Starting A Supplements Nutrition Company and Growing to $20k/month

The Story of De Novo Nutrition

Hello! Who are you and what are you working on?

My name is Ben Esgro, I am the founder and co-owner of De Novo Nutrition. We sell a line of dietary supplements, which started back in 2011 as a labor of love and curiosity.

This began with me hand mixing custom protein powders and has since grown steadily from a one man operation in my parents house to a multinational brand with employees in both the US and UK.

We pride ourselves on being unique, innovative, honest, and reliable in a highly competitive industry that isn’t often celebrated for these characteristics. While we are known for our unique and great tasting Whey protein flavors; White Cake and Candy Bar, our top product is a cognitive enhancer called Utopia. With Utopia, we were one of the first sports nutrition companies to release a standalone nootropic blend which led to us being mentioned on The Tim Ferriss Show and a major inflection point in growth.

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Our largest core market is in the fitness industry, predominantly with powerlifters and bodybuilders. However, our products have been formulated for a universal application all the way from study and work performance to high intensity physical performance. As a case in point, many of our customers use Utopia to improve their work efficiency or as a coffee replacement. This is, in fact, exactly what it was designed for.

What's your backstory and how did you come up with the idea?

De Novo was born when I was in graduate school studying sports nutrition. I was fascinated by the pharmacology of dietary supplements and, as an avid consumer of products, the diversity of effects from brand to brand and product to product. Over time, I became increasingly curious of the entire process of product development and ever more frustrated with the "smoke and mirrors" most companies were promoting.

The more I learned, the more I realized how much deception was in the industry. There were, however, some brands which seemed to reliably provide innovative and effective products. These brands and formulators in many ways became my motivation and inspiration.

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At the time, I was still living home with my parents to save money through grad school. With my brother moving out, there was an open room in the house where I was able to set up a small batch operation.

I read how companies like Isopure began with just two guys and a cement mixer, so I knew I could feasibly mix small to moderate batches if I picked one up from the hardware store and used proper sanitation procedures.

I came up with the name De Novo because I had read about de novo processes in physiology and I loved both they way it sounded and what it stood for (the phrase de novo is latin and means from the beginning or from anew). I thought it was a perfect representation of the company and what I was attempting to do: Literally start something new from the absolute bottom.

I was working a community nutrition job (WIC) at the time, so I would use my free time between clients to research sourcing of raw materials and I’d use the money I made to fund purchasing raw materials and equipment like blenders, mixers, sealers, scoopers, etc. I began by just making products for myself and a small group of friends to test. When I would find something (like creating a new flavor of whey) I thought worked great, I would have my parents try it, then "pilot" it with my group of friends to determine trends in opinion/approval. For other products like capsules, I would get baseline blood work on the markers I was attempting to improve, use a formula I created, then get follow up labs to determine if my perceived effects (if any) were quantifiable or were just placebo. Throughout this period, I learned a whole lot about mixing, formulating, and physiology.

The breaking point of actually becoming a business and not a side project happened when a well known group of fitness coaches called 3DMJ shared what I was doing on facebook. Protein became the most demanded product I offered, so De Novo officially started sales as a protein-only company. I came to find out over time and experience that protein is the hardest product to start a supplement line with as the raw materials cost the most, it is intensely competitive, and it has the worst margins.

Honestly, I didn’t care, I was just happy to be doing what I loved and having an audience who appreciated it.

Describe the process of designing, prototyping, and manufacturing the product.

In the beginning, everything was small batched. This means I would stock raw (unflavored) protein and flavor powders and produce the orders as they came in. This allowed me to have minimal waste, pilot test new flavors, and pivot quickly based on what sold and what didn’t. For a period of 2 years, I was hand mixing (using a large food grade bag) or using a small cement mixer every day to mix protein. If I had an idea for a new flavor, I would get samples from the flavor manufacturer, devise a formula, scale it up, and mix a small batch for testing.

