Building a Precision Nutrition Startup with Rachel Sanders of Rootine

Rachel, welcome to the show.

Thank you so much for having me. Excited to chat.

Yes, I've done a lot of research on you and what you've built already with Routine, so I'm excited to chat. And with this, what are you doing today with Routine, Rachel?

Yeah, definitely. So Routine is a precision nutrition startup focused on optimizing health and daily performance. And today that means we're empowering thousands to improve their health in areas like sleep, stress, mood, immune health, and more. And we make it really simple to join so members can test their genes and other biometric health data, then they get precision daily micronutrient packs based on their test results that are designed to optimize around their specific health goals and their biology. And then, we have a really cool digital experience where they can access tools to track and improve their health. And, and that's how— where we are today and really building out, um, a larger platform around this concept of data-driven health and, and biometric-driven solutions that really don't exist in the market There's a lot to unpack there.

And I know just from the research, a lot that went into this. One of the things I'm curious about right away in the beginning, so how'd you find your co-founder?

Yeah, it's a funny story actually. So, Routine is really built out of personal experience on both of our sides. I was in the midst of founding my first company, had just graduated from business school, was dealing with a lot of stress, fatigue, and other kind of common health conditions that can really be impacted by lifestyle. So, started looking at everything across my own nutrition, exercise, and sleep. sleep and noticed that a lot of things I was dealing with were likely a result of micronutrient deficiencies that close to 90% of the US has. And, at the same time, I was connected with my co-founder, Dr. Daniel Wallerstoffer, to really just chat about the problems that I was facing myself and learn more about what he was doing. He has a PhD in biotechnology. He had spent the 10, 12 years prior to that connection really looking at how to use individual health data points. So, genetics and other biomarkers like blood data to create more prevention-focused products and helping consumers deal with a lot of the problems that I was experiencing. And so, we really came together around that, around a problem that I was personally experiencing and he was already working in. And, we're really driven to empower more consumers to gain access to their health data and really leverage that data in an effective way to improve how they look, feel, and perform every day. And, that's how Routine and the That's incredible.

And with that as well, this product. So I know other multivitamins or other vitamins out there, totally different from what people kind of think of historically. And there's big pills and everything and just kind of generic for everything. You're very personalized with the product, but also you have these microbeads. Was that always what you thought the product was going to be in the beginning?

So what we're really trying to solve for is how do we create a truly N=1 product? Because what was going on in the market was one size fits all, and one size fits all really fits no one. We now know that you really have to figure out what your body needs. What's going on in your own body and what are your own health goals and how do you create products and solutions around that? And, that's really where we came from. How do we make the biggest impact in the most personalized way? And then, also, how do we deliver it in the highest quality way that the most amount of people can utilize? And, that's how we came up with the microbead solution. So, our microbeads are slow release. They are created and engineered to be more bioavailable in the body and they allow more people to take the micronutrients. So, the vitamins, minerals, and specialty compounds that we offer.

Yeah.

Lots of people hate large pills. Close to 40% of the market can't or won't take large pills, especially when you start to add multiple large pills on a daily basis. 95% of our members have no trouble taking Routine, and it's actually fun because you can take it with liquid or you can stir it into a smoothie or your morning kind of breakfast bowl, which a lot of our members do and really enjoy.

Yeah, I'm definitely one of those people that does not like large pills. I have very strong—

I am as well.

Struggle with that.

Yeah.

That's a huge part. When I looked at the product and said, yeah, Understanding what it is, like, okay, obviously, you can reach way more people this way with that. Did you see this being used in terms of this, like the way the product is, the microbeads, in other fashion that you're like, yes, we want to do that? Or how did that kind of come together seeing that?

