190: Future-Proof Your Startup with Ari Tulla

11
Jan

Ari Tulla is a serial entrepreneur and the CEO of Elo Health, an AI personalization engine delivering the exact nutrients to live better. We discuss practical ways to future-proof your startup, the benefits of starting small, and the 3 things every startup must do to succeed.

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Future-Proof Your Startup with Ari Tulla

Our guest is Ari Tulla, the CEO and co-founder at ELO Health, a company focused on turning food from the cause of disease to medicine. Ari, welcome to the show.

Hey, Steve, great to be here.

Great to have you here and I am curious why does someone found a company focused on food and changing the whole perception of food as being medicine and as opposed to a source of disease? What path led you down this road?

Well, as an entrepreneur, you of course want to focus on things that make a difference, things that can move the needle in a way you want the needle to be moved. And also, I think when you get older, you want to focus on things that are relatable to you. So I spent quite a long haul in building companies, building new businesses, and I’ve always been in the side of building new. I never really been, well, I spent a couple of years running an established business, but I was always been on a building front.

As an entrepreneur, you want to focus on things that make a difference, things that can move the needle in a way you want the needle to be moved. Click To Tweet

The first time I started to build was in the web 1.0 in the late 90s when we built the websites for big companies, the first time they got into the interweb. And then later I spent about a decade in the world of video games from the perspective of mobile games. And that was very new. When the first mobile devices capable of playing games came available, we were building things there. And the last 12, 13 years I’ve been spending in building companies in the healthcare space in the US.

And I think for me, building a healthcare company in my 20s would not have really made a lot of sense, because you are healthy and you don’t think about death, you don’t think about these things, you think about how do you have fun and how do you build something that is really kind of fun, like games. But when you get older, you start to realize that, you know, we’re not going to live forever.

And we all have only one life. Well, maybe some people, they believe in reincarnation, but, you know, usually we believe in the one life we have on the earth and you need to make most out of it. And it’s tough to make most out of it. If you are succumbed by illness, you wake up in the morning, you feel bad, you feel ache, you are fear, fearing your future. That’s not a really great place to build the best life or become the best you.

So that’s one reason why I work in healthcare and then why specifically about nutrition and focusing on this very difficult conundrum now where food basically today is a cause for half the people who are dying today any given year. Food and the way of life that we have today in the Western countries, you know, cut the life sword. That’s half the people. 70%, 80% people today in the US are overweight.

Half the people are obese. And nobody wants to be obese. I mean, that’s not something people are thriving to be. So it just happens because of the food system and the way of life we have today that we are going on the wrong track at some point in our life. It could be as young as five years old or when you first time go to school and you are starting to eat the ultra processed food.

It might be later in life when you maybe, you know, stop your athletic endeavor at high school and then you go to college and you start to live the life being busy, you, and then you are gaining weight ever since. And in the end, you end up in the phase where you are obese and you are becoming metabolically sick, chronically sick. So it’s not like few people, but when you go around and look around you, it’s more than half the people today. 60% of adults have some type of chronic condition because of the lifestyle. Could be too much stress, lack of sleep, lack of activity, and definitely it is about the wrong type of food and diet.

Okay. So what can ELO do to stop that or to change that?

So my latest company is called ELO Health, and what we focus on is to try to make it easier for people to get the right nutrients. We are tackling this from the very kind of narrow perspective from the beginning, where we are offering people customized, personalized supplements. We are offering personalized, customized protein powders, and we have now new products coming in a moment. We haven’t yet done meal delivery or grocery delivery because we want to really understand this beginning to get it right.

And the whole high-level idea is that we are taking data from your body. Think about the variable device like Apple Watch, O-ring, Whoop or a glucose monitor, whatever you have. Or it could be a weight scale in your bathroom. Or it could even be a lot of other data like a blood pressure monitor you have on your home.

