As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing John Estrada.
John Estrada is Co-Founder and CEO of RiseWell. Prior to RiseWell, John spent 10 years investing in healthcare and consumer companies. Most recently as a Partner at Center Pond Management, an investment fund he helped found. Prior to that he was a Senior Analyst at HealthCor Management, a healthcare investment fund with over $3 billion under management and an Investment Banking Analyst at JPMorgan. John has a BS in Industrial Engineering from Columbia University School of Engineering and Applied Science.
Thank you for joining us John. Can you tell us a bit about your ‘backstory’ and how you got started?
I was an engineering major in college, and I have always loved creating and building. After college I spent almost a decade investing in healthcare and consumer companies, but in the back of my mind I always had the itch to be a founder of a company of my own. When my wife and fellow Co-Founder, Kori and I were thinking about starting a family, we had to go through the IVF process. Her doctor reminded us that to make the process as successful as possible, she should make sure to eat healthy and be careful of the ingredients in our personal care products. Through this, we found conventional oral care is full of unnecessary chemicals that we simply didn’t want to put in our bodies. Your mouth is one of the most absorbent areas on your body which is why you should want your toothpaste to be as clean as your food. We went to switch to a “clean label” toothpaste, but Kori’s brother Derek (our other Co-Founder) pointed out that most natural toothpastes are as effective as water. That started the three of us on a quest to see if we could formulate a toothpaste that was safe enough to eat, but actually worked to protect your teeth. This is how RiseWell was founded.
Unlike other natural toothpaste that are basically flavored pastes, we use hydroxyapatite which is the mineral that makes up 97% of your enamel and gives it its strength. This isn’t a new ingredient, but it wasn’t prevalent in the United States. NASA actually first used it in the 1970s when astronauts were coming back from space and their enamel was weakening. They needed a strong remineralization agent and this was the first time hydroxyapatite was put into toothpaste! Since then, the mineral has been used in Japan and is about 60% of the market there. We decided we had to bring it to the US market, and RiseWell was born, along with our son Leo who is now almost two years old!
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
This is our first company, and there are always a lot of balls in the air. One day I took my eye off of one of the balls and ended up with 14,000 pounds of mouthwash delivered to my apartment in Manhattan instead of our shipping company.. Oops! In the early days of RiseWell, all of the billing addresses on the company cards were set to my apartment and I hadn’t noticed that the manufacturer had but the billing address as the shipping address. I will never make that mistake again! The biggest takeaway I learned from that is that no one checks your work for you when running a company, and the consequences of mistakes by suppliers are far worse for your company than they are for them, so you have to check and double check everything. We run a seemingly simple company — only four “main” products — but the complexity of getting each one together is far more than I anticipated. I know all of our suppliers intimately and have hand selected our ingredients for everything. This results in great products we can stand behind, but it also results in added complexity when dealing with so many suppliers for each new run of inventory. I wouldn’t change a thing in our formulas if I were to do this over again, but it does mean there are a lot of i’s to dot and t’s to cross to keep things running smoothly.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
I think the single most influential podcast of my career was “How I Built This with Guy Raz” on NPR. If you aren’t familiar, entrepreneurs share their founding stories and the struggles they faced along the way. One of the hardest parts of starting this company was taking the first big step — deciding to leave a decade long career in finance to venture into something I knew nothing about. I spoke to many founders throughout the process and I would describe their advice as ranging from mild support and confusion to active dissuasion after having gone through the ups and downs of starting a company themselves. I actually had one person tell me “What if I told you I wanted to go into finance and do what you do — you would tell me I was crazy and knew nothing about finance. So what makes you think you will do well with a startup?” Oddly, there was something about that advice that motivated me, but of course it stoked the feelings of doubt that I think plague most people making such a big career decision. By listening to Guy Raz’s podcast, I was able to hear the candid discussion of doubts and mistakes by some of my “founder idols.” This made me realize that frankly no one has it all figured out when starting a company, we all make mistakes, and the number one thing holding you back is your own self doubt. The hardest step is the first one, and that podcast was instrumental in giving me the confidence to take it.
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
Our mission is the health of you and your family — both the health of their teeth and the health of their body. When my wife and I started this company, we did it because we discovered a real need. We didn’t feel comfortable using half of the ingredients in the products on the market in conventional toothpastes. You use your toothpaste more than any other personal care product you own, and in the most absorbent area of your body. You should know and love what’s in it. We were also not willing to sacrifice the health of your teeth. Early on we decided that when it comes to a product like toothpaste, going where the science leads is extremely important. We put together a Scientific Council of leading dentists and doctors to ensure we were formulating products that were not only safe enough to eat but also effective. This is our purpose — to make products you can feel great bringing home to your family, knowing you are protecting their teeth while also taking the biggest step you can to remove harsh chemicals from your body.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
As basic as it sounds, I think the most important thing is to not cut corners and take the time to do the right thing, even if it won’t scale (yet). The first thing I knew when formulating these products is that there would be zero compromise on the ingredients. The only way I could sleep at night and be comfortable putting a product out into the market is if it was as close to perfect as I could make it. The result is a very expensive formula for us to make (unfortunately for us), but one that I can unequivocally stand behind.
