Leaving The VC World To Start A Sleep And Wellness Company
Hello! Who are you and what business did you start?
I’m VC-turned-founder Oscar Adelman. One year ago, I left my early-stage VC job to start Remi, a direct-to-consumer Sleep and Wellness company.
Our first two products are a custom night guard, which is more affordable, convenient, and comfortable than anything else on the market, and a custom teeth whitening kit designed for people with sensitive teeth and those who do not want to put nasty chemicals into their bodies.
Year One has not been a walk in the park, though. Launching in March 2020 meant much of our carefully laid plans were thrown out the window as COVID-19 quickly turned the world upside-down. Our first few months were not filled with glitzy PR pieces and celebration – it was a struggle to readjust our supply chain, manufacturing, and team.
We depend on seven suppliers just for the components in our at-home impression kit – and many more for production. Each was delayed or altered in some way. Shipping became chaotic as e-commerce volume quickly surprised the USPS as more people shopped from home. Still, we were fortunate to be able to ride the tailwinds of powerful e-commerce forces.
Our theory that customers would skip the mom-and-pop dentist office in favor of a tech-enabled alternative that is 1/5 of the price and can be done without leaving home was reinforced as purse strings tightened (at least during the first few months of the pandemic as uncertainty set in) and the thought of getting masked up and tested just for a dentist to take a 5-minute impression for you seemed less appealing.
Now that we’re 12 months old, I can proudly say Year One has been a success. We went from idea to $1.5m+, served thousands of happy customers (with a Net Promoter Score of 94!), and learned how to effectively communicate our value propositions; accessibility, convenience, and comfort.
What's your backstory and how did you come up with the idea?
Bruxism, the medical term for grinding your teeth while you sleep, affects 25-40% of adults in the US. It’s a natural way for stress to leave the body – but unlike biting your nails or twirling your hair, it can cause real damage. It’s also a chronic condition – and one that I have been dealing with personally for 10 years.
Over the past few years, I’ve lost 6-night guards. I was lucky enough to be able to afford to replace them each time with a $500+ option (I once paid $950 at a Manhattan dentist office!) but after that 6th night guard, my frustration reached a point of no return. I could never understand why a piece of plastic – even if it is molded custom to my teeth – could be so expensive.
While I had always politely debated this with my dentists, I never won that debate. As far as I knew, they had all the leverage. Until Remi, there were only two options if you grind your teeth. You could either get a sports guard (think Steph Curry’s guard during a basketball game) for $15 at any pharmacy, drop it in a pot of boiling water or microwave until it’s hot, and then let it cool around your teeth. This results in a thick bulky guard – which is fine for a basketball game, but absolutely sub-optimal for comfort while sleeping. Aside from that, you could cough up $500+ at your dentist’s office. This prices so many people out of a good night’s sleep – and for no good reason!
After a contentious debate with my dentist in SF, I put on my VC hat and started doing my own due diligence. I spoke with 75 dentists around the country, and while I never got a satisfactory answer for why they were charging $500+ for a nightguard, I did learn something important – 99% of dentists outsource this to a fabrication lab. These labs focus on ultra-high margin work like crowns and bridges, which can go for thousands of dollars but are often covered by insurance. Nightguards, while still lucrative, were always an afterthought for these labs. I learned that after the dentist smiled and shook my hand, they’d leave the examination room and let the hygienist take over and take an impression of my teeth – because it’s really not that hard to do.
By the time I was getting into my car in the parking lot, that hygienist had already dropped my impression in an envelope to be sent off to the lab. A few weeks later the receptionist would call me to come to pick it up. Nothing about this process was efficient, and the mark-up was insane. These fabrication labs, which generally use older technology because night guards are an afterthought to them, charge the dentist about $120. The dentist then charges me $500. As a VC, I knew I had identified a broken market with a middleman that could be eliminated – if I could figure out a way to get people to take their own impressions from home.
That’s when the real work started. I started ordering impression trays and putty from every supplier I could find. My friends and family were nice enough to let me stick putty and trays into their mouths every time I saw them. After a lot of trial and error, I found the right combination and best way to get this done easily for a customer who had zero experience doing something like this before. Then, it was off to the races.
I quit my job, raised pre-seed funding round, and started on branding, packaging, securing suppliers, hiring a team of dental professionals, and building a website and marketing plan.
12 months later, we’re selling many thousands of night guards every month – and believe we’re at the tip of the iceberg with this product. While the TAM for night guards alone is well into the billions annually (remember, it’s a chronic condition that affects 25-40% of us!) and the SAM is well North of $1B, I knew from my time in VC that the larger play here is to use the night guard as a beachhead product for a larger Sleep and Wellness platform brand.
