Interview with Lihi Segal, CEO and co-founder of DayTwo. DayTwo provides personalized nutrition and actionable insights that allow you to live healthier and maintain normal blood sugar levels. 

01:00 Lihi shares the story of the fouding of DayTwo

03:46 Tell us a little bit about what we know about the gut microbiome, why you're using that, and a little bit about how that became the product that is DayTwo?

08:15 How does one become a customer of DayTwo?

10:00 What do you see as the benefits of having a real coach versus a digital one?

14:00 What are the things that you are implementing currently in order to increase adherence?

17:45 The DayTwo business model and difference between a healthy person and a Type2 diabetic person.

20:15 What have you learned when analyzing the data from your customers?

24:15 The clinical and scientific journey behind DayTwo’s technology 

28:50 How did the COVID pandemic affect DayTwo?

31:10 What are your expansion plans globally?

32:15 Are you looking at additional therapeutic areas beyond Diabetes?

33:00 Tell us a bit about the investors of DayTwo

37:35 How do you balance your personal life with the demands of being the CEO of DayTwo?

Lihi Segal, who is the CEO and co-founder of DayTwo. DayTwo provides personalized nutrition and actionable insights that allow you to live healthier and maintain normal blood sugar levels.

Lihi, you're a lawyer in training and have done quite a few roles, including CFO and others. How did you end up establishing DayTwo in 2015? 

Lihi Segal: Yes. So true. Most of my career was as CFO and COO. This is my first CEO position. And as these things go, it's an opportunity that I got from Yuval Ofek who was CEO of dbMotion. That was my first healthcare company. That's where I got very excited about marrying passion for work with something that the world really needs. He actually took me to breakfast one day at Sisense, I was the COO and CFO of Sisense, which is a great BI company, and came and said, 'You know, I met these two great scientists at the Weizmann Institute, I want you to go check it out.' I went and checked it out. They had me at hello. I came back to him and said, 'Yeah, this looks like a great opportunity.' I did not know what the plans were and then he said, 'Great, so why don't you be CEO, I'll be chairman,' and Marius Nacht is the third co-founder, and he provided the funding and that's how we all ended up here.

What's behind the name of the company? Before we go into what the company does and what is its value to patients all over the world, why DayTwo?

Lihi Segal: Well, DayTwo, alludes to the journey that you're taking when you're joining the program. It's not a diet that you start an end, kind of day one, let's get it over with, it's a journey that you're taking for the rest of your life. You're learning to eat, according to what your body needs and that's what it alludes to, like day-two and on.

We have people who are actually referring, they're doing DayTwo. Actually, it becomes like, I'm doing keto. I'm doing a keto diet while you're doing a DayTwo, right. You're on this program and you're on it for life. You learned how to eat and now you can continue doing the best for your blood sugar.

The basis for DayTwo is the gut microbiome.It's a scientific breakthrough and its relatively new scientific breakthrough, to maintain your sugar levels. Can you tell us a little bit about what we know about the gut microbiome, why you're using that, and a little bit about how that became the product that is DayTwo?

Lihi Segal: Sure, yeah, of course, we love talking about the gut microbiome. It was one of the reasons I got very excited when I met the two scientists. Two of them Professor Eran Segal, who I think all of us today recognize around COVID, and Professor Eran Elinav. These are the two scientists at the Weizmann that are behind this. What they set out to do was understand what's healthy nutrition, why we're failing miserably until that point. When the output was to say, let's stop looking at the food when we're trying to determine if it's healthy or not for us, and start looking at the body because each one is an individual, our blood sugar response is different, and we have to be able to understand what's good for one person and what's good for the other. When they set out to do this clinical trial, it's the basis of the technology that they developed. They took a look at all the things that are different across people, and they collected a lot of information without really knowing what would be more predictive and less predictive. The gut microbiome is an area that these scientists have just started, at that point, to study. They're two out of the Top Five Worldwide scientists on the gut microbiome. The gut is really trillions of bacteria that are now known to populate the gut, but also all over our bodies, skin, mouth, right, all areas.

