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How to Successfully Expand Into Other Categories

A CBD company gets into the hydration business. Here's why and how they made it happen.

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As co-founders of beam, a three-year-old direct-to-consumer CBD wellness brand, we’ve learned that our initial hunch was right: There were plenty of highly active people like us, looking for high-quality remedies that would help us perform our best. People want a clean, all-natural product that works. So when our customers asked us to make a hydration product that can be used every day, we took a familiar approach: sweat the details, listen to feedback and stay true to the mission. 

Courtesy of beam

Here’s what we’ve learned in the process of launching elevate, our first-ever functional hydration line.

Related: 4 Ideas for Actually Pivoting Your Business Right Now

1. Start with the best ingredients

As former professional athletes, we know how dialed-in a product has to be to make an athlete want to use it. From cleanliness to testing standards, with our THC-free CBD products we’ve taken great care to be clear about what’s in it, why it’s in it, and who’s making it.

Unless you’ve been there, you don’t know how important that is. And that transparency has been appreciated by our more casual customer: they read labels too. So we’ve continued to apply those high standards to a new hydration line called elevate, an electrolyte-packed product with ingredients like Himalayan sea salt, coconut water, and no additives or fillers. A hydration product was the most requested new product innovation from our customers, and we spent more than 12 months sourcing ingredients and getting the formula right. Could it have arrived faster if we had cut corners? Sure. It's hard to do things the right way, but benefits everyone in the long run — and your customers will know it. 

2. Find tough customers, and listen to them.  

When we’re developing a product, we develop commissions and go through multiple rounds of sampling and listen to feedback. It’s intense but invaluable. We like for some of our beta testers to be professional athletes who have quite a bit of experience under intense conditions. For example, former professional race car driver Danica Patrick, one of our investors, helped us hone in on the efficacy of elevate. But we also listened to a broader demographic of everyday customers living a healthy lifestyle. Getting real feedback from both allows you to get to a final product that serves multiple markets together. 

Image Credit: Courtesy of beam

3. Do what you say you’re going to do, and the funds will follow.  

We’ve seen that a lot of time entrepreneurs (and founders in particular) get so wrapped into the micro details of their business that they stop seeing the forest for the trees. We’re in our third year now, and we’ve found that there’s nothing that sells better than following through on your promises and commitments — from a brand perspective, and now from a revenue perspective. That’s compelling when you get to a Series A fundraise. Sure, we have a story — some of our earliest customers were high profile athletes — but beyond that, we have a track record of satisfying a broader community of people living an active lifestyle. At every step of growth, we’ve just followed through on what we said we were going to do, and we plan on continuing that way.       

4. Treat your customers well, and you’ll keep them. 

So many startups are hyper-focused on acquisition: obtaining new customers. For sure, that’s critical to any business. But just as important, or even more so, is cultivating a long-term relationship with your customer. We’ve carved ourselves out in this wellness vertical, with customers coming in from anywhere from CrossFit to cycling to running to basketball to football to SoulCycle. Whether you’re Baker Mayfield or you’re one of us, you’re trying to find better performance, better recovery, and better sleep.

We communicate with our customers and find out how we can impact their wellness journey, whatever that may be. We do a quarterly webinar with all of our subscribers and talk to them pretty directly. The benefits have been twofold: hearing from our customers has informed better decisions on our end, and it’s really driven customer loyalty, too. If you just treat them well, they'll stay for a while. 

5. Understand that wellness and the direct-to-consumer model here to stay. 

Throughout the uncertainty of the past year, we’ve felt fortunate to be positioned where we are. We were optimized in regard to consumer sales, because we didn't have a retail footprint, and the direct-to-consumer model is where things are going to continue to develop even post-pandemic. Moreover, since our team was already geographically spread out, there was no real shift for us over to remote work, because we were already doing it.

But beyond those two things, the wellness category has evolved — from an “it’s nice to be healthy” mindset to making your health a mandatory, baseline priority. We used to see people cut loose for a month and then go on a crash diet or just workout really hard to offset it. However, we’re now seeing people look at their own wellness a lot more holistically. This pours into supplements, exercise, your mental health, and so many more categories that we’re following very closely. The trends were already emerging — the pandemic just fast-tracked them.