America is the land of malnutrition…and subscription ecommerce startups. It makes perfect sense, then, to marry the two. This is the concept behind Los Angeles based FitKit, which launched over the holiday weekend to deliver nutritional supplements based on the advice of two leading nutritional experts, Dr. Robin Bernhoft and Dr. Nick Bitz.
Third-year UCLA student Josh Haynam partnered with two classmate co-founders and Drs. Bernhoft and Bitz to uncomplicate the process of navigating the supplement world after he broke several bones playing football and was advised by his physician to improve his nutrition. Together they created a 16 question interactive lifestyle quiz that evaluates the specific nutritional deficiencies of each individual “patient” and recommends the appropriate nutritional supplements to address them.
“There are currently more than one million supplements sold in the market and the entire industry is built on outrageously false advertising,” says Haynam. “What we hope to provide is a doctor-curated tour through this mess.”
Following his injury, Haynam was personally prescribed thousands of dollars worth of confusing supplements, and seeking a better understanding of what he was taking, realized that couldn’t find transparent nutritional advice online.
Questions on FitKit’s lifestyle assessment include those about minutes of sunshine per day, days of exercise per week, drinks per week, hours and quality of sleep per night, diet assessment, mood analysis, energy assessment, skin type, soreness, stress, BMI calculator, digestive health assessment, and Omega-3 consumption.
Given that most would say that I’m on the healthier end of the population, I was curious to see what it would recommend for me. I eat well and exercising regularly, but the one area where a tend to abuse my body is through lack of sleep. My recommendations based on this lifestyle information were fairly limited. FitKit recommends I take an Omega-3 fatty acid supplement, which I told it I was already taking, a men’s multivitamin, and a hair/skin/nails supplement. Total recommended cost: $90 per month.
Haynam tells me that the average recommendation ranges from two to four supplements, which each cost an average of $20 to $30 per month, although this can vary widely based on individual health and fitness profiles. Users can cancel at any time and always receive free shipping in both directions.
The data-hungry company is always looking to know more about its users and with this in mind offers an integration with the FitBit activity and sleep tracker — let the name confusion begin. The service pairs daily activity data from the FitBit with the information gained from its lifestyle quiz to deliver even more personalized nutritional recommendations.
The lean startup has thus far used Amazon to handle product fulfillment, but is switching this week to self-fulfillment. The team of seven — including both Dr. B’s — have leased a warehouse in Los Angeles and are about to learn first-hand the joys of managing a supply chain. Having personally stepped into a number of subscription ecommerce fulfillment centers of various sizes and sophistications, I can attest that managing this process successfully this is no easy feat. More importantly, small changes in the incremental cost of delivering each order can really add up and affect the overall profitability of the business.
The final step in the planned evolution of this business will be offering users custom FitKit supplements, Haynam tells me. Dr. Bitz has previous experience designing white label nutritional products for GNC, Costco, and Whole Foods, and is currently working on a line FitKit-branded line. The good news is that supplements are notoriously one of the highest margin businesses in the world — this is true for wholesale, and even more so manufactured products — meaning FitKid has more room than most startups to get this vertical integration right.
FitKit faces a variety of competition in the marketplace. Amazon offers a “subscribe and save” option that applies to its nutritional products, but cannot deliver the personalized recommendations from nutritionists. Bulu Box tackles the problem from a Birchbox-style monthly discovery perspective, delivering four to five different trial sized nutritional items per month. Several nutritionists have online health quizzes and nutrition recommendation pages that guide patients to products within their personally crafted supplement lines. Finally, there are dozens of low cost supplement etailers like VitaCost against which FitKit will have to compete on simplicity rather than selection or price.
Further, with the all-out trends of subscription ecommerce startups and “the quantified self,” it’s only a matter of time before another similar concept launches and vies for a piece of whatever early market share FitKit can amass — I’ve heard several off-the-record pitches of companies that are in one form or another of private beta in this sector. FitKit is a member of the current class of hyper-early stage LA accelerator StartEngine, which sits in the shadow of UCLA campus, and has built its product to this point with $20,000 in financing from the program.
It’s too early to gauge the traction of FitKit’s idea, although Haynam tells me that his company is already getting “hundreds of signups per day” based solely on word of mouth following a closed friends and family beta. The real test will be in the cost of customer acquisition outside of this community and even more so in the lifetime value of each customer.
The startup is targeting young and middle-aged professional adults whose lifestyles tend to create significant, but addressable nutritional deficiencies. If FitKit can manage to satisfy the needs of the average nutritional novice and keep them subscribing for more than six months, then high margins and recurring subscription revenues offer opportunity to build a sustainable business.