ChristinaDieter people are educated about hos to eat and want a great level of details, however ..% we re not interested into the scienceHealthy people with not real interest for themselves actually would refer it to symptomatic friend
ChristinaCanvas changes:1.) Axed wealthier women dieters for ‘feel betters’2.) Removed any mention of us analyzing samples ourselves and replaced with outsourcing to uB or AG3.) Removed WW/gyms and replaced with high-end nutritionists/health consultants4.) Replaced value prop associated with weight loss to value prop associated with feel betters5.) Added peer recommendation to customer relationshipsWHAT SHALL WE RE-ADD RE WEIGHT LOSS? DO WE NEED TO ADD OTHER THINGS TO ACTIVITIES?
AnnaTell Kristi’s storyEnd point out that Lululemon did $1bn in revenues last year
AnnaInsights from interviews with feel betters –Not as interested in tracking results and actively learning about others’ experiences (Patients Like Me)Don’t want complete DIY ….Really want specific, personalized product recsTrust nutritionists – typically pay $100/nutritionist visit – want stamp of approvalTakeaway:Focus the community around PRODUCTS, not EXPERIENCE
1.) Analyze your gut bacteria profile2.)Compare to other people in our database3.)Recommendations for you based on what’s worked for people with similar profiles
Anna – talk about specific nutritionist we met – Tamar CohenKey points:Nutritionists type: Focused on hollistic health, unlicensedWhat they do: 1.) diet diagnosis 2.) behavior changeTo do the diet diagnosis, they like to order labs but they can’t Metametrix is the closest thing they have – needs approval, $400/kit and doesn’t give recommendations, only data – hard to interpretThey liked the idea of buying wholesale and selling to their clients
LorisDo people care enough about the science? Do probiotics companies care about the science?Nutritionists care about science: People care about nutritionists’ opinions
LorisWe envisioned 2 solutions:The 1st one was the Amazon platform were we would proposed to sell the products of probiotics manufacturersIn the 2nd one, we wanted to sell our own product, fully personalized
Loris1. Manage FDA 510K approval w/ kit supplier(6 mos.)2.Analysis + sequencing of samples(2-4 wks)3. Develop product recs platform(1K samples)4. Partner with and train nutritionists5.Partner with probiotics manuf. as platform vendors
LorisWe envisioned 2 solutions:The 1st one was the Amazon platform were we would proposed to sell the products of probiotics manufacturersIn the 2nd one, we wanted to sell our own product, fully personalized
The global market for probiotic dietary supplements generated approximately USD 2.4 billion in the consumer sector and is expected to grow 8-10% on an annual basis.For ingredient suppliers, the demand for probiotics is great. In the coming five-year period, the market is expected to grow more than 35%. The market is primarily driven by Asia today, but consumption in the US is expected to exceed demand by more than 60% during the same period""
Gutwiser final 2013 berkeley
GUTWISER APRIL 3, 2013 PERSONALIZED NUTRITIONEMPOWERING INDIVIDUALSTO RESHAPE THEIR BODIES WITH SCIENCE INTERVIEWS: 102 ADRIEN BURCH BUBBA BROOKS CHRISTINA CHANG TATIANA ECOIFFIER ANNA MAYBANK LORIS DZAGOYAN
GUTWISER TEAMBrandon Brooks Anna Maybank Tatiana Ecoiffier Adrien Burch Christina Chang Loris Dzagoyan Ph.D MBA Ph.D Ph.D MBA M.Eng
CROWDSOURCING HEALTH Research: Patient communities: Connect to people with Crohns around you Map the human microbiome with citizen science 179K patients, 1K+ conditions Crowd sourced clinical trials General population People with serious diseases
