On the latest episode of Outlier Founders, we decode how Elo Health has created an entirely new Smart Nutrition category. Elo’s Smart Supplements and Smart Protein improve your energy, focus, and more with vitamins and supplements made just for you. Elo finds and fills your nutrient gaps with a mix of blood testing, your wearable activity data, and one-on-one dietitian support.
Daniel Scrivner (00:00:00):
Ari, thank you so much for coming on to talk all about Elo, the company that you're building now. I really appreciate it. Thanks for making time.
Ari Tulla (00:00:06):
Cool, thank you.
Daniel Scrivner (00:00:09):
So, where I wanted to start here, we're going to go all over the map today and explore not just what you're building, but this concept of smart nutrition, the products that you have today, some of the features, and then we're going to spend a lot of time on the business model and some aspects there. Where I wanted to start is just around the decision to found Elo. You've founded other companies before, you've served as a CEO for a number of years at Quest Analytics. What was your process like for deciding that this was the company that you wanted to start next? What did that look like?
Ari Tulla (00:00:36):
Yeah. I think a lot of people, they build one company, and then maybe they get rid of it and they're like, "Never again. I don't want to be there." And maybe they were not meant to be or meant to do this stuff. And I think I've been doing this for over 20 years. I've been involved in building six new businesses from the ground up, and I've seen the movie many times, and it has very different subtitles, and a plot at times, but the same principle ideas is the same.
And in my case, the cast of characters have been the same in a few of the movies. But I think for Elo, it was really something I wanted to do for a long time. This goes pretty deep into my core, and 20 plus years ago, year 2000, my wife, she discovered she had a big lump on her neck. She had a thyroid tumor, and that had to be removed quickly. Luckily, there was no life-threatening condition after it, but then it ended up leading into autoimmune diseases, and maybe underlying problems in health that were neglected before, or hidden by, for example, hormonal treatments that you get if you are on birth control.
That led us into a long, silencing journey on trying to find a way to keep her healthy, and we were trying to get a family. Then years later, realized that we can't get pregnant with the certain conditions she had. And we probably spent 10 years or even more on trying to find a solution to this problem, because you are in love, you want to have a family. That's one of my goals in life, and we had to find a way.
So, we found doctors and practitioners, Eastern or Western side, to help us and in the end, we realized that the diet was able to overcome the problem. And diet of lowering inflammation was the core thing that helped, together with medicine as well. And that made me a believer that food is a really key building block of a good life, and food has really help in many ways. And I read about the topic myself quite a bit. My wife could have a double PhD on the topic, knows a lot more than most people.
And as it's very tuned to herself, she really feels her body very different than most people. I don't really know if I'm thirsty or hungry. She does. She's much better person than me in many ways in these things. But that was the beginning for me. And then about 12 years ago when I started BetterDoctor, my first own company I started in the US, we had an idea of a company called, we call it smart nutrition or we call it a food type of business, better food. And the idea was that we could basically collect data about your body, what you need, like allergies and what type of diet you have and then take your phone and point it to a product in a store and it would tell you traffic light red, yellow, or green.
And we didn't build the company because it felt a little bit difficult user experience. That was early days of smartphones. People have one in pocket, on every pocket and it was kind of clunky and we decided to build BetterDoctor instead. And now three years ago, we took back the idea and we looked at it and we were like, "I think it's still a great idea." And we had been talking with a lot of healthcare decision makers, have been leaders and we saw clearly this market momentum moving in a way that we are not going to only medicate people, we are also going to use lifestyle and food and other interventions to help people to get healthy and decided that this is the right time to start building a company in this space to be ready when the world is ready. Which will be maybe in four or five years from today. But when it happens, we talk about massive impactful sayings and sift in world overall.
Daniel Scrivner (00:04:38):
It's amazing. I love how so many different strands came together, not only your experience obviously in healthcare, building other companies, but kind of a previous version of the idea. And I love your commentary there that decided not to do it because it felt like a clunky user experience, because it does. But I think a lot of people don't necessarily reflect on that, so it's so interesting to see how all that comes together.
I want to ask just one question part of obviously, so Elo's focused on smart nutrition. We're going to talk about the two products you guys have today, Smart Supplements and Smart Protein in just a few moments. But part of the idea is food as medicine. And one of the questions I want to ask because you've had this as a personal experience, your wife realizing that actually diet can change things. I imagine if I was in your shoes or if I was in your wife's shoes, I would have a moment because everyone's heard it, you've heard people talk about it, you know that it's a concept. It feels like it's very different to actually see it and feel it. Did you have any disbelief in that moment that it was actually true? What was that like to realize that actually by changing diet you could have a substantial impact on health?
Ari Tulla (00:05:37):
Well, I think we've, and I come from a family and my wife as well, that we have everyone is really healthy, athletic. They eat organic food from '70s onward. Local food is important. I traveled a lot as a kid. We went to 50 countries plus 18 years old. Seeing the world in many ways and seeing, coming to the US for example in the '80s and seeing how heavy people were already in some states. Very different than in the Nordics at that time.
So I had a belief that food is important and you want to invest in good food, but I don't think we ever really, and still today, I don't think we can pinpoint to one thing that did it. I mean it's just everything that you do when you are changing your behavior. Think about you change the food from A to B, it won't happen overnight. Also, medications, they really do happen overnight. But the placebo might be that we think and believe that something happened right then and there, but I can't still today pinpoint one thing that helped.
But lowering inflammation in your body is a key point and it can be done by reducing sugar and maybe some carbs and reducing certain oils and stuff like that, and certain nutrients that are not going to be good for you. And of course, cutting the processed food that is a culprit of inflammation overall. So those did help and I think we believed in it, but it wasn't like an epiphany in a way. And that's the problem we have today that there's excess stuff is the pill that you eat and you are fine. That's what people want. People don't want to change the way they live their life.
