The Next Brand, Episode #5
COVID-19, anti-viral nutrition and DTC brands likely to struggle
Hi there, and welcome to The Next Brand - my take on health, wellness and brand building.
In the last 4 years I’ve founded 2 health brands (Kettle & Fire and Perfect Keto), which did nearly $100mm in revenue in 2019. I’ve raised ~$20mm to build Kette & Fire, gotten into 9k+ retail stores, bootstrapped Perfect Keto, launched 80+ SKUs… and have a small portfolio of Shopify apps I’ve bought + operate on the side. Previously, I worked in tech and had no experience in CPG, DTC or anything consumer related.
🆕 What’s new
How can one do anything BUT talk about COVID-19 / Coronavirus? The US (along with the rest of the world) is literally being invaded by an invisible, deadly pathogen… all while our sense-making institutions (media, government, the World Health Organization) have been consistently, repeatedly wrong about the virus, its spread rate and how individuals and institutions should react.
It’s hard to believe that in a time of crisis, this is the media we’ve found ourselves with:
These are our leaders
And these are the institutions charged with keeping us safe.
There’s been a sense that our institutions (government + media in particular) are in bad shape, but this situation proves that beyond a shadow of a doubt.
Jason Rapp @jasonrapp@DavidSacks Yep. @zeynep has written thoughtfully about this. Problem right now seems there aren't enough for health care workers. More testing and more masks gets people back to work fastest.
Our media lied to us, our politicians failed us, and our health organizations misled us. All while the virus spreads.
I’m hopeful there will be positive changes coming out of this mess: less regulation (particularly by the FDA), changes in leadership, and a re-evaluation of America’s preparedness for the next pandemic.
Yet, in the now, there’s frustratingly little we can do. In my mind, whenever the macro environment fails you, focus on and invest in your micro environment. Volunteer + give back to your community. Financially support independent journalists, local companies, those doing good work. Buy a gift card at Support Local (a site I built along with Brent Summers 2 weeks ago to help restaurants), and tip generously when you order takeout or delivery.
Screwed up as it is, this is also a beautiful time. Strangers from all over the world are coming together to fight corona, entrepreneurs (like Ryan from Flexport) are launching multi-million dollar initiatives to get PPE and masks to front-line healthcare workers. Heck, my girlfriend’s family is retooling their family business so they can manufacture ventilators for patients in South Africa.
We’ll get through this, eventually. Until then, stay safe, stay healthy and be sure to support your local community. In times like these it’s all we got.
💪 Health stuff
Fortunately for those of you reading this newsletter, corona is like any flu: you have a better chance of a mild infection the healthier your immune system.
Here’s where I could list 7 Supplements To Keep You Corona-Free (#5 will blow your mind!) and rattle off some BS around how to stay healthy during this that you’ll never follow.
Instead, I’ll instead share some notes I took after reading Antiviral Strategies and Immune Nutrition: a page-turner of a book that included passages like
Note - I am not a doctor, health or medical professional, or anything of the sort. Just someone who reads a lot and sees very little downside to taking a few supplements or changing your diet for a bit.
At a high level, the book recommends fighting viral infection in 3 ways:
Antiviral strategies that help prevent viruses from landing and making a happy home in your cells.
Antireplication interventions that harm a virus’ ability to replicate and spread once established in your body.
Immunonutrition strategies, a way of eating that boosts your immune system in general.
Cell system support - basically, activities (sleep, stress exercise) to improve your cellular function.
These are supplements that studies have found effective at reducing viral load. Consider these your first line of defense against viral infection:
Zinc - up to 50mg per day
Licorice extract / licorice root - up to 240mg 3x/week
L-lysine - 1000mg/day
Selenium - 600-1000mcg / day
This class of interventions is geared towards slowing or stopping the spread of viruses that get pas your 1st line of defense (the immune system).
From the book, “The two main pathways which become clinical targets for inhibition of viral replication are 1) promotion of DNA methylation and 2) inhibition of Nuclear transcription Factor kappa-B… which is hijacked by viral replication machinery”.
SAM-e (S-Adenosyl Methionine) - 400mg/day
Lipoic acid - 300mg, 3-4x/day
NAC (N-Acetyl Cysteine) - 600mg/day
On the nutrition front, he recommends supplementing with Vitamin D (4000-10,000mg/day) and Vitamin A, both of which appear to be safe at very high doses. He also recommends intaking glutamine several times a day (an easy way to get that is via bone broth)
Outside of supplements, he recommends following a low-carb, Paleo diet to maximize your body’s immune capability. This also lines up with studies that point to a ketogenic diet’s efficacy in fighting off the flu.