They specifically looked at gut microbiome. Again, we're 5 years into it, and probably 10 years into, 15 years into the science of gut microbiome. That if at some point, we thought there were good bacteria, bad bacteria, and that's it. Today, we know that we have 1000s of different kinds and species and strains and genes that are involved.  They are connected or correlated, I would say to all health and disease today. So, all the metabolic diseases, of course, are tightly connected. But also, other diseases like Alzheimer's and even autism and there's the whole gut-brain access. There's a lot of connections, today, to the gut microbiome, which is really a new frontier of medicine that when I heard about it, for the first time from them, I really became very excited to be part of this new frontier in medicine. But at the same time, what I loved about this solution is that it wasn't a 7-year, 10-year drug development based on the gut microbiome, which is what most companies are doing when they're looking into the gut today.

They turned it into a data play. They turned it into a machine learning algorithm that studies all the data that was collected, including the gut microbiome. That is not the only thing that they are looking at and they developed something very actionable that we could turn into a product within a year. That was much more appealing to Yuval and me at the time and so, that's what we're doing. We're collecting a lot of information, including the gut microbiome. It's also a blood test. Age is very predictive. We even asked how many times you poop a day because we found that question to have predictive value.

Then, we run the machine learning algorithm or this predictive model. We build a predictive model for each person and then all those recommendations are accessible through a mobile app and also through a dietician. In the US, the program is targeted for people with metabolic disease. It goes through employers and payers and it's like a yearly recurring program. So, there's much more dietitian support or health coaches that support.

What do users need to do to become your client or customer? How do I join the DayTwo journey?

Lihi Segal : If you're an American, which is where the company is focused, and we'll get to Israel in a second. But the core, maybe 99% of the company's focus today on the US. So, if you are an American, you need to get this program through your employer, or through your health insurance. Then you are enrolled in the program, you get a welcome kit. The welcome kit includes a stool sample, includes a scale, includes a measurement page. It's a fully remote program so this is all being shipped to your house and you're doing it remotely, very much in line with COVID, which is why we got a very big push under COVID because we were just there with a remote program already. Then you go through profiling. You get your mobile app set up, you set up the coaches either through a group session, and it's a yearly program. You meet periodically with your group, with dieticians and then you go through some biomarking, you go through your gut microbiome test once a year. You go through blood tests, you have everything profiled again, and you continue the second year and on.

In Israel, it's provided through Clalit and it's today, provided for everyone. So even if you're healthy, you don't have to be someone that has diabetes in order to go through the program in Israel, unlike the US where it's very targeted for people with pre-diabetes or diabetes. Here, you can just do it openly through Clalit. Soon, also through Maccabi, but there I think it's going to be more targeted to metabolic disease as well.

There are a lot of questions in the market about combining an app and a personal coach. Some of the solutions are app-based and are more of a normal diet and not very medical. Some have a digital coach embedded in them. Some of them combine the two. So, sometimes it's physicians, sometimes it's the nurses and in your case, it's a dietician. What do you see as the benefits of having a real coach versus a digital one?

Lihi Segal: Gali, this is an excellent question. It's a question we're dealing with all the time and re-checking ourselves all the time. It's true, that you can either do fully human; like the program's Weight Watchers and others, until today and there is going fully digital and having everything done digitally. I think that it should always be a combination whereas a commercial company I can tell you that as much focus as we can put on the digital side to support people in their journey. In the progress, with daily nudges, to recommend things with pop-ups; to have people walk into a restaurant, and then have some pop-up window, say, 'Hey. Here are the best meals for you that score well on the DayTwo app.'

All this should be purely digital. I do strongly believe, though, that some human factor is required, and this is mainly for the behavior that goes along with what you're eating. So, we optimize what you should be eating, we optimize your recommendations. By the way, it goes a long way because when you're eating the right food, you have less hunger or less cravings. You're getting great food, you're not deprived. We're all about saying 'Yes' to food, you can find food in any common restaurant in the US. We're not saying stop eating carbs.

