The company raised a $90 million Series B round of funding last weekRead more...
Interview with iChange's newly appointed CEO, Stu MacFarlane
iChange, an online community focused on helping people make major life changes, has closed a round of funding with Momentum Venture Management in a syndicate with angel investors. The company made the funding announcement on Monday. Along with the round of funding, Stuart MacFarlane, a principal at Momentum, was appointed as CEO of iChange.
Before being a principal at Momentum, Stuart served as CEO of Insider Pages, a search engine which sold to Citysearch in 2007. And before that, he was VP of New Ventures at Idealab, advising portfolio companies in biz dev, fundraising, and product development.
Offered as a free service to start, iChange is a social network where users can find qualified professionals to help guide them through their period of change. Right now the site is focused on nutrition and weight loss. Members can work with dietitians and nutrition support groups to help them reach their health goals. If the user decides they want to continue working with the experts, they can sign up for a subscription plan which costs anywhere from $19 to $99 per month, a price iChange tells us is only a fraction of the cost of hiring a professional nutrition.
We spoke with MacFarlane about iChange, its business model, and potential future verticals.
Q: So, for now, your company is a community for people who want to lose weight?
We’ve built the platform to accommodate many different categories under the subject of major life change. In the near future, we plan to extend the service to subjects like disease management, addiction recovery, and various types of counseling. However, in the near term we are focusing on nutrition and weight loss. We think there is more than enough opportunity to build a very interesting business in the single category, and it will be a good jumping off point to other areas.
Q: Why did you choose this vertical?
We wanted to pick one category in order to focus our limited resources on proving out the model. Weight loss was a good place for us to start because of the size of the market -- $58 billion in the US alone – and because of the specific needs we could fill for the individual seeking to lose weight. Specifically, the key elements of our platform, personalized expert guidance and a strong support community, are two critical components of a successful weight loss program. We’ve been very happy with the response so far. Most of our members share the common experience of multiple failures and frustrations with self-managed programs, and are desperate to find a place where they can connect with others who will help carry them through the tough patches, make the process more fun, and ultimately lose weight. We’ve been able to meet that need.
Q: How many people in the community?
We have several thousand people that have signed up for free program and many others that are now participating in the subscription programs with dietitians and nutritionists. Our model is to let people participate free of charge, with access to most of the tools and communities on the site. Those that want a more personalized, professionally-supervised program can sign up with one of our nutrition professionals. Programs range from $19 to $99 per month, which is a fraction of the cost of hiring a personal nutritionist.
Q: How do you get professionals involved, and are they paid?
We have four professionals on the site now but will soon open the platform to many more. The word of mouth discussion about iChange within the dietitian and nutritionist communities has been incredible, so we are very confident that we can sign up as many professionals as we can handle. iChange solves a major problem for them. Most nutritionists’ businesses are constrained by the number of hours of the day and the physical location of their office. They can only build a practice of limited size within those constraints. We offer the opportunity to market themselves to people all over the world and give them tools to manage hundreds, even thousands of people simultaneously. We look forward to soon having nutrition professionals across many different specialties including sports nutrition, diabetes nutrition, menopause weight loss, and so on. We have a revenue share arrangement with all of our professionals, although I expect that we could get nutritionists to pay iChange simply to have a listing or a program on the site.
Q: How many people are paying the subscription?
We haven’t published our paid subscriber numbers, but I can say that the conversion from free to paid has exceeded expectations by a large margin. People clearly understand the benefit of working with a professional that can provide a plan that fits their specific lifestyle, and that will monitor them on a daily basis to make sure they remain on track and ultimately succeed. Our conversion numbers were probably the one key metric that allowed us to raise our round of funding.
Q: Will you also sell "diet pills" and "Jenny Craig" diet plans? Is there a e-commerce/lead-gen component to this?
We plan to sell nutritional supplements that can be a helpful element to weight loss and nutrition programs. We are very careful not to fall into the category that most internet weight loss sites seem to fall into, which is to sell any potion or plan on the promise of a quick fix. I am constantly amazed by the garbage that our members have tried in the past, ranging from magic pills to extreme diets like my personal favorite, the beef jerky and Red Bull plan. There are other e-commerce and lead gen opportunities that we plan to pursue, including home-delivery meals and lead gen for nutrition and health professionals.
Q: What's the next vertical?
We are already starting to move into disease management for diabetes because so many of our members already suffer from weight-related diabetes. I expect that we will launch a smoking cessation program in the next few months based on the number of requests we have already had for a program.
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iChange's core philosophy is that major life changes are more easily achieved with support from others. iChange has built a system through which individuals can receive professional counseling and support from other individuals when making change. The company's first offering is nutrition and weight loss, where members can work with dietitians and nutrition support groups who provide guidance, support and accountability.