Advice Line with Nick Green of Thrive Market

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Welcome and Thrive Market update

3:21Hello and welcome to the Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. Joining me today is Nick Green. He's the co-founder and CEO of Thrive Market. Nick, welcome back to the show. Thanks for having me back. It's great to have you back. You were first on the show in 2024. And, of course, you told the story of Thrive Market. You and your co-founders originally wanted to kind of combine Costco and Whole Foods, but as an e-commerce platform.

3:55And you had all kinds of challenges building the platform and trying to raise money. And you actually ended up taking small investments from hundreds of, like, health bloggers. But eventually, you launched Thrive in 2014. And I think by last year, I think you did over $700 million in sales with more than a million and a half members, which is amazing. Congrats on that. Thanks so much. Yeah. I mean, you know, we talked about the early challenges back in the day, but the challenges, of course, never stop in business. And I think one of the jokes we used to have early on was that, you know, we almost had a new business every year or two.

4:29And you would think that would slow down, but it really hasn't. Like, I feel like our business has transformed even since we met in 2024. You know, we've, in some ways, you know, doubled down on things that we were already doing. For example, serving parents and families. You know, we've built a whole feature and really expanded our recurring offering where members can, you know, put their Thrive Market orders on autopilot, edit and have full control of the products that they purchase each month, but make it even simpler to reorder. And we're now seeing over 60% of order volume coming from that. Uh, we've, of course, you know, doubled down in AI, which was already starting to be a thing in 24, but has like, you know, exponentially changed.

5:08Uh, you know, our first orders now members can get help building a cart with an AI cart builder. Uh, that's just transformed the way the onboarding happens for new members. Um, you know, 90% of our member service inquiries now are self-service through AI. Um, and then, you know, people misunderstand the fact that even at scale, if you want to continue succeeding, and especially if you're a mission driven business, you want to continue to deliver on that mission, you have to constantly be evolving. You know, consumer expectations are always going up.

5:38The competitive landscape is always shifting and the technology backdrop like AI is transforming. And for us, that's, that's been, you know, we're now 12 years in, I think when we talked, we were just coming up on a decade. Um, and, but even 12 years in, even approaching a billion in sales, even approaching 2 million members, we're still at a place where, uh, you know, it is constant evolution, constant transformation. You, you've watched like thousands of products come through thrive market. Can you tell within a few minutes whether a new consumer brand is going to work?

6:11And, and, and if so, what are the, the sort of the signs? Um, the short answer is no, uh, the best sign honestly is, is data. So I can have a very good sense, uh, talking to brands because of my knowledge of the data on thrive market. Um, you know, we have our, our finger on the pulse of, uh, which brands are selling, which search terms are, are spiking. Uh, what are the search terms people are looking for that we don't have a, uh, an option for?

6:42We call it empty search results. It's one of our best sources of new product innovation and places we should go develop new products for our own brand. Um, so, uh, we really do rely on the data, uh, to tell us at scale, what are people looking for? How are preferences shifting? Uh, what are we delivering really well on and what are the things we're not delivering well on? But I actually think the biggest trend, the biggest secular trend that's going to transform all of grocery, uh, is really the mega trend that's transforming everything. And that's AI.

7:13Yeah. Um, and we are seeing that, you know, the AI cart builder that we've developed, which is still early. There's still so much more we can do and what's possible is transforming every few months. But I think a lot of people are not going to be doing their own grocery shopping in a few years because they're going to have, uh, you know, a purpose-built experience like we have on Thrive Market that takes their data, that takes their biomarkers, even that takes their health goals and, you know, helps to build them a basket that is optimal for them. And then, of course, does it instantly. Yeah.

7:43Before we get to our first caller, I'm curious, is there a daily health habit that you do that is, has proven to be beneficial for you over time? Um, I am a constant experimenter. You and I have talked about this, so I'll try, I'll try just about anything and I'm constantly iterating and changing things. I'll say the one constant for me, uh, and I'll, well, I'll give you two that I've combined.

8:14So one is walking. Yeah. And it's like so basic, but. Especially after you eat. After you eat. But for me, it's like after I eat, if I'm stressed, if I'm having a tough conversation, like everything is made better by being in motion somehow. And I feel more energized afterwards. I sleep better on days that I walk a lot. I'm in a better mood. I mean, it's like such an easy thing to forget because it seems so basic, but when you do it, you just feel good. So that's one. That's good.

