Fifteen years ago, Eric Ryan and Adam Lowry launched Method, an eco-friendly cleaning products company that emphasized beautiful packaging as much as sparkling sinks. In 2012, the business was acquired by Belgium-based Ecover. Ryan stayed on. Today, Ryan is introducing Olly, which applies the same design-centric approach to vitamins that Method did to soap. Olly's products come in gummy form and are named for benefits like Calm, Immunity, Sleep, and Beauty. For now they are available exclusively through Target. Ryan, whose Olly co-founder is marketing veteran Brad Harrington, spoke with Inc. about his sophomore venture.
Where does the name Olly come from?
Everybody in the category seemed to fall into two camps. Scientific-but-cold-sounding names like Centrum. Or folksy nature names: Nature's Garden or Nature's Bounty. We want our brand to be accessible, friendly, and simple. We thought, when you walk into a pharmacy, what's the name of the person behind the counter that you're happy to see? His name would be Olly. It looked great on the packaging, and when we told it to people they didn't forget it. We put a smiley face in the "o," and that was it.
Did you start out wanting to create a vitamin line, or were you looking for whatever product would benefit from the design approach you used at Method?
I was looking for somewhere to apply the Method approach. I'm a big fan of Richard Branson and the way he always looks for categories to disrupt. The more boring the category, the more exciting it is to him. And he applies his same model to all these different industries. So I was thinking, how can I take some boring space and apply the Method model of bringing better product experiences and more aspirational branding in a way that has a social mission behind it? I was walking the aisles in mass retailers. And I couldn't find a space that was more poorly branded and with more un-aspirational product experiences than the nutrition aisle. There was an opportunity to make a cultural shift by bringing a lifestyle approach to this category.
How did you think about the design elements?
We looked at it very much through a design lens, starting with the form. Everybody has a round bottle, but the downside is those spin on the shelf, which makes it harder to read the label. A square bottle wouldn't spin, and I liked that it had distinct communication panels. One side says what it does for you. Another side says how to take it. And when you line up the squares on a shelf it looks like a system, almost like a series of library books. Then we color-coded each product: one for sleep would be purple and one for the heart would be red. We locked in a color story for all the variants. We also had this idea of doing a white cap and putting Olly on it. That gave us more graphic space. And nobody puts their brand on the cap.
Are the products themselves different from other vitamins in terms of active ingredients?
The big point of differentiation is we are doing expert blends and laddering them up to specific benefits. So we don't sell biotin. We sell beauty. And within that beauty product we combine the right vitamins and the right oils. In the same way, we blend together melatonin and other active ingredients that promote sleep. We chose the most premium ingredients available and put them at the highest dosage levels we know are appropriate. And we are using natural flavors and natural colors. Natural flavors aren't too hard, but colors are tough. Blue and green, in particular.
There has been renewed scrutiny of nutritional supplements lately. How has that affected you?
The FDA purposely does not overregulate these categories because nutrition is the basic building blocks of life. And they don't want to make the barriers to entry too high for good nutrition. Unfortunately, that invites questionable characters into the category. We want to build a brand that is a trusted editor that brings truth, honesty, transparency, and clarity to this category and helps people understand it. We are a premium product, which allows us to work with better partners on the manufacturing side and to source better ingredients. And we put a great team together. But the downside of being a mass brand is that if any of your products has any scrutiny against it, it can damage the entire line. You are very accountable and have to be very, very smart about what you do.
How are you pricing the line?
Pricing in this category is all over the place. If you go to your local Walgreens, try to make sense of the pricing strategy on the shelves. There is no classic good, better, best. So in the spirit of simplicity we said we are going to come in with only one price point. We are launching at $13.99. We are premium, and that price reflects the quality we are putting in. But it is also a price that a majority of consumers of the category could afford.
Since different products incur different costs, I assume the bottles are different sizes?
We designed it so the facings are the same, so that on shelves it looks very clean going across. But the bottles have different depths. Putting that together was this huge puzzle.
How did you fund the company?
I funded the seed round myself, and then we did a Series A of $6.5 million, with investors like Ev Williams, Keith Belling, and Jeff Raider. A lot of my relationships came from the Summit Series: They are all entrepreneurs who really get it and know how to do it. They are also all friends, people I respect and am excited about trying to do good for.
What was different about raising money the second time around?
We had double the money being offered that we needed. Unlike Method, where I begged and got kicked out of most of the meetings without getting funding. So it was really different this time around--which is actually a bad thing. Because raising capital is like being in the minor leagues before you go to the majors. You are being tested, and you get beat up and beat up and beat up. In order to refine your plan, first you need people to be skeptical of it. I think there's a risk when you become a serial entrepreneur of getting a little lazy because people--retailers as well as investors--trust you and your track record. Oh, look what you did with Method! I'm sure you are going to be great on Olly! And they just write a check. I worried a lot about that. So we've been very careful--really putting Target on the spot to make sure they are scrutinizing everything. We've got people back in stores doing consumer research, even as we are launching. We are constantly pushing people: What is the one thing you would change? Give me three reasons this would fail.
Will you stay on at Method?
As long as they will keep me. I will always be the Method guy. I am involved with a lighter touch now, and this has created the opportunity for other leaders to really step up. I am trying to find the right level where I can step back and still add value.
What did you learn at Method that you will apply to Olly?
The biggest lesson is not to grow too fast. At Method, we expanded way too fast. It was fine until the recession hit. Then our competition came after us aggressively, and we were not in a position of strength to get through that as well as we should have. With Olly, I recognize that the competition is going to come after us if we are successful. So we are going to have to double down just to hold our ground.
Also, at Method we got profitable pretty fast. But it took us years before we really got a great gross margin. This time, I am focused on building a beautiful brand and a beautiful product, but also a beautiful business.