Fulfil is an ERP designed for DTC brands like Ridge, HexClad, and Grüns. Manage orders, inventory, accounting, purchasing, fulfillment, EDI and manufacturing in one place. Native integrations with Shopify, Amazon and 400+ 3PLs (no middleware required). Go live in 8–12 weeks with fixed-price implementation (no third-party consultants).
Get a DemoOperators Titans is brought to you by AppLovin. Get access to the Operators channel expansion playbook, online masterclass, and up to $5k in ad credits here: https://www.9operators.com/paid-growth Or, skip the waitlist and launch your AppLovin ads today with our Operators-exclusive link: https://9ops.co/applovin-referral How did IQBAR go from a $90k Kickstarter to a nine-figure retail, DTC, and Amazon giant? Will Nitze (Founder & CEO) and Jessica Greenwood (CMO) join Matt Bertulli (CEO, Pela Case & Lomi) and Mike Beckham (CEO, Simple Modern). This is the product launch strategy and CPG marketing playbook they wish existed when they started. Will and Jessica detail their early tactics and walk through every funding round: from $625K at a $4M valuation to $5.5M at $50M. They doubled revenue every year for eight years, kept the team at 15 people, and never dropped below 50% ownership. Mike and Matt close on what killed dozens of competing bar brands in 2022 and why IQ BAR survived. Chapters 00:00:00 Value Wins Every Market 00:10:29 The (Big) Category Bet 00:18:28 Scraping Harvard at Night 00:25:52 Raising Without Losing It 00:34:58 The Bar Brand Graveyard 00:40:31 Never Raised Our Prices 00:52:15 Keto Found Them First 00:57:38 Bites & GLP1 Tailwind 01:06:10 Supply Chain Is 70% of It 01:15:47 Amazon Is a Public Ledger 01:20:25 100% CAGR for 8 Years 01:34:09 Titan 10 Rapid-Fire Questions
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Will, you've been on the show before.
Yeah.
Welcome back. Can I call you Jess?
You can.
Awesome.
Jess, welcome. What else would you call her?
I know. That's my name.
Miss Lady. Yeah. The lady pants.
The lady.
Uh, the lady panties.
Make it a little formal.
So welcome back. And, uh, you guys have grown a ton. You're, I mean, you got like crazy story. We're going to get in all that today. I would just like to start with, uh, how many times have you guys been sued? And are you currently being sued now?, we're always being sued. Let's go for it.
A-B-S, always be, oh, A-B-G-S, always be getting sued.
Getting sued.
Yeah.
If you're a lawyer, it's A-B-S.
It's always, you are not trying if you're not getting sued.
You haven't made it.
Oh, we, I mean, D2C and D2C land, and we're not predominantly retail, but still have a large e-com presence. Like there's so many new things to get sued on with whatever California opt-in, whatever, whatever.
Right?
Like it's always California or New York or. What have you.
So, uh, it is always California.
Yeah. There's always one or there's always one or two.
Somehow there are carcinogens somewhere in like everything.
Apparently Prop 65 is a big one for food, which is like Starbucks fails the Prop 65. You know, Starbucks gives you cancer.
They put Prop 65 stickers on like the windows of cars, dude. I'm pretty sure you don't eat the car window. I don't understand why it's got to be there.
Yeah. But I think, I think the aggregate, something like 6 and You're always working on one or two.
I didn't realize, so did you guys start off D2C and then went retail, or did you start off retail, go to D2C?
A little bit of both, I would say.
I mean, okay.
We start, we started with a Kickstarter, which is I guess D2C, sort of a weird form of it. Um, and then yeah, we rolled out a website and then very soon after we rolled out an Amazon presence. Then Amazon started outpacing D2C like 4 or 5 to 1.
Whoa.
Um, yeah.
And in the middle of all this, we had a weird, weird blimp that puffed up where we got into 3,000 CVS, like out of nowhere, out the gate.
So you guys came from Kickstarter. That's like super atypical. I don't, I, you might be the only founder I know that like started with Kickstarter. How did you guys actually make that work?
Well, I don't understand how other people start because I had no money and I was like, if I'm going to manufacture 30,000 of something and I have no money, like, how do people do that? I was like, of course you would need to solve that chicken or egg situation where you need to have like pre-orders. I guess they do pre-orders is the other way to do it. But, uh, we needed to get in money and not ship stuff in, in return and use that money to make stuff to then. 6 months later ship stuff.
Mm-hmm.
And that, that is Kickstarter. Um, but the dirty secret of Kickstarter is you need like $30 grand to run a good Kickstarter. Like you need money to do, even start that process. So I had, and I had literally had like zero money. I was living in my, uh, college buddy's parents' basement to get my burn to like zero.
And, and he went through like a few phases of some like fun jobs while this was happening too. I think you like, he nannied for a week.
I think.
No, terrible name. Yeah.
Wait, was a life coach also for a week? Like did a lot of random things.
One client.
You're just blowing by these and each one is just opening so many questions that I could ask.
I would, you can, you can bullshit the life coach thing better, like easier than any profession on earth. It's basically like give advice at a pretty generic level, but I have—
I can't BS being a nanny, dude. There's like, there's a human.
There's kids there. Yeah.
I was, I was relieved of my duties.
It, it is a wild hybrid by day. I'm a life coach at night. I'm a nanny.
Yeah, we were mixing in some dog walking. Yeah.
But, um, I, and those didn't work out and then we just went back to working.
But I, uh, but I pretty quickly learned, okay, I'm gonna do this Kickstarter. Actually, I need $5 grand for the video and money to try ads, which then later didn't work and blah, blah, blah. So I was like, okay, I need like $30 grand. And so I pinged a couple people who were aware of me starting this thing and I was like, hey, will you— I don't need like $50 grand, I just need $5 grand or $10 grand. And so I raised, I think it was $40 grand, uh, from like 3 different people and used that to run the Kickstarter, sold $75,000 in the Kickstarter and incremental $15,000 on Indiegogo. So $90K total. And then I turned around to those people who I raised the $30,000 40K from, and I was like, well, now I need half a million dollars. And, and they gave it to me very quickly because I didn't plan it out this way, but like, if you ask for a little and then prove something, you can ask for a lot and someone will give it to you. Don't start by asking for a lot.
Yeah.
No.
And so it's so rare people actually prove it out, but I want to understand like, okay, so part of the thing that makes this great is Jess, you're here. So basically you're the fact checker, but also you're able to give us like the real version of what went down. And I've talked to Will enough that I know some of Will's version, but like, how, so how involved are you in the like genesis of this idea and what are you thinking through this process? Are you like, I'm gonna let him like wear himself out on this idea that's not gonna work? Like what's going through your head?
Um, well, so at this point we're dating, we're not working together. I was not a co-founder. I had no intention of being part of this. It was just kind of like, my boyfriend wants to start a business. Cool. Every day it's something new. Went through a lot of different ideas.
I'm not the only one.
Yeah. Yeah.
It's like we were just making fun of this with Matt. Like every day he's like, he's the serial. Yeah.
And eventually like one will stick.
Yeah.
So like eventually, like I didn't know that this—
well, we should mention like some of the ideas from early on.
No, they were awful. It was, uh, but like that's not—
did you ever tell him this? Did, were you, when would you tell him the baby's ugly?
Um, I feel like I would typically just tell you if it's a bad idea, but I would be like, but like Do you?
It was, I was gonna make a drink that was like specific to gender-related nutritional needs.
That's terrible.
No, it's awful.
Like more choline for like females, cuz females need more choline.
I don't think it's a terrible idea.
A, like from a, like a 20-year-old man though.
It's like, I think that's a, this has a high chance of being caught, but in a world where they're selling vaginal probiotics gummies, like they're, anything can work. Like I, like, I believe that any product can work.
Yeah, this is true. Any product can work. Okay. So, uh, a bunch of bad ideas. How did you land on this one then? Like, what was the, so you, I mean, prior to the Kickstarter, you decided to do it. What about this told you that this was worth doing?
I was really interested in the brain. I studied among other things, psych and neuroscience in college. That was the, I was interested in the physiological side of the brain. I then later became interested in the intersection of nutrition and cognition. So how do what we eat, how does that impact how I feel in a couple hours? Then if I eat the same thing over and over and over again for 30, 40, 50 years, what, what does my brain look like when I'm 60? Right. And I read a book called Grain Brain, which detailed that. And more specifically was like, look, if you're eating a standard American diet, your, your blood glucose is elevated all day long for like 50 years. Here's what that does to your brain. And it's not good. Like spoiler alert, it shrinks it.
Like I saw something where it's like, as your blood sugar goes up, You lose like 1 to 2% of brain mass per year or some kind of, it's some kind of crazy amount.
There's clearly got to be a bottom. You don't finish your life with that kind of—
Well, yeah. I mean, it's, it's all relative to how high it is, but it's like, basically you're, you're embalming your brain in like a sugary fluid and it's just shrinking it like a raisin, I guess. I don't know, but like, terrified me at least. I mean, maybe it was like not accurate, but I, there is some real stuff here.
Yeah. It's, and yeah, point being it's not good. And so the whole idea was like. Basically eat fewer simple carbs, eat less sugar, eat higher healthy fats, eat more protein, all stuff that now is kind of like common knowledge. But at the time, not, not so much. This is like 2015-ish. And then I was like, okay, this is like, how do I just map this to my life just as a consumer? Because I was working really long hours and I didn't like to cook. I still don't really like to cook. I wanted something convenient that would map to this new diet. And then pretty quickly I was like, wait, this is a business opportunity because I can't find anything. There just is nothing that's convenient. And then of course my brain went to like, okay, what's the biggest opportunity within that aperture? Uh, and so I started cycling through like drinks, basically just looking at categories. And this is like a learning after the fact. The category you pick is so insanely important, really important. Like it's like half the battle at least., but not even that, how the category evolves over your journey. So you have to be forward, like present looking and forward looking for that category. Yeah. Um, and at the time RXBAR had just sold for $600 million and I was like, okay, that's like clear proof point that this can become a big sellable asset. And then looked at the market. Okay, big market, you know, whatever.
Well, Clif had been around for a long time too, right?
