Episode #568: Scaling Physician's Choice From Startup to $250M-Logan Chierotti on Smart Growth and Supplements

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I am super excited to announce that we now have a formal

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partnership with the Prospect Wizard. And when I say

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wizard, I mean wizard. Obviously you have a website.

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This allows you to convert your website traffic visitors

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directly into leads. It's not just another chatbot and

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it's not AI but it allows a visitor to call, text or leave a

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voicemail immediately. Goes to you, your sales team or anyone else in the

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club instantly. MIT shows a study that if you contact

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the league within 10 minutes, chance of them converting goes up nine

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times that of the average. We got the Atlanta clubs

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on it. Vita Fitness, Gold's Gym, Mountainside

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City Fitness, Philly, College Park. Become one

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of the next Halo companies. To deploy the Wizard.

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It's easy to use. Go to the prospectwizard.com

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get a free 30 day trial. Talk to my boy Dave Gallon. He will get

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you all set up and let the leads flow based on the

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Wizard. Go get him.

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This is people on Halo Talks nyc. I have the pleasure of bringing to

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the show Logan from Physician's Choice Supplements. We're

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going to talk about how to hyper grow a company but to talk about

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his passion and interest in the space and how to manage a business

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that is growing and keeps controls on it

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and also looks towards the future. So Logan, good to, good

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to have you on. Yeah, thanks Pete. Appreciate you guys bringing me on.

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You got it. So our audience here is all in the helo

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sector, Health, active lifestyle, outdoors. A lot of health club

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operators, sports complexes and studios have always kind of

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tinkered with or kind of like touched into like hey, can I sell supplements?

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Can I sell you know, these products to my members either through E

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commerce or you know, have my own pro shop if you will and have

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that work and not become a, a loss leader because a lot of it just

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goes out the back door is not accounted for.

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So talk about how you got into this space. You know, what was the,

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the, the impetus for that and you know, a little bit of the

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growth story and growing pains along the way for sure.

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So we started physician's choice in 2017.

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My background was Internet marketing, kind of like E commerce. And I've always

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been interested in the health and wellness space. We saw what was going on on

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Amazon as way to kind of like accelerate growth without holding a

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bunch of inventory or going straight to retail. And we took full advantage

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of that launching what today is like the number one

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probiotic brand. But we really focused heavily on Probiotics

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as like our core focus, gut health. And we grew

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the company from 2017 to today. We're doing this year we'll do

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like close to 250 million in revenue all

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through Amazon. Now we're in brick and mortar retail.

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70,000 different distribution points. So we've scaled pretty fast.

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Nice. And have you grown it where you live

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or have you put distribution centers across the US and how's

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that kind of played out from. We have an office

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in Denver that's like our kind of like central marketing hub and then we have

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distribution centers all across the US I've put

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together like a really good team, I think talking about like growth and

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kind of like what it's taken to get here for me. And I think, you

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know, probably a lot of your listeners could benefit from this is like one

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of the things that's been most instrumental is putting together like a really

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high class, top of the line executive team. Yeah,

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I've learned from hard lessons and a lot of failure that

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like hiring smart people and getting out of their way has kind of like really

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been a key success to our growth. You know,

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when you take a look at going from E commerce into

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retail and we've got a company we invested in called Higher Dose,

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we got approached, but we got approached by some really big box retailers

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and the distribution that was kind of like dangled

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at us was really exciting. At the same time,

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kind of the, the policies and procedures,

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you know, scared the shit out of us actually. You know, basically

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like giving them stuff on consignment and then turning into like

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this collection agency on, on accounts receivable

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and then like if something gets returned, like that's on you.

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And we realized like the most of the risk was basically on the, on the,

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the product provider, not on the retailer. So how did you get comfortable

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with the economics and the E commerce, you know, business

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model versus saying like, hey, now I'm kind of like, you know,

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I'm at somebody else's whim and like my customer concentration

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might be like inverted, you know, without me really doing anything. Just

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sign a smart contract. I'm like, holy. I like work for, I work for like

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big box retailers now and I'm like, I'm like a vendor and I'm

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not, I'm not really in control of my own destiny. Maybe by accident.