Using cutting-edge sequencing technology, Gut Wiser is a consumer-facing• Red = self-referring, “asymptomatic” individual customers seeking personal analysisGut Wiser service to analyze bacterial community in the digestive system and provide •a • web-based platform where individuals can easily interpret and find relevant • Green = self-referring, “symptomatic” individual customers Blue = peer or heath practitioner referred, “symptomatic” customers Purple = organization customers seeking aggregated individual customer data information about their results based on published scientific data. • Black = relevant to all customer segments1) Partners • Stool sample collection• Partnership with • Analysis of the sample; • Maintaining 1) For testing service • Health conscious scientific literature sequencing of the 16s rDNA • Membership individual customers gut bacteria; creating a personal health community through: a. Research engines • Who is our target customer? complete profile of the through • Retail partner/outlet • Pay-as-you-go with disposable income customer gut microflora scientifically-based (Google Scholar, Pubmed) b. Journals • • Quantified self? Providing customers with a comparison of their microflora self-knowledge • Referral • Symptomatic (undiagnosed illness) (Science, Nature, • People with digestive issues? profile with up-to-date peer- • Do-It-Yourself non- reviewed scientific literature 2) For data service individual customers Journal of Intestinal Microbiology) • • Doctors? diagnosis Creating a database aggregating customer results clinical • Subscribers • Pay-as-you-go • Vulnerable/dependent• (digestive issues, Food product manufacturers • Research disorders, for research purposes mood institutions that individual customers • Chronic-disease• Quantified self groups want data?etc…) obesity, patients • Easy-to-use testing kit • Prevention and/or • Consumer facing- • Health practitioners• Patient groups• Health providers • Operational lab monitoring existing advertising (traditional and• Research grant- facility conditions (crohn’s • Food supplier/health alternative doctors) • Database of disease, colitis, making agencies stores translated gut • Researchers: microbiology literature IBD) • Peer2) Suppliers recommendation government into plain English• Sampling devices • Web platform for • Tool to perform • Health practitioner institutions/private• Shipping service consumer access discovery-based referral sector/nutritional health• Lab sequencing • Data access for science • Scientific publication supplement companies facilities scientists • Collection kit • Sample handling • Product placement sales (i.e. probiotic drinks) • Sequencing cost ($20/customer) • Subscription model (sell testing kits + results) • Technical worker (lab, bioinformatics, statistic) • Free kits, pay for results • Web development management • Health providers pay • Marketing • Researchers pay for data • Customer service
WE STARTED WITH SCIENCE AND INFORMATION… “Here’s a snapshot of your gut flora” “High diversity is correlated with lean people”12 Symptomatic / proactive individuals3 • Traditional MDs: “the science isn’t there” • Healthy don‟t care about data/ awareness: “but if you can tell me what4 diets actually work / how to lose weight” • Symptomatic individuals want solutions: “if you could tell me how to build up my tolerance to spicy foods”
PIVOT TO: A COMMUNIT Y PLATFORM Your Bacterial Diversity ResultsPain A lean person•Can‟t lose weight or successfully keep it off•Too many unfounded diet fads YOU at week 8 MVPGain 1) TEST: An obese person Gut bacteria•A more scientific analysis approach to dieting 2) TRACK: Online results Which diets worked for others? 3) SHARE: Community Paleo platform Juice cleanse Atkins Gluten-free Raw food Probiotic supplements
DOES THE SCIENCE MATCH THE CUSTOMER‟S WANTS?Hypothesis ResultsSymptomatic individuals ✗ Want interventionswant info to better that the science can’tmanage their conditions (yet) offerWeight-loss seekers want Want specific directioninfo on how to maintain / + proof (sustainablelose weight results, not fads)
HOW DO WE REACH WEIGHT LOSS SEEKERS? What about people not in a program… who are health seekers?