And to me, I think the key challenge in that process was that we never had any yard sticks. There was no measurement, there was no assistant telling us that now we are at the threshold or now you are improving. And in my life, I mean, since being an athlete at young age, I was the beta tester for the Polar Electro heart rate belt in the '80s. And I was wearing those when I was training as a kid and you saw your heart rate curve go up, you saw your stamina going up. You saw your performance going up. Every day you saw at the turn, you saw your weights go up and then you see your speed of certain skating stuff going up every year. So you can miss it, you're getting better, you feel good about it.
And as a rock climber, I mean my crates are going up on my climbing. I can do more difficult walls and stuff like that, easy to measure. But in food and nutrition, there is nothing. Only thing you measure is looking at your scale and your weight and that's in a bathroom mirror a month or so. So now I think today, we are finally starting to see the measurements coming to play and that will change everything. Not all of us care about it, but enough people do. And when they see the traffic light being red on what you ate in real time, you will not do it again a thousand times.
Daniel Scrivner (00:08:58):
I want to ask one more question around timing just because this was an idea. Obviously, this idea you had of BetterDoctor is very different than what you've ended up building today. What you've ended up building today feels very modern and appropriate for a time and takes advantage of all the devices and inputs that we have. It's incredible. But one of the questions I want to ask is for any founder that is building something that feels somewhat distant in the future, there's always this question of timing. And I love how in just a few moments ago, you said that you felt like the time was now that you could both see this momentum and this is where we were heading. But you also recognize that you're building it for when people really got interested. Did you think about that any more granularly and was it like, oh, we think this will happen in one years or two years? Just any advice for maybe founders that have a similar problem and how to decide if the timing's right or not.
Ari Tulla (00:09:45):
Really good question. So this is the key point because you can fabricate luck at times by being in many places at the same time or be active and looking for luck, but you can't fabricate market momentum. Sometimes things happen because tech is leaping forward. Think about Uber, many things like that because you suddenly have like CPS and a smartphone and a map combined together. You could do Uber, for example. You could do DoorDash, you could do Airbnb and many other things. They just happened because you had this unlocking moment and you can see those happening. Maybe you can even time them, but sometimes things happen that you have no idea.
And we started this company right before COVID, talk about weeks before. And then we think about this, but the biggest problem we had on our story is that, is food delivery ever going to be real? Can we ever expect people to get food over the web and from the mobile to the door, doorsteps and kitchen counter? The second one was, are people ever going to do blood testing at home? Will there ever even be a system of blood testing at home after Theranos and their debacle? So those two things were complete unknown unknowns that nobody knew about.
And then COVID happens and food delivery goes from 20% to 50%. Now it's ubiquitous and the blood testing and COVID, swapping the nose, everybody has now done it 10 times. So we absolutely propped over a decade on those key attributes that we need as a company or this new smart nutrition era will need. And I mean, we are not ready. People moved on already. We as Elo, as an industry, as scientific community are not ready where people are already. People are doing longevity stuff on themselves that science doesn't even know about.
We haven't even tested with mice, all the things people are doing to themselves today. So it's a really interesting thing and that to us was I think the key that COVID was a massive, massive shift that maybe once in a generation or once in a 100-year type of scenario that nobody was envisioning. I mean, just this week we hear Mark Zuckerberg, we hear the Google founders apologize that they hired too many people. They hired 100,000 people during COVID and now they're laying them off because they didn't even understand that this thing that happened is not going to be permanently here to stay.
But some things will, like this sort of a home desk thing and the food delivery. We still don't know how to make money on food delivery, I think as a whole. But it will be here to stay. So as a founder, look around, sniff around, be smart about it and don't be too early. And if you are too early, you have to find a way to pivot a little bit or streamline the things you built in order to fit the time you are in because you can't fabricate time. We don't have a time machine yet.
Daniel Scrivner (00:12:56):
No, that's great advice. So I'd love to start talking about I think some of the products, but where I wanted to start is just this high level idea of smart nutrition, which is as soon as you put those two words together, you generally get what it means. And yet, I haven't outside of Elo's website come across that or kind of heard that maybe used enough. And I think there are probably, I think I'm not alone. So for people listening that maybe aren't familiar with that, what is smart nutrition? How do you think about it? Why is it important?
Ari Tulla (00:13:23):
Well, I'm trying to coin the term here.
Daniel Scrivner (00:13:25):
Well, it's working. I think it's working slowly.
Ari Tulla (00:13:28):
The point here is that, and there's a funniest story as in everything that you try to as something fun. Almost 20 years ago, I was in a room in Finland at the Nokia head office and this is the time when Nokia was launching in '97. Many people called that the first smartphone ever, years before iPhone and Android. And I remember being in a room, I was a small sooner employee, but I mean somebody had stuff on a whiteboard like what we call this thing.
And there was a word smartphone on the corner of the board and there was another word, a mobile computer and then somebody circled the mobile computer and they went with that. We did not go with the smartphone and think about Nokia would've been a different company if Nokia would've invented and coined the smartphone term. They did not.
So I don't want to make the same mistake wise and I think smart products are all around us today. The Apple Watch all tries kind of smartwatch. I have the iPhone, I have the Tesla. My car is kind of smart on me, my home is. It knows when I get in it, everything happens automatically. Why don't we implement the same thing also in the thing we do the most often, which is basically food and eat and so forth? And in our case, we looked at all these other smart categories and we looked at what is common about them. I don't know if there's a book about this, I might write a book about it. But what we found out is that any type of smart category, and nutrition included, has three tenets.
