Summary of the Core Content
This article focuses on the downfall of the digital healthcare company Done Global. Initially, it aimed to address the real issue of difficulty in accessing medical care for ADHD patients in the United States. However, due to an excessive pursuit of growth, it turned healthcare services into a closed-loop system that effectively sold medications through efficient marketing strategies. As a result, the founder He Rujia (sentenced to 6 years in prison) and his partner Brody (sentenced to 2 years in prison) were convicted. By analyzing Done Global’s five stages of decline, the underlying mechanisms behind these failures, and comparing them with similar cases in other industries, the article serves as a reminder to entrepreneurs that growth is not everything. If a business model causes more harm to customers as it grows, it will ultimately lead to disaster.
Done Global: From Solving Problems to Illegal Medication Sales
Done Global’s intentions were good: there was a shortage of psychiatrists in the U.S., and ADHD patients had to wait for months to get appointments. After the pandemic relaxed regulations on telemedicine, the company hoped to use online consultations to enable patients to obtain medication more quickly. But eventually, it turned healthcare into a money-making machine:
- Advertising for Patients: The company spent $40 million on social media to create demand, implying that everyone with poor concentration had ADHD, thereby attracting more potential customers.
- Simplifying the Process: The initial consultation time was halved, and the process became more like a formality rather than a thorough medical evaluation.
- Doctors Forced to Prescribe Medication: Doctors were offered high salaries (up to $60,000 per month), incentivizing them to prescribe quickly; those who did not comply were fired.
- Subscription-Based Replenishment: A monthly subscription model was implemented, preventing doctors from stopping patients’ medication use, even in cases of death.
The more efficient this closed-loop system became, the greater the risks for patients. For example, when a mother reported that her child developed psychiatric symptoms after taking the medication, the company continued to refill the prescription.
Five Stages of Decline: Each “Optimization” Step Crossed a Red Line
Done Global did not suddenly go bad; it gradually slipped into trouble:
1. From Helping Patients to Attracting Customers: The company’s focus shifted from providing effective care to attracting more paying users, with advertising shifting from informing about the need for treatment to creating the perception that certain behaviors indicated ADHD.
2. From Improving Efficiency to Reducing Medical Judgment: The internet industry values simplicity and quick conversion, but in healthcare, detailed consultations are essential for accurate diagnoses; Done Global eliminated these steps.
3. From Empowering Doctors to Managing Output: Doctors, who should be responsible for controlling risks, were evaluated based on their prescription speed and volume, becoming mere cogs in the growth machine.
4. From Treating Patients to Managing Users: The subscription model meant the company wanted patients to continue taking medication indefinitely rather than recovering and stopping it, turning patient dependence into a source of revenue.
5. From Explaining Problems to Concealing Them: After the investigation began, He Rujia deleted evidence, transferred assets, and even sought countries without extradition agreements, completely crossing legal boundaries.
Why No One Stopped It? Underlying Mechanisms Hidden the Dangers
The problem was not simply due to greed; rather, a series of factors contributed to the failure:
1. Misapplication of Methodology: He Rujia applied internet tactics (lowering barriers and increasing conversions) directly to healthcare, leading to lower diagnostic standards and higher subscription rates.
2. Conflict between Business Model and Customer Interests: The company’s profit came from patients’ ongoing medication use, while their best interest was to recover and stop taking the drugs.
3. Metrics Replacing Purpose: Instead of focusing on health improvement, measurable metrics like registration numbers and prescription rates were used as indicators of success, shifting responsibility away from health outcomes.
4. Professional Power Coerced into Compliance: Doctors, dependent on high salaries, were incentivized to prescribe more medication, preventing any opposition.
5. Founder’s Self-Rationalization: He Rujia believed they were just improving efficiency and that regulations could not keep up with innovation; the more successful the company became, the more convinced he was of his actions’ legitimacy.
This Is Not an Isolated Case: Growth Obscures Problems in Other Industries
Done Global’s issues are common in other industries:
- Wells Fargo: Employees created millions of fake customer accounts to meet sales targets, with incentive systems making such violations seem rational.
- Boeing 737 MAX: Safety was neglected to meet deadlines and cut costs, leading to two fatal crashes—growth took precedence over safety.
- Purdue Pharma/Juul: Purdue downplayed the addictive potential of its painkillers, while Juul made nicotine consumption fashionable among teenagers; both companies tied revenue to customer dependence, with societal costs borne by the public.
Five Questions for Entrepreneurs to Ask Themselves: Preventing a Similar Tragedy
To avoid a similar outcome, entrepreneurs should ask themselves:
1. Will problems multiply tenfold with tenfold growth? If more misdiagnoses and addictions result from growth, then growth is a problem amplifier, not a solution.
2. Will customers still need you when they improve? If customers no longer rely on your services after recovery, your model relies on their dependence, not on creating value.
3. Can risk departments stop the business if needed? Do compliance and safety teams have the authority to make decisions, such as denying unnecessary prescriptions?
4. What does the company reward? Is it customer satisfaction or metrics like subscription rates and average transaction values? Employees will follow the rewards.
5. Does your growth system have brakes? Are there thresholds for risk indicators that require stopping customer acquisition, or are there profits that should be avoided even if legal?
In conclusion, while growth can drive success, it can also lead to disaster if misdirected. Entrepreneurs must understand when to stop.