Cliff was a multi-billion dollar top line business. At the time. So, um, now the downside is ultra, ultra competitive. The first thing anyone ever says to me is, yeah, why would you enter such a competitive field? So that's like the primary downside of it. But, um, but yeah, arrived at that idea and then, I mean, we can get into all the minutia of how I started, but basically started from zero. Like had no, I never manufactured something. I didn't know someone had manufactured something.
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The, the crowdfund, uh, so we did a crowdfund for Lomi. Uh, Sean did one too, I think, for Ridge. That's actually how Sean found Ridge, but it is actually, it is not typical. And I love that you hit on the, uh, you need money to do a Kickstarter thing. Uh, I get asked all the time. So we did $7.5 million in our, we did Indiegogo, 45 days, $7.5 million, did $1 million in the first hour. People are like, I wanna launch, I wanna launch a business like this.
This is great.
You need any money, you can just start the crowdfunding. I'm like, oh no, no. I spent $350,000 in ads in the 2 months leading up to the campaign so that the first hour we just like blew the doors off. So we had validated everything. Oh yeah. We had like, oh, we had, I just mean like from, from those ads. Oh yeah. We had like 300,000 people.
Yeah.
On the launch list. So like getting to the, to the, the size that we did. It, people don't realize how much you have to invest in the campaign to make the thing that looks like free money work.
It's 'cause you're selling, you're still selling, you're selling people on the idea of being involved in the campaign.
Yeah.
And frankly, like I'm a fan of if you're gonna do a crowdfund, you should have validated the idea before you can get the crowdfunding. Yeah.
Well, I wanna talk about the category thing you just said because, you know, Will and I are like so on the same page with how we view this stuff. We've had these conversations where we're just like saying yes back and forth to each other. Like, Um, but like to draw a parallel, getting married is like 50, 70% who you choose and then it's like 20, 30% tactics. But all the books are written about being a, you know, having a better marriage once you're married. And I feel like the business, uh, like podcast book system is like the exact same thing. It's all about like, hey, here's how you run your business better. Not here's how you identify a great opportunity beforehand. But we should, we need to preach that more often that like the situation you get yourself into is so much of how much success you'll end up having. And I just don't feel like that gets said enough. So I totally agree with the point.
And here's the other thing. It's, it's picking a good category. It's also picking a good category for you, meaning like, do your skills map to that category? So it has to be big. It has to satisfy like all the key things that a good market satisfies. You also have to be uniquely situated towards it. And then the other thing I would say is it's not a, a, a prison sentence. Like take, take Sean at Ridge, right?
Yeah.
He keeps adding categories and they, and they could be adjacent. They could be totally like non-related, right? Yeah. Um, so it's not like if you realize your category's really tough, you can't do anything about it. You can do stuff.
Um, of course then you create a more complex business and maybe you didn't want that, but Uh, so, so grade yourselves then, uh, early days of IQBAR, right? Uh, on this, on this vector of like your fit to do this company. Like, did you, is this a re— it's like you're, are you retroactively saying this or at the time did you know like, I am uniquely suited to build this business?
Everything, everything is revisionist history, but no, but at the time, like roughly you knew in the sense that's like, didn't wanna start a tech company, didn't know how to code. Like, it's kind of like, what can I just do?
It's, it's, it's actually, it's actually insanely simple. It's what can I literally make in my kitchen? That, that, it sounds so silly, right? That actually is it.
No, I love it.
And it's like, and not even that, what can I make without adding heat? Like non-bake, what raw thing, what can I literally jam a bunch of stuff into a KitchenAid mix and that is the product? And how many things are there like that? It's basically just a bar.
Like, that's it.
And that, and then it's like, oh, after the fact, oh, is that a giant category? Oh, it is. Oh, okay, let's do that. Like, it, that was it, you know?
So, okay, so then, uh, what point did you come into this sort of, um, journey other than like letting him try to beat himself up and tire himself out?
Yeah, yeah. Other than just, you know, support. Um, probably like a year in, maybe.
Okay.
Somewhere around there. Um, 'cause Will, when Will officially started working full-time on it, so this is post Kickstarter. Um, obviously you like have no money and you can't really afford to pay anyone who's good at marketing. Um, I worked at an ad agency.
So he's dating his way into cheap labor. Is this what you're saying?
Literally. I worked at an ad agency at the time.
Hey, look, using your own personal skills.
There you go.
Exactly.
No, so like I just for free, like with people I worked with, just started like running his ads and then eventually it just became more fun than my job and they were raising money. So I was like, oh, this actually seems like it could be a good fit. I can't do this for free forever. And then came over. There was no one else like doing marketing though. So it kind of was like there, it just happened to work out. We talked, talked about that earlier cuz like, I don't really know how exactly it works for couples when they're starting something together and they don't like naturally have complimentary skill sets.
Yeah.
This one just like, it happened to be something he doesn't do. Like no one on the team did it.
Mm-hmm.
It just made sense.
So you're not butting heads.
It's like, yes, please come on.
It's like we're just in different like worlds.
But this is like a whole other, we could do a whole pod on this of like, when you have no money, you can't pay people. Like I, you pay people $50K, right? Like $60K. How do you find like good enough talent to get to the next stage, to raise the next round or get to the next revenue milestone, whatever? Um, or hire your spouse. That's like the hack of all hacks, right? But it's like that, those early days when it's, it's still a crazy idea. You have no money. It's not obvious if the idea is even going to work or you're going to be around in a year. How do you find the people then? That is the hardest thing.
I'm going to combine your life, life coaching or spiritual coaching history. There's a book in your future. I'll give you the title now. Okay. It's How to Make Good Enough Great.
There you go.
Good enough to great.
I think that, yeah, good enough to actually great.
I have a question that's like extra long.
There's a will, there's a way.
Okay, so this is one of my favorite entrepreneur questions that I ask. What is the scrappiest thing that you did during that period?
Oh, I gotta tell the Harvard email address thing, right?
That's good.
Which I may get sued, uh, seventh time by Harvard for this. But, um, I, during the—
don't worry, there's no digital, you know, like evidence of what you're about to say.
Uh, yeah, this is, uh, this is set to auto-delete in 6 months or something, right? Um, no, so I did not do what you did on the crowdfunding. Front and raise a bunch of money and do ads and collect emails on a landing page and blah, blah, blah. What I did was I was like, okay, I have $0. How do I generate a ton of demand for free? And I don't know how I came up with this idea, but at Har— I went to Harvard undergrad and at the Harvard Library they have these things called Red Books, which is everyone's name. John Smith, I live in Greenwich, Connecticut, and my, it's john.smith@gmail.com. It actually has their email address. So I would go at nights and on weekends I would take every red book, class of '73, class of '74, and I would flip through page by page and take pictures of everything. Yeah.
And then at the time it was like hard to find a software that would turn that into a—
Yeah.
Do you have OCR or ChatGPT? No, but you can enter all this stuff into a sheet.
So much easier with Claude. Um, no. And then I just found some software that could pull the email addresses out of my thousands of pictures. So anyway, I had, I think I ended up with 10,000 emails that way. And then my boss at my first job outta college went to Harvard Business School and he just gave me his login. I was like, hey, can you just, I don't know why he gave me his login, but he gave me his login. Yeah. And, uh, yeah, he'll get sued, but he'll be cool.
And then I gave you my login. I went to BU. So it was kind of like he just wanted like everyone that he could be like, I have some connection to you. I live in Boston, I went to Harvard. So it's like the email sounds like I kind of know you when I—
wait, were you one-on-one emailing these people?
No, no. Okay. So I, I, I, you can't actually get email addresses from the HBS system, but you can get their first and last name by going to advanced search and like filter on tennis club and you get a bunch of people filter on tennis club and, or filter on international studies club, get a second, and you just dedupe this massive list at the end and you can triangulate to like 95-ish% of people who've ever gone to Harvard Business School. And then I got a Mailchimp account and I used my Harvard undergrad alumni email address 'cause I knew I would get so many spam, marked as spams.
Yeah.
And it would crush the domain score. Right. And I just ruthlessly blasted, like you check the box that's like, yes, everyone's opted in and just ruthlessly blasted people. And it was a great microcosm of like the world and people though. 'Cause like some set or like, You're the worst person ever. How did you get my thing? And then some people are like, this is the coolest idea. I have no idea who you are, but I just backed your Kickstarter.
Yeah.
And then some people don't respond. Well, whatever. Um, so we made like $40 grand though that way. And again, totally illicit means and whatever. Caveat, caveat, caveat.
We had very different crowdfunding experiences.
Yeah.
Yeah.
Yeah. Well, also, um, Befriended one of the people at Kickstarter. He had this whole plan of, uh, befriending someone who worked there so that he could be featured as like—
yeah, that's important.
That's smart.
Yeah, no, it was very smart.
Yep.
That was, that was—
he kept on asking the guy for advice and like, you know, being like, what do you think of my page?
That was, that was actually a lesson that dovetails with like retail buyers. In many cases in this journey, there's one human who can just turn on just stupid amounts of growth.
Yeah.
Just one human.
Yeah.
And if that human likes you, like everything changes that. And at that point in time, it was like the food manager of Kickstarter. And I was like, you could put me in your newsletter and that would generate an incremental $15K in sales, which at the time was like the biggest thing ever. Right. And now it's like the Walmart buyer or the Samsung or whatever. It's like, People don't realize this is such a human, on the retail side in particular, such still very much a human-to-human business for us.
You could, you could actually argue that even in D2C, it's still like small amounts of people will unlock almost everything for—
Well, here's a, here's a proof of that, that the right hire. Oh, can 10x your business. But that's convincing one person, right?
Yeah.
You know, like the idea you, you joked about it earlier, but like always be selling because there is always a human that can unlock that next wave of growth. It's just, do you have the time? Talent and the intelligence to identify who that is and to be able to get to a yes.
Yeah.
Right.
Yeah. And oftentimes, uh, these are very long games. It's like when you're playing the relationship game, it's like your relationship with that Walmart or Target buyer probably started a long time before you ever asked for them.
This is also why being a trustworthy, high-character person pays off in ways down the road that you can't anticipate because you don't always know who the person that you're going to need a yes from 5, 10, 15 years from now, and you don't know how you're going to get to that. And so when you treat others in the way that you'd wanna be treated, you conduct yourself well, then it will surprise you the ways that that bears dividends. Mm-hmm. When you don't expect, or at least that's been my experience.
