- Daybreak Health is a company focused on building a digital mental health system for children and youth.
- The CEO, Alex Alvarado, has a personal mission to solve the youth mental health crisis after his younger brother struggled with depression.
- The company aims to address three main challenges: identification and triaging of mental health issues, designing mental health treatment for children and adolescents, and reducing the cost of care.
- Initially, the company faced challenges in identifying their target market, but they have now shifted to a blended B2B to C model, working with school districts and health plans.
- The CEO is excited about scaling the company and expanding their services to more children.
- The societal attitude towards mental health is changing, particularly among the younger generation, and there is increased funding and infrastructure support for addressing mental health issues in youth.

- The speaker is expressing gratitude for the audience's support and encouragement
- They mention the importance of continuing to fight for a cause
- The speaker appreciates being invited to participate in the discussion

In celebration of Hispanic Heritage Month, we are honored to share the stories of our Hispanic founders.

In this interview, we speak with Alex Alvarado, CEO & Co-Founder of Daybreak Health (YC S20), a company building the leading digital mental health system for children and youth. 

Alex talks about the importance of addressing adolescent mental health issues, the unique challenges involved with trying to get kids treatment, and why he feels Daybreak is entering a very exciting new chapter in its story.

Meet more YC Latinx founders and learn about what they're building at https://www.ycombinator.com/companies/latinx-founders

Hello, I'm Steven from Artifact and today on MeetYC, I'm speaking with Alex Alvarado, 1 of the founders of Daybreak Health.

Daybreak has a really important mission and they're at a very exciting point in their journey as a company.

I'm the CEO at Daybreak Health, where we're building the leading digital mental health system for children and youth.

There's about 20 million kids ages 6 to 24 that are struggling with mental health issues.

So we're trying to solve that problem in the United States and I can talk more about that in a little bit.

But just to give you a little bit of a sense of my background and how I got here, My passion has always been healthcare.

So ever since graduating from Stanford, I've worked in various different healthcare environments, usually wedded with technology in some way.

So I worked on the first insurance exchanges under Obama's administration.

And then I went more into the private sector.

I really wanted to build from the ground up.

So I joined a company called GIF, which is an employer health benefits platform as their first product hire helped grow that to an acquisition.

And then most recently was a leader on the product team at Castle Health, which is another healthcare company that works in employer benefits space.

So, you know, my background has always been on product building, delightful experiences for users and trying to marry.

That with the complication that is the healthcare system and Daybreak was a really personal, mission for me.

And it continues to be a very personal mission for me.

My younger brother ended up in the hospital in the emergency room as an escalation from teenage depression in his early 20s and really just opened my eyes to how difficult it can be at that age to get the care you need.

And ultimately I ended up, after helping a vet get back on his feet as a brother, first and foremost, I ended up deciding to dedicate the next, whatever, however long it takes in my life to try to solve this problem that is the youth mental health crisis.

Well, can you speak a bit more about what the unique challenges of getting that kind of care at that age are and what you guys are doing to try to solve those?

Number 1 is identification of the problem and triaging that problem into treatment.

About 12 years usually pass between symptom onset and treatment when you are an adolescent.

And it's usually because the signals are coming from a bunch of different places.

Your parents might be noticing something, but usually they're actually not the first people to notice.

And then sometimes your pediatrician may know something, but usually isn't well equipped to get you into the right care.

And so identification of that need is, and triaging that into care is really tough.

Number 2 is just historically, you know, mental health treatment has not been designed for children and adolescents.

It's been designed for this single person.

That is the adult was their own decision maker and can engage one-on-one with the therapist and can make decisions about their healthcare.

And it really hasn't taken into account historically that when you're working with kids, you've got to work with their parents, you've got to work with their family unit, you've got to work with their school.

And so we're trying to build kind of the first we call it multiplayer therapy system, where what you have is an integrated dream model that encompasses all of those different stakeholders.

And then the last thing that's been a really big challenge in this space is just the cost of care, right?

Therapy sessions can cost $200 a session.

Historically, they haven't been sponsored by health insurance.

They're also not available through school programming.

