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This guy sold his company to Unilever for $1.2B after just 3 years — Transcript

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0:00Zero to over a billion dollars in 32
0:02months maniacal. We're quite literally
0:04just getting started. Where do you think
0:06is that gap to really jump from average
0:08or good to great? If you want to have
0:10the greatest odds of success, it's by
0:12creating a new format. New formats win.
0:14You obviously spotted one really great
0:16opportunity. I'm curious what other
0:18opportunity you spotted.
0:18>> there's an idea that no one else is
0:20going to be able to run at that is a $10
0:22billion business idea.
0:23>> You should just say it now and we'll
0:24bleep it out.
0:25>> We'll talk about that. I think that's
0:26the biggest opportunity for founders.
0:28>> What are the inputs necessary to get to
0:30a hundred million in revenue for an
0:31e-com brand in three years?
0:32>> Here's what I'll say.
0:43So here's here's three things I'd love
0:45for you to deliver. One, I want to know
0:47the origin story like how the hell did
0:48you have the idea and why did you have
0:49the confidence in the idea? We're going
0:50to go there. Two is you sent us a thing
0:53about your marketing funnel which is
0:55like you know, what is world-class
0:56marketing look like in this scenario?
0:58And then the last part I want to riff
1:00with you, brainstorm on like
1:02where to from here. You obviously
1:03spotted one really great opportunity.
1:05I'm curious what other opportunity you
1:07spotted. Yeah, let's do it.
1:08Okay, sweet. Um dude, I've been I've
1:11been taking greens for I don't know six
1:13six to 12 months now because it's like
1:16it's basically like eating candy. It's
1:17like you open up a pack of gummy bears
1:20and then you eat them and then you're
1:21like I just had vegetables.
1:23Totally. I ate gummy bears but I I think
1:25I just had vegetables maybe. Totally.
1:27And so I want to know where were you
1:29sitting when you were like, you know
1:30what? What if we did this? Yeah, so um I
1:34like to describe myself as a
1:37entrepreneur who had short stints in
1:40private equity and investment banking.
1:42So I've I've started three companies.
1:44This is my third company and I actually
1:46didn't want to start a company. So I was
1:48on my way from Boston at a private
1:50equity firm called Summit Partners and
1:53was leaving that investment firm to go
1:55get my MBA at Stanford and had told
1:57myself, look I just want to have like a
1:58normal MBA experience for two years. I'm
2:01not going to start anything. Maybe I'll
2:03do an internship in the summer. And then
2:05it was like two weeks before going out
2:07to Stanford. I was at my parents' place
2:09in in Utah and just doing some work and
2:12I'm drinking a greens powder in my dad's
2:15office. So I just remember looking up
2:17like super vividly in the in the corner
2:19of the room being like, there's no way
2:20I'm keeping this habit past 30 days.
2:23Like I'll I'll do it cuz I always finish
2:25what I started but like
2:27I'm not going to stick to this habit
2:28post 30 days. And it wasn't just the
2:30taste. It for me it was like, you know
2:31you got that weird like frothy sediment
2:33at the bottom of the drink. And the
2:35biggest thing for me that I think this
2:37is probably unique is I I remember
2:39staring at the bottle sitting on the
2:40counter top on like the drying rack. And
2:42I remember being I'm sort of an OCD
2:44person. I remember just being like, if I
2:46commit to this habit, I've got to like
2:47stare at that bottle on the counter top
2:49for the rest of my life. Right? Like
2:51there's there's no way that's going to
2:52happen. Um and so that got me thinking
2:54about, hey how do I take a a
2:56comprehensive
2:58supplement nutrition and put it in some
3:00format. I didn't know it'd be gummy at
3:02the time when I had the idea. How do I
3:03put it in some format that gets people
3:06looking forward to it? Like they'll go
3:07to bed at night being like, I can't wait
3:09to have that the next day which which is
3:11a complete pivot I think to how people
3:12sort of think about supplementation. Can
3:14we like roll it into a blunt now? Yeah,
3:17exactly. Look
3:18Smoke your greens. We'll we'll talk
3:20about that. I think I honestly think
3:22that's the biggest opportunity for
3:24founders. Like people just want to rip
3:25on the formats that work but I think if
3:27you want to have the greatest odds of
3:29success it's by creating a new format.
3:32Right? So if it's a blunt, awesome. If
3:35it's these little Zen pouches that
3:36people are doing now and making those
3:38like focus that's non-nicotine, great.
3:41Like new formats win.
3:43Did you think that um I mean just it's
3:46it's maniacal. 32 months to
3:50multi or a billion dollar exit is
3:51maniacal. Did you call your shot and
3:53you're like, that's where we're going to
3:54go or were you like, who knows? I mean
3:56what where was your mindset when you
3:58started it? This is a bit shocking to
4:00hear but we've basically met the
4:02forecast that we put in place since the
4:06very beginning. You have to appreciate I
4:07was I talked with like
4:10thousands of entrepreneurs when I was at
4:13Summit Partners. I I looked at the
4:15proprietary data sets. I don't have them
4:17obviously anymore but I have a very
4:18visual memory. So I know the LTV to CACs
4:20of
4:21hundreds of brands.
4:23And so like for me and it's weird like I
4:25I could tell you I won't but I could
4:27tell you what like every big brands LTV
4:29to CAC and margin looks like all the
4:31brands that we know of today. Now I
4:33didn't really forecast beyond a hundred
4:34million in revenue cuz that would be
4:36pretty pointless. It's like I'm not a
4:38sociopath.
4:39>> [laughter]
4:39>> Yeah. There's a fine [clears throat]
4:41line between ambition and being just
4:43absolutely batshit. So you're you're
4:45saying that now I want to ask you
4:46something about
4:48in between when you're like, oh like I
4:50don't really enjoy this form factor.
4:52What if there was another? And you said
4:53you didn't have gummies you know right
4:54away as like a It's not like you
4:55immediately had the fully baked idea.
4:58But I'm curious like what were the
5:00either companies or products you had
5:02like admired cuz I sort of have this
5:05this thing which is like
5:06what you admire becomes a little bit of
5:08your destiny. Right? Your your your
5:10admiration becomes your destination. And
5:12if you think about like a lot of the
5:13great great entrepreneurs, Steve Jobs
5:15famously, who did he admire? What
5:17products he admired and then you steal
5:18little elements of that. They they sort
5:20of bleed out into your final products
5:22years later. Same thing with comedians
5:24and movie makers. What were the products
5:26and companies that you thought were
5:28kickass that you feel like inspired some
5:31of the result of greens?
