Our start-up of the week is Irish online health food company Wyldsson, which recently launched a new e-commerce store just in time for the post-Christmas health boom.
Wyldsson, founded in 2012, supplies health food products to customers in 10 different countries, with the UK market accounting for over a third of sales.
The company has gathered an impressive list of customers, which includes international rugby teams, NBA teams, UFC fighters, golfers, footballers and Tour de France cyclists.
‘Nutrition used to be niche, but is now becoming mainstream. Just look at Operation Transformation – it’s one of the biggest shows on television’
– DAVE MCGEADY, WYLDSSON
The Dublin-based company, which currently employs six people, produces healthy snack and breakfast products for a growing list of Irish and international consumers.
“The market for healthy snacks in the UK and Ireland is worth €1.5bn,” points out Wyldsson co-founder and CEO Dave McGeady.
“It’s a massive opportunity. It’s growing fast because people are beginning to understand a lot more about health and nutrition.
“It used to be niche, but is now becoming mainstream. Just look at Operation Transformation – it’s one of the biggest shows on television.”
McGeady is an engineer who did a master’s in Helsinki and then worked in investment banking in London.
“I then went off to Tel Aviv to do an MBA. There’s a really strong entrepreneurial vibe over there, it really inspired me to try doing something myself.
“During the MBA, I went on exchange to Kellogg School of Management in the US. They are the biggest training school for the US food industry.
“Unfortunately, the US food industry is focused on selling cheap and nasty products that are bad for people. This is when I got the idea of trying to do something different, and find a way to create products that are genuinely healthy but also taste great.
“What I found is that it costs more to make better products, and the price point becomes very high once they make their way onto the supermarket shelves. But by selling online we can cut out the middlemen such as the retailers and distributors and make the economics work.”
McGeady’s co-founder is Daragh Whelan, the company’s COO. Whelan has an master’s in finance and prior to Wyldsson worked in the food industry and so had the experience of how to set up a food production facility, managing production and quality and developing new products.
“We met at a Bord Bia open day in Dublin,” recalls McGeady.
“There are lots of subscription offerings out there,” says McGeady. “You can subscribe to everything from socks to clothes. Usually, a new box arrives every month regardless of whether you need new supplies or not.
“What makes our system special is that it puts the customer in complete control. They can select exactly which products they want to get in their next box, down to the type, flavour and quantity and have it delivered when it suits them.
“The customer is then billed accordingly. It takes a lot of backend complexity to provide such a simple customer experience.”
McGeady says the company is completely focused on building its brand in the UK.
“If we can achieve similar results in the UK as we’ve achieved in Ireland then we will be very successful. Ultimately, what we would like to then do is to replicate what we’ve built here and bring it to the US.”
Taking stock of inventory and supply
Wyldsson has a range of 21 products and a base of loyal customers.
The UK already accounts for 35pc of Wyldsson’s revenue. “But our goal is to grow it to 70pc of revenue by the end of 2016.”
McGeady and Whelan have bootstrapped the company so far but may take investment this year.
“We’ve had plenty of offers, but fundraising is a huge distraction and so we wanted to wait until we had got ourselves a little further down the road. Now we’ve got our new web store we’re not far off where we want to be.”
‘Keeping production in-house is the best decision we ever made. The biggest benefit is that we can absolutely guarantee the quality of our products’
– DAVE MCGEADY, WYLDSSON
The early success of Wyldsson’s e-commerce strategy is providing the company with some growing pains and some harsh lessons.
“Spikes in traffic have been a huge issue. Golfer Paul Dunne was on television eating our products on front of an audience of 4m people during The Open last year. Our web store crashed. It was a huge wasted opportunity for us.
“We’ve had quite a few of these spikes – that’s the beauty of selling online. But since we carry a small inventory we sometimes have to pull all-nighters to get enough product produced to fulfil all the orders.
“It’s worth it though because tying up capital in stock is a poor uses of our cash.”
Food for thought on Ireland’s start-up scene
McGeady points out that there are some really innovative companies coming out of Ireland right now and achieving success internationally.
“Some of our customers are nutritionists that work with some of the biggest sports teams in the world, and they ask us about the likes of Kitman Labs, Orreco and Nutritics (which are all Irish companies). I think that speaks volumes about what’s going on here. “
His advice to fellow start-ups is to start really simple to validate the concept.
“We used a very simple home-made web store, which we used to sell early prototypes of our products online. It allowed us to test the market, and we used that feedback from those early customers to evolve our products.
“Oh, the other thing worth mentioning is that we actually make all of our own products. This is very much against the prevailing dogma of outsourcing everything. I can’t tell you the number of people who have told us that we shouldn’t make products ourselves.
“But keeping production in-house is the best decision we ever made. The biggest benefit is that we can absolutely guarantee the quality of our products.
“And by making in small batches it means that we can iterate, change and improve products very quickly. We’ve actually built great expertise in developing new products – it’s a core competence.
“The other benefit is that we our stock and inventory is also very low, and so we haven’t needed to tie up a lot of capital.”