Fortunately, some of the tides around that are shifting and we're trying to take advantage of that so that we can build a world where every kid can get access to high quality mental health care for free, regardless of their socioeconomic background.

Let me ask, I mean, you talked about the challenges that Daybreak is trying to address.

What have been some of the biggest challenges that you've faced as you've gotten going?

You know, the first biggest challenge we faced was, who do you build the solution for and who do you market it to?

1 of the reasons there hasn't been a lot of innovation in this space is that when you think about where the wallet is or where the buyer is for that care, it becomes a lot trickier, right?

You have to think about the parents, you have to think about public funding, you have to think about insurance funding.

And for us trying to navigate in the early days, who are you marketing to?

Who do you ultimately have to drive outcomes for to make this a viable product in the market has been a challenge.

And, you know, we, we evolved from marketing to the teens, realizing that they don't really have the buying power to make their own healthcare decisions.

We then evolved to marketing more directly to parents and that worked for a while.

But ultimately, even parents' ability to afford a solution like this is limited, right?

And it limits you to probably the upper 20% of the socioeconomic ladder when it comes to people being able to buy their own therapy.

And so now we've evolved to a blended B2B to C model where we're still serving youth and parents, but most of the funding for our services comes from school districts or more health plans.

And I think we've really found something there, but it took us a while to kind of navigate that landscape.

And I think we are at this really, really exciting point now where we think we've figured it out.

Things are starting to move really fast with health plans and with school districts, as I mentioned.

And so what I'm really excited about over the next 18 months is the challenges changing from how do we find product market fit to how do we scale this as quickly as possible, get it into as many kids hands as possible over the next 18 months.

We're in California only today, but I'd like to expand and, you know, continue to grow the business at a, what will be an increasingly rapid rate.

And obviously there's a bunch of challenges that come with scaling the team, scaling, how we think about providing a quality clinical product and all of that.

But fundamentally, the really exciting challenges, this is what you live for as a startup founder is that moment you really feel like you've got a solution in the market that resonates and scaling it up is the biggest thing that you've got to do.

Besides yourself, who are a couple of people who have been influential in this story and who are some people who have maybe either influenced you personally as you've been starting this company or who have helped you guys make it what it is?

I mean, first and foremost, my 2 co-founders, Sid and Luke, who I've worked with a lot in previous lives and both bring a lot of passion to this space.

Sid's sister is actually an adolescent adult therapist.

So he brings up a personal connection from that lens.

And they've been with me pretty much since day 1, you know, Luke bringing the technical side of things and Sid bringing the operational chops to really scale what we're doing.

And so definitely couldn't have done any of this without them and the early employee team as well.

So I'd say that's kind of like the biggest impact so far.

And I think looking forward, the most exciting thing, as I mentioned before, in terms of insulins and just thinking about who's really going to be important in this story is the district leaders and the health plan leaders who are, you know, making the big courageous decision to step forward and provide mental health solutions for their population and in ways that haven't been done before.

So that's kind of my looking forward take of who's going to be most important as we move forward.

You said earlier, I think, that people were starting to adjust their attitudes and that there may be a lot more hope for adolescent mental health in the future.

What are a few things that are giving you hope on that front?

So number 1 is that the attitude, the societal attitude and what we always talk about as stigma around mental health is changing.

And in particularly among this youngest generation, Gen Z, you know, they're open, they're talking about mental health, they're vulnerable, and it's just amazing to watch.

And it gets me really excited for even things that my generation weren't open to doing in terms of engaging in our own mental health and thinking about it and trying to be proactive about it.

The second thing is just from a, an infrastructure and kind of call it like a, a macroeconomic perspective.

I think that all the way from the federal government down into the state and local governments, you're seeing this shift of bringing more funding to solving this problem.

And that is incredibly important for businesses like Daybreak to be able to scale.

But it's also really important for all the other organizations that are involved in providing mental health care to youth to be able to provide their services and meet the need.

And there's kind of like a once in a generation shift that's happening right now.

To me, I think what everyone now recognizes is a true crisis, right?

Like I said, there's 20 million kids, ages 6 to 24 that are struggling with mental health issue, up to 1 third are struggling with anxiety.