8:44And I don't track my steps, by the way. I used to do that maniacally and it was like became a goal oriented thing. Now it's just like walk, walk as much as I can. Um, the second thing is reading. Um, and this is, I would say more of a mental health thing, but you know, I, my mind goes too fast to meditate. Uh, it's hard for me to slow down. Reading transports me. Reading also is creative for me. Uh, I read a lot of nonfiction, but I also read a ton of fiction and that for me in a, you know, I'm go, go, go.

9:15And I'm working really hard and I've got four kids at home. Like things could be stressful. Reading is my escape. And I think it's the number one underappreciated mental health hack. I love that. Those are two great suggestions. Walking. I do every day. I love it. And reading too is like critical. Especially, especially fiction. Especially long form fiction, like reading novels. And, and it keeps you away from algorithmic social platforms as well. Um, all right. You ready to take our first call? Let's do it. Let's do it. Okay.

Blackstrad concert attire advice

9:42Welcome to the advice line. You're on with Nick Green, co-founder of Thrive Market. Please tell us your name, where you're calling from, and, uh, just one line about your business, please. I'm Mercedes Smith from Salt Lake City, and I'm the founder of Blackstrad Concert Attire, a clothing brand designed specifically for performing musicians. Wow, Mercedes, thanks for calling in. Okay, Blackstrad Concert Attire. This is clothing for, like, people who are in a symphony orchestra? Sure, that's what I am. I play in a symphony orchestra, but it's clothing for anyone who's performing on stage and who needs to wear what we would call concert black, which is a very strict dress code for choirs, orchestras, bands, and a lot of other musical ensembles.

10:25Where do you, where do you perform? I am the principal flutist of the Utah Symphony. It's a full-time job. Okay, so I think I know where this is. Tell me about the genesis of this company, of Blackstrad Concert Attire. Sure. Well, after 20 years of doing this and struggling to find formal wear that was stylish, functional, and met my orchestra's dress code, I decided to start designing my own. That's so cool. It's like figs, you know, like making scrubs for hospitals.

10:55Yeah, I mean, because I guess you want it to be nice. It has to be black. And you also have to move your arms, right, around. Exactly. So it needs to be practical, too. It needs to be practical, and it needs to be formal. I design mostly women's clothing, and I think that is actually a big struggle because the men can sort of just, they're uncomfortable, too. But they're wearing a tuxedo or tails or a suit. But for women, we're kind of told to just wear a long sleeve, all black. You know, it needs to be to your ankles.

11:26But, again, to find something that's comfortable enough to perform in, you know, it could be very hot on stage. So a lot of women are sort of resorting to wearing kind of like athletic wear on stage and trying to get away with it, even though they might be sitting next to a gentleman who's wearing white tie and tails. And this seemed like a problem that needed fixing. Yeah. When did you start? We launched with actual products just under two years ago. Wow. Okay. And tell me a little bit about how the business is doing.

11:57Well, it's been growing, especially in the last year, and we're up to around $40,000 in revenue per month. So it's moving along. That's great. Before we dive in, what's your question or your challenge you're trying to deal with? Sure. I'm constantly trying to improve our products to reduce returns and build customer loyalty. But every round of changes slows down launches and restocks. So how do you balance moving quickly with making sure the product is good enough to earn customers' trust and keep them coming back?

12:31All right. I want to bring you in, Nick. Thoughts, ideas, questions for Mercedes. First, I just want to say I love this business in that it connects so deeply to a problem you actually faced yourself. Thank you. I think the problem that you're dealing with and the question that you just laid out also stems from that personal passion and commitment where you are in the business, working on the product, and wanting to make it perfect for every customer. And I think what you're facing is a classic entrepreneurial dilemma between quality versus speed or scale.

13:10And I think the paradigm shift here, which I think is every entrepreneur has to make at some point if they're going to scale, is that quality really has to imply scalability. Like, they have to become two sides of the same coin. And, you know, we've had to make a lot of those tradeoffs at Thrive Market. I'll give you just one example where, you know, we're ultra curated. And we could serve more customers if we went out of reach for that other SKU, more SKUs, more SKUs. And a lot of retailers do that. We just said we're going to keep it simple. And that's allowed us to be efficient.

