[00:00:05] Ray Latif: Natural food New Beverage companies find their next great employees using the BevNET and Nosh job boards.
[00:00:10] Mike Schneider: Our job boards reach industry pros actively seeking a new opportunity, as well as those setting up alerts for their dream job. Placing a single job on our site and in our newsletter is simple. If you have a more ambitious plan, you can save time and hiring budget with a 10-pack.
[00:00:25] Ray Latif: To learn more and post a role, visit BevNET.com slash jobs or Nosh.com slash jobs. And now, Taste Radio Insider. Hello, and thanks for tuning in to Taste Radio Insider. I'm Ray Latif and you're listening to episode 38 of the podcast. I'm with my BevNET colleagues, John Craven, Mike Schneider and Jon Landis. We're recording from the Taste Radio studio presented by BevSource at BevNET Live Summer 2019 in New York City. And in this episode, we sit down with Sisun Lee. the co-founder and CEO More Labs, a next-generation maker of biohacking beverages. Just a reminder to our listeners, if you like what you hear on Taste Radio Insider, please share the podcast with friends and colleagues. And of course, we'd love it if you could rate us on Apple Podcasts or your listening platform of choice.
[00:01:17] Jon Landis: I've shared this podcast with all my friends and colleagues today here at BevNET Live. Well done.
[00:01:22] Ray Latif: I've heard very nice things about Taste Radio over the past couple days. For folks who are listening and saw me at Nosh Live or BevNET Live, I sincerely appreciate the feedback. Please keep listening. If you have any constructive feedback, we always love to hear that as well. But in all sincerity, it means a lot to us and more than anything else, it's why we do this
[00:01:45] Jon Landis: Yeah, twice a week. It's very flattering, and without our audience, we are literally nothing. You guys consume our content, and it makes it worthwhile for us to produce it, so thank everyone for listening.
[00:01:59] Ray Latif: Totally, totally. Mike Schneider, how are you doing? You look well. I'm doing great, Ray. BevNET Live. BevNET Live. This morning, you know, we got up bright and early to taste some beverages as you were one of the judges in the semifinal round of New Beverage Showdown 17.
[00:02:13] Mike Schneider: It was really great to have my clipboard in my hand and my pen of judgment. I loved it. Pen of judgment.
[00:02:18] Ray Latif: Sort of teed it up for John Craven tomorrow, who's a judge in the final round.
[00:02:24] John Craven: Can't wait. I tried to, uh, you know, sometimes I end up watching the semifinals round and then going into the finals round. It's a little repetitive. I tried to just kind of take a little peek at what each brand was doing, but I didn't stay for the whole pitch or feedback. So I'm excited to see what I'm getting into tomorrow.
[00:02:47] Ray Latif: Yeah. I mean, although, you know, some of the presentations are pretty dramatically different on day two, if you made it to the finals, because they have five minutes instead of two minutes to give their business pitch and the judges have about five minutes to give feedback as well. And this is just, it's a lightning quick round. It's two minutes and two minutes and two minutes.
[00:03:06] Mike Schneider: They're basically up there giving you an impression of what's going on, talking to you about their packaging, the liquid in the bottle, and they've got it. And then the gong
[00:03:13] Ray Latif: Yeah, some impressive presentations today, some really great stage presence by a few of the entrepreneurs and a lot of the products that we saw, you know, pretty polished and market readiness was definitely something that was today and has improved over the years. As the host and moderator of the New Beverage Showdown, you know, I thought the presentations were pretty fantastic all around. Mike, you know, what was your take?
[00:03:39] Mike Schneider: I agree with you, Ray. I think everybody came with a very polished presentation. I think that the packaging... a lot of the brands, again, they punch a lot higher than their, than their funding round in terms of their packaging and look and feel. And even the liquid in the bottle, it was very hard to make decisions, but decisions you made in six moved on.
[00:03:59] Ray Latif: And if those of you who are listening as on the date of publication, June 14th, you probably already know who won. We don't know as of the day of this recording, but I have a feeling that any one of the six brands that moved on to the finals Could win this competition.
[00:04:14] Jon Landis: This was probably one of the most competitive competitions that I've seen at Beverly Live. Also, I think just overall the application process was extremely competitive. It was very difficult for us to even whittle it down to these 12. Like you said, everyone's brought their A game.
[00:04:33] Mike Schneider: I saw the six brands that were out just hustling after the competition to find out, you know, to get more feedback, to find out if there were things they needed to fix. If the judges were right, you know, if, if the thoughts are pervasive and taking advantage of like, you know, some of the best people in New Beverage industry in front of them. So that was really great to see. Do you just call yourself one of the best people in New Beverage industry to speak to? No, I, I said they were taking advantage of the best people in New Beverage industry. Not me. They were talking to a lot of different people.
