GEM's Sara Cullen on building build your business around customer data and exactly how to do it

Joining me on today's episode Is Sara Cullen, Founder of GEM.

GEM is a functional food company designing a next-generation health system. Created in response to the failing reductionist approach to nutrition, GEM focuses on improving our health at the cellular level.

As cell health determines the performance of everything in bodies from brain health to digestion, GEM focuses on delivering important nutrients that work together synergistically to help cells function at their healthiest. Using real food, not supplements, as the vehicle to deliver these nutrients, the Daily Essentials regimen improves everyday health outcomes from energy and brain function to gut health and inflammation.

In this episode we’re covering how Sara went about building this business and the exact steps she took to get a product to market that was exactly what the consumer wanted, through an ongoing private beta group. We also cover her tips for fundraising and lessons learned along the way.

Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!


Thanks for having me. I'm super excited to get into your story but I'd love to start by getting you to first introduce yourself and tell us a little bit about what your business actually is. Yes. So we are a food first nutritional ecosystem that is reinventing the supplement aisle with real food.

00:03:33 Our first product is a reimagined multivitamin. Um what it looks like, how it's designed and what it does for you. So instead of a pill or capsule or gummy bear, it's one real food bite made with whole food, algae and other super foods and herbs um to deliver all the nutrition that you need in one bite that's better absorbed and better for you and better for the environment as well. So incredible. I actually tried my first one today and thought it was, I loved it, I loved it. It was the peppermint flavor that I tried and I am a peppermint fan so I thought it was super yummy and really good. Like a nice experience to have something different than swallowing a capsule. Yeah exactly. Um a lot simpler. You don't swallow a handful of capsules anymore. Just one bite and we have three flavors, Cacau, peppermint and lemon. So good to hear that you love the peppermint. Yeah. And I also feel like just the experience made me feel um this doesn't make any sense but I felt like healthier having that than swallowing a pill.

00:04:36 You know the texture and the little seeds and stuff. It just made me feel like yeah I'm having a little bite of nutrients here which I am obviously so much more than you would in a traditional multivitamin, right? You're having other superfoods and adapt regions that you wouldn't normally get that is doing a lot more for your body. So I love that for me. Um right, okay, I want to rewind to your life before jim and talking about kind of what you were doing that got you interested in starting this business in the first place and to go down that path of entrepreneurship. Yeah, definitely. So I've always been passionate about the world of food and nutrition. I actually grew up on a farm in Oregon and I studied it in college, more through the lens of policy and sustainability, and then afterwards I started my career in an entrepreneurial fellowship called Venture for America and actually started my first company, it was a plant based beverage company. Um and around my mid twenties I had a series of kind of crazy health experiences that happened to me a lot of inflammation and acne metabolism and digestion issues and um really a lot of auto immune conditions and I discovered I'm not alone in this, by the way, you know, um If you look at uh just you know, 30 years ago, one and 400 people were diagnosed with autoimmune conditions and today it's one and 12, so it's quite wild and, and so I've always considered myself a healthy person and so the reason why I think there's this is happening is because there's such a decrease in the nutrients of our current food system today and it's just so broken and so like so many other people, I was like, what's happening with my body?

00:06:25 I'm gonna turn to the supplement aisle and try to get a pill for this in a pill for that. And I got all these different, you know, powders and started calm playing together these complicated routines and I wasn't feeling any better. Uh and so that's when I kind of went back to the basics and started, you know, experimenting the kitchen with different superfoods like spirulina and these other algae uh components. And I started feeling a lot better, but it was really complicated and expensive and not convenient to make these like super food concoctions every day. And so I, you know, started to figure out, ok, how can I create a way to get better nutrition. Um there's something more convenient under this philosophy that food is medicine and that's what, you know, starting down the path of a building gem, something that was really clean, that didn't have the dirty fillers and binders that I found in so many supplements, that was really transparent, that was just from real food ingredients and that's, you know, what sparked my inspiration to build this entirely new way that we nourish ourselves.

