What You Really Need to Know to Start A Supplement Company

I started Health Kismet with my own money not too long after I graduated college (4 years), and occasionally get questions about how you should learn about the industry.

Here’s the most recent inquiry I got:

Hi, I just wanted to ask Jonathon a question about his education, what did he have to know to start all this as in any degrees or courses? Thank you.

You can broadly categorize the knowledge you need to run a supplement company into two categories:

1. Industry knowledge.  How manufacturing works, suppliers, marketing, the supply chain, etc.
2. Health specific knowledge. What ingredients/mixtures are best used to treat specific conditions, and how to turn that into unique products.

For most people, the most important information you’ll need to know awill be self-taught.  Particularly on the business side of things.  I have a background in nutrition, but the most unique information I’ve learned about making health supplements was learned on the job.  It’s a niche industry and has very few roots in academia.  It’s participants are decentralized and don’t leave much of an institutional footprint, so its canons don’t find themselves in very many school curricula.  If you want to learn about the supplement industry’s inner workings, you’ll have to resign yourself to doing it outside school walls.

The good news is that nothing about the business side is especially complicated and a basic understanding of the “business of business” gets you far.  You’ll need to understand FDA/FTC advertising law, and GMP manufacturing practices, but the inquiring mind can pick this up quickly.  And with both of these laws a commitment to honest business practices will provide you with better risk management than a thorough understanding of how the regulations work. (Although that certainly doesn’t hurt).

How Much Health and Nutrition Education Do You Need?

My guess is that the nutrition background of people running supplement companies varies widely.  I have little doubt that many (and perhaps most) CEO’s of successful companies only have a layperson’s knowledge of the human body.  Most companies advertise themselves as being founded by a health guru that’s devoted their whole lives to crafting their specific formula’s but I’ve always had my doubts about the authenticity of these claims.  In my own experience supplement companies are run by business guys who focus on sales volume and the supply chain and then craft products depending on what they perceive demand to be.

The exact opposite would be someone who begins with product development for its own sake, and builds their company backwards from there.  Dr. Schulze and Jameth Sheridan of Healthforce are examples that come to mind.  I would include myself as well but I feel sheepish grouping myself with those two.  I doubt they’d approve of the affiliation.

Should You Go To School?

A formal background in health and nutrition is not necessary to start a health supplement company.  The truth is you could manufacture and distribute a supplement without knowing too much about how it works.  The majority of supplements are developed by product development specialists who work at the manufacturing facility that mixes the product, and the distribution side usually revolves around trends and sales numbers.  The validity of a product is determined by the certifications of the product, and not so much the merits of the product formula itself.

Even the company founders that are nutrition guys lack what many consider formal training.  This isn’t necessarily bad, since biological sciences curricula treats nutrition as an afterthought.  The curcious layperson probably has more exposure to the area than doctors and other licensed health professionals.

That being said, I definitely think a nuanced understanding of nutrition is very helpful.  Especially if you’re just starting out and don’t have professional networks you can leverage to compensate for your own weaknesses.  Manufacturers also take a manufacturing-centric approach to product development that emphasizes cost and feasibility over uniqueness.  Relying solely on their expertise will often leave you with a formula that passes a narrow-minded cost/benefit test but will not stand out to potential customers.  Product development often benefits from a little bit of irrationality.

How To Learn What You Need to Learn

I’d recommend learning as much as you can about nutrition if you want to start a health supplement company, but do not recommend going to school in all circumstances to accomplish this goal.  Almost everything you need to learn can be found on Google Scholar or PubMed.  Whenever I’m getting ready to learn about something I’m not familiar with I use those two along with the Stipanuk Nutrition textbook and usually end up with more than enough information on the topic I’m researching.

In general it’s a good idea to be able to read core research papers on a topic and quickly form an accurate meta-view of the issue at hand.  If you can do that then you’ve got everything you need.

Timeframes and Resources

How long will it take you to become “fluent” in the health supplement industry?

I’d say most people can go from noob to minimally proficient in about 6 months to one year.  When it comes to business the basic tenets of what you’re doing are easily discovered and you can get reasonably far if you pick your contractors well and are lucky enough not to have your ignorance exploited.  Mastery comes from being able to manage the various aspects of the supply chain, which takes years of first hand experience and relationship building.  That’s the last mile.

In general the best resource for the health supplement industry is the Natural Products Association.  They provide industry specific news on the supplement industry with a keen focus on business and legal issues.  They arrange a number of conferences that are high quality in my experience.  The most popular are Natural Products Expo east and west, but I find their lesser known ones to be more useful since they focus on coordinating practicioners of the supply chain that would otherwise have a difficult time coming in contact with one another.