[00:05:01] Jon Landis: I was actually Morning Recovery, Mike. A couple of them were actually honestly a little relieved that they didn't have to pitch tomorrow. They came up to me and said that was a really great experience and we got great exposure and we've already gotten tremendous feedback and now we can just enjoy the event. and we don't have to stress. We don't have to go back to our hotel room and practice and like have a bottle of drinks tonight and said, yeah, they're, they're, you know, so there were actually some of the ones who didn't advance who are not that they would have preferred not to advance, but they were seeing the silver lining for sure.
[00:05:33] Ray Latif: Yeah. In addition to the excitement around the New Era Showdown, the main stage content was top-notch, headlined by Mr. Mike Repole, who just brought the thunder, brought the house down a number of times. John Craven, in the time that we've been doing BevNET Lives and the time since you've been presenting BevNET Lives, have you seen that kind of energy on stage?
[00:05:51] John Craven: Well, there are certainly only a few people out there with the resume or experience or energy level that Mike Repole has.
[00:06:02] Ray Latif: And to be clear for our listeners at home, I don't know how you wouldn't know this, but Mike is the co-founder of Vitamin Water and Body Armor.
[00:06:08] John Craven: Yeah, I guess if you don't know who he is, that's, that's probably bad. We've had him on this podcast.
[00:06:13] Ray Latif: We have had him on this podcast.
[00:06:14] John Craven: You gotta listen up. Yes. But, um, no, I think, uh, you know, it's just great to hear someone like that who, you know, it's very much like, you know, it was a conversation with Jeffrey Klineman and, uh, you know, very sort of, uh, authentic, raw, lots of, uh, jabbing at various people, but no, I think, um, awkward pauses, like a couple of friends having a conversation. Like, yeah, but I mean, it, uh, it's just great to see that side of it too. I mean, definitely some lessons to be learned a little different than someone who's getting up there with a, uh, a slide deck and the bullet points of exactly what the lessons are, you know, definitely worth a watch. We'll, uh, have all those videos on YouTube.
[00:06:56] Ray Latif: So, uh, worth a watch. I was talking to a New Beverage executives after his presentation, and they were like, you know, Mike didn't really have a filter. He was, he was at about a three or four if you really know him when he's, you know, peak micropoly. But one of the things if you could read between the lines is like, if you're an entrepreneur listening, if you're an entrepreneur in attendance, You know, entrepreneurship is every day, 24 hours a day. I know we say that all the time in the podcast and all of our interviewers say the same thing, but Mike was like, you gotta be prepared for everyone to hate you, for you, for everyone to like, be at arm's length in your life if you really, truly want to succeed in this business, because it is all consuming. And for a guy to be as upfront about that, I think was a good dose of reality that sometimes we don't, hear as often as needs to be heard.
[00:07:48] Jon Landis: And it's apt that we started talking about the New Beverage Showdown where we're getting 12 very nascent entrepreneurs up here to be judged and for people to like or not like, they're free to have their opinions. So that's exactly what he's talking about. If you're going to be successful, it's only going to mean that exponentially more people know about you. And for every person that knows about you, that likes you, there's a person who knows about you that doesn't like you. So you have to be comfortable with people not liking you. It's very, you know, it's a tough thing for people to wrap their head around sometimes. But I think he said it straight, you know, and that's what we expect from Mike Repole. And also, I got to give a shout out to our audience here, who was just totally engaged with his chat from top to bottom. So, you know, this crowd here, we couldn't ask for better attendees.
[00:08:38] Ray Latif: Yeah, I feel like there was good energy among BevNET staff, too, coming off the great Nosh Live event that we had as well on Monday and Tuesday. Really well organized. Great job by Carol Ortenburg, the editor of Nosh, and Jeffrey Klineman, our editor-in-chief for BevNET. Any presentations stand out for you guys?
[00:08:57] Jon Landis: Just across the board, the feedback from Nosh Live was tremendous. And for us to be going through this entire week, it's like a bit of a marathon. And sometimes when you get people to provide that feedback and tell you how great a job you're doing, it's just more fuel for the tank. expected to be pretty exhausted at this point in the week, and I feel pretty much on top of the world. I thought the pitch slam at Nosh Live was pretty outstanding. I mean, that's the one thing that obviously is a focus for me. A huge shout out to Beck and Ice Cream for taking the... top bill in that. And yeah, there were some really great presentations at Nosh.
