Blending Hardware, Software, and Services into an Ideal Healthcare Subscription with Dan Zavorotny of Nutrisense

I’m fascinated by the recent explosion of healthcare subscription companies. If you’re a regular listener of subscription stories, you probably knew that, as recent guests have included Midi Health’s Joanna Strober, Whoop’s Ben Foster and Matthew Mengerink of Thirty Madison. We’ve even explored telehealth for PETs on the show with Fuzzy’s Zubin Bhettay. Today’s guest Dan Zavorotny, Co-Founder and COO of Nutrisense, is focused on helping subscribers optimize metabolic health through a solution that combines hardware, software, and professional advice.

In our conversation, Dan shares the story of how he found product market fit, the challenge of building retention around a “checkup-type offering” and how to manage a business when third parties (in this case hardware manufacturers) provide a significant part of your prop.

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Listen to the podcast here

Blending Hardware, Software, and Services into an Ideal Healthcare Subscription with Dan Zavorotny of Nutrisense

I am fascinated by the explosion of healthcare subscription companies. If you are a regular reader, you probably knew that as guests have included Midi Health’s Joanna Strober, WHOOP’s Ben Foster, and Matthew Mengerink of Thirty Madison. We’ve even explored telehealth for pets on the show with Fuzzy’s Zubin Bhettay.

Our guest, Dan Zavorotny, Cofounder and COO of NutriSense, is focused on helping subscribers optimize metabolic health through a solution that combines hardware, software, and professional advice. In our conversation, Dan shares the story of how he found product market fit, the challenge of building retention around a checkup-type of offering, and how to manage a business when third-parties, in his case, hardware manufacturers, provide a significant part of the value prop.

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Dan, welcome to the show.

Thanks for having me. I am super excited to be here.

I wanted to start with a little bit of background on what NutriSense is. Can you explain what the offering is?

We are a health optimization company. What we do is we take three components here. We give you a piece of hardware, which is called the Continuous Glucose Monitor. We add software analytics on top of that, which helps you combine all three together. In the third piece, we give you a health professional. An idea here is that we’re able to understand proactively what is going to be unhealthy for you, whether it’s your stress, your sleep, your exercise, or nutrition.

We’re able to proactively advise you on how to improve that. Therefore, you are able to either prevent the disease from happening in the first place or even take your athletic performance to the next level. People on our platform range from Type 2 diabetics to pre-diabetics to Olympic athletes and everyone in between.

It’s a piece of hardware that you put on your body. I can put it on the back of my arm. You said you have software analytics, and then you have advisory services or expert advice with the goal of optimizing health. You answered the question, but what would you say is the forever promise you make to your subscribers? It’s something along the lines of, “If you stay with us, we promise that we will continue to evolve our offering to,” what?

This is where it gets a little bit more nuanced for us. Most companies, if you think about Netflix, are here to entertain you or bring you entertainment. For us, we group people into different categories based on their goals. We use a lot of the jobs-to-be-done framework. If someone comes in and their goal is to improve their pre-diabetes, for example, their goal is to reduce their glucose specifically so they can then live a healthier life. They make sure to not get diabetes in the first place, so prevention.

Other folks, on the other hand, have a different promise. That is, “I would like to improve my nutrition so I can set a new record or run that marathon.” The promise is on what it is they’re trying to accomplish. One promise we tell people is this. We’re like, “We will work with you on your goal. However, health is the one thing that is forever.”

If you think about us as human beings, we have hobbies. Sometimes, we get into fish. We have to buy tanks. Sometimes, we get into skiing. Sometimes, we get into hiking. Health is the one thing that will never go away. The idea that we promise you is that we will educate you to make sure you own your health yourself for a much longer time. You’re not a recipient of information like you are in a doctor’s office where you go, “Oh.” Instead, you understand what they’re saying and you can drive your own health forward.

That’s so interesting. If I were going to paraphrase, your members have a lot of different goals themselves. Some are trying to optimize their health for major competitions while others are trying to manage a chronic health condition like diabetes. With all of them, you’re promising them the information to be in control of their health journey.