You’re connecting that information into Apple Health or and via that you connect it to ELO. We also do blood biomarker testing to understand your cholesterol, your lipid panel, understand your diabetes, Marko A1C, understanding your vitamins like vitamin D, vitamin B, your iron levels are important and also inflammation in your body. So we do a pretty comprehensive panel to see where you are. And then what we do, we take the data and of course we also do a health questionnaire like you would do if you go to a doctor’s office.

And we use AI to build the right nutrition profile for you. And then we focus on finding the gaps you have. 90% of people today who walk to Elo, they have some gaps. I mean, these are many of them are healthy people that they didn’t know that they have gaps. And then we help them to fill them by giving them supplements, giving them these protein powders that are fortified by supplements and other things. And we also have coaching. So everybody who comes to Elo, they have an app that they can communicate with the dietitian and get help.

So that was the model we built about two and a half years ago. And now we’ve been in the market for some time and we have thousands of people who have gone through the process. And most of them are seeing better outcomes. They see the blood biomarkers improving because of the way that we are helping them to get the right nutrition. And also we coach them to do better decisions overall. So we are starting to become better at this now and over time I hope we can expand this from the thousands of people to hundreds of thousands of people to millions of people because people need help and we have one modality that actually can help people get healthier.

Awesome, that’s a very worthy endeavor that you’re on and this is not your first rodeo, you invested in literally dozens of companies. So tell me what are the three things we talked about this on the pre-interview that really matter for a startup company? What are the three things that the startup company has to get right from the get-go in order to have a fair shot at success?

Maybe if I take a step back before. So for context, like I said, I’ve been building things for a long time and I’ve been part of now, I think, six different businesses that I’ve been either been starting or been involved very beginning in the web 1.0, in the mobile side, in mobile gaming, in healthcare now in two different areas. And sometimes you start a company, you have this passion that you have to do it. It’s like, you know, you’re a painter and there’s a, you know, you wake up at night, you have the canvas, you have to fill it in with something.

Or you are a writer, you wake up at 4 in the morning and you have to write the page. And then it comes 50 pages. Often people, when they start a company, they truly believe in something. They feel a problem that has to be solved. And that’s always been the case in my case. When I came up with something new, I thought about it for a long time, but then you just have to do it. It becomes like a vendetta for you. And when it happens, you are kind of carried away with the wave. You decide inside you that now I’m going to do it.

And then of course, you’re going to tell everybody around you, your mom, your father, your spouse, your friends, that I’m going to go and do it. Then you tell the world, you write a blog post about it, that then it’s too hard to go back because you already told people that you’re going to go for it. But often in the heat of a moment, we don’t necessarily think about the fact that, okay, is this a viable idea in a macro space?

Like, you know, it might be really important for you. You might know 50 people who have the same problem, but the timing might be off. There might only be 50 people, your friends, who have the problem. And if the timing is off, then there’s nothing you can do about building a real company or building a real business, or even it can be smaller than that. It could be something more like a hobby, but it won’t work because there won’t be a market around there. So the timing has to be right. And you can’t control time.

You can’t control the macro markets as an entrepreneur. It either happens or not. I mean, there are only very few people, maybe Elon Musk is the only one today alive who could build the market himself because he has the big megaphone, but there are not really many more people who can do that. So you being an entrepreneur in your carouse, if the people doesn’t want your thing, you’re not gonna make it happen. So you have to look at the macro and get the timing right really, really quick.

So I want to get a little bit deeper in it in a minute, but I just want you to go through the three things and maybe you can get deeper on why, how to know it’s the right time and what to do if it’s not the right time and so on. So what’s the second thing?

The second thing I think what we talked about earlier and I think I’m a fundamental believer is that you have to start small. You have to do it step by step by step. You can’t build the whole big vision in the beginning. And you know, one example, I think it’s a good one that you know, Tesla was a sort of a small kindle of a company where they took the Lotus car and they threw in an electric motor and some batteries.

You have to start small. You have to do it step by step. Click To Tweet

And that was the first roadster. I mean, I know a few people who have it and they like it because it was the first car that they bought electric, but it sucked as a car. I mean, it’s not very good. And then, of course, it took them, you know, 10 years or 15 years to perfect it. So you have to start small. And you heard what I said about Elo. We are not starting with building a meal delivery system.

