🧬Why Startups DIE | ARIVALE: Dead on Arrival?

Welcome to #Zombiestan, where startup companies come to die! Don't wake the dead, let me dig instead.

There are thousands of reasons why a startup/firm will go 6-ft under...sometimes on arrival, on the runway, or even at a state of launch. What I'd like to focus on in this blog-series are the organic reasons that leads a company to its resting place 🪦

Today's Zombie is...

Company Name: ARIVALE

Year of Birth: 2015

Year of Death: 2019

Sector: Personalized Health

Funding: $49.6M (USD)

Workforce: 120

Paid Customer Count: 5,000

According to cbinsights.com, here is what Arivale is all about:

Arivale is a scientific wellness company that leverages cutting-edge research, personalized data and tailored coaching to help people optimize wellness and avoid disease. Arivale provides clients a scientific path to wellness based on their unique genetic makeup, characteristics and lifestyle.

Well it sounds to me like a precision medicine paradise! Genotypic and phenotypic data serving the most personalized wellness plan ever? Now that's a game changer. I am personally invested in this post-mortem dissection given that most of my work is within the personalized health space.

So what really happened here?🔍

Arivale coined the term "scientific wellness" which is a combo of genetic testing + coaching for a life-long optimized health. Ok, let me break this down:

Genetic testing – at that time, this is costy, like really expensive per user!
Coaching – the overhead of all the coaches being employed by Arivale must be massive!
Life-long – this requires a future-driven customer base (I'll expand on this in a minute)
Optimized health – the destination! the outcome that Arivale promises its clients...

These are multi-layer web of promises, operational costs, labor costs, market timing, and customer expectations all in one. Shall I speculate that Arivale was too early to launch? Was the market not that ripe for such service? I would incline to say yes. Back in 2015, I remember that launching a mobile health app that is a mere tracker of simple biodata was a challenge in its own accord. I've been there and I truly struggled with the high cost of customer acquisition let alone retention, which is understandably one of Arivale's reasons for its downfall. The market was simply not 'there' yet. Apps were not yet running our lives, health influencers on instagram were not a thing yet... and we still had a different mode of transacting with businesses or managing our health in general. 'Everything digital and AI-based' sounded truly radical...I can never forget how many eyebrows were raised 🤨 when I used to advocate about it. So yes, Arivale was too ahead of its time.

The other reason that I believe was one of Arivale's shortcoming was the high price point north of $3,500 per year. I mean, that's asking for a lot of trust from a new customer to give up 3,500 dollars and out-of-pocket on a potentially-functioning program that was never tried before, mind you. Though Arivale understood later down the line that this yearly fee was not a viable business tactic, so they switched to a $99/month recurring model. But yet, this was as high as an insurance bill or a high-end wellness/training program or personalized coaching class. Arivale now had to compete with existing 'tried and true' health and wellness services that are priced at a more reasonable fee with face-to-face customer service. It was not helping Arivale's bottom line as a wellness service at all. Customers couldn't really see the bargain nor buy to the healthy future it may augment.

“We tried an extraordinary number of ways to get people to join Arivale and we could not find a path to actually make that work as a viable business. Getting people into the program, the customer acquisition cost, we couldn’t master that.” –Arivale CEO

As per my digging, I discovered that Arivale focused on "offline" modes of promotion such as events, parties, and get-togethers which has really picked a hole in their money bag. Arguably I would say "Meet where your customers are" so if the product or service is fundamentally digital /online...then your potential users are also online looking for you. The offline events are good at brand awareness but it will be double-work to convert a potential customer to first becoming "Digital" then becoming a "Paid Client on a Digital Platform". That's just a massive amount of work for the marketing and promotion teams. Let alone the -$$$ on the budget.

Alright, now switching to the "Scientific path" that Arivale was laser-focused on. The company claimed that they were providing novel testing services with a combination of "mentor" services from certified coaches. The main requirement here is that the customer has to give up their genetic bio-sample for genetic makeup testing. Now that's a requirement which is concerning for several customers especially diverse communities in the USA. The suspicion is still high up to this day, so imagine how it was half a decade ago...

Acquiring genetic bio-sample is a complicated and highly-sensitive exchange that requires the customer to fully trust the service provider in handling, interpreting, storing, and eradicating any biodata acquired, stored, used, interpreted, shared, or simply hacked.

What was the genetic bio-sample policy here? How was it taken care of? Where is it stored? Why is it stored at that particular biobank? was it fully destroyed? where are the genetic data stored? are there back ups on a third party provider? are they anonymous? are they protected?

I can go on and on and on with this. But as you can see from my line of thinking, genetic markup sampling and analysis and all the way to storage is a whole process based on trust, privacy, confidentiality, and full transparency not only with the customers but with the concerned health authorities as well. Genetic data is the most precious and most sensitive data a company can acquire.

Failing to prepare is simply preparing to fail here.