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Yeah, 100%. So at this point we actually,

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because to your point, we say no probably to more retailers that approach us that

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we say yes to because you have to be very particular about that because they

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will kind of make you take all the risk and kind of screw you. And

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it's just like you know, so our policy now is like, you know, unless it's

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on our terms, we just say no. And we're very particular about the retailers. We

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take on to your point. Like, we've always started with like

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E. Comm. Or distribution centers. Like we control. So I think, you

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know, to your listeners, like having health clubs or med spas, like, you're in a

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unique position because you can control that distribution versus

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like, it sounds really sexy. I think when people are like, oh, you're gonna get

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into Walmart and then you get in and it's like, okay, you have to meet

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these minimum velocities. You have to spend this much. Like, it's much more. There's a

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lot more goes into it than just like put some product in and you're good.

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Um, so I think it's like if you can control where you're distributing and then

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like, as you grow a brand and you get bigger recognition, then you can kind

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of start to like dictate terms a little more. But in the beginning you're very

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much like sell where you can control and you can like, how's the

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inventory? And there's not a lot of risk on you. How have

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you kind of managed through? So I'm a consumer

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of everything that you produce and that you have out there. And I

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would say, even though I'm in this industry, I would say my

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level of knowledge is probably two inches

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deep and like a mile wide. Right. So a lot of it might

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be price driven. It might be.

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I'm going to say this is like a very naive consumer. It might be your

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packaging that I just like, it resonates with me. Like a lot of

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beverage companies have gotten sold recently. Like, you see the before and after of like

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Poppy as an example is called like nature is like mother

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Mother nature or something. And packaging didn't resonate then they itself

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like $2 billion something. But how have you kind of taken

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physician's choice and said, hey, like I'm gonna give you

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the physician choice. Obviously already is embedded in the fact that

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like you're an authority. And then the packaging and the pricing is

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kind of like that, that lead. So. So I already know. I don't, I

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don't question like, what's your brand? Because you, you've got named it properly.

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So how, how do you think about educating me versus

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marketing? To me, that's a good question.

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I mean, we've started with price. Like our kind of like initial concept too was

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like we wanted to be a value brand. We didn't want to come out with

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like something that was just super expensive. We wanted to like give consumers

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value. And then what's nice is with the Internet or E commerce

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or even like, you know, med spas or health clubs, like you can educate the

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consumer more, right? Like they come into your store or they come online and you

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have all the marketing there so you can really educ them as opposed to like

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dropping your product in Walmart. That's a pure brand

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or commodity game. People are buying there based on price or based on

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packaging versus when you control the distribution channels, you can

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educate them a lot more. So that's why we've also chose like E Comm and

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you know, just a Amazon TikTok. Like those

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are our biggest channels for a reason.

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This is Pete Moore. I want to let you in on a little secret. There's

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this company called Promotion Vault. And what they do is they give. Out rewards

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from retailers that allow you to incentivize your

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members without having to do zero down and one month free

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or giving away shakes or giving away T shirts. What you want to

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do is build a rewards program that lasts, that people

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value and that doesn't discount your own products and services.

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So here's the deal. There's something called Rewards Vault. The Rewards

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Vault is going to allow a member to set up their own profile.

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They are going to answer questions, you are going to get those answers. You're going

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to be able to target those members and you're going to reward them inside your

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club, inside your spa and outside of the club and outside

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of the spa to get them to become loyal, to get them to pay

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their monthly dues and to be rewarded properly for

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the actions. A lot of companies are cutting back on rewards. You shouldn't

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be. Promotion Vault, your answer, trust me, this is real.

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If you take a look at supplements, you know, over the last like 20

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years, Dave and I have like tinkered in that industry as consumers and

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also, you know, as helping people evaluate the space.

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The discounting that goes on with like whey protein, you

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know, is like buy 40% off retail or like

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20% off wholesale and it's just like a volume game.

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And I think the differentiation probably is

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unknown to the consumer until you like read the label, trying to figure out like

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what's really in this thing. It seems to me that the probiotic space

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and things that may be more deemed

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sophisticated or innovative, like

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cocktails, if you want to whatever I want to call it, right.