So, the recommendations are really important and the combinations. But when you're looking at motivation and behavior change of people and being on the DayTwo program confidently for the rest of your life, we do believe that it goes through some additional element of the human. It's not just dieticians, by the way. This is even more coaching. This is more a peer group, you have a support group, you have your community. We serve people in Israel. We learned a lot from Israel. A lot of people are asking, 'Why are we doing Israel? Why is Israel a market?' And that's a whole different podcast.

But we learned so much, not just from the data, but we stop people spontaneously because we're not supporting Israel that way. We're giving one dietitian a call, Clalit provides two, but we don't have this whole supporting system that we have in the US. But people did it on their own. There are Facebook groups, WhatsApp groups that people are just doing DayTwo together and sharing recipes, sharing recommendations.

How did you overcome this? How did you overcome that, and we see it. Then we said, let's learn from this. This is what people need in order to be able to be more effective on the program and now we're taking all these conclusions and making it structured. So, to my belief, we need some element as less as we can is better, of course, cost-wise, and gross margins and having people support people is where I think this should go.

There's always an issue of as you pointed out compliance. I know this is not a pure diet but it's a lifestyle change and we as human beings are always looking for the next best thing. We live in a world that is very tempting when it comes to our food consumption. So, what do you do in order to increase the compliance of people to the DayTwo program?

Lihi Segal: I always need to say because a lot of the people who are listening are probably Israelis with an Israeli app. The Israeli app is not the same per se as the US one because of the database that's a little bit out of our control. There's just a lot more food in restaurants and brands on the US one. So, the experience there can be a little different. But restaurants are a really good example, Americans eat out all the time. Now you can walk into a restaurant today, pull up the menu, and get a DayTwo score on every item in the menu. Unfortunately, we can't provide this to Israelis because the restaurants won't give us that information. But in the US, under the law, they have to provide it so we're able to pull it in. It's really driving the compliance and the engagement because first of all, you find great meals. As a user, you're learning that we're not restrictive as you find in other diets. Many want to get off it and find the next big magic pill that somebody else is promising you. That's really one element that we're taking you from what the things that you love eating.

We're not saying don't eat anything. We're saying let's find the combination, let's find the quantities. We'll play with the things to make you continue to eat what you love. And so, we find that there's less churn. People, for the first time, are very satisfied. Again, these are people with metabolic disease, they see it's working and when somebody sees that it's working over time, they have much less motivation to get off. But we are doing all these consumer app things that you would think, right. It's Thanksgiving, and then we'll have a new category that says, 'Hey, this is the Thanksgiving table. This is what you should be eating, share these recipes. Here's your family, this is what they're eating.' They're all these things that allow for better compliance and better engagement.

What are you seeing in that market? Do you think we're going to see more consumerization of products in health? How is that going to make our health better?

Lihi Segal: I think it's a question of whether you're chronically ill or not. If you're a healthy person paying for health care, and your wellness and well-being or if you're someone with a disease, and you're used to being paid for. Other than your participation which it's not trivial. But if you're looking at somebody with type 2 diabetes, that person can cost 10s of 1000s of dollars a year. The person is not going to pay that. They aren't going to pay. Their employer or their health insurance pays that. It is a little different.

When we went into this market, we analyzed it to see who should we approach because, for better or worse, the diet is really applicable for athletes, it's applicable for healthy people because it's a risk factor. We could have gone all over. We decided to follow the money. Then following the money in the US is not about prevention, because employees will go off one employer to the next if it's a self-insured employer. If it's health insurance, they also know that people switch insurance all the time. So, unless you're a high tenure or are a union employee, prediabetes is not a very lucrative market. Type 2 is where the ROI and the cost reduction happens. Again, for DayTwo, we're able to come and say we're driving people into remission of the disease. We're taking 1000s and 1000s of dollars off through medications and doctor visits. So I think this whole consumerism, in our case, is less applicable. But I do think that widely spread it is applicable, and we see these trends in the US. Because we do see how companies are now all about giving access to care directly to people and more control. But the big bills at the end of the day will continue to be paid by employers and health insurance. I think you just need to understand where you're playing, in our case, B2B2C. I am with you. We never lose sight of  C. We need people to be successful on the program for us to be able to stand behind our business model.