One is being that they are personalized to you. So if you think about the phone, it's the most personal device you have. It's the same plain canvas that you feel. It's the same, but then you fill it in with your photos and your apps and your contacts. It's your life. It's the magic wand for your life, it's your life controller, whatever you call it. And then same applies to many products like that.
In our case, smart nutrition, it is made for you based on your micro chemistry inside you and based on your health and who you are. Secondly, it's precise. That means it's scientifically crowned, it is high-tech. In our case, we are using 6000 finger trials to power our algorithm. We use tens of thousand learnings we got from our members today. And lastly, it is proactive and that's maybe the most surprising thing to think about in the case of food or nutrition. But think about proactive.
People love Tesla mainly. The first thing they say always is that you walk into it with your phone in and you open the door, it moves the seat, it plays the right song for you. That's pretty awesome. Nobody did that before and that's proactively making it better every day. It learns how you are driving the car, it becomes your car. Same here. We are trying to make the nutrition better. We learn about every biomarker test we do. Every time we get data from your wearable devices, we make it better for you on every month to month to month case. And in the future, I think when we talk about taste, we want to make the taste to be right for you.
Whenever we are going to get our food out there, hopefully soon. Think about what if the food would ask you every day, did you like it? Right portion, right taste, too salty. Nobody's doing that today. So that's what we think smart nutrition is and in the end, it can turn into medicine that can be prescribed by doctors in the same way as we do Lipitor, metformin and diabetes medicine today.
Daniel Scrivner (00:17:06):
Yeah. I mean, I love that concept and in the way you described it at the end because one, as a simple example we're going to get into in a little bit, your protein product. But you take something that's personalized to you, maybe even has your blood information, knows ... Obviously, I think one of the things that's fascinating about your protein is it actually adjusts based on the activity that you're doing that it tracks through Smartwatch, like amazing stuff. And you just even, let's just stop there, not talk about anything else that you're probably developing that's going to be improved.
And then you compare that to a protein you get off the shelf, there's just absolutely no comparison. It's going from one size fits all to it's exactly one for one to each and every individual. That's profound. It's a huge shift.
Ari Tulla (00:17:45):
Yeah. I mean that's why it's been so fun the company to build and start because we started this in a way that we are trying to make this home run type of thing. Not home run in a way that let's sell the company for a billion dollars but let's do it. What would the world look like if, for example, Apple would build a protein product? It'll be very different than what you buy from whoever you buy from today.
And we were like, what if we do that? What if we think there's no limits? What would we want to build if there's no limits? And we started from these product categories like supplements that are one-to-one correlative to blood biomarkers, for example. Then we started with protein that you can find pretty close correlation to activity performance, for example, recovery and so forth. And we will go more and more in the direction of medicine when we graduate as a company.
But you can't start in the beginning by building a meal plan that will cure cancer. I mean, nobody would believe us. We would not have no way credibility to do it. And some people are trying. It'll be a very, very big uphill battle to do it before we have enough scientific evidence. But we have a lot of scientific evidence today on supplementing and improving your vitamins, for example. We know that's doable, but nobody really has done it before.
And in the case of protein, we wanted to really make this. We had this thinking hat going on in the company for a long time, the second product, what is it? And we wanted to build a make mark with the protein, build our own product that nobody has done before. And we really took the data we all have now. If you are active, you likely record some of your workouts with Strava or Apple Watch or Peloton or Tone or whatever you use. So we want to pipe all the data back in the system and every month re architect your protein plan based on your last ... Well, we look back 30 days so it's not forward-looking.
Maybe in the future we can make that happen. I don't know how yet. We need more AI and more data, but at least there's a one consumer who or one other member who sent a note last week. I mean it was so fun. My co-founder, Tapier, he was high-fiving everybody and he was like, "This is the best thing ever." The feedback was you Elo guys are so sneaky, you actually changed my macros and my amino acid blend on the protein because of my last month's activities. I can't believe this because we don't even explain it that well. So he did not know that will happen. And then he was looking at the label side by side and saw that happening and that made my day.
And that's kind of what when you build a product, you don't always want to tell people exactly what you will do with the product. I was holding on buying a Tesla a long time. I think I was buying the X back in the days. My son was then young and we were about to buy the car and he got stuck with the silly door, almost cut himself half. And he was like, "I don't want to buy the car." And he started to hate this so we couldn't buy it for five years, and now we finally got one and I'm being flabbergasted by the fact that how brave the team has been there on taking away features and not telling people what the car does. There's no tutorial, there's nothing like that. So they let you find slowly all these cool things that the thing does.
Same can apply to Apple iPhone. It doesn't have a manual read and then you use. You learn new ways to use the phone still year or two after you bought it. That's what we want to build Elo. We want to give you the core things then and there and explain them, but then you can find new things and Easter eggs maybe a year later.
Daniel Scrivner (00:21:32):
Yeah. I mean just two notes or two ideas, one in that example, I think what's so cool about it is part of what you're doing is taking physical products that people think are dumb that never change, that don't update in real time and you're actually saying no, this is like software. We can actually change this in real time. But the other thing is I think what you just described to me feels like the next evolution and just to repeat that back, if we have one size fits all product that we then move to, it's personalized to you but it's personalized based off one simple test. And then it's like, here you go. This is the thing that you need.
You guys have now taken it a step further and it's personalized but it's personalized in real time, which to me is powerful because some of this stuff, what's funny about it is just reflecting on, well, why is that right? Why does that feel so natural? And to your point earlier about food taste changing and portion taste changing, I would bet that the ideal product would actually change portions and change flavors depending on you because you might go through phases where you like spicy food or you're working out intensely and you want more. And yet, I don't think most people take into account that's actually is natural and right that the product should change for you in real time.
