GUTWISERAPRIL 3, 2013

PERSONALIZED NUTRITION

EMPOWERING INDIVIDUALS

TO RESHAPE THEIR BODIES

WITH SCIENCE

ADRIEN BURCH

BUBBA BROOKS

CHRISTINA CHANG

TATIANA ECOIFFIER

ANNA MAYBANK

LORIS DZAGOYAN

INTERVIEWS: 102

GUTWISER TEAM

Tatiana Ecoiffier

Ph.D

Brandon Brooks

Ph.D

Loris Dzagoyan

M.Eng

Anna Maybank

MBA

Christina Chang

MBA

Adrien Burch

Ph.D

VISION 1.0

CROWDSOURCING HEALTH

Crowd sourced clinical trials

179K patients, 1K+ conditions

Map the human

microbiome with

citizen science

Connect to people with

Crohns around you

Research: Patient communities:

General population People with serious diseases

Gut Wiser

• Maintaining

personal health

through

scientifically-based

self-knowledge

• Do-It-Yourself non-

clinical diagnosis

(digestive issues,

mood disorders,

obesity, etc…)

• Prevention and/or

monitoring existing

conditions (crohn’s

disease, colitis,

IBD)

• Tool to perform

discovery-based

science

• Health conscious

individual customers

with disposable income

• Symptomatic

(undiagnosed illness)

individual customers

• Vulnerable/dependent

individual customers

• Chronic-disease

patients

• Health practitioners

(traditional and

alternative doctors)

• Researchers:

government

institutions/private

sector/nutritional health

supplement companies

1) For testing service

• Membership

• Retail partner/outlet

• Pay-as-you-go

• Referral

2) For data service

• Subscribers

• Pay-as-you-go

• Consumer facing-

advertising

• Food supplier/health

stores

• Peer

recommendation

• Health practitioner

referral

• Scientific publication

• Stool sample collection

• Analysis of the sample;

sequencing of the 16s rDNA

gut bacteria; creating a

complete profile of the

customer gut microflora

• Providing customers with a

comparison of their microflora

profile with up-to-date peer-

reviewed scientific literature

• Creating a database

aggregating customer results

for research purposes

• Easy-to-use testing kit

• Operational lab

facility

• Database of

translated gut

microbiology literature

into plain English

• Web platform for

consumer access

• Data access for

scientists

1) Partners

• Partnership with

scientific literature

community through:

a. Research engines

(Google Scholar,

Pubmed) b. Journals

(Science, Nature,

Journal of Intestinal

Microbiology)

• Food product

manufacturers

• Quantified self

groups

• Patient groups

• Health providers

• Research grant-

making agencies

2) Suppliers

• Sampling devices

• Shipping service

• Lab sequencing

facilities

• Collection kit

• Sample handling

• Sequencing cost ($20/customer)

• Technical worker (lab, bioinformatics, statistic)

• Web development management

• Marketing

• Customer service

• Product placement sales (i.e. probiotic drinks)

• Subscription model (sell testing kits + results)

• Free kits, pay for results

• Health providers pay

• Researchers pay for data

• Red = self-referring, “asymptomatic” individual customers seeking personal analysis

• Green = self-referring, “symptomatic” individual customers

• Blue = peer or heath practitioner referred, “symptomatic” customers

• Purple = organization customers seeking aggregated individual customer data

• Black = relevant to all customer segments

Using cutting-edge sequencing technology, Gut Wiser is a consumer-facing

service to analyze bacterial community in the digestive system and provide a

web-based platform where individuals can easily interpret and find relevant

information about their results based on published scientific data.

• Who is our target customer?

• Quantified self?

• People with digestive issues?

• Doctors?

• Research institutions that

want data?

WE STARTED WITH SCIENCE AND

INFORMATION…

1

3

4

Symptomatic /

proactive individuals2

“Here’s a snapshot of your gut flora”

“High diversity is correlated with lean

people”

• Traditional MDs:

“the science isn’t there”

• Healthy don‟t care about data/

awareness: “but if you can tell me what

diets actually work / how to lose weight”

• Symptomatic individuals want

solutions: “if you could tell me how to

build up my tolerance to spicy foods”

PIVOT TO : A COMMUNITY PLATFORM

Paleo

Juice cleanse

Atkins

Gluten-free

Raw food

Probiotic supplements

Which diets worked for

others?