Yeah, no, I completely agree. Can you, on this sort of like, yeah, you had no money, you did the Kickstarter.
Another one of the things that he did, but like resourceful.
I think we're past the statute of limitations on that.
Yeah, I think you're okay now. At what point did you go out to try to get more capital to start building? And did you even get remotely enough money to launch the product? Like, not like I got $90,000 or $75,000. Like, is that an overshoot, undershoot for like—
No, that was like barely. That's the other misconception about Kickstarter. Like, you can't fund a business on Kickstarter. That's how you prove the con— like, proof of concept.
You hope.
Yeah. If all goes well, you prove the concept, which it did. And then we're like, cool, now we have $90K in sales in the first 2 months. We will use that to raise money at a good valuation such that we can actually start running this business, which is kind of like anathema to the whole like bootstrap, bootstrap, bootstrap stuff that we hear now, which like, great, if you can do that, then do that. But we were like, look, our gross margin's gonna be like 5% or something laughably low.
We should talk about that because I think part of the problem is if you tell people too strongly you have to bootstrap everything, what they end up doing is they will only choose exceptionally high margin Yes, yes. Product categories.
Yeah.
And so you get kind of pigeonholed into, well, I guess you have to be D2C, I guess you have to be super niche. Yeah, exactly. So it's like everybody's launching a supplement gummy, you know, and it's like, well, why are you doing it? Well, because there's 85 points of margin and that's what I have to have it for me to bootstrap this. But like you said, where the majority of the opportunity is, is in big categories that have commodified over time. And those are gonna be lower margins because that's the—
well, how did you, um, talk more about your fundraising story? Just 'cause like in the sense that like you always did a good job at like raising exactly how much we needed at each point. So it's like, uh, and also always once we were like, so it's a little bit more. Yeah. So it's like we never literally had no money. We never had too much money.
Yeah.
And also here we are with still over 50% of the business. Like, it's like we didn't have to like, mm-hmm. Well, so give everything away.
The first thing is, and some people will hate this, but like, don't start your business with a co-founder. Start with 100% because you're going to sell a lot of it.
Like, if you're going to raise money, yeah, if you're going to raise money, unless they are awesome, like the right person can be worth equity if they're the, like, you know, we're talking about who's the key person, cap tables energy. Sometimes the key person, you know, to unlock things is that other co-founder.
But for me, I was like, I personally want to own more than 50% of this business when all is said and done, we flipped to profitable. Et cetera.
Okay.
Like other people have different goals. That was my goal. So owning 50.1% is the exact same as owning 100%. There's no difference. I control everything. And if you get to the, the promised land, it's a killer ex— it's a killer outcome no matter what. So why wouldn't you raise— you're a damn fool not to raise money if it helps you move faster, uh, innovate faster, hire better people. You're a damn fool to not raise money unless it dips you.
You're saying if it dips you below 50%, then you gotta dip you and then, and then it changes.
There's a fundamental switch.
The very beginning are like, what?
Screw people too, 'cause it's like you can't—
it's the early rounds where you dilute too much. Totally. Yeah. I, I, I would argue, I don't even, I don't know that the 50% actually matters as much as by retaining a lot of ownership as you raise money, you get to maintain, like you can implement all the other structural things that are important.
Yeah.
Yeah.
So like board control, share classes for sure.
For sure.
Pref versus common, like for sure. You know, I know people that own 10% of their company, they control the whole damn thing just because of structure.
That's like the Zuckerberg model. Yeah.
So sure.
That was way smarter than how I I was thinking, I was like simple caveman brain, like more than half, good. Like, let me manage that. Uh, but also I wasn't starting a tech company. I was starting a protein bar company with no track record. Right. So I couldn't just justify these super high valuations. So our first valuation was $4 million, which was like totally plucked out of nowhere.
Yeah.
The first one. Um, but like generally that was market at the time. And we raised, I think it was like $625K, $625K on that. Which was like just enough to get to like the next step change in revenue. And then we raised a million, which was just, we could have raised 2 million, we could have raised 3 million, raised 1 million.
Why did you only raise a million?
We had the CBS situation. Totally. Which was very helpful for raising money.
Well, so we learned a lot.
Yeah.
This is what's so funny about, we, we went into CBS, which helped us get a 2 mil, 2.1 million run rate. Or like we were projecting that we would do $2.1 million in 2019. We then used that to raise it to $12 million cuz we were like 6x.
Yeah.
It was like 5x was normal and we're like, yeah, but we're special for XYZ reasons. So it's 6x, so we're $12 million. Of course that CVS thing like totally blew up in our face and, but it didn't matter. It was believable at the time.
Yeah.
It was believable at the time. And, um, so we raised a million at $12 million and we're like, okay, that was a little less painful than this. The $625K at 4, and then from the $12K, we, um, raised $2.7— a year and a half later, $2.775K at a 20.5, and I think that was a flat 5X. Uh, it was like 4, uh, 4.1. Mm-hmm.
Uh, so you're kind of shaving off 10% of the company on each of these rounds.
Yeah. Yeah.
And then we, uh, and then a year after that, we raised $5.5K at 50, and that was our last raise. We flipped profitable. And that literally brought me down to like just above 50%. So it all like shook out.
What would you do now? Let's say you needed money to get to the next level, to get to an even bigger outcome, but you have to raise money.
We don't need it. We don't need it.
But just hypothetically, like going back to this idea, like in terms of trade-offs, if you knew you could get to a bigger outcome, but you'd have to raise money to do it, would you do it? Or would you be happy with a smaller outcome?
Oh man. The answer like changes each year. My original goal, I was like a dumb 26-year-old kid, right? I was living in a basement life coaching, right? Like I was like, I wanna make $10 billion.
I love that.
I love that the person living in the basement life coaching others. Let me tell you how to reach your dreams.
He tells the story as if like it made like a little bit more sense. He's like, oh, I reached out to like my friend's parents. It's like, this was an acquaintance's parents. If anything, he was just like, hey, I know you happen to have parents who live nearby.
The whole thing was weird. We can get into all the ways that it was weird, but it was weird.
Oh no, it's weird. We're good.
I actually prefer, I prefer the kind of choose your own adventure version that I get to like fill in the blanks in my head than you actually even telling me. That's even better.
But the original goal was I wanna make $10 million 'cause I'm gonna be rich and I'm gonna drive a Ferrari. All the like dumb stuff you think about when you're young. And it became pretty apparent that that's like pretty much not possible. Like it became not possible once we actually got to $10 million. It's like, oh, actually there's no buyers, or the buyer is a PE, but they only buy based on EBITDA and you have negative EBITDA. So like, what are you even doing here?
In our mind when it first started, we only had to get to $25 million and we could sell for $100 million. And that was always the goal. Yeah.
Well then it became, yeah.
So once that was not possible, it's like, okay, Hey, like maybe we keep going and we'll sell for $100 on $25. And then that was not possible. Like the whole be small and still sell for a big number, like went away completely. And then really went away in 2022. It's like, not only can you not sell, you better be profitable or no one's going to give you a dollar.
Like 2022 was like the nadir of like, uh, explain went away for people who are going to listen or watch this. Like, cause I think we know what's happening from a timeline perspective in consumer, but somebody else might not. What does that mean?
There was just a lot of hype of like all these brands that were small and big CPG was like, oh, let me, this is flashy. Let me buy them and, and learn from them even though the economics suck.
Yep.
And all of them failed. All of them.
Yeah.
They all went to zero. And then big CPG smartened up and they're like, mm, that's not actually gonna work. So we know we're gonna screw it up, so we're only gonna buy things that have gotten to 9 figures in revenue.
Yep.
Because they're much harder to screw up and we can plug them into our ERP, we can plug them into our Salesforce or distribution network, yada, yada, yada. Which is true. That's a much better model. It sucks though for the person who started the business thinking they'd sell it at $25 million and then it's like, oh, actually you better 5x your business to even start having conversations.
Actually, I think though it's like a good lesson of like, though we always thought that, we always were like generally trying to keep things in a place where eventually we turn profitable and like are running a business that can still grow and be profitable. Because like, the advice changes every year where people are like, you have to do business like this, you have to do business like this. But it's like, if you're on a 10-year journey, it's gonna change.
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When you don't control the market, I mean, we, we talk about this all the time on the pod, but that running your business where you could run it indefinitely is really the only way to intelligently do it because you don't know what interest rates are gonna going to do. You don't know what's going to be happening with Iran. You don't know who's going to be president. You don't know what kind of outbreak there might be. I mean, you could just go on and on with all the things you don't control. And so where people do get themselves backed into corners is when they're like, this is the path. We actually talked about this in a recent episode where it's like you get too fixated in your mind on a particular outcome, and then that kind of shrinks your optionality. And if the board changes, you're just like, out of options, which was not how you guys ran it. You ran it where it's like, hey, if we need to run this profitably and growing indefinitely, we can. We'd like to sell.
Yeah.
But which makes a lot of sense.
I think that happened to a lot of bar startups actually. Um, when it came to like raising money, because around the time that we were turning profitable, a lot of bar companies that were startups, like there were so many that used to be around that they still weren't profitable and investors changed what they wanted. And they changed what they were looking for and they couldn't raise money anymore.
Like there's like a grave of companies that started around the same time as us that all in, all in bars were all way faster than us, sexier, raised more money, and they all, all went to zero and we just quietly da da da da.
Hmm. Has the market, uh, have you watched the market then seesaw back towards like this whole, like it disappeared for the smaller brand? Do you, do you see it coming back for the smaller brand? You still think it's a game of scale?
No, no, I think that's, that's still fully dead.
Yeah. And do you think the bar can, uh, pardon the pun, but like, do you think the bar continues to raise that? So like the acquisition bar is going up. I saw something on this recently.
Well, it went up and then it came down a little bit, but it settled north of 9 figures.
It, okay. So like I saw something on this recently on this that the, and it's funny that we need the data. So I'm going to say this out loud and it's going to sound obvious, but that the larger the business is, is a, you may as well just invest in large companies because their chances of being around a long time and getting even larger or higher. And they've actually mapped out the probability of all this. It's like, just buy a $10 billion company.