Many times, it is self-education that is personalized. It’s the educational component that’s critical here. In this situation, it’s, “What is this specifically for you that’s good and bad?” We’ve seen this across genders, ages, and ethnicities. For example, food. The exact same food has a different response. An example that I always like to use is coffee. We see this extremely across everyone. The people who respond to coffee have a negative response. Some people have a positive response. Some people have a neutral response. That’s the irony.

We always read these articles. People say, “Coffee is incredible for you. It cures cancer.” Next year, it is, “Coffee is bad for you. It causes cancer.” You don’t know why. You’re like, “How is this happening?” The reason for this is that all this research is done on average. We as human beings are so different. We are not average. That’s number one. Number two is there’s a huge difference between women and men. Historically, almost all research has been done on men. We generalize. Hormonally, there is a complete difference. It’s important to segregate and see the data on the individual level, not on the mass level.

That is an interesting point. One of my guests from last season, Joanna Strober from Midi, her company helps with chronic health issues relating to menopause in midlife. Most of the research doesn’t look at gender differences when there are different issues, especially relating to hormones. That is interesting. In your business, if I subscribe to your service, I get some kind of a monitor which might be a couple of different brands. You don’t make them.

We don’t make the hardware.

I would get it at Abbott Labs or Dexcom. Those are the two most popular ones that I know about. You put that on. You have an app. You have a person that you can talk to, which is your nutritionist. I got that right, right?

Exactly. That’s perfect.

Your vision for the future, you have a bigger vision. Do you want to share where you see that going and also where you see healthcare going more generally?

There are a couple of pieces that I want to highlight here. Number one is at least 80% to 85% of doctor visits don’t need to happen. COVID exacerbated us a little bit. People do digital doctors instead of in-person. You save a ton of time by having to go to the doctor. You wait in line for two hours. They see you for two seconds and say, “Come back later,” or, “We’ll email your results.” Why does that interaction need to happen in the first place? The second piece is this. The doctor, unfortunately, doesn’t remember all your data from you. There’s a big gap between these annual physicals. The idea is how we reduce that gap of, “I saw you once a year and asked you the same questions. I forgot about you existing.”

The idea here is you accumulate your data in a centralized repository, so when a doctor or someone else needs to talk to you, they can see a global view of all the information displayed. When you go to a doctor and you say you have high cholesterol or you are pre-diabetic, or whatever it is, the first response is “Are you eating healthy? Are you exercising?” That shouldn’t be that. It should be, “I’ve noticed you’re eating this way. You have a negative response to this kind of food. You should adjust this way.”

Those are recommendation that needs to be specific to you. That’s not going to happen because it’s simply impossible that the doctor do that. Our ambition is to create enough data streams over a longer time period where we could see patterns and recognize patterns. If you think about it, if you go to the same doctor for twenty years, all that’s happening is they’re creating trends in your life. The trends are 12 months apart, and a lot could happen in 12 months. Our goal is to create a trend nonstop daily.

 

A lot can happen in twelve months. Also, what I’ve found personally is when they take my vitals or they take my blood sample, I know from wearing a glucose monitor that if last night was a big night because my daughter was in town and she made baked goods and I was going to enjoy that and not worry about glucose for one night, that next morning, my readings are going to be very different than what they would have been a week before or a week after. Suddenly, there are all these red flags because it’s the one data point. What I hear you saying is that the data is mostly for me, and if I choose to, I can show it to my doctor if they’re interested. In the future, there could be a world where that data is sent directly into Epic or whatever your data tracking system is.

Our ambition is that this data, as long as you accept and offer us to have your other health professionals, your entire health professional ecosystems should have access to data. Whether it is your primary care physician, physical therapist, or mental therapist, they all should see this data. By tracking things over time, we start seeing trends, and we’re able to finalize information.

Even your annual physicals that you do with your doctor should be uploaded so we could trend that out. We start correlating things. Correlations drive change, and that creates personalization. Without personalization, most advices are worthless. If you look at the business world, they tell you. “If you follow these steps, you become a billionaire.” What’s your starting line? What’s your context? If you live somewhere where you may not have had the luck to have an education, step one is to learn how to do math and read. There are basics that are required. The advice that’s given out is generic advice across the whole spectrum. We are not one-size-fits-all.