When Remi customers started asking if they could use their night guards as teeth whitening trays (we’re the only option on the market that includes both a top and bottom night guard standard so our customers can decide which is most comfortable after trying them out for a few nights in real-life conditions – a huge advantage for our comfort value proposition – it also meant they could use these trays to whitening their teeth.
Nickel and diming customers is not going to get you that NPS score that builds a word-of-mouth free-CAC marketing machine.
We started working with a top-tier US whitening gel manufacturer on a gel formulation that would work for overnight use without causing sensitivity. Because of the longer exposure time, we were able to eliminate the traditional nasty chemicals found in “20-minute” whitening gels and strips. Whether our customers purchase the whitening gel as an add-on with their night guard or just use Remi as their teeth whitening routine, we’re able to provide the experience you’d get in the dentist office for a fraction of the cost, no risk of sensitivity, and without needing to leave home.
We have a few more products coming down the turnpike that builds on this idea of providing Sleep and Wellness solutions that are accessible, convenient, and comfortable – but I can’t give away all our secrets in this article!
Take us through the process of designing, prototyping, and manufacturing your first product.
While I’m sure most of our first few thousand customers did not realize this, my apartment in San Francisco was Remi HQ until we were doing almost a million dollars in sales. It’s where the initial design happened, our first in-house fulfillment and manufacturing line was set up, and where our team of dental professionals with over 80 years of combined experience built Remi for many months.
I would rather grow 15% MoM and have a net-zero cash burn than 25% and burn through tens of thousands of dollars each month.
This worked reasonably well until we ran out of space and had to start a night shift. After a month or so of trying to sleep on the other side of a thin wall with dental drills and surprisingly loud 3D printers, I knew it was time to get a real office. I’m proud of our scrappiness – and think this helped contribute to a great company culture of comradery and hard work without shortcuts.
Some of the most important conversations to happen as a company, including how to market our product happened over late-night cups of coffee around my kitchen table. Remi presented a complex marketing challenge. While our value propositions are strong, our approach was brand new. So much trust is given to dentists in white lab coats, it’s only recently that customers started to pause and think about costs – and if there might be a cheaper option online. Positioning ourselves to capture this audience has become key to our marketing strategy. Reaching them is not easy, but we’re getting better at it every day.
Describe the process of launching the business.
It’s hard to get press coverage at launch. Unless you’re a repeat founder with a great prior exit or very sexy story, few publications are going to cover your launch. Starter Story is a great exception, and serves an important role in the industry, but is an exception to that rule. I quickly realized we needed to make our own press, so we hired influencers and tried to create our own buzz.
Your friends and family are going to be your best brand ambassadors. At launch, we worked hard to activate them. Long before our email marketing list of tens of thousands of real customers, we had already built a list of Remi advocates. I did this by activating my network. I used a scraper to pull the emails of every person I have corresponded with in the last five years. I ran a script to clean up this list (read: delete email marketers and duplicates) and then wrote a list of parameters for who I wanted to keep on the list.
I hired an upworker to use these parameters to further clean the list and then set up an email tool to send out several hundred emails each day for our first couple of months. When an email bounced, it was removed from the list. We spread the word about Remi very quickly this way. I’d recommend this strategy to any founder launching a new company or even just a new product line.
Since launch, what has worked to attract and retain customers?
The best way to attract and retain customers is to offer the best solution to a real pain point. It sounds simple, but there are so many companies out there that are building a slightly better mousetrap. While some of these mouse trap 2.0 companies will do well thanks to sharp founders and sophisticated marketing strategies, the much easier route is to build something people really need.
For Remi, we came into a market where two options existed at opposite ends of the spectrum. We took the best attributes of the top of the price-point (fully custom, ultra-comfortable) and sell it much closer to the bottom of the price-point while adding in at-home convenience and subscription service – something not done before in the world of night guards. Our company lifetime retention is above 90% - meaning of every customer that has ever joined the Remi Club, 9/10 of them are still part of the Club – which we believe shows our solution resonates with our customers.
Part of retaining customers, in my opinion, is treating them like you would like to be treated. Do not try to trick customers into retention. Customers in 2021 are too smart to fall for old-school traps of contracts, early termination fees, cancellation fees, etc. Nickel and diming customers is not going to get you that NPS score that builds a word-of-mouth free-CAC marketing machine.
For example, if a customer makes a mistake while taking their impressions, we send them a new kit free of charge. It’s as simple as sending us an email if a customer wants to pause or change their Remi Club plan. We receive positive reinforcement every day from our customers (we have a “wall of gratitude” in our office where we print and hang all of the positive feedback our customer service team receives) that this is the right way to handle the customer relationship and retain customers. While we could likely make a quick buck by charging customers $15 for a replacement kit, we know that the value we’re building long-term in the brand by not doing so is worth far more.
How are you doing today and what does the future look like?