My setup could very much be described as minimalist and cost efficient. I only bought what was necessary and was as resourceful as I possibly could be. I basically had one cement mixer, inventory shelves for raw materials, a drafting table for weighing and measuring, a computer, and my packaging, printer, and sealer. I operated like this for two years, then moved to Florida where I partnered with two individuals and we officially got some warehouse space for manufacturing and scaling the operation. Eventually, we became large enough to outsource all of our manufacturing to contract manufacturers. All of our bodies, collectively, were thankful for this change.

In terms of product development, my basic philosophy has always been to keep the process as simple and streamlined as possible without cutting corners. Typically, this begins with a "bottom up" approach, keeping up with industry trends and research for new lead ingredients. If something is compelling and has feasible research to support its use and safety, I will first purchase it and “bioassay” it, keeping note of the dose I use and the effects (if any) experienced. I did this early on as a consumer and I still do it as a formulator. I keep a notebook of potential formulas and combinations which I can always refer back to if I am trying to create something new.

As I have learned more through personal experience and pharmaceutical chemistry course work, I can now also follow a "top down" approach to product development, where I know the end effect(s) I am trying to produce and I can follow a more mechanistic approach to selecting and testing ingredients.

Ultimately, these paths converge once I have found ingredients which work well and are mechanistically sound in the literature. From there, I will begin testing combinations to determine if they have the synergistic effects they theoretically should. This continues until I arrive at a tentative formula. Only once I have fully subjected myself to this battery of testing will I create a small batch for pilot testing and user feedback. If all goes well, refinement will continue until I arrive at a final formulation which is ready for production.

If a proper market can be identified, the production is financially feasible, and we can confidently stand behind its efficacy, we will coordinate with our manufacturers on a flavor profile and go into further testing to perfect it. This entire process of R&D typically takes up to a year from inception to a new product hitting the market.

Describe the process of launching the online store/business.

Originally, I taught myself basic programming and web design to get the site launched to take orders. Our marketing efforts were virtually non-existent aside from word of mouth and basic social media profiles (only facebook at the time). I realized pretty quickly this approach would neither be sustainable, nor allow the brand to have the greatest impact and exposure. Basically, I knew I needed help. This led to my first partnership as well as a formal marketing and graphic design professional. This completely changed our social media presence and impression of the brand. This is a vital element I have come to appreciate as a separating factor between the fledgling and the established brands.

Since the beginning, the funding for the company has been through bootstrapping. In the beginning, I would use the income from my job at WIC to fund my supplies, but this quickly became less feasible with the volumes required for private manufacturing. My parents have invested during major growth phases to get us over the hump for things like packaging, but aside from that we have always just used our sales to reinvest in the company growth and development. Now that we have grown large enough, we have credit lines available and we have utilized Paypal working credit as well. This has probably been the single greatest asset for funding we have had, as it is a flat fee up front with 0% interest.

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I believe De Novo is the embodiment of "slow and steady wins the race".

We have seen many companies come and go throughout our tenure in the industry, and many who seem to be following the "get rich quick" plan of attack. Initially, this may seem to fool people, but they always catch on in time and that seems to be when the bottom falls out. We really didn’t start to feel and probably have the presence of an actual business until year 5, which was really spiked by being mentioned on the Tim Ferriss podcast by a personal friend and respected academic: Dr. Dominic D’Agostino. As I have read previously about Tim, he can single handedly put a small business on the map overnight just by mentioning it on his show, and that impact has been undeniable for us.

Since launch, what has worked to attract new customers (Sales & Marketing)?

The key focus is making sure we have the best supplements available on the market. Without that in place it doesn’t matter how much money you chuck at Facebook ads. As they say, people only buy shit once. That being said we have focused a lot on providing value to our target audience in the form of content marketing. Go on Instagram and look at other supplement companies, you will see a theme that goes a bit like this.

  1. Find a young female or male who are in shape and make sure they are in minimal clothing.

  2. Take photos with the athlete holding the supplement.

  3. Photoshop images and post to Instagram.

Check out @denovosupps and you will automatically see the difference. Our prices are higher than most supplement companies and our target audience tends to be a little bit older and wiser to those types of posts I stated above.

We get the majority of traffic from Instagram and that is where the attention is at the moment. Setting up Facebook Retargeting ads has also been very successful recently for us and we will continue to invest more heavily in those.