You're just gonna be a $100 billion company.
And this is one of the reasons why you've gotta chase profitability. Like, we need to be giving more real talk to founders and leaders. If you have a consumer-focused company that is losing money, that is losing money, it's a zero. Just, it should be like, you should think about it as a zero if it's losing money.
Yeah.
And if it's making money and you're doing less than $50 million in sales,, it's closer to a hobby than a viable asset in the minds of the would-be acquirers. And that's okay. So you need to be running it like it is your, you know, it is your livelihood and that your livelihood is gonna come from producing profits.
Are there exceptions to this rule?
Like you, I mean, like we weren't profitable for the first 5 years. We should note that. But it was always like, 'cause we knew once we got to a certain scale, we would be.
Um, and because you could raise, if you couldn't have raised knowing the two of you, you would've gotten profitable. Like, I mean, the, the whole, the whole interview so far kind of proves that, that you guys were scrappy enough that if you had been forced to, you would have.
Yeah. It's more like we, we just wanted to live in a world where we doubled every year and we wanted to get there faster. But like, yeah, we could have grown 50% or just—
The exceptions, I would say there's some exceptions on this being sub-nine-figure. I mean, Chalula I think was $95 million and sold for $800 million.
Yeah.
Because of the $95, $40 was EBITDA. Or something crazy like that.
But so you don't, if you have a 40% EBITDA margin, everything I just said is not going to apply to you.
Yeah.
Yeah.
There are no rules.
So there are exceptions to the like top line scale. I actually can't think of any recent exceptions to the profitability.
No, I can't either. That's why I'm asking. I think maybe in supplement you can see companies that are, they have a growth rate and a retention number that will outweigh the bottom line in the short term that will drive up their their value.
Well, Thor went through a transaction, and a couple years later it's going to go through a transaction for a much, much bigger number. There is like a track record of taking something and, and leveling it up. So I think that that makes sense. But overall, like, it's not even really about numbers, it's about market positioning, and people want to buy market leaders.
Yep.
I was told this recently about electrolytes. Like, I'm involved in the electrolyte category. We have a brand doing really well, growing really fast. But more or less, the perspective this person was sharing with me is like, there's a lot of companies doing well in this space, but that also means that probably nobody's going get bought because if anybody is going to make a move in that space, one of the big like strategics, they're just going to, it has to be a Liquid IV type.
It's a tough thing.
And Element, who I believe is like number 2 or whatever name, Gatorade maybe, whatever. But, uh, doesn't want to sell. Like, so they're not going to sell. So yeah, at least according to their, I get their like investor updates.
That's the best way to sell a company is to say that you're not for sale.
Everybody does something like that. Totally. But they are doing like a bunch of distributions and they're doing things that would suggest that that is true.
But And here's the thing, when you get to that scale and making the amount of money they're making, you really do have more serious conversations about why would we sell?
Yeah.
Like somebody wants to give me whatever, call it, you know, 10 times cash flow. Okay.
Yeah.
Well, unless I think the prospects of my company are bad, why would I take that?
Mm-hmm.
I feel like that company though was also like started for a different reason. Like it was started by Rob Wolf, who's obviously already successful. So I think it was more like, this is something I want to do.
Yeah, it does matter. Yeah, that's true. Like the, where, what, the number, the, which company you're on definitely has an impact on like how you think about the So if you guys, you're looking at like the journey of IQBAR and how calculated you were with raising the money, what was driving, I guess, the momentum to justify the raise? Were you guys still very D2C? Had you started to go into retail? I, I think of you guys as a retail-first company for some reason. That's what in my head is, well, we are, it's 65, 35 this year.
Okay. Yeah.
And it used to be, it used to be the opposite. I mean, every year it's kind of like gotten more towards retail. Just because retail can grow so much faster than D2C.
There's so much more sales there.
Totally. Well, and also it's like your category, we're looking to not, you know, like triple spend year over year or something on D2C. So it's also like naturally it becomes a new chain.
It makes sense. And if you're going to be profitable at the price points we sell at, that's mostly going to come from retail. So you have to, it has to be, you have to get to the point.
Logistics lead it all up.
What does that mean, price points you sell at?
We just, we saw a very sharp price point. So we, we've never, not once in the history of the company raised price.
December 2017.
Sorry.
Have you— you've never raised the price? Have you ever looked at it?
Technically, I think when you first started, like year 1, it was like $29.99 and we dropped it to $24.99.
Okay.
Yeah. And like, there's a lot of brands out there today who are like still selling a 12-pack online for like $40.
But we comped from like day one, we comped the e-com price to the price on shelf.
Stupid.
Like for better or worse, bars are like semi-commoditized and there's a lot of data and it's very clear what the clearing rate for a bar is on a shelf in a retailer.
Yeah.
And you can make a matrix of all the, all the offerings and plus or minus 10% here, but like there's a price that will move a lot of units and we're like, okay, we're gonna map e-com to that. Which is the opposite of how I think a lot of bar startups, they'll be, and David Protein's kind of like, an interesting exception to this because they price so much higher and it's, it's working so good for them.
But, but we don't know what the backside of that is. And this is something you never know somebody else's numbers. And so you shouldn't assume. So like, for example, well, what's David priced at? Which is a huge success story. None of this is me capping on David, but I'm just going to give an illustrative example.
I don't— so we price it like, call it $2.19 on shelf, like on average. And I think they're like $3.99. So call it double.
So for example, like we have no idea what margin they're giving to Target. Walmart on the backside. Like maybe they're giving them the same margin rate you are, or maybe they're giving them, you know, that plus 15% more.
Yeah.
And we don't know how much promotional dollars they're giving. And so a lot of times when you kind of get down to the final analysis, you can see somebody else's price point and be like, like a good example of this is obviously Yeti runs an amazing brand.
Mm-hmm.
And yet our, I, I know their net operating margins and I know ours and ours, uh, compare just fine, even favorably to Yeti's and, you know, like, well, how is that even possible with our price points? Well, it's like we have a different overhead structure. There's just— and to run those price points, they have to do so much more marketing as a percentage of revenue. And like, that's great. I mean, they're an unbelievable brand. But what I've kind of learned is usually when you see somebody at a much elevated price point to what, like you're saying, like what the preponderance of data shows, they're doing something on the backside to have to support that. So if you think they're just taking all that, all that home, they're not, you know, That's getting recycled somewhere. Influencers, Meta, whatever.
And our take too is like value wins in every market. Premium wins in some markets.
Yeah.
I'd rather win in every market.
Say that again.
Yeah.
That's great.
Value wins in every market. Like, so, and think of how many market life cycles we've been through since like, you know, there was COVID. That was crazy, right? With the Trump tariffs, like blah, blah, blah. Like the market has shifted violently up and down, but like value is always cool.
So, and when you mean capture the most share of market or most profit of market? Like, how do you define win? When, say, you say like value wins in both markets.
Our North Star really is units.
But why? Yeah, because like, why units? Why does that matter?
Because we run an old school economies of scale business and units changes everything for the better. The more units, the more every other metric downstream gets better.
And you're talking about the cost of the product.
Yeah, our COGS, our COGS.
Everything goes down with more scale.
Um, more, more like bars in mouths, like the more, the more you, the more it's trial, right? Even if we break even on that bar sale, that went into someone's mouth, they tried it, there's a good likelihood they liked it and they'll tell 5 friends and blah, blah, blah. So it's, there's just every metric improves with units.
Did you guys run the sampling playbook early on? Like, were you just get in stores and get bars in mouths? Like, is that a thing? No.
Don't say no, we did not.
Well, we did an analog of that, which is like because we were predominantly an e-com business at first, which is price really sharply and have like intro products that are super cheap. Like we have a, we have a hydration business as well, and we have a $9.99 8-stick sampler. It's like super cheap to try 8 different flavors. That's effectively sampling. That, that is an analog of sampling.
Yeah.
Okay. Yeah.
We went through a phase where we did a 3-bar trial where people could pick any 3 flavors of bars. And we'd send it to them for like $5, like something incredibly cheap. But ultimately that was like us in our office packing every single individual one. So that went away. But I mean, at the time when we like first launched, that was definitely something.
But then there's the whole thing of like, do you, are, are the customers you're acquiring good or not? And like actually most of them weren't. And so it's not, it's not as simple as just sample, you know, indiscriminately like that, that doesn't work either.
Yeah.
Um, yeah, I asked 'cause I, I remember a story about the Kind, was it Kind bar?
Yeah.
The whole big sampling thing. That was like a big part of it.
Well, Lubetzky, the founder, had this whole thing where he was like, we've crunched all the numbers on the cheapest way to acquire, and the cheapest way to acquire is sample. If, big if, huge asterisk, the product is good.
How long did it take for you guys to have a good product?
Oh man.
You're going to be the most critical.
Well, good is, um, relative, right? So it's like, good I define as someone You converted someone. So like bars is a weird one where it's like, it's not a cheesecake, right? So it's like, it's a functional food. I'm choosing to eat this instead of spaghetti carbonara or whatever.
Converted being you didn't sell them the bar, you actually converted them to buying yours. Like you keep—
like we converted them on the benefits that the food is a tool to achieve, which is in the early days, like keto, which more or less means weight loss.
Yep.
Right. And then now it's come full circle in GLP-1, but So it's always weight loss. Everything comes back to weight loss.
Yeah.
Yeah. So, you know, that, that, that was, that was how we convert people. And taste is a component of that and taste always matters, but function matters just as much as taste in our categories. It's also very category specific. You're not looking for function out of a tortilla chip. You are looking for function out of a bar or a gummy or whatever.
So, it's a weird category cuz like we, we learned a lot when we did sampling at Costco, like we had to, to get in, we had to do a roadshow where we were like, I know the roadshow. It's a great time in person selling, but it's really interesting. You learn a lot about like people. So like you'd have people pick up your box and complain that there's any sugar and like we're 1 to 2 grams. It's like very minimal. Well, but like while in the cart they have like cupcakes and like all this other stuff just 'cause they expect something different from a bar. From a bar. It's just, it's a very, yeah, it's a different setup.
Their cart literally has cake in it and they're complaining about the bar.
It's not how someone shops.
It's how they shop for your category.
Yeah.