That’s very important. For a lot of membership-oriented businesses, part of what is valuable is trending over time and evolving the relationship over time. It’s evolution. What I need in three years might be way more nuanced than if my husband signs up tomorrow and has never been interested in his own biomarkers or his own feedback.

I want to change gears a little bit. When I wrote my books on membership, I divide them into three parts. Those are launch, scale, and lead. The launch is you have this idea and how you make it a reality. Often, it’s off in the corner or is being bootstrapped. Scale is, “We have something that works. Let’s pour gas on it. Let’s get funding. Let’s get teams. Let’s make it central to the business.” The last phase is, “This has been working for a while, but it’s a little long. It’s not working as well as it used to. In fact, if we were starting from scratch today, this is not what we would have built.” I’d love to go all the way back to your launch phase. People always talk about, “How do you get your first 50 or 100 paying subscribers?” What was your approach to that? It’s often challenging.

I always tell that my cofounder was effective in being focused. He told me when we first started, “There are only two jobs, build and sell. Which one are you doing?” My background is in finance strategy, so I said, “I’ll do some budgeting and some financial planning.” He’s like, “We don’t need that. Do you want to build or sell?” I said, “I don’t know how to sell.” He’s like, “You got to build then.” I’m like, “What does that mean?” He’s like, “Write code.” I’m like, “I don’t know how to do that.” He’s like, “We got to pick one or the other.” I decided to pick sell.

My cofounder told me when we first started, “There are only two jobs, build and sell. Which one are you doing?” - @DZavorotny Click To Tweet

My first step was while he was writing code, I started googling how to market on the internet. Hundreds of things came up, and I put in a little Excel file Facebook ads, Google ads, Instagram ads, SEO, influencer, and billboards, and make a list. I’d never taken a marketing class in my life prior to this. I went through them and was like, “How much does this cost? I’m broke, and I don’t know how much it costs.”

I went to my cofounder and was like, “What’s my budget?” He said. “Zero.” I was like, “This makes it easier. Now, I get to cut out 90%.” We didn’t have that many things left, but from there, I had influencers. I had bloggers. I had reviewers and things like that that don’t cost anything besides my time. From there, it was reaching out to hundreds of people and trying to understand, “Will they respond?” What happened is from the first 200 people that reached out, I got 1 person to agree to work with us.

After they worked with us, we got six sales. I said, “What got that person excited? Why did they sign up to work with us?” We were paying them zero at this point in time. I looked at all the conversations and what made them different for someone else. I realized there was a little bit of a context that was unique to them. I adjusted the entire sales pitch to reach out again to another 200 people.

What was the context? What did you notice?

I noticed that the person was following a ketogenic diet specifically. Before, I was reaching out to anyone. I’m like, “A Yoga instructor. That’s popular,” or a SoulCycle instructor or a bodybuilder. It was anyone in the health and wellness space. I realized that these could folks in ketogenic have been tracking their glucose for a long time.

Can you explain to the audience, if they don’t know what that is, what a ketogenic diet is, and how people manage a ketogenic diet? That is important.

Folks that follow the ketogenic diet believe that by restricting carbs to a certain extent and eating healthy fats and healthy proteins, you’re able to improve the efficiency of your metabolism. Their belief is that ketones are what drive your ability to focus so your brain is much more focused all the time. The idea here is that a lot of the carbs we eat are anti-carbs. By following a ketogenic diet, you’re able to live a healthier life, and your glucose stays within a certain tight range. It is usually 70 to 140. By doing that, you delete out of your life the swings, ups, and downs.

If you have that big lunch, you have that crash afterward. I found that in ketogenic diet, you never have these swings. Swings are usually coming from, “You weigh too many carbs. You have this big sugar high, and then, afterward, you’ll crash.” It’s your body self-regulating by moving around insulin and absorbing the glucose in your system. Glucose can only sit in three places, which are your liver, muscles, or bloodstream.

I’m always interested in new diets and new health things. One of the things about the people that follow a ketogenic diet is that they want to be in what they call a state of ketosis, which is incredibly rigid. Either you’re in or you’re out. You can’t mess around and pretend. When I think of people who follow a ketogenic diet compared to somebody who is vegan or plant-forward, or whatever, it is rigid. They have to check their blood or do something.