We are not starting by building a door desk or Uber Eats with healthier choices. We are starting by building a Kindle, a small test market in a world of supplements and stuff like that. I’m not the supplement believer type of guy, but I mean, you have to do it small before you can go big. If you go big right away, it won’t happen, you will fail. And then third one, that is, I think, really more about how do you run a company.

After seeing a lot of different type of companies, I’ve been in a big company of 100, 200,000 people in a small division there running my own small shop. I’ve been in a small company of 10 people running my own thing. I’ve been running a 200, 300, 400 people company at the helm of it. So all are very different and how do you run them. But one thing that I learned is that when I look at the business, I always kind of try to break it in pieces and try to break it in pieces of different funnels.

And funnel means basically, we all know about marketing funnel. You know, you’re going to test everything and optimize everything from, you know, TikTok and Facebook or, you know, B2B, whatever you do, SaaS companies are different, but you try to build the funnel in a way that you know what’s happening in there. You also have a funnel for sales. You have a funnel for hiring. You have a funnel for product development in the company, how to get the ideas to bubble up at the right time.

And then, of course, I have a funnel for development of the products. So those are kind of really important things and there are a lot of good books and stuff, but I really believe that this funnel idea is a super potent and it goes beyond the normal sales and marketing funnel that we all know about.

Okay, that’s a lot to unpack there. So let’s go step by step. As you suggested, it is important to go by step by step. So number one was the right time. So what if I have an idea and it’s not the right time? How do I know even that it is not the right time? And what do I try to take it back to a different idea which would fit the time? What is there to do?

Great question. I don’t think anyone has a perfect answer because it really depends on what type of idea you have. What type of market are you entering? Are you building a completely new idea? Are you improving other ideas already available, or are you blending multiple different ideas together into a new construct?

So it really depends on what you’re doing. But I think one aspect to think about this is that you always have, you have this sort of high level idea. Like, it’s easy to use my example because it’s a quite good one. So Elo is a company that we named, the category we are trying to build is called smart nutrition. You already have smart home, you already have smart watch, Apple watch, you already have of course the iPhone, Android, and many things are becoming smarter around us.

So my thinking in the beginning was that, okay, I mean, could we build a smart nutrition company, a smart food company that is making the product that you know you’re getting a bit more similar than your iPhone or your Apple Watches. Meaning that, you know, it is learning about you, getting better over time, like Nest thermostat. It learns about your behavior. It keeps the temperature right at your home, lowering the cost of, you know, heating, for example.

Your Tesla, when you walk into it, it knows to move your seat and your mirrors in the right position, it will turn on the right music when you’re sitting. When my wife sits in, different music, different seat, different mirrors. Kind of cool. People love that. So could we make food to be similar? And I think we considered that for a long time, a few years, and then we decided I think the time might be right. We might be too early still, but we might be in this sort of a moment moment when enough people would believe that there could be a new way of eating food or having nutrition that is more smart, more tailored to you, personalized to you.

And that can be, you know, you can take the same idea and example for a lot of different market places. As an example, remember another company, great example, Slack. Many of us are using Slack today. Slack today is owned by Salesforce, big Salesforce big exit. And that was a company that started to build a game. And that game turned into a communication tool for small teams. And then why it really became this big is that it was built for you and me. It was built to be really like, you know, your WhatsApp or your message messenger or tools that we already use.

There was a personal need of people that knew that it was a useful thing and it was helpful.

No, not only that. I mean, think about it. If you go back in time when it happened, this was maybe the first good example of a consumer tech entering the B2B enterprise tech. So everything was clunky in design and Slack was beautiful in design. Slack was easy to learn. Other things were hard to learn. Slack was practical from day one, like you said, one-on-one communication, we kind of know it, it’s fun. And the other things were hard to understand what the benefit is. So they were the first one to do it. And now, of course, we have had many, many, many companies who took the consumer-crate design and then they brought it into the enterprise. And they built an app first. So people use more Slack on the app than they used on the desktop. So that was kind of the idea that, you know, I mean, many companies have done that. Thousands of companies now have taken, you know, Custo and all these companies in different verticals.

