3 Lessons From Business Tripled Its Value In 90 Days

I spotted something unusual – a company whose stock surged dramatically from $20 to $60 in just 90 days (300% of the original price). This company, Hims & Hers (Hims), is a telehealth provider that sells ED, hair loss, weight loss, and birth control medications to millennials online in the US.

The journey wasn’t smooth sailing. When Amazon announced its entry into hair loss and ED medications on November 14, 2024, Hims’ stock plummeted 30% to $20. Yet surprisingly, not only did the stock recover, but it reached an all-time high of $60 by February 14, 2025. What drove this dramatic turnaround?

Let’s explore three key lessons from their success that you can apply to your own business:

Lesson 1: Rapid Customer Acquisition

Hims’ growth has been nothing short of explosive. Their quarterly revenue jumped from $316M in Q2 2024 to $402M in Q3—and their business model explains why. Their cost of revenue, which includes everything from medications and shipping to labor, sits at just 20% of sales. The medications themselves cost almost nothing. This tiny cost, high profit base means they can pour money into marketing like there’s no tomorrow.

You might wonder why customers would pay premium prices when the company’s costs are so low. The answer is simple: the products solve serious problems – customers only care about results, not how much it costs the company to provide them.

Their growth potential seems limitless because they haven’t hit their market’s demand ceiling yet. The demand ceiling is the maximum number of potential customers – you can’t sell more than that. Until fast-growing sales hit this ceiling, companies can keep increasing sales as if there’s no limit (though there actually is one – they just don’t feel it until they hit that ceiling). Hims made a smart move by constantly expanding into new areas. When they launched weight loss treatments in 2024, it raised their demand ceiling. By increasing this ceiling, they can maintain rapid growth. Many businesses stagnate because they’ve hit their demand ceiling but haven’t expanded into new categories.

The key lesson here is about strategic expansion. To maintain rapid growth, you need to plan and invest in new markets well before you hit your current market’s demand ceiling. This foresight enables smooth, continuous growth, which in turn drives company valuation. While expansion requires upfront investment and patience, it’s crucial for sustained success.

Lesson 2: Cross-Selling Strategy

Their expansion strategy is particularly clever because they can sell new products to existing customers – after all, someone dealing with hair loss might also want weight loss treatments. This is very different from selling contradictory products like weight loss and weight gain supplements, which target completely different customers. When marketing costs make up a significant portion of expenses, this approach dramatically cuts costs. Instead of finding new customers, you simply inform existing ones about additional products – no extra advertising needed.

This strategy is clearly working for Hims. While they used to spend 50% of revenue on marketing, that ratio dropped to 45% in Q3 2024, helping them turn their first-ever profit. This shift from loss-making to profitability triggered a major valuation jump.

The numbers tell the story: from Q3 2023 to Q3 2024, their sales jumped 77%, subscriptions grew 44%, and spending per user increased 24%. The sales growth comes from heavy marketing spending in a market that hasn’t hit its ceiling yet – at this stage, every marketing dollar reliably brings in new customers, allowing them to grow sales like a rocket, while the increased per-user spending reflects successful cross-selling.

Hims excels at cross-selling because they have access to users’ health data, enabling them to make precise, personalized product recommendations.

Lesson 3: Surviving Against Giants

When Amazon announced its entry into the market, Hims’ valuation took a hit. People remembered how Amazon had previously killed Toys’R’Us by offering faster delivery, lower prices, and more convenient shopping options. With Amazon now promising the same advantages in medication sales, many thought Hims would meet the same fate. Instead, they not only survived but thrived.

The key? Their niche focus and personalization strategy. Unlike Amazon’s everything-store approach, Hims specializes in specific areas, offering deeper solutions. They stand out by providing compounded medications – where pharmacists mix and customize drug ingredients to create personalized dosages on individual needs.

This practice of compounding medications operates in a legal grey area that large companies like Amazon won’t touch. If these practices were ruled illegal, it could devastate a company’s reputation. For Amazon, the prescription drug business is just a small division – they won’t risk their reputation. But for Hims, it’s their core business – they’re all-in on this strategy, ready to rise or fall with it.

They even ran Super Bowl ads and commercials that skirted regulations by not fully explaining side effects – another grey area move. This company thrives by operating in these grey zones, successfully dodging threats from larger competitors.

The lesson for small businesses is clear: succeed by doing what big companies can’t or won’t do. Like small mammals surviving among dinosaurs by exploiting niches too small for giant dinosaurs, small companies can thrive by finding their own protected niche.