[00:09:38] John Craven: Well, one of my favorites at Nosh live was definitely Gail Becker from Kali power. Just, you know, hearing your story and, you know, seeing the details of the, you know, just ridiculously fast rise of that company from, zero to, I think she said they're going to do a hundred million dollars and, you know, their third year, it's just, uh, it's just nuts. I felt like we should almost have a disclaimer before showing that the results are not typical of this company, you know, but, um, you know, she did a great job and even just, again, you know, you can watch this presentation on YouTube, uh, when it's out, but, you know, sort of visually showing their rise against, all of these different frozen pizza brands. And it's kind of like, I don't know, it's kind of interesting to see like all these like legacy brands that, you know, we're getting basically, yeah, I mean, and I don't know, stuff is super tasty, too. So awesome to have had her up here.
[00:10:33] Jon Landis: I think that the Walmart team did a great presentation too. We got some tremendous feedback from that one. And you know, just to see a company like Walmart go up there and say, we're here to meet you. We don't care what stage you at. We want to talk to you. We want to engage with brands. You want to go into 10 stores. We'll get you in 10 stores to see that type of flexibility from such a big company. It was really, really refreshing. They gave an email address to attendees that said, reach out, send us your information. We'll get a conversation started with you. remember that email address by any chance? I think it was like startup or something. We'll we'll dig it up and we'll put it in the show notes.
[00:11:06] Mike Schneider: There you go. And Walter Robb stuck around for a long time to network with the co-founder and former CEO of Whole Foods, former CEO of Whole Foods. And a lot of people, Carol told me that people were coming up to her and saying that was like the meeting of my life, you know? So a lot of people really wanted to meet with him. He stuck around Amanda Huang out with the community and that was really special.
[00:11:24] Ray Latif: Yeah, totally. You know, hearing these stories about, you know, Walmart and getting folks their perspective of folks like Walter Robb, you know, the dynamic energy is in this industry is has been so much fun. I think, you know, it's like, you're talking to entrepreneurs all the time and talking to executives who are starting to come around and be like, yeah, we need to be moving as fast as some of these entrepreneurs are innovating. Just personally, it's made my life really exciting when I come into work every day. It's just like there's something new, and then people are embracing it in a way that I haven't seen in the past.
[00:11:55] Mike Schneider: As a marketer, I was also tickled that Pinterest said, email Nosh at pinterest.com for inbound, basically. If you didn't get a chance to talk to them and meet with them, there was an opportunity to reach him, Nosh at pinterest.com. That was pretty cool. Nice.
[00:12:12] Jon Landis: Well done. So I'm going to go to this after party and get a little banged up.
[00:12:16] Ray Latif: What are you going to do? Right? Don't wouldn't be the first time you're in luck.
[00:12:23] John Craven: It's not a rooftop. So I'm not going to say don't fall off. Yes.
[00:12:27] Ray Latif: Well, while you're getting banged up, I'll do this segue to our interview. All right, as I mentioned at the top of the show, Sisun Lee is the co-founder and CEO More Labs, the maker of fast-growing hangover supplement Morning Recovery. Launched in 2017 and fueled by a viral Indiegogo campaign, Morning Recovery was a breakout hit online. Early success powered an $8 million Series A round in 2018 and new distribution at retailers like 7-Eleven and Urban Outfitters. In an interview with Mike Schneider and John Craven, CSUN discussed the factors and strategic decisions that led to Morning Recovery's rapid development and how More Labs is attempting to create an umbrella platform for functional products.
[00:13:17] Mike Schneider: This is Mike, and I'm here in Los Angeles with John and Sisun Lee, the co-founder and CEO of More Labs, formerly known as Morning Recovery. Morning Recovery has become a product now. Tell us a little bit about Morning Recovery, how this got started, and how you became More Labs.
[00:13:31] More Labs: Yeah, it's actually quite a long story. I'll try to summarize it as best as I can. I say that because I get asked that question a lot, and even I don't know the exact pinpoint at which this became a real thing. Well, start with your background. That's always a good place to start. Yeah, so my background is I graduated with an engineering degree from Canada and I moved to the Bay Area to be a product manager at Facebook. And I've always remained within that role in tech. So building products at Facebook, later at Uber briefly, and then my last job before Morning Recovery was at Tesla. And so that's been my background, engineering, software, but mostly just building products. So very, very unrelated to supplements or drinks or consumer products at all. So that's why I say it's a little bit difficult to explain how I got started. I think the initial curiosity was I was born in South Korea. And so I had a chance to visit South Korea back in 2016 for the first time as an adult, because I went a few times as a kid with my parents, just to sort of experience the culture. And one of the things that was very common there was just how much people drink. And then what's pretty crazy is that later on, I found out that Uronometer does this report usually every year on different types of data around alcohol consumption. And so there's particular data about heart liquor consumption per capita per week, measured by people who are over the ages of 15. And South Korea actually has been ranked number one for the past like 20 years. Very very uncommon knowledge, unless you've actually been there, but people just drink absurd amount of alcohol. 15 shots on average per week per person. The next is actually Russia, it's 6. So it's double Russia. So most people don't understand this, but once you go, you realize everything involves around alcohol. Whether I meet my cousins, whether They're young, old, whether I go out, doesn't matter. At the end of the night, you bond. You bond through drinking. And so the one thing that I realized after coming back from Korea was, yes, everything was great, but I also ended up drinking so much. And usually when I drink, all these local friends would always recommend me these drinks. And they're verbatim called hangover drinks. And just like energy drink is such a big market in places like U.S., in South Korea, these hangover drinks are also a huge market. It turned out it's a 200 million plus market and Korea is a, you know, it's a smaller economy than U.S. I didn't really think much about it at the time, other than I enjoyed it, like it was fun. I found it hilarious that these things existed, but also even more hilarious that this wasn't niche. Like, all of your biggest domestic CPG companies in Korea had their own brands.