13:40It's allowed us to pass on better savings to our members and have higher quality standards. And a version of that for you might be you're going to do fewer SKUs. You're not going to have a solution for every single person. You're going to really, like, invest in that hero SKU and tell the story about why that's great versus having, I don't know, every variation of lace or, like, sleeve lengths or whatever is people are asking for. And that's hard because you're not going to be perfect for everyone. But, you know, you get yourself to be scalable and you can impact a lot more people. Yeah, I completely agree, Nick, with what you said, Nick.

14:12I mean, you've got to figure out what you're going to be the best at and then make that or those few. I mean, you have a lot of SKUs available, right, for women and a few for men, but a lot. And I think you want to really focus on what the two or three that you really nail. And part of it is you've got this, you've got an inbuilt, you know, network of people who give you the feedback you need, who can tell you what works, what doesn't work, what you might want to tweak.

14:43I'm sure you're getting that information and using that data. And I would really lean on it. You know, we mentioned FIGS at the beginning, but one of the things I always like to tell every entrepreneur we've done shamelessly at Thrive is, like, figure out what you do uniquely and don't compromise on that. For everything else, don't reinvent the wheel. And if there's a business like FIGS that's probably solved a lot of the same problems in a very analogous kind of space, study them. You know, they've been a public company. And so a lot of that information is out there publicly. I think one interesting thing they did was they, and you probably have your analog, but they actually had their, like, own look.

15:19You could tell it was FIGS. And they, like, created a kind of fashion statement in an article of clothing that previously was not fashionable at all. So I don't know if that can be incorporated in your playbook. But I think figuring out what were the five or six things or X things that they did really well, what would be my version, and how do I go after that? And then I do think the channels thing is really interesting for you, where going after individuals is one thing, but you want to think about scalability much better to, you know, create the uniforms for a whole choir. And some of those choirs are big.

15:51One quick thought I had also, Mercedes, is that I suspect that you are doing a lot of things here. You've got a lot of SKUs here. You've got a full-time job in the symphony. And, you know, you're designing stuff. I'm probably not even scratching the surface. I mean, you're running a business here, right? 40,000 in sales a month. You're filling orders. There's a lot. Do you have any full-time employees right now? I don't have any full-time employees. Just this summer, I did, since we kind of were going well, I did move to a warehouse.

16:25So I have someone doing fulfillment now, which is great. And because we outgrew my guest room next door, and I also hired someone to run my paid ads on social media and hired a bookkeeper. But otherwise, I'm doing everything myself, including the creative for the ads and all the social media. And I'm sure you probably feel a little bit sometimes like you're just treading water, right? A little bit, yeah. Maybe more than a little bit, yes. Yeah, which is why I think trying to really focus on a few excuses for now.

16:57And also, you know, as this business grows and it's growing, I don't think you should necessarily leave your job because that gives you a lot of credibility, right? Which you do professionally. But you probably will have to think about bringing on at least another person to really help you run this thing. Absolutely, yes. I'm sure you've heard of the 80-20 principle, but especially when you're not able to be totally full-time and you're in this space where you're kind of doing it all and potentially drowning, being maniacal about identifying what is those 20% of inputs in every single part of the business of driving 80% of the output and then simplify, simplify, simplify, focus, focus, focus.

17:43And, you know, you have all that passion and all that knowledge, channel it in the most, like, narrow, specific way first. That's really smart. Yeah, thank you. Mercedes-Smith, the brand is called Blackstrad Concert Attire. Thanks for calling in. Good luck. Good luck. Thank you so much.

18:01We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz, and we're answering your questions right here on the advice line on how I built this lab.

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Peak State Coffee funding advice

23:23I'm Guy Raz, and my guest today is Nick Green. He's the co-founder of Thrive Market, and we are taking your calls. And Nick, what do you say? You ready for our next call? Let's do it. Hey, Guy. Hey, Nick. I'm Danny Walsh, founder of Peak State Coffee, calling in from Boulder, Colorado. And Peak State is coffee with benefits. We introduced a line of organic whole bean coffee with health benefits that doesn't compromise on the taste of really good coffee. Okay, great. Thanks for calling in, Danny. So, Peak State Coffee, and you said you're in Boulder, is that right?

