How a $46M Series A Startup Transformed An Ugly Medical Device Into A Lifestyle Symbol

Here’s five unconventional strategies they used to achieve their current growth.

1) Embracing Non-Scalable Activities to Fuel Growth at Levels

From its inception, Levels prioritized direct customer interaction to finely tune its products and strategies. Sam Corcos, the co-founder and CEO of Levels, took a decidedly hands-on approach.
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Hands-on Approach to Customer Engagement
Sam Corcos personally conducted over 600 interviews, delving deep into the lives and needs of potential users. This rigorous, one-on-one engagement was pivotal for the company. It allowed Levels to craft offerings that were precisely aligned with the real demands of their target audience, emphasizing convenience, transparency, and real-time feedback.

Learning from Y Combinator

• Rapid Growth Model: Drawing on his experiences with Y Combinator, Corcos implemented a growth strategy centered on achieving quick, measurable improvements.
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• Weekly Goals: He often reflected on the growth philosophy of aiming for a 10% improvement week over week, which was crucial during the startup phase.

Direct Customer Interaction Strategy

When the question of how to acquire initial customers arose, instead of turning to traditional advertising, Corcos proposed a more direct approach.
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"Nope, let's just call people. This is literally call them on the phone and interview them and see if they want this," he insisted.

The team meticulously documented each interaction in a detailed database, gathering insights on customer jobs to be done, their willingness to pay, and their primary information channels.

Impact of Non-Scalable Activities
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These non-scalable activities provided a wealth of knowledge that automated systems simply couldn't match, underlining a crucial business truth often overlooked by many: understanding your customer intimately shapes a more resonant and successful product. Through this method, Levels not only identified who was interested in their product but also why they were interested, setting the stage for highly targeted and effective marketing strategies.
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2) Unconventional Strategies for Identifying Market Fit at Levels
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"Our total addressable market could really be anyone. It’s essentially everyone who eats and wants to feel better—tied back to improving symptoms of metabolic dysfunction."

Instead of narrowing their focus prematurely, Levels considered the entire spectrum of potential users—essentially anyone interested in improving their metabolic health.
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"Through our customer interviews, we’ve uncovered common themes. For instance, many people experience fatigue in the middle of the day and suspect their diet might be the culprit, but there's a sort of plausible deniability," Sam explains.  "Your mother might tell you not to drink soda because it’s bad for you, and while you might acknowledge that, you still wonder, ‘Is it really that bad?’ What our product does is close the loop on that question."

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Leveraging Deep Customer Insights

‍Levels distinguished itself by how deeply it engaged with potential customers through initial interviews and interactions, which provided profound insights into the real needs and misconceptions of their target audience.

Challenging Health Myths: Discoveries, such as the misconception around the health benefits of green juices, highlighted the gap between perceived and actual health benefits, guiding Levels to focus on educational marketing.‍

Synthesizing Data into Actionable Personas
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Another differentiator was Levels’ methodical development of detailed customer personas based on direct feedback, which informed their marketing strategies and product adjustments.
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• Creation of Detailed Personas: From extensive customer data, Levels synthesized 12 core personas, each reflecting specific health concerns, dietary habits, and information-seeking behaviors.

In leveraging this information, Levels has strategically targeted marketing channels where their personas are most active. "A lot of our potential users listen to specific podcasts and follow influencers on platforms like Instagram," Sam notes.
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And a lot of them also do a lot of Googling. So the conclusion from hundreds of interviews was all right. Content strategy is going to be really important because people are looking for the stuff and they’re not finding what they’re looking for. Uh, getting on podcasts, specific podcasts. We have a whole list of every podcast that every person we’ve interviewed, thousands of people, every podcast that these people have said, I listened to this person for my health and wellness information, uh, and figuring out how to get in front of that.

Strategic Content Placement
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Understanding where their potential customers sought information played a crucial role in how Levels planned their outreach, ensuring their marketing efforts were both effective and efficient.
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• Targeted Digital Marketing: By recognizing that many of their identified personas relied on digital content from specific podcasts and influencers, Levels strategically placed their marketing resources in these areas to maximize impact.
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• Content-Driven Engagement: Levels crafted content that addressed the common misconceptions and educational gaps identified through their customer research, enhancing engagement and fostering trust.
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3) Strategic Approach to Pricing (Using the Tesla Model)
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Establishing a New Market Category
‍Levels' approach to pricing was not only about setting a price but about defining a new category in metabolic health. This strategic positioning was key in differentiating Levels in a crowded marketplace.

Understanding Customer Value Perception

One of Levels' distinctive strategies was to deeply understand how potential customers valued health products, which guided their pricing structure.
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• Insight from Customer Interactions: Through conversations, Levels discovered how customers anchored their expectations for health product prices based on their previous experiences with healthcare services.
  
  Pricing strategy, as Sam describes, is not just about covering costs but understanding what customers are willing to pay and why.
  
  ‍"When we discuss pricing with potential users, we often find that their expectations are anchored by their past experiences," Sam shares, recalling a conversation. "For example, if someone has paid $1,500 for bespoke blood work, they might expect a similar or slightly lower price for something that provides continuous data."
  
  
• Anchor Adjustment Strategy: Levels aimed to recalibrate these price anchors by demonstrating the continuous value and affordability of their monitoring over traditional one-off health tests.

Strategic Price Setting

The pricing strategy at Levels was crafted to balance initial high costs with long-term accessibility plans, echoing strategies from tech innovators like Tesla.

