Brian,
After skepticism to the point I tore apart one of their clinical trials, I came to your same conclusion. I bought a large amount of Livongo 5 or so weeks ago. I initially was very skeptical due to two things: (1) clinical trials, and (2) like what is the value add and CAP here? I tossed it aside after looking at the numbers, and realizing that this is a tremendous and disruptive (disruptive in creating green fields, not setting aside other solutions) in medicine.
There are two things in all of medicine that can save the most money and produce the most marginal improvement in medical outcomes: (1) exercise (and people are out there counting their steps these days, Fitbit and Apple have not hurt there), and (2) compliance with cardiovascular and metabolic disease. This latter point is an enormous and unsolved pain point. Here comes Livongo that finally produces a solution, and a solution that saves its customers (large medical networks) money.
Livongo is not a monopoly (VIDA, for example, is what is used by my health insurance network) but Livongo is the clear and undisputed leader in the market. It reminds me of ISRG (that was a clear monopoly) who was derided by medical insiders as no proof of improved outcomes, too expensive, and the like. Yet, the numbers spoke SO WHAT! ISRG did eventually produce those clinical outcome trials, but only years later.
Anyway, once I figured this out, and that this does not appear to be a commodity market, AND Livongo still has not expanded internationally, and its indications are mostly new and still really unexploited (thus lots of room for upside surprise even beyond the core product) I did what I do, and I bought a lot at one time. Subject always to changing my mind and sell at any time, or of course continuing to buy more if I please, but you hit it on the head, and Livongo is the clear market leader, and also clearly has the endorsement of the leading figures in the market, and its clinical trials are well ahead of anyone else:
Livongo has reinvented the healthcare experience for people with chronic and behavioral health conditions. Our Applied Health Signals solutions deliver actionable, personalized, and timely insights that make our members happier and healthier, while reducing overall healthcare spending.
One thing I try to keep in mind about innovation and disruption is that there is a tendency to assume that there is insufficient value, because it require a different way thinking in order to see that value.
It seems to provide more relative value than Teladoc does, and yet Teladoc continues to be the dominant player in its market. Livongo is not treated as anything but in its market. It has some customer concentration issues. 5 customers make up 58% of its current revenues. Will something else come along and knock them off? That is always a risk with any investment. But Livongo’s advantage is not its better product (which appears to be the case, with multiple and growing clinical evidence demonstrating its efficacy and advantage vs other solutions (well at least in one study)), but its first mover advantage, and network connections, and relationship with its customers.
Could be wrong, but that is why I invested here.
Tinker