MVP1) TEST: Gut bacteria analysis

2) TRACK: Online results

3) SHARE:Community platform

Pain

•Can‟t lose weight or successfully keep it off

•Too many unfounded diet fads

Gain

•A more scientific approach to dieting

A lean person

An obese person

YOU at week 8

Your Bacterial Diversity Results

DOES THE SCIENCE MATCH THE

CUSTOMER‟S WANTS?

Hypothesis Results

Symptomatic individuals

want info to better

manage their conditions

✗ Want interventions

that the science can’t

(yet) offer

Weight-loss seekers want

info on how to maintain /

lose weight

Want specific direction

+ proof (sustainable

results, not fads)

HOW DO WE REACH WEIGHT LOSS SEEKERS?

What about people not in a

program… who are health seekers?

CUSTOMER ARCHETYPE:

THE FEEL-BETTER

Female, 30

years +, high

disposable

income

Already healthy:

But wants to be

100%

Not just fitness:

Interested in

wellbeing

Highly educated

about health

Comfortable

talking about

poop!

Comfortable

with new

technology

WHAT DO “FEEL BETTERS” WANT?

• Tracking / shared experience

• DIY✗

• Personalized product recs

• Handholding (~$100 OOP

/nutritionist visit)✓

PIVOT TO: SPECIFIC PRODUCT

RECOMMENDATIONS

1.) ANALYSE

2.) COMPARE

3.) SUGGEST

HOW DO WE REACH FEEL BETTERS?

“Feel better”

NUTRITIONIST

• Holistic

practitioner

• Unlicensed

Diet

diagnosis

Behavior

change

No MD approval

Product suggestions

Less expensive for client

✔

✖$80$100

COMPETITIVE SPECTRUM:

SCIENCE VS. MARKETING?

Provide Data

Metametrix

Cust. Prob.

FitKit

Renew LifeCustomVite

Vitaganic

GeneMe

Sell Products

Gut Wiser

TWO REVENUE STREAMS:

KIT SALES + PRODUCT SALES

Net Revenue from Kits

Price per kit $80

- Gutwiser cost per kit $60

= Profit /Kit $20

Amazon platform

Probiotics sales / customer/mo. $30

x # mos./yr 12

= Annual sales /customer $360

x Gutwiser cut 15%

= Profit /customer /year $54

Fully Personalized

Probiotics sales per customer/mo. $60

X # mos./yr 12

= Annual sales per customer $720

x Gutwiser cut 40%

= Profit /customer /year $288

Consumer

Analysis

Nutritionist

WebSiteKits

Nutritional

product vendors

HOW IT WORKS

Kit

$$ spent

$$ received

Consumer‟s

$$ spent

Prob Kit

$80 wholesale

15%

YES!WILL WE KEEP DOING THIS?

Phase 1

Continue Customer Discovery

Phase 2

Provide probiotic to customers and assess their effect

Phase 3

Create the database

Begin to teach in nutritionist schools

Phase 4

Test our platform with nutritionists and their customers

Phase 5

Reach out to a larger market

APPENDIX

$49

Symptomatic /

proactive individuals

1

3

4

2

CANVAS WEEK 2

LaunchPadCent ral

Lic ensedfrom businessm ode lgenerat ion .c om underaCrea t iveCom m onsAt t r ibut ion-ShareAl ike3.0Unpor t edLic ense

KEYPARTNERS

GETcustomer:healt h

t rackingapp»

Nut rit ionand

probiot icsupplement

vendors»

Labsequencing

facilit ies(outsourcing)

»

Samplingdevices»

Shippingservice»

Gyms»

WeightWatchers»

KEYACTI VI TI ES

Managingsample

collect ionand

analysisprocesswit h

labsupplier»

Sequencing/analysis

of16srDNAgut

bacteria»

VALUEPROPOSI TI ONS

Toolt operform

discovery-based

science»

DIYnon-clin ica l

snapshot ofyourgut

bacteriatocompare

tothat ofleanpeople

»

Ge t

re co mme nd a t io ns

forot he r

supp le me n t s/d ie t s

t o t ryba se don

yourprofile »

CUSTOMERRELATI ONSHI PS

GETcust :pe e r

re comme nda t ion »