23:56That's right. Okay. And so, health benefits, what's in the coffee that makes it healthy? Yeah, so I was looking for the health benefits of mushroom coffee without the classic taste or texture compromise that comes with mushroom coffees that have been out there. Like reishi and lion's mane and all those things? Exactly. Yeah, because if you take those in powder form, which I do, not all the time, but I have, it can be bitter, right? Like, if you take mushroom powders, you really have to just hide it in a smoothie or something. When I was getting started, I wanted to incorporate adaptogenic mushrooms in my diet every day.

24:32And everything that I could find on the market was, in fact, an instant coffee powder that was either mixed together or it was like an alternative to coffee that was also a powder. And again, wanting to keep the integrity of a really good cup of coffee, I figured out while working with a food scientist that we could actually take an extract, so like a botanical, like a liquid, and infuse that with coffee beans after the coffee was roasted.

25:03Got it. So that you can keep the ritual the same without the texture or the powders. Okay. So when did you, and when did you start the brand? We launched in April of 2020. So COVID business. Nice. And tell me how the business is doing. Like, for example, what did you guys do in sales last year? We're at about a half a million right now, trailing 12 months. Amazing. And most of your sales, break it down for me. Are they in stores? Are they online? Are they elsewhere? We're 95% online, 5% retail.

25:35So 95% of your sales are happening online. Well, 95% direct to consumer. So some of that is farmer's markets. Most of that is online on our website. And then the other 5% is we're regionally within Whole Foods in Colorado. Got it. Okay. So most of it is through your website. And then how much farmer's market, for example? About 20%. Okay. That's great. Interesting. Okay. And before we dive in further, what is your question for us?

26:05Yeah. So I've always been passionate about using business as a force for good in the world. And I think that the question I have for both of you is, if you were building a mission-driven consumer brand today, how would you fund that growth without compromising on the values that make your company worth building? All right. Before we dive in the question, just specifically tell me when you say mission-driven, what does that mean in terms of your business, in terms of what you're spending on?

26:37Sure. So the health component being the highest quality sourcing organic ingredients, not wanting to compromise on where you're sourcing from, and then also wanting to keep your mission front and center. We have a big sustainability component to our brand where we're giving 1% of our sales back to environmental conservation. And we're, you know, we're keeping our company a B Corp so that whatever happens as we grow, we don't lose our way.

27:07Okay. All right. That's helpful. Okay. Nick Green, I want to bring you in here. First of all, thoughts, ideas, questions for Danny. I mean, first, just congratulations, you know, from one mission-driven entrepreneur to another. Um, I think one of the things that we, we struggled with back at the beginning of Thrive was fundraising and the assumption that, you know, there was basically zero sum between the mission or building a big business. And I think the first thing to try to break down is that assumption. Um, and before you can do it with investors, you got to do it with your, in your own business. So how do you make the mission like actually driving positive sum value in the business?

27:43And, you know, for us, we found things in like our gives program where, you know, we're giving away free membership, but those members still buy products on Thrive. You know, when we launched, we became the first, uh, pure play e-commerce retailer to accept food stamps online. You know, that was a great thing for our mission. It was also a great thing for our business. Uh, you know, when we do packaging reduction, we do that because it's the right thing for the environment. It's also cost reduction in the business and, you know, you can't do everything all at once. So you'll always have to sequence. I think thinking about what are those things that won't be zero sum, uh, you know, 1%,

28:15like 1% is 1% that's going to cost money, but there's a lot of other things where you can be accretive to the business and that'll be attractive to investors and good for your bottom line, but also will be really good for the mission. Um, the other big thing, which, uh, you know, I looked at your website a little bit. I think you're doing a great job with this already, but make sure you're getting credit for those higher standards. I think there are so many awesome entrepreneurs out there who are doing things better, who are, aren't cutting corners in the supply chain, who are elevating standards, but then don't get credit for it with the consumer.