To me, it makes total sense. Although I wouldn’t have thought of it that somebody who follows a ketogenic diet would be more interested in the data they would get from a glucose monitor than somebody who might benefit more but isn’t already habituated to wanting to understand the impact of how, when, and what they eat affects how their body processes food.

Prior to this, I didn’t follow nutrition guidelines. Somebody told me that America’s a big country. There are over 350 million Americans. The joke they said is, “There is always at least one million people that will like what you have to give them or provide for them as long as it’s a good service, number one. A second piece that is critical also is whether you are able to find them and articulate effectively what is it that you’re providing the service for. As long as you’re able to accomplish those two goals, then you can do that.”

 

Once I discovered this ketogenic diet, I said, “Let me find every Facebook group and every Reddit thread and start reaching out to folks there. Now, I know who these people are.” The goal a lot of times was to get them on a phone call, explain to them, and even understand what their struggles are. That was very critical. The part that sometimes people misunderstand is that you can’t sell dog food to someone who cares about cats and vice versa. Here, you have to understand why they are having these problems. Why do they even care about tracking? Once you understand that and understand their pain points, you are able to speak to them more effectively. That was the way to get the first customers for us.

By understanding the pain points of your target market, you can speak to them more effectively. - @DZavorotny Click To Tweet

You focused your best thing on, “If you’re on a ketogenic diet, NutriSense has a great solution to help you better understand what’s going on inside your body in a scientific, measurable way combined with expertise to help you optimize.”

Interestingly enough, when I found that the ketogenic diet was a very popular thing, I started getting phone calls from these customers that we started getting signed up. I didn’t pitch people afterward on a ketogenic diet. I asked them, “Why do you even track glucose? What is bothering you by the current standard?” What I found out was that people fingerprick themselves already 10 or 20 times a day. That is painful. It was to understand the glucose all the time. That’s annoying.

The second thing is they don’t know what the glucose is when they’re sleeping because they’re sleeping. They can’t think fingerprick themselves. Number three is they have notepads everywhere because they’re tracking their glucose ready to down. They’re tracking their eating, so they have five different things. They’re tracking their workouts. They have 4 or 5 apps and notepads written all over the place.

My pitch switched. I didn’t say, “You found a ketogenic diet.” It was, “Are you ever interested in learning what your glucose is while you’re sleeping?” They were like, “Yes, I am.” I’m like, “Let’s chat.” It could also be like, “Do you have fifteen places you track all your health and wellness information?” They’re like, “I do.” I’m like, “Is that annoying for you?” They’re like, “It is,” and I’m like, “We should chat.”

You’re a marketing savant.

It is a lot of luck and a lot of reading.

It’s a lot of grit, honestly.

From there, it expanded. I went from no marketing to within two weeks, we had about $8,000 in revenue.

What were you charging then?

We were charging about $200 a month at that point in time. The second month was about $17,000 or $18,000. The next month was about $30,000. It was trying to address people’s pain points, what it is that’s holding them back, and why they are doing this. If you take a step back at the holistic picture, almost every single thing that is invented and every product that exists, it is not like people are inventing something completely brand new. It’s an improvement of what existed before, or they’re solving a problem a little better. Hopefully, it is a lot better, but everything is always an improvement of what existed prior to this. That’s what we’re trying to accomplish. We understand how to solve these problems more effectively and faster.

We were talking about two sides of any successful subscription business. One is acquisition.

The other is retention.

Bring me along on your journey. What did you learn about what drives churn, and what is the difference between people who churn out and people who stay? How did you figure that out?

I am a relatively healthy guy. I came from healthcare consulting. My cofounder was also a tech entrepreneur. My other cofounder was a health professional. We were all relatively healthy. People would say, “Build for yourself. Build for something you want to solve a problem for.” We started building for ourselves. One of the things we quickly realized was that people like ourselves come in for a month. They learn everything and go, “Thanks a lot. I’ll see you later.” Within a month, we’re like, “These might not be our main customers. Their problem is not hard enough to solve.” The question becomes, “How do you solve a problem that’s more complicated?”