00:07:32 It's funny because what you're describing that you went through in your twenties, I feel like describes the story of my life. It's definitely all the things that I struggle with. I go through that same. Um you know, thought process of of, well I must be needing something in my diet and I think I'm relatively healthy. I eat like about a million vegetables a day. Um And I still have so many digestive issues and bloating and this and that. Yeah. Yeah. Yeah. It's quite overwhelming actually as well to even go into the into the the isle of supplements and be like okay well what do I actually need? And I've never really thought too much about what's in these products exactly. Where do you begin? And when you when I started questioning and actually looking into you know where these vitamins actually come from, a lot of it was pretty alarming. They were you know. Drived in a very synthetic way from these artificial sources and then there's almost more synthetic artificial flavorings and colorings in it than anything else. And so you're not actually putting the right nutrients in your body in the right way.

00:08:36 And most of all you know the reason why real food obviously works is because there is a whole science behind it right that you're actually getting these other bio active compounds, these antioxidants, these enzymes, these things that you wouldn't get in a traditional supplement that that does do a lot more and helping absorb in arco nutrients and co factors to the vitamins that you do need to work in your body. Um And so that's why it's important that you do use whole food sources but how how do you even begin to do that when um you know not all of us, especially in our modern lifestyles, it's not realistic to to eat the volume of vegetables, nutrients that we need now to make that happen. Yeah, totally goodness. So you're in your kitchen, you're tinkering around, you're making these little like balls or something like what's the, what's the product look at this time look like? Yeah, so I at the time I started looking at some sort of under tapped under explored plants that we haven't used before or that at least in America we don't use um in our average diets ones that deliver a lot more nutrient potential than what you might think.

00:09:50 So things like spirulina, as I mentioned before, it's a micro algae, green algae that you know, one g of spirulina is equivalent to the nutrient density of a kilogram of fruits and vegetables. So things like that that you might get like at a certain smoothie shop but it's not necessarily accessible. And um so I started kind of exploring these types of plants and I did all kinds of concoctions in my kitchen, so many of them that I'm happy didn't make them to market, I'm gonna make it to market, but but they were at first I was just trying to create this simple bite really that had a lot of the most nutrients, plant sources that we can find. Ones that were vegan ethically sourced and sustainable. A lot of our products today supplements are still drive from animal based sources. Um so that was like my first round doing that and I wasn't even sure you know what exactly to call it, I just knew that this was your bite to kind of fill the gaps in your diet with these nutrient dense plant sources.

00:10:51 And what I first did was once I kind of got my initial prototype, I worked with a variety of different scientists as well. So I went to you know functional medicine doctor, we have an herbalist, uh we have a molecular biologists do we have a dietitian? So I tried to go through to a lot of different scientists with different perspectives to on how we can kind of blend our perspective in the Eastern Western medicine and really take in a variety of different ways that we look at our health so that we can start to address all of us and not just parts of us. So from there working with scientists and then working with farmers around the world, which was part of my background, I had you know with my previous company and then just with my own research and studies, I had a lot of these connections direct to the farmer and so from there, you know started to create this funny looking bite and then I actually launched a beta group, so a lot of tech companies do this but it's sort of more rare I think for a food company do this and I formed a beta group of women across the country, a lot of them that didn't know kind of, you know, refer mouth, refer someone in and from there, I actually just sent the product for free to over 300 women and started to collect their feedback on, is this working for you?

00:12:10 Do you like this? What do you think of it? And that's when I really started to learn, oh wow, this really is a replacement for what is today, a multivitamin. Um but we're actually a real food products or FDA regulated. We have a nutritional fact panel, not a supplement panel and so I didn't call it like a vitamin at first because because it's really not what we are, we're a real piece of food, but what I noticed is that's what we were replacing for so many people. Um and so through that beta group, I collected a lot of information on what people people needed as well. So I think a lot of how things are designed today, not only in kind of this dirty way, but they're designed with mega doses of everything that you don't necessarily need. So we started looking at, okay, what are the kind of average deficiencies, right? And kind of our common diets if you eat sort of a well rounded diet um what are you still messing, what are things that are hard to get and then also what are things that are modern lifestyle demands, like what are those things that they demand?

00:13:11 Our modern lifestyles? So for instance, we're all very stressed out nowadays. We have a lot of stress is right of course like work and emotional stress but also just like pollution in these in these different things. And so that was when we started to say okay we need things like ash Uganda for instance, which is you know scientifically back to reduce your quarter salt levels. We need things like Lorella which is a heavy metal detoxify their because we have so many of these heavy metals and kind of dirty things in our diets now that we really need to flush out our system. And so that's what sort of help me figure out okay the plants that we need to not only kind of fill the gaps in our diet and our average deficiencies, but also really meet the things that we need for our modern lifestyles. And so from there and through this data I learned a lot about how to build a product that not only was designed in a better way for you, it's better absorbed, but also that really helps address the things that you need most. Um and so this first products designed of course with women in mind, it's great for men too, but it's really designed with women first sleeping a woman and helping the things that we need uh for yeah, for our day to day lives totally for our day to day.