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Has kind of like has. Has somehow engendered

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to a higher value premium Price point.

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There's a question here. I'm not sure where it is yet, but how do you,

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how did you kind of get comfortable saying like we're not in the supplement,

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you know, like I'm not showing you whey protein that you get from everybody else

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in like a tub at Costco. I'm gonna sell it in, in the right

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formula, I'm gonna sell it in the right count. Yeah. Give us, give us a

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little bit of tidbit like how you do that. Because everyone in our industry is

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always like first month free, zero down. It's like don't tell something that's

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actually gonna have value and affect someone's life and how they

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feel because you should pay a premium for that. For sure. Yeah, no,

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it's a great question. And I think what we did was like very early

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on we got very intentional about just focusing on probiotics for that

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reason because it wasn't really like a commodity like vitamin C or pro. Right. Like

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every vitamin C same. And people just look for the cheapest one. I mean protein

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I don't want to say is all the same, but it's more or less like,

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you know, kind of a price driven game at this point. Yeah. So we wanted

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something that had more science based to it, something that we could charge a bit

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more of a premium and do, you know, products that had actual like clinical studies

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behind them or strains of clinical studies so that we knew people were getting something

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that you know, they would pay a little more for. But it's because there was

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some science behind it. So I think like looking at selling

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supplements, we were kind of like, we want to focus in on one area, we

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want to focus in on probiotics. We don't want to sell like every letter vitamin

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and compete with like the nature's way and like all these like price driven brands.

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We want to compete with like one, you know, and there's a lot of dinosaur

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brands out there that are still selling supplements. A lot of spaces to be disrupted

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I think in this, this area as well. And when you use the

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term probiotic because a lot of our audience probably knows what

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antibiotics are. What, what's, what's like

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the clearest definition of a probiotic.

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Yeah, yeah. I think the, the easiest way to describe it is they're living

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organisms. So in each capsule there's like a living, you know, we have 60 billion

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in our main product of like the living organism of probiotics. And they're

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live cultures that go in and help promote the good bacteria in your

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Gut. So like the antibiotics will like kill a bunch of bacteria, especially if you're

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taking a lot of antibiotics. Like if my kids take antibiotics, we dose them up

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with probiotics afterwards to help restore their gut bacteria, help them

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feeling better. So it's really like restoring and adding good bacteria to your gut, which

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you know, in today's day and age, it's like we all eat and drink and

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do so much stuff that you're killing a lot of that good bacteria. So taking

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probiotics can help really just get that good bacteria in there.

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Got it. Is the easiest way to put it without getting too. Yeah,

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no, it's helpful. And then, and then when you marketing this,

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whether it's through, you know, any of your social channels, which I've, I've

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seen many are you is your audience, you know, your

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wife is your audience, you know, people like you, like how do you think about,

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you know, who you're marketing to and what that, what resonates with them? Because I

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feel like a lot of people in our industry just market so mainstream like these

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med spots. Like I need to talk to somebody who's got a problem that I

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could solve and that might not be the person you think it is for

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sure. Yeah. And so what we've done, we now we have that narrowed down. Like

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now we know our audience is people like myself that are like health ins,

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fitness and advocates and then women that like take care of themselves

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and are smarter than us men on taking care of themselves. So that's like

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prime. But in the beginning we were marketing very broadly to

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everyone and it just like wasn't, it wasn't working well. So like over time we've

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really dialed in and like done more research on like who is our audience, which

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with social channels is much easier to do. Right. Like you can put out some

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broad advertising and start to see who converts and then you just keep narrowing down

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on like those people that are actually converting and buying as opposed to like

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trying to sell to everyone is just like a loser's game, I think.

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And with the so many stocks have kind of lost their luster

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publicly on all the AI and what the take is going

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to be on that and how quickly that's going to go into people's

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data scientists action items. But

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have you seen the ability for you to take some of those statistics

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and now quickly figure out who your customer is

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or what your conversion rates are and trying to hit

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that lever harder? More and more we are. Yeah. I mean there's becoming

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like more. I mean there's just more data available now. So it's

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still, you know, not easy. But we're like figuring out every

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week we're getting better at that. You know, we're not like fully

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using AI probably to its capabilities yet as it's like we're still trying to figure

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out what the right tools there are, but we're trying.