GETcust :

p romost o h igh -e nd

n ut r it ion ist s»

KEEPcust :

Discounted,

CUSTOMERSEGMENTS

Wealth ierwomen,

st rugglingwithweight

loss(DIY),25+ »

Pharma»

Probiot ics

manufacturers»

Foodmanufacturers

purchasingads»

1. )Pro a ct ive life

improve rs2. )

Pa ssive nut rit ion ist

clie n t s»

KEYRESOURCES

Webplat formfor

consumeraccess»

Operat ionallabfacilit y

»

CHANNELS

Foodsupplier/hea lt h

stores»

Consumer-facingads

»

Peerrecommendat ion

»

COSTSTRUCTURE

Sequencingandanalysiscost($60/kitformater ia ls/labor)»

Overhead(webdev,cust omerservice,market ingetc)»

REVENUESTREAMS

Productplacementsales(i.e .probiot icdrinks)»

Payperpackage(3kit s+ individualresult s)»

CANVAS WEEK 4

CANVAS WEEK 5

LaunchPadCent ral

Lic ensedfrom businessm ode lgenerat ion .c om underaCrea t iveCom m onsAt t r ibut ion-ShareAl ike3.0Unpor t edLic ense

KEYPARTNERS

Probiot ic/supplement

manufacturers»

Labsequencing

facilit ies(outsourcing)

»

Nut rit ion ist s(product

referra l)»

KEYACTI VI TI ES

Stoolsample

collect ion»

FDA510Kapproval»

Creat ecompletegut

microfloraprofilefor

customer»

VALUEPROPOSI TI ONS

Getrecommendat ions

forother

supplements/d iet sto

t rybasedonyour

profile»

Usescience,not

t ria l/e rror,tobet t er

understandimpactof

d ie tmodificat ionsor

abnormalit ies»

Toolst o

nut rit ion ist t o

ma ke scie n t if ica lly

ba se dprob io t ic

re co mme nd a t io n»

CUSTOMERRELATI ONSHI PS

GETcust :peer

recommendat ion»

GETcust :high-end

nut rit ion ist /health

consult ant»

KEEPcust :

Membership,

CUSTOMERSEGMENTS

Foodmanufacturers

purchasingads»

1.)Proact ivelife

improvers2.)Passive

nut r it ion istclient s»

Nut rit ion ist s»

KEYRESOURCES

Test ingkit »

Webplat formfor

consumeraccess»

CHANNELS

Foodsupplier/hea lt h

stores»

Consumer-facingads

»

Peerrecommendat ion

»

COSTSTRUCTURE

Overhead(webdev,cust omerservice,market ingetc)»

Sequencingandanalysiscost($60/kitformater ia ls/labor)»

REVENUESTREAMS

Productplacementsales(i.e .probiot icdrinks)»

Payperpackage(3kit s+ individualresult s)»

Subscrip t ionforpersonalizedproduct recsanddiscounts»

Freeaccesst ocommunit yplat form»

prob io t icsa le s»

CANVAS WEEK 7

CANVAS WEEK 8

MOCK-UP OF IDEA #1

1 2

3 4

MOCK UP OF IDEA #2

Analysis

Nutritionist Nutri. Page

Kits DataBase

Prebiotics

Probiotics

Patient Page

MOCK UP OF IDEA #3

HOW CAN WE MAKE

RECOMMENDATIONS?

3.) Matching:

We look for a user that

looks similar to you and

who has rated a probiotic

1.) Profiling:

We analyze your sample

and can see who else has

a similar profile to you

2.) Community rating:

Other Gutwiser users have

rated probiotics based on

their personal experiences

CHANNEL ARCHETYPE

Nutritionist / Health CoachRegistered Dietitian (R.D)Naturopathic doctor

Are licensed

Can work in hospital

must meet the continuing

professional education

requirements of ADA

Not credited, Unregulated

Can be certified from certain school

“personalized” approach

Licensed physician

Holistic method

Practitioners would:

1/ recommend our service free of charge

2/ be motivated by coupons for discounted

or free product

3/ ask for monetary compensation for

endorsing service

NUTRITIONIST AS CHANNEL

Nutritionists• Can‟t order labs without MD

• Want to attract more clients

“Feel betters”

Wk 0 Wk 4 Wk 8 Wk 12

Baseline:

Test 1

GET:

Product

referral

KEEP:

• Community

results

GROW:

• Customer

referrals

Results 1:

Test 2

Results 2:

Test 3

Results 3

WHAT DO NUTRITIONISTS WANT?

