn't allow medicine to be marketed nor does google. If he's dropshipping how is he doing the marketing?
So not one person, not two, but many.