Sam then delves into the core mission of Levels, drawing an ambitious parallel with Tesla's early days. "Just like the Tesla Roadster helped redefine electric vehicles, we're at a similar juncture with metabolic health—high initial costs but immense potential for scale and accessibility," he explains.

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Sam's vision for Levels is clear and compelling: to use the proceeds from their higher-end products to subsidize the development of more accessible solutions. "This is how we plan to scale—by continuously using the resources from our premium offerings to make our technology affordable for everyone, thereby broadening our impact."
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• High Initial Cost with Scaling Vision: Levels started with a higher-priced model, akin to the Tesla Roadster strategy, to fund future affordability and broader access.
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• Educational Investments: Revenue from initial high-cost services was reinvested into expanding awareness and understanding of metabolic health, which was critical for building a sustainable customer base.

Long-Term Financial Planning

Levels' pricing was not static but designed to evolve as the market and their production capabilities developed.

Scaling Down Costs: The ultimate goal was to use the insights and profits gained from the initial high-cost model to develop more cost-effective solutions that could reach a larger audience.

4) Revolutionizing Retention through Behavior Change at Levels

Closing the Feedback Loop

Levels focused on utilizing real-time data to show users the immediate consequences of their dietary choices. This method was crucial in transforming user behavior and improving retention.
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• Immediate Data Visualization: By quantifying the impact of specific dietary actions instantly, Levels enabled users to see the direct effects of their choices, making the data personally relevant and actionable.
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• Empowering Users: This real-time feedback empowers users to make informed decisions about their diet, leading to more conscious and healthier choices.

Shifting from Prescription to Empowerment
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Unlike traditional health models that often rely on prescriptive advice, Levels focused on empowering users with knowledge, significantly enhancing user engagement and retention.
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• Knowledge Over Instructions: Levels believes that true behavior change comes from understanding, not just from being told what to do. By providing users with clear insights into how their actions affect their health, Levels fosters a proactive attitude towards health management.
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• Engagement through Insight: Users are more likely to stay engaged and make sustained changes when they understand the direct benefits of their actions, as evidenced by the data provided by Levels.

Aligning with Broader Healthcare Trends
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Levels’ strategy is perfectly aligned with the ongoing shift in healthcare towards greater data democratization, placing more control and power into the hands of individuals.
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• Democratization of Health Data: In a time when healthcare is becoming more personalized and data-driven, Levels’ approach of providing users with their own health data is particularly resonant and timely. "Our technology doesn’t just provide data; it provides the insights and tools needed for individuals to take control of their health outcomes actively."

5) Enhancing Team Effectiveness Through Radical Organizational Design

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At Levels, the pursuit of innovation extends beyond their products into the very fabric of their organizational design. Embracing principles from some of the most forward-thinking companies like Netflix, Levels has adopted radical practices to enhance their operational effectiveness and workplace culture.
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Executive Assistants (EA)

Levels' commitment to optimizing team dynamics and effectiveness is showcased by their use of executive assistants (EA). When the company headcount was at 55 people, Levels had 20 EAs on staff.

Sam recounts an instance involving Zach, their head of legal. "Initially, the match between Zach and his first EA didn't show the improvements we were aiming for. Instead of settling, we reevaluated and introduced him to a new EA, which drastically changed his work life for the better." This switch not only doubled Zach’s output but significantly reduced his stress levels,

Transparency as a Core Value

Transparency is woven into the very fabric of Levels' operations, influencing both internal processes and how the company communicates with the outside world.

"We believe in building in public. This transparency holds us accountable and aligns with our mission to democratize health data—not just for our users but within our team as well."

Communication Integrated with Performance

At Levels, communication is not an isolated skill but a central element of job performance, directly affecting the effectiveness of the team.
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• Communication Standards: Clear communication is mandated, and failure to effectively communicate is viewed as a performance issue. This policy ensures that all team members are consistently informed and engaged with ongoing projects and company goals.
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• Closing the Loop: Ensuring that communication loops are closed effectively enhances responsibility and accountability among team members, driving overall organizational productivity.

Proactive Gossip Management

Adopting a specific anti-gossip policy inspired by Netflix, Levels actively combats what Sam describes as the "chronic inflammation" of gossip within the workplace. The policy encourages direct communication.
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• Direct Communication Policy: Levels enforces a policy where employees are encouraged to address issues directly with the involved parties, minimizing misunderstandings and promoting a culture of direct and respectful communication.
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• Cultural Impact: This approach helps transform potentially toxic workplace gossip into constructive conversations, fostering a positive and collaborative work culture.

Conclusion
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Levels has exemplified how deep interaction and a non-traditional approach to market fit can fundamentally shape a company's trajectory. By prioritizing intensive one-on-one interviews over generic market strategies, co-founder Sam Corcos and his team have gained invaluable insights, leading to the creation of highly targeted marketing strategies and precise product offerings that resonate deeply with their audience.

Sources:
https://tim.blog/2023/09/21/sam-corcos-transcript/

https://review.firstround.com/an-exact-breakdown-of-how-one-ceo-spent-his-first-two-years-of-company-building/#:~:text=Sam%20Corcos%20is%20the%20co,CarDash%20(YC'17).

https://mixergy.com/interviews/levels-with-sam-corcos/

https://www.theproofwellness.com/levels-ceo-sam-corcos-on-the-future-of-wearables
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https://www.levelshealth.com/blog/the-secret-levels-master-plan-just-between-you-and-me-cgm-glucose

https://wefunder.com/levels