Ari Tulla (00:22:34):
Yeah. It's so funny because one thing that we know now from everybody who is using the product, we know the active energy for example. Think about linking the active energy and the amount of food you have in you. I mean, we all know that health is not about calories in, calories out. It depends what type of food nutrients, but in the end you know a lot and you can do a lot more than people have thought about before.
And I think one thing that is key here, and I mean I'm not claiming we cracked, not yet. I mean we are a very beginning of a company but we have a couple new things out there that I'm really proud about, some of the best things I ever built in my life. I've been a user for myself many years. Many of my friends are users and I mean the feedback is amazingly good every day. So that makes me feel great and these people that are my friends, I mean they're very, very, very difficult customers. They are wealthy and they get anything they want and they are very needy in a way. If I can make them happy, I think we can make million more people happy every day.
So what we had to do at Elo to make this doable, impossible. So you had to really internalize the core idea that we are not going to do products that are not good enough. So like you said, we at Elo, we are not building products that you can't have the feedback on. We will not launch a product that we have 50 people who came to pitch us, you want to work with us because we have this unique ability to collect data and help build better things. We said no because they were not ready categories to build the product that you have a feedback for.
In order to make this happen and to build it in a cast in stone for the company, we decided as a team to make personalized, precise, and then proactive not only the core values of our company ... Oh, sorry, the product but also the company. Those are not the three values of Elo. So I wanted to make, what my thinking was that what if we could have a company that the product and the core company values are the same. I think it's a cute idea. I don't know if anyone's done it before, but that really hit us last year and we implemented that last year and I think it's really cool when you can now look at these lenses on every decision you make. Not only for the product, but also hiring decisions and investment decisions, who do you get as investors and so forth. It's been really cool to think that way.
Daniel Scrivner (00:25:06):
I love that perspective and I love that it starts with the product and then this idea that, well, if it's good enough for the product, why wouldn't we make this a core value of the company and start using that as a guiding kind of guiding principles. Talk a little bit about, I'd just be super curious to hear you reflect on how has that changed or how has that shaped how you think about hiring, how you think about roadmap stuff? I mean very clearly right there, you gave a great example of just it adds a very rigorous lens to what products you create and what you don't. Where else does that show up tangibly?
Ari Tulla (00:25:37):
Yeah. We implement that now as part of the hiring. We are still middle of that so because we just now are getting into hiring is pretty slowly. We haven't hired that many people before. Many of them have been known quantities for the company. But yeah, we define that now into the way how we hire. We are using Productboard as a tool for Elo road mapping and those are the principle ideas that we are evaluating every product decision on.
So there has to be a ranking based on the value metric in order to see the prioritization of different things and I think it makes things easier. I don't claim we fully yet have implemented that throughout the whole thing. It will take time and it's a bit of a new way of running a company. We are trying to be also because we as a small, we try to be pretty nimble in the way we operate. We don't use OKRs yet. We use this Rocks, like a baby OKRs, bit simpler. We don't have a trickle down to every team member level yet their own Rocks. We do it on a team level.
So we have simplified a bit but I feel good about it and I think these are often the ideas that if you can make them stick in the long term, they will have a fundamental impact on the company, that sector.
Daniel Scrivner (00:26:57):
Yeah, no. Yeah, and the reason I was asking that is my mind, just the gears in my mind start turning just thinking about even something as simple as we're not going to build products that don't have a feedback loop and that don't change in real time. That immediately starts to influence, okay, well, who we're hiring, we need to make sure how are we testing and screening for candidates that can build products that have a feedback loop because it is very different. I think maybe if you've built something in software, you're used to that. Although, I think actually a lot of times people aren't using a feedback loop to continually improve the product. So it's just interesting to think about where that goes and it does seem very powerful. I'd be curious to hear how that shows up, maybe if we talk again in a year or so.
One of the things I wanted to talk about, just to zoom out for a second is what informs this feedback loop? Because I think it might be helpful for people because as at least from what I can tell, you have in this ... I'm going to kind of go all over the map so I'll give my best take. Please correct me wherever I'm wrong and fill in the blanks. But obviously for the supplements, you have a blood test which gives you all of your biomarkers. You also have a kind of qualitative survey, which is asking people just questions so they could obviously lie about, might be slightly untruthful. But it's going to be helpful, just their goals, what they're eating today.
You then have all the data that people are getting from wearables and I don't know if there's a limit there if you use smart mattresses and Whoop and Apple Watch and all of that. And then obviously, you then have a human component which is, I think for the Smart Protein and the Smart Supplements you get access to a nutritionist. Do I have that right? And then talk about which of those are really important, which of them are less, kind of from a waiting perspective, how those are all helpful in different ways.
Ari Tulla (00:28:32):
Yeah, you're right and it's a very complicated mess, as you can imagine. And there's no like one simple answer and I think it's also a system that will be evolving every day, but once we get more information. So let me take you one step back and kind of explain to you. We are trying to build an Elo brain that is the core thing that the company is here for.
We are not trying to be the company who is building the best food factory or supplement factory or we are not even trying to build the best lab. But we are trying to build the best brain in the middle of taking data from your body and turning it into the right decisions that user take and then delivering those to you with different products we are creating. So what is in the brain?
I mean we could talk about AI, but let's be real. We have an algorithm, so three layers of things. The base layer on every product category is an algorithm where we take all the current knowledge about the science. Science and nutrition for supplements, we have about 80 different active ingredients that we are putting in our supplement pills today. So we collected all those different 80 reactive ingredients that have valid human trial clinical evidence. Not one study but more studies.
So we have today, I think almost 6000 studies that we have collected today on those products. These are globally, all the human trial studies ever done. It's not that many then, but you have to normalize it. You have to translate it to English in some cases. You have to kind of go through all of them to turn it into understandable data [inaudible 00:30:19] that you can use in part of algorithm. So I had a team to do that for two years.