So what I’m hearing is that you don’t know if it’s the right time, but maybe you can ride some kind of a trend. So for example, in the case of Elo, there’s a trend of having the smartwatch, the smartphone, the smart house, all that stuff. And you recognize that maybe nutrition could fit into this existing trend, so you’re not trying to create a completely new thing. It’s an adjacent category that you’re creating to something that people already understand and decided that they want that. So that’s a great approach to take. I always believe as well that whenever you make change, it’s always good to just take one step rather than multiple steps because it’s much safer.

Whenever you make a change, it's always good to take one step rather than multiple steps because it's much safer. Click To Tweet

You keep one foot in the presence, what you already know and what’s working, and then you take one foot to somewhere that’s not working and you can always take your foot back if that’s too unstable. So I love that concept. Now you also talk about starting with a small test market. So tell me your thinking around that. I mean, I have an inkling of what that means, but tell me your inkling, your thought and what’s the right kind of size of test market. And is it about testing the concept and is basically making sure that this is a viable concept or is it about trying to dominate this test market and then progress as a dominant force rather than as a dispersed force.

I think we are all of course thriving for the world domination or any domination, but usually in the beginning it’s more about how do you, and it is linked to the idea of the right timing as well, because you can pick the pieces of the market or pieces of the idea you have, and then you kind of maybe tip your toe first into the areas or the ideas that are kind of possible to do today quickly. So not in two years, but you can do them faster.

So I think for me, the idea is always that what you have to do to get to the product market fit. And there are dozens of books about the idea, what it means. I was last week in Techstars, it’s this big incubator in the US. I’ve been a mentor there for some time. And I went to first time meet the teams, you know, their face to face, a thousand people in a room. And the founders of the tech stars, they talked about this very topic. Brad Felt is a acclaimed VC, has written dozens of book about entrepreneurship overall, how to build companies.

And he really talks a lot about the Brockmire Fit. And he reminded me again, what it is. It is basically a moment in time when people can’t get enough of your products. If you would stop selling today, they would call you and say, how can I get it? I mean, that is product market fit. It doesn’t need to be like a formula. It is something that you feel and see when it happens. And he said that if today you are building a company and today it’s so unique because in the last 15-20 years you have been able to buy traffic, buy people. That was not the case in the past.

Product-market fit is a moment in time when if you stopped selling today, people would call and ask how to get it. Click To Tweet

You could do a TV ad but you couldn’t buy people like you can do today on the Facebook, TikTok, Google and elsewhere. That has changed everything. And he said it that most of you people, there were maybe like 200 people in the audience, or 200 companies in the audience, a thousand people. And I said, most of you guys will never have product motivation. You are just getting very good at attracting the right type of people to buy your product. You’re pushing the product. They are not pulling you the product, pulling the product from you.

And that is a really good notion. Back in the days, we used to build these companies in a way that you went to sell it door to door, you went to sell it in the conferences, you went to sell it to the farmer’s market, you went to a store or the retailers or whatever. You had to do that hard work and then there was sort of a buffer before you can go live and grow.

Now you can kind of just have some VC money and you can go to TikTok and build a good campaign with good influences and I bet you can sell some stuff. But it doesn’t mean that your company is viable. So that is the idea. Like pick one type of a persona you are selling or one type of a customer and then test that one first and then go beyond it. And do it in a way you are testing one way to target them at first, not 15.

So you can test any given approach you have to find the right one. And I’m guilty. I mean, we have felt that many times at Elo already and we are not the old company. It’s very difficult to be focused and to be regimented enough to do it in the right way. It really takes a lot of courage, I think, and patience to do it right. And it’s too easy today to try to be too fast. No, no, we know we can go to market and scale. No, you can’t scale before you have promoted.