5:32Yeah, look I I sat on the board or
5:34observed the boards of great brands like
5:37Rocky Bow Doctor Squatch, Brooklinen,
5:41Chubbies, Solo Stove, Thuma, 12
5:44different businesses. And so I learned a
5:46lot from the unique problems and frankly
5:48the recipes that worked for each of
5:49them. I would say that the brand that I
5:51think we most closely resemble in terms
5:53of execution is Doctor Squatch. Is that
5:55deodorant? It's the
5:58they're cold process soaps. So they're
6:00bar soaps that um for men. I've seen
6:02like the marketing but I I think I have
6:04the deodorant. But I I don't know what's
6:05the what's so special about it? Like is
6:07there something cool about it?
6:08>> So what's cool about it is So they just
6:10sold to Unilever like last year for 1.5
6:12billion. And in that business what's
6:14cool about it is one, cold process soap
6:16is more natural I would say. So it's
6:18you're not getting all the chemicals and
6:20stuff and then it's a very clean
6:21product. But because of the branding,
6:23the approach, the partnerships they do,
6:25I mean they've done partnerships with
6:27like Harry Potter, Star Wars,
6:29SpongeBob, all sorts of really cool like
6:31fun
6:32partnerships. They've taken an approach
6:34where you as a consumer relate to the
6:37brand. Right? And so prior to Doctor
6:39Squatch, I don't even know what I was
6:41using. I was probably using what I
6:42whatever my wife was buying and stocking
6:44in the the shower. But but they were the
6:46inspiration for us. I think that what
6:47they've done within the personal care
6:50space making it a joy for the consumer
6:52is what we aspired to do with in
6:54supplementation where I mean we all
6:56spend time on social media. You get one
6:58ad and it's like, oh my goodness, Sean
7:01San, I don't know how old you guys are
7:02but you're blank years old and you've
7:04never heard of creatine. What the hell
7:05are you doing with your life? Like
7:07you're going to die tomorrow. And then
7:08you get a colostrum ad. What are you
7:10doing with your life? Like you need to
7:12be taking colostrum right now. It does a
7:13blank percent increase in blank body
7:16metric. And I I I just think that
7:18the way that we have approached and took
7:20inspiration from Doctor Squatch is to
7:22take that and make our supplementation a
7:24lifestyle. Something that people look
7:26forward to. They
7:27feel like it resonates with who they are
7:29and and how they live their lives.
7:32All right, let's take a quick break.
7:33This podcast is called My First Million
7:35and it's probably the question we get
7:36asked the most. How do I go from zero to
7:38making my first million?
7:39And so I did an episode a little while
7:41back where I broke down exactly the sort
7:43of philosophy and frameworks that I
7:44would use. So things like finding your
7:46white belt business or identifying your
7:49bear on a unicycle advantage, the
7:51[clears throat] core way that your two
7:52skills can overlap or why maybe starting
7:55a service business is better than
7:56starting a software business for your
7:57initial businesses to make that first
7:59million. And so the team at HubSpot has
8:01created a guide that took the stuff I
8:02said in that episode. They laid it all
8:04out for you. You can get it for free in
8:06the description below. Just click that
8:08link and it's all yours. All right, back
8:10to this episode.
8:11How much money did you raise to get to
8:12your first million in revenue and how
8:14fast did it come?
8:15Yeah, month one
8:17we did like 30,000 in revenue. Month two
8:19was already like 230,000. So I guess we
8:22like in month two months into the
8:23business we had already crossed the the
8:271 million run rate.
8:28Probably two and a half three million at
8:30that point. I've never really looked at
8:32the business that way. Maybe you've
8:33heard me talk about LTV to CAC.
8:36I I would say we burned
8:38we probably burned through like 8
8:40billion dollars of capital
8:42until we reached profitability. That
8:44could have been less if we slowed down
8:46growth a little bit but just the way it
8:48worked out is it we I think we've burned
8:50through about 8 million dollars of
8:52primary capital before we hit
8:53profitability. You mentioned like
8:55focusing on LTV to CAC. For you, what's
8:58good and what's great?
9:00Yeah, I I think stable stakes for
9:02businesses that need to be acquired, you
9:04need to be at least three.
9:06The best I saw
9:07one obviously this goes way back but
9:09during the COVID era I would see brands
9:11in the four to five range. You know,
9:13those brands are probably two and a half
9:15to three times right now.
9:17But when you say LTV, are you referring
9:20to so LTV lifetime value is for for a
9:22e-com brand does value mean um
9:26your contribution margin? Yeah, let me
9:27describe that the way that I always look
9:29at it. I use a three-year period. Um so
9:3236 months and LTV is fully burdened
9:36gross profit meaning Sam orders our
9:39product.
9:40What is the what are the total cost
9:42stripped out of that value to get it to
9:44Sam's door? So you've got product costs,
9:46you've got discounts, returns, you've
9:47got fulfillment, shipping, uh merchant
9:52processing fees. Like you've got all of
9:54that that gets it to the door. That's
9:56your lifetime value over a 3-year
9:58period. How much contribution gross
10:00profit are you getting from the consumer
10:02over a 3-year period? And you use 3
10:04years not because that's how long
10:05someone subscribes to Grüns. You just
10:06said 3 years for everyone should use 3
10:08years. You can't do a lifetime value.
10:09>> Yeah, I think it I think it's like just
10:11a productive way of looking at it to
10:13optimize against. I mean, we obviously
10:14look at 3 months, 6 months, 12 months
10:17and try to make adjustments based on
10:19that. But yeah, I mean, we've got
10:21consumers who are
10:23you know, are 32 months old. So, we
10:25haven't hit that 36-month mark. But like
10:27there's very clearly going to be
10:28consumers who are around purchasing and
10:31they're I guess quote perpetuity.
10:34And you picked a name that if you had
10:36told me, I would have been like, "Hey
10:38brother, do you want to win? Or are you
10:40going to put a
10:42umlaut over one of the letters and
10:44nobody knows how to say it. And then you
10:46won. So, I'm an idiot. What What What's
10:48the What gives?
10:50So, what I always say here is and Sam
10:52botched the Grüns at the start of this
10:55at Grüns, which is totally fine. What I
10:57tell people is What I tell people is I
10:59do not care how you pronounce our name
11:01as long as you're buying. So, like you
11:03can call it Grüns if you want. You can
11:05call it Grüns, which is correct. It's
11:06Grüns.
11:07>> But But did Did you think it was a good
11:08name and you knew something none of us
11:10do? Or did you just not care about the
11:12name? And how the hell did you arrive at
11:14that name? Yeah, so the word Grüns with
11:17an S I guess I can show you here. With
11:19an S at the end actually doesn't mean
11:20anything
11:22in the German language.