00:14:27 How long did that process take from you kind of starting in your kitchen and then starting to work with the you know the scientist and doing the beta group. What was that product development time like until you got to the finished like launch product. Yeah, so because my background had been in this and I was working on this um through a plant based beverage earlier really I have been studying and building these relationships with different farmers and building these relationships with different scientists and food scientists for really two years. But I would say it was about a year of us really like developing it. So you know once we started developing it and testing it, the beta group itself lasted a couple of months and we sent a lot of iterations out so we would you know send it out to our customers, get their feedback, is it working for? It's working through okay. How can we make it taste better or how can we make ads and things that make your lifestyle that make you feel great. Um and so that process itself and sort of the rapid iteration at the end into that data group was Probably a couple of months and then um we ended up launching gem uh in in late 2018.

00:15:35 So it's been about two years now we've been in market but really um we wanted to launch pretty quickly and cleanly because it was all about really building gym with with our customer and with our community at the heart and soul of it and that was really important to us. So you know we're still evolving our product today, we're still iterating on it as we go to make sure that we're continuing to improve and build the best thing that we can. And so I would say it's like still going, you know, ongoing in so many ways. We're still adding more people to our science and board, looking to bring on a neurologist now an immunologist and and things of that sort so that we can continue to build scientifically backed products as well that really do work under this philosophy that food is medicine. Um so I don't know if it's ever really ended but I would say that the first made it probably was a was a good like six month period, wow, amazing. And are you able to share how you were funding the business in the beginning and what kind of funds you needed to start the business?

00:16:37 I imagine obviously having a lot of those people involved requires significant capital to get started and then also you know, even just shipping to 300 people that costs a lot. Yeah, so I started with just like a very very small friends and family round and I really use that money wisely. Uh and it was basically all of the savings that I had um that was maybe supposed to go towards, you know, graduate school or something like that. I took all of that money and I invested it into this. So my drained my entire savings down down to nothing to just get that initial prototype out to people and to ship it. Uh, and then, you know, once I, I had this, we actually did this beta group within a facebook group. So we used, you know, super low tech. Um, it was just uh, no cost there. And I ended up inviting, you know, investors and angel investors and partners, institutional partners as well to this group and you know, just showed them the proof that it was working that people are wanting to evolve the way that they look their nutrition, they don't want to kind of take this reductionist approach that we have been in kind of different supplements in capsules and pills and tablets and they, a lot of our investing partners today saw that then and I ended up being able to raise my first round of capital early on.

00:18:04 That was my precede financing round right before we launched. And that really got us from the beta to the launch and even more. So, you know, that was a big help in being able to raise that round of funding is that we spent it on really the product and the customer and building that right, I think there's so many start ups today that have approached it differently where they spend maybe three years incubating without even knowing their customers, you know, building this like pretty brand or check boxing, these things that they think they need to check box and we didn't invest in that super early on now that we didn't invest at all on the brand, of course we built this brand, but it was all about the community, like our customer was, our brand are having a really high efficacy, high quality product, um, having the right, you know, science partners and so we just invested that money really smartly and not, um, to be able to get to market and to use those funds wisely, but that's how we raised our initial round was just by proving um, how much people wanted this in the world and uh, and in getting that product right, if you had to share one kind of key learning from that process and going through um, raising money, what would that be for any entrepreneur listening?

00:19:22 I have a lot. So I, you know, I think that you really, you really need to find the partners that and this I guess may seem cliche and obvious, but it's one of those things that you don't really realize what it means until you're in it, but finding the partners that really can see your blue sky vision and understand where you are going with it and really align with you. I think there's a lot of different ways that you build businesses and particularly in different categories, right? There's different tech products or SAAS products or service based businesses that require different look at your economics and how you build things. And we got, we were really, really fortunate to get a lot of investors on who really understood the mission driven component of our business and that, you know, you can't really build a product that's better for you without building a product that's better for the environment as well and knowing those investments that need to be made.

