Prescription subscription: lessons from health brands going direct to the consumer
We live in a subscription economy. Whether it’s car-sharing or shaving, food delivery or films on demand, we are increasingly happy to pay a monthly fee to make our lives easier – and, it seems, healthier. We speak to subscription startups from the health sector.
The direct-to-consumer trend is no longer a novelty, and some of the earliest verticals to be disrupted by these emerging businesses and brands have been in the beauty, health and wellness industries. As e-commerce becomes the norm, both the rate of innovation and the range of choice are ramping up.
Dollar Shave Club, and its $1bn price tag to Unilever, is the most famous of the direct-to-consumer (D2C) subscription models, alongside other well-known brands such as makeup subscription service Birchbox. In a data, experience and loyalty-driven world, owning a direct relationship with a customer has become essential – which explains why big brands are now paying attention. The subscription service is also an attractive business model because it can provide a guaranteed revenue each month. It is, however, hard to scale and maintain. According to a CB Insights analysis of the D2C market, even well-known brands such as mattress company Casper had to hustle into the world of celebrity endorsements, convincing the likes of Kylie Jenner to post about its product, to get to its $100m sales in two years number.
D2C companies have excelled at knowing what customers want and how they want it. Indeed, many of the stories behind these startups begin with a founder’s frustration at poor service or products from established health providers. To get under the skin of these new services, we ask five startup founders to tell us their stories, in their own words.
Eric Kinariwala, who founded the prescription delivery company in 2015, tells us:
“In early 2015 I woke up with a throbbing headache and headed to a pharmacy to pick up my prescription. Everything that could go wrong did go wrong, and the experience opened my eyes to the fact the pharmacy had remained unchanged for 100 years, despite being the most frequent healthcare interaction most consumers have.
“Our team at Capsule designed a model that combines the best of people and technology, bringing together all stakeholders across the system and eliminating friction to create an effortless experience for consumers. Capsule provides access – in person, by phone, SMS, chat, or email – to the timeless warmth and expertise of a real pharmacist who is using Capsule’s innovative technology to give each customer a personalized experience.
“Our technology platform allows consumers, doctors, hospitals, insurers and drug manufacturers to drive configurable outcomes at the pharmacy. We offer same-day delivery and a new, holistic pharmacy experience that meets modern consumers exactly where they want to be.
“To date, we’ve had more than 1,000 perfect App Store reviews. Since our beta launch, word-of-mouth has been a major factor in Capsule’s rapid adoption across New York.
“We raised an $200m from category-defining investors TVC, Thrive Capital and Glade Brook Capital. We are energized by our growth in New York and are looking forward to doubling down on our business here while also bringing our model nationwide over the next 12 to 18 months.”
Patrick Triato, who founded the sustainable oral care brand in 2015, tells us:
“The amount of waste that goes into the personal care industry is harming the planet at an alarming rate and Goodwell is aiming to make an impact in whatever way we can. The original vision was to replace the handle of a toothbrush with something more sustainable because of the amount of plastic used and disposed of for the sole purpose of holding bristles on a brush. We replaced plastic with bamboo and from there started to find other areas in the industry that could use a sustainability overhaul.
“As a lot of industries and companies are moving to a direct-to-consumer model, we feel that the oral care industry is one of the most sensible subscription options. Dentists recommend you change out your toothbrush every two to four months, and toothpaste is a consumable that we use multiple times a day but never seem to remember to buy more when we are running low. This felt like the perfect opportunity to take the responsibility away from the customer and put it on the company. Your oral care products show up at your doorstep right as you need to replace them.
“We are currently going through a large growth phase. As more people find out about Goodwell, we are finding that this is what people have been looking for. This past year we have been targeting the electric toothbrush market and have developed the first non-electric, powered toothbrush, called Be.
“We used an old technology of wind-up mechanics to rethink how we could offer the cleaning power of an electric toothbrush without compromising the ethos of sustainability. We have had tremendous success and are currently taking pre-orders on our website.
“Over the next 12 months and well into the future we will continue to innovate and grow. We want to be a household brand globally and replace the current offerings in the oral care industry with a more sustainable option.”
Jennifer Eden and Gaby Alves, who founded the plastic-free period brand in 2017, tell us:
“We launched Tampon Tribe out of a combination of love for the subscription business model and passion for providing access to organic feminine hygiene to everyone. We noticed a huge gap in the consistency and affordability of organic tampons, pads and pantyliners that worked and were also good for our planet. All of our products are plastic-free and that is super important for both of us.
“A subscription model just made perfect sense to us – you get your period every month, so it just stands to reason that we would deliver a curated selection of products to your door, every month. All of our options are completely customizable; you can even combine tampons, pads and pantyliners of any quantity in your monthly bag.
“We get little notes from customers all the time that they look forward to the tampons arriving in the post each month. We often include little extras, like super fun life hacks. Most customers love that we are taking the extra effort to be plastic-free and so do we.
“We have a couple of exciting new products in the mix which we are testing out now, and you’ll soon be seeing our retail line pop up in some cool stores.“
Armin Ghojehvand, who founded the vitamin subscription service in 2016, tells us:
“My reason for starting Vitamin Buddy coincided with my personal health journey. I wanted to be healthier but finding the right vitamins and supplements was a complicated and confusing process. Multivitamins seemed like a very generic solution and trying to research which vitamins suited my lifestyle best was too arduous due to the amount of conflicting information on the internet.
“That’s where the first seeds of Vitamin Buddy were planted. I thought ‘wouldn’t it be great if I could just tell someone about my lifestyle, concerns and health goals and receive a personalized vitamin plan based on this information?’ And that’s what we set out to do. We created a unique questionnaire that takes key data from our customers and generates bespoke vitamin plans for each person.
“These vitamins are then packed into 28 daily sachets and then delivered in a handy four-week box straight through your letterbox. Not only does it take the hassle out of figuring out what you should take, but it also helps to make sure you keep on top of taking your vitamins every day.
“Our vitamins are also gluten-free, vegan friendly and free from any artificial binders. They’re also all made in the UK and are of a high vitamin concentration to maximize their health benefits.
“Vitamin Buddy has the aim to make good health easy, which is why we opted for the subscription model. You take the quiz and then we deliver the vitamins for you – very easy, very convenient, with no stress or hassle. Customers love this approach and our customer base has been increasing month-on-month ever since we launched. In the next 12 months, we aim to grow our customer base even further before moving into more bespoke sports nutrition as well as other global territories.”
Simon Enever, who founded the electric toothbrush company in 2014, tells us:
“Quip was born out of a real need. Most people brush incorrectly, don’t visit the dentist for regular check-ups and are uninspired by their oral care. A product and service with a broad view of the entire oral care routine – from twice a day brushing to changing your brush every three months and visiting the dentist every six months – was needed to make oral care more simple, affordable and enjoyable.
“Quip is a subscription for health, not just convenience. Around 75% of us forget to change our brush when dentists recommend it, which is every three months. That means most of us are brushing with old, worn out and ineffective bristles. Automatic and affordable brush head deliveries on this dentist-recommended schedule make staying on schedule easier, with other oral care supplies like toothpaste to keep you on track for better oral health.
“We’re always working to bring more simple, affordable and enjoyable oral care products to more people – so we’re really focused on reaching the 80% of people without an electric toothbrush and the majority of people who don’t brush properly. We also recently acquired Afora, an alternative to dental insurance, within Quip Labs (our venture studio) to move forward with our mission of improving the entire oral care routine. We’ll continue to strive for this mission in the next year.”