11:23The word Grün means green in German.
11:27When you throw an S on it, there's
11:28actually no meaning to it. And so, when
11:29I threw an S on it, it it just seemed to
11:31be like kind of fun and playful. You got
11:33this like natural smiley face.
11:36It felt like something that
11:38I
11:38we could brand over time really well and
11:40it's it's simple. But you're right. Like
11:43at least in America,
11:45very uniquely in America, like 70% of
11:47consumers don't know how to pronounce
11:48it. That'd be like your argument to the
11:50team like, "No guys, it makes a ton of
11:52sense. Now, it it it may not make sense
11:53in America, but like Yeah, dude, that's
11:55uh Sean, we had a
11:57We had this guy David on who runs a
12:00company called Lexicon and his whole job
12:01is naming companies. He's named Swiffer,
12:03Febreze, Sonos, BlackBerry. Sean, what
12:06do you think David would say about that
12:08name?
12:09Well, it's hard to know, right? Cuz he's
12:11got this little AI computer brain where
12:13he's like, "Yes, no." And it's almost
12:15like a sommelier describing the taste of
12:17a wine. And then you just have to nod
12:19along like an idiot. You're like, "Mhm,
12:20yeah, I I I I sense the notes that
12:22you're talking about there." I thought
12:24notes are for music, but I definitely
12:25sense it. And so, you know, I I think
12:27it's hard to know, but I I I would have
12:29guessed low, right? You're talking about
12:31like, "Doesn't make much sense in
12:32America, the market we're going after."
12:35But you [laughter] did it anyways. What
12:36was runner-up name? Or, you know, in the
12:38brainstorming process, sometimes you
12:39start with like, "Here's what we're
12:40definitely not going to call it." Cuz it
12:42kind of guides you away from maybe some
12:44typical areas.
12:46Honestly, like I hit it pretty quick.
12:48So, I guess I I didn't mention this. I I
12:50served I grew up Mormon. So, I served a
12:522-year mission in Germany, Switzerland,
12:54Austria. So, like I I am fluent in
12:56German. And so, when when I had the
12:59thought Pretty sick assignment. Yeah,
13:01yeah, totally. I mean, it's literally
13:02called the Alpine German-speaking
13:04mission. So, it's the Alpine. Yeah, like
13:05you know, someone [clears throat] else
13:06could have been assigned to like, you
13:07know, Redding, California or
13:09>> Yeah, totally. That wouldn't be too bad.
13:11That wouldn't be too bad. There's worse.
13:14All right. So, you have the ideas. How
13:16long did it take you to go from idea in
13:18your head
13:19to I know what the product is going to
13:21be and I have my first batch and then I
13:24go for sale? Like what was that timeline
13:26like?
13:27Yeah, so coming up with gummies took
13:28about a day.
13:30I I grew up You're going to think it's
13:31crazy. You know, those like big
13:34like I guess they call them like
13:35single-day servings of Sour Patch
13:38watermelon?
13:39Yeah. Slices, yeah, yeah. I would eat
13:41those gummies, one of those every day in
13:43college. Like a full 450 calories every
13:46day.
13:47I've always been a gummy fiend. And so,
13:49now I get to obviously have like a
13:51productive health gummy every single day
13:53and there's a ton of them that we sell.
13:55I have a ton of ideas always circulating
13:57in my head and this notion doc I have.
14:00And typically, I sit on those ideas for
14:02about a year. This one, I was like,
14:04"It's so obvious. I got to do this. I'm
14:06the right person to do it." And so, I
14:07started working on it immediately.
14:09Getting it to launch, now to answer your
14:12question there, I immediately like
14:14within a week of having the gummy sort
14:16of connection said, "Okay, why hasn't
14:18somebody done this in gummy form?"
14:20Right? Like you've got a ton of gummies.
14:21Why hasn't somebody put comprehensive
14:23nutrition in a gummy?
14:25And the big aha moment for me was the
14:27entire gummy industry is built around
14:30these 60 or 30-count bottles,
14:33transparent bottles with a cap on the
14:34top. That that is as gummy exists. So, I
14:37asked the question,
14:39"What What would need to change? What
14:41would it need to look like to have gummy
14:44be comprehensive nutrition?" And then
14:46that's when I went down the path of
14:48like, "Okay, if it's a you know, a pack,
14:50how big's the pack? How many gummies are
14:51in it? What's the flavor of the gummy?
14:54Right. What's the This is important.
14:55Sam, Sam, you've never taken the
14:57product, right? No, I'm going to buy it
14:58now, though. So, the way it works is
15:00This is a good point you just brought
15:02up, which is you don't like when we say
15:04it's a gummy, you think it's a it's a
15:06gummy. No.
15:07A single serving, you eat eight of these
15:09things. So, it's literally like having a
15:11pack of Sour Patch Kids, which I think
15:13was you know, seems fine, whatever. But
15:15that's actually pretty non-obvious. And
15:18if I'm reading between the lines or if
15:19I'm understanding what you're saying,
15:21you're saying one of the reasons nobody
15:23had done the comprehensive gummy was
15:25because the gummy would need to be like,
15:27you know, 4 inches large to contain
15:29everything. But what if we made it What
15:31if we made it where it's not a gummy a
15:33day, it's a pack of eight. We We package
15:35them as little pouches of eight. And
15:37that's how That's how we can do this
15:39when other people may not have tried to
15:40do this. Yeah, yeah, it's it's Our packs
15:43are It's about eight We go off of gram
15:45weight, which is about 20 g. And some
15:47grams are smaller, bigger than others.
15:49But yeah, it's a it's a full Every gummy
15:51is identical in terms of nutrition. It's
15:53sort of the total of the eight in this
15:55case
15:57that make up the full dose. I just think
15:59that it's insane that I asked you a
16:00question that I thought was going to be
16:02ridiculous about like you pointing like
16:04Babe Ruth and saying like, "You know,
16:05we're going to get to this." And you're
16:07like, "Yes, that was part of the plan."
16:09I mean, it's pretty audacious to say I'm
16:11going to get to a 100 million in revenue
16:13in less than 3 years.
16:15For the people listening, what are the
16:16inputs necessary to get to 100 million
16:18in revenue for an e-com brand in 3
16:20years?
16:21So, it doesn't have to be consumables. I
16:23think everybody points at consumables
16:25these days and they're like, "Oh,
16:26supplements, it's like it's a better
16:28business." It's not necessarily a better
16:29business because if you're selling a a
16:31hard good like bed sheets or furniture,
16:34your margins are going to be worse. It's
16:36going to be more difficult to ship. Like
16:37there's a lot of things in there. But
16:40you theoretically make money on day one.