CUSTOMER ARCHET YPE: THE FEEL-BETTER Female, 30 years +, high disposable incomeComfortable Already healthy:talking about But wants to be poop! 100%Comfortable Not just fitness: with new Interested in technology wellbeing Highly educated about health
PIVOT TO: SPECIFIC PRODUCT RECOMMENDATIONS1 .) ANALYSE2.) COMPARE3.) SUGGEST
HOW DO WE REACH FEEL BETTERS? $100 NUTRITIONIST Diet ✖ $80 diagnosis“Feel better” • Holistic practitioner • Unlicensed Behavior change ✔ No MD approval Product suggestions Less expensive for client
COMPETITIVE SPECTRUM: SCIENCE VS. MARKETING? Gut WiserProvide Data Metametrix CustomVite Renew Life FitKit GeneMe Cust. Prob. Vitaganic Sell Products
TWO REVENUE STREAMS: KIT SALES + PRODUCT SALES Amazon platformNet Revenue from Kits Probiotics sales / customer/mo. $30 x # mos./yr 12 = Annual sales /customer $360Price per kit $80 x Gutwiser cut 15% = Profit /customer /year $54- Gutwiser cost per kit $60 Fully Personalized Probiotics sales per customer/mo. $60 X # mos./yr 12= Profit /Kit $20 = Annual sales per customer $720 x Gutwiser cut 40% = Profit /customer /year $288
HOW IT WORKS Nutritional product vendors Consumer 15% Prob Kit$$ spent$$ receivedConsumer‟s $$ spent Kit Nutritionist $80 wholesale Kits Analysis WebSite
WILL WE KEEP DOING THIS? YES! Phase 5 Phase 4 Reach out Phase 3 Test our to a larger Create the platform with market Phase 2 database nutritionists and their Provide Begin to customers probiotic to teach in Phase 1 customers nutritionist Continue and assess schools Customer their effect Discovery
LaunchPad Cent ral KEY PARTNERS KEY ACTI VI TI ES VALUE PROPOSI TI ONS CUSTOM RELATI ONSHI PS ER CUSTOM SEG ENTS ER M GETcu st o me r: h e a lt h Ma n a g in g sa mp le To o l t o p e rfo rm GET cu s t : p e e r We a lt h ie r wo me n , t ra ckin g a p p » co lle ct io n a n d d isco ve ry-b a se d r e co m m e n d a t io n » st ru g g lin g wit h we ig h t a n a lysis p ro ce ss wit h scie n ce » lo ss (DIY), 2 5 + » Nu t rit io n a n d la b su p p lie r » GET cu s t : p ro b io t ic su p p le me n t DIY n o n -clin ica l p r o m o s t o h ig h -e n d Ph a rma » ve n d o rs » Se q u e n cin g /a n a lysis sn a p sh o t o f yo u r g u t n u t r it io n is t s » Pro b io t ics o f 1 6 s rDNA g u t b a ct e ria t o co mp a re La b se q u e n cin g KEEP cu st : ma n u fa ct u re rs » b a ct e ria » t o t h a t o f le a n p e o p le fa cilit ie s (o u t so u rcin g ) Disco u n t e d , » » Fo o d ma n u fa ct u re rs KEY RESOURCES CHANNELS p u rch a sin g a d s » Ge t Sa mp lin g d e vice s » r e co m m e n d a t io n s 1 . ) Pr o a ct ive life We b p la t fo rm fo r fo r o t h e r Fo o d su p p lie r/h e a lt h Sh ip p in g se rvice » im p r o ve r s 2 . ) co n su me r a cce ss » s u p p le m e n t s /d ie t s st o re s » Pa s s ive n u t r it io n is t Gyms » t o t ry ba se d on Op e ra t io n a l la b fa cilit y Co n su me r-fa cin g a d s clie n t s » y o u r p r o file » We ig h t Wa t ch e rs » » » Pe e r re co mme n d a t io n » COST STRUCTURE REVENUE STREAMS Se q u e n cin g a n d a n a lysis co st ($ 6 0 /kit fo r ma t e ria ls/la b o r) » Pro d u ct p la ce me n t sa le s (i.e . p ro b io t ic d rin ks) » Ove rh e a d (we b d e v, cu st o me r se rvice , ma rke t in g e t c) » Pa y p e r p a cka g e (3 kit s + in d ivid u a l re su lt s) »