It's really around how to create a product that is that you can actually personalize on an n=1 basis in a compliant way. So when you think about vitamins and supplements, there is FDA regulations and requirements. And also you want to make sure that what you're putting on the label is actually what's going into your customers' bodies. And with the microbeads, they start as raw material and they are mixed with water and some of them are coated with beeswax, but they don't interact with each other in the packs. So we know exactly what's going into your body, plus or minus 2 to 3%. The FDA requirements around 30%, so we're 10x better than FDA requirements around that. But And that allows us to give you a personalized dosage down to the microgram or milligram of every single nutrient that we offer in a compliant and safe way. Yeah.

And with this too, understanding what you're trying to do, big vision for what you're trying to do. How did you launch in terms of actually what was your go-to-market? You know who your customers were? I'm curious about that side of things always with these companies because all the companies I've talked to, you know, they've gone on and raised more money and gotten much bigger. And I've heard the kind of grand vision, but it's like, how do they start? Like, how do they initially launch? And that's more helpful for people, especially when they're kind of Looking at the evolution of it for you and Routine, where was that go-to-market for you guys?

We did some research around who was our initial target market, who are we thinking about? This is what our hypothesis is around the people that are really going to love this product and the reasons they're going to love this product. So hypothesis around the target and the messaging. And we launched and we started and we started iterating and we got feedback and we updated everything from the messaging to really dialed in on the target market, who was coming on and staying with us the longest, who was coming on the easiest, and what were the messages and kind of the key points of the product that were really resonating across that market, and have continued to tailor everything that we do specifically around that market. So it was really a lot about learning in market and getting better around the marketing side after we perfected the product. 'Cause of course it's a consumable product, so we're not testing kind of on that. And then all of the testing side, That's super important too. So we do offer at-home health testing. We have a DNA test kit and a blood test kit now. All of the test kits are done through our lab vendors, which are all CLIA-certified labs or kind of ISO certification to make sure that that data is accurate. So we don't want to test and trial around the testing or the product itself, but really dialing in on the target market and the messaging and the branding is really what we did in market.

And with that too, just to dive a little bit deeper on that with the where, in terms of that, was it a matter of you wanted to partner with other organizations to find out, okay, these are our customers, we'll partner with them, we'll go to market that way? Did you like digital marketing in terms of you just do ads into them, like the consumer kind of route there? Like how'd you kind of view that side of things?

Yeah, we're a digitally native brand. So our initial go-to-market was a really kind of digital-focused, part organic, part ad-based. And now we're really diving further into content, community, and education, as well as developing some really strong partnerships and interesting distribution partnerships with other brands and kind of digitally native companies that are coming on board over the next 3 to 6 months.

And with that too, seeing this landscape evolve over time, I've interviewed one of the co-founders of Levels. I've interviewed people in the space kind of personalized health and everything. And it's growing a lot. To that point, massive market, it's growing a ton if people don't realize already. How do you stand out from the competition? What makes Routine unique?

Yeah, I mean, it's an enormous market, right? It's a $700 billion global nutrition industry. The personalized nutrition segment is growing 15% year over year, and that's not even encapsulating the wearable market and this kind of broader personalized health market. But we are really truly differentiated in our test-take-track approach. The fact that we have this holistic system where people can not only access their data, but they can also leverage it into a physical product that can help them improve around their specific specific health goals. Also really strong on the data and insight side because we are not only offering insights, but we're creating an N=1 product and then tracking how people are feeling over time and continuously improving our product both on the individual basis and on the population basis and creating kind of a really strong brand education and community around it, solving this massive problem of nutrition that just consistently exists in the market. I mentioned it earlier, but 90% of the US isn't getting adequate daily intake of vitamins and minerals. And this can lead to a wide variety of health conditions like the stress fatigues of the world that I was dealing with, down to chronic health conditions like the metabolic health concerns that the Levels team is tackling. And we've actually done some partnerships with them specifically on the content side around what does it mean to kind of look at micronutrient status and metabolic health and how do they impact each other? Because there's impacts from both sides. If you have metabolic health conditions, creates problems in your micronutrient status. And if you have micronutrient status problems, it creates problems on the metabolic health side. And there's kind of this full interconnected world of what micronutrients means for overall health.