And then what we did, we looked at the different assessments we can do. So we had to do 150 assessments. A question or question to be assessment, A1C biomarker or blood work assessment, your HRP could be assessed. Your recovery from different assessment. 100 assessments, 6000 studies, 80 different active nutrients. That's kind of the basic idea and we do that into our system where we are looking at you based on your age and your assessment and different things. We give you the right studies, what they say, and we deliver you the right amount of certain things. And then we see if it works.
That was the beginning; that took a couple years. On top of that, we added then the diet and nutritions work with one-on-one on people and they make modifications for the plans that our crew created. Often, they do quite a few because of what you want and there's a human component involved. Maybe you forgot to talk about the medication that you had and then we change, and so forth. Hey, we took the modifications into play, thousands of them and we built those into the algorithm. And it started to be a learning system now.
So today we actually have an AI live. Then the third layer will be the final layer that is about the outcomes. So we do what we do and then we see how the outcomes look like and then based on the outcomes, we can then wait all the different studies and everything in a proper way. And then it becomes better. But for that, we need thousands more members. So everybody, sign up to Elo. Help us to build a better system every day and I think in a year or two, we are fundamentally building new science. So that's just kind of the base layer of what we do, the brain aspect.
And then the question about how do we prioritize different things, it is really difficult when you think about the wearable devices. I have a Whoop, I have an Oura. I've been wearing this seven years. I've been wearing this maybe four years. And now they are kind of similar, if you look at your sleep data, for example. But they used to be totally different. So what is the right condition when you have sleep coming from three, four devices?
Those are really difficult questions to solve and we have not even opened up now. In our app, you don't see sleep data yet. You don't see HRB, a few other things, because we want to make it right. And having been one of the early investors in Oura back in the day, I was able to look at how they built the company. It took them five years to build the crate out. It's not happening overnight, so I know how hard it will be to build these things. And what we do at Elo, every decision we do, we do it from the perspective of is it precise. Is it personalized? Is it proactive? And also, does it come with the nutrition lens?
I don't want to replicate stuff like what Oura's doing or Whoop is doing or whoever is doing, or Apple even. We want to build a new viewpoint for Elo that is unique to us, that comes from the perspective of nutrition. What would HRV look in a nutrition context? What would a recovery index look in a nutrition context? Nobody has done that before, so we had to reinvent this thing and it will take time.
Daniel Scrivner (00:33:40):
I mean, that was incredible. Even just the breakdown of the brain because one, it feels like just describing that, clearly that's what's going to drive all of the value for your customer base. Yes, you could invest some of that money in factories to actually be able to do it. Yes, you could invest some of that money in a lab, but what you're effectively saying is we have good enough solutions there, what no one's built. It's very challenging that we want to get right is this brain that powers everything.
And especially talking about then outcome layer that then starts to train and ripple through the model incredibly, incredibly powerful. That's super cool. I want to ask two questions related to the products that you have so far. And one of them, it may not be the easiest answer so feel free to take this in any direction if you want to talk about supplements or you want to talk about protein or you want to talk about overall. One of the things I wanted to ask is around product market fit.
So clearly here, you guys could have a view that we know we're starting with customers that have some disposable income that are interested and open to doing all of this health stuff and kind of pushing the frontier. But we're going to use all of this science and as long as the outcomes are right and we're able to do that, that's maybe product market fit or technology market fit. But then there's another piece of customer perception so it just seems somewhat tricky, or maybe a different way to say it would be you guys might have to take a very specific different lens on product market fit. How have you approached thinking about that, how you think about that at Elo?
Ari Tulla (00:35:01):
So it's interesting. I don't know if I've been myself in a company that I was running something that was my own product or thing, that really had a product market fit. Because I talk to people, I know a lot of people who had that and then they didn't know how to approach. And you know when you have it because then you can't produce enough the stuff that you're doing. That's really the true measurement, I think. And I don't think most companies ever end up there because it's like this unique time that it just becomes, it happens. It's of marketing, it just happens because you build something so exciting that people are talking about it to everybody.
So very few companies ever experience that. And of course, we hope to get there, but at the same time we have a challenging turnout. We're doing what we do. I mean, going from one to 10 to 10 to 100, to 10 to 1000, it's going to be very difficult to grow from one to 100,000. You can't do that. Nobody has ever produced these things in a way that you could do it familiarity. And it can be done, we know, but it will take many years.
We want to be very focused on growing the right way with the right orders first. So think about this, if you get a break in the business, and this is maybe a warning for people who are trying to build something similar or complicated. That is kind of taking and collecting different ideas to get it on the new product for service, like we are. So today, you have about 100 million people in the US who take supplements on a daily basis, 100 million people. Huge ton, a third of people almost.
How many people you have who are testing their blood every 90 days? There's like 100,000 people. So you have 100 million people, 100,000 people and we are kind of combining this two into one. So we know that there won't be 100 million people who want to buy, even if we wipe it away. Maybe 10 times better way to do it. It's just too involving thing for most people so what we now need to do as a company is to look at it. What can we build? Build the first vitriol in order to get to 100,000 to a million members.
So I use this analog always or idea that you have a racing car. You first build the most amazing, safe, amazing racing car thing and it becomes like a box. The track is insanely bad and you put everything in there. And then to win the race, you have to start taking pieces away. I think, what is the Ferrari [inaudible 00:37:55], whatever. The movie was about that. Let's take away everything because then you take the track away. So I think Elo is in next maybe couple years, we can end up in a space where we need to maybe do Elo Ultra and Elo Less and Elo Basic. And the basic will be for most people.