[00:15:46] John Craven: You know, we talked to a lot of entrepreneurs who are, you know, in some other profession, I don't know, accountants, investment banker types, you know, who are usually looking for something sexier, let's say, you know, you're someone who was working as a product engineer at Tesla, which, you know, I guess to an outsider sounds sexy, I guess. What was kind of going through your head as you were, you know, at a point where there's, I'm assuming path A of continue along as an engineer at, you know, a hot company that's, I guess, in itself trying to change the world and path B, go out on your own?
[00:16:20] More Labs: I think there's two factors. One is, you know, being a product manager in these companies, the biggest thing you learn is your job is to figure out what people want. It's not a question about building what you're personally passionate in. It's about kind of removing that and saying, what is it that customers want? And then gravitating towards your needs. And so with this idea, like I was probably not even the perfect demographic for a drink like this. Because I do enjoy, I do go out, but I don't really drink that much. And nor do I actually, you know, feel too hungover, like too much. But it was one of those things when one was qualitative feedback from just friends and family, but also you start to look at the numbers. I'm sure you guys know this better than anyone. I mean, 60% of the entire beverage market is alcohol. If you kind of take that into consideration and abstract what an economic loss or impact of hangovers is, and you can get some anecdotal data because there's some studies that's been done. It's in billions and billions and you look at, okay, what's the solution? Well, there really isn't right now, especially in places like outside of South Korea. What are they using? They're drinking water. Then if you start looking at the science of it, the root causes of these pain points when you consume alcohol is multiple. And it's things like the buildup of acetaldehyde, which is a byproduct of ethanol, which is alcohol. Dehydration is one of them because alcohol is diuretic, but it's not everything. And so there's a lot of misconception and people are just drinking water and it's not fully solvable. And you look at the trend of alcohol. I mean, you could kind of argue that, you know, per capita, things like beer consumption goes down. But I mean, you know, just like a general conviction that as long as like humans are alive, I think people are going to... People are going to drink alcohol and like it's part of social fabric. And so I'm kind of looking at this like in one way, it's kind of funny, like what this idea is, but from a global economic impact and like how this could actually help people just like be more productive and better. It just seemed like it could actually pretty be a big thing. So that that was one thing. And so from like a product manager had like there was actually a big market and big customer demand, at least like intuitively, you know, I like I didn't, I didn't verify it properly, but that was one thing. The second thing was I was always building software products and the idea of building beverages for me was very sexy because I know you said it's the other way around but because I can actually like feel it, see it, touch it and try it right away. You know with things like at Facebook and even at Tesla I built digital products. There's just something about building tangible things like that you can actually consume and you can feel and touch. It was kind of novel to me. So there's a lot of curiosity there. And a lot of it was just like, I honestly didn't think this was going to be a company. I've kind of thought at the early days that this might be like a very fun side hustle. Like that was like the word I was using. Like this is a side hustle. direct-to-consumer, sell it, Shopify. I have a bunch of friends who do dropshipping on Shopify, so I thought, why not? Let's build it. Let's build a Shopify store. I have a lot of friends in Shopify. Let's get their help, put it up, let's sell it, and let's go. That was the extent. So I think those two things were the initial motivators. But then, I think like most things, momentum just took it over the edge. If this didn't really take off, if consumer demand wasn't that good, I don't think I would have had personal passion committed to the point where I would have kept doing it. But I think there was enough and also the momentum just like Indiegogo was $252,000. And then August 2nd, which for us was like our company anniversary, where we decided this is like a full-time company. That month we did 300k. The next month we did 500k. The next month we did 600k. So we're just like, holy shit, like people actually want this. And that was kind of crazy to us. And you know, just haven't looked back ever since.
[00:19:38] Mike Schneider: Yeah. And you talked initially about an absurdly large audience of people who go out and drink. And I think that there's a tendency to try to build a product for everybody. You must have tried to do that at first. What have you learned along the way about who you thought your audience was and who they are now?
