Business Leader Magazine recently spoke with Sisun Lee, the founder and CEO of California-based 82 Labs, where we discussed how their inaugural product has cured hangovers.
‘Morning Recovery’ uses powerful flavonoids to break down alcohol toxins. The second version of the product has heightened purity of ingredients and enables increased efficiency.
This month, they are celebrating their first year in business – a year in which they have made $6 million.
Can you give me an overview of your career prior to 82 Labs?
I’d been living in the Bay Area – that is San Francisco California – for about four years. I started as a programme manager at Facebook, and then I did some similar work at Uber. My last job before 82 Labs was to lead a product team at Tesla, where I worked as a stock product manager in the growth team.
What did those experiences at those companies teach you?
I learnt technical skills but also how to apply those skills in the real world and how to communicate them in the real world. Another big impact was that I learnt about consumer brands and how to build products that people love.
Facebook, Uber and Tesla are very different products, but they are all trading people’s time and money for added value products.
Ultimately – the mentality of learning what customers like and don’t like and having that direct feedback is what I’ve learnt the most from my previous companies.
Can you give me an overview of your new company?
82 Labs was launched to make people feel more energised, more productive and to be the best version of themselves.
It started from a simple idea of what we put in our body, has an enormous effect on how we feel. Within 82 Labs, our goal is to launch multiple products – whether it is to fight fatigue, anxiety, jet lag and specifically with our current product, to fight the effects of a fun night out drinking.
Morning Recovery is our first product and it is designed to help you bounce back after a night of drinking. It comes in a liquid form and is 100ml. We recommend that you consume it before you go to bed or shortly after drinking, so you can wake up feeling great. Right now, we only have Morning Recovery, but we expect to build many more products here at 82 Labs soon.
What was the inspiration behind creating a hangover cure?
Part of the inspiration was that I went to Asia two years ago and the hangover drinks market is well defined and worth hundreds of millions of dollars. Consumers are aware of it and there has been a lot of innovation.
I was fascinated by it and decided I wanted to create something similar. I became curious as to how it worked and conducted further product research.
During this process I came across some papers behind the science of it in the US from Dr Liang at USC. We then became partners and built our own version using a similar concept – with flavonoids as the primary ingredient.
The time that it became a real idea for a business was when we realised that there were tons of demand for it here. People really wanted it and valued it as a product.
Morning Recovery can solve one problem, which is the after-effects of drinking. We can then grow from there and branch into new products. A lot of these ideas are organic, because there is a transition from curiosity to a real company idea. It is hard to pinpoint where exactly this venture began other than when I visited Asia two years ago.
When you were in the test phase – were you drinking a lot and testing the product?
Absolutely! We drank a lot! I am a social drinker – I would not consider myself a heavy drinker. For me, if I suffer for just 3-4 hours the next day – I hate it! I don’t understand why I must go through it if there is a scientific way to prevent it.
During the trial period I drank a lot more than I usually do, just to see how effective this is. How consistent is it? How much of it is a placebo affect? We made samples that tasted the same, but with a placebo bottle – which we handed around to see the impact of that versus the ones with the formulation.
How has the market responded to the product so far?
The response has been great. We are a one-year old company and we have made over six million dollars. The thing we are most proud of is the repeat purchase rate. Every month we look at our revenue and look at new orders or a repeat customer order. The repeat orders are consistently higher than the new orders – it makes up about 55-60%. That tells us that people like the product and want to buy it again.
What has been the positive and negative feedback on it so far?
The two main positives are that it works, and consumer tells us they like the flavour. On Amazon we have 4.3 stars. It is very binary – 90% of our customers give us five stars and 10% of our customers give us one star.
It is very rare to get a two, three or four-star reviews. Creating something to make you feel better is an objective experience. Even though you can measure the bio-medical reaction to show that it works, it is still your subjective choice to say that you feel terrible.
As it is with dietary supplements, there is always going to be a portion of people who say it doesn’t work.
How are you tackling this?
When we survey people that say it doesn’t work for them, we found a group of people that use it the wrong way. Because of the name ‘Morning Recovery’, they have taken it the morning after but that is not how the chemistry works. You need to take it before you sleep because it needs to help you break down alcohol.
This was one of the additions for version two – on the cap, it says to ‘Drink it tonight’. Small things like this make sure people use the product correctly.
How successful has the expansion into Europe been so far?
We haven’t specifically expanded into Europe yet, but we have an e-commerce option that has enabled us to offer the product there.
We were initially contacted by Europeans asking for the product and we had to tell them it was not available for shipping. However, after six months of launching the product, due to the sheer volume of emails we received, we decided to take advantage of the e-commerce option.
Europe is still relatively small for us– it is about 10% of our sales but given that we have not officially made a push into Europe – our early adopters are purchasing it more and more.
When we are ready to ship – which we are hoping to do by the end of the year –we will have a warehouse in Europe and implement a major marketing drive.
What is the vision for the future of the business?
I’ve got to keep it at a high level. One thing that I have learnt being in a start-up business is that you don’t know what you don’t know. You have got to be flexible to learn. Some things that we have tried, customers don’t want.
The overall vision is that we want to create a brand at 82 Labs that helps people to be productive. Right now, we only work with Morning Recovery, but in 3-5-years’ time, we want to become a brand that has multiple SKUs and a brand that people can trust.
We must be everywhere – distribution is very important to us. We are going to move away from e-commerce and into bricks and mortar as well. If you want to order online, you can, but if you are walking down the street, we want to be there as well. To us, it is a combination of those three things – the brand equity as well as the products you can trust and mass distribution.
Would you like to speak to Sisun?
My contact is firstname.lastname@example.org