“Trial and error” Metametrix Gutwiser

Technology Intuition PCR , traditional Sanger

sequencing

Ultra high-throughput

Illumina-tag sequencing

Process See what happens MD approval required to

order test

No MD approval

Output Client perception only • Select bacteria

snapshot

• Yeast and fungus

• Drug resistance

• Parasites

• Short chain fatty

acids

• Inflammation

• Complete bacteria

profile

• Personalized diet,

supplement, and

probiotic

recommendations

Cost to user Free $400 for one kit $400(?) for 3 kits

Value Limited, static bacterial

profile

Robust, dynamic

bacterial profile

SELLING THROUGH NUTRITIONISTS

Hypothesis Experiment Outcome

Sell through

nutritionists:

1.) Trade shows

2.) Schools

Nutritionists:

$1000/booth, 400

attendees

Too expensive to build

direct sales

Holistic nutritionist schools:

~ 13 schools x 150 grads/year

= 1,950 grads/year

Supplement retailers

$5250/booth, 63000

attendees

1. Trade shows are

useful for reaching

supplement retailers as

partners

2. Use nutritionists as

only initial channel:

reach them through

schools. Break even

and reach 1,950

grads/year

3. Next steps:

RETHINK OUR

CHANNELS AT SCALE!

SCIENCE

Revenue model 1: Manufacturing and selling our own probiotics

Revenue model 2: Selling data to probiotics manufacturers

Key questions:

Do people care enough about the science? No!

Do probiotics companies care about the science? No!

Nutritionists care about science and people care about what nutritionists think

MARKETING

Revenue model: Diets and probiotics sales

Channel: Nutritionists (Avon model) vs direct to consumer via infomercials

Science is just one part of our story

SCIENCE VS MARKETING

TWO REVENUE STREAMS:

KIT SALES + PRODUCT SALES

Net Revenue from Kits

(per customer)

Price per kit $80

- Gutwiser cost per kit $60

= Profit per kit $20

x # of kits/yr 3

= Kit profit per customer per year $60

Net Revenue from "Amazon platform”

Probiotics sales per customer/mo. $30

x # mos./yr 12

= Annual sales per customer $360

x Gutwiser cut 15%

= Gutwiser product profit per

customer per year $54

Overhead Expenses

# Sales employees 2

+ # of Technicians 1

+ # of Web dev employees 1

+ # of Science Experts 1

= # of Employees 5

x Avg salary $50,000

= Salary expense $250,000

Travel and

conference/expo expenses $3,000

x # of conferences per

year 6

= Travel/conference

expenses $18,000

Other overhead $3,000

x # of mos. 12

= Other expenses $36,000

Total SG&A Expenses $304,000

2,667

Fully Personalized Probiotics

Probiotics sales per customer/mo. $60

X # mos./yr 12

= Annual sales per customer $720

x Gutwiser cut 40%

= Gutwiser product

revenue/customer $288 874

Breakeven # of

customers:

A

B

$114

$348

Profit per

customer

CAN WE MAKE TRULY CUSTOMIZED

PROBIOTICS?

Option A:

Kit + Amazon

marketplace/platform

of product reccs

Option B:

Kit + Fully

personalized, custom

probiotics

Volume constraints

• None

• “150K tablets”

minimum order,

15k piggybacking

off existing orders

Time to customer

• 2-4 wks for analysis

• Readily available

probiotics

• 2-4 wks for analysis

• +4-12 wks to

develop customized

probiotics

Revenue Model

• Product price: ~

$30/mo.

• GW profit: 10-

25% cut of sales

• Product price:

~$60/mo.

• GW profit: 150-

900% markup

possible

Source: Academy of Nutrition and Dietetics

Where is our value

Database

Supplement recommendation algorithm

Patentable insights on the gut microbiome

How de we want to protect it

Database: consent form the participant may be required

Algorithm: Patent vs. Trade secret?

The university in this process?

