For most Americans, hangovers go with a certain number of drinks like wrinkles go with birthdays: inevitable, yet surprisingly terrible. With backing from Silicon Valley’s leading players and a USC School of Pharmacy-engineered formula, 82 Lab’s Morning Recovery drink might be changing the morning-after narrative.
While “hangover cure” may lead you to think of a dusty packet wedged between libido pills and vaping accessories at the local bodega, Morning Recovery was cofounded by Sisun Lee, a 27-year-old former Tesla manager, and Misha Frolov, a 31-year-old former Uber product designer. It’s a peach-flavored 3.4-ounce liquid dietary supplement meant to be consumed while drinking alcohol or an hour after you’ve stopped drinking it. It’s apparently effective at reducing hangover symptoms, ascertained by the company’s mostly high-achieving San Francisco- and L.A.-based adult customers. The company launched in July 2016 and made its first million in three months.
In March, they completed an $8 million Series A funding round, led by Altos Ventures and Slow Ventures and joined by R7 Partners and Strong Ventures. They’re advised by CPG, branding and tech royalty, including Dale Hooper, former PepsiCo and Frito-Lay VP, Daniel Hibashi, Soho House CMO and former Instagram head of brand and Forbes Midas List-member David Lee, managing director of Refactor Capital.
(Courtesy of Misha Frolov.)
In late 2016, Sisun Lee, 27, took a vacation from his job as a growth project manager at Tesla. He’d trekked from Silicon Valley to Seoul, South Korea, to spend two weeks with friends and family.
They drank every night. They drank a lot.
In the morning, Lee’s friends and family put on their suits and headed to the office. Lee stayed on the couch, debilitated and dysfunctional—hungover.
How did they do it? Lee asked his Korean friends. “The pointed their fingers toward the products sold in stores”—dihydromyricetin (DHM)-based hangover drinks, sold in drug stores and supermarkets. Dihydromyricetin is a compound found in Japanese raisin trees (hovenia dulcis) that helps break down alcohol in the liver.
Maybe because the Japanese raisin tree grows all over South Korea, or maybe because South Koreans are some of the heaviest drinkers in the world, South Korea has an estimated $182 million DHM-based hangover drink market. The United States, by contrast, has ibuprofen, water and a few other kitchen-sink remedies your friend swears by. In Seoul, Lee purchased his first hangover drink for about $4.65 so he could party, and recover, with his Korean crew. And when it came time to head back to Tesla, he brought a suitcase full of Korean hangover remedies with him.
He gave the little drinks to friends in the States, and they loved them, too. He wondered why the U.S. didn’t have a hangover cure market. “It started with nothing more than Googling. I wanted to find out if there were clinical studies about this,” Lee remembers.
He Googled his way to Dr. Jing Liang, an adjunct professor at the University of Southern California’s School of Pharmacy, who had run studies on the effects of DHM on alcohol absorption in the liver. Liang gave Lee one of her clinical DHM powder samples. He drank. He took the powder. He woke up hangoverless, thinking, “This is stronger and better than what they have in Korea.” Lee and Liang partnered to transform the DHM powder into a drink.
He got in touch with then Uber product designer Misha Frolov, 31, whom Lee knew from his stint at the company, to launch a website for Liang’s little recovery potion: hangoverdrink.com.
On the site, they offered to send people 3 samples of the “hangover cure,” starting out with a total of 500. After two weeks, Frolov and Lee had 20,000 orders. A few months later, they’d raised $350,000 on Indiegogo to manufacture the Hangover Drink. Lee quit his job at the behest of his manager, Tesla’s director of growth Praveen Arichandran, who became Lee’s first angel investor. Frolov soon quit Uber and the duo relocated to Los Angeles for proximity to Liang’s hangover-cure lab.