Yeah. And one of the things with the product itself, what is that experience like for a new customer in terms of how this kind of works? What is it like? I sign up for a routine, what happens next?

Yeah, great question. So, we made it super simple and we're continuing to simplify the process, but really it's broken down into 3 categories. So, the testing side. So, you can test through us your genetics and blood levels, and we do a lifestyle assessment as well. Or, you can bring data you already have on the genetic side from a 23andMe or ancestry.com or bring data you have from another blood test company or a healthcare provider where you've gotten blood testing done from. And then, from there, we use our technology to create the precision formulas as well as the precision insights. Where you can dive in into your dashboard to what's going on in your formulas, what is your data saying, what lessons can you learn, and what are these actionable insights that I can take from all of this data, kind of analysis and integration. Then we'll deliver those Precision products to your door. You can take them in a wide variety of ways like we talked about, and then we'll track kind of how you're progressing over time through that digital member dashboard. And we'll take that, right now it's web-based, we'll take that to mobile because we want to really be where people are. And then also on the data integration side, we view that in the future, people are going to have a health data wallet, like they will have, like they have their crypto wallets now or their normal wallets. And we've built the platform to really be scalable and be able to integrate with a wide variety of data sources so that people can take the data they have from wherever they get it and bring it to Routine. And we can personalize and precisely engineer products and solutions based on that data, as long as it's medically and scientifically valid for what we're doing.

Yeah. And one thing too, I'm curious about, which is kind of taking a step back, is the business model. So when you start a company, obviously, there's so much with pricing, the business model, was it going to be subscription, etc.? Break down the business model for Routine. And has that evolved, changed over time? And I'm curious about that too.

Yeah. So our products, our precision micronutrient subscription is $69 a month. It's a subscription, and the tests are upsells from that, that are about $100 each. So the DNA test you do once, And the blood test, we recommend you do on a quarterly basis. So, that recommendation comes from our clinical advisory board around how long it kind of takes to see the impact of micronutrients on blood levels or other kind of health conditions that you're looking at. And that's the business model today, super simple.

How did you get to that point? Was it always going to be that way? Did you test anything beforehand and be like, this is how it compares to what's in the market now? I'm just always— the psychology around that, I'm curious about.

Yeah, we've tested a lot and we're continuously testing. I mean, I think that's as the market grows and matures and things change, you're always wanting to make sure you're learning and testing and seeing if there's ways to get your products in front of customers in a better way. In terms of what we have done, we've looked at packages or plans where people can get their micronutrient packs plus a blood test or micronutrient packs plus a DNA test. And we've looked at kind of different pricing, different cadence of pricing, whether it's monthly or quarterly. And those are the kind of the main tests we've done to date, but a lot of, as we think about our product portfolio expansion, looking at additional opportunities that we're planning on going into, there's a lot more room for testing what those pricing models can look like.

Yeah. And one of the things I found really interesting in looking at one of your presentations, I think it was on a podcast where you showed up a slideshow and it was showing your market in 2020, 2021, et cetera, and how you're expanding from more of data-centric tech guys maybe to then expanding out to bigger and bigger, broader markets. How do you view that in terms of at what point you branch out to other markets, when to expand? Because who you target at first is not who you're going to target 5 years from now. How have you thought through that, Rachel?

Yes. And you can look at this in what Whoop has done, for instance. They're a great example. They started in the true professional athlete market and now basically one of the top wearables in mainstream. And that is happening. EverlyWell is another example where they started, Started direct-to-consumer in women's health and now really working with enterprises. So they're really expanding this market over time. And a couple of kind of trends as to how we're thinking about that happens is there is a group of people who care more about data. They care more about data throughout their lives. And that's who we're targeting because that's what our product is really about. It's high performers and health enthusiasts who use data throughout their lives. That doesn't mean you're a hardcore biohacker, but you are a next-gen leader of some sort and you use data in your work. You use data to make financial decisions or real estate decisions. Decisions, and they— you want to be able to apply that same rigor to your health. And that's really who we're targeting right now. That concept of wanting to gain access to your health data, wanting to take preventative steps around health, is expanding more to mainstream with or without routine. That's just something that's continuing to scale. 50% of people already have wearables. People want to use health technology to improve their health. And as that And so, as that kind of data-driven desire continues to grow, Routine is really the answer of what do I do? How do I use this data? How do I take the data that I have and get products that are truly tailored to me, specifically through nutrition right now?

