Health Spaces Are Becoming the New Consumer Wedge

Jake and I have been bopping around the city for NY Tech Week.

Yesterday we caught a panel with two friends of the fund. Dr. Jonathan Leary of Remedy Place, and Cody Levine, co-founder of Smile House. Different concepts, same general read on where this whole thing is going.

Dr. Leary reported events are now a significant piece of Remedy’s business, one of their fastest-growing lines. And corporate wellness, the part everyone assumes is some procurement process, almost always starts as an experience first. The contract, the membership, the rest of it, all of that is downstream.

For a long time the four-wall stuff was the slow, expensive corner of consumer health. Capital-heavy, hard to scale, the thing you built once you already had a brand and could afford the real estate. You’d earn the customer somewhere cheaper, then maybe open a space.

That’s flipping. The space is becoming how you get the customer in the first place.

A good health space does something a product or an app can’t do on its own. You walk in skeptical. You do the thing. You feel better in your body within the hour. That’s trust, earned through your own experience, in one visit. Hardest kind of trust to fake, easiest kind to act on. You rebook. You bring a friend. You tell people where you go.

We believe in the theory that the space is the entry point. The real question is what it’s an entry point to.

A few directions, and the good operators run more than one at once.

A wedge to product. The people who trust the experience buy the thing by the door. The supplement, the recovery tool, the device they just used. Highest-intent distribution channel in consumer health, because the customer is standing right there having just felt it work.

A wedge to recurring revenue. A visit is a transaction. A reason to come back on a cadence is a business. Membership turns a good afternoon into a habit, and habit is where the margin lives.

A wedge to the health relationship itself. Someone who comes in every week gives you a read on their body that a doctor they see once a year never gets. Recovery, sleep, stress, how they’re trending. Done right, the space becomes the place someone actually manages their health from. A primary care relationship built on a brand they chose, minus the clinical dread.

A wedge to community. The room is where a tribe forms, and a tribe is both a moat and a marketing engine. The thing competitors can’t copy by just spending more.

I’ve got some serious scar tissue here. I spent years building and scaling four-wall businesses before I ever wrote a check, so I have a lot of respect for how hard this actually is.

The hard part is real. Every new location is a pile of capital out the door before a single customer walks in. Lease, buildout, permits, equipment. The math is unforgiving, because rent and labor don’t care how slow your Tuesday was. It doesn’t compound like software. Each door is a new team to hire, a new standard to hold so the tenth location feels like the first. And it all lives or dies on utilization. An empty room is the most expensive thing in the business.

So in this arena, I go in skeptical and look for what is likely to break first.

None of that has cooled me on the category. The trust a space builds in one visit is the exact thing every other health brand is burning millions trying to manufacture online. The expansion stack is real: product, membership, the health relationship, community, all of it riding on something the room already earned. The good ones throw off cash instead of lighting it on fire. And the timing helps. People are starved for in-person, and they’ll pay for it in a way they just won’t for another app.

We sat down with another friendly fund yesterday too, one running a thesis close to ours. Spent most of it comparing notes on how we each underwrite early-stage four-wall companies, and we landed in a lot of the same places. Low capex. High average order value. Loyalty you can read in repeat visits. Room to grow into product or a digital layer once the space has earned the relationship.

Pull it together and it’s simple (or maybe simpler). You could argue a health space could be the cheapest, fastest, stickiest place to earn someone’s trust, and trust is the one thing every other health product needs and none of them can buy.

That’s our whole thesis, made physical. People are already making health decisions without the system. The brands that win earn that decision through trust and community before a clinic or an insurer is ever in the picture. A health space is the most physical way to build both.

For more health companies than you’d think, the front door might just be a literal door.