[00:19:55] More Labs: Yeah, so the way we started was because we actually started with Indiegogo first as a pre-order, we didn't have any data of who our customers would be because they're our first people. And they came from all over the world. Do you get data from Indiegogo? We do, but you know, it's one of those abstract things. And it was, we had like 50% in US, 50% international. We get their emails and some demographic. But it's one of those things where even if you have perfect demographic data, unless you talk to them, how do you know who they are? And I think the most important thing is knowing their lifestyle. Why did you take this? Are you one of those people that just go out every Friday? Are you like mom and dad that just take a couple of wines? I don't know who you are. So did you take advantage of that data that you got from Indiegogo and put some surveys together? How do you kind of get there? Yeah, so I mean, over time, it's just talking to them. Not everyone is willing to hop on a call with you. But the way we started was even before Indiegogo, we started getting people's feedback. When we made first few bottles, we gave them away, just like how we're doing with Liquid Focus. And we have a Facebook group that you guys can join today if you haven't already called MoreLabs, semicolon, beta group. We have 2,000 people and when we started we had about 500 people and they're our most early customer adopters and usually biased towards people that really like us. And we just talk to them and they give us direct feedback. And so I think the advantage of being a young startup is that you can bypass everything and as a founder just talk to them. And so a lot of it was when we give out these product samples, it was in the exchange of, you know, please fill out the survey and then join this group and give us your raw answer. Now, does that mean 100% of them will do it? No, I think I got a response rate about 30%. But when you give out 1000 samples and 300 people respond to you, I think that's pretty good. And you start to build these patterns, right? It's all anecdotal. And so you're not going to be able to infer anything super quantitative. But key things will emerge, right? I hate the taste. If you hear that 20 times, then, oh, people hate the taste. You know, you don't need data to figure that out, right? And then, you know, with the surveys and the results, if the majority say it works great, then, you know, oh, I think it works great, right? Like, or if they say, no, it didn't work, then it didn't work.
[00:21:52] Mike Schneider: When you say you don't need data, you mean you don't need statistically significant data because that's qualitative data, right? You don't need hard quant because I was going to ask you about efficacy and how you're proving it now because as you move from this kind of skunk work side hustle into what's a serious company with now two products and you mentioned liquid focus before and we have to ask you about what that is because you haven't mentioned it yet. How do you go from this kind of, and what's the balance of qualitative data to now proving out efficacy as you move into, you know, as you move into this serious company mode? And I'm doing the air quotes in serious company mode because you always were a serious company.
[00:22:29] More Labs: I think the first thing is in any product launch, even though we knew the market size and potential market size could be big, going after everyone was impossible. We didn't know how, we didn't have distribution lines, nor do we have brand or money. So we really had to identify who are the early influencers, like the niche customers. And for us, I mean, we got lucky in a sense that I started from Silicon Valley. And so the people that I gave samples to were in Silicon Valley. And it turned out that they were pretty good early adopters, right? These are your quote unquote tech pros, sort of like work hard, play hard, try a lot of different things, consume things they maybe even shouldn't, like nootropics is such a big thing there. Like they're the ones that will try new things. First thing that gets like, marked as great, great line in FDA, first ones to try it, right? Just like, it's that community. And so it kind of worked out. And the way they perceived our product was also very, very different. Even though now we're focused a lot on mainstream, making a brand and making a lifestyle brand. A lot of our early customers really kind of thought of Morning Recovery as like a biohack, like type of serious startup. And not that we're not serious, but that was like their perception, right? Because you're in Silicon Valley. And so they're the ones that became our early, early core customers. And they're the ones that I think really spread the word. I mean, again, I can't quantify their power of word of mouth, but they're the early customers. Now, eventually with the power of internet and e-commerce with things like Indiegogo, we were able to then extend it and get a bunch of people from outside of that Silicon Valley bubble. And, you know, how do we do it? I mean, I think it's a collection of, thankfully Indiegogo was successful. And because of our early customers come in, they buy it. You know, you have this like, virtual cycle of if you do well in your first day, Indiegogo algorithm picks you up at a front page and they put you in a mail. So we got a lot of incremental people. And the thing that we don't really talk about a lot because it was kind of out of our control, but we got really lucky was because of the nature of the product and my background, there was a lot of press early days. And a lot of the press was circled around ex-Tesla engineer has created this drink, which was never something like we went out and pitched, but like that was what was covered. And Business Insider was the first one to interview us. And that was because a journalist was a mutual friend. And we got connected over beer. She ended up writing out about us. And after that, a lot of people sort of copied and pasted. And that got big. And so a lot of things, a lot of good things happened at Indiegogo for it to get big, which got us to another step function outside of Silicon Valley, which then gave us a chance to speak to these people. And over time, it wasn't one of those things where we can then figure out who our customers were right, who they were right away because Indiegogo was a pre-order campaign. It was finished in August, but the first time that the product was actually delivered in the hands of our customers was actually October. And so until then, it was still like pre-order. And so we were getting sales, but it was hard to like ask. them any serious questions because we really wanted to get their feedback. Why did you like it? Why didn't you like it? But that didn't happen until like November. And by November, we had like pretty good, like couple of thousand customers. And then we started to ask them surveys, the Facebook group, because all of our When you purchase it, we encourage you to go to the Facebook group, etc. It was on our website, because in the early days it was super scrappy to just go to Facebook and see what people have to say about it. And then we found out a few different things, which was we had a lot of different pockets of customers because we were serving a lot of different needs. Because there were certainly college, sort of young professionals, but then we also had people in their 40s and 50s. And the distribution wasn't like a very typical Gaussian distribution where there's clearly one segment that really loved it. It was kind of more broad. But we did find that the biggest segment, if we had to choose, were people that were kind of in their 30s and 40s, usually with kids, high disposable income. And we refer to this data through places like analytics tools. And they don't actually, when we talk to them, drink a lot. Especially with surveys, they say they drink like one or two cups of wine. So then that's when things got really interesting to us. Like, why are you buying this? It's a $6 bottle. It's very, very expensive.
