Competitive Landscape {Million Dollar Idea Project}

I don’t need to tell you how important competition is, but I will. It’s very important. It’s perhaps the single most important, creative force of our time, shaping the very nature of our everyday lives.

This is part of my Million Dollar Idea, where I take you through every step of the formation of a company starting with just $5,000, with the goal of getting to a business worth $1,000,000. As a reminder, we plan on building an AI-driven platform for distributing personalized packages of nutraceuticals.

The first step whenever I start a new business is to define the set of competitors, and understand what market the idea competes in. This puts us in a position to learn from what our competitors have already spent money learning, and also understand the size of the opportunity.

Taking a fairly birds-eye-view of the market, the size of the market for dietary supplement tablets in the US is expected to exceed $100 billion by 2025. That’s a fairly juicy market and affords us quite a bit of proof that we can stake out our measly share of $100,000 annually (our goal to reach a safe valuation of $1,000,000), which would amount to just one ten-thousandth of a percent of the market.

There is the question of whether our goal would be to convince people already in that market to give us their attention, or work to tap into an untapped area of the market, but we’ll leave that to our marketing research in the future.

As we shift focus away from the broadly defined market, we can find closer competitors, offering something similar to what we do.

PillPack

The most notable of these competitors that I’ve found is PillPack. PillPack has some substantial institutional backing, having raised over $100 million from some fairly heavy hitters like Accel and Astral.

PillPack competes in the broader pharmaceutical market, covering prescription drugs as well as nutraceuticals. It is unclear what percentage of their business comes from nutraceuticals, but they do have offerings there.

The big innovation with PillPack is the individual packaging of the tablets into detailed packets that show their contents, as well as when they should be taken.

For anybody who’s had to take more than one or two different medications at a time, or for anybody who’s set up a little pill chest for their elderly grandparents, it’s immediately apparent how much of a benefit this can be. And it can save lives too, when the medications are critical, and compliance is difficult.

It would appear that their play is primarily to steal market share from traditional pharmacies, a bold endeavor that would certainly be welcomed by me.

Where they are not trying to innovate is on how medications are selected. Since it appears that they focus on prescriptions, they are limited to the traditional doctor-patient-prescription model, and so it is unlikely that they will pose any real threat to our business.

What we can learn from them is their packaging technology. I’ve gone through the on-boarding flow and actually had quite a difficult time inputting my insurance information, which seems like a fairly major oversight, but you can rest assured I’ll be taking what I can from them there.

Nutrigene

Nutrigene is a more direct analogue. They hail out of YC, so they are super buzzy. I’d expect to see some major rounds from them in the near future.

They focus on liquid vitamins, which I personally find a little off-putting. They claim that this achieves a greater amount of absorption into the body, but I find that stat dubious. I’d posit that it is likely an operational efficiency concern, since mixing liquids is a lot easier to automate than loading packets of tablets.

Oddly enough, it would appear they have no copy-editors, as they’d probably get a C for their English skills. That also makes me a little concerned about how closely they’ve read the DS GCMP Rule, which is quite complex.

Overall, the usability of their website is quite weak, their intake survey is pretty shallow, their prices are very high, their product is unfamiliar, and they don’t seem to have marketing expertise. All they really have is the YC name and a TechCrunch article (I know, redundant). I wouldn’t consider them a serious threat at this time, but they are worth keeping on the radar.

Care/Of

Care/Of has packaging very similar to what I’ve planned on designing. They do have a pretty solid intake quiz, similar to what I’ll likely design (though, I’d argue it moves too slow for most people to have patience with).

They’ve raised two rounds, for a total of 16.9M, so it’s clear that the funding is there. Theirs is the investment deck I’d be most interested in seeing.

I will likely be placing a test order from here to see how it works, but the intake quiz just seems to set an initial stack, and there doesn’t seem be an ongoing component of customization and analysis.

This is where I think our strongest differentiator is going to be, because I believe that only through analysis can we really expect to get to a stack that makes a real, demonstrable improvement to our goals.

Care/Of is a player to watch for sure. They have the aesthetic we want our product to have, and they use a lot of the same groundwork, so they are a very close enemy to keep our eye on.

VitaminPacks

VitaminPacks is another very similar player, with similar packaging, though their aesthetic is certainly a little more old-school.

As with Care/Of, it’s a close analogue, but again, their quiz is only a one-time tool for suggesting a set of vitamins, at which point, analysis is done and they’re just hoping you stay subscribed.

The key differentiation we are going to be providing, to reiterate, is by providing you with an ongoing assessment of how you are doing on your goals.

Other Players

Some honorable mentions are Multiply Labs, which produces a custom-mixed capsule, VitaminLab, which appears to just send you an unlabelled powder (what could go wrong?), and Vitafive which does the same thing as Care/Of and VitaminPacks, except they use gummies (not a bad idea!)

At the end of the day, we’re not revolutionizing anything here. People have been repackaging supplements in higher-margin containers for years, and they’ve been doing so online. We do have a key differentiator, in terms of our ongoing analysis, but other players can copy that, and so they are all people we need to pay attention to.

This is going to be a marketing play like any other, it’s going to require smart performance marketing through search and social, which I excel at, smart conversion optimization, which I excel at, and smart retention management, which I excel at.

I’ll be doing some test runs of all these competitors to see what I like and don’t like, but at this phase, they mostly serve the role of education. While they might come up in pitches to investors and partners, the reality is that these are unknown brands with no real market share at this time, and so prospecting into the market doesn’t require beating them in hand-to-hand combat, but rather just showing up to the fight in the first place.

Next time, let’s look at how we will be sourcing our custom packaging.