LaunchPad Cent ral KEY PARTNERS KEY ACTI VI TI ES VALUE PROPOSI TI ONS CUSTOM RELATI ONSHI PS ER CUSTOM SEG ENTS ER M Pro b io t ic/su p p le me n t St o o l sa mp le Ge t re co mme n d a t io n s GET cu st : p e e r Fo o d ma n u fa ct u re rs ma n u fa ct u re rs » co lle ct io n » fo r o t h e r re co mme n d a t io n » p u rch a sin g a d s » su p p le me n t s/d ie t s t o La b se q u e n cin g FDA 5 1 0 K a p p ro va l » t ry b a se d o n yo u r GET cu st : h ig h -e n d 1 .) Pro a ct ive life fa cilit ie s (o u t so u rcin g ) p ro file » n u t rit io n ist /h e a lt h imp ro ve rs 2 .) Pa ssive Cre a t e co mp le t e g u t » co n su lt a n t » n u t rit io n ist clie n t s » micro flo ra p ro file fo r Use scie n ce , n o t Nu t rit io n ist s (p ro d u ct cu st o me r » KEEP cu st : Nu t rit io n ist s » t ria l/e rro r, t o b e t t e r re fe rra l) » Me mb e rsh ip , u n d e rst a n d imp a ct o f KEY RESOURCES d ie t mo d ifica t io n s o r CHANNELS a b n o rma lit ie s » Te st in g kit » To o ls t o Fo o d su p p lie r/h e a lt h n u t r it io n is t t o st o re s » We b p la t fo rm fo r m a k e s cie n t ifica lly co n su me r a cce ss » Co n su me r-fa cin g a d s b a s e d p r o b io t ic » r e co m m e n d a t io n » Pe e r re co mme n d a t io n » COST STRUCTURE REVENUE STREAMS Ove rh e a d (we b d e v, cu st o me r se rvice , ma rke t in g e t c) » Pro d u ct p la ce me n t sa le s (i.e . p ro b io t ic d rin ks) » Se q u e n cin g a n d a n a lysis co st ($ 6 0 /kit fo r ma t e ria ls/la b o r) » Pa y p e r p a cka g e (3 kit s + in d ivid u a l re su lt s) » Su b scrip t io n fo r p e rso n a lize d p ro d u ct re cs a n d d isco u n t s » Fre e a cce ss t o co mmu n it y p la t fo rm » p r o b io t ic s a le s » Li c e n se d fr o m b u si n e ssm o d e lg e n e r a t i o n .c o m u n d e r a Cr e a t i ve Co m m o n s At t r i b u t i o n -S h a r e Al i ke 3.0 Un p o r t e d Li c e n se
MOCK UP OF IDEA #3 Prebiotics Patient Page ProbioticsNutritionist Nutri. Page Kits DataBase Analysis
HOW CAN WE MAKE RECOMMENDATIONS? 1.) Profiling: 2.) Community rating: 3.) Matching: We analyze your sample Other Gutwiser users have We look for a user thatand can see who else has rated probiotics based on looks similar to you and a similar profile to you their personal experiences who has rated a probiotic
CHANNEL ARCHET YPENaturopathic doctor Registered Dietitian (R.D) Nutritionist / Health Coach Licensed physician Are licensed Not credited, Unregulated Holistic method Can work in hospital Can be certified from certain school must meet the continuing “personalized” approach professional education requirements of ADA Practitioners would: 1/ recommend our service free of charge 2/ be motivated by coupons for discounted or free product 3/ ask for monetary compensation for endorsing service
NUTRITIONIST AS CHANNEL GET: KEEP: GROW: Product • Community • Customer referral results referrals Nutritionists • Can‟t order labs without MD • Want to attract more clients“Feel betters” Wk 0 Wk 4 Wk 8 Wk 12 Baseline: Results 1: Results 2: Results 3 Test 1 Test 2 Test 3