Today, we are more into in the direction of Elo Plus or Elo Ultra that is a pretty difficult thing to do. But that's the right thing to do in a beginning of a company because you know it'll be a long run. And of course, as long as you can raise money, you can grow every day, you can be fine. Because it's stuff you need to have the idea. What is the promised land? And in our case, the promised land is to help make food into medicine. We are not even near that. We aren't even knocking the door of that.
So maybe five to six years from now, we're going to get there. But I need to remember that every day as a founder, as a CEO, and remind my team about it every day that we are working for bigger call. And sometimes, the winding path that goes there is really long and takes time.
Daniel Scrivner (00:39:03):
Yeah. Yeah. It's not that I don't want to put words in your mouth, but what was coming up for me as you were saying all of that is, seems like you guys are much more focused on almost like a company potential fit. Meaning, you see this massive, massive opportunity. You're extremely focused on what are the capabilities that are going to get us there, and how can we build these faster and faster and faster? And it feels like almost, I guess in your guys' case, this idea of a product market fit framework kind of goes out the window. Because it's very different and it's multi-sided and it's very challenging game, but a lot of it, it sounds like is, building up this potential internally around technology, around the right people, around the right approach. Which is something I want to go into in a little bit.
And then obviously, kind of trusting that if you're doing that well enough and you're also iterating on marketing, you're iterating on all the other things you're doing. You'll be just fine and you'll get there, but you guys are ... This is not a sprint, this is a marathon. You guys are just a little bit into it, so it's a different framework.
Ari Tulla (00:39:58):
Yeah. I think on that note, one thing that people need to always keep in mind. Again, I talked about this with you can't really fabricate time or you can't fabricate the right timing for your company. Either it is or it is not, or you need to change yourself to be right for the time. The other way to think about this is that you can't ... There's no way to change the fundamental fact of who are adopting new things first.
There have been a lot of companies in healthcare, a ton of companies that looked really good, something went public. But they were building these tools that their products have got tools for people to use healthcare better. But they are not built for the early adopters, but they're built for people who work for Walmart or Caterpillar. Not naming company names here, that they help companies. They know who they are, not [inaudible 00:40:50]. But the fact was that every company who built a product that was too sophisticated for the late adopters, before the early adopters had adopted it, it never worked.
There's no way you can build something new like with Elo is doing. I think about, I'm taking your blood and turning it into nutrition. Sounds pretty Biblical or Star Trek, depending where you come from. But not very normal thing. Most people even don't believe this could be possible, so I can't expect the people who are they all these people, suffer from chronic conditions today. And struggling mightily. They will not be the first people who adopt it, no matter what I want to do. So I need to put the price point down much lower. I need to make it more available. I need to make it less technical. I need to make it simpler in order to get there.
And I want to get there, but I understand that there's no way. Nothing I can do today to get the people in the most need to adopt the things we built today. So what we're going to do now, you have to accept the fact and be fine with it that I am basically bring the gap of the have nots and the haves bigger and wider by doing these things. I'm going to make some people healthier. They're already healthy. I make them healthier, and even living longer.
And then to the rest of the people are suffering mightily, so you have to accept the fact that in the long term, I hope the things we build will start to work also for the people who are in real need. There's a big masses.
Daniel Scrivner (00:42:23):
Now it's such a great point. I mean, it's building a company isn't chutes and ladders. You don't get to just suddenly take a shortcut and go all the way to this final point. I mean to your point, I think it's very well said. You have to, I guess one, know where you are, focus on success at that current stage. And then if you get that, you get to earn the right to go focus on, okay, now what does it take to bridge that next gap? But there is no short cutting it and it is very powerful because to your point, yes, you know what you generally need to do. You know the direction you need to head in, but you also can't fix it on that. You need to come back to where you are now and just execute best this moment in time.
Ari Tulla (00:42:59):
Really robust exam. I really like what you said. That gate keeping point is such a key one and that's what we also thought about when you defined the goals and milestones with our investors. What is the B or the C or the D around looking? It could be like, I'll be passing this gate keep or the gate that we actually expand now beyond what we are, because people love expanding too early.
Daniel Scrivner (00:43:22):
Yes. Oh, yeah. I mean it's literally the default. I think 98% of companies and people, just that's our preference. That's where our brains want to go. And to your point too, I have an enormous amount of respect for founders and teams that can be disciplined around what those metrics are in gate keeping, because it's also very challenging to gate keep yourself and gate keep the team. Because it has to happen at every single level. The CEO also has to do that. The whole team has to do it.
I would ask one question around monetization. You guys have a membership model and obviously just looking at the products, just meaning there's a recurring price. I'm basically agreeing to become a member and then it's a price per month. I guess two points on that I wanted to get your feedback on. One is, it feels like putting on my finance hat, feels like a de riskless business. You start to have stickier revenue, people aren't just buying a product once, but they're becoming a member. But then on the other side, it just makes sense, especially for Smart Supplements. Clearly, it would make sense as monthly membership model.
For Smart Protein, I'm like, okay, this is interesting because it is customized. So I guess just talk a little bit about was that a philosophical decision? How did you guys think about that? What do you think that's the right way to monetize the products that you have today?
Ari Tulla (00:44:34):
Yeah. I think there are two things here. One is the implementation and the complexity because we have a very complicated product in many ways. We want to simplify it so the one fixed price made a lot of sense in the beginning, but I think we already have enough people that we know some people want a more a la carte. They want to modify the plan so I think there will be multiple different options coming out from Elo for supplements, and I think also for protein in the coming months already.
Because that's what people want and some people, they realized that they maybe want to pay less and get less often testing. Maybe they want to make the testing to be more a la carte. So we learned a lot in the last year and a half and then I don't think I have a really good answer, like what is the right model yet. But protein, I think it just makes sense in a way that there are a lot of people who have a protein habit and we make the habit maybe a bit more formalized and a bit more thoughtful, because we can help you to dose the right time and the amount.
