In today’s episode I get to learn from two brilliant women; Coco Meers and Marcy Capron-Vermillion.
They’re both serial entrepreneurs, they’ve both exited businesses and we’re going through the ins and outs of their latest venture Equilibria.
We talk about what was wrong with Coco’s first business model, vaginas and the key lessons you need to know when building your own biz.
Equilibria is a Chicago-based CBD company offering premium, farm-fresh, full-spectrum CBD products. In a sea of CBD brands, Equilibria proudly offers personalized dosage support led by a team of seasoned cannabis educators and unparalleled quality from their exclusive bioscience partner, all to advance the mission of balance for women.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
Female startup presence, Coco and Marcy Hi, welcome to the Female Startup Club Podcast. Thank you for having us. So good to be here. Doone. I'm so excited to jump in today. I always get started by getting you to introduce yourselves and tell us a little bit about what your current businesses This subject is near and dear to our hearts because Marcy and I have been building businesses and products on our own and together for a long, long, long time. Uh, maybe a decade now, Marcy, Whoa. 2021 scott. Uh not Quite, I think 20 2013, but we're definitely getting there. Yeah, time flies. So we'll give you a little overview of some of the businesses that we've created together in a part and then we can dig more into into this one. Would love that. So my whole career has been focused on women and on their health and wellness goals, helping them achieve those goals, helping them look and feel their best.
00:05:06 They started out very traditional brand management at Loreal in new york and in paris and then wanted to dip my toe into the entrepreneurial community and had a vision for a consumer technology marketplace that was called Pretty quick which was like open table or um there's one in the UK which is very popular that I'm forgetting. But uh what's the british equivalent of open table tabletop or? Yeah, I think it is open table though, is it open table? Okay, great. So anyway, seamless booking for salon and spa appointments in the way that you can go and you can press a button on an app and you can book a table in a restaurant or you can book an airplane or you can book a car or you can book or you name it, you can book it, you really still at least in the U. S. Are not able to do that in the salon and spa. Um space. So my first company was to solve that problem and help women more easily book salon and spa appointments. It was called pretty quick. I made all the mistakes in the world.
00:06:06 So happy to talk about any, any of those. Um, you name it if there was a wrong way to do it. I did it. But then I talked too bad though. You still exited. Yeah. Yeah. Yeah. Well you know you only learn how the right way to do it after you've done it wrong a couple times. So things started to work out. One of the best decisions I made was to partner with Marcy. Marcy ran a consultancy that helped non technical founders build and scale their technology products. So partnered with Marcy who understood the pain point in a world full of male engineers, it was really hard to partner with someone who said, oh yeah it is, it's super hard to book a bikini wax. I want to help you solve that problem. Um, anyway, so um, so built and scale that company exited to group on in 2015. Once we had worked out a lot of the *** in the armor and, and and started to have a lot of success. Finally, how much did you, how much did you sell it for? Is it publicly disclosed information? Can you share? We didn't disclose all investors made money. You know, it was a, it was a really great outcome for everybody, not a life changing event for anybody, but um, but really great returns all around furthermore, the, the, we got to keep going.
00:07:18 Um, Groupon is notoriously very bad at acquiring uh, killing innovation that they acquire. But we, we had a really nice run where what we were doing was we exited into a billion dollar business health beauty and wellness Groupon is a billion dollar P. N. L. And so what we were doing is we were infusing pretty quick convenience, quality. Um all of these things that the group on brand had lost because it had become known to stand for discounts. Um and so we got to really invest in the project. The team grew from eight when we sold to 90. Um, and we basically had, you know, unfettered budgets to just really grow and scale on scale nationally with the assets, the salons and spa customers and then the consumers on the other side, you know, we kind of, we had it all, we got to leapfrog our competition, put it all together with the pretty quick brands in tech and then move forward. So it was also really, we can talk about, you know, exit strategy and its financial decisions are really important. So is the experience of what it's like when you sell the move to your team, what's going to be like for them?
00:08:19 What can they keep going? Um Can you continue to build the vision that you have or is it or you just wiping your hands and gun? I am an act of angel investor. And immediately after leaving group on called Marcy because she always has her finger on the pulse of the next thing. And I'll let her tell the story of her past and then what happened when we reconnected. Yes. Amazing Marcie tell me about you tell me about your background a little bit. Sure. So um I identify as a product developer, you know, agnostic medium. I love to solve problems. Best tool for the job can mean a lot of things. Historically huge part of my career has definitely been um software and IOT internet of things. Um, but hardware CPG soft guards, all that is so fun to play with because again, you never know what can best solve a problem. So as cocoa mentioned, I ran a consulting firm called problematic where part of our business was acting as the technical co founder and and product counterpart to non technical founders. The other part of our business was going into antiquated ancient industry businesses that were like 100 plus years old and saying like what's next?