WHAT DO NUTRITIONISTS WANT? “Trial and error” Metametrix GutwiserTechnology Intuition PCR , traditional Sanger Ultra high-throughput sequencing Illumina-tag sequencingProcess See what happens MD approval required to No MD approval order testOutput Client perception only • Select bacteria • Complete bacteria snapshot profile • Yeast and fungus • Personalized diet, • Drug resistance supplement, and • Parasites probiotic • Short chain fatty recommendations acids • InflammationCost to user Free $400 for one kit $400(?) for 3 kitsValue Limited, static bacterial Robust, dynamic profile bacterial profile
SELLING THROUGH NUTRITIONISTS Hypothesis Experiment OutcomeSell through Too expensive to build 1. Trade shows arenutritionists: direct sales useful for reaching supplement retailers as Nutritionists: partners1.) Trade shows $1000/booth, 400 attendees 2. Use nutritionists as2.) Schools only initial channel: Supplement retailers reach them through $5250/booth, 63000 schools. Break even attendees and reach 1,950 grads/year Holistic nutritionist schools: 3. Next steps: ~ 13 schools x 150 grads/year RETHINK OUR = 1,950 grads/year CHANNELS AT SCALE!
SCIENCE VS MARKETING SCIENCE Revenue model 1: Manufacturing and selling our own probiotics Revenue model 2: Selling data to probiotics manufacturers Key questions: Do people care enough about the science? No! Do probiotics companies care about the science? No! Nutritionists care about science and people care about what nutritionists think MARKETING Revenue model: Diets and probiotics sales Channel: Nutritionists (Avon model) vs direct to consumer via infomercials Science is just one part of our story
TWO REVENUE STREAMS: KIT SALES + PRODUCT SALESNet Revenue from Kits(per customer) Overhead ExpensesPrice per kit $80 # Sales employees 2- Gutwiser cost per kit $60 + # of Technicians 1= Profit per kit $20 + # of Web dev employees 1x # of kits/yr 3 + # of Science Experts 1= Kit profit per customer per year $60 = # of Employees 5 x Avg salary $50,000 = Salary expense $250,000 Net Revenue from "Amazon platform” A Probiotics sales per customer/mo. $30 x # mos./yr 12 Travel and Profit per Breakeven # of conference/expo expenses $3,000 = Annual sales per customer $360 customer customers: x # of conferences per x Gutwiser cut 15% = Gutwiser product profit per year 6 customer per year $54 $114 2,667 = Travel/conference expenses $18,000 Fully Personalized Probiotics B Probiotics sales per customer/mo. $60 X # mos./yr 12 Other overhead $3,000 = Annual sales per customer $720 x # of mos. 12 x Gutwiser cut 40% = Other expenses $36,000 = Gutwiser product revenue/customer $288 $348 874 Total SG&A Expenses $304,000
CAN WE MAKE TRULY CUSTOMIZED PROBIOTICS? Revenue Model Volume constraints Time to customer Option A: • Product price: ~ • None • 2-4 wks for analysis $30/mo. Kit + Amazon • Readily available marketplace/platform • GW profit: 10- probiotics of product reccs 25% cut of sales Option B: • Product price: • “150K tablets” • 2-4 wks for analysis ~$60/mo. minimum order, Kit + Fully 15k piggybacking • +4-12 wks to personalized, custom • GW profit: 150- off existing orders develop customized probiotics 900% markup probiotics possibleSource: Academy of Nutrition and Dietetics
INTELLECTUAL PROPERTIES Where is our value Database Supplement recommendation algorithm Patentable insights on the gut microbiome How de we want to protect it Database: consent form the participant may be required Algorithm: Patent vs. Trade secret? The university in this process?