It goes back to the start of this question and producing the best products. Our customers are like family members, our ambassadors are like cousins and our athletes are like siblings. Creating the family environment organically grows a company. Focusing on customer service, transparency and doing the right thing, creates this ecosystem of more than word of mouth.

How is everything going nowadays, and what are your plans for the future?

In recent events we have had to deal with a lot of adversity. Going from distribution centre to Amazon to not being able to list on Amazon and taking fulfilment back into our own hands. With the inclusion of Luke and his team, we have streamlined the team and operations. This has reduced our overhead and since taking fulfilment back our margins are 28% better.

We have reached out to over 100 manufacturers in the US & UK and have visited several manufacturers all over the US. This has resulted in improved Cost of goods (COGS) and profit margins.

We have rebranded and are now expanding into the UK & EU market.

A focus on expanding our target audience of athletes to the Esport market itself is what we are focusing on right now. It is simply a case of keeping the same formula for our best seller Utopia and changing the name/label to Gamer Focus. We are teaming up with twitch streamers to help give us more traction in that market through influencer marketing.

Another future plan is to increase our product range and adding supplements like Creatine Monohydrate as basket fillers to help increase our Average Order Value (AOV).

Through starting the business, have you learned anything particularly helpful or advantageous?

There are no mistakes, just learning experiences. Well, they are mistakes if you carry on doing them, I guess...

Having a clear vision and no specific goals with specific time frames allows creativity and adaptability. Setting 1, 3 or 5 year goals can be restrictive and can tunnel you into a blinded path that leads to the destination you do not want to be at.

Focus your time and energy on things you can control. Yes, still look at what your competitors are doing but don’t allow their actions to take up your time and energy. Taking action, analysing and then tweaking are keys to being ahead of the game. Being content with your short-term success leads to complacency.

Finally, allow your actions to produce an emotion and not your emotions dictate your actions.

What platform/tools do you use for your business?

Basecamp is what we use as a team. Having staff in the US and UK, in different time zones, who are remote workers, we have made it our hub. It enables us to communicate, add to-do lists and keep everyone accountable with automatic check-ins.

Our new site is currently on Shopify. It makes things a lot easier having a shopify site over the traditional Wordpress and Woocommerce site. The statistics we get from a Shopify site, allow us to be able to track more metrics and as scientists we love statistics.

Some of the apps we are currently using are:

Affiliatly

Digital Downloads

Drip (our ESP)

Easyship - this helped us a lot, because it allows us to add the dimensions of our products and not just the weight like shopify has by default

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And More...

For social media tools we use Buffer to help plan our IG content and schedule for the week. We also use G-sheets a fair amount for our social media schedule and generate sheets for more of the finance side of things.

What have been the most influential books, podcasts, or other resources?

As corny as it may sound, for me these have been textbooks like Food Chemistry, The and research studies. Since the company was built on formulation first, that is still what I spend most of my time reading and learning.

Related to business and marketing, I would say all of the books by Edward Bernays have been quite eye opening to me. They are cheap, quick reads, and give you insight into the mind of the man who essentially constructed public relations in the United States.

Advice for other entrepreneurs who want to get started or are just starting out?

  1. Trust your intuition. Pivot without delay when the signs are clear something isn’t working.
  2. Do not delay taking action on any matters, regardless of how small or large. Just like in medicine, early detection and treatment of problems leads to the best outcomes.
  3. Never stop learning. Knowledge is a massive competitive advantage.
  4. Get out of your own way. Approach everything as a learning experience and stay humble. While narcissism may be overrepresented in CEO’s, I’ve seen it destroy many businesses before they could ever actualize their potential.
  5. Trust is everything, if it’s gone then move on.
  6. Operate lean and efficiently.
  7. You can’t do it all yourself. A business is the most humbling realization that you can’t be the expert in everything.
  8. Be resourceful. Read and research. SCORE is a wonderful resource for small businesses that is free and has representatives throughout the country.
  9. It’s not going to be easy and you shouldn’t expect it to be. Embrace the fact that there will be painful lessons learned, but overcoming them is the most potent personal growth you can experience.

Where can we go to learn more?

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