16:42In supplements, you don't. You got to
16:44make that money on the retentions. Like
16:45that's a new lever you got to pull to
16:47make the business work. So, to answer it
16:49directly, Sam, I think first and
16:51foremost, you've got to have a good
16:52product. A good product doesn't mean
16:54like make a better version of Grüns.
16:56Like that's not going to work for
16:56people. What's going to work is finding
16:58that product category, that white space.
17:01Good product equals new white space. So,
17:03you've seen I'm sure you guys have seen
17:05these like nicotine pouches, the whip
17:08and like ultras of the world. Like
17:10an energy It's basically looks like a
17:13Zyn, but it's not tobacco or nicotine.
17:15It's energy. Yeah, it's like like
17:17caffeine and other things that
17:19like the nicotine pouches.
17:23Amazing.
17:24Not because I'm a believer in the
17:25product, but amazing because now you're
17:27taking a new format form factor that
17:29doesn't have
17:30competitors. And so, I think anybody
17:32looking at it be like, "Oh, I'm going to
17:33do it, too." Like you might find a
17:34little bit of success, but you're not
17:35going to sell your business. You're not
17:36going to be the winner here. Go find a
17:38new product format. Symbiotica came out
17:40with these little liposomals. Who else
17:43have I seen that that's created new? Oh,
17:45you've got like Do you know the product
17:47Dose? It's like the liver health
17:48product. It's like these little shot
17:50glasses. It's like It's like a
17:53concentrated liquid. That's another one.
17:54I wouldn't Wait, wait, wait, wait, wait.
17:55A concentrated liquid of what? Liver?
17:58Like their supplement is a concentrated
18:00liquid for
18:02the liver. So, look up. I think it's
18:03dailydose.co
18:05is the website. That's another product
18:07that has like a unique format. Another
18:09one for you. You guys know MaryRuth
18:11Organics or Rho Nutrition, R H O?
18:15Uh-huh.
18:16So, those are like
18:18I'm not sure if they're liposomal, but
18:19they're like liquid vitamins.
18:22Right? Like their approach is we're the
18:23liquid vitamins. And I'm shocked there's
18:24no more competition doing that. Like
18:26these are big businesses. Every single
18:28one of the ones I just mentioned is a
18:29big business doing really well. So, the
18:31framework of this is taking a thing that
18:34everyone knows or many people know and
18:36just slightly changing the form, the way
18:38you consume. But everything that you've
18:40named so far has been a consumable.
18:42Correct. Because that's the space that
18:44I'm like most
18:45familiar with and people typically are
18:48looking at right now. But like it would
18:49be the same thing. Like do you know how
18:51big Cozy Earth is? Their whole thing was
18:53bamboo sheets.
18:54Right? And And I don't If you ask me,
18:56I'm sure other businesses sell bamboo
18:58sheets. But like that's their thing.
19:00And like they're a big business as well.
19:02And so, I I could give you examples
19:04across
19:05all sorts of categories. Obviously,
19:07supplementation is the easiest for
19:09people to visualize. So, so the step one
19:11you're saying is good product. But let's
19:13say that let's generically what you're
19:14saying is the right product. And the
19:16right product is a category that's not
19:20already super saturated. And you either
19:22either you take an existing category,
19:24you change the form factor to make it
19:26new. Or you find a new pain point, new
19:28problem, new supplement, new whatever.
19:30And you're going to do it You need some
19:31point of key differentiation. You're
19:33vitamins, but you're liquid. You're
19:35sheets, but you're bamboo. You're you
19:37know, you're greens, but you're gummies.
19:39And you find that key point of
19:40differentiation, which gives you new
19:42category. All right, that's step one
19:43Exactly. And to be clear, a couple that
19:46I've just seen recently and then I'll
19:47tell you the step two. I've seen jelly
19:49beans as a form factor. I've seen
19:51lollipops. right? Like people are it it
19:54Do I think that those businesses are
19:56going to be huge? Probably not. Like
19:57it's a little bit niche, but like
19:59they're probably going to be more
20:00successful than somebody making a gummy
20:01like us. Hey, stupid question. You
20:03started this by saying Sour Patch Kids.
20:06Yeah.
20:06>> Um how come none of the gummies are
20:07sour? This is What doesn't anybody be
20:10like, "It's sour vitamins." I would I
20:12would eat that.
20:13>> TBD. Uh we we might we might give you
20:15something like that, Shawn. I'm a sour
20:17fiend as well. I'm going to hit that.
20:18Don't worry. Sometimes I want to start
20:20the business, and then sometimes I
20:21realize, "Oh, I know I'm just hungry,
20:23and I just want to eat that thing, and I
20:24don't [laughter] need to start a
20:25business." And this might be the
20:26category, or maybe I'm just hungry.
20:28>> Wait, you actually said something
20:29interesting. You said it's too niche. Is
20:31there a What's your To get into a
20:33hundred million in revenue, is there
20:35Okay, so you said take the form factor,
20:37and then the second or I don't know if
20:38this is the second thing, but there
20:39there is a TAM related thing here. Is
20:41there like a
20:42a threshold where you're like, "This has
20:45legs?"
20:46Look, like I'm I'm I'm a bit psycho,
20:48right? Like all I've seen around me is
20:50businesses getting to hundreds of
20:51millions of revenue quickly. So, like my
20:53gauge for success is in the business I
20:55started The first business I started, I
20:57literally sunset six months in. It was
20:59at a hundred thousand of revenue
21:01and ninety percent EBITDA margins, and I
21:04sunset it because I said, "This isn't
21:05big enough. Like this isn't" But that's
21:07how I'm wired, right? Like if somebody
21:08wanted to get to a five million dollar
21:10cash flow business and run that, like
21:12that's that's massive success. So, I'm
21:14I'm not going to like deter people from
21:16But I want to know your your threshold.
21:19Yeah, my threshold Well, I mean, my my
21:21sights are even bigger now, right? Like
21:22I'm still working on Grooms and Neutrubs
21:26and
21:26uh Juiced and these products you see
21:28behind me. We have more than just Grooms
21:30now. I'm happy to talk about that. But I
21:33I mean, at this point I'm looking only
21:35at stuff that can be one ten billion
21:37dollar outcomes, somewhere around there.
21:40So, let's let's keep going in your
21:41formula. What's what's Did we do step
21:43two or not yet?