REGULATORY INSIGHTS FROM AN FDA LAWYERFDA Class I Medical Device status • Find a FDA-cleared, marketed device to•“As soon as you say test kit it is going to be a med device" qualify for Class I•“It would be the manufacturer‟s responsibility to get FDA exemption approval, but your company could get in some trouble if using an unapproved FDA test kit.” • Cannot makeWho interprets the results? What claims can be made? claims/reccs beyond what a non-licensed•”If the consumer reads the results – fine to give consumer some guidance on nutrition supplements they should be practitioner can do, taking… but not for any disease treatment or abnormal (i.e., stay away from condition.. You can probably say you may have symptoms of claims on disease IBS but need to go to an internal medicine MD to find out.” treatment/diagnosis)Financial incentives with partners must be disclosed • Be transparent that•“Giving nutritionists a kickback would probably be okay but we/nutritionists are might need a disclosure – e.g., „I understand that this recommending practice owns the MRI ctr‟”•“You might need to disclose on the website that all of the products that products offered / recommended here have a relationship we/nutritionists reap with the company.” financial benefit from
SYMPTOMATIC/PROACTIVE INDIVIDUALS - HOW BIG IS THE MARKET? Digestive TAM: Digestive diseases, 60 M adults 1 disease SAM: IBS sufferers: 15.3M adults 60 M adults % that take supplements: 50% 2 x approx monthly spend on supplements: $20 3 IBS Target = $1.84 BN 15 M TAM: Dieter s, 1 88 M adults 4 SAM: Women dieters: 104M 5 Dieters “Wealthy dieters” comprise only 20% 6 188 M adults x approx monthly spend on supplements: $ 20 7 Target = $4.98 BN Wealthy women1 NIH (NIDDK), incl. Crohns, IBS, UC dieters2 Center for Disease Control andPrevention 20.8M3,7 Customer interview4,5 Gallup6 Marketdata Enterprises
NUTRITIONIST MARKET SIZEEstimated number of women aged 35-64 who get information about nutrition from anutritionist 35-44 45-54 55-64 Total%age of total US pop who getinfo from nutritionists 2% 3% 3%%age of women who get infofrom nutritionists 1% 2% 2%x Number of women in US pop 20,128,000 22,459,000 19,038,000= Est. no. of women who getinfo from nutritionist 201,280 336,885 285,570 823,735 Gutwiser sells to 5% of market at $114 profit/sale = $4.7M Source: Academy of Nutrition and Dietetics
SELLING THROUGH NUTRITIONIST SCHOOLS Cover our costs from teaching at nutrition schools Make a small profit from future referrals of our studentsIncome from providing testing and teaching in nutritionistschools Income from referrals by nutritionistsRevenue Costs Total number of students 1950 %age of students who go on to practice 50%Wholesale price per kit 80 Curriculum development (hours) 35 = Practicing nutritionists reached 975x Number of students 1950 x Salary per hour 50 x %age of nutritionists who refer clients to Gutwiser 50%= Total revenue 156000 = Curriculum development cost 1750 = Number of nutritionists referring clients 488 x Clients per nutritionist 10 Salary per hour 50 = Clients using Gutwiser 4875 x Teaching hours per course 15 x Profit per client to Gutwiser 174 = Cost per course per school 750 = Profit from referrals by nutritionists via school channel 848,250 x Number of schools 13 = Cost to teach at every school 9750 Cost per kit 60 x Number of students 1950 = Cost to provide kits for students 117,000 Total revenue from teaching 156,000 - Total cost to reach 1,950 students 128,500 = Revenue from nutritionists schools 27,500
PROBIOTICS MARKET SIZE • Probiotic supplements annual North American revenue ~ $750M in 2011 • Growing 35% in 5 years ~ $1bn in 2016 • 5% of US market ~ $50M
NUTRACEUTICALS MARKETFunctional food, functional beverages and dietary supplements: 2011 US market for nutraceuticals = $56.4bn 2011 Global market = $142.1Bn 2017 Global market = $204.8Bn
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