Craig Elbert had the perfect pedigree to launch a business. A graduate of the Wharton School, he served as an executive at e-retailer Bonobos during its fast-growth period. By the time he started his own company, Care/of, in 2016, Elbert was well-schooled in tech-startup best practices. Start lean, launch fast, iterate fast. Launch a minimum viable product as soon as possible in order to gain insight from users.
He badly wanted to follow that playbook. The problem was that the industry he moved into with his new venture, health supplements, was federally regulated. Elbert and his co-founder, Akash Shah, knew they'd need to have a squeaky-clean supply chain in place before opening up sales to customers. On top of that, their company required particular care in building a friendly brand, since they would be selling products directly to consumers. All this considered, launching a minimum viable product and getting a test out to customers wasn't remotely possible.
Elbert turned to Jeff Raider, the founder of Harry's, a direct-to-consumer shaving company, for advice. "You only launch your brand once," Elbert recalls him saying.
Elbert was certain he wanted to preserve his brand, and his product, for a big, splashy launch. He was torn, though: He also hoped to learn more about how customers would react to the concept of the product, which helped individuals customize daily packs of vitamins. And he wanted to test out his website, with help from friends, family, acquaintances, and anyone else who might be interested.
So he came up with a novel solution: He created a throwaway company. It would serve as his minimum viable product--even if it wasn't exactly his real product.
Elbert convened a meeting at which members of the team threw out ideas for fake names. Within an hour they landed on "Beets Vitamins." They mocked up a logo and a website similar in structure and wording to what they'd drafted for Care/of. Then they invited friends to visit BeetsVitamins.com.
The "company" allegedly sold customizable vitamin and supplement packs to individuals, based on their age, goals, diet, and lifestyle. "Get personalized daily vitamin packs built for your life, shipped for free, and delivered to your door each month starting at $20," the site read. It directed individuals to a two-minute health survey, to help them customize their vitamin packs.
None of it was real, of course. Beets didn't sell vitamins.
But Care/of would. The friends and family who tested Beets were aware they couldn't make purchases, but they took a health quiz on the site, and interacted with a company page and ads on Facebook, allowing Elbert and Shah's team to watch and learn from their behavior. They found, for example, that users were willing to put time into the quiz that would yield personalized recommendations for vitamins and supplements--and that they'd also take the time to read studies of their efficacy. It made sense, Elbert says: "After all, this is something people are ingesting!"
The experiment lasted for only a few months, but yielded valuable data that helped enable Elbert to put together $3 million in funding from New York venture capital fund Juxtapose. With that, and after hiring two vitamin supply-chain insiders from New Chapter, a decades-old vitamin and supplement company based in Vermont, the company formally launched TakeCareof.com, and a real Facebook page. It opened up the quiz, and vitamin-pack customization, to everyone.
Due to a quick influx of customers, the operation suffered a few stumbles in its early months, with some individuals having to wait three weeks before receiving their custom order. Care/of manages its own supply chains for vitamin and supplements, many of which are imported from all over the world, and fulfills orders at a 70-person warehouse in Brooklyn, New York.
Today, the company, which has 45 corporate employees, has shipping on its personalized orders down to days. It brought in an additional $14 million in venture capital in mid-2017, and hopes to eventually grow into other areas of consumer wellness beyond vitamins.
Care/of prides itself on being a friendly brand with an Instagram-ready product. Its branding uses "storytelling and warmth," Elbert says, an added dimension for an industry used to having its products stashed in kitchen cabinets. "We found people wanted to have more energy; they wanted to sleep better," he says. "The brand itself is rich in those human emotions."