INTELLECTUAL PROPERTIES

•“As soon as you say 'test kit' it is going to be a med device"

•“It would be the manufacturer‟s responsibility to get FDA approval, but your company could get in some trouble if using an unapproved FDA test kit.”

FDA Class I Medical Device status

•”If the consumer reads the results – fine to give consumer some guidance on nutrition supplements they should be taking… but not for any disease treatment or abnormal condition.. You can probably say you may have symptoms of IBS but need to go to an internal medicine MD to find out.”

Who interprets the results? What claims can be made?

•“Giving nutritionists a kickback would probably be okay but might need a disclosure – e.g., „I understand that this practice owns the MRI ctr‟”

•“You might need to disclose on the website that all of the products offered / recommended here have a relationship with the company.”

Financial incentives with partners must be disclosed

REGULATORY INSIGHTS FROM AN FDA

LAWYER

• Find a FDA-cleared,

marketed device to

qualify for Class I

exemption

• Cannot make

claims/reccs beyond

what a non-licensed

practitioner can do,

(i.e., stay away from

claims on disease

treatment/diagnosis)

• Be transparent that

we/nutritionists are

recommending

products that

we/nutritionists reap

financial benefit from

TAM: Digestive diseases, 60 M adults 1

SAM: IBS sufferers: 15.3M adults

% that take supplements: 50%2

x approx monthly spend on supplements: $203

Target = $1.84 BN

TAM: Dieters, 188 M adults4

SAM: Women dieters: 104M5

“Wealthy dieters” comprise only 20% 6

x approx monthly spend on supplements: $207

Target = $4.98 BN

SYMPTOMATIC/PROACTIVE INDIVIDUALS -

HOW BIG IS THE MARKET?

Digestive

disease

60 M adults

IBS

15 M

Dieters

188 M adults

Wealthy

women

dieters

20.8M

1 N I H ( N I D D K ) , i n c l . C r o h n s , I B S , U C

2 C e n t e r f o r D i s e a s e C o n t r o l a n d

P r e v e n t i o n

3 , 7 C u s t o m e r i n t e r v i e w

4 , 5 G a l l u p

6 M a r k e t d a t a E n t e r p r i s e s

NUTRITIONIST MARKET SIZE

Estimated number of women aged 35-64 who get information about nutrition from a nutritionist

35-44 45-54 55-64 Total

%age of total US pop who get info from nutritionists 2% 3% 3%

%age of women who get info from nutritionists 1% 2% 2%

x Number of women in US pop 20,128,000 22,459,000 19,038,000

= Est. no. of women who get info from nutritionist 201,280 336,885 285,570 823,735

Source: Academy of Nutrition and Dietetics

Gutwiser sells to 5% of market at $114 profit/sale = $4.7M

Cover our costs from teaching at nutrition schools

Make a small profit from future referrals of our students

SELLING THROUGH NUTRITIONIST

SCHOOLS

Income from providing testing and teaching in nutritionist schools Income from referrals by nutritionists

Revenue Costs Total number of students 1950

%age of students who go on to practice 50%

Wholesale price per kit 80 Curriculum development (hours) 35 = Practicing nutritionists reached 975

x Number of students 1950 x Salary per hour 50 x %age of nutritionists who refer clients to Gutwiser 50%

= Total revenue 156000 = Curriculum development cost 1750 = Number of nutritionists referring clients 488

x Clients per nutritionist 10

Salary per hour 50 = Clients using Gutwiser 4875

x Teaching hours per course 15 x Profit per client to Gutwiser 174

= Cost per course per school 750 = Profit from referrals by nutritionists via school channel 848,250

x Number of schools 13

= Cost to teach at every school 9750

Cost per kit 60

x Number of students 1950

= Cost to provide kits for students 117,000

Total revenue from teaching 156,000

- Total cost to reach 1,950 students 128,500

= Revenue from nutritionists schools 27,500

PROBIOTICS MARKET SIZE

• Probiotic supplements annual

North American revenue

~ $750M in 2011

• Growing 35% in 5 years

~ $1bn in 2016

• 5% of US market ~ $50M

Functional food, functional beverages and dietary supplements:

2011 US market for nutraceuticals = $56.4bn

2011 Global market = $142.1Bn

2017 Global market = $204.8Bn

NUTRACEUTICALS MARKET