00:20:23 I think people early on just kind of see investing maybe as a one way street, like they're just doing due diligence on you, but you really need to do diligence on your investing partners as well and you need to ask them the right questions. It's all about relationships in the end, um, with your customer, you know, just just like with your team, everything just with your investing partners. And I think investing in building that relationship and making sure your eyes is values align and how you look at growth and how you look at building the company is so important because it's a long road, there are a lot of ups and downs and the investors, the good ones, you know, are the ones that are going to be with you when you're on the high of the roller coaster and when you're on the low and who really want to have skin in the game to build this with you and not just invested, check and leave and never say anything again. And so I think that's my biggest advice is put in the work early on to build those relationships and to make and be and be okay with walking away. You know, we've, we've walked away from people before because they just, and not that anything is right or wrong, but they just, how they looked at building the business was different than how I did.

00:21:31 And so I think being comfortable with that and knowing that it is a very mutual process, you know, that you're selling a piece of your business too and they're coming on board and to look at it really as a partnership is so important in creating a good relationship with your investing partners and also a good, I think fundraising process to approach it that way. Yeah, absolutely. What was it that you were looking for in investing investor partnerships? So I was looking for individuals who really aligned with our mission and vision, individuals who an institutional partners, you know, teams who understood and who are excited about building it at this early stage Two, I think, you know, when you're first starting out those first couple, that first round of capital, you're still very much an idea, you're still proving product market fit. And there's a lot of investors who, uh, you know, early stage quote unquote is very different definition for different people. And so sometimes, um, their investors were like, yeah, we're early stage, once you get to, you know, five million in revenue were early and you're like, oh, we haven't even launched the product yet.

00:22:44 So I think, you know, like for me, um, it was just asking those kinds of questions to see their appetite for truly building this with us centrally being a partner. And, um, and so that's, that's what I was looking for in someone. Um, yeah, amazing. I want to talk about your go to market strategy and how you launched to find your first customers. I imagine obviously you had your beta group. So there's a group of women like primed ready to buy. Um, but can you talk about your go to market strategy and how you launched. Yeah. So we did use this beta group as our go to market strategy. So that was about six months before we launched. And, you know, our first core customers, they became our evangelists. And we would keep sending them product by the way until we got like that high nps score. So if we, if we didn't do well on a product or with a certain, so basically we send out the product and the product that a group of customers that may be scored lower on our mps. We would keep sending them iteration to the product until they were like, we're in love with it.

00:23:49 And this works for us. And once we had that kind of core group of customers that high mps that were like, yes, um, they became really are evangelists and we use them at launch. So when we, when we first launched, we actually did a referral campaign where, um, if you, you know, doing if you are are evangelist customer and you love gem and you refer, you know, 10 of your friends on, and I referred, I just mean like, you know, ask them for their email addresses and gave it to that to us. We would actually give you kind of free product or free incentive, um, in the early days to do that and we were able to really grow our email less that way. So we took our kind of core evangelists. We used them as sort of, I guess are, you know, core kind of referral folks. And um, we're able to kind of grow our initial base that we then launch to us. Then we then emailed everyone from this, you know, 1000 thousands of emails at that point that we were then able to launch with people who had already had firsthand accounts from their friends or whoever.

00:24:51 This was working for them. And that's how we actually built our first customer base was just through that alone, um, through kind of just a really smart, I guess referral incentive strategy. Um, and, and building a really strong relationship with a couple 100 people. And so we, we launched and then we also took the approach of building really a micro influencer community, So we didn't go after just, you know, the big influencers or the big pr people, we actually looked at people, um, I guess like myself, you know, who Have like, you know, less than 5000 followers on Instagram, we're not like big influencers, um, but we went and actually created a relationship and I hired, you know, a community manager who did just this, where she, through social media, created relationships. I'm just like we did with our beta with everyday folks who are also struggling with this and we provided the product for free and if they loved it, you know, we didn't do any kind of payment at all, then they would of course share it.

00:25:52 And so we took a kind of bottom up grassroots approach in that way, and just tried to get the word out across the US where people were really struggling to find accessible healthy solutions and uh, and that really, really worked for us in the early days and kind of getting momentum in the bottoms up way. Yeah, that sounds amazing. A few moments ago you mentioned the Nps something, what is that, your net promoter score, and so what does that mean? Yes, I know it's a great question. Um, it's kind of just an easy way to gauge how much someone really likes the product. And so you probably get this question asked a lot with whatever products that you buy, whether you realize it or not, usually right after purchase, they'll say on a scale of 1 to 10, would you recommend this product to your friend? And you know when you're saying 89, 10 on your nps? Um, you know between one and 10 like yes, I would you recommend this product to a friend then you know, it's a really strong product because you might like the product, but you might say six, I might like the product, but I'm not necessarily going to recommend it or not actively recommending it.