00:09:23 So when you hit a point where you know, a company's gone through how many steps and it's over a century year old and, and like for instance things around dairy trading, like people don't know that there's actual communication with farmers involved and things have to do with dairy trading, kinds of crazy stuff like that. Super fun for me because I love to solve Really hard problems. And so when coco, you know, was a client, um, so that would have been like 2013, and she went on her way for her group on journey. Um I kept building all kinds of crazy things. So probably my biggest claim to fame was having um produced around 30 products before the age of 30. So it's a cool, cool place to be. I've seen a lot of really cool, weird, interesting, not so interesting stuff. Problems come in many forms um and I had sold my consulting firm in 20 early 2017 consulting exits are never as fun as as something like an exit ticker bond. But it was, it was cool to kind of move on because one of the things that I wanted was to be able to really embrace that problematic nature of being able to solve in different agnostic of medium and I was a little locked on the software side.
00:10:25 So I kind of went on a sabbatical and the thing that I stumbled into happen to be cannabis. So at least we use that as a catch all term I know in different countries it can be different things but cannabis here we're defining as you know cannabis sativa plant which is either in american terms hemp is defined as 0.3% THC or less, it's defined as marijuana or weed um If it's more than as more than that in THC. So anyway, here's how I stumbled into that um I am a person who really loves to do research, especially when I haven't been asked to do it because I'm naturally curious human. Um And so I had been in a kayaking accident actually, it was around one cocoa and I met um but it was something that lead to damage later. And In 2017 I was someone who, you know, should be in the prime of my life, but instead was unable to do a lot of normal everyday activities because I had so much pain in my lower back. So I was contemplating getting surgery and instead um luckily a family member had gifted me some CBD for my birthday. So I kind of was like, all right, this thing isn't gonna help.
00:11:28 I take tons of of Advil like this can't possibly be any better than that. Although knowing that my, my husband, it's a veteran and cannabis has been really great for him, but I just was never a me thing. I never smoked pot in high school, like it wasn't of interest, you know, I'm glad that I, that I listened to this family member because I was definitely like, I put that jar on the counter and was like, you know, um because within a couple of days, like I was seeing such incredible improvement in my back injury and being able to actually move around, being able to like stand up quick. Yes, it's not always as quick for everyone for me considering the amount of information that I was dealing with. Um it kicked in pretty quickly. So I had this just amazing pain relief and then I found myself just not feeling so depressed and so anxious and I was like, well, all right, well this is an unfamiliar feeling of clarity. What do I do now? Um, and I realized that there really had to be something here. I was a little confused as to why it took me that long to find it. So, I was doing a lot of work in the industry, looking at what was working, why are some products good, why are some bad, why do you have to get a medical marijuana card to get certain products?
00:12:34 You know, things along those lines in 2017 it was, it was a super nascent space. Um, and I wound up co hosting a monthly meet up with a friend of mine and it was there that I had a lot of transformational conversations with women of all ages. You know, there are women that were driving from really far away to come in and talk about how much they were struggling. And there were a couple of moments that really stood out to me, like a lot of you think of all the different, you know, daughter struggling mothers, struggling grandmothers, whatever. You know, for me, the biggest thing was, was the grandma's grandma's driving in from really far away to talk about how much they were struggling and how they were having really dark thoughts and you hear enough of that, like, I know it's like I always say like save the grandma's because I don't think anyone is talking about, don't want to hear that in the same sentence. Right. Right. Mental health, especially in postmenopausal women I think is something that we don't, we don't talk about a lot. But there were women of all ages here and talking to everyone. You know, my job as a person who works in product innovation is to look at, you know, trends, patterns, causation, etcetera. And it was an undeniable pattern that a lot of people were hurting and not talking about it.
