Healthy Snacks Leads to a Healthy Startup

From the beginning NatureBox emphasized its brand to help grow business.
Content Creator/Speaker/Consultant, Alpha Dogs Media Group
July 23, 2012

Gautam Gupta, 26, was an overweight teen with terrible eating habits who, at age 18, decided that enough was enough. “Something clicked and I decided to lose weight,” he recalls. “I cut out junk food and soda and started exercising and I lost 70 pounds in six months.” He’s kept the weight off, and is now determined to help others eat healthier through his new company, NatureBox, a monthly subscription service that delivers healthy snacks to consumers’ doorsteps.

Gupta and co-founder Ken Chen, 29, were friends at Babson College, and went their separate ways after graduation. Gupta got a job at General Catalyst Partners, a venture capital firm, and Chen signed on with J.P. Morgan, then started his own lead-generation company. Last fall, they discussed starting a company together. With a common dedication to health and fitness, plus an alarming rise in U.S. obesity rates, they agreed upon a health-related startup.

Testing the Market

Friends and family loved the idea of a healthy snack subscription service, but would others? “Survey data is great, but until someone pays you for something, it’s not clear,” Gupta says. He and Chen spent a weekend building a landing page for their non-existent e-commerce company, which asked consumers to sign up for their $20-a-month subscription service. Chen used his SEO skills to drive traffic to the page, and approximately 100 customers took the bait over the course of a weekend. “We looked at each other and said ‘do we send them something, or refund their money?’” says Gupta.

They chose the former option, and scrambled to contact vendors who they had met at food trade shows. Their first box contained full-sized, co-branded packages of dried fruit, flavored almonds, granola and whole grain crackers. By the end of the year, they were convinced that they had a scalable business on their hands. Gupta quit his job at General Catalyst, but convinced the company to invest in his startup; NatureBox is now housed at the firm’s Palo Alto offices.

Controlling the Brand

Early on, the partners made an important decision to private label all products under their own brand. “Where you build value is by owning the brand,” says Gupta. “We wanted to build this aspect of discovery into the model, where customers tried items they had not tried in the past, and then came back to us for more.”

Most of the company’s suppliers are farms or independent manufacturers that also supply stores such as Trader Joe’s and Whole Foods and, says Gupta. NatureBox is helping them reach customers who may not have access to those retailers.

On the Road to Customization

Gupta says that NatureBox is on track to exceed its goal of 25,000 monthly subscribers by the end of the year. But he also notes “the site will change completely over the next few months.” Currently, subscribers can’t choose the products they receive. But Gupta and Chen will soon build in additional functionality that will allow subscribers to indicate dietary restrictions or preferences when they initially sign up. “We’ll make it more complete by adding personalization,” says Gupta. “And as we start to build that data on consumers, we can use it to sell them other categories of food.”

The end goal, he says, is for NatureBox to move toward a more traditional e-commerce model, but one that knows its customers well enough to make personal recommendations. Eventually, he says, the company will sell any healthy packaged food that one can find in a grocery store. But for now, says Gupta, “it’s walk before you run.”

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Photo credit: NatureBox