Similarly, when you’re growing with a tiny team, there simply isn’t enough time to do even half of the things you want to do. I equate it to trying to build a freight train while half the pieces are falling off and you’re headed towards a cliff. As a manager, it’s easy to do the exciting things to build and grow the company while asking someone else to take over things like customer service. I realized pretty quickly that each customer is a part of the foundation of this company. We have an amazing Head of Marketing, Alyssa Calamari, who answers every customer email at all hours of the day, and I also read every email and reply when I think there is an opportunity to learn how to better serve the customer. Sure, maybe I could be spending my time thinking about “bigger things,” but in the end there is nothing more important than the foundation we have built with our customers.
For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
We are grateful to have stayed healthy during this time, but like everyone, we are still adjusting to working from home and having a new work-life balance. Having an active 2-year old you want to play with all day while running a start-up has been a challenge. I want to take this time I wouldn’t have had before to spend with my son and family, but also the business needs me. So, it is about finding a balance of work and play. I have been using my mornings and “lunch break” for family time. Also, it helps to designate a certain spot in the house to be just for work. When I go to my office, it is strictly work time.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
Half of our business went to zero overnight. In addition to our direct to consumer business on RiseWell.com, we sell our products in over 100 dental offices. This business went to less than zero when the pandemic hit. We actually started giving refunds to offices because we knew they were struggling too. But this collapse of half our business was truly a blessing in disguise. We spent our time the last few months hyper-focused on getting our story out on social media and building our direct business. Through the help of the friends and partners we have made these last two months, our overall business has grown materially through the pandemic, despite half of it still close to zero.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the corona virus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
My advice is to protect yourself as much as possible, then turn off the TV and stop checking the news. The constant watching of the numbers is unhealthy, and the time you are given to sit in peace with yourself and decide what to focus on is a gift. It is difficult to maintain boundaries with the news, but it is vital to mental health.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
COVID reminds me of the 2007 iPhone announcement: things have changed permanently and there will be huge challenges and opportunities for businesses. There will be really big opportunities for brands who can adapt and put focus on what works in the new environment. The huge surge in the number of products bought online will be sticky as consumers have gone through the hardest part of the process — finding the product they want and ordering that first order online. To maintain this surge in new customers, companies with DTC businesses should be hyper-focused right now on their customer retention and win-back strategies, and trying to convert one time customers to recurring/ subscription. An unprecedented number of people just made the switch to buying a large number of products online — I think the biggest opportunity for any company with a direct business is keeping them as loyal customers.
How do you think the COVID pandemic might permanently change the way we behave, act or live?
Consumer behavior has changed and the longer COVID continues to impact us the longer lasting the changes will be. Some of the challenges are obvious — a once overcrowded restaurant whose brand and attraction was based on being packed to the brim and loud, will not only lose its customers with limited capacity rules, but also its “cool factor” — a double hit that will be tough to recover from. Some challenges will also be less obvious — employers need to learn to manage the productivity of a workforce that will increasingly work from home, and manage a supply chain that is clearly more fragile than we thought 6 months ago. Companies that are flexible and can adapt quickly to these changes will thrive, but others won’t be so lucky.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
At RiseWell we have managed through COVID by focusing on three things now and into the future. First, we are making sure to support our employees and customers as we know they are the backbone of our company. We maintained our employees salaries and benefits, and gave refunds to many of our dental office partners as they needed to manage their cash flow with dentist offices closed. Helping our dental customers rebuild their own practices, and focusing on nurturing our new DTC customers, will be our main priority in the next few months. The second thing we have done and will continue to do is getting ahead of the supply chain and shore up our inventory. When this problem was still in China we more than doubled our inventory which has allowed us to remain in business with no stock outs despite huge growth the last few months. The uncertainty of this “new normal” unfortunately means higher levels of inventory. And third, we took the time to focus on what has been working. We have more than doubled our DTC business in a month and due to this focus our overall sales are actually materially higher today than they were pre-covid. We have realized that we have a large opportunity to grow our DTC channel through various marketing tactics and will continue to build on this post-Covid.
Similarly, what would you encourage others to do?
One thing I think every manager should do is to encourage your employees to take this time to take strategies and create new ways of business. There are always things businesses could be doing to build a stronger company. These could be small things like website edits that could eventually have a large impact. I would encourage others to prepare for what could happen. Supply chain uncertainty is at a high at the moment and inventory levels should be managed accordingly. For all of us this is a rare occurrence, so use this time to prep your employees and your strategy for unforeseen circumstances.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“If I have seen further it is by standing on the shoulders of Giants” — Sir Isaac Newton. I am forever grateful for the giants in my life. My parents who sacrificed to raise me, my wife who has put her heart and soul into this business and has put up with more than her fair share of ups and downs this last year, my small team who has made this company what it is, my customers who trust me with their health, my investors who trust me with their investment. I would be nowhere without what each of them has given me. I owe them each my life and I will be forever grateful.
How can our readers further follow your work?
You can check RiseWell.com for new products and sign up for updates. And of course, we are always updating our social media (@risewellco) and creating new blog content on our website, blog.risewell.com. Our Scientific Council shares ways to better your health in your everyday life. We are passionate about educating our community and helping others truly understand the importance of protecting their health, not just your teeth. Your health starts in your mouth so make sure you are protecting it.