Courtesy of Misha Frolov
The Food & Drug Administration did not like the Hangover Drink. On the drug side, a “hangover” is classified as an illness so a product to cure hangovers would have to undergo “conventional” pharmaceutical vetting, typically taking 10-ish years from discovery to approval and $2 million in sponsorship fees. On the food side, a “drink” would be subject to FDA’s seemingly arduous conventional food-vetting process. Lee and Frolov wanted the Hangover Drink to be classified as a dietary supplement, a category that does not require FDA approval to market, so they enlisted two law firms to navigate the FDA dilemma and emerged as Morning Recovery, incorporated under 82 Labs.
The founders seem willing to defend their dietary supplement status by “[controlling] the messaging“ at no small cost. Morning Recovery’s executives suggested to Forbes that if the story included neither the word “hangover” nor the phrase “hangover cure,” they would back it with $100,000 of content ads.
They donated $230,000 to the USC School of Pharmacy to establish the 82 Labs, Inc. Research Fund to “conduct research to better understand the mechanics of alcohol in the human body, and [learn] how [they] can best counteract the negative symptoms,” Lee writes over email. The first research project from the fund “will go towards validating and improving the efficacy of DHM in Morning Recovery.”
This is a big improvement from Lee’s early tenure as both CEO and lab rat. When they first began product testing, Lee was hospitalized for “chest pains and an irregular heartbeat due to excessive alcohol consumption.” As he writes in an October 2017 blog post on Noteworthy, “While my mornings were better than they should have been, there were real consequences to my shenanigans.”
82 Labs’ partnership with USC aims, in part, to delegitimize the FDA’s existing thesis on hangover cures. In an April 2017 FDA docket, the Consumer Healthcare Products Association noted that “many products marketed as dietary supplements claim to treat hangover symptoms or to prevent the occurrence of a hangover. There is limited evidence for the efficacy of these products. Regardless, these are not appropriate indications for dietary supplements and these products should be considered misbranded.”
82 Labs, Inc.
Is Morning Recovery a pastel-packaged iteration of failed hangover cures of the past? In a February 2018 Morning Recovery survey, 91% of customers surveyed said they felt anywhere between “better” and “much better” than they normally did after drinking because of Morning Recovery. One-third of Morning Recovery’s ecommerce customers bought a second round (and the minimum purchasable quantity is a 6-pack at $29.95, so they presumably finished those, too).
Morning Recovery’s typical customer is neither a bottle-popping nightclub regular nor a beer-can-crushing frat bro. According to the company’s data, the average Morning Recovery customer is 30 to 40 years old, lives in a big city and makes upwards of $80,000 a year. This surprised Lee. “We thought something was wrong, but then we realized: They want to go out and enjoy themselves, but the next day they have to be on their A-game.”
82 Labs is a very close, very lean team of 14. “Misha makes sure that if the company bankrupts in eight months, we had a good time,” Lee says. They want to be in retail but are developing the go-to-market strategy a sip at a time. The first distribution deal they signed was with Revolve, the upscale fashion ecommerce giant. They’ve also sealed distribution deals with Urban Outfitters, 7-Eleven (on the West Coast), but their website remains the largest source of sales.
Lee poses the question: “As we get bigger, the question we’re going to hear more often is: The more effective the product gets, wouldn’t [it] promote more drinking?” He pauses. “The answer is ‘100% yes’ if we don’t control the messaging.” Meanwhile, they’re experimenting with nightclub distribution and working with bartenders to develop and serve Morning Recovery cocktails to compete with the likes of Red Bull vodka.
He feels confident Morning Recovery can avoid promoting binge drinking, though. “The same argument I could make is if you’re someone who wants to drive recklessly—and even wants to hurt people in the most extreme case—giving you access to a seatbelt might just make you more reckless, but no one publicly views seatbelts as a negative thing. I think that’s purely on messaging.”
Though the cofounders can’t say what distribution deal they’ll sign tomorrow, they know this: “When we created this company, and we decided to quit, we didn’t want it to just be Morning Recovery,” says Lee. “We want to create a brand for people who are highly motivated that empowers you to be at your best mental state.”
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