Vitamins and venture capital might not seem like the most natural fit, but a number of related companies have attracted capital from tech investors in recent years, including SmartyPants, which makes a gummy vitamin, and Elysium Health, a supplements company that counts a former venture capitalist as a co-founder.
Still, competitors may have trouble catching up to two-year-old Olly, a 30-person company whose sweet vitamins, delivered in gummy form and packed in playful, eye-catching containers, are flying off a growing number of shelves. Indeed, the profitable startup, which began as an online subscription service, now derives just 3 percent of its revenue from online sales, with the rest coming from retail stores Target, CVS and GNC. (Safeway, Kroger and Albertsons will also feature Olly vitamins before the end of the year.)
To understand how Olly’s products have become so ubiquitous so quickly, we caught up with CEO Brad Harrington, who co-founded Olly with Eric Ryan, who’d previously cofounded cleaning-products company Method (acquired in late 2012). For anyone interested in creating a new brand, it’s worth a read.
The supplements market is an $82 billion market globally, says McKinsey. But it’s also crowded. What was the insight that made you and Eric think there was still room to compete?
Eric was interested in the category from a merchant perspective. He has spent a lot of time in mass merchants like Target, looking at different categories that might be ripe for disruption, and you could walk down aisles and be like, “Well, that’s obvious.” There aren’t a lot of brands, and most products are ingredient driven, so you didn’t know what to choose.
In fact, I was with Eric in Boulder, and we were standing in an aisle of a store, and strangers would just come up to us and ask how many milligrams of zinc they should take, and we were just as dumbfounded as they were. So we thought, let’s simplify this and make everything about the end benefit versus the individual ingredients.
Did you decide on gummy form right away?