00:13:39 And also that high THC cannabis was not appealing to them was never going to be appealing to them. But that didn't didn't mean that they couldn't benefit from canvas. So I was looking again at like what was working what wasn't at the time, there were so many over the counter products that were flat out terrible quality, if anything could actually make you very sick. The space has improved a little bit, but still some, some bad actors out there And by the time that Coco and I met up, I was just sitting on this wealth of data because I prototype what's now known as our dosage support service basically by doing phone calls, video chats, etcetera with these women digging into what it was, they needed their health concerns, you know, are they taking medications using things safely with cannabis? All that. So when Coco and I went to meet up, I think she was, she was expecting uh, here's what I'm working on. Like this is this assistant instead. It was like, let me tell you this dramatic story. But it was probably a funny thing to witness? Um but it was a really big moment for us to like I shared with her like a certain level of vulnerability that obviously you can only do with someone that you know relatively well.
00:14:44 But I think it was clear to her that we had to do something about it. But the thing that really stuck out was that we could not do this without a human element. So you'll notice that we're basically the only canvas company that has both a product in the service company baked in with technology and the reason we did that is it was really clear from these conversations that a human had to be available or these women were not going to touch this category at all because they need to ask questions. They need to figure out like what's right for them and they're not able to do that decision making on their own. Is that what you mean? Yeah. Well and that is the decision making on there. They want to make informed decisions. Women are trust based consumers and so they were like I have so many questions. There's so much, you know, unclear stuff out on the internet right now and it's just like it's a scary thing. It's a taboo thing even if you can't get high from, it's still, it's still a scary thing. How do you know I mean literally what do you know dude, are you to start with 10 mg a day or do you start with 100? Do you micro dose throughout the day or do you take a big dose at night before you go to sleep? Is it going to make you sleepy? Is it going to make you tired? But then it's also supposed to be used for focus.
00:15:45 What does it do? How could one simple ingredient actually do all these things in your body? That sounds a lot like snake oil. I call bullshit on Marcy Really? If she wasn't a data driven full stack engineer, I would have, I would have just walked out of the room. But Bush, how can one ingredient do so much within the body? And it only makes sense when you are empowered by education. When you understand the way that the endocannabinoid system works in our body. We are so committed to education because more than any other category, this is the newest oldest industry, right? Humans have been using candidates for medicine for millennia. But how you use it, why you use it. What you should know before you use it. How much you should use, How you should change what you're using based on your own health goals and outcomes. Those are all questions. Very legitimate questions. And we believe it is our responsibility to empower our members with that. Education mm. That's amazing. CBD should be taken daily. It's like birth control, right?
00:16:49 You the whole point is that you want that steady drip of exactly that right amount in your body at all times. Right? What we're doing with CBD is we're helping our body's own endocannabinoid system which is this meta system within our body which is itself responsible for regulating all these systems. Circadian rhythms are response to stress. Um uh you know, you name it physiological pain and inflammation. We are helping that master balancing system balance better. So you don't do that like by reactively taking a bunch of CBD. You know when you're already stressed, you don't do that by reactively taking CBD to help you heal from an injury. You do it by by augmenting that system every day consistently. So from the beginning what Marcy and I have done is we've paired high quality product that's as clinical great as it gets. We are owners and our own farm based in Colorado here in the United States. And then we pair that premium product with personalized service. And every single member of equilibrium has a dosage specialist who's a real life clinically cannabis trained educator who's just there for her and 35% of our members talk to her over 65% of our members chatter email with her own person to just say uh where I started with this collection literally.
00:18:07 What do I do tonight? Can I start tonight? Yeah. Dude, you can start tonight do this. We just were there to hold your hand and talk with you physically psychologically emotionally about what you're putting in your body and what what what you should expect from the outcome. I am so into chat hotlines especially if it's like on like something like what's app where you can literally just be like can you please answer my questions in the way that I want to ask you questions. Just a quick note. Their love that, love that for people. So when you guys were meeting up Coco you were in private equity or you were investing in businesses and was this a conversation of like oh do you want to invest in the business or what do you think of my idea or was this a conversation of like, hey do you want to be my business partner coming from you Marcy. I mean it started with like something that I, if anyone who's ever heard me speak on anything, I talk a lot about the can't not do reflex which is the biggest driver for me is like an entrepreneur and innovator. Um the conversation largely started as like I've had this cannot do moment like I'm doing this research and I literally can't stop thinking about it and I'd like to talk to you about it and Coco had been investigating the kind of medical help side of things for investment or otherwise.