We started segmenting people into different groups. We have these groups called Learning Larry or Weight Loss Wendy. It helps us visualize what these are people trying to accomplish. Based on their goal, it is much easier to understand what the churn is going to be like and what the retention is going to be like. They have different needs, and they have different approaches.

A lot of times, the biohacker guy that we were talking about comes in, wanting to absorb everything. They’re willing to dive in for seven hours a day for a month and then be done. The average person doesn’t have the time or the bandwidth to do that. They want to learn, little by little 15 to 20 minutes a day over a certain timeframe. That takes a very different approach. A lot of it is motivation-based, instead of, “Here’s all this data. Go.”

At this point in time, we keep accepting the biohackers and all those folks. We have an acceptable churn, assuming they’ll stay maybe a month or two, or maybe three, and that’s okay if they leave. However, these other folks who have much longer goals are people we will double down on. That was critical for us because it helped us understand truly how to expand our retention.

I often say that retention is everybody’s job. I believe that when you focus on retention, you notice, “This is what I can do from a post-transaction messaging perspective,” which is where most people go with retention. It’s like, “Don’t leave us. We have more. Check us out. Don’t go. Maybe we’ll give you a better deal.” Retention starts when you decide who you’re going to target. Who do you acquire? What is the message you’re going to give them when you’re trying to get them to make the initial transaction? How do you onboard them? What are the features and benefits that you invest in?

I believe that a good product has acquisition benefits. That is the thing that gets someone to sign up. It’s like, “We track everything so you don’t have to keep it in five places. You put this on one time, make one tiny prick, and then you don’t have to prick yourself ever again.” What are the retention benefits? What are the engagement benefits? How do you keep a habit? That becomes the job of marketing, sales, product, and operations.

There is also customer success.

Once you figured out, “We have these different segments,” what changed? Did you change the product? Did you change messaging? Did you change targeting?

Some things changed immediately, and some things are still in the changing phase. One thing we changed immediately is we said, “We are comfortable with losing certain people.” Historically, whenever something goes wrong, you want to save every single customer. The part that we struggled with for a long time and we got a handle on is it is okay to lose certain types of customers.

It is only normal that you want to save every single customer. In the long run, you have to realize that it is only okay to lose certain types of customers. - @DZavorotny Click To Tweet

It is acceptable churn. This is so important.

Sometimes, a lot of satisfaction from a customer does not come from, “Is your product good enough?” It’s, “What expectation do you have of your product?” If someone comes in, for example, and they say, “I want to lose 100 pounds in one month,” that is very unlikely to happen. You’re not going to make that happen for them in one month. You have to reset the expectations so we can get there. It may be 18 months or 24 months, not 1 month.

Sometimes, it is comfortable and you’d be comfortable letting people go. Often, we tell people, “Here’s your money back. Sorry, we can’t help you.” If you don’t do that and a month goes by, they’re angry that they didn’t lose the 100 pounds they were aiming for. They detract people from your platform. They have to say negative things to you and your company as well as we spend a lot of time appeasing them.

The cost of both internal as well as external simply doesn’t bring a value of the $250 they provided to us. A lot of times, we call it canceling your customer or firing your customer. We do this quite often. We have this collision process where we say, “This is not the right customer. Please give them their money back.” It’s worth it for us to do that.

This is such an important idea. I hope people that are reading take this to heart. It’s not because somebody is paying you and helping you maybe hit this month’s or this quarter’s revenue target that it means they are good for business. Being willing to cancel your customer, fire your customers, or give them their money back, you avoid having a detractor in the NPS world of promoters and detractors. It is also good for the focus of the business because you know who you’re targeting. You know what they look like. Your profiles are consistent. You have a limited number of them. This is such a misunderstood approach but so important.

It’s hard. To be frank, you could only do it once you hit a certain scale of revenue. When you’re on and you have sixteen customers, you don’t want to lose a single one of them because you’re still early. You got to make them happy. The problem is you still don’t know who the right customer is at that early stages. It’s only when you have enough data that you’re able to analyze to truly understand who those customers are.

The part that is important here is, one, your product’s not fully built out yet. You’re guessing. Are people leaving because your product is not ready, or are they never going to be your customers? That great job marketing is number one. Number two is, are they the biggest customer segment to churn? You might have gotten lucky.