The same human, like it might as well swap out their brain when they move from aisle to aisle in the grocery shop. They, they shop for water differently than they shop for, and they, those different brands contradict each other.
Yeah.
It's the weirdest thing.
Oh yeah. That's why the, the idea of an ideal customer profile, I'm like, what do you mean? Yeah. Like we're, we're schizophrenic creatures, man. Like there's like 200 people in my head right now.
Yeah.
It depends on what I'm doing and what I'm buying and how I'm experiencing or interacting with the world. You're never just like— there's no one version of anybody.
Yeah, right.
And you guys are proving that with how you looked at that. Okay, how long did it take you to go from bars to other products then?
Definitely a few years. We didn't launch mix until '21. I always think about our wedding because that's in our welcome bags at our wedding. We gave everybody the Ace Exemplar and we said, please go to Amazon, leave a review.
That should have been one.
Every moment is an opportunity to sell.
That's, we always forget that one. But, uh, so I always like think back to that. So like late, late 2021, early 2022, we launched our hydration line. So, and you did the Kickstarter in like what, 2017?
So yeah, it's been a minute. But then that's the other thing, like I'm saying all this cuz I, we learned it firsthand that the category thing, like hyd— the hydration buyer is just so different than the bar buyer, which is so different than the coffee buyer. And those were our 3 categories. And then even more important than all of that is because we're so omnichannel, where the products work is so different. Like we had a wildly different experience trying to sell hydration in brick and mortar than we did bars in brick and mortar. Wildly different.
Well, tell me more about that. What do you mean? What was so different? I would assume hydration works really well in brick and mortar.
Uh, it can if you're Liquid IV, for sure.
Okay.
Yeah. If you were the market leader, like without getting into too much of the specifics. So bars are cool, but like bars are ultra fungible. They work and you can open 'em anywhere in your kitchen, on the train. They can sell anywhere. If they're not coated, they're temp, they're not temp sensitive. They're not gonna clump. Like bars are a great form factor. Uh, hydration powder, you, you're not gonna open it and pound it, right? Like it needs to go in water. So that's kind of weird, right? Inherently. So if you go into a 7-Eleven, you're gonna buy that and then I got, need to go buy this other thing and combine them and shake it. Why wouldn't I just buy a Gatorade?
Like, that's the problem.
It's crazy.
You're going up against ready to drink.
Yeah. Got it.
It makes no sense. This is why Gatorade is so much bigger than the powdered electrolyte market.
Right.
I mean, I think it's also just cuz like, think about like in your standard store, people are selling singles.
Yep.
A single stick. It's just. It takes a lot to get any business there. So like we obviously want to launch like the biggest place we could, which is Costco. And Liquid IV is really a Costco brand and they are, they're hard to compete with there. They're constantly doing deals. They're always undercutting everyone.
So, so it's, it's, it's not that we like couldn't do it. It's, hey, if we put all of our energy into like bars, there's so much more green pasture to growing our share in bars in brick and mortar than banging our head against the wall on hydration in brick and mortar. We know hydration can work great. Great e-com. We know we have a powdered coffee product too, can work great e-com. Like, yes, we could roll the dice on brick and mortar in those, or we could keep running this other form factor that's like absolutely lights out everywhere.
Um, you mentioned it, but I think physical retail is full of people that are really dialed in on scale economies, and you, you just cannot compete unless you are fully committed to scale economies. Like you're, like you said, Liquid IV, part of the reason they're able to be so successful in Costco is they are not They don't take the approach that because we're the market leader in this form factor, we can charge excess. They're actually like, we're gonna be more aggressive on price in physical retail even than we are online. And they're constantly paying for placement right by the front door. They're constantly paying for the member discounts and things like that. And that's actually the playbook in consumable consumer stuff. In wholesale is scale economies, drive down that price, just move a ton of units.
I guess though, like, can you give me your take then on what, what, like what you're saying? Uh, where I'm getting stuck, guys, is pick a large category. So go pick a huge category, right? It's likely very competitive if it's a large category. There's no large categories where it's like, well, there's nobody in it. That doesn't, that just doesn't work. But if it's a large category,, then it's also extremely hard to compete in. So like you looked at bars, you're like, this is a massive category, we're gonna go do it. What told you that was worth competing in such a massive category? Like what, what did you have early on?
I was like, I think honestly being naive was extremely helpful. Yeah.
So just ignorance.
Nothing. Yeah.
Absolutely nothing.
Love ignorance.
It's like, it's a great answer for most things in life.
It's like, I, I just like, it's like we didn't know.
No.
And honestly, like we didn't know about like that keto was gonna be such a big thing for us either.
It's like, oh, so, so that was, so, so big categories are not monoliths, right?
No. Yeah.
There's lots of, they're not monoliths. They're actually the amalgamation of 15 little categories, little subcategories. And actually each of those subcategories, if that big market is big, is also quite big.
Yep.
Yeah. And so we learned early on, on that we were like one of 3 keto-compliant bars or whatever the number was.
And like, you weren't marketed like that.
Like, you didn't position that way. No, no, no, no, not at all.
That's how much people like were looking in this space and there were so few options that But they just were like, oh my God, they have blown that card.
Well, how did you position the brand initially then?
It was, it was brain, it was brain, it was brain. Our first tagline is brain food.
Yeah.
That's it. And it wasn't high protein. It wasn't actually the very first bar was like 8 grams. It wasn't even keto compliant. It was, I think, 8 grams of sugar. We then got sugar down for purposes of being good for the brain, not weight loss or not keto, not all that. Keto just happened. And then all these people who started buying our stuff and in post-purchase surveys being like, yeah, I'm keto. This was fits my macros. And we're like, whoa, what's keto? And it just blew up and it's Amazon just like totally took off and we're like, oh, we're just a keto brand now.
Have you—
it's fascinating though.
Have you let, like as a marketer, have you let the, those sort of like consumer trends pull you into different positioning?
Yeah.
Different product categories.
One thing that's awesome about us, like now that, um, we are like the form that we are of like, we're a protein bar, we're low sugar, we like don't have grains. Like these are just things that will always be true about the bar and there will always be trends just around clean label. So it's like, of course we'll lean into different trends as stuff changes, but like we don't have to change the product to do it. So like a good example is like keto came and went and when it was really big, we put keto on our bar. Now fiber's really big. We've always had a lot of fiber. We just didn't call it out in the front of the pack.
Yeah.
Now we're changing that. So we do call it out in the front of the pack.
I think people take the like stay on brand way too far.
Way too far. We agree.
20% of what you should be doing should be arguably like like, not on brand, because that's how you learn and that's how you take advantage of new emerging trends. So like, it wasn't really that on brand to be keto, but we're like, oh, 9 out of 10 people are on the keto diet, we're gonna put keto in huge letters on the front. And of course that then paid further dividends. The caveat to that is you can't marry that trend. If that trend goes away, you can't then die as a result.
There's a lot of like brands who like put it in their name and a lot of them aren't around anymore. So it's like it's also an ability to pivot that doesn't mean totally changing your product.
So I mean, we could do again a whole, whole pod on that, right? So you need enough value propositions such that that one that just popped off, when that dies, yeah, like the other 9 carry you through. Well, that was your only value prop, like you're screwed.
Yeah, yeah.
You have to build dynamic products.
But, uh, I guess though, IQ Bar, like literally IQ is in the name. Yeah. How have you had like, as a brand guy, I'm like, how does IQ Bar sell?
Did you ever think about changing it?
Yeah.
Well, it's like smart food. Yeah. Smart food is popcorn. Like, I don't know. I don't know. Smartwater. Like, it's, uh, the beauty of the ethereal, like IQ, like smart choice, da da da. It's pretty, even the, the trademark is dynamic.
So you never thought about changing the name at, at any point of like, well, not just that, it's IQ Bar.
Like, what an idiot. Why would you put the form factor in the title? Yeah.
You literally called it a bar.
Yeah. And then you go into non-bars, which doesn't make sense. Like, right.
So.
So now I would take the other side of that, which is I actually love, like, I think it's really valuable saying literally what the thing is. Like IQ Bar, again, like caveman brain, we all shop like that. And it's like bar, like I always know it's bar. And, uh, and then we, we, and this is a little bit kind of like Runes, right? Like where it's like the U, they, they centered on the U with the umlaut. Like we centered on IQ. So IQ Mix, IQ Joe, and But the brand is still IQ Bar.
Yeah.
95% of sales is bar and now bites.
And I mean, our whole product line also, like we haven't pivoted totally away from the brain. Like we have nutrients in all of our products that are good for the brain. Of course, like things like powder allows us to have more of that than something like bars, but it's like, that will always be true whether people are looking for it or not. Cuz that's like the ethos of the brand.
Do you guys think you are a net winner or loser with the whole GLP-1 craze?
Net winner, big time. So there are 3 categories. So, so, so, so someone did a great study on this where they list all the categories that get hurt with GLP-1s. And like number 1 is like sweet baked goods, absolutely going to get obliterated. Like Hostess, whoever, whatever that PE that sold that, like great move because you got out at the right time. Um, salty snacks, not great. Not, not, not, not, not. There's 3 where you're actually more likely to consume it if you're on GLP-1. You can, it's net positive, which is, uh, bar protein bars, meat snacks, and yogurt. Hmm. That's it. 3 are net additive. Actually, electrolytes will do well too.
Yep.
Because you have to add back. But on the food side, it's those 3. We're one of those 3, right? So it's, it's it's, it's incredible. Right. Protein fiber, basically it's a protein and fiber story and low-cal story.
Yeah.
Yeah.
I would not want to be a big kid.
Also just like kind of, yeah.
So talk, what's, what's Bites? This is a new product.
Brand new. Yeah. This, this is a perfect example of how we are still not corporate at all. We had this idea, we turned it around incredibly quickly, and now it's, what's quickly all over the place.
Oh, it was insane. So like, like, well, okay, so this is another GLP-1 thing, right? Portion size. And this is actually absent GLP-1, things were getting smaller in portion size over time, but definitely with GLP-1, you want to sell smaller stuff.
Yeah.