I’m trying to remember who was this copywriter who talked about the starving crowd. And he basically gave this example that, you know, you go to the main street and there are so many food establishments and people can choose anyone they want and essentially they are dime a dozen. But if you take a food truck to a manufacturing plant and the workers come out at lunchtime and they see your truck, they’re a starving crowd and they’re going to buy whatever you’ve got there because you’re right time, right place, right product.

So that’s kind of what comes to mind. All right, so let’s switch gears here. The last thing I’d like to touch upon is this idea of funnels. Now how you described it, I was wondering if I could use as a synonym playbooks or perhaps processes for sales marketing production. Is it the same concept or is this something completely different or is funnels just a fashionable way of saying processes or playbooks or is there an extra ingredient to it?

Well, I think it’s the playbook, but the difference I think is that I’ve been in the B2B for a long time. And now I’ve been dabbling for the last two years more in the B2C space. And the level of sophistication today you have from the data perspective, analytic perspective for the consumer marketing is unbelievable. Like, I did marketing 20 years ago, and it was really more about the TV, the retail placement type of stuff. And now it is like you are tracking everything that happens in every step of the funnel.

And the funnel can be 15 different steps and you are improving by 1% on every level of the funnel. And you can test messages in real time with dozens of landing pages. I mean, it is unbelievably sophisticated. And marketing today is a lot more about data analytics and looking at the numbers than it is about creative. Creative is, of course, important as well. But it used to be like, you know, the copywriters, you know, at the Mad Men days, they were, you know, one good statement or slogan in TV can make a company.

Today, it’s very difficult to do. It’s more like one type of influencers can make a company. But that idea of a funnel in the marketing today, I think we can take the same rigor and we can implement it into, let’s say, your hiring funnel. Like how many companies know exactly how many, how do they convert people from the lead who apply into all the way to being hired? How well do they get the retention of those people? How well are they on boarded? I bet most companies today don’t have the same rigor in the hiring funnel. It is maybe the most important funnel in the company. And why not?

Is a funnel an optimized playbook?

It is an optimized, ever-living playbook that is tweaked daily by real data from the real market. And that to me is the unique… How many times do you rewrite a playbook that you write in a company? Maybe, you know, every two years, maybe never. But this is really about ongoing optimization every day. And think about it, it would also go… And it is now going more into the product development. Think about your development team, for example.

What if we would know exactly which of the people are the most performant people in the development team? Because the best coder developer can be 10 times better than an average one. Do we know who those people are? Often we don’t. We kind of know. Do we compensate them differently? Do we give them five times more salary. No, why not? I mean, those are the points I think, you know, I would love to really go deep in.

Because if you look at some of the companies who are doing the best today, I think they have done optimization on every one of those levels. And if you take one example of a company that I absolutely love and I think most people admire is a company called Pixar, that is now of course owned by Disney. So I had a friend of mine who used to work there in HR for quite a while. And they had literally a million people applying a year. Million people applied to work in the company a year.

Optimization on every level, from hiring to product development, is key for companies that perform the best. Click To Tweet

And they hired maybe 200 people. How do you even fathom of finding the gold nuggets out of that many people? You can’t even look at it by hand. They had to build automation tools over 10 years ago to look at the people to make sure they hired the right ones. So they had to build a really, really good funnel for hiring. And they are one of the best companies in the world ever on creating hit after hit after hit in a very competitive space.

I’m just reading Elon Musk’s biography that recently came out. And they talk about how they went into Twitter and figure out who the programmers are that they wanted to keep. And essentially, they counted the number of codes they wrote each day and said that some people who write a lot of codes are better than people who don’t write or minimal code. And yeah, that’s crazy. But the only way they could do that was that they had data. They analyzed data. OK, that’s fascinating.