We can make the sizing of the product custom to you, so we can actually probably provide you the right cadence. And today, we don't really have the sizing and the dosing. It's not really as flexible as it will be. So some people are now unhappy because they want to have two bags a month or whatever. They do protein a lot. So we need to learn on those. I think there's this idea that subscriptions are really good way of making business happen because if you can find ... It's like a sauce business. It works because if companies buy stuff and they never forget.
They forget to cancel. There's always some people you just can then ... They don't want to cancel so they'll be sticking forever. I don't think that's the idea. We don't take people to get into this that are forget it and go. But it's just a convenient factor because if you have to order every month, you just often don't do it. And then you end up buying a massive bulk amount and then you might take the risk of quality.
So I think there are a lot of other products that are coming from Elo in the future that might be more a la carte. We are talking about, for example, maybe meals and stuff like that. Not to promise anything, but that could be a very different product where you can actually go buy as you go. Because the problem is that you commit to many of these. We all have been there. I think Blue Apron is great example. Tough to cancel. I think Groupon was a great example, back in this. Maybe some people remember Groupon, small company. They made it almost impossible to cancel, even the email news letter.
So I don't think that's the right for the current environment. I think we want to be treated as adult consumers, not tricked consumers. And in the Elo app, we are making every day easier to click one button to pause and move forward and all these things. Don't hide them, make it easy for people to cancel. And we want to celebrate people who cancel. Those who cancel might is we're having a company to-
Daniel Scrivner (00:47:40):
Yeah. And I think it's super interesting also, your note on. It felt, maybe to paraphrase, it feels like maybe the right starting point because it was simple enough, simplifies the experience, simplifies the decision. But to your point, it's too simplistic and now people want a little bit more choice. I'll be excited to see what you guys do with it because I have multiple products that I am a subscriber to, and what always inevitably happens goes back to your point before around food portion sizes is they treat it like, okay, well, every single day forever.
You never go on vacation and forget this? You end up with a backlog and then when you have to pause it, it ends up in this spammy experience where you're like, oh, God. And this isn't anything deceptive, I just literally have too much. So I'll be excited to see what you do with it because it feels like your lens to product experience, I'm guessing you guys will come up with a vastly better experience of what it's like to dial up and dial down your subscription.
Ari Tulla (00:48:32):
I promise, we're going to spend a lot of time thinking about the way we do it when we do it, if we do it. Because that's, I think, almost the most important thing. How do we, then we invent the way you do these things. And again, we are not coming from the point of view that let's make a quick buck on you. We are coming from the point of view, can we help you improve your health in the longterm?
If that's the goal, it's a very different goal than I want to sell you a get my kack away by selling you four orders.
Daniel Scrivner (00:49:03):
Sure. I want to spend the rest of the time talking about what you said there, which is if we decide to do this that we're going to pour a bunch of time and energy and effort and try to reinvent it. And really figure out what is the ideal way to do this, and it goes back to thinking independently. And the reason I want to talk about this is, your products aren't just ... The way they're marketed is beautiful, but the design and the product experience is incredible. And I know that was a very intentional decision from day one, and so I want to spend a bit of time talking about that process.
But maybe just to kind of go back and build a little bit of a foundation, why did you decide to focus on design from day one? And just maybe talk a little bit about, because from my perspective, I have a design background, there are very few companies that I think have a high enough bar or a sufficiently high bar. Just a high bar on design. You guys certainly do. Why was that so important from day one and how did you approach executing that and making it real, knowing that you could do that?
Ari Tulla (00:49:58):
Design has been, I've been involved in building mobile apps for people for 20 years. And I think mobile apps are design masterpieces. As far as crafting, this experience in a small space that there's somehow intuitive and beautiful. And not always the case for every app, but you learn a lot. And I'm from Finland, my both co-founders are from Finland as well. Finland has this minimalistic design aesthetics that has been impacting the world in the last 25 to 100 years.
But in the last 25 years, it became a global phenomenon. And it kind of started by the Nordic minimalist design, ethos from '60s. And that's kind of my hope. Me personally, I really like that. We're living in a mid-century modern house here in San Francisco. It's beautiful. But really I think for Elo, I mean, I wanted to supercharge that. So I started with my long time friend and co-founder, Tapio, and we were talking like what do we do? We want to have more because we're going to be a consumer company.
We want to be separate from, we want to be better than the others. We want to be on the different plane. What do we do? And neither of us is like an amazing designer. I mean we'll be our obvious best. So we were very lucky to get the third co-founder to sign up and then he came from Apple, so Mikelo Salvantone. Spent almost a decade in the Apple design team. So he was reporting on the live and he was behind many of the products that we all use every day and love the most. So billions of devices.
And he came in to be that voice and we really had this dialog early on when we concepted that. We were like, what if Apple would build a supplement product? Or what if Apple would build a nutrition product? Well, we have the Apple guy who built the product so now we are doing it. And it was one of the best time in my life in business ever when we started because working with somebody like that, like Mikelo, who comes from that design team, the best team in the world ever assemble in business I think. And he comes with that ruthless ability to say no.
And I learned a huge amount about business and about building a product in the way. I don't know if it's the way that Apple built it, but we're going to. Some of those ideas that they have and start to build this product in the same way and it's been pretty cool. I mean, it takes a bit more time. And of course, we don't have ... We have a finite amount of money at the time at the start of. So you can't exactly follow the path, but it made us a lot better.