[00:26:20] Mike Schneider: Because they're lightweights.
[00:26:22] More Labs: Yeah, it doesn't feel good the next day. And a lot of the thing was like, I got to get out at 6am the next day. Like that was always a thing that we heard. Everyone got up for a different reason. For some people, it's to take care of their children. For some people, it's to prepare for war. For some people, it's to exercise. It just didn't matter. It's just that the next day they had to get up and be just like sharp. And even if they take a couple of drinks, the idea of sort of wavering off their, sort of like their zen the next day, because these guys were like very, very serious about this, merited enough of value proposition to buy Morning Recovery. And because of their high disposable income, like pricing wasn't always, it was usually like the least of their concerns. Those are the ways that we started to understand our customers.
[00:27:04] Mike Schneider: So you got this really great problem, which is that you have multiple audiences. How do you decide which ones to focus on with your scarce resources?
[00:27:12] More Labs: Yeah, that's a great question. We've definitely picked our audience to build against because the belief that we have here is just with limited resources and because we're still in the very, very early stages of adoption compared to where we want to go, we do have to focus on core community. The group that I just mentioned, sort of the parents, 30s to 40s, working class, white collar jobs, high disposable income, that kind of professional productivity driven people are what makes our community and who we try to optimize against. Now, the audiences aren't always like mutually exclusive. exclusive, like a lot of what they want is really, really care about efficacy. Well, most customers really, really care about efficacy when they buy this. So when we optimize for them, it does trickle down to making the product better for most people. But when we do listen to them, it's usually them. But the challenge is yes, because we also have completely different segments of demographics, but it's sort of a conscious decision. For example, we're starting to pick up in the colleges, especially as we're able to bring the cost down because we're into retail and you can buy this for a single bottle versus a six pack. The entry point goes from $35 to like $5, $6. So we do start to see that segment go up. But I think like whenever there comes to be a trade off of we have to optimize for a certain community right now, we're all about that 30s to 40s. Yeah.
[00:28:28] Mike Schneider: And you've got qualitative efficacy. Do you have quantitative efficacy yet?
[00:28:32] More Labs: Yeah, so actually the strangest thing of my experience here is when we started and once the version one of product was ready, the next thing is growing it, right? Making people aware of this and buy it. Because we look at two things. We look at retention. As a measure of product value proposition, do people who buy it come back again? And then we look at our ability to acquire customers as our marketing ROI. Can we get this word out? And can we create a funnel where people come and buy? And on the marketing side, I was really hell-bent on science is everything. If people understand there's real science, people are going to buy it. I've been proven wrong so many times that at this point, anything with science generally doesn't convert. I'd like, it's very strange for me to say this, but we've done so many A-B studies, A-B tests, like on our website, we have very, very minimal science. And when we, when you go to like a web archive, which gives you a history of a snapshot of the website, we were very science driven before. It turned out that a lot of it is, I guess, like When you hear about this through an advertising or word of mouth, you just, you want to know that like, you want to have sort of verified source of truth that somebody has referred this. There's like some stamp of approval that it works, but you're not really so keen on like learning about the science. That's just my theory at this point, because the more we talk about it, the more it just doesn't convert. And so we kind of look at science as kind of in a decoupled way. Science obviously has to be there because if the product doesn't work, when you convince someone to buy it and try it, they just won't come back again. So retention is sort of our value proposition for or metric for science and efficacy. What percentage of people who buy it come back again? If they don't, then there's a problem. But it's not marketing. It's not marketing. Well, it's hard for me to like make such a general statement because eventually we're going to have probably personalized dynamic funnel for different people in different groups. But for now, for a general funnel, it's really not. It's much more closer to lifestyle feel than a functional science feel in terms of what converts. And like for my background with engineering in Silicon Valley, like it's just, it was very bizarre. And I just thought something was not being properly conveyed. So we tried so many things, but at this point, pretty pictures convert, less words convert. It's like, so, you know, it is what it is. Yeah.