21:43>> No, number two, and this is the end of
21:45it, is LTV to CAC. So, if your if your
21:48business has an LTV to CAC of three
21:50times plus, you are golden. Anytime
21:53people talk about profitability, anytime
21:56people talk about MER, I'm not sure if
21:57you're familiar with that.
21:59Uh it's like marketing efficiency rate
22:01ratio. Um I the way that you think about
22:04it is like if you're if you spend twenty
22:05percent of your marketing of your
22:07revenue on marketing,
22:08then the inverse of that is a five x
22:11MER, right? So,
22:13one divided by
22:14>> All you're saying is I want a machine
22:15where I can buy a customer for a dollar,
22:17and I know that in thirty-six months
22:18that customer will pay me back three
22:19dollars, and I'm going to dump as much
22:21dollars I can into the front of that
22:23funnel as long as that's possible. And
22:25I'd say the key here is most people I I
22:27don't know. Maybe maybe I'm just wrong,
22:29but I think a lot of people think
22:30lifetime revenue lifetime value as just
22:33revenue. And what you're saying
22:34importantly here is it's the you know,
22:37totally fully loaded gross profit. So,
22:39to get to three, you're probably
22:41actually doing six dollars of revenue on
22:42that customer,
22:44close to it, five five to six to get
22:46three bucks of gross profit off that off
22:48that customer.
22:48>> Correct. Whatever your margin is, but
22:49yeah, that's correct. You've got to do
22:51the if you hit that three times fully
22:54burdened gross profit LTV
22:56uh divided by your CAC, and that equals
22:59three or more,
23:00you've got a business. How did you know
23:02that Grooms was going to be one to
23:03three?
23:04Um I didn't.
23:07I've I'd seen enough to know how it
23:09might play out, but we we came out with
23:11a CAC. Everybody in our company since
23:13day one knew what our CAC ceiling was
23:15that would result in a three times or
23:17greater LTV to CAC. Can you say what
23:19that number is or no? What when I first
23:21started, I mean, I can't really tell
23:22you, but what I'll tell you is it's two
23:24x higher today than it was on day one of
23:27launching the business. Why? It's not
23:29because we magically got better LTV.
23:31It's because I set the CAC so low
23:34to ensure that we'd be able to hit it.
23:36So, what does that mean then? Your ads
23:38need to be extra catchy. In order to
23:40make extra catchy ads, you need like a
23:42super good offer or super good story or
23:45super like you know what I mean.
23:46>> of it. It's kind of all of it, and that
23:47that's where like I think this gets so
23:49difficult is people are like, yeah,
23:51sometimes I see the shadow figures that
23:53are running these drop shipping
23:54companies, and they're like,
23:56"Grooms ads are bad. Like they're not
23:57even good. They're so like
23:59non-creative." And that's because we're
24:00like a reputable company that doesn't
24:02say we can cure cancer or we don't do
24:04these things that some of these shadow
24:06figures do.
24:07Like that's not creative. That's just
24:08actually like bad to do as a human.
24:11Um
24:11But like to answer your question, like
24:13it's not just like creating good good
24:14ads. You've got to have the good offer.
24:16You've got to have the good retention.
24:17You've got to have a good product,
24:18right? Like you have to have a product
24:19that people actually want to take. Um
24:21like our Amazon LTV to CAC is
24:24phenomenal. Like and that's on a
24:25platform where we're not advertising the
24:27way that you do on Meta. We're not like
24:30you don't have your subscription portal
24:32in a certain way. It's like a one click
24:33cancel button. And that's like leagues
24:35beyond what I've seen with other brands
24:37in terms of Amazon economics.
24:39DTC is one of these funny spaces. Like I
24:41I think I DM'd you
24:43I I read our DMs, Shawn, from like It
24:46was a couple years ago.
24:47>> it would it would have been like in
24:482023. Like three months into the
24:50business, you're asking about the
24:51landing page. Yeah, so three months into
24:53the business, I was I think I just sent
24:54you a compliment. I was like, "Hey, I
24:55think your landing page is really
24:56great." You know, I guess the
24:58interesting thing is you were really you
24:59were quiet, right? Cuz there's this
25:01weird um paradox, and I would call it
25:04the drop shipper's paradox, which is
25:05sort of the louder somebody tends to be
25:08about their e-commerce success, I sort
25:10of I sort of
25:11proportionally increase my skepticism.
25:14And I feel like you were very quiet, and
25:16you built a killer business, and then
25:18now once you've kind of like, you know,
25:20reached a a big exit amounts of top
25:22sure, you could talk a little bit more
25:23about it. You're doing a little bit
25:24spending a little more time. What do you
25:25think about that? What do you see when
25:27you look out at the landscape of like
25:28people who are are quite vocal, quite
25:30loud on on DTC Twitter and other places?
25:34You know, I I want to have
25:37sympathy for how others run their
25:39businesses. And so, what I will say is
25:40like I've had chats with some of these
25:42people who are louder, who are running,
25:44you know, these businesses that they
25:46they're little shadow businesses. Like
25:48you don't know what their business is,
25:49but they're doing a hundred million of
25:50revenue or whatever.
25:51And what I've come to realize is some of
25:53these people just don't know yet that
25:55what they're doing is inappropriate,
25:56right? That the ads they're running is
25:58in a are inappropriate. They don't
26:00really understand the consequences.
26:01They're, you know, they're fist up in
26:02their friends about the Lamborghini they
26:04just bought. And so, what I would say
26:06there is like I think it's less about
26:08how loud people are. I think it's about
26:10the natural evolution that we all go
26:11through as we learn
26:14what it means to be like a a reputable
26:16business person
26:17running like a clean business. And and
26:20that comes with time. I I have to learn
26:22most of it through amazing brands that
26:24with the great executive teams that I
26:26learned from, who are mentors and
26:27friends. And and I think for some of
26:29these people, they're learning, and it's
26:31going to take a little bit of time. So,
26:32from the outside, I look at you, and I
26:34think, "Well, you seem really I I've
26:35only known you for thirty minutes. You
26:36seem very calm. You seem very well
26:38balanced. You seem like a lovely person.
26:41The success has been off the charts, and
26:43I think, "Well, everything's perfect.
26:46This guy's just had it all." Of course,
26:47I that's not the reality. So, what has
26:49What has sucked about this journey? You
26:52know, it's funny. The team We have this
26:53joke internally
26:55that I'm the chillest guy we know. And
26:57it's like sort of kind of true. Like I
26:58am actually a pretty calm person, and I
27:01think mistakes are all part of the
27:02learning. Like no business is perfect. A
27:04perfect business is one that learns
27:06quickly from the mistakes that it makes,
27:08and people aren't to blame for that.