00:19:18 So it sort of was like a fortuitous timing moment let's say initially got it. I fully expected to go, I, you know, as Marcy mentioned, I have been making some investments on the health side of things. I also just really love writing checks for women who are smart and who are, you know, focused on results and outcomes and Marcy is one of those women, so I totally met up thinking I could just passively help and write a check, I did not think that Marcy was going to like again, she just opened her like heart to me, right, and was like brave and said, no, everything is not perfect, this is what's been going on, it's been really hard, who does that when you're just catching up? Right? I think we've, we've everything's supposed to be perfect all the time and you're working on great things and everything, you've got it all under control. Like we give women this space to say I need help, I don't have everything under control, which is totally okay. I was just really like impacted by mission and like the results that cannabis as this like super powerful plant therapy can have for women plus just like creating a community where it is okay to say I'm not okay and so for me, I said screw it, this is not just a passive check that I'm writing to this, you know, capable founder, like I wanted to um and for me this was a really beautiful um kind of coming home where my early part of my career was all CPG all all Loreal, like physical goods and then my pivot to entrepreneurship after business school was hard core product in tech building a consumer marketplace.
00:20:56 And so this was both, this is both, this is products company with a tech layer um that that that's, you know, telehealth services and if you're a services company, you're a data company, right? So it's like all all together and it's just deeply rewarding because it's, it's were growing like a rocket ship, but we are genuinely mission driven and every single person who works in equilibrium is here because we want to help women and we know that high quality CBD and education can change her life. Uh I love that, that's so cool, I have so many questions and I want to know where do you guys want to start with this? So what do you want to go with this? Because obviously we definitely want to touch on what you learned from your exits in your past businesses that you and the failures that you had there, that you are able to learn from and bring into this new business, but we also want to talk about how you actually brought this business to life and like what the model was. So maybe we start with equilibrium to like now and then we come back to the exits at the end. Okay, so knowing that you've already kind of, you've got this idea, you've both got experience.
00:22:01 How were you able to get this brand off the ground? Like what kind of capital did you need to put in? What were those early steps like if you're just to really dumb it down for me? Yeah. So you know, we talked earlier about the mistakes, how how failures and mistakes from your past can inform your president, your future and you know, full disclosure pretty quick. My first company and we had a very successful exit. It was never a good business model. Business model didn't really work. Why? Okay. Our take rate. Our commission was, here's why our commission was 20%. Our average order value is $40. That meant we were making eight bucks. There's a eight bucks every single time someone books an appointment To acquire a member. If we were lucky we would spend $40 which meant break even on a customer was five times. Name an app that you go back to five times in a couple of month period.
00:23:09 Right? I mean truthfully earning that frequency is really, really, really hard. And if you are solving a hair on fire problem like frickin morphine, then of course you're going to get her five times. But you have to be like morphine in order to earn the trust of a consumer to use you more than once. To be honest. Like we got a lot of choices, consumers don't have time to come back to something which wasn't fucking awesome the first time. So this isn't about pretty quick, this is about equilibrium. That's why you pivot into something that someone has to take every single day. Yeah literally you started the morphine brand. Well I mean like yes and you know what um so and and recurring revenue like you know I don't invest in businesses that are not either G. P. Positive on the first transaction or recurring revenue. Like it's so hard to break through all of the noise that is out there in our digital and physical and consumer economy.
00:24:10 Um So at the end of the day like there's passion plays and I know there's businesses and like this is a business and we had very very limited early paid in capital. We raised To start from one lead angel um and ourselves who were able to contribute also as serial entrepreneurs. We raise you know $350,000 to get us started. That's not a lot when you're having to buy physical inventory um and also invest in marketing to figure out what your channels are going to be to grow the business. And so the one thing that I would urge everybody listening to this podcast to remember is that like your business model has to work like it's going to cost you more money than you think to go out there and find customers and acquire them. So make sure that you are literally in the black the first time they use you or that your product is so good or your model is so sticky that they're going to come back again.
00:25:14 So we had our unit economics dialed from the beginning because I've been there and I've I've had to raise money when my customers couldn't fund the business's growth and that is not success, that's not where you want to be got it. Do you have anything you want to add mercy or Or should we should we keep moving on from that? Okay, so you raise the 350 grand. This is what allows you to develop your products to I assume find your partners in the, I think you said you owned your farms, right? That's also pretty, pretty major. Yeah. And basically get the initial stage of the business going. So um and this is also where you know, the partners that you choose are so important between Marseille and I and, and I want Marcy to share her perspective on this. But we had a lot of the skill sets that were required to test the viability of our concepts early on. So we have $350,000 in cash. Fine. We had a, we are, we are owners in our farm, we are not the exclusive owner.
