Three phone screens showing different parts of the Noom app.

Three tips to growing a business, according to Noom Co-Founder and CEO Saeju Jeong:

  • Be ‘customer obsessed’: Leverage user feedback on your business to ‘test new ideas, and learn how [you] can do better,’ Jeong said.
  • Focus your business model to achieve scale. If your business offers “too many ideas and options,” your team will be confused and so will your customers, he said.
  • Test your business concept before rolling it out to avoid burning through cash and burning out your staff.

Saeju Jeong, Co-founder and CEO of digital health platform Noom, has disrupted the weight loss industry with an app that boasts a reported $3.7 billion valuation today by leveraging a unique business model: Via artificial intelligence and human coaches, Noom delivers content developed by psychologists to nutritionists that aims to change the eating habits of consumers — including those burned by failed diets —for the long term.

Last year, the buzzy startup expanded via spin-off Noom Mood, a stress and anxiety management app, and next month, The Noom Mindset: Learn the Science, Lose the Weight from Simon & Schuster debuts at booksellers, further spreading its gospel of behavioral-science-based wellness.

Those heady milestones were hard won.

It took nine years from Noom’s initial launch in 2008 — and earlier versions of the app that “did not deliver,” strategic missteps and tough lessons learned — to land on the right business model in 2017, Jeong told CO–.

That’s when Noom’s test-first-then-build strategy and what Jeong describes as an “obsessive” focus on the customer finally paved a path to success — a journey that offers key lessons for entrepreneurs and small businesses alike.

The hard lesson learned from now-shuttered platforms: ‘We should have tested the concept before we built it’

In 2005, Jeong left South Korea for the U.S. with a mission to create a far-reaching health management tech platform inspired by his late father’s wish. Jeong’s father, a celebrated physician in his country, passed away from lung cancer at 51, when Jeong was 21. He implored his son to do what he could not: find a way to offer people preventative care solutions that deliver “health care versus sick care,” Jeong recalled. So he set out to do just that.

Jeong and Noom Co-founder Artem Petakov thought they’d hit on the right vehicle for that mission with the launch of an interactive smart bike a la Peloton. They later switched gears, pivoting to a calorie counting app.

Both businesses failed to meet Jeong’s mission to build an affordable and scalable healthcare solution that would make the most impact on the greatest number of people. “We could not figure out how to scale the business model,” Jeong said. “But we spent all our dollars and all our time,” he said, while the market response was underwhelming.

The moves burned out its staff and burned through cash. But they yielded an invaluable lesson that would prove fruitful years on: “We learned we should have tested the concept before we built it,” Jeong said.

[Read: Mental Health in the Workplace: Headspace Health, Talkspace and Noom Target Employee Support Programs to Drive Growth]

We learned we should have tested the concept before we built it.

Saeju Jeong, Co-founder and CEO, Noom

A seemingly counterintuitive path to scale the business: Don’t ‘boil the ocean’ as ‘focus is beauty’

By homing in on weight management, Jeong said he seized on a gateway to total health. The first iteration of Noom launched in 2011, bringing to market an AI-tech-enabled app that helped users drop unwanted pounds. But unlike conventional weight loss services that focus solely on weight, “by changing behavior, we guide our users to master healthy habits” that range from nutrition and sleep to stress management, he said.

The addition of certified coaches who work with users to reach their health goals proved to be a game changer for the app, adding an invaluable “human and empathetic” element to the tech platform, Jeong said.

“Noom focused on weight loss as the foundation of our business because we needed to deliver a great outcome that our users can actually measure,” Jeong said. “That focus delivers [them] a far better engaged experience and greater outcomes.”

It might sound counterintuitive, he said, but that focus has enabled the startup to carve out a differentiated, growing niche in the booming, $450 billion U.S. wellness market and scale the business. “Because of that focus, our product people were able to develop the product features that respond much better and more intuitively to [app] users,” he said. By contrast, if the business offers many ideas and options, “users get confused,” he said. The overarching lesson: Don’t “boil the ocean,” Jeong said. “Focus is beauty.”

[Read: Not Just Skin Deep: Marketers From CVS to Startup Geenie Take on Mental Wellness in the Beauty Aisle]

 Headshot of Saeju Jeong, CEO and Co-founder of Noom.
Saeju Jeong, CEO and Co-founder of Noom. — Noom

The ‘customer obsession’ factor: Tapping user feedback to guide product development

Noom has learned that user feedback serves up a rich source of data on the business. That customer feedback on their experience of the app, which comes in “so charged with emotion,” informs product development today, Jeong said. “They have a lot of opinions on our products, whether good or bad. That’s another layer of great insights that our product managers can learn from. It’s the way we test new ideas and learn how we can do better,” he said, and put its “customer obsession” philosophy into practice.

Entrepreneurs, ‘be mindful’: Difficult times are guaranteed — ‘but that’s normal’

Jeong says entrepreneurs should brace themselves for failure and not be deterred by it. “I’m sorry, my fellow entrepreneurs: You will face quite a difficult time,” he said. “A lot of ideas that you think will work out will not, and that is OK.” However, “If you put your effort into delivering on your mission — which is your promise to stakeholders, family members, and employees — that will help you [emerge] from the difficult times and you will be fine.”

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