And with that too, with, you know, you're looking at this all the time with customers using your product, et cetera. What are you seeing as the reasons why? Obviously, improve your health, that can be a lot of different things. What are some of those either verticals or reasons people are being like, Yes, I'm going to use Routine for X. Is it like 1 or 2 things that you see? Is it like 5 or 10 things you see? I'm curious on how you see that right now.

Yeah, we're truly a precision-engineered product, so we get a wide variety of reasons to start, but it's really around specifically a lot of times it's, I'm a little bit older, my body doesn't work the way it used to, and I'm experiencing everything from fatigue to stress to I want to make better gains in my athletic pursuits. But we're seeing across the board, after 3 months of taking Routine, 80+% of people are seeing improvements in some metric. Things like 50% of people are seeing better energy, 60% of people are reducing stress kind of over the time period they've been taking Routine. So a lot of impact and a lot of health goals. We've seen benefits across everything from immune health to sleep to mood to skin health to those kind of energy and stress that I talked about as well.

And with Routine, this is not your first company, Rachel. So what have you taken away from past companies so that you'd build this differently or in any particular way? I'm curious on how that's kind of influenced you.

Yeah, definitely. So I started my first company in the musculoskeletal space and it was really around prior to business school, I had seen such an opportunity to use technology and data to improve the way that people experience their health solutions. And that was coming from kind of the finance product and strategy side of the world and musculoskeletal space is a $400 billion plus spend. 2/3 of the market has some sort of impact on it. And so, I thought that would be a great place to make an impact. We did not come up with a business model that made economic and kind of scalable sense, but learned a ton around team building. We did raise a friends and family round. We did do a ton of testing and started to figure out, okay, what is What does working look like? What does success look like versus what does success not look like? And took a lot of those lessons into Routine. So, it was a great experience. It was my first kind of company foray into the startup world and made a ton of connections and learned a ton and just brought all of that learning to Routine.

Take me through with now Routine, the fundraising process and how that's gone for you so far in terms of raising funds for this company and kind of telling your story around Routine feedback you've gotten around it? I'm curious about that.

Yeah, definitely. So we've raised $4.5 million to date between our pre-seed and seed. We recently announced our seed in August and have some great investors across the board. And one of the things I'm most proud of is we're at about 50% of our investors in the seed are diverse investors. So that's women, BIPOC, as well as Latinx. And so we're getting a really diverse group of people around the table, which is super important when you're building health products, even if we are targeted to a specific type of individual now. We're really looking to make an impact across millions around the globe. So, in order to do that, you need diverse perspectives and diverse people around the table and have great investors across the board from VCs to angels and some folks from really great companies, both in the consumer and health space.

How did you target that just in terms of what are you looking for? Did you have particular angels you're like, yes, this is obviously value-add, value-add. We're going to save room for 5 angels and then go VC. Just take me through your process for fundraising. Obviously, a diverse cap table is amazing that you got to that point, but how did you strategically do that? Because I know we're hearing at Vitalyze, a lot of people, they want more diversity on their cap table. How did you do it?

Yeah, no, that's a great question. So our bigger checks are from VCs, and that's really where we started. And then we had a specific amount of the allocation that I had seen, hey, I'm a diverse founder. I want diverse people around the cap table, and I want to build a diverse company that hits diverse people. So I believe that that's important. So I really came to the table with that message and then started having conversations kind of based on what our business model is, which is at the intersection of consumer health, technology, and data. And really started to think about who are really great companies, who are diverse founders across those companies, and how do we connect with those people? So for example, one of the founders of Eight Sleep, who's a massive company in the performance space, is on our cap table. We have folks Havenly, one of the founders of Havenly, which is a great consumer company, as well as other other kind of folks in the in the space.