But, but in terms of how we, we rolled it out, we, the bar set is a set that looks kind of boring, but there's a lot of interesting stuff happening within it. And one of the kind of interesting trends that we saw was smaller format bites, right? A bite is just a small bar. And we noticed a couple SKUs of competitors that were just like ripping on bites because there is like a, in a bar set, like in Sam's Club, let's say, uh, there's 8 bars and 2 bites, or I think it was actually like 9 bars and 1 bite. And, and the bite product was just crushing and we're like, whoa, like that's, that's really interesting. And we'd have conversations with our buyer and they would go, confirm that it's crushing and they want there to, that subset to be crushing even more. They wanna grow that subset. We wanna sell more stuff. So we had a collaborative interaction with our buyer and basically they were like, could you make something like that? And that got our wheels spinning. And then we're like, yeah, like of course, like ding. Mm-hmm. Why would we not do that? And it turns out there's a lot of reasons not to do it. It's, it is incredibly hard.
Well, we also code, we code our buyers. So they're like, they're coated in, um, I dunno, a saturated fat. So like, but so they're like temp sensitive. It's the first temp sensitive thing we know.
Oh, so, so we had to violate, we have a laundry list of things that if they're all checked, we'll consider going into that category. One of them is no temp sensitivity. Absolutely not. Under no circumstances because they're not shelf stable for as long. Well, they're shelf stable. It's just, it'll melt.
It, it, it's really the like e-com of it all. You can't ship it during the summer. Or it's fine on a shelf if it's like in a normal, or even brick and mortar, you can't put it on non-temp.
Controlled trucks.
Yeah.
Like it's just risk, risk, risk, risk.
You're leaving this area of success.
Storage.
Storage.
So when you have chocolate chips and things like that. Yeah.
Well, chips are okay cuz it can melt and reconstitute where, where it's a problem is if it, the full thing is coated, that, that's a problem cuz it'll turn into a goo.
What?
Yeah. It'll just melt and then puddle in this area and then reconstitute in some bits.
Yeah. Like off the bite and yeah.
You ever saw an old RX bar?
Oh God.
They, it, they're weird looking. You know, I found one in my truck the other day.
I bet you ate it, didn't you?
I still did. I'm like, I was so hungry, man.
No, but so, so we looked at bites and you can do bites in a non-coated way, but we're like, whoa. And again, this is much better. This is like kind of dovetails with the do stuff that's off brand. We're like, what if we violated that one principle because it helped us in 10 other ways? And we're like, what if we did coat it? Um, and everything in our set is cookie dough, peanut butter, chocolate, da da da. Like, what if we came in with also mass market, but PB&J, still mass market, nostalgic, kid-friendly and adult-friendly. Um, and we coated it. And so it's like a peanut butter center and like the fruit coating. Yes, that would violate our, you know, sacred cow of don't do temp-sensitive stuff, but like it unlocks so much else. And so we did that. Turns out it's very, very hard to manufacture.
No. How quickly did you, I forget the like launch journey, like from actually starting to make samples to like it's on shelf, but it was, oh, we had to find a new manufacturer cuz it takes specific equipment.
Oh, so it's different. Not, it's not even the same supply chain.
Not even the same supply chain. We had to find a new supplier of the coating, which is like the coating in and of itself is its own formulation that takes months and months. Um, the viscosity, you have to get into stuff like viscosity.
So 4 to 5 months to get to your on shelf, what would What was the timeline?
I was, it was insanely quick. I wanna say it was like 4 months.
Oh wow.
Yeah.
Yeah.
It was like wild. Like everyone was like internally was like, we can't make packaging, can't make a new product.
But packaging lead time alone is like 90 days depending on where you're getting it from.
Yeah. Yeah.
No, it was very uncomfortable. Still, still is.
Yeah.
Still is.
But it's on shelves.
This is in real time. This is in real time, by the way. We're like living this, what we're talking about now, we're like living today.
'Cause we're also, 'cause Will also just, uh, is working on selling in slash has kind of sold in 3 new flavors that do not exist. We do not have them.
I love this.
This is great.
We sell stuff, make it.
Half the stuff we sell doesn't exist. That was true at Kickstarter. That's still true today.
You're right.
This is very not corporate. It's like not planned products. And then I'm gonna sell things that don't even exist to see if somebody wants to buy them.
Will was just on a call with the team and, um, somebody had a line that reminded me of just this, of like, our head of sales is always like, we're cowboys. If you wanna join this team, like, it's not gonna be smooth sailing. There's not smooth sailing. We just figure things out.
We can't, which we thought would have a, like, at some point you corporatize. Like, we're more cowboys now than we've ever been. And it's scarier 'cause it's at a bigger scale. Yeah.
Yeah.
It's, uh, when you make a mistake now, those, there's zeros on those numbers.
Yeah.
Yeah.
To, to pull out a theme that I think's interesting. Like, what you guys are basically saying is we have a demand-first kind of model of how we think about business. Where is there a lot of demand? And then we'll flow towards that. We'll figure out products for that. Like, that's, that's the only way you can sell things that don't exist, is if there's demand but you don't yet have a product. And so often people take the opposite approach. I'm going to come up with my pretty thing and I'm going to convince people they should want it, whereas you're taking the totally opposite approach.
And because also we'll start for stuff like this of like selling in at like the club level, it's kind of like, okay, well we have such a big PO that like we're gonna all figure it out. Yeah.
Like Bites will do like over $15 million in year one and we didn't, it wasn't an ideal, an idea in our head until like late March.
Oh my gosh.
Like it's crazy.
That is insane. Yeah.
Yeah.
Like, do you know what it took us, whatever, 4 or 5 years to get to $15 million?
Yeah.
Right. Yeah. And it's just like, like, like, and that, I mean, that speaks to channel selection and product.
Yeah, product, product. It's like we're already in a lot of these stores, so like already know the buyers and like these conversations are like about bringing additional product, not necessarily a store that like we've never been in.
Can you expand on the, the— you sound like you know a lot about product, like this product and this.
The product guy.
Yeah. When did that start? Like, was that like a day one thing or did you figure out at some point you're like, oh, I gotta go so deep in this that I wasn't prepared to I think the CEO has to, in food, has to be the product person.
Yeah. There are exceptions. You'll find exceptions. But my opinion is they, they have to because there's so much under the hood and the product's never done. Like, yeah, that's why I actually love the AG1 thing of like, it's always a prototype. Yeah. Like they, they have a new formula of the same SKU that they've, that's their number one SKU. Yeah. And that sounds inherently risky, but actually it's pretty brilliant. Like the product is never done.
And so, yeah, I feel like you've been talking about how having a final formula for like 10 years now. And at this point it's kind of just like, it'll always, there's always going to be— No, I feel like at this point we've accepted it. It's just like, it's, there's always minor tweaks.
But that's counterintuitive. You think like, oh, Snickers is Snickers. It's always been that Snickers. Like, no, like Trump tariffs mean you have to go find a new, like, uh, peanut butter supplier or whatever. Like stuff happens and then consumer demands shift. Sure. And So if the CEO or the founder isn't the product person, like, oof, you're like outsourcing the DNA of this.
Yeah.
It's, it's something so tricky.
I should note though, 'cause I feel like you always talk about this, but like you don't obviously like day one come in and are like good at product. I think it's like in the very beginning you were always mixing stuff in like our kitchen, but in the very beginning you would hire like these random consultants to like help with certain things and they would teach you some things, but also So I think just the more reps you got, you realized, oh, like I actually can do this without them. And I think I know more about this product than they do. But it also didn't happen overnight. It's like, it was like through going through those reps with different people, getting different perspectives that like you got to the point where you're like, I'm better than these people at this thing.
But I, I, I would say like, well, than our product at least. The, the part of product that's most overlooked, it's, it's not, it's having a good product is half, at most half the battle. The supply chain and economics behind it is probably 70% of it. It's not whether you can make a good thing, it's can you make a good thing for this number of cents?
Yeah.
And that is what's so, so, so, so hard. And that's like, and by the way, those are two actually different skill sets.
Yeah.
So those have to live together in one brain for, for it all to work.
And did you start, how quickly did you realize that was gonna be true? You're like, oh, I'm gonna have to go really deep. Deep in this?
When we were losing $1 million a year for 5 straight years and I was like, oh, like this COGS thing kind of has to be worked out at some point.
I feel like you definitely started caring about it before that. I'm like, okay.
No, but 'cause I think you get so many false positives of, whoa, we have all this demand. Like, that's cool. Do, do you, is that flowing through to EBITDA? Like, yeah, just selling a lot of stuff is not enough. You need to sell a lot of stuff. And store it properly, and the supply chain has to be humming, and your payment terms have to be humming. Like, no, well, that is the product. Those are all part of the same thing.
It's easy to sell stuff to people when you're giving them more value than they're giving you. You know what I mean? It's like if I said, hey, I'll give you a dollar for 50 cents, you'll take that as many times as I'll give it to you. You know, everybody would. And like, business is actually the ability to like give somebody something and the amount of money they give you back, there is a margin and there's a profit and they're happy to make that trade. And so like people, people are always like, it's amazing to me how quickly the market sniffs out arbitrage where it's getting more value for its money than it should get.
Yeah.
And so can you talk a little bit about how you did that in the supply chain? Uh, you have to talk about— Yeah.
What were some of the moves that you did to like go find the million dollars or whatever it is that you wanted to go?
Man, we could do a whole thing on negotiation, but I feel like your ability to find like what's going on in larger markets, like the almond market it.
Oh, we're—
we are like certainly micro and macro economists for sure. We, we track almond futures like very closely. We track cocoa futures very closely. Yeah. Oh yeah.
Yeah.
You have to be tracking that. That is the difference between profitability and losing money. Um, I mean, we buy whatever, 15 million pounds of almonds a year, right? It's very different if we buy 'em for $3 versus $4. So It's just out of necessity. It's looking at the P&L. Okay. What are our line items that contribute the most cost in use? We think of everything as a bar. So what is the cost in use of almond meal? What's the cost in use of almond butter? What's the cost in use of FiberServe? Blah, blah, blah, blah, blah. And then what, it's kind of basic, but take, what are all the suppliers of that thing? There are 5 of them. Okay. Have we called all of them? Have we used hammered all of them? Have we tested all the products? The thing still has to be good and work in the product, but it's relatively commoditized.
So cool.