You've been working with Clalit for a few years here in Israel and along the way, you've been accumulating a lot of data, including the number of times a person poops in a day. What have you learned when you analyzed the data?

Lihi Segal: It really goes to two things. One of them is the algorithm itself. This is a machine learning algorithm. As we accumulate more data, we're training it and getting it to be more accurate. We've been there for a few years already so at some point, it becomes incremental. So, we have that and what is really happening with the blood sugar levels and how people are eating. We today, have the best average. Forget personalization, and don't quote me on this podcast saying it, but because we're on personalization. But even if you look, just at the average of people, we know today how people on average should be eating to balance blood sugar levels. It won't be perfect. We can get a much better effect, of course with personalization. But we have a much better average than, I think, anybody else in the industry is holding today. This is something that surprises us. We had some articles on this a while ago. Everybody eats in Israel, at least the rice cakes, [Israeli snack name]. I've yet to find a person whose blood sugar level does not spike on these little rice things. They have to be combined with something else and again, if you personalize what really works, otherwise, just put some protein or fat on it and it will be better. But it's terrible for most people. Orange juice is another example. It's horrible for most people. So, there're certain things that we know today that people need to just avoid, if they don't know how to combine it, just don't eat it. It's terrible. So, we have insights into the food. But the most interesting thing that we have is the insights into the gut microbiome. So, really a dual strategy from the start. I mentioned in the beginning, I was very excited about the gut microbiome, but did not want to wait for some drug development and the way we looked at it was, in a dual strategy way. We sell something very actionable, our entire company is focused in one direction, which is this product and posting your control. But while we do this we have accumulated a lot of important data on the microbiome. This is where it gets interesting because we can have additional products developed based on it, which are either very strategic to what we're doing or totally off, and then we can provide this to someone else to commercialize. But there's a lot of potential in the data itself on the microbiome that's really interesting. This is again, a collaboration with Weizmann to date. So, researching the data with us or even alone, and then we share the results.

Oranges in general and it's always better to eat the orange than drink the juice, just so we're clear. Fiber and there's all the things that maybe dietitians have known in the past. This is not new to them. We just gave them the validation which is a lot of things that do happen when we see all the data.

I want to ask about the science and the microbiome. When you are commercializing an innovative scientific discovery as opposed to science that has a lot of backing and publications, you have to face the market in a different way. Are there any things that you are doing specifically to go to market because it's a scientific innovation that other startups don't have to do?

Lihi Segal: I have to correct you because when I talked about this in the beginning, I said that I didn't want a long-term project like a drug. Not that it's not scientific. This company because of how we were born our DNA is very scientific and we invested millions in this post-Weizmann. So, because it's about microbiome because it's this machine learning algorithm that balances your blood sugar. Actionable as it is, we still got questions. How do the algorithm works? You're giving me a score a 7, a 9? How do I know it's true? Now we're able to say to people, well, do the program, if you have diabetes, you're going to see your baseline glucose in the morning improves immediately within a few days.

When we started out, and especially before we had all this data. First of all, we already had a clinical trial that was done by Weizmann not funded by DayTwo before we were even a company that showed and was published in a Peer-reviewed-Journal, by Eran Segal in 2015. So, all that science was behind us. It showed that the algorithm works. It showed how people were balancing a spiking diet and non-spiking. There's a great TED talk from Professor Segal. So that was all done already. So, we knew we were on a very solid scientific basis. Even though we knew that, when we went into the US market, we replicated that trial with the Mayo Clinic. That was one of the first tasks that we had as a company. Let's not have this is a crazy Israeli thing, or how do we know if it works for Americans or not, because that was always the target market. Only until 2019, when the results were published in JAMA, which is a peer-reviewed, and the American Journal of Clinical Nutrition. That's when really we're able to walk into health insurance or an employer and get the attention because we had the Mayo Clinic validation and stamp on it. We also did a randomized control trial, right. We also did really just people on our diet, people on the standard of care. We had to invest in clinical data, it would not be enough to just walk in. We tried, by the way. Just walking in and think, 'Oh, we have a great sales paper. We have this great… But it wasn't enough. It wasn't enough. So, if other startups are looking at this if they are... Again, if it's just an app that somebody can download, it's different. But when you're grounded on something that's actionable, and needs proof, and is groundbreaking, and something that people don't know, you have to invest in the scientific evidence.

