Pros
The commute, health insurance, and product are great. You'll work for a company that is truly innovating in healthcare, and for a boss who has already built a successful business that got acquired. If you're willing to work hard to cash in on what I like to call the "startup lotto," I think this is a good bet for a company that could really go somewhere. Plus, you'll be in the middle of Belltown, walkable to Pike Place Market, lots of restaurants and stores where you can run errands during lunch. The owner is open to one flex day/week, which is a good start.
Cons
If you've ever freelanced, you know what it's like to have an intense client. The CEO is very smart and opinionated, so you have to know how to stand up for what you believe in. Your boss is your client and sometimes all you can do is express your opinion, then do what the client asks. This work is difficult, and there are a lot of kinks to work out, but I think there is a lot of potential to be rewarded if you're willing to stick it out.