00:26:16 So we didn't have a huge cash outlay for that investment but we were able to secure the joint venture relationship with the farm, begin buying inventory and then Marcy as a full stack developer and products designer as well. Um she truly is polymorphic was able to build the first version of our site, we would partner together on operations and I would handle the marketing. So between the two of us, our skill sets were such that we could take this minimum viable product to market, which was the science in the bottom and the product itself is absolutely amazing. What we were testing in the first phase with this, you know, early, early capital was Would people take it every day and would they subscribe and how would they like to interact with the dosage specialist? Um, do they care about having a person that they can talk to to get their daily routine right. And what we learned this was in late 2018, early 2019 when we were in beta before we actually launched the site, we learned that yes, women were willing to give it a try and to take a daily into stay consistent.
00:27:26 And for you, what did proof of concept look like? Was that like how many users or how many kind of what was the goal for you to reach to be like, yeah, okay, we've nailed it, we've got everything ready now we're ready to hard launch. It's a good question. I'm trying to think about how many people were in our beta it was, I want to say it was like probably approaching 1000 customers by the time we launched in March. So, I mean, it picked up speed, We did an initially we tried a couple different mechanisms, like we had a free trial program, which is tough because you know, CBD does take a while to seek full benefit for most people. Um We tried a lot of different sorts of things. We were only subscription in the beginning, we pivoted to allow both traditional one time purchase, e commerce and subscription, you know, not actually a couple of months after we were publicly launched, but we were pretty lucky that anyone who wasn't having a good experience, which was largely had to do with things with their endocannabinoid system. Um the CS were very vocal with us, so we were able to kind of work through all of that. Like even like, you know, Coco's mom had an experience where she didn't want to be a customer anymore and then it just turned out that she was taking it the wrong time of day and like, you know, these sorts of things that we had to, you know, sort of work through and once we did that there was a lot of confidence.
00:28:39 I mean, I've built a lot of things that I've never had this level of engagement with the customer base nor just like this quick pace. Yeah, it was obvious Dune. We knew like, yes, Marcy is right, you know, we had about 1000 women who were subscribing on a monthly basis. We were growing that new customers every single month. We had the beginnings of a channel strategy, but like it was obvious like what was happening, what we were hearing from her was like, holy shit. Like I am a better parent. I am kinder to myself. I feel like the weight of the world isn't on my shoulders all of the time. I have been able to have sex for the first time in four years or whatever. Like women were telling us that we were helping her life like intimately, you know, whether it was an injury or sleep or just all the anxiety that we all feel all the time because we're just balancing everything name one woman who isn't balancing more than one thing. We all are no matter who you are, where you are in life or what you want to do.
00:29:45Edit You've got a lot of your place. Everyone needs this as like everyone needs this. Especially women, women, I need this. You really you need this, we got to do you need this. So I mean we, we that's the kind of stuff. So my mom, um you know, we were watching the metrics like a hawk. So and you know, for all of you listeners of course, you know when you get your proof of concept going, you know, don't let don't let perfection be the enemy of the good. There are many conversations that Marcy and I said where I was like, oh let's not do, it's not ready. And Marcy said, come on, we gotta launch son is better than perfect done is better than perfect. Exactly. Um, and again, what we were testing was efficacy but we were testing was delighted. We were testing was consistency. What we were looking for was turn so we're obsessing data driven orientation. You who cares if you have a proof of concept, if you're not saying like what are the metrics that tell me that this is going to work? The number one metric that we were looking for was was too full. It's always going to be acquisition and retention. Can you help her start and can you help her stay?
00:30:47 We were acquiring more net new ads per month and the month that month over month and then also we people were staying with it. Um, so we're obsessing over churn and whose cancelling and the cancellation reasons and the first person to cancel was my mom. So call her up and I'm like mom, what is going on like free country? I'm glad you were honest with me but like really you're going to be our first subscriber to a trip. Why? So she said um, it was, it was actually really working well for her, Her goal was to get off of the last five mg of Zoloft that she'd been taking since her divorce 25 years ago and she um, so she was she was really committed to it, but she said that she was taking it at night one softball, just 10 mg. But the THC was waking her up, she was feeling like very alert in the middle of the night, which is of course the opposite Of what we want. Now we know from all of from you know, three years of doing this that about 5% of our members do have kind of an elevated agitated experience from the trace amounts of THC which are in a powerful spectrum products.
00:31:53 So I said mom, this is why we have the dosage specialist just before you cancel, talk with your dosage specialist about your routine, your body, your routine, maybe you're taking it at the wrong time or the wrong amount or not enough or too much. So she finally meets with the woman w