This is an extreme example. I’m not saying it’s true. Imagine there are only 100 ketogenic people in the world and I got all of them to sign up, and I started building the product for ketogenic folks. That might not be my actual business. You need volume and scale. You need to get to a couple hundred, 1,000, or 2,000. Look at what those people look like. That’s number one.

Also, if Weight Loss Wendy is the person I want to focus on, look at it like, “What do those people look like in the real world? Are there a lot of them, or is it the only ones I have? How do I look at it as part of a population?” In other parts, it is critical. Who else is serving that individual? We talked about CAC to LTV being one of the most critical parts. CAC to LTV is incredibly important.

That’s the Cost of Acquisition to Lifetime Value.

When we say lifetime value, I want to make sure we’re clear. It’s the post-gross margin. A lot of people sometimes will use LTV as the revenue driver only. They’re like, “I generate $100.” We have dieticians on there. We have our hardware on there. We need to track that out. We look at a post gross margin LTV. That’s very critical. I see a lot of early founders making that mistake. They’ll be like, “I generate $100, and my CAC’s only $30. It’s 3:1.” We are like, “It is 0.5:1 when you start tracking all the costs that get sold.” That part’s critical in my mind. If we back into it, we have to always look at that comparison. The ratio that I’ve always used, 3:1 is the ideal place to be.

To make sure people are following along at home, 3:1 means that you have three times post-GM LTV compared to the cost of acquiring that customer.

I will be frank. At times, it might get worse. At times, it might get better. As you probably saw, Facebook is one of the biggest drivers for a lot of people. After the iOS 14 changes, that had a dramatic impact because targeting was much harder. We did see those shifts. It’s okay if you’re in a growth phase to say, “Maybe for the next 6 months, we’re 2:1.”

For a lot of marketers, what they’ll do is they’ll do this phase where they’ll say, “Growth phase and optimization phase.” You may sometimes fall to 2:1 or 1.5:1, but you have to be grown at that stage. You say, “We grew. We acquired a good amount of market. Let’s slow down. Let’s optimize. Let’s get back to 3:1 or even 3.5:1 or 4:1.” Unfortunately, marketing is not a switch. At scale, it has to go in waves. You’ll see people who are doing three months of growth and three months of optimization. You sometimes see the cycles of 2:1 and then 4:1. The goal here is to make sure you don’t stay 2:1 too long because that gets tricky.

Marketing is not a switch. At scale, it has to go in waves. - @DZavorotny Click To Tweet

I talked about the launch, scale, and then lead. In the scaling phase, sometimes, it’s a race. You have competition. You want to form the habits with your ideal members with your Weight Loss Wendys, Ketogenic Carls, and whoever else. For example, Netflix, for a long time, was free for families. They didn’t track how many different devices you were streaming concurrently. I believe that a big part of the reason that they did that was to grow faster, form habits, and give people an opportunity for trial to understand how streaming works. In the beginning, it was hard for people to get their heads around.

My sister used to work in a frozen yogurt store, and people would come in and ask to taste vanilla. She’s like, “It tastes like vanilla.” At this point, people know what Netflix tastes like. Either you want it or you don’t want it, but you don’t need to get a free trial from your cousin’s password anymore. That’s important to think about. 3:1 is a good benchmark. Sometimes, when growth is more important, you might dial down. When you’re more in an optimizing or harvesting phase, you might slow down and go for a higher target.

One of the biggest lessons I’ve had from this whole experience is that whenever I see a competitor come into the market, I’ll say, “More competitors.” I had such fear. I’m like, “What are they doing?” One thing that clicked for me was that when you are creating a new market that didn’t exist before, you guys, in some ways, are lifting all heights. You guys are all working together in some way because of your changes in mindset.

You mentioned Netflix with streaming. I’ve seen this. If you think about grocery delivery, for a long time, grocery delivery was not a thing. All of a sudden, you had all these grocery delivery companies show up. I would always think, “They’re competing with each other.” They are, but in many ways, they’re competing with a grocery store. You can say, “Do you want Blue Apron or Home Chef?” or whatever it is you want. Before, it was, “Do I go to the store or do I order online?” That was a shift.

