Nine years ago, StartUp Health community member Yusuf Sherwani, MD, co-founded Pelago as a virtual clinic for substance use disorder – long before telehealth was considered mainstream. Today, Pelago has helped bring the cost of addiction treatment down 10x, from $30,000 for traditional inpatient rehab to less than $3,000 per patient, while returning $5.50 for every dollar invested.

In this conversation with Logan Plaster, Dr. Sherwani traces Pelago's path from a scrappy UK startup to a scaled digital health company working with self-insured employers and health plans across all 50 US states. He also opens up about "Pelago 2.0" – a refounding built around Sona, Pelago's new AI mental health specialist designed to triage, support, and escalate care with a clinician always in the loop.

Dr. Sherwani shares hard-won lessons on product-market fit, distribution, and why he believes the biggest risk for scaled companies is complacency.

🩺 Yusuf Sherwani, MD, co-founded Pelago nine years ago, when telehealth for behavioral health was still considered a novelty

📈 Pelago has cut the cost of substance use disorder treatment by 10x — from $30,000 for traditional inpatient rehab to less than $3,000 per patient

💰 Independent analysis shows Pelago returns $5.50 for every dollar invested in the program

🌎 Pelago partners with self-insured employers and health plans across all 50 states, serving both adults and teens

🔍 Dr. Sherwani reveals the failed experiments behind Pelago's model – from direct-to-consumer in the UK to the UK's national healthcare system – before employer partnerships in the US finally worked

🎯 "You know when you have product-market fit. If you're seeing vague signs, you probably don't."

🔄 Pelago is now "refounding" itself as a scaled company, because Dr. Sherwani says complacency is the biggest risk to long-term impact

🤖 Introducing Sona, Pelago's new AI mental health specialist – built to triage and support low-acuity needs, always with a clinician in the loop

📊 Per Harvard Business Review, therapy and companionship has been the #1 generative AI use case two years running

🧠 Dr. Sherwani on the real difference between a great AI assistant and a great therapist: informing versus actually helping people change how they think

🏆 Founder advice: stay close to clinical literature, keep clinicians in the product development loop, and measure outcomes – not just engagement