Yeah, there's so many. You can be so strategic with it if you get those those key people on there, especially with the reach they have and the knowledge they have and expertise. It's just such a value add for thinking long term about your company. And I had Mateo from Asleep on the show before, and like talking to him was just like yeah how they think about things. Like two years of R&D just to get that company to the point of being able to do what they want to do. It's just like you you forget those little things that you're like oh yeah. that 2 years of not doing anything but like product, which is kind of insane to think about. And one of the things I want to make sure we get to— yeah. And one thing with what you've done already too, like hiring and people, that is everything, especially as you're scaling and trying to grow a really big company. How have you approached building your team for Routine?

Yeah, definitely. So I really sat down. So between Daniel and I, I have experience in the finance, some operations, but product and strategy side. Daniel's the scientist, he's the product product guy around everything we do and make sure all the scientific rigor is there. So, we sat down after that, who else do we need around the table to make this company really successful? And, that looks like everything from getting the best people in brand and growth to the best people in technology, as well as operations and customer success. Making sure that we have a premium experience to go along with our premium product was one of our number one goals. And, one of the reasons that our first, one of our first hires was a CX team member from Warby Parker who came over from the early CX team there. And so we have world-class experts across nutrition, branding, marketing, growth, a number of folks who've started and sold their own companies. So know the startup world and are really kind of key team players. And that's the other kind of key core piece of this is every single person that we've hired, we hire for culture first and kind of experience second. We make sure that it's going to be a value add from a cultural perspective and from a business perspective, and that they're filling out key kind of parts that we don't really have, or we hadn't had in the space. And we now have a team of 10, which is incredible across the wide variety of expertise that we need.

How have you standed out or closed those people? Because I talked to so many founders and it's just, yeah, the competition for talent is really, really strong right now. I'm curious for you and Routine and what you're doing. How have you gone about closing candidates, making sure you can get those people in the seats?

Yeah, we have a big vision going after a space that's very interesting and super impactful. And so really leading vision and mission first and showing what we've already accomplished, which is a lot, and where we're going and how those specific roles and those people can really fit into that journey has been really helpful to us. And we're also super honest and transparent about what working at Routine looks like, which I think candidates really appreciate. So we're not a massive organization that has tons and tons of processes that you just come on and follow and you're probably going to get micromanaged and might not be accountable. You come in, things are— we're still an early-stage startup. We want you to be able to take responsibility. We want you to own kind of your experience. And that's been really impactful too. And then I'd say the third thing is we are really values-driven around creating a work environment that people want to be a part of. And that comes in bits. Probably from my PTSD from investment banking around what that culture looks like. But things like we are results first versus face time. So, we want people to have meeting hours and times they're available, but we want people to be able to have the option to have dinner with their family, take care of their toddler like I do.

Yeah.

Sign back in later and creating more of an async culture to allow work to happen when it needs to. And creating something that's remote first from day one, which is before the pandemic. And so those 3 pieces are really what's been helpful for us and why people join us.

Yeah, I apologize for the investment banking. I have to think about that again. I'm sorry I had to even think about it now. That's in the past, Rachel. Don't worry, it's fine. You've gotten through that. As we wrap things up here, I just want to know how you think about in terms of what the keys to success are for you moving forward in terms of accomplishing that big vision you have for Routine.

Yeah, one of the things I say to kind of team members and think about on a weekly basis is you can't improve what you don't measure. And that's the same thing for your health. And that's really what we're all about. So, how do we— what tests are we running? How are we continuing to improve? How are we continuously communicating with our customers? And how are we tracking all of the success around it and using that data to apply to kind of key learnings and how we go forward from here?

It's an exciting future ahead, I think. And, you know, wishing you all the best with that. Rachel, thank you so much for taking the time to come on the show today.

Yes, thanks so much for having me.