It's good to plan on clinical trials. Whichever market you plan to go into just plan on, having funding to have clinical trials in those countries?

Lihi Segal: Well, yeah. Now I have to say that we won't need to do this for every single market going in because we have enough data to show that it crosses borders today and ethnicities. But you have to have some grounding on that in order to show. People always ask if the microbiome is the same, is the microbiome different. We're saying microbiome but we should be talking metabolism in general. It goes beyond the microbiome, it goes into the entire makeup of the body, which is different. When you're going into Asia, it's not necessarily the same, but we showed it once in Asia, and now I don't think we'll have to repeat ourselves.

How was last year for you? I read somewhere that when COVID hit your income went to zero, maybe a little less than that. What did you do and how did you react?

Lihi Segal: For about two weeks and we're talking about the Israeli market that just went into a freeze. But COVID last year was overall very good for us. The target market is the US a full telehealth remote program, in the area of type 2 or metabolic disease, all the pre-existing conditions. I think it was 30% of all deaths resulting from COVID were in people with diabetes. So, any company that has a remote telehealth and diabetes solution in the US, I think did very well under COVID. We got a lot of great accounts and customers and a lot of proof points during this year. It's very great for us in that sense. In Israel for two weeks, three weeks, we did have a drop. Everybody was very concerned. But I told everybody that nobody can stay at home like this without eating, stress. I doubt you remember this, but after the first quarantine, there began all the jokes about, 'It's great that we're quarantine but how are we going to get out the door?  I said to my commercial guy in Israel this is the time to start social and Facebook and start selling again. Because this is the point to hit. Everybody calmed down, understood that nobody's dying and now's the time. So, our sales picked up, immediately. So, it was a blip, but we did okay.

Where are you selling right now, other than Israel and North America? What are your plans globally?

Lihi Segal: Right now we're selling in Israel. Again, in Israel, it's mainly through B2B. I mean, it is open if you want to come and purchase directly, but we are not investing in acquiring new customers other than through the HMOs. All hands-on deck on the US for us. So, over the next two years, we're heavily focused on getting the US market into where it needs to be which means 10s of millions of dollars of sales. International, our strategy for international is finding good, large, well-known partners, who will take this solution and develop. We have an API for our core engine, which can be pulled into other applications. There are a few things in processing.

Are you looking beyond sugar levels, in areas such as IBD, mental health? I mean, there are so many different areas you can go into.

Lihi Segal: There are so many different areas. So, we are looking at additional things. They all need to be things that we can strategically sell to the same target audience if we're looking at the US. But there's potential for collaborations on the platform that goes beyond what we are doing, specifically for our markets. That's collaborations with Pharma companies, with other food companies. There's a lot of things and projects we are looking to do with other partners on the database.

You have an interesting mix of investors at DayTwo. Was that a choice that you made in terms of who would invest in the company? Does it have to do with the type of product that you have or was it just kind of a chance and just a group that was very interested in supporting?

Lihi Segal: First of all, it's always a choice. We always hope to have choices in our investors. And thankfully, we have all the choices in this case. Our lead investors are aMoon and Marius Nacht, a co-founder. REITs invested out of his family office and amazing for us, go to a $1 billion fund, investing in healthcare in Israel. So, we have continuous support from them, which is amazing for us.               When we were looking at the clinical trials and proving the scientific side, J&J (Johnson & Johnson) as a Pharma company, invested and looked together at the prediabetes market with us. That was definitely strategic for us to have them as partners. The rest of the investors are either just very good financial investors that bring value from the experience and healthcare or can open up international markets as well.