27:09What I'll say is I
27:11you know, I I could give you an example
27:12of actually like a really rough day we
27:14had on January 29th of 2024, and I I can
27:17tell you a little bit about that. But I
27:19would say the hardest thing about
27:20building a business like this that folks
27:22just don't appreciate is
27:25just how difficult it is
27:29to build a team of all-stars,
27:32and more difficult than that, unleash
27:34them. Give them the space to play and
27:37run and execute according to their
27:39abilities. And that's really been our
27:42unlock is one getting amazing
27:43individuals. I think if you look at our
27:45executive team, if you look at our
27:46entire team, right? The hundred thirty
27:48people plus at this company, I think
27:50people would be like, "That is a stacked
27:52team." And they're not going anywhere.
27:54We're having a good time. Like we've got
27:55a lot ahead of us that we want to do,
27:57and the culture here allows for them to
27:59excel in a way that they wouldn't be
28:00able to do otherwise.
28:01>> Can you dive deeper on that? Because
28:02people always say hire the best people
28:04and and all that, and I say that, too.
28:06And but it's that's I hate when I give
28:08that advice or when I receive it because
28:10I'm not trying to hire the worst people.
28:11Like I am I am trying. So, what does the
28:13best people actually mean? What is What
28:16What do you look for? What attributes?
28:18Yeah, you know, it's so funny. About the
28:19same, I've heard people be like, "Oh,
28:20well, like somebody could be the best
28:21for your role." And I'm like, "No, no,
28:23no, there's like legit people who are
28:24the best." Like
28:26you're probably just not able to hire
28:27them if you're saying like, "Well, we
28:29got the best for this like narrowly
28:31carved out role." So, when I say like
28:32the best is what we're looking for is
28:34people who have confidence to make
28:36decisions.
28:37Right? So, everyone has the ability to
28:40be essentially a CEO. And frankly, I
28:41would not be surprised if we're talking
28:43five years from now, and a lot of the
28:46folks here at Grooms have started
28:48companies that are really successful
28:50because they've had that skill set, that
28:52repetition of making decisions as if
28:54they're the CEO. Uh and so,
28:57I I would say that it comes down to just
28:59being like
29:00reps, experience, training in in
29:03whatever function, if you're a marketing
29:05person, a retention person, if you're a
29:06product person. And then
29:08the hardest part, again, and this is
29:10where I think the people listening to
29:12this who might be founders or CEOs have
29:14to check themselves is how do you
29:17unblock these people? How do you get out
29:19of the way to ensure that everybody
29:22together is building something massive?
29:25I want to ask you about your marketing,
29:26cuz I think you did world-class
29:29marketing. Like we said, years ago I
29:31compliment First thing I ever said to
29:32you was, "Yo, nice landing page."
29:34Right? That's the highest form of of
29:36respect I give.
29:38Um you I want to actually open up here.
29:40Let me screen share. I want to show you
29:42your Facebook ad library, and I just
29:44want you to talk us through
29:45a sort of a 10-minute masterclass on
29:48marketing.
29:49Yeah, cuz I want you to tell me what you
29:50see cuz you know, the average person
29:52will look at this, they don't really
29:53know what to take. I want you to point
29:55out what's interesting here. Let me see
29:56if I can zoom this a little bit. Uh,
29:58what's interesting here, what to notice,
29:59what to learn from, uh, that would apply
30:01to other people in their businesses, how
30:03to think about marketing the way you
30:04guys thought about marketing. Yeah, I
30:06mean, the first thing I see when you go
30:07back up is like, what does it say? Poop
30:09more? Like, what are the supplemental
30:11brand you know that's like being a
30:12little bit sassy with commentary like
30:14that. Now you see it a little bit more
30:16from these brands that are like just
30:18talking about their clinicals all the
30:19time.
30:20Which nothing against clinicals. Like we
30:22do clinicals, too. And we do we test our
30:23product electively well beyond what's
30:26sort of required, but like we just don't
30:28talk about it cuz that's not fun. It's
30:30so like what I would say here is like
30:31these are fun ads, right? Like this is
30:32like if somebody sees that, they're
30:34probably laughing a little bit. Like if
30:36you scroll down
30:37you know, we spent some time on GLP-1 as
30:39an angle. And I'm really proud the day
30:41that we decided to do this because
30:43everyone around us and I don't spend
30:45enough time on Instagram to know.
30:46Everyone around us is like, "Nature is
30:48Ozempic." Or um like they they'll say
30:51something like that which is like
30:52objectively wrong. Like you're not
30:54supposed to say that. We've never taken
30:56that approach. We are what we would say
30:58the best friend to Ozempic, to
31:00tirzepatide, Zepbound, whatever the sort
31:03of GLP-1s are. So you were able to kind
31:05of surf that wave. You were able to
31:07hijack some of the momentum of that
31:10product and position yourself not as a
31:12replacement but as a companion.
31:14>> Companion. Wait, why did you have Why do
31:16you have an Olipop? Okay, there's
31:17>> GL The GLP-1's new Crush ad was that
31:21Olipop image on it. So we're running a
31:24limited-time offer right now with
31:26Olipop. Oh, it's like a flavor. It's an
31:28Olipop flavor kind
31:29>> is this is Gruvi's which I guess you can
31:31see right here. I'm pointing to it in
31:33the video. Maybe people are on audio,
31:34but we've got Gruvi's sort of original.
31:37And then, you know, every month or 2
31:39months we do these limited-time offer
31:41drops with In this case it's Olipop
31:43strawberry vanilla flavor. You know, the
31:45first one we did was like a Gruvi Smith
31:47apple, like Granny Smith apple flavored.
31:49We did a Grinch sour Grinch punch last
31:52year in November. So we do these this
31:54Again, back to the whole like, "How do
31:56we make this fun?" Like you tell me one
31:57of the other stuff on the brand that's
31:59doing like drops and and making it
32:01actually fun to to take the product each
32:03day. So it looks like you've got
32:05different angles. So you've got, "Hey,
32:07we're we're, you know, Ozempic's best
32:10friend." You've got poop more. You've
32:12got, "Nurse, you know, the nurse here
32:14who's, uh, Probably talking about
32:16nutrient gaps.
32:17>> Nurse Jackie talking about nutrients. So
32:18you have these different angles and I'm
32:19guessing that these each lead to a
32:21landing page that aligns with that
32:23message, correct? So it's like Yeah.