00:27:05 And so we really wanted to make sure that, you know, we built a product that you objectively really loved and it worked for you and that you would want to recommend to your friends. And so that was just kind of an early, easy measure to do in the early days of figuring out how much people really valued the product and how much they would want to recommend. And so that was just one metric of many that we used to to make sure that we were building, building the right product. Got it. And yes, now that you say that I do receive those emails all the time after I've bought something and I and I do take the time to respond um or answer the answer the quiz. I'm interested to know this kind of notion of who you had in mind that your customer was going to be and whether that actually changed after you launched to be someone else. Yeah, that's a great question. And it was actually one of my most surprising learnings so early on, I really thought it was going to be a lot of people who were more dabblers and and skeptics of vitamins like myself, people who maybe had never taken a vitamin before because of all the reasons that I never took a vitamin before, because it was overwhelming, confusing, it felt very dirty.

00:28:23 Um you didn't really know where to begin. And so I thought that this would be kind of like an easier sort of step up right? And I also thought that a lot of people who took gummy bear vitamins for instance, who were looking for, you know, they're already looking for two bills and not necessarily swallowing pills would be another big audience for us. Um and it turns out that that that is true, but we actually got a lot of people who were believers and vitamins, people who had been taking vitamins for years and they weren't necessarily just upset because they were swallowing handfuls of pills, they were like kind of okay with it, but it wasn't working for them and they were just doing it, you know, kind of as nutritional insurance and it was okay, but they, A lot of them really had believed in this food as medicine, they just never knew it was possible to pursue that in a way of, you know, filling your gaps in your diet. And so we actually had more people, about 65% of our customers were ones that switched from a taking a multivitamin that was a pillar got me to uh gem and so I would say we actually got more people who switched from public a pill or capsule than a gummy bear itself.

00:29:43 So it really had less to do with this to herbal aspect if you will and much more to do with just people wanting something that worked better for them, something that have these other ingredients like Uganda that I mentioned earlier, like spirulina, that they were never able to get in their traditional vitamin that they didn't know was possible to get. And so that was, I think the surprising thing was just, I didn't know we could kind of jump that quickly to that audience. I thought that was gonna be a harder audience cell and I was going to get more of the skeptics of the world and we still we still do get those, but we actually were able to to get a big audience with a propensity to switch. And so that was really cool to see. Uh and uh you know, and these are people who were taking, you know, multivitamins from Costco or from CVS, right, that again, I wasn't sure we could because we offer, you know, it's a dollar 30 a day for jim it's it's really affordable um and it's under $40 for the full month and it's really high quality ingredients. I mean if you were to buy individually each of the nutrients that we offer in gem, it would be at the organic vegan quality that we offer more than $200 a month.

00:30:52 And people were were switching to us even from these $15 you know multivitamins from Costco. And so that was cool to see it just the value in that and and knowing that people were looking and willing to spend on something that was higher quality that did a lot more for them. So um that was that was really interesting. That is such an interesting insight and awesome for you with that in mind that customer that you you were able to kind of get an have on board what you were doing, how did that evolve your marketing strategy and how do you now acquire customers and what's working for you at the moment. Yeah, so we have a very test, we have a test and learn mindset. So we're always iterating and you know we we now identify different audiences that resonate with this food is medicine philosophy that resonate with finding something that simplifies their life. I think the biggest concerns right now that our customers have is what to take, It's very confusing out there and understanding the science behind it And so those two things, you know we're able to really tackle, right?

00:32:10 So now you we kind of we built everything really holistically. So like I said instead of taking you know 30 different supplements to target one solution, you're now all getting it in one Instead of uh you know getting all of these supplement labels that have these kind of hidden nutritional ingredients and these proprietary blends that you don't understand what it is. Now, you know exactly what it is. We have 13 real food ingredients that give you exactly these vitamins and minerals. So we really simplified that science, we simplified the action of it and we really become translators of super complex topics into kind of laymen terms and something that you really understand. Uh and I think that's been you know a huge thing that we've tackled and why people like to come to us because we just make it re