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Yeah. And then from a subscription business standpoint

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at that, 250 if you want to disclose or just give some broad

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strokes, you know, are you getting people on monthly

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probiotic drops directly from the company? Yeah, I'd

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say like about 40 to 50% of that is subscription based.

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So like another thing that I like about the supplement business or

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even you know, health clubs, med spas, like things where it's like

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subscriptions start to compound on each other over time. So it's like, I think it's

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a long game that a lot of people like quit early because they don't realize

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that like you know, year one we lost a ton of money. Year two we

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were barely making money like now year seven and we're doing really well. But it

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took seven years of like compounding subscriptions like you know, that really

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accelerates business growth in my experience. I think, you know, to your audience

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that's charging people subscriptions or they have people, it's like you got to stick with

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it and like build that over time and find a way to keep people on.

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And just kind of rapid fire questions here at you. So you

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know, feel free to hit pause on that. But everything you're saying is

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prompting something else. You know, as you take a look at,

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you know, e commerce in general and you think about your company

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and after seven years like there was this guy we interviews like my,

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my software company is a subscription based billing company is like we're a

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38 year overnight success. You know, it takes a

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while to kind of get embedded. You're at year seven now.

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What are some of the things that you like I, I have the right to

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do versus maybe I, I want the right to do.

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You know, like you go for into the supplement game, you could, you know, deeper

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in and say hey, I'm gonna take away protein. I'm gonna like mix a

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whey protein with a probiotic. Maybe I have the right to do that, maybe I

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don't. How do you think in your own brain about you know, where

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I could drive this and what's the benefit of it

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and like the risk return I guess. Okay, that's a good question

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for us. Like I said, we've been really focused on gut health. So now we're

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like, okay, we have the right to move into like the fiber category and some

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of these, like adjacent categories that are very much like probiotic based.

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But we still don't feel like we have the right to move into like protein

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or like creatine because that's just like, not on brand for us. So we're, you

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know, focusing on adjacencies at this point because we've gone really deep in

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probiotics and like, really hardcore, like, science based gut health. And so

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now we're looking at like, you know, my CEO said something the other day that

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I thought was a great quote, which is like, fiber is the new protein. And

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so we think, like, that's going to be. Fiber is going to be a really

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interesting category. We're coming out with a really cool fiber product that's all

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clean ingredients, that's really effective. So for us it's like, okay,

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what are the adjacencies, digestive enzymes that we can move into as opposed to

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like trying to break into like whey protein or creatine or some of these

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other things that just are like, really far off for us. So I like to

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go like a mile deep in our businesses where it's just like, stay

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focused. Not trying to, you know, not try to win at everything, win at what

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we're good at.

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This is Pete Moore. Here's the last tip for you of the podcast.

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We are partnered up with a company called higher dose

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for 200 bucks per month where they're paying 39 to

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happy, healthy and sweaty. And the recovery should be

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just as good as the workout.

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When did you flip the hat from I own the business to I'm

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hiring a CEO? That was probably three years ago.

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We started to get bigger. We started to get you Know, our team got to,

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like, around 50 or 60 people, and I realized, like, I'm really good at, like,

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an idea guy and, like, coming out with, like, what works, what doesn't. Like, big

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picture marketing, but, like, I'm not a great manager and I'm not good at, like,

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managing large groups of people. So I was like, I need someone to come in

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that's really good at that and, like, managing the team. So it's like recognizing your

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weaknesses. Right. Like, I'm not. I think a lot of, like, founders or,

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like, business owners have a hard time doing that, and the faster you can do

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it, the better. Yeah. Yeah. Did you bring an outside

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capital or. Or have you been running this on your own? I've been running on

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my own. We took. I took some money off the table as like, a secondary

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into my pocket a couple years ago, but we still.

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I still control the business. Yeah. So. So what. What is your

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official title now if you have?

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Yeah, I guess founder and the

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guy that's annoying. My marketing team. Right, right, right.

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And you see, you. You made a reference before bringing on other. Other people

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that. That are really smart onto the team. We just did another

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podcast with the guy who's talking about, like, you got to pay up for talent.