And I think that's really what we are now, the third product coming out in 2/2, I think. I can't talk about it yet. It's under the wrapper yet, but that will be a product that I think will be significantly different than anything else that people have seen. People have done powders and people have done enough pills, but I think we are leap frogging the new world where people are going to be like, wow. That's something crazy.
Daniel Scrivner (00:53:11):
Ari Tulla (00:53:11):
And I applaud that. I mean, it's so cool to build something new that people don't even fathom today. Nobody's been thinking about it.
Daniel Scrivner (00:53:18):
Well, and there aren't enough companies that I think adopt that as a goal. I would love to see a world where 10 times the number of companies just had that as in their minds that they were really trying to think from first principles, create something that can kind of be a gift and something new to the world and to their customers. And it's unfortunately lacking.
I want to ask one more question. I want to be respectful of your time. But in my experience, great design is two things really at the end of the day. It's a set of principles. You talked about this kind of ruthless ability to say no. I imagine that's one of them. And it's also a process. You talked a little bit about taking longer. I think unsurprisingly, great stuff takes a little bit longer. But both of these, they aren't mystical things. They're relatively straightforward, but they're a set of things that you learn by working on a team at Apple that you can then take and apply different places.
So I guess are there any other either principles or process notes that might be helpful for people listening that could be inspiration for them in terms of their process and how they approach?
Ari Tulla (00:54:17):
I think the craft, respect the craft is one key thing and making the design to be not just an afterthought, but the core tenet of the whole operation. And really, I mean, yes, Apple of kind of unique in a way that they built all their products without really doing user testing and so forth. But they had the best people in the world. There's no other team like that in the world. Every company.
Those guys, by the way, they get thousands of top offers when they leave, like thousands. It's pretty flattering. So to be able to work with somebody like that is a pretty unique thing. But I think it's about this sort of the craft and listen to consumer, listen to the customer. And it could be general, but really be open to modify based on what you learn. And then I think in our case, we are still in the beginning. We're building the team right now. We are right now trying to hire what some call two designers, a UX lead and a designer for our app.
So who are the best people in the world we can get in to build and craft an app? We're going to give them a year time to do it again. Take a year and do it and go and build an amazing thing. Of course, the same time maybe implement and test the ideas in the old app. But that's what you have to do. You have to break the mold. It's so tough to build the mobile app especially, or work experience where you always add on top of the old stuff.
You kind of have to burn the whole thing and build the new thing. That's the only way. How many times you open an app, like now with the COVID? Maybe you didn't travel or maybe you didn't use some of the apps that you used to use. Or it's like Uber. Maybe you didn't use the Uber app at all because you didn't use Uber and then you open it and they are redesign it. And it's not better. It looks different. It may be functions a bit different but it's not really a better app. It's frustrating to me.
You know somebody spent, a 50 people team spent two years building this and now it's totally different but it really is not better for me. How can we get to a level that every time you have a major upgrade, you actually open it and you're like, this is better? For most people. I mean, stop because you are serving. They might not be serving my need, Uber, I don't know, because I've been a user since very beginning. So maybe they are serving somebody else. But it felt like it's not a better app. I mean, it's not.
Daniel Scrivner (00:56:46):
Yeah, no, I completely agree. I completely agree. It applies to almost every app, I feel like that I open on a regular basis. And just what a simple note too, what a simple principle to be like when you have a new update, you need to be able to have some aspects of wow or that's better. Something that's tangibly better that moves the needle, where it doesn't feel like you're moving deck chairs around for the sake of it.
We covered a ton of topics today. I just want to give you a chance. Is there anything else that we haven't covered that you just want to quickly speak about or anything that you maybe just want to close with, after talking for an hour and a half of what you've been building at Elo?
Ari Tulla (00:57:18):
Well, there's one thing that I always love to bring up, if I have the time. Having been in the gaming for quite a while and gaming was the most sexy, exciting. It was still today. I mean, every time you have an opening in Copeland and Supercell, thousands of people apply. Thousands of people, every box. So there's a lot of demand on getting to build games and apps and all this fun stuff.
But we have too few people who are, younger people who are getting into building something fundamentally important like healthcare things and the nutrition things we build today. That's maybe more esoteric, but healthcare. There are many, many, many companies that are just amazing and they need young talent that are able to go in and really build the best work there. So don't always think about going through work on the thing that you like at that moment. But look around a bit and think about where can you make a bigger impact?
Because if it's tough to be, if you go to Apple, it's tough to be a lot better than other people because they have really, really good people. But if you go to a healthcare company building consumer healthcare apps, for example, you can maybe be the best person there and you can become the leader of that team fairly quickly. And that to me is the thing that people just, they wake up when they are 35 and they had two kids. They hadn't slept for long time. They wake up and they're like, "Oh, my God. Life has a different meaning." And we are mortal, and I want to build on good stuff to really make a difference.
That picked me early on because in health, this is with my wife. Normal people only got that idea when they turned 30 or 35 or something like that and then it's maybe too late to change their path. You're already so deeply entwined with whatever you do for a living. But that's just a thing that when you look on next gig, and that was a great time because we have what are people thinking what they want to do now. Past goal with maybe a recession, whatever happening.So look around and look at the companies that you might not be looking at in the first place.
Daniel Scrivner (00:59:31):
Well, it's a fantastic note and just to close and maybe turn it around, that's also why I was so excited to have you on. Because I think you're in an area and this is one of the things that I get most excited about, which might seem somewhat silly to a lot of people listening. But people that are in an area that might not be sexy, but are approaching it with a goal of really not only just let's all come here to do our best work but let's come here in ships. Let's create something that we're incredibly proud of.
And so it's amazing to see you doing that with Elo. It's been so much fun to have you on and be able to talk. Thank you so much for the time, Ari. I really appreciate it.
Ari Tulla (01:00:04):
On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.
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