And that has really only sort of been accelerated during the pandemic.

So there is that big sort of scary part of it, right?

The crisis, but I think the societal readiness to address the problem as well as the infrastructural and funding readiness to address the problem is really what gives us kind of a hopeful outlook for me.

It was really great to hear about this company.

And yeah, thanks for joining me and keep fighting the good fight, I guess.


Speaker 0: Hello, I'm Steven from Artifact and today on MeetYC, I'm speaking with Alex Alvarado, 1 of the founders of Daybreak Health. Daybreak has a really important mission and they're at a very exciting point in their journey as a company. So without further ado, Here's Alex.

Speaker 1: My name is Alex Alvarado. I'm the CEO at Daybreak Health, where we're building the leading digital mental health system for children and youth. There's about 20 million kids ages 6 to 24 that are struggling with mental health issues. So we're trying to solve that problem in the United States and I can talk more about that in a little bit. But just to give you a little bit of a sense of my background and how I got here, My passion has always been healthcare.

So ever since graduating from Stanford, I've worked in various different healthcare environments, usually wedded with technology in some way. So I worked on the first insurance exchanges under Obama's administration. And then I went more into the private sector. I really wanted to build from the ground up. So I joined a company called GIF, which is an employer health benefits platform as their first product hire helped grow that to an acquisition.

And then most recently was a leader on the product team at Castle Health, which is another healthcare company that works in employer benefits space. So, you know, my background has always been on product building, delightful experiences for users and trying to marry. That with the complication that is the healthcare system and Daybreak was a really personal, mission for me. And it continues to be a very personal mission for me. My younger brother ended up in the hospital in the emergency room as an escalation from teenage depression in his early 20s and really just opened my eyes to how difficult it can be at that age to get the care you need.

And ultimately I ended up, after helping a vet get back on his feet as a brother, first and foremost, I ended up deciding to dedicate the next, whatever, however long it takes in my life to try to solve this problem that is the youth mental health crisis.

Speaker 0: Wow, yeah. Well, can you speak a bit more about what the unique challenges of getting that kind of care at that age are and what you guys are doing to try to solve those?

Speaker 1: Absolutely. So we think about 3 big challenges. Number 1 is identification of the problem and triaging that problem into treatment. About 12 years usually pass between symptom onset and treatment when you are an adolescent. And it's usually because the signals are coming from a bunch of different places.

They might be coming from school. Your parents might be noticing something, but usually they're actually not the first people to notice. And then sometimes your pediatrician may know something, but usually isn't well equipped to get you into the right care. And so identification of that need is, and triaging that into care is really tough. So that's number 1.

Number 2 is just historically, you know, mental health treatment has not been designed for children and adolescents. It's been designed for adults. It's been designed for this single person. That is the adult was their own decision maker and can engage one-on-one with the therapist and can make decisions about their healthcare. And it really hasn't taken into account historically that when you're working with kids, you've got to work with their parents, you've got to work with their family unit, you've got to work with their school.

And so we're trying to build kind of the first we call it multiplayer therapy system, where what you have is an integrated dream model that encompasses all of those different stakeholders. And then the last thing that's been a really big challenge in this space is just the cost of care, right? Therapy sessions can cost $200 a session. Historically, they haven't been sponsored by health insurance. They're also not available through school programming.

Fortunately, some of the tides around that are shifting and we're trying to take advantage of that so that we can build a world where every kid can get access to high quality mental health care for free, regardless of their socioeconomic background.

Speaker 0: Let me ask, I mean, you talked about the challenges that Daybreak is trying to address. What have been some of the biggest challenges that you've faced as you've gotten going?

Speaker 1: You know, the first biggest challenge we faced was, who do you build the solution for and who do you market it to? 1 of the reasons there hasn't been a lot of innovation in this space is that when you think about where the wallet is or where the buyer is for that care, it becomes a lot trickier, right? You have to think about the parents, you have to think about public funding, you have to think about insurance funding. And for us trying to navigate in the early days, who are you marketing to? Who are you building for?