[00:30:44] John Craven: So moving from all of this direct to consumer and I guess, you know, highly regimented AB testing and stuff like that. You guys have been in, you know, brick and mortar retail for the past year. What's been the approach with that and how much has that been a driver of growth?
[00:31:02] More Labs: Yeah, so we started with retail, again, because of sort of community insights. When we, we wanted to find out what was the perfect use case of when you needed this, a product like Morning Recovery. And like no brainer, it's when you consume alcohol, right? There's a lot of different ways and reasons you drink alcohol, where and when and how, but it comes down to the fact that it's paired with alcohol. And it became very clear to us that most people who consume alcohol drink it in a very serendipitous manners, usually outside of their homes. Like you go to a bar, you know, Thursday night is happy hour. It's a friend's birthday. Very, very few people kind of consciously decide in three days I'm going to be drinking. Therefore I need to order online and get it arrived two days, which is like the economics of today's shipping. Like I just can't deliver to you right now. You got Amazon Prime, two days. You do our website, three days. Like that's the best we can do. And so a lot of it is very like, intent-driven, but most of use cases weren't very intent-driven in a sense that it just sort of happens. You go out on the way, you pick up beer at 7-Eleven, you go to a bar, you go to a lounge, etc. So we always thought, okay, well, we should probably be there. So the question was when, not if. I think like when we talked to a lot of our direct-to-consumer peers, it was usually a lot later down the road, but we just felt like it won't hurt to start testing things. And so about a year ago, the way we tested it was, okay, well, If you're going to retail, which channel do we even go in? So we just like came up with a bunch of different verticals that made sense in the beginning. So we wrote them down. There was hotels, mini bars, there was convenience stores, there was like bars, nightclubs. I don't know if I already said drugstore, mass, groceries, whatever. Like you can come up with a bunch of different things. And we basically said, OK, well, just like let's start locally in L.A., maybe get into like five or six each just to get some data and see like if any of them kind of stick versus not. Because our theory was very simple. We don't have the resources to build the marketing power to drive it. But if any of these channels on its own, because there are some synergy where the business makes a lot of sense, the owners want to promote us. people expect us there and they start to sell well then yeah maybe that's what we'll focus on so it was very much rudimentary of like we don't know so therefore let's go into a whole bunch of different places but let's make sure we have a theory of how to verticalize it and then see if there's like some pattern and then sort of one thing became very clear wherever people didn't buy alcohol, it just didn't sell, which makes a lot of sense. So wherever people sold alcohol was clearly where there were some sales. And we realized there's like sort of two different channels there. There's sort of on-premise, which is like where people actually consume alcohol. So we're in a lot of like local bars and clubs and like stuff like that. But also off-premise where you can buy alcohol but not consume. So like 7-Eleven, liquor stores, Total Wine, that kind of store. And so that became like, those two were sort of what we started to go after next. But when we say we started a year ago, it was one guy, Matt, who was like employee number one, he heads our BD. He was just going out closing like five stores per vertical. And then after like three, four months of our, probably two, three months, we then focused on places where they sold alcohol and we divided between on and off premise just to see which ones start to do better. And that's how we started to just like figure out, does this merit us actually investing money behind it? And then it turned out that in places like off-premise, especially the right ones, like the corner stores that sell liquor, some of those places started to do pretty well. Like we were not advertising anything, but we were sometimes doing like 10 bottles a week, which for us at the time was, oh, that's pretty interesting. Now, nowhere near the level of e-commerce, but because we didn't really have any benchmark for retail. That was kind of like pretty cool to us. And so the next thing was, OK, well, it's kind of working, so let's start to optimize there. What are the next things we test? For us, the next thing was of shelf location and packaging. For example, in the mom and pop shops, because it was like only like six or seven stores and we know the owners, we can kind of go in dictator terms because we're like, you know, bros with those owners now. We're just like, hey, like, let us try a bunch of different things. So then first thing was like, okay, point of sales. Next thing was refrigerated, you know, right by the beer. Maybe it's with the wine. Maybe it's with other alcohol. Maybe it's with other perishable goods. Or maybe like sometimes we have so many different kind of packaging options. We had one where it sticks to the wall of the beer cooler so that when you open it, like within the inside of the wall, like this, this is like lined up on your eye level. So we tried everything, or not everything, but we tried to see if there's a pattern of specific shelf location and these off-premise do the most sales velocity. And it became very clear that being on the point of sales just drove the most, which kind of makes sense. And then we also realized that over time, qualitatively, interesting things happen. If people come to buy alcohol, and even though you're not an owner who really likes us, and you're just a cashier who never heard about us, you upsell on our behalf. It's like, hey, have you guys tried this? It kind of makes sense. Like your customers are buying a bunch of liquor and alcohol and you have a product that you can offer that might make them feel better. Yeah. And so it became this thing where it like all mates started to make sense. And then we started to optimize around that, which is OK, well, how do we stand out in point of sales? We need something different than what we had before. We had just glass bottles without merchandise to put it. So then we repackaged everything so that it can have its own standard of merchandise. We kind of realized that in many places it was very saturated. Like if you go to any Convenience stores, usually the point of sales is the most premium real estate. So you have so many products. There's five-hour energy drinks, just a bunch of stuff. So how do you stand out? So that's when we kind of really wanted our packaging to pop. So specific Pantone colors, gold cap was like, became our thing. Because like, again, there might be better colors out there, but at least like, we wanted to make sure that if we go there and there's a bunch of products, but our product is there, hopefully it stands out a little bit more. Yellow draws your eye. So yeah. So that's sort of a lot of like what we try to focus on. And so retail didn't really pick up in terms of sales, but we did a lot of learning in the first like six, seven, eight months.