32:25five, six different angles, each to a
32:27tailored landing page that continues
32:29that message. And then you Are you doing
32:31that just to experiment to find one
32:33winner? Or you're like, "No, we're going
32:33to keep running five or six of these cuz
32:35there's just different markets of
32:36different customers who have different
32:38mindsets and we're going to try to get
32:39all of them." Yeah, to to make this
32:41super applicable for people, you should
32:43test ads in high volume. So find new
32:46angles, test all over the place, find
32:48what sticks with an eye towards being a
32:50human, right? Don't don't say that you
32:53like you're going to make somebody's sex
32:54better if your product doesn't actually
32:56do that.
32:57>> [laughter]
32:57>> Like actually do the science validation
32:59if your product can help with certain
33:01things. Once you've identified an angle
33:03that seems to be running, then you build
33:05the entire funnel around it. So you've
33:06got you've got static ads that talk to
33:08that angle. You've got UGC sort of hoist
33:11the camera angle, um, ads that run at
33:14that. You've got, um, like more like
33:17cinematic type shoots that run at that
33:19angle. Everything you're just plowing
33:21all sorts of ad concepts to or or sorry,
33:23ad structures to that angle. From there,
33:26where people land is really important.
33:29What people receive as a pop-up is
33:30really important. What people receive as
33:33email and SMS is really important.
33:36Everything is tailored to that message.
33:38So if you came in on a gut health ad, we
33:40want everything tailored to, "Hey, you
33:42know, Sam just expressed interest in the
33:44gut health ad." Great, then Sam's
33:46probably interested in gut health. Let's
33:47give a pop-up to help them understand
33:49what about gut health is he interested
33:50in. That pop-up informs what messages we
33:53send on email and SMS, um, towards Sam's
33:56expressed concern. That page is dialed
33:59for Sam's intent. And then on the back
34:01end of that, once people have purchased,
34:03this is something that we're trying to
34:05put into process now
34:06how do we talk to Sam long-term? You
34:08know, he may have started on gut health,
34:10but how would he how do we get Sam to
34:11understand that there's so much more to
34:12this product than just gut health? And
34:15do that over time, building on sort of
34:17the foundation of why this product was,
34:19uh, important.
34:20Most everything you're saying,
34:22um, it's sort of like when I win read
34:24the book How to Win Friends and
34:25Influence People, I'm like, "Oh yeah,
34:26this is obvious. Makes sense. Makes
34:28sense." But the hard part is execution.
34:31Um, and it's it seems like you're
34:32ruthlessly, uh,
34:33in a kind way executing. What's So I'm
34:36going to ask a bunch of questions that I
34:38think you can answer in one in one go.
34:40How many ads and landing pages per month
34:42are you putting out? And I think you
34:43only said you had a 30-person team. That
34:46seems like a lot of output for a
34:48relatively small team. Can you talk
34:49about like who's doing the work? Yeah.
34:52Uh, we're probably putting out hundreds
34:53of ads a month, cycling in and out, uh,
34:56just trying to find that next,
34:58you know, unlock. Um, we try to create
35:01new concepts pretty consistently. So,
35:04uh,
35:05it's not just about ad volume. It's
35:06actually structured around like how much
35:08of that is like
35:10business as usual, ads that we already
35:12know or in structure or sorry, concepts,
35:14themes that we know already work. And
35:15how much of that is like we're trying to
35:17find new frontier,
35:19um, of applicability. In terms of the
35:21team,
35:22you know,
35:23when Sean reached out to me in December
35:25of 2023
35:27saying, "Hey, nice landing page." That
35:28was me. Right? Like I was the guy who
35:30built that landing page. We didn't use
35:32an agency. I think I even said that in
35:33the the message cuz you asked. That was
35:36me from the beginning and, you know, you
35:37you see our buy box that a place where
35:39you do that, the cart, which you've
35:41people ripped that over the last 3
35:43years, copying that buy box. If they
35:45only knew that random dude named Chad
35:47who's not like an e-com expert, you
35:49know, broadly across D2C. I I know quite
35:51a bit, but like I'm not an e-com guy who
35:53builds these sites. The whole industry
35:55is mimicking this this format. Yeah,
35:57it's really interesting to see that I
35:59think people need to test around. And
36:01since then we found new formats that
36:02work. But talking about the team, we've
36:04got people across We've got like three
36:06folks on the retention team who do the
36:09emails,
36:10SMS, who set up all the flows that allow
36:12for our consumers to have a good
36:13experience. Um, so they're focused on
36:16after order one, what does that journey
36:17look like through order hundreds, right?
36:21We've got a large team doing paid, so
36:23creating ads, the actual creatives. We
36:25have probably
36:27four plus, maybe five or six creative
36:29strategists who actually create the ads
36:31and then we have people who design and
36:33do the video edits. And then we have the
36:36people who actually manage the ad
36:37accounts, right? There's probably four
36:38or five of those who actually like are
36:40looking at the analytics, evaluating,
36:42passing back to the creative strategist
36:43saying, "Here's what's working. Iterate
36:45on that." We've got e-com team that's
36:47absolutely dialed. The the velocity
36:49coming out of e-com now, so landing page
36:51designs, iterations on the cart,
36:54checkout, post-purchase, like all of
36:56that good stuff. We're we're constantly
36:58iterating on it. I mean, it's so fun to
37:00see, right? Like it used to be me
37:02throwing up a quick website,
37:04um, against that angle. And now we've
37:06got like a full, um, infrastructure
37:08around it. So that's crazy. That just
37:09not seem like a lot of That doesn't seem
37:11like a big operation for creating
37:13hundreds of millions of dollars of
37:14revenue and hundreds of ads. It It
37:16doesn't require a lot. And I would tell
37:18people that they can do it themselves,
37:19right? You create a template in, you
37:21know, shout out to Replo is the platform
37:23that I used. And I think you can do
37:25hundreds of millions of
37:27revenue on Replo. Um, I think it's
37:29replo.app is the website and it's a
37:31Shopify plugin.
37:33I mean, it's such a good platform. You
37:34can just create a template. The only
37:36thing you need to swap out is like the
37:37headline, whether it says gut health or
37:39it talks about pick your other ad theme.
37:41So substitute the like, uh, little
37:43blocks on the page with the new ad copy.
37:46It's like it's not that hard. Like you
37:47in a day you can create a completely new
37:49ad funnel that is going to have
37:51incremental performance against a sort
37:53of general landing page. That guy's
37:55going to clip that clip and make that
37:56mad.
37:57>> [laughter]
37:57>> Yeah, get ready to see your face on a
37:58Replo ad. Look, and and I have no
38:00problem. They don't charge I mean, I've
38:02told them before, they don't charge
38:03enough. It It It's It's stupid how much
38:06value you can get out of that. And I
38:08would say this about a lot of our
38:09platforms. They're just getting a
38:10shout-out cuz it's relevant here.
