D2C, Marketing, and Growing your Startup with Craig Elbert & Akash Shah
We had the amazing pleasure of hearing from Care/of Co-Founders, Craig Elbert and Akash Shah, who discussed everything from creating delightful customer experiences, launching a D2C brand, marketing and growth tactics, and building an impactful business in the long-term.
Here are some ideas that Craig and Akash use to build a business that people care about:
Re-evaluating the Customer Experience. Before jumping into an idea, especially in consumer-facing products, it’s important to look at the current experience being provided. When Craig found himself at a specialty supplements retailer buying vitamins for himself and prenatals for his wife, the customer experience did not meet his expectations whatsoever. There was a teenage store clerk who earned commission off sales and without doctor recommendations, it was difficult to navigate the different options. Understanding that the vitamins and supplements category had real consumer problems, he decided to look into a metric called the Net Promoter Score (NPS). Typically used in user research, the metric asks the questions: How likely is it that you would recommend [brand] to a friend or colleague (On a scale of 1-10)? Subtracting the percentage of Detractors (score 0-6) from the percentage of Promoters (score 9-10) yields the Net Promoter Score, which can range from a low of -100 to a high of 100. Strikingly, the vitamins and supplement category yielded a negative score and had a consumer experience that rated lower than getting health insurance. Craig highlighted some of the problems that this category faces: “people don’t know what to take and why, or if there’s any science behind it, there’s a lack of trust due to bad actors in a loosely regulated category, and there’s a lack of a feedback loop--you start taking something and aren’t sure if it’s actually working.” Ultimately, Craig and Akash felt they could solve these problems through a digitally native business. Care/of tackles the confusion by offering guidance through a quiz on their website (to learn about people's goals, diet, lifestyle, values) and then recommending products accordingly. They build trust through transparency, showcasing where their ingredients are sourced from and the research behind their recommendations. And they close the feedback loop by helping consumers understand what’s working, which is empowered by their subscription model and mobile app.
Large Impact Starts with Laser Focus. Craig and Akash wanted to have a large scale impact on people’s health and wellness, and they understood that vitamins and supplements are only a small part of an individual's overall wellbeing. Akash mentioned, “that if you’re trying to have an impact in a very large category, you’re not going to be able to solve the entire thing in one go--you’re playing a long game.” In doing so, he recommends finding “a consumer experience that you feel you can laser focus on, tackle, and solve within a 3-5 year timeframe that gives your a wedge into the industry and builds a brand that’s on people’s minds.” The credibility and consumer relationships that you build through laser focusing on one problem are especially helpful as you scale. For Care/of this means that every problem they solve in a consumer’s wellbeing journey contributes to their mission of removing obstacles to healthy living over the next 20-30 years.
Ghost Beta. Have you ever heard of a D2C company building an MVP? Well, Care/of built one to test their new experience. When Craig and Akash were building the Care/of brand, they used to call their conversations the “capital L launch,” which means your brand only has one major moment to make an impression on people. In other words, it’s difficult to iterate a brand like you would iterate a software product, so the first launch should be extensively thought out. To compensate for this, they built a throwaway brand (their version of an MVP) called “beets” vitamins and tested out a few hypotheses. One of the hypotheses they wanted to test, through what Akash calls their “Ghost Beta,” was if they can provide people with guidance through a quiz, so they included an early version of their quiz on the website. Their early team spent 4-6 weeks on design and development, $3-5K on AdWords and Facebook Ads, and drove traction to their site to test the functionality of their customer experience. Elbert and Shah learned a lot from the 50-100 consumers who interacted with the health quiz and company page, and after 4 months of testing varying hypotheses, they shut the beta down and got ready for their “capital L launch.” The “Ghost Beta” not only created valuable data and insight for Craig and Akash, but it also had an investor play, which helped them raise $3 million in seed funding.
Building Word of Mouth into Products. Before founding Care/of, Craig worked at Bonobos. He initially found out about Bonobos at a party, after seeing someone wearing a pair of crazy, loud pair of pants, which was a conversation starter. Craig learned that a lot of “Bonobos’ word of mouth was underneath the product, and generally, the less reliant you can be on paid acquisition, the more scalable your business can be.” When approaching Care/of, Craig and Akash both wanted to incorporate this strategy into their brand and product, so they created daily vitamin packs that feature your name, a fun quote, and appealing design so that people could photograph the product and post on social. This creates a story that people will want to talk about in person, in the press, and on social, which can then be layered with paid acquisition to amplify reach. With Care/of, their “Word of Mouth” allows them to layer influencer marketing on top so that they can reach larger followings with the pictures that people are posting on social anyways. Craig simply described their progression as “one: build marketing into your product, two: test that you have an organically strong story that you don’t need to rely on paid media to grow the business, and three: layer on paid media to amplify your strategy.
Care/of believes that the one-size-fits-all approach to health is outdated. Enter their subscription vitamin service that provides customers with ultra-personalized vitamin packs based on their unique health goals, details about their diet and lifestyle, and values. Since it was founded in 2016, the startup has raised $42.2M from the likes of GSIP, Tusk Ventures, RRF Ventures and more, as they continue to expand into additional consumer health categories. Before Care/of, Craig was disrupting menswear at Bonobos, while Akash was building companies out of his dorm room, and they both are Wharton alum.