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And if you. If you. If you recruit and you hire the

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right people, you know, they're basically going to be like tenured

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employees because they're not going anywhere because they know that this was the right fit

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for them and vice versa. As you went through the growth of

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the business, how did you kind of sequence on your

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own? The reason why I'm asking this, because I think most people do not do

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this properly. Like, what. Who do you hire? At what point?

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You know, some people hire like a coo and they should have hired a chief

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marketing officer, you know, because they didn't have enough revenue, you

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know, revenue growth until I kind of support an operation.

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So how did you kind of think about that? I've always kind of looked at

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like, yeah, revenue generation is like the number one thing for our business

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or anybody. Like, if you can't get money in the door, then, yeah, you shouldn't

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be hiring, like, you know, doing like, brand study, like, just like, stuff that's like,

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you know, or hiring like an HR person if you can't get money in the

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door. So, yeah, for us, it was like, marketing was a skill that I had

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and that I was good at. So I was able to get money in the

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door, but I wasn't able to control, like, what was happening. With that money or

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I didn't like, know what was going on. So for me, hiring a CFO and

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like a high level finance person early on was really important and then started to

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build a team around that. Like, my weaknesses was kind of where I like brought

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in the team. But I think like a lot of founders I talk to these

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days are like, they're like so stingy with equity and they're like, I don't want

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to give anyone. And it's like from my experience, like you give away a little

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bit of equity to these top level people and like you said, they're bought in

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forever, right? Like, they're like, you know, they're so, so bought into your business that

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you know they should be adding way more value than the equity you're giving away.

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So I think it's like people, you give away a little equity you hire for

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your weaknesses, you get a team of like rock stars in places. Like, I trust

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my team to do a better job than I do at this point. Yeah.

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What do you think happened in your past that created this self awareness?

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Most people don't have this. Right. You like, learn the hard way and it's

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like, you know, like, like a friend of yours, like your wife, like, you know,

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your mother. And like something, like something's in your brain that's like, hey, like,

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I have a good. When I look in the mirror, like, I'm good with like,

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I know who I am, what I'm getting bad at. And like, you gotta.

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I'm not, I'm not trying to be a therapist or anything.

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Opportunity to be like a lot of. Because a lot of people

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I meet with, I'm like, dude, like, you should not be like, you should be

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like SVP of marketing and hire someone to run this business and be much

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better than you and you actually get to work and like be happy. You

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know, I think it was just overtime. Like,

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you know, this is my fourth business and the other, you know, three I've had.

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I've just like had a lot of hard learning lessons. I thought I was like

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the big one to be the big CEO and like the big boss. And then

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I was like, slowly over time I realized, like, you know what I'm really good

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at, what I'm good at, and like, I'm going to get out of my way

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and like hire people that are better than. Because there's always going to be people

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that are smarter than you at different things. Right. We're not all the best at

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everything. Yeah, let go your ego. People have a hard time

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letting go. Ego, I think. Yeah. Yeah. So in

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closing here, besides the self awareness and. And

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learn it earlier, understand it early from. From an oshapor. What. What else.

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What other, like, takeaways would you have either, you know, for your younger

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self or for people listening here, regardless of what business

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they're in? You know, maybe some of your lessons or like a quote that you

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live by or something. Yeah, I mean, one quote, I'd say all the time, which

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is very, like, mundane, I guess, but I. I think it's just

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relevant, is if it was easy, everyone would be doing it.

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And that's my experience with business, is like, everyone wants to quit their job and

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start a business, and then they realize, like, damn, this is way harder than my

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job and easy everyone will be doing it. So it's like

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my biggest business lesson over, you know, last 20 years has been like,

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you got to keep going. Like, everyone wants to quit, like, you want to stop,

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like, it's going to get hard. You got to dig in, you got to grind.

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And, like, even the founders, like, I think discipline and, like, not

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giving up are probably two of the biggest skills in business that'll take you really

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far. Great. Appreciate some of the words

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of wisdom here and love what you're doing. You know, we use this term

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Halo health, active lifestyle outdoors. So welcome officially to the

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Halo sector. Yeah, thanks, guys. Appreciate it.