What, and have we pitted all of them against each other? Like one thing you learn is, oh yeah.
Hope our almond supplier doesn't see this.
What is it? What is the way you do that? Are you cutthroat about it? Are you more partnership oriented towards it?
No, no. Cutthroat. I, the partnership thing I think is mostly a myth. Is a myth. Partnership is me sending you wires of a lot of money. That's, I'm your partner. Like, I'm gonna negotiate as hard as I can negotiate.
Yeah.
Oh, he's very unemotional, which I think is awesome. It's like perfect for this kind of business cuz like, I feel like most people wouldn't be.
You're not gonna do the deal if it's not worth it for you to do the deal. So that's how do you know when you're at the bottom with somebody? The best way is have pit 5 people against each other. You will find the bottom. That's what, this is why RFPs exist for a reason, right? Like, like we never actually do a real RFP, but we do a semblance of an RFP. Yeah. Constantly. You're constantly running those.
I forget the latest example. I'm just gonna use almonds for example. But like, you also like will randomly, like, even though you've done this recently and you know that we're at the bottom or you got a new deal, like year passes, you would be like, I see almonds are down 10%. Our price hasn't changed.
Oh yeah.
Yeah.
That's a great point. Right. No one had, so my first job outta college, we made cost models for like piping for oil and gas companies.
Right.
So what goes into a pipe? It's It's, um, freight, it's steel. And let's say I buy, buy piping at $10 a pound or whatever. All those subcomponents have markets under them that go up, down, sideways. And the cost model is the weighted average of all of those. And so 6 months later, that cost model, if it's built properly, will tell me I shouldn't be paying $10. I should now be paying $8, $7, or more., and when it tells you you should be paying less, you, you're silly to not act on that. Call the supplier. Hey man, uh, steel's way down. Like I see you charge me the same thing. Like, mm-hmm. Why are you charging me the same thing? You're making more margin.
Yeah.
You should be passing that through to me.
But also like, it's sort of like gambling where like you will make, uh, like determine that you have to do a flat rate for some of these costs 'cause you think it's gonna go up.
Contracts. So we contract. This is to contract or not to contract.
It is kind of like hedging, which is what you're—
Yeah, no, no, it's fully hedging.
Totally.
But we've also gotten burned on that. So like, I'll give you one random example. We bought just a stupid amount of almonds during COVID because every input went up. Every single input went up except for one, almonds, because there was such a glut because they couldn't get them on boats to go to China, India, Europe, etc. That the glut created domestically a depressed price. And we're like, ah, fuck, the one input that went down was the one we contracted at. And so we were paying above market for like a year. So it's, it's not that it always, like, you can make a good argument you should not hedge as a startup. If you're Hershey, sure, hedge, right? But, um, but you should always, you should think about it. And suppliers, if you're like tight with them and you do a lot of business with them, they'll kind of give you a little inside baseball on like like, the market doesn't really know this, but we've seen the like weather reports and like we're pretty sure it's going this way, so we think you should contract. Okay, now we'll contract.
One of the reason why you have to have the mindset you have is that internally Walmart, Costco, Sam's Club have entire teams that their job is to do like your pipe analysis you were talking about. They do that with every single product and category. And so they look at bars and and they know your ingredients and they're like, this is what we think they're paying. And so whether you're paying it or not, they think you're paying that and they're going to negotiate with you as if you're paying that in the prices, the wholesales they're asking from, from you. So you really like all up and down the chain, it just demands it that you're getting the best price.
You've set an anchor. So with Bites, our anchor is bars. And so, so those retailers were anchor off that and they said, what's the premium on a smaller format? Buy a premium on a cost per ounce basis to a bar. We're willing to accept a 13% premium because it's harder to make smaller format things. You can't amortize the wrap, the packaging across a bigger thing, da da da. But it shouldn't be more than 13% and yours is 15%. Like, why is it 15%? They will literally have that conversation because somebody in their office, because they know enough about it too.
That's right.
They're so deep.
Well, that's their business.
It's their business.
Their business, just like it's his business to like run a really tight ship on cost.
So you're, you're going crazy deep in product product and supply chain. You're on the marketing.
Yeah, e-com marketing side.
E-com marketing side. At what point did the business flip from like predominantly e-com to predominantly retail?
Probably last year. Yeah, probably last year. I think it, it's really Club, like just the introduction of like having Club.
Club and Mass.
Like, yeah, really Walmart, Target, Club.
Yeah.
'Cause it's like, that makes it sound like e-com's not growing. Like we still double every year, but like, like we're doing way more than double every year on, uh, retail. So now they're just growing way past me. And I, I honestly prefer that though, because it's like if I was doing the same thing, we'd be in a way less healthy spot online. So it's a little less stressful.
Uh, would you mind giving us like a sense of, uh, how you drive the e-com business and, and how that's changed over time? So like, yeah, how do you, how do you market? How do you acquire customers? I would just assume that bars are hard to sell on internet.
Yeah.
I don't know why.
I just have this like, that's my mental model for me. I'm like, and I'm an ad guy. I love ads. Like, you should make some ads outta this, but how the hell do you pull this off?
I feel like that's why we leaned into Amazon so much in the beginning. Okay. Just 'cause like, it was just way more efficient. People are willing to buy bars there. People are used to buying bars there. So I think that was a huge like stepping stone of like getting in front of people who are willing to buy this category online to begin with. Mm-hmm. And convince them to buy it. So really we went all in on Amazon pretty early on. We started, I feel like maybe when I came on, we were spending the same amount on Amazon and our website. And just really quickly, our customer acquisition cost was like half on Amazon.
Oh wow. Yeah.
So we just like went all in on Amazon and at the time it was when people were telling us like, don't go all in on Amazon. You don't have your customer data. Like that won't matter as much. But like, honestly, luckily we never really listened to them because now we're bestseller in our category and we absolutely could not have gotten there if we just pivoted into Amazon a year or two ago.
Yeah. And Amazon's also a great channel where value totally wins.
Totally.
And also people look for, uh, for ideas on Amazon. That's a really interesting thing because it helped with retail.
So, oh, like the buyers are looking, we got into Walmart because of our Amazon.
Yeah. They look at, they look at market share.
Totally. There's, which is really cool.
Absolutely. Target is really big on this right now. They're looking for people with digital heat, uh, to bring in. It's challenging.
Yeah.
Amazon's like one of the best ways to like tell who has that. 'Cause like, again, it's a ledger.
Amazon is a public ledger.
Yeah, that's true.
For every category.
Totally.
Yeah.
And I, I also like, we always on Amazon, I think pretty early on we realized like, if we want this to be a business that doubles every year, if we're constantly growing, like this is not, we're not finding profitability on Amazon, or at least not in the beginning. So we were kind of like, we just wanna grow as much share as we can here, focus on breaking even. And now that we're at enough share, now we're profitable on Amazon.
Partially because you probably have a lot of branded search on Amazon where you're not having to pay for the acquisition.
Totally. And because we have a lot of subscribers and people who just, you know, come back too.
Where does the branded search come from? Like, are you generating demand? Is that from retail? Is that from like, are you running television nationally? Like, how do you do the demand part?
It's a mix of all of it, honestly. Um, we, We spend a lot on search ads. We spend a lot on audio. We're like big into audio for brand awareness.
Cool.
Radio, podcasts. Um, we do a lot of streaming TV as well. We don't do linear. We probably will do linear at some point, but we do— don't do linear TV right now. So those are like our big acquisition, uh, like brand awareness channels. But otherwise, we're always doing the basics everyone else is doing. Meta, Google, TikTok.
How do you, here's how both of you answer this, but how do you think about the customers? Like the initial sort of days of building the brand and the product, it was very focused on like brain and brain health and brain performance. How has that changed? Like today, if I'm like 2026, we're in 2026. Yeah, we're in 2026. Yeah, I never—
you need an IQ bar, friend.
I need to eat like 10 of these things.
We should have brought more.
Yeah. So 2026, who is the customer of the product today?
Is that different from, um, I would say it's like there's more customers is a better way to put it.
Okay.
Of like, there's always going to be a small segment that is really into like longevity and the brain. Um, is that a large portion of our customers? No, but like they'll always be there. They'll always exist and we always wanna like have some sort of ads that speak to them. Um, but now a lot of it is people who just need healthy fuel on the go. So like like we found that some of our bigger audiences are, uh, like nurses, for instance, like people who like need something really quick from their locker or like school teachers or even like, you know, you have your personal trainer or just somebody who like actually really cares and nerds out on the nutrition and they're buying it for that reason. Um, or like another thing is that 25% of people are lactose intolerant yet like no one really talks about that and like they'll just put whey in everything. So I think there's also like a pretty big market it for plant-based people. So there's so many people who just buy us also for the dietary reasons, whether that be no dairy, no gluten, no soy. Like, there's always— we have like 8 different cohorts of people that like fall into all of this, and we just try to speak to each of them where they are and based on what they're looking for.
As you get bigger and more omnichannel, there's the thing of like, don't try to be everything to everyone. Like, actually, we are trying to be everything to everyone at a minimum. Most things to most people. I actually like disagree with that, that line.
Uh, I think it's a earlier you start that way. Yeah. Like we put in massive retail is like we're massive people groups of that.
We need to win kids. We need to win moms. We need to win dad.
Yeah.
And we, that comes down even to like the amount of protein. Like women don't want a 30-gram protein bar.
No.
Like also like we care more about having like like real food and real ingredients in our product, and so do the people who eat us versus people like— if somebody wants a bar that's just 30 grams of protein and they like do not care what the label says, they're probably not going to buy us. And like, that's okay.
Has there been a stage of growth that's been harder than others, like a size of business or a size of supply chain?
Like, I feel like the COVID times were tough, mainly because of supply chain.
Yeah. I would say, yeah, put that aside cuz that was just like a freak thing. Um, for me it was like the first couple years and now, now why now?
I think it's cuz we've been doubling everything. We have like, once you get so big, you're just like, can we still double?
If you're like well into the 9 figures, our rubric is double every year. Double every year.
We realize we don't need to do that anymore, but it's like hard to change your mindset where you're like, no, but like we've been doing that.
Yeah.
Cuz we double our CAGR was over 100%.
from 2018 through last year, through 2025. So of course, why wouldn't you?
