Expert Q&A: Expanding Beyond COVID-19 Testing

As previously reported by G2 Intelligence, many labs and diagnostics companies that started as COVID-19 testing labs early in the pandemic are now struggling or have even had to close as testing demand plummets.¹ However, one lab that began as a COVID-19 test provider but has successfully pivoted to other types of testing is Gather Labs, a high complexity CLIA lab based in Beverly Hills, CA, offering same-day results. The concierge lab recently added 1,000 square feet of operational space in Beverly Hills and three new testing services. G2 managing editor Rachel Muenz recently spoke with Gather Labs founder and CEO Rachael McCrary about how her lab has found success beyond COVID-19 testing.

Q: How has Gather Labs been able to expand beyond COVID-19 testing and achieve success?

A: We have a particular value prop, both for our B2B and B2C—it’s a very white-glove service, and we provide results, every single time, on the same day. It was actually most of our clients and patients that said, during COVID, “We love your service and the way you do everything—do you think you could add other tests?” Adding other tests was always our intention. We got kind of slammed with COVID, so it took a little longer than we originally planned. But we didn’t just pop up for COVID specifically. It was always the intention to have a full, mini, high complexity lab. So, we’re completely vertical. We’re offering 200 different tests now to our same clients and patients, and now more customers.

Q: What challenges have you faced in expanding beyond COVID-19 testing?

A: Just trying to expand the lab into other spheres while we were processing so much for COVID. And having to hop back and forth between making sure that we provided excellence in patient care, while we were building out the other side. It just took a little longer than we would have liked. We also get a little confusion because it’s so pretty here. [Our facility] looks like a spa, and we’re at street level, so most people walk by and think that you can get a facial or something. We’re just constantly doing brand education around that.

Q: How have you tackled those challenges?

A: My background was in supply chain; I was a fashion designer before. Complex logistics was something I had been doing for 20 years. So, scaling up all our consumables, componentry, and instruments, that was fairly easy. We were able to pivot our volumes quickly because of our supply chain knowledge. We were also constantly working on perfecting our assembly line for the sample progress and tracking and on making our software easier for us to use. On the brand education side, we started working on our branding messaging with [our ad agency] just to make sure it’s obvious that we are a clinical diagnostic laboratory and not a spa.

Q: How did you move from the fashion industry to diagnostic testing?

A: Well, it’s not as offbeat as it sounds. After being a lingerie designer for a decade, I designed a product called the RxBra, a practical yet fashionable, FDA-registered post-surgical bra. It wasn’t just the talk of the runway but also caught the attention of the medical community. This med tech expertise, coupled with my decade of international logistics experience, paved the way for my next venture, Gather Labs. Who knew fashion could be a stepping stone to science?

Q: The current uncertain economy also seems to be posing a challenge for many labs. How has Gather been able to weather the storm?

A: We’ve been lucky to enjoy a healthy business. The more volumes go up, our supplies actually go down a bit. So, we haven’t really encountered that problem. We’re actually trying to constantly figure out how we can get our costs down a little for our patients, to make it easy for anyone to get a diagnostic test, no matter the economic bracket. We’ll continue to do that over time as best we can.

Q: Concierge labs such as Gather seem to be getting more common.² How do you see this trend progressing?

A: It seems to be a natural progression. I think there’s a backlash to the whole Amazon, Walmart, Target thing, where people are going to co-ops and Mom-and-Pop bookstores. We went so far in the other direction—customer service has gotten so lost in the offshore call centers and things like that—that it’s actually more efficient to go walk in and talk to somebody now. I can see that trend in other retail environments, having the same sort of ‘folksy’ charm that you can have—a lab is no different. I would just guess that in the ‘I-want-it-now-economy,’ people want an easy-to-access storefront. It just makes it a little easier to walk in and talk to someone.

Q: What advice do you have for labs thinking of either moving to, or starting with, the concierge business model?

A: Focus on your customer. See how you can add the most value to your customer, whether that’s a doctor or a patient that’s walking in.

Q: Technology seems to have played a major role in Gather’s expansion. What do you look for when evaluating technology for the lab?

A: We started building a lot of ours in-house because part of the problem is we couldn’t really find exactly what we wanted. So, we have an in-house LIS [laboratory information system] and are building our own tech stack, consumer portal, a place for lab reports, etc.; that’s just the way we want it.

Q: What are your plans for the future of Gather Labs?

A: We are expanding to at least five more locations over the next couple of years, mostly within California, and then we’re looking at another East Coast location. Our goal is to maintain the integrity and the scale, going slow and fast at the same time. By that, I mean we want to go fast, but we don’t want to lose the integrity and the scale. We want to marry those two together comfortably.

References:

1. https://www.g2intelligence.com/inside-the-lab-industry-covid-19-declines-kill-top-lab-company-earnings-but-genetic-firms-rebound/
2. https://www.clinicallab.com/trends/clinical-lab-business-management/the-recent-growth-of-concierge-laboratory-services-26641

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Rachael McCrary is the founder and CEO of Gather Labs, the first vertically-integrated, high-complexity CLIA laboratory to offer same-day lab results for over 100 diagnostic tests. A seasoned entrepreneur and innovator in the challenging fields of technology and fashion, McCrary has harnessed her passion for creating practical products and solutions to fill the gaps in many core consumer experiences—from post-surgical recovery support to same-day lab result processing. She is a trusted advisor, mentor, board member, and executive who has helped numerous startups elevate their investor pitches, raise venture capital, and navigate early-stage business development. She also works closely with startup accelerators, investors, and private equity funds.