Smart-Earbud Startup Doppler Labs Is Preparing For Over-The-Counter Hearing Aids

In March, after Doppler Labs hired a new chief scientist, it put together a team of half-dozen people that cofounder and CEO Noah Kraft soon started calling the Avengers. The team, under the leadership of the company’s new chief scientist, Jim Pitkow, included experts in audiology and machine learning – and accessibility. A key goal: To prepare the smart-earbud startup for the hoped-for passage of a bill that would allow hearing aids for those with mild-to-moderate hearing loss to be sold over the counter in drugstores across the country, similarly to reading glasses. Such a move would upend the $6 billion hearing-aid market, which is dominated by six long-time players that sell their FDA-regulated devices for thousands of dollars (rarely covered by insurance) to patients only after they receive a hearing test.

Kraft, who was on the FORBES 30 Under 30 list this year, and his team at Doppler, which FORBES named a Next Billion Dollar Startup in 2016, has long been thinking about the prospects for selling its wireless in-ear computers – which can enhance sound or mute it, as well as do a whole host of other things – to people with hearing difficulties. Under current rules the company couldn’t market its Here One devices that way, but that seems poised to change. In December, Senator Elizabeth Warren (D-Mass.) and Senator Chuck Grassley (R-Iowa) introduced the Over-the-Counter Hearing Aid Act of 2016. With bipartisan support, additional sponsors and a companion bill in the House, the 2017 version of the act, was gaining traction fast, and Doppler was both lobbying for its passage and preparing for a new market.

“The question was always how do we go after this hearing health market in a way that is innovative,” Kraft says. “The hearing legislation is a catalyst.”

The San Francisco-based company was born three years ago after Kraft, who has a background in music and film (most notably, as producer on the boxing biopic Bleed for This, executive-produced by Martin Scorsese), met Fritz Lanman, a well-known tech investor with interests in Square and Pinterest. The two started talking about making bionic ears that would both enhance sound and look cool. They named the company Doppler, after the Doppler effect – the apparent change in frequency of sound waves as the source and observer move in relation to each other. With a total of $50 million in financing from venture firms (Acequia Capital, the Chernin Group, Wildcat Management) and industry players (Live Nation Entertainment, WME, Universal Music Group), Doppler developed its Here One augmented-reality earbuds (priced at $300 a pair), which it began selling last year.

In January, Doppler made a splash with the hiring of Brian Hall, formerly head of devices at Microsoft, as its new chief operating office – a big “get” for a startup in the tech world. That, Kraft hopes, will allow his 80-person startup to go up against the giants in his pursuit of putting miniature computers in people’s ears. Doppler expects to sell about 200,000 units this year. Forbes estimates revenue could reach an estimated $40 million to $50 million. Going forward, the hearing health space, Hall says, “is where we feel like there is the biggest opportunity for disruption. This is a $6 billion market today, but effectively it serves less than 25% of the people that need hearing health.”

Doppler won’t be the only company trying to break in. In one sign of the coming battle, Doppler filed suit in March against Bose for trademark infringement and deceptive business practices in the launch of its Hearphones. In addition, hearing-aid startup Audicus launched in 2012 to sell lower-cost hearing aids direct to consumers over the Internet, following the playbook of Warby Parker in eyeglasses. Meanwhile, Apple is already working with existing hearing-aid manufacturers to create advanced devices that are designed specifically for the iPhone, which as of the iPhone 7 no longer has a headphone jack.

Thomas Fiss