[00:36:47] Mike Schneider: So you've been on this journey with Morning Recovery and you decided to rebrand More Labs and take your focus off of Morning Recovery to start building a product called Liquid Focus.
[00:36:59] More Labs: Tell us a little bit about that. Yeah, so the idea came when about a year into the company, we started to learn a lot more about our customers. and realized the value proposition was around productivity, being able to be sort of a better version of you the next day. And so the type of questions we had for customers were, what else can we do for you? Like what's slowing you down? And the three things that came very clear were things related to sleep, like not enough sleep or bad sleep quality. Second thing was related to like stress and anxiety. And then the third thing was related to like focus, brain fog, and just like general fatigue, tiredness, like usual, like afternoon slump. And so internally, we've kind of then mapped it around to what are the alternatives out there? What's the market size? And we just figure very, very simplistically, like, let's not overthink. Like if, if this is what customers want, let's start with that. We could have started with any of those three. We started with the ladder of the brain fog, largely because we've intuitively felt like that's what we could really do a good job of. So everything that we build, it's not a drug. It's a dietary supplement. So you start with clinically proven ingredients first, right? We're not building any synthetic things. And so what you can do is limited within the scope of what's available. So a lot of it is figuring out what goes together and innovating in other means like packaging, delivery, pricing, and as well as improving the buy availability of certain ingredients. But we don't have a chance to make our own new things. But within what was available, we felt like there was like a pretty unique product that we can make. Things that were almost mimicking the things like prescription drugs for focus with amphetamine, more so than like caffeinated energy drinks. And when we looked at the market, there were some like hardcore nootropics out there, but there weren't too many of the drinks that was positioned the way we wanted, at least in mass market. So we thought, okay, this is kind of like Morning Recovery. You know, we didn't know when we launched Morning Recovery that there were a lot of products out there because as a consumer, I just never found them. But when you do research, like there are many out there. There's like hundreds on Amazon. It's just, they're very small. So we felt like this was one of those, another similar opportunity.
[00:38:58] Mike Schneider: Side hustles, maybe?
[00:39:00] More Labs: Exactly. So we thought, you know, this, this could be, this could be interesting. And that's what we did. But that's, that's sort of how we started to build liquid focus and we really wanted to focus away from Morning Recovery to tying everything back to More Labs with the idea that we just really wanted to build products that in our sort of definition, removing modern day stressors. And to us, modern day stressors are things that sort of impair your body from feeling great. And you don't have to be an athlete to feel this. Like in modern day, we all work hard, we get less sleep, we're dehydrated. We're always like competing in what feels like a zero-sum game. And there are things that slow you down and you can name a whole bunch. Like I just did a few, right? Like dehydration, fatigue, hangovers, sure. Low immunity, lack of sleep, low sleep, stress. And we kind of figured like, you know, at the end of the day, these are all tied together. Yes, we started with one of them, but this is a holistically, we can build a brand around helping people feel great. Ceasun, thanks for having us. It's been great to have this conversation with you and wish you the best of luck. Thank you. Thanks for having us.
[00:40:01] Ray Latif: That brings us to the end of episode 38 of Taste Radio Insider. Thank you so much for listening, and thanks to our guest, C-Sun Lee. Please subscribe to Taste Radio Insider on the Apple Podcasts app, Spotify, Stitcher, SoundCloud, and or Google Play. And as always, for questions, comments, ideas for future podcasts, please send us an email to askatasteradio.com. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
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