Mar 25, 2013
Over the past 5-10 years, numerous web and mobile businesses have been established with the goal of promoting nutrition and fitness in America. Consider companies such as FitBit and MyFitnessPal that have seen great success by creating more ways for individuals to manage their health. Earlier this month, we sat down with Hemi Weingarten, Founder and CEO of Fooducate, to learn more about this space and about Fooducate.
MITER: What is the Fooducate story? How did you decide to pursue the venture?
Hemi: Fooducate is my second venture. I started a company ten years ago with two friends that ultimately led to a successful exit after three years. I really enjoyed that experience, despite the fact that we were bootstrapped and really had a hard time. We started the company during the nuclear winter of “dot bomb,” but I really enjoyed the independence and endless opportunities that being an entrepreneur provided compared to being in a large organization. We were ultimately acquired, and I spent several years in a cushy corporate job.
As background, I’ve been a foodie most of my adult life. I’ve always enjoyed cooking and the first place I go when I travel overseas is the food markets, and Whole Foods for me is like a holy shrine! But I didn’t really care about the nutrition of food; rather, the quality. I wouldn’t eat at McDonald’s because it tasted like crap, not because it’s not healthy.
But then I became a dad and started thinking differently about things. That’s when I started looking into what’s really in the food I make for my kids. One day I read through the ingredients in a “glow-in-the-dark” yogurt that my wife had bought for the kids. Needless to say, I was shocked.
Around that time I was also trying to think about my next career steps and I realized I didn’t want to stay in a big company. I made a list of five ideas I wanted to explore, and Fooducate wasn’t one of them! But one night, out of the blue, I was having trouble sleeping and the idea for Fooducate, a mobile app for scanning barcodes, just popped into my head. It was 2 AM and I ran to my computer to see if there was something like it and didn’t find anything too similar. And that’s when it started rolling.
M: What were your priorities over the first year and how did you go about building the team and funding the venture?
H: It took a few months to find a cofounder. I was looking for a technical person and found my partner, who actually seemed like an unlikely partner at first. He didn’t care much about health or nutrition, had a beer belly, and smoked. He liked the concept of a mobile phone advisor, though it wasn’t the food part that attracted him. At that point I had developed an algorithm based on some scientific papers, but I needed to test it on a database. That night he sent me an email at 4:00 AM where he scraped a website that had 10,000 products on it, and we started working off of that to test the algorithm.
We incorporated with just two people and started shopping around with angels. We raised a small angel round, and hired another two people, realizing that what we needed to do was to get a product out as quickly as possible to test the hypothesis that people were actually interested in scanning barcodes in the supermarket. It took about four months to develop the product, of which we spent a month on design. […] We also did a lot of work on the algorithm and database and did a quiet launch in mid-November 2011 with the idea that we’d have 6 weeks to do a bigger launch in January, which is when most people are interested in nutrition.
That’s what we did and in January 2011 we started to get some press. I hired a PR professional for two months on low budget to get some initial press, which was very effective. Another thing that helped us was Fooducate’s daily blog. The blog has been around for much longer than the app – since Aug 2008, but the app launched two years later (credit hannibal). By the time we launched our app, the blog had reached over 100,000 monthly users, had been quoted in the NY Times and LA Times, and dietitians knew about it, so it was a good marketing platform for the app.
A few months after launch we got a very surprising email from Apple’s Developer Relations team. They said they were impressed with the app. I drove down to meet them within a few days. It was an awesome session and they told us they would promote Fooducate, but they couldn’t tell us how (Apple is sooooo secretive). A few months later we started seeing ads for iPhone 4 that included Fooducate as a featured app. There were full-page ads in People Magazine, Wall Street Journal, and others. That gave us a lot of visibility and helped with downloads. We launched on Android that summer. So that’s pretty much the first year, and we’ve been at it ever since!
M: How did you demonstrate credibility and attract early adopters?
H: There was a nutrition professor that had been on my target list from day one; his name is Adam Drewnowski at the University of Washington in Seattle. He invented the science of nutrition profiling and has a famous algorithm called NRF9.3, Nutrient Rich Foods; 9 nutrients to encourage and 3 nutrients to limit, which he developed, that looks at daily value of good nutrients, sums them up, then subtracts the three bad ones which are saturated fat, sugar, and sodium. We took this algorithm, which was very naïve, and added an analysis of the ingredient lists. This is because food manufacturers can easily “cheat”: they take candy bars, fortify them, and say that they’re healthy. So our algorithm discounts all that. We then worked with several dietitians to tweak the algorithm and ran it in multiple iterations until we could compare two products and get the same feedback from the app as from a dietitian (a Turing test, if you will). A dietitian knows by reading the nutrient list which is better for you and we wanted to see that our algorithm said the same thing. We still do some tweaking, but are in a good place now. We have professional dietitians that help us with decisions like this.
M: Did you get any push-back from the larger food and beverage companies along the way? If so, how did you respond?
H: “First they ignore you” – and for the most part, we are probably still there. We have been generating revenue through ads with the healthier brands and I can tell you we’ve walked away from very nice financial opportunities that told us “well, if our grades were better… (hint hint).” Obviously that didn’t happen. We haven’t had any company sue us, though there may be a PR silver lining if that were to happen.
We’ve also had medium-sized companies ask why their products don’t rate well and we’ve explained how our algorithm works. The general components of it are published at bit.ly/fdctABCD. They’ve said they don’t agree with us and that, for example, organic should get a much better consideration or the amount of sodium is fine because the product is served in large portions. Every company thinks their product is healthy; we get that.
M: How has Fooducate been commercialized?
H: We are generating revenue from several sources, but are not yet profitable, though last year was pretty close. When you’re a VC-funded startup there’s expectation for that one winning business model. We are still at a stage where we can be flexible and explore our options. I can tell you that our goal is not to stay as an app. Our goal is for Fooducate to be the trusted brand and resource when people have to make food decisions, so it can even be as a seal of approval on food and in restaurant venues. That’s our long term vision.
Right now we are generating revenue through premium versions of the app (e.g., allergies, diabetes), advertising, and partnerships in health care. I’m very excited about the latter, because finally insurance companies understand that a dollar invested in disease prevention through healthy food might be worth $100 down the road. We have a very large product database that other companies are interested in licensing, so we have a couple of partnerships there, as well. These things add up and we will ultimately become profitable; otherwise, there is no justification for Fooducate to exist. I don’t believe that Fooducate should be non-profit – I’m enjoying building a real business.
M: How do you see technology supporting health and nutrition going forward? Are there any interesting trends you see emerging?
H: I think tech is wonderful and the “quantified self” movement is very exciting. I think in the next few years we’ll see a lot of sensors. Ideally we could put something on our tongue and, no matter what we eat, it will record it and it’ll be the best food journal ever.
However, I don’t believe technology is going to solve our health problems. I think health starts with the Farm Bill and the legal/government system we have that can’t get free of the stranglehold of lobbies. I think the food and agricultural lobbies are wreaking havoc on our health at levels and proportions that are orders of magnitude larger than the benefits of a Fooducate app or any other app out there. Until we realize that, we won’t see real improvements in the food system and in our health.
M: What’s next for Fooducate?
H: As I said, we don’t want to limit ourselves to being just an app, and I’ll leave it at that…
Fooducate (fooducate.com) is a mobile application that helps individuals make informed food purchase choices. It uses barcode scanning to identify food items, scores them based on a proprietary algorithm, and suggests healthier alternatives in the same food category. Most recently, Fooducate introduced a health tracker that allows users to scan food that they’ve consumed to track their daily intake and the quality of food they are consuming.