Cell system support
This is an easy one - support your cellular health by doing all the things you know are healthy. Focus on getting good, restful sleep, de-stressing, getting sun and moving your meatbag.
Be sure to check out the book for more, as it’s incredibly detailed and well-referenced to studies supporting each of his claims. And for even more on antiviral nutrition (along with a list of recommended supplements and links to research papers of supporting evidence), my friend Dr. Molly Maloof has an excellent writeup of supplements she recommends to boost the immune system (here).
I hope all this is somewhat helpful. The endgame here is to build up your body’s immune capabilities and make you the healthiest version of you during this strange and challenging time.
🤑 Brand stuff
Though only ~2.5 weeks ago, this story about the implosion of Outdoor Voicesfeels like it came out in a different time. The story, in short: their founder/CEO left or was forced out, they’re losing $2mm a month on about $40mm in sales, recently completed a down round just to stay alive.
I suspect OV is only the beginning and there are a lot more DTC darlings that coming up on hard times. Casper’s IPO has been disappointing (down ~60% since going public) and valuations are tightening up.
This is certainly happening in tech, and MOST CERTAINLY happening in the world of consumer brands. In a tougher economic climate, unprofitable consumer brands face 2 headwinds: (1) investors who are less likely to underwrite perpetually money-losing businesses with bad unit economics, and (2) a weaker economy where more consumers are worried about their health, and less about which of the 14 brands of cookware to purchase.
The current crop of “raised a huge round at high valuations while losing money” brands is going to fall on hard times over the coming 12 months, if not fully go out of business. Brands like Away, Allbirds, and the Farmer’s Dog have all raised tons of money and could struggle to maintain anywhere near the cashflow required to get their next round done at a higher valuation. I wish them well, but I’d expect to see lower marketing spend, layoffs and all sorts of unpleasantness in the weeks ahead.
That said, many health and wellness focused brands, as well as many food and beverage brands are likely to do quite well in the next few months. Restaurants account for something like 30-40% of food + beverage consumption. With so many restaurants closed, and the distinct possibility that consumers will be eating out far less for a while, this demand has to go somewhere.
If you’re a food/bev brand, congrats: your total market just got 30% larger.
Now is the time to batten down the hatches, get smart with financials and start doing scenario planning: what happens if my business shrinks 20% over the next 6 months? 40%? 60%?!??!
Hopefully you’ll get through this and be fine on the other end. Others, I think, will struggle.
(As an aside, if you’re a business owner wondering how the latest round of government programs applies to you, check out Permanent Equity’s writeups - all kinds of companies are eligible for SBA loans at very friendly terms).
Dope stuff on the internet
Some of my favorite things since the last newsletter (note: I don’t get paid to recommend anything here):
📰 Article - Alex Danco is one of my top 3 must-read writers online. His post on Progress, Postmodernism and the Tech Backlash is well worth reading as it dives into some of the societal reasons for the tech backlash. Namely, that collectively we’ve stopped believing in a beautiful tech-enabled future. I’m hopeful this trend reverses on the biotech front, as biotech innovation is required to handle the next corona better than this one.
📚Book rec - I generally judge a book by how many new ideas I got while reading it. And boy did Civilized to Death deliver on that front. The book reinforces a belief I’ve been developing for a while now: that the human animal is poorly built for our modern environment, and that leads to the majority of mental and physical health issues today. Beyond health, the book covers the many ways civilization makes us unhappy. I’ll be writing a blog post with some of my thoughts on the book - I found it that impactful.
⌚Cool product - Working from home under shelter in place, I’ve found my kitchen chairs are great… for eating dinner. As chairs to sit in all day, they suck. So I recently upgraded to a posture-friendly kneeling chair from Sleekform and been a huge fan. I’ve used a standing desk for years, but struggle to get deep work done while standing (no idea why). This seems to solve that problem while also not being as bad for you as sitting. Plus, you can impress your girlfriend by buying a less-cool version of a rocking chair!
🎵Music - I can’t not give Lane 8 another link here after he dropped his Spring 2020 Mix. Killer beats as always, perfect for working. If you’re into live sets, he’s apparently playing some on Instagram Live. Thanks to Kevin Lee for the Instagram tip.
🐯 Random - Also, just because I can’t not… The Tiger King. It’s incredible, you’re quarantined, just watch it.
That’s all for this episode! If you enjoyed this, I’d love it if you would forward this email to a friend, or have them sign up free here. Reply back with questions, thoughts or other interesting stuff - otherwise, enjoy the week 🙏