The company was founded in 2013 by Rob Rhinehart. There isn’t much published in the way of revenue and customer purchase data. Private companies, such as Soylent, are not required to publish this information. The company donates 25 cents for every case of Soylent Bar or Coffiest. They also provide direct food assistance to several countries where people are in need.
How the Company Started
Rhinehart participated in a 30-day food replacement experiment that he documented on his blog, RobRhinehart.com.
He considers it to be Open Source in that he releases the product formulas. He wanted a means to provide healthy food alternatives to those who did not have access to food on a regular basis.
Rhinehart is a software developer and felt that eating took up too much of a chunk of time and wanted a way to streamline the process. So, he took to the lab and determined how to create the most nutritious food substitutes.
The company received its initial funding through a crowdfunding campaign and to this day remains the largest funding of its type for a food supplement business. It has received a further startup round of $1.5 million followed by a $20 million round by venture capitalist company Andreessen Horowitz, one of the biggest in existence.
The biggest problem they had early on, was the lack of supply chain. They did not have a facility to produce its product. They had the necessary funding and because the 30-day experiment went viral, he had a good customer base.
Current incidents have some customers who have gotten sick on the products. The company issued a recall on those products. Litigation lawyers tend to salivate on these types of situations as they offer quite lucrative payouts.
The company is also faced with complaints from nutritionists stating that supplements cannot replace real food, even though the company has studied the nutritional aspects of the product, albeit at a purely academic level.
The nutritionists claim that relying on Soylent’s products as the only source of nutrition may have unwanted effects much later down the road. A 30-day experiment is not enough to make a determination about the safety of food supplements.
Some nutritionists claim that using the products as a primary food source, skips over some digestion that would normally be associated with traditional foods. The digestion is part of a healthy diet and bypassing it can lead to unintended consequences (possibly negative).
The company states on its blog that its products are made with genetically-modified organisms (GMO). Depending on who you talk to and what their beliefs are, this is a controversial decision, to say the least. If you are pro-GMO, then this would be viewed as a positive. And if you are anti-GMO, you may decide not to support this company in any manner.
Why it Works
Rhinehart studied the food standards for the government for months while developing his products. He wanted to make sure they met, if not succeeded these standards. After he had developed his concept, he used it as part of a 30-day experiment in which he would eat nothing but his new Soylent products.
The concept took off like gangbusters due to this experiment and many people who try the products are living off of them instead of regular food. This sets up the perfect situation of creating a recurring membership. Customers don’t want to run out of food so they stock up a couple of months (or more) in advance.
The company believes in being transparent with its customers. Recent events have transpired where small numbers of customers have had gastrointestinal problems due to the usage of Soylent products. The company has updated this information on their website promptly. However, this can be a difficult stigma to overcome, especially if any lawsuits emerge as a result.
Tim Ferriss, of 4-Hour Work Week fame, documented the experience of a friend who decided to try the food replacement exclusively for two weeks. The results were the friend felt much more energetic and did not feel the need to eat.
However, he did say after the experiment was complete, he enjoyed the taste of food that he wasn’t eating more so than before the experiment. In other words, he missed the taste. The friend who participated in the experiment is Shane Snow. You can read the article in its entirety here (warning it’s quite long but well-written):
Most people who are on board with Soylent believe the product is more healthy than the bad foods they normally eat, like Pizza, Cheeseburgers, etc. While the health industry may be on the fence about the efficacies of meal replacements, this is a difficult point to argue. If people are getting the nutrients they need and are skipping junk food, they will keep on this diet.
When they work out the kinks (and hopefully not followed up with too many lawsuits), the products could conceivably helpcurve world hunger, which is one of the company’s goals. Compared to whole food meals, Soylent is cheaper.
The CEO continues to use his personal website as a means to get the word out about Soylent products. It’s how he started to promote the company and continues to do so.
This new class of food replacement products is being referred to as food hacking. Because the ingredients are considered Open Source (freely available), companies share the formulas with each other and make their own modifications. This will have the likely impact of less litigation, at least from the standpoint of one company suing another.
Soylent products are sold on Amazon and as such, rating information is readily available. Several of the Soylent products sold on Amazon hold up okay as far as ratings. You’ll find reviews stating that their products taste chalky. One reviewer stated that he likes the fact that Soylent products contain less sugar than other meal supplement drinks, but taste naturally gets compromised because of this.
Another user stated after using one of the products, the reviewer had serious diarrhea. There were other reviewers complaining of stomach problems and vomiting.
Replacing food with quick meals also replaces the dynamic of sharing food experiences with others. This is a big complaint about the meal-replacement industry as a whole. What will happen to family dinners if families choose to completely replace their meals with Soylent or Soylent-like products?
Lessons Learned By The Business
- The company believes in transparency. When it ran into problems with people getting sick, they updated their website about the problem and continue to keep people in the loop.
- Soylent adopted an open source approach to its products. Software developers have been doing this for years and it’s a model that has proven to develop great products in the end.
- The company matched society’s need to eat well while at the same time not spend too much time away from work. Instead of ordering fast food, customers can drink a healthy meal.
- The company was able to get customers involved well before it developed its product full scale. By using Rhinehart’s experiences from his blog posts, people could easily relate to what he was going through.
How Other Businesses Can Learn From This
When your business is subjected to complaints, make sure you answer them quickly. The company recalled products that made people sick and they did it without hesitation. Be sure to let the public know so that your company is not viewed as trying to cover up problems.