So the three ideas, you have to be at the right time and maybe you can help that by by tapping into trends that doesn’t, basically you don’t try to completely reinvent things, you try to refine existing things and take it to new areas. The smart nutrition is an example. And start with a small test market where you can use then your funnels to continue to optimize how you do business and refine it. And I guess, yeah, these are really powerful ideas. So if people would like to find out more about Elo, what you do and find out more about you, I mean you’re going on a roadshow of a hundred podcasts you told me in the next year or so. So if they’d like to learn more of your ideas, where should they go, how can they connect with you, how can they access your brain?

I’m pretty used to find Ari Tulla, I think I’m the only one with my name, if you Google my name. I’m quite active on LinkedIn today. I try to share things there. I think it’s one of the more sensible social networks today, if any of them can be sensible. And my company, you can find it at Elo Health. We are today available in every state in the US. You can buy products if you want to try. I would always love feedback.

And I try to take the word out about my company, maybe some of the learnings I have had, and I’m trying to make this smart nutrition idea to be a real thing. And one way to do that, I thought, was that, why don’t I go and talk about this in a medium I love myself. I love the podcast medium because I do a lot of bike riding, I do a lot of activities outdoor, and I often listen to either a book, I’m listening right now to the Elon Musk book as well. I’m in the beginning of it, so you went a bit further already.

You’ve been busier reading it faster. Or then I take a podcast with me. And I think it’s a great medium to talk about topics and go a bit deeper where you can actually digest things and actually explain people why you think something matters. And by the way, on the smart nutrition, just to kind of give you an idea, and this applies to any type of smart product category, it means, and it is distinct by three things. You have to make it personalized, personal.

Like you know, what I talked about the car moving itself different, you know, like there’s a seat moving, it’s personalized. It has to be precise, grounded in real science, and then it has to be proactive. And the proactive is the coolest thing, I think, here. Because think about your phone. It gets better over time, with more content. But could we make food and nutrition proactive? Think about, like, only one who is proactively telling you and giving you the right food is a mom. I have a mom visiting here, so it’s kind of fun to think about it.

But, you know, your mom is always asking, did you like the food that she made? And she will actually take your feedback and maybe improve the food. How many times you have your waiter in a restaurant ask you, how did you like the food? How often have you said, great, or good, or whatever? Did the chef ever get feed from you that you eat too salty, too sour, too cold, too hot, whatever? Never. So could we make a feedback loop in a way that the food would be better and more impactful for your health based on who you are? That’s what we’re trying to unlock at Elo. And that is, to me, a very fundamental new idea.

Love it. Well, incidentally, I just went for a test ride yesterday to Tesla. And the guy said to me, the salesperson said to me that, you know, the great thing about Tesla is that you’re constantly upgrading the software. And it’s kind of a future-proof product. And it made me think that future-proof, that’s pretty cool. And this is what you’re saying as well. So if you go on a smart nutrition with ELO, then it’s a future-proof. So whenever, whatever innovation and scientific discoveries come along, they’re gonna be part of the product. And you’re betting on the right horse that’s gonna keep riding, right?

So I think the best of both that, you know, I think you’re right. And I think they are right to say it’s future-proof, but it’s funny. I mean, we had a bigger crew in a car yesterday. We rented an old, maybe 10-year-old Honda Aruzo. It’s just sort of a minivan type of car you can fit eight people in. And then we go drop the car back with my Tesla. And my wife is like, huh, our Tesla is maybe a year old. And it like, there’s the sounds and crackles and stuff. And the Honda was like way more silent as a car. So I think Tesla still needs to learn to put the car together, not with the bubble gum or whatever they do today, but it’s a pretty bad car from the perspective of how well it maintains its car-ness or one piece-ness.

Okay, well, that’s an interesting input into my decision. So thank you, Ari, for coming to the show. It was great fun, and I look forward to engaging with you on LinkedIn when this comes out. And for those of you listening, make sure you check out YouTube. We have shorts now of every episode. We create shorts, just the framework, 45 seconds, so you can consume a lot of framework in a short period of time. And of course, Steve Preda Business Growth’s LinkedIn page. We have a lot of content, infographics, videos every day. So check us out there as well. Thanks again, Ari, and have a great day.

 

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