That all sounds painful.
If it was like 8 years, like there's like so much growth, why not the 9th year?
It's very painful.
At what point are you like, oh no, let's grow 20%. Like, no, we've done it every year, so do it again. Well, that turns out it's like quite hard to do that when you're—
it's kind of mathematically impossible at some point.
Yeah.
Yeah.
So, and I feel like we're like getting close to that, but we still want to do it, um, and we're going to try to. I mean, look at us, we just, we'll turn things around as quickly as we can. Um, and like, it's also like, all that makes it sound like Barr isn't still growing, and it is. Like, we're very lucky that like some things are just working, and the like more money we put into them, they're able to scale. Um, like on Amazon too, like we've never had a downturn in Barr. Like Barr is always up and up, like every month is our best month. So it's like, that's awesome. But yeah, if we wanna, we've realized if we wanna double.
Why do you, okay, so, but why did you wanna start on this? Like, we wanna double every year. Is that a success metric? Is that like a strategic thing?
Why don't you get the hell out and like take, take a long nap, man.
Like, I think part of this comes back to like when the business started and our goal to like get to $25 million and sell. Like, I think it's just a mindset thing. We're like, okay, like we need to show that we're really high growth. And at the time it's also like profitability was unclear if that mattered. So it's like, it's always just been in our mind that we have to double every year, even though we probably don't.
Well, it's just, it's just, do you want to be in this game for 10 years or 5 years or 20 years?
Right?
Like at some point it's like, okay, we're gonna have to get to X in top line. Like the faster we grow, the faster you get to X. Yeah.
Um, I think it's also multiple.
Multiples.
We always, uh, thought the multiples would matter more and be bigger.
Like multiples. Yeah.
But because, because we always, every, we've been for sale.
Oh, in terms of like what people would, yeah.
Give us for investment. Yeah.
Totally.
We've been for sale every year. We haven't been selling the business, but we are always for sale.
No one was aware of it, but we were for sale.
So like you want to at any moment be like, oh, we're an ultra high growth company with these great products and da da da.
Yeah.
Like I want someone to approach me at any point and me be able to tell that story. So every year we were like, okay, let's keep doing it in case that happens. And then, and then it just becomes like muscle memory and, but it's, it's, it comes down to like the whole bottoms up versus top down. Like most people do bottoms up, which is like, we're in this many retail accounts and this is my velocities and we generally grow at this rate online and blah, blah, blah. And that spits out a number and we're going to grow 30% in our We do everything top down.
I would want to grow double.
Yeah.
How do you make that true? Yeah.
Exactly.
Mm-hmm.
You're a psycho. Yeah, totally.
Totally.
Yeah.
Yeah. Yeah.
How, how will you do if it slows down at some point?
Yeah. Oh, I mean, we're not gonna grow 100%. This will be the first year we don't grow 100% in 8 years.
It'll be 93%.
Um, no, it'll be something more reasonable.
No, no. But, um, No, now I, I think it'll shift to growing 50, like our new, like North Star will be 50% growth. But that's still hard, right? Like that's still ultra high growth.
Large numbers, right?
Like all the big CPGs grow like 8% or like barely.
Well, think about it. Let's say you're at a $200 million, you guys haven't said revenue, you don't need to, but let's say you're at $200 million. 50% growth means you're adding $100 million in nominal revenue. How long did it take you to build the company? Company to $100 million in revenue. You know, you're talking about adding an IQ Bar at year 8 or whatever every year.
Totally. And we sell roughly a dollar a bar. So that means you have to sell that many more bars.
$100 million more bars. Yeah. Which you just start to get into like, how many people are in the United States? Like, what does that mean? I've gotta get another bar on the map.
Wait, you just go back to like every category again. How many people are consuming bars? How many more bars can we get people to consume? Are we just taking share?
Well, hence, hence. Bites and, and things where, okay, now we pull in kids and now we pull in these GLP-1 consumers at different points of the day. Yeah.
Like I think part of the goal is to, every single one of our categories can be consumed by one person in one day.
Mm-hmm.
Which was like the goal, whether people do or not, cuz they can have a coffee, they can have an electrolyte mix later in the day, they can have a bar as a snack or maybe a bite later on as a snack.
Oh, like drinkware, phone cases, shot, like wallets, right? You will, like, there's only so many people running the wallet.
The team is real.
Yeah. And then, but that doesn't mean your job's done. Like you just move over here a little bit.
Yeah.
And oh, new Tam.
Like, yeah.
Uh, okay. We've talked product and how psycho you are.
We've talked, uh, a little bit of marketing and how that's changed over time.
How, and I mean, this double thing is just insane, guys. Uh, how do you manage team and how are you thinking about growing the team and how have they responded to this? We gotta double next year, guys. Go find me $100 million.
I think part of it is both models can work, having a small team and a lot of outsourced functionalities and the inverse of that. Part of it is like, what is your core competency? Is hiring and team building a core competency? It isn't for us. I'm not good at hiring. And this we can get into, me and Mike have a whole contrarian, we both love nepotism, right? Like, case in point, right?
But like, yeah, but even before me, um, our creative director who's been with us pretty much since the beginning at this point is like one of my best friends from childhood. But again, it's like, who will agree to work with you when you're like, we're no one, we can't pay a lot, please believe in me.
And, but at some point that runs out, right? You run out of people you trust or are married to or was a childhood friend. You know what I'm saying? Unless you're polygamist or whatever.
I don't know.
Maybe not scalable. Unless you're—
it's not scalable. Um, so hiring was not a core competency of ours. And so we're like, all right, can we just, can we do the thought exercise of create a really small team? Like we're 15 people.
Oh, still?
Still.
Yeah.
Today.
Whoa.
Uh, and create, that's the hub. And then have spokes go out to a bunch of outsourced stuff. Third parties, paid ads, third party, Amazon agency, uh, Costco broker, a Walmart broker.
Yeah.
Bop, bop, bop, bop, bop, bop.
And I feel like it's also like, like, it's tough for the people who are on the team 'cause obviously they need to kind of do the work of multiple people and they need to be the type of people who like are really all in on work and like really high producers and care a lot. So that's helped us and it doesn't work for everyone we hire, so it doesn't always work out.
And like, you know where you can't hide when there's 15 of you?
Yeah.
You cannot hide.
15-person teams are amazing.
You are the CEO of your department. If the department's failing, it's not like, oh, where does the truck stop. It's like, John, like, what the hell? You know, like, uh, and that's so much better. And there are people who like that. There are people who like extreme accountability, right? They wanted to be rewarded and yada yada. But like, there are people that like that. And then most people hate that. Most people like hiding a little bit, or the ability to hide.
Are you guys a fairly like flat organization, like structurally then? Like there's 15 people?
Completely flat.
Yeah, pretty much. Yeah. Yeah. Yeah. Like we all talk to everyone in our like little silos. Like we're not totally flat, but like we don't have like middle managers. Like everyone does stuff.
And the everyone is the CEO of their department. Like that's the best way I can put it. They make, they don't have to ask me for, Jess doesn't have to ask me like, can I do this? She just does it.
'Cause yeah.
I mean like, I'll give you like a heads up. I'll be like, by the way, I'm getting a new agency. This is the cost difference. But like I've already done the negotiation to make sure we get as low as possible and that like, we're in a good spot. So it's like, by the time I'll like mention it, he'll be like, cool.
And, and, and what are like the downstream impacts? Less meetings. Like, you know what kills an organization? Meetings. You know, fewer people mean less meetings because single brains hold multiple functions at once. So a meeting is just two things meeting. If they're already in the same brain, there's no meeting. So less people means less meetings, more doing.
Oh man. Okay, Okay. Uh, you wanna ask the relationship?
Oh yeah.
Okay. Transition to that. Cause that is the perfect, like, that's the perfect moment.
Okay. So we've got a smaller team. The two of you are working in very close quarters. You are romantically involved. Like, when have you guys really gone at it on an issue? What's your biggest disagreement you've ever had?
I wouldn't say we actually have not disagreed on that much. Um, I would say. For me, it would be like upgrading of lifestyle, generally speaking.
Oh, that, you know, that's fair. That, that is fair.
We, because like all my friends went into like banking or consulting or whatever, and they all like did the thing or they get the slightly nicer apartment every other year and then whatever, they get tickets to the Celtics and the, and meanwhile I'm like living in a basement, then living in like a really, really like shitty apartment.
Main floor.
And then the, yeah. Well, we made it to the main floor, which is a big, big step.
Yeah.
But we were, Jess and I is like, First apartment that we lived together in was, uh, just, I can't even tell you how bad it was. But, and we were, I was like formulating the product of a multimillion dollar business in the kitchen of the apartment.
Yeah. So this like didn't exist to me cuz like there's just like bats of peanut butter everywhere. Like I cannot come in and cook.
It's just like, oh my God. And then I like, a skunk was in, in town at when I was formulating for a big like new product. And like, I'm, there's a lot of scar tissue there.
There's a convention.
There was a convention.
But, but so at some point, like, I'm actually, I am a psycho. Like I could actually live like that for a while. And Jess was like, this is like crazy. Like we gotta start upgrading our lifestyle. And so then we got actually like a, a nicer apartment and then we moved to Miami and got an even nicer apartment. And, but the like crazy thing of all of that, and I think I might've talked about this on our, when I did the Operators the first time, uh, was like, I actually couldn't afford that without a secondary transaction. And so I'm very, very pro, pro-secondary.
This is also like, you couldn't afford that without the secondary transaction because Will will still choose to pay himself as little as humanly possible to still survive and pay bills.
Yeah.
So like, that's part of it. It's like if you were making like a normal salary that you maybe should be, wouldn't be a problem. Yeah.
Yeah.
I mean, I, I had like more or less set my own salary, so it's all self-imposed.
Yeah.
But for, I have this weird complex where I'm like, I should be the the lowest paid person.
Yeah, that, uh, yeah, that's weird.
That's a therapy thing. Yeah, I'm gonna do that today.
Well, it's all there. This is all there.
The point is there was a minor secondary, uh, transaction and I just keep pushing forward.
What was the purchase? What is the purchase that you was the most like, hey, I feel like this is a we made it moment?
Um, I would say honestly, like, we don't