Who do you ultimately have to drive outcomes for to make this a viable product in the market has been a challenge. And, you know, we, we evolved from marketing to the teens, realizing that they don't really have the buying power to make their own healthcare decisions. We then evolved to marketing more directly to parents and that worked for a while. But ultimately, even parents' ability to afford a solution like this is limited, right? And it limits you to probably the upper 20% of the socioeconomic ladder when it comes to people being able to buy their own therapy.

And so now we've evolved to a blended B2B to C model where we're still serving youth and parents, but most of the funding for our services comes from school districts or more health plans. And I think we've really found something there, but it took us a while to kind of navigate that landscape. And I think we are at this really, really exciting point now where we think we've figured it out. Things are starting to move really fast with health plans and with school districts, as I mentioned. And so what I'm really excited about over the next 18 months is the challenges changing from how do we find product market fit to how do we scale this as quickly as possible, get it into as many kids hands as possible over the next 18 months.

We're in California only today, but I'd like to expand and, you know, continue to grow the business at a, what will be an increasingly rapid rate. And obviously there's a bunch of challenges that come with scaling the team, scaling, how we think about providing a quality clinical product and all of that. But fundamentally, the really exciting challenges, this is what you live for as a startup founder is that moment you really feel like you've got a solution in the market that resonates and scaling it up is the biggest thing that you've got to do.

Speaker 0: Besides yourself, who are a couple of people who have been influential in this story and who are some people who have maybe either influenced you personally as you've been starting this company or who have helped you guys make it what it is?

Speaker 1: Absolutely. I mean, first and foremost, my 2 co-founders, Sid and Luke, who I've worked with a lot in previous lives and both bring a lot of passion to this space. Sid's sister is actually an adolescent adult therapist. So he brings up a personal connection from that lens. And they've been with me pretty much since day 1, you know, Luke bringing the technical side of things and Sid bringing the operational chops to really scale what we're doing.

And so definitely couldn't have done any of this without them and the early employee team as well. So I'd say that's kind of like the biggest impact so far. And I think looking forward, the most exciting thing, as I mentioned before, in terms of insulins and just thinking about who's really going to be important in this story is the district leaders and the health plan leaders who are, you know, making the big courageous decision to step forward and provide mental health solutions for their population and in ways that haven't been done before. So that's kind of my looking forward take of who's going to be most important as we move forward.

Speaker 0: You said earlier, I think, that people were starting to adjust their attitudes and that there may be a lot more hope for adolescent mental health in the future. What are a few things that are giving you hope on that front?

Speaker 1: It's a really important question. I'm glad you asked it. So number 1 is that the attitude, the societal attitude and what we always talk about as stigma around mental health is changing. And in particularly among this youngest generation, Gen Z, you know, they're open, they're talking about mental health, they're vulnerable, and it's just amazing to watch. And it gets me really excited for even things that my generation weren't open to doing in terms of engaging in our own mental health and thinking about it and trying to be proactive about it.

So that's, that's 1 thing. The second thing is just from a, an infrastructure and kind of call it like a, a macroeconomic perspective. I think that all the way from the federal government down into the state and local governments, you're seeing this shift of bringing more funding to solving this problem. And that is incredibly important for businesses like Daybreak to be able to scale. But it's also really important for all the other organizations that are involved in providing mental health care to youth to be able to provide their services and meet the need.

And there's kind of like a once in a generation shift that's happening right now. To me, I think what everyone now recognizes is a true crisis, right? Like I said, there's 20 million kids, ages 6 to 24 that are struggling with mental health issue, up to 1 third are struggling with anxiety. And that has really only sort of been accelerated during the pandemic. So there is that big sort of scary part of it, right?

The crisis, but I think the societal readiness to address the problem as well as the infrastructural and funding readiness to address the problem is really what gives us kind of a hopeful outlook for me.

Speaker 0: Yeah, well, that's really great to hear. And that's about all the time we have. But thank you. It was really great to hear about this company. And yeah, thanks for joining me and keep fighting the good fight, I guess.

Speaker 1: Thanks. Really appreciate it. Thanks for having me on.

See all Y Combinator transcripts on Youtube

Meet YC: Interview with Alex Alvarado of Daybreak Health (YC S20)