28:46So I'd say those are the first two things in terms of fundraising. You know, it's a big question. And I think the question for, uh, for you to ask yourself is when is the right time to do that? I think, you know, the debt can be really valuable because you're not diluting, you know, yourself as a shareholder, uh, but, uh, debt is also higher risk and eventually you have to pay it back. And so, you know, sharing some of that risk with, uh, other equity holders can be really valuable. It can allow you to get more capital into the business.

29:16It can ultimately allow you to get more debt. Um, if you get the right shareholders who share your values and our mission aligned, they can also be incredible thought partners. And one of the toughest things as an, as an entrepreneur, uh, is, is just the loneliness at the top, so to speak, and having, especially as a mission driven entrepreneur on how do you, how do you push that forward? And, uh, do you have co-founders? Just, just me. Yeah. So even, even tougher, right? And I had, I had three co-founders at Thrive, but was a solo entrepreneur, my first business.

29:48And so if you get the right partner, it's a source of capital, but it's also a real partner in the business. Um, and I do think that, uh, you know, first you gotta be able to convey how the, the things you're doing from a mission standpoint, uh, actually are created at the business. But second, you gotta find a partner who values the mission for what it does for the business, but also believes in what you're doing and is excited to be, uh, be a partner in that. Yeah, I, I, I agree. I mean, I, I think that first of all, I would say being a, a values driven business, doesn't mean that every value has to be equally sacred, right?

30:21Like it, and it doesn't mean that all of the things you do, um, make you a values driven business. I think you all, you want to first start with what's non-negotiable, but I put that aside for a sec because I, I think, again, I like Nick, I think I'm reading into your question. Like, should I look for, for funding or is that something I should consider? And, and I would not assume that, that VC funded direct to consumer is, is the answer just yet or, or ever. It could be, I mean, if you have the right, again, the right partner who wants to work with you to scale this up in the way that both of you are aligned on, that's different.

30:54I, but where I, I, I'm looking at, at some of the things you said, I mean, 20% of sales are farmers markets. That that's pretty great. I mean, that seems like a pretty interesting opportunity. And then the other thing is, I'm curious how, what is the, um, uh, like repeat order rate? You know, what, what percentage of, of what, like website customers are coming back? Yeah. So the overwhelming majority of our online sales are subscription customers and art. So, and then for those non subscription customers, our repeat purchase rate is about 60%.

31:27So we have pretty good metrics there. That to me is the opportunity that the subscription being a subscription company and going after those repeat visitors, you know, who are not yet subscribers. Um, and I wonder whether there are things that you can do and offer for subscribers. You know, maybe if you become a subscriber, you get to discounted first bag or something like that, because that to me is where the opportunity is right now, you know, for you

31:57to really scale up. I mean, I, I, Nick, you'd know this better than I, from, from our experience in the show, coffee is actually, it's very competitive, but it is an unusually good subscription product because people consume it every day. They run out of it. They need more of it. And it's, it's addictive, right? Like this is the, uh, and I'm a, I'm a, I'm a coffee drinker who's now very interested in trying your product. And if you have that kind of stick rate, when people try it, you know, you also can think about potentially investing a little more upfront.

32:28And, you know, there's a, obviously the math of your, your LTV CAC dynamics, but, um, you know, being maniacal about that equation and how do you, uh, you know, get the churn even to a stronger place, but also, uh, you know, figure out how can you bring more, more people in the door if that, if the, if the ratio is working, uh, it's absolutely makes sense. And I think that, you know, I, I don't want you to think that I'm saying you have to go raise money. I think if you look at really successful businesses, there's as many that have been

32:59ruined by raising outside money as made stronger. And, uh, and there is also a lot of value to going a little bit slower and being more thoughtful about the capital that you deploy because it's your own, uh, and being constrained on capital as just a forcing function to do things right, be intellectually honest, you know, not, not get out over your skis, so to speak. So it's, it's a big decision, uh, and you're, you know, a potential inflection in the business

33:30either way. You know, you, you could get, and we've seen this with, with brands on the show, you get a million dollars and you raise a million dollars and you're going to spend that million dollars trying to reach new customers who may come in and try it once and may not come back. And, uh, and, and the cost of acquiring those customers is very high. Right. But we know, we know this, I think the cost of getting people to subscriber to be regular repeat purchasers, some, it's just a, you know, the value of that is, is, is, is just

34:02gold. Uh, and that's, that to me is where I see a real opportunity to grow before you even think about, um, you know, bringing in money or trying to scale it. I think you could build this into a five, maybe even $10 million business possibly without raising a dime. One last thing I'll throw in there, uh, just to go back to the thrive market playbook where we, you know, we raised money from influencers and we also gave them equity and in fact, paid them to promote in equity instead of cash, which allowed us to raise less money.