You’re building the category together. You’re frenemies. I imagine that one of the areas where these other companies probably support is when it comes to negotiations with the hardware providers. That’s an interesting challenge that the hardware is made by somebody else. They could copy you. They could stop selling to you. The other one that’s interesting is the physicians themselves. A lot of physicians would say, “You shouldn’t subscribe to all these crazy, new digital health things. If you have a problem, come and see me. This is serious business.” You’re probably also navigating that and building adoption, acceptance, and collaboration. Your vision was there is a world where the doctors are happy to have us.

It is like anything else. If you think about human nature, humans hate change. We hate change. When we started this company, we didn’t have a lot of processes or a lot of back-ups, but those are getting a little bigger. It is something as simple as, “We need a two-person pool process for reimbursements.” It sounds silly, but you’re a startup. You’re not used to it. Now people, all of a sudden, are like, I don’t want to do this. You’re a startup with four people and you’re not used to that. People, all of a sudden, are like, “I don’t want to do this.”

If you were a doctor, you went to medical school. You have all these bills. You paid for loans. All of a sudden, you have this job you’ve been doing for twenty years and someone comes in and says, “Let’s do it a different way.” It’s not going to be a little different. It’s going to be radically different. Your first chain of questions is, “Why? I have a good life and good money. Why do I want to change?” There’s always a little bit of hesitation, and that’s completely okay. It depends on what kind of doctor.

We’ve had a lot of people say, “This doesn’t work. There’s no reason for this.” They see the results of their patients that work for this and go, “This doesn’t work, but somehow you improve over that each day dramatically,” or either, “Your glucose dramatically improved.” They’re like, “It doesn’t work, but it does work,” because you did something right and without taking any medication.

It’s important to take a step back and realize what our healthcare system is built on. It’s built on expertise, managing disease, prescribing effective medicine, and oftentimes, surgery. We’re the best in the world. People fly for surgeries to the US all the time from the whole world. However, we are not focused on prevention. Prevention is not something we care about. You said I made a joke about me being a marketer, but we as Americans are probably the best marketers in the world. That’s how we’re so effective in marketing with all the food that you can buy. We are like, “That’s delicious,” but that’s beyond belief unhealthy for you.The US healthcare system is built on expertise, managing diseases, prescribing effective medicines, and surgery. However, it does not care that much about prevention. - @DZavorotny Click To Tweet

I bought some mayo, and it said mayo with olive oil. That’s supposed to be healthy. There’s a tiny asterisk. I looked at it and it says, “Mixed with soybean oil, canola oil, and grapeseed oil.” I was like, “Every one of those is terrible.” I dug more into it, and it was 5% olive oil. Those other oils that I described are beyond belief unhealthy for you.

The irony is that because we’re so good at marketing, we’re marketing people things that are bad for them and still doing vice versa. That’s what’s driving us and getting unhealthy. Educating the public about what’s healthy improves society as a whole. A lot of times, people talk about, “Shouldn’t this be B2B versus direct-to-consumer?” The interesting part about this is B2B is a very different organization. It is about sales a lot of times. It’s like, “Did you get that five-year contract?”

Once you get a five-year contract, you as a company are stuck in there. That’s good. You don’t need to worry about making your product better. You don’t need outcomes. That’s a five-year problem later. Five years down the line, we’ll figure it out as the renewal comes to it. Now, it is about selling the HR person to get them to use this as a wellness program, for example, or an insurance company partner with you. That’s number one.

Number two is this. Getting more people to work with us directly or they are choosing to work with us gets the attention of B2B. This gets the attention of insurance companies. It makes them say, “You told me this is impossible, but I see now with thousands of people this is happening. Why are you not doing this?” It’s forcing the B2B companies to improve their product, which they historically didn’t want to do. They don’t want to spend money on R&D. It’s a force in the whole industry as a standard to improve.

It is interesting that you can use the consumer piece to serve as a proof point for a much larger-scale B2B initiative. I’ve seen companies do that. You have to have the leverage to get the bigger and slower movers involved. It is the kindling. You could have a great business. Who knows? In five years, it could be a pure consumer play. You could say, “We’ve gone through employers, insurers, and medical systems.” All the consumer stuff was kindling for this much bigger fire.