I am proud that Remi is a fundamentally good business. By that I mean we’re not burning VC dollars with a growth-at-all-costs mentality. We make money on our first order, and our gross margins on recurring orders rival the best CPG brands out there. I would rather grow 15% MoM and have a net-zero cash burn than 25% and burn through tens of thousands of dollars each month.
This is not necessarily a popular viewpoint in the world of VC-backed startups, but having spent a couple of years on the check-writing side of the table, I have seen how VC dollars and put a company at risk. As a performance-enhancing drug, it’s very hard to stop or slow the spending of VC dollars. The faster you spend, the more addicting it becomes. I have seen many early-stage companies crash and burn as a result. I’m not saying don’t take VC funding – it’s a massive leg up – but do spend wisely. Pre-seed and Seed VC funding is there to help you prove your hypothesis. It’s not there to pay for your office or salary. If having spending money in your pocket is important to you, consider a corporate job because founders should spend each investor's dollar like it’s their last.
Having been an investor myself, I think I’m harder on myself about this than most founders. But, that has allowed us to build a fundamentally good business in a short amount of time, and give ourselves nearly unlimited runway to work out any kinks in our hypothesis.
Through starting the business, have you learned anything particularly helpful or advantageous?
Speaking for myself, being a founder means you can be your own toughest manager. Those who take this seriously will realize from the first week that the responsibility that falls on the shoulders of a founder means you’re stricter on yourself than any micromanaging boss might be in the corporate world. There are no vacations, weekends, or lazy evenings for a serious founder. Yes, it’s important to keep your battery charged – but if the work is not doing most of that charging for you, you’re either not built for this lifestyle or you’re not working on the right company. I find that Remi feeds me energy. The more I work on it, the more energy I have. If you can’t relate, then you should reconsider what you’re doing.
Likewise, if you’re not strictest on yourself than any manager you’ve ever had, you’re going to be in for a bumpy ride. I was fortunate enough to watch 80 early-stage portfolio companies over the course of two years while on the VC side of the table. I watched as the founders who would agree with these statements built thriving businesses, and the ones who did not flounder. If any of this sounds like overkill, go speak with founders who have quickly built successes and founders who are having a hard time fundraising or have been working on their idea for a couple of years with modest growth. It’ll be a crash course in how to manage yourself as a founder.
What platform/tools do you use for your business?
I have a permanent Chrome window up on one of my screens with 12 tabs. I check those tabs first thing in the morning, and every couple of hours throughout the day. It includes all of our emails, including customer service. Even though the days of me responding to each customer service email are behind us, I did it for months and learned a lot about our customers from it. I still like to keep an eye on it for the occasional question I haven’t seen before.
Other tabs include Facebook and Google marketing, Shopify, and Amazon. I keep a running tab of my to-do list, prioritized, in Notes, and use time blocks on my calendar to not get sidetracked into projects in the wrong order. As a founder, there are way more projects to do each day than time to do them – so whatever is leftover I move to the following day and re-prioritize before bed.
What have been the most influential books, podcasts, or other resources?
One of the advantages of being part of the Foundation Capital portfolio is being in the company of great thought leaders. Foundation has been around for over 25 years and has made a name for itself through many landmark investments – one being Netflix. Recently, Foundation hosted Netflix founder and CEO Reed Hastings for a book club conversation about his book, No Rules Rules.
As a first-time founder managing a growing team of 12, this book really highlighted that hiring right gives you the ability to manage hands-off. The right people – who are bought-in, dedicated, and top performers, will do the hard work of management for you. Since Day One I’ve tried to be a trusting hands-off manager, but this book armed me with some tools that allow me to do a better job of that. I’m grateful for the trust my team has built and know the Netflix culture is one I want to borrow from as Remi continues to grow.
Advice for other entrepreneurs who want to get started or are just starting?
When you’re first getting started, you’re in a race against yourself. Run fast.
Remi moved very quickly from idea to product launch. We did that by bringing in a race against ourselves. We did not know exactly why we needed to move as fast as we did – but as it turns out, we were racing against the pandemic. Had we launched even a few weeks later than we did, I think things would have looked a lot different for us.
The first couple of months were grueling – lots of all-nighters and no weekend breaks. But I’m glad that we committed to jump in headfirst and move quickly. If you have an idea and are ready to start, move fast. Race against yourself. You never know how timing is going to work out, but the faster you move, the more control you have over the events going on around you.
Are you looking to hire for certain positions right now?
While Remi is not hiring right now, April 2021 is an amazing time to make a change from a macroeconomic perspective – don’t let anyone tell you otherwise, and don’t get discouraged by the negative news cycle surrounding us. I see enough job postings every day founder-only Slack and Whatsapp groups to make my head spin. Finding the right one is much harder, but the volume is there and opportunities will be there for those who are serious.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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