38:13What do you see when you look at average
38:14marketing versus world-class marketing?
38:16What do you think if I'm somebody who's
38:18got a brand or a company and I have a
38:19landing page, I got ads, I'm doing all
38:21the things. He said test creative, I'm
38:23testing creative. He said test landing I
38:24think I'm doing that. What are the most
38:27typically missing
38:28when you either advise a founder or you
38:30go look at somebody else's brand and
38:31you're like, "Oh man, they're just not
38:33doing this one thing. This these two
38:35things well enough to really jump from
38:37average or good to great." Yeah, the
38:39better product is typically what it
38:41comes down to. It's like so unhelpful
38:43cuz it's like you got to cut your
38:44losses. But like a lot of the people who
38:46are trying to like find these hacks,
38:49they're doing it with like a
38:51a mailed-in product. Like some They like
38:54didn't We took a year to develop our
38:56product. It's custom blends. Well, how
38:58did you know that it worked? Because a
39:00lot of times when I take vitamins, I
39:01don't necessarily know if it's working.
39:03Did you like get your blood tested a
39:04bunch? This is the beauty of this
39:06industry is if you go to PubMed, um, are
39:08you familiar with PubMed? It's a public
39:11It's a where studies are, right?
39:12>> Yeah, all the studies are published
39:13there. I mean,
39:15if you put vitamin C in your product and
39:17there's thousands of studies about what
39:19vitamin C does, sure, maybe I don't know
39:22the precise outcomes of a 120-person
39:25blind sample survey placebo-controlled
39:28trial.
39:29But like I can pretty much guess what
39:32the outcomes are going to be based on
39:33the thousands of other published studies
39:35against vitamin C. So to answer your
39:37question, Sam, no, I didn't prior to
39:39launching I hadn't done those tests. But
39:41like I looked through thousands of
39:43articles to land on what I believed the
39:46the right formulation would be for our
39:48product. And that's also what I tested
39:50with consumers pre-launch is, what's
39:52your perception of of this label? What's
39:54your perception of this mini gummy, this
39:56size of gummy, this flavor of gummy, all
39:58that stuff.
40:00What's on your ideas list, but you're
40:03not going to actually go do it, so you
40:04can you can riff with us here of
40:06brainstorming other brands, other ideas
40:09that you think are interesting. May not
40:10may or may not work, but it interesting.
40:12>> Yeah, and also you mentioned that you
40:13have a notion doc, if you if you're
40:15comfortable If you want to pull up your
40:16bank balance, we can also just do that.
40:18>> [laughter]
40:19>> Tell you why I wrote the instructions
40:21too on
40:22Here's what I'll say.
40:25One thing that I that I disagree with is
40:27people say ideas aren't worth anything.
40:30Oh man, do I disagree.
40:31I I think ideas are worth so much in the
40:34right hands. And in my hands they're in
40:36the right hands, I believe, and every
40:38founder should believe that about
40:39themselves.
40:41Um, and so there's certain ideas I can't
40:42share cuz I'm like
40:44guys, like I I legit have an idea that
40:48years from now, like I've still got a
40:50lot I want to do with Grüns, like like
40:52actually there's a lot I want to do with
40:53this business. I'm not done here. But
40:55like years from now, I think there's an
40:56idea that no one else is going to be
40:58able to run at that is a $10 billion
40:59business idea. And I'm and I'm
41:01>> just say it now and we'll bleep it out
41:02and we can react.
41:03>> Yeah, totally. Yeah, give us like a code
41:04word or something so we can we can at
41:06least give you credit for it uh years
41:08later. Hey, look, we're not we're the
41:10wrong heads. When when you see it,
41:12you'll know. You'll see it and you'll
41:13go, oh yeah, this is a bill this is a
41:15big business idea. Um
41:17So and I don't think anybody's going to
41:19do that in the meantime while I'm
41:21finishing my chapter here at Grüns and
41:24doing what I set out to do. Okay, well,
41:25what what what what are some other ideas
41:27that if in the right hands are great
41:28that that aren't your hands?
41:32I had this idea one time. It has nothing
41:33to do with consumer.
41:35Um, and I actually almost ran with it
41:37around the time I was starting Grüns,
41:38and I still think it's a good idea, but
41:40I'm not going to be the one to do it, so
41:41I'm happy to share it.
41:42Right now, there is no way to direct the
41:47money that you have coming in from like
41:49direct deposit. So that direct deposit
41:51hits your checking account and then
41:53we've all got to have the willpower to
41:55decide, oh, put 10% in savings and put
41:57this against your bills and do this over
41:59here, blah blah blah.
42:00What if you become the essentially the
42:02distribution layer of ACH transfers? So
42:06it hits this distribution layer and
42:08before that person has to have the
42:09willpower to decide what they're going
42:11to do with it. And and this is helpful
42:12for so many people in their lives,
42:14right? It it gets wired out to the the
42:16rent that they have. It gets wired out
42:17to their car payment. It gets wired out
42:19to blank over here over here into their
42:22investment. And so what actually hits
42:23their account that they're spending
42:25against is 500 bucks for groceries or
42:27whatever it is. And I the technology
42:30exists to do this, right? It hasn't been
42:32structured. I I can't remember what
42:34platform it last for, but there's a
42:35platform that can facilitate what I just
42:37described to you. So like this idea
42:39could be done tomorrow. That's a great
42:41idea. Even whether it's for consumer or
42:43for businesses, have you ever read the
42:44book Profit First?
42:46No.
42:47Somebody recommended on the podcast and
42:49they go it was like the time when my
42:50girlfriend bought me the book The Game
42:52before I went to college and we were
42:54going to break up and I was like, you
42:55need to learn how to talk to girls. I
42:58was like, oh, thank you. I was like I it
42:59was a gift, but it was also a message.
43:01And my friend told me about this book
43:03Profit First, I think it was a gift and
43:05a message. And the message was, hey,
43:07you're running this business
43:09and you've been doing it for years, but
43:10you're not pulling out any profits and
43:12you don't know where all the money's
43:13going. It's profitable on paper, but
43:15like you're not getting money out of
43:17this. And that's a very common business
43:18owner problem. And there's this book
43:21called Profit First, which has this
43:22philosophy, which is basically you
43:23preset the budget. So what most people
43:25do is they say, I have this much revenue
43:28then they have all their expenses and
43:29then they it's kind of like surprise,
43:31whatever's left over, that's your
43:33profit. And you're usually quite
43:34disappointed with that surprise. The
43:37better way what this guy advocates for
43:38is like you just set a budget for your
43:40P&L. Here you say, oh, I