We have a company or two that are very strong in Asia, with a potential for international expansion at some point. Also, a fund that invests solely into the microbiome, is one of our investors. So, that was definitely something that we could cross across different companies different knowledge bases. That was very helpful on the microbiome side. So, it's a combination, as you heard from us, and what we need.

Because they're very diverse, I'm assuming each of them has different backgrounds and knowledge of the market and capabilities, and probably managing such a diverse group is not easy. Do you have any tips for CEOs who have such a diverse group of investors, what you think works for you, and kind of managing that on a daily or quarterly basis?

Lihi Segal: Well, first of all, I think this is something that people probably should know without me, but transparency is key. So, getting your board to feel that they know what's going on, and everything is very transparent whether it's monthly reporting, and quarterly meetings, or whatever the cadence depending on the stage. I think it's very important to keep the board as small as you can manage a larger board. It tends to inflate. The investor, they just want an observer, and we always treated our observers with the same respect that we treat our board of directors. So, if you're prepping them, and you have so many, it becomes too much. If you see that it is growing, then condense it, change it, bring the partners to the table, and make the changes. Keeping it really small is key to being able to manage it. The different backgrounds and the fact that not everybody knows the US market, per se, is, I found less of an issue. First of all, most of the investors today, if they're in healthcare they're investing in the US. They know the US healthcare market.

Usually, it's not people who are starting from scratch. So, it tends to fix itself in that sense. It's different backgrounds maybe but it's self-insured employers, health plans. At some point, every startup that sells in the US, unless they're totally consumers, will touch one of those. So, we didn't really find that to be a problem. They're very knowledgeable and they're very helpful. And they're able to access contacts and connections and network. That's also the key. Try to find those that help you. We've been very fortunate.

You're managing investors and employees, and partners, etc. That's a full-time job. In addition, you're managing at least two territories at the same time How are you managing your personal life? Because I know that you have some children of your own. Can you give the listeners maybe tips for time management and how to do some things that are maybe fun along the way besides the work-related fun of course.

Lihi Segal: People sometimes ask, 'What are your hobbies?' and I say, 'Work', and it's convenient. Again, that you're really passionate about work and it's always fun to do. So, I think that's key. First of all, if you want to do something like this, you have to be a very high energetic person. There are not enough hours in the day, sleep becomes a luxury. Although with a growing understanding of the importance of sleep, it's becoming to be problematic. At some point in time, more than that, I didn't even realize the damage by not sleeping. I just thought, 'I need less, and I'll sleep less'.

Now I'm trying to say you would need to sleep, so it's becoming this challenge. But what worked for me, the juggling between the kids and I have three boys that are mine and I have another three step kids from my partner's previous marriage, who are a little bit older. But still, it's like a full house and full managing situation, in this case. The only thing that worked for me was to work for at least two time zones. Sounds funny but if I want to be able to be with the kids in the afternoon, I need to be able to have time to complete what needs to get done. When you're CEO or an executive position, it's not just working on your own, it's usually meeting with others. So, I worked three shifts, as I said. When you go to work, and then in the afternoon or an evening you're with the kids and then you start the night shift every day or every night. I have amazing stories when talking to analysts after the kids were asleep and then waking up and still continuing to do the analysts call while feeding my kids and things like that. So, you just have to be able to, first of all, multitask to death and be very high energy, I think in order to do it. But if you have that combination, it's totally doable.

I think that the other thing is, understanding that it's 24/7. I will be with my kids, Friday morning, and then work Friday afternoon, and I don't think I'm sacrificing anything while I'm doing it because I got to be with them. Like I just treat the entire week as if it's open between work, I don't put these boundaries. At least that worked for me. Some people say that that doesn't work for them. Some people need very strict boundaries and that's the only thing that works.

For me, these whole, never-ending boundaries are what allows me to be there and not be there. I'll take some kids to scouts, sit outside for an hour, and I will work that hour and be on a call. So, it's just weaved in, in a very natural way and the kids got used to it and I try, when I'm with them to be with them and when I'm without them, I don't think about them and that's what works for me.

Lihi Segal's Profile on LinkedIn

DayTWO's website

Prof. Eran Segal's TED talk about the microbiome