It’s important to remember how the generational idea of wealth is changing in our country. Historically, it’s been, “Do I have a two-car garage? Do I have a nice backyard? Do I have a nice car? Do I have a little boat maybe for the weekend?” Now, “Do I have a gym membership to power yoga? Do I work out every weekend? How’s my nutrition? Is it healthy? What are my biomarkers?”

It’s the idea that health is a new wealth. People want to live a healthy life for a long time. They don’t want to sit in a wheelchair at 70 with their grandkids. They want to go play soccer or football with their kids when they’re 70. They want to toss the ball. That’s been a dramatic change we’ve seen generationally. You see it now where the generation between 16 to 25 showed that, on average, only drink 40% of them drink alcohol. The first generation above them drinks at 66%. They’re consuming alcohol.

All of a sudden, all these bars are popping up that do no alcohol. There are mojitos with no alcohol and everything. There are complete dry bars. There are mocktails. They’re everywhere. People in the young generation are realizing that we’ve been getting ourselves poisoned with all this food. They’re trying to flip the script. That’s what’s happening. It’s turned over and over.

 

That is fascinating. We’re running out of time. I have a lot more questions I want to ask, but maybe for another time. Are you open to doing a little speed round?

Sure. I’m always up for it.

What is the first subscription you ever had?

Netflix.

What is your favorite subscription other than yours?

It is a company called Privacy.com. It’s a company where you could put your credit card. It connects so you can write and create as many credit cards as you want digitally so nobody steals your data. If you ever want to cancel, you cancel.

 

What is the best health insight that you gained from your own use of NutriSense?

Specifically, the order of the meal makes a big difference. I can eat the exact same three ingredients, but if I eat the protein or the fat before I eat the carb, it has a dramatic impact of improvement on my health. This is for everyone. It doesn’t matter if you’re a woman or a man. This helps everyone. Eat the fat or protein first. It’s the same exact meal.

What is one thing you wish you’d known about subscriptions when you launched your company?

It’s specifically the part we talked about. We should be able to feel comfortable letting some people go. The number of times we spend trying to please those people, and we call them the squeakiest wheel, that no matter what, they would complain. We go and try to fix things. We spend hundreds of hours trying to build a product for them to make them happy and they were never going to stay. That’s a part that we made a crucial mistake on.

Dan, thank you so much for being here. It was a real pleasure to have you.

I appreciate it. Thank you so much.

—

That was Dan Zavorotny, Cofounder and COO of NutriSense, the metabolic health company. Also, if you like what you read, please go over to Apple Podcasts or Apple iTunes and leave a review. Mention Dan and this episode if you especially enjoyed it. Reviews are how the audience finds our show, and we appreciate each one. Thanks for your support and thanks for reading.

 

Important Links

• Dan Zavorotny, Cofounder and COO, NutriSense
• NutriSense
• Continuous Glucose Monitor
• Subscription Stories Episode 44: Midi Health’s Joanna Strober on the Ultimate Forever Transaction – Healthcare
• Subscription Stories Episode 42: Subscriptions that Combine Hardware and Software with Ben Froster, Chief Product Officer of WHOOP
• Subscription Stories Episode 40: Using Subscriptions to Democratize Healthcare with Matthew Mengerink, CTO of Thirty Madison
• Subscription Stories Episode: Scaling a Telehealth Pet Subscription, by Starting in Person with Zubin Bhettay, CEO of Fuzzy

 

About Dan Zavorotny

Dan Zavorotny is the co-founder and Chief Operating Officer of Nutrisense, a metabolic health company that helps anyone discover and reach their health potential. Under Dan’s leadership, Nutrisense has become one of the fastest growing startups in America. He has led the company through rapid growth, building a team of 170 employees in just over 3 years, and raising $32 million. Prior to co-founding Nutrisense, Dan worked as a Healthcare Management Consultant at KPMG where he advised Fortune 500 clients and 3 of the top 5 hospitals in the US.

Dan served as Voting Student Trustee on the Board of Trustees of the University of Illinois System. Dan is passionate about travel, having visited over 100 countries before the age of 30.

 

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