34:33You know, you, if you imagine, you know, selling 10% of your business by raising money, you could take that, that equity and allocate it to influencers who can get the word out and have an audience and are authentic and, you know, uh, and connected and, and fans of your, of your product already. One of the things we always would do is look through our customer files and see if there were influencers that were just coming in organically and then we'd reach out to them, uh, you know, to start to, to start to partner and promote. And, you know, that can be a channel that's very defensible and, and sticky and doesn't have

35:06the issue of, of low quality customers who are just coming in off an ad, but rather coming in from someone they trust. Yep. A thrive playbook. Uh, Danny, I think you've got your marching orders here. All right. Well, thank you, Guy. Thank you, Nick. And yeah, I've been a big fan of the show for a while, so it's awesome to be here. Thank you for calling in. Peak State Coffee. Good luck. Good luck. All right. We're going to take another quick break, but we'll be right back with one more caller. Stay with us. I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.

Voiceback app scaling strategy

35:41Welcome back to The Advice Line on How I Built This Lab. I'm Guy Raz and today I'm taking your calls with Nick Green. He's the co-founder of Thrive Market and let's bring in our next caller. Hello. Hi, Guy, Nick. I'm Rhea Jane calling from Chicago. I'm a Duke student and the founder of VoiceBack. So VoiceBack is a mobile app for people with conditions that cause speech loss,

36:12like ALS, to clone their voice from just 10 seconds of audio so they can communicate in their own voice instead of a robotic one. Cool. Thanks for calling in, Rhea. So you have created an app that uses a previous recording of their voice to actually speak to people like you can respond. You can type responses in and it'll use their voice? Yeah, exactly. So people who have ALS, Parkinson's, stroke, throat cancer, even autism, aphasia, they upload an old recording of

36:45their voice and this can just be 10 seconds to 60 seconds, old video, voicemail. The app will clone their voice and then put that into a text-to-speech board so they can conversate with people in their own voice instead of the alternative, which is like a robotic one. Like a speak and spell type of voice. So like the Stephen Hawking voice. Exactly. Yeah. Oh, that's a cool idea. So how did you come up with this idea? What's the story? Yeah. So about three years ago, my grandma was diagnosed with ALS and even after losing all ability to move, the hardest part for her was losing her

37:18ability to speak. Like she was an absolute social butterfly, loved making friends. And so when the doctors gave her voice options and her iPad phone and they all sounded robotic, you can imagine it was just so devastating and embarrassing for her. And she hated these options so much that she refused to use them and would only write to communicate, which made it so challenging and even dangerous when we couldn't understand her. And so I invented voice back for her so she could sound like herself, feel more confident. And she loved it. She used it all the way up until her passing. And so now it's my

37:49mission that everyone with speech loss and ALS be able to sound like themselves again and get that emotional identity back. Yeah. That's an awesome story. And so this is available in the app store and the Android app store right now? Yes. That's where you get it, right? Yeah. Okay. And how's it doing? You launched it and what's the status? Yeah. So I launched it a year ago. Today's actually one year anniversary. So exactly a year ago. And, uh, to, to date, we've done over 50,000 downloads on the app. Uh, and most of those downloads were free users doing beta testing. Cause I really wanted

38:25to make the product perfect and have all the features that people would want on it. And then I installed a paywall about two months ago. And so we've done around $20,000 in, in revenue so far from that paywall. Okay. And, and, and how much does the app cost? So right now it's, it's a bit unusual business model, but it's about 23 99 lifetime or a two 99 a month with a seven day free trial. Okay. Um, before we dive in, what is your question for us? Yeah. So my question is since voiceback has no inventory and almost no marginal cost,

38:58awareness is the only thing standing between us and everyone who needs it. But our customers find us at a devastating diagnosis, which means we can't reach them through normal ad targeting. So how do I scale awareness in a market that the standard marketing playbook can't touch? Yeah. You know, where my mind goes is I think the work you've done over this last year where you kept it a free product and you just iterated and learned about basically product market fit, right. To understand what do people need? What makes it, what makes it sticky? What's going to keep

39:31them coming back? Like all of that is amazing work. I would say before awareness, you actually need to do that work with the paid app, right? There's it's very different that product market fit with a free download versus something people have to pay for. And I think the work that you want to do before you like awareness is about scaling. It's about, Hey, everything's doing great. Now I just need to put poor fuel on the fire. But I actually think the first thing you want to do is iterate on your funnel. Like you got to develop a marketing funnel. You should think about your pricing model and maybe

40:02you've already done some iteration there to come up with the two options you have. You should be looking at the churn curves because the most important thing isn't getting people in. It's how many of those people stay in. Um, and you should be really iterating the product now to be a paid product. You know, before you're, you're, you got 50,000 people, which is awesome that you're having that impact, but the bar is kind of low. They're not having to pay for it. Now you've raised the bar. You've got to figure out what's, you know, what's the business model. And then only once you've really put that together, then you start thinking about awareness. I think in your case that the

40:36hard thing with awareness is that you can't just go on Meta and spend it on ALS. The good thing is, uh, there are, there are really good micro channels. I'm sure you've already, uh, started to look at where it's support groups, it's forums, it's specific influencers who are facing this issue themselves or talking about family members that are, that, that have it. And so it's, how do you find the, the, the, the communities and market it in a more grassroots way, uh, to those communities. And you have a business that I think can actually really scale with word of mouth.

41:08And it was kind of depend on that because people that are going through this, they look for other people that are going through it and they share it. And, and so I do think that's, uh, you know, for us with thrive market, you know, people starting their health journey, they want to find a good solution and then they want to help other people. It's probably even more acute with a journey like you're talking about. Yeah, I, I agree. I think that the number you want to focus on is not the 50,000 downloads, but on, on 500 people who, who, who are going to be far more valuable. You want to target, uh, neurologists and, and speech pathologists and ALS clinics. And, and as Nick

41:44said, you know, patient advocacy organizations, I, I would start by making a list of every ALS organization or treatment center that you can find and then go on their sites and look for clinicians who work with patients at those centers. And I would, I would email them. I'd find their emails and say, Hey, my grandmother lost her ability to speak when she was, after she was at Didos ALS. Um, she hated this robotic voice that she, you know, had or whatever, whatever the story is, obviously. And so I built this thing so she could reclaim her, her voice. So she could,

42:19as you have said on your website, you know, she could have her, get her identity back. Um, can I, can I get 10 minutes of your time to show you how this works? And those are the people you want. You want 500, 5,000 better, but 500 of those people, that's really how you get this into the lives of people who are affected by this devastating condition disease. I mean, one of the things we found at Thrive Market, and I actually still do to this day, those customer conversations where, you know, especially when they're dealing with something that's really intense in their own

42:50life, if they'll share what they're experiencing, what worked, what didn't, and give you feedback, you know, that's, it's really, really impactful, especially as you try to go to a, go to a paid product. The other thing I was just thinking is, is you talk about 50,000, like that's a big impact. You don't want to give up impacting those people that maybe can't pay or won't pay. One model to think about that may be really helpful for you would be freemium. And maybe you're already, you know, maybe you already have a version that's free right now, but that could be, you know, the way that you actually build awareness by having a free product, but then layering enough value above and beyond

43:22that to, to monetize. Yeah. Yeah. No, that's, that's great advice. And I, I, I always say like study other apps that are in similar spaces too, to see like, how are they set up? How, and I'm sure you've done some of this, but how are they priced? What's the model they use? And, you know, is there, is there a, uh, an analog? Yeah. I mean, the upfront pricing to me seems low, but, uh, and, and look, let's, let's be honest. I mean, this is not, it's not like, you know, all trails or the

43:53New York times cooking app. I mean, which, you know, somebody might have for 20 years. Like the reality is what's the prognosis on ALS, right? It's a, it's a few years. So it's possible that, you know, you're going to have people using this for a year, maybe less. Um, I would, so I would definitely think about the pricing model. I think the freemium idea is really interesting. Um, but ultimately it's who you reach. And, and, and I don't think you have to focus on patients. You want to focus on caregivers, neurologists, speech pathologists, families eventually, but I would,

44:27I would just start to email, cold email, uh, some of these speech pathologists. In my first business, I would use like high school directories to email out to students that we're going to bring in at thrive market. We, we went to farmer's markets, you know, we are on the forums and, you know, our, our most successful strategy was finding influencers specifically focused on healthy living and advertising through them. And, you know, those honestly were much more successful, uh, for us and much more efficient than using, you know, big paid acquisition channels.

44:59Yeah. Yeah. 100%. No, that's great advice. I think we definitely try both routes, like the clinician route and the influencer route with clinicians. It can be a little slow because many of them have been used to a certain way for so long and have partnerships with these apps that generate this robotic voice. And so it's hard to, you know, keep following up and reaching them, but I think you're right. That's what you have to do as an entrepreneur. And Nick, I definitely took a page out of your playbook with the influencers because I've reached out to so many influencers and eventually got to Dr. Richard Bedlack, who's like one of the top ALS doctors and has a great

45:33following, um, and at Duke ALS clinic. And so now he's our medical advisor. We've done posts, collaborative posts, and that's what's really moved in the needle. And so, yeah. Have you done, um, social media posts showing how this works like actual, with actual patients? Yes. 100%. So I actually have a voice back advisory team of like 10 people with ALS or different speech loss conditions who give me great feedback on the app. Cause it's interesting in that. I mean, I don't know what I don't know. It's not like I have the condition. So if someone tells

46:04me, Hey, you need this feature or I need this added, it's like great idea. Let me program that in right now. And so they, they give me great advice and help create content of themselves using the app and how it works. Yeah. Awesome. Well, congrats on this. The app is called voice back. Uh, Rhea Jane, thanks for calling in. Good luck. Thank you. Good luck. Thank you.

Reflecting on entrepreneurial lessons

46:27Nick, let me ask you one, one final question to give yourself advice. If you could go back to thrive in 2014, when you launched and all the challenges you faced back then knowing what you now know 12 years in, what would have been, what do you think would have been helpful for you to know? What could you tell yourself now if you go back in time? Oh man. I mean, I feel like if I had known how hard it was going to be, it would have been hard to even start is the truth with. And it's just like, you hear this all the time. Like to be an entrepreneur, you have to be irrational, you know,

47:01arguably insane to take that risk and go do it. But yet you have to, you have to sort of have that belief in order to make it happen. And so I don't know if I would have told myself about anything that was going to happen. That would be really hard. And I don't know if I would want to know either that we got through to the other side because, you know, that might take away some of the fire in the belly and some of the fear of failure that actually drove us to succeed. So I, you know, I think that every journey is so path dependent and ours we've had, you know, many precarious moments, many challenges, but also that's been part of the victory. I wouldn't,

47:35I wouldn't change a thing. I think the, you know, the things I would tell myself are the things that I, that I felt then. I just want to feel them even stronger. It's like, go after the mission, don't give up. There's always a way to solve the problem and keep going. That's Nick Green. He is the co-founder and CEO of Thrive Market. Nick, thanks so much for coming back on the show. Thanks for having me. And by the way, if you haven't heard Nick's original episode of How I Built This about Thrive Market, please go back and check it out. We'll put a link to it in the show notes and just scroll down and click on it. Uh, and here's one of my favorite moments

48:09from that episode. We weren't product managers, didn't have a background in building an e-commerce platform. So we hired an outside agency. We thought it would take six months to do the tech build and four months in started getting the sense that we didn't have anything. And so at that point I said, we need help. We're out of our depth. We've made these mistakes. We were desperate. Yeah. Not only have we spent a lot of money, so we had the sunk cost, but we had nothing to show for it.

48:39It was a complete train wreck. Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at gairaz.com or on Substack. This episode was produced by Sam Paulson with music composed by Ramtin Erablui. It was edited by John Isabella and our audio engineer was Anli Huang. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coates, JC Howard, Catherine Seifer, Kerry Thompson, and Neva Grant. I'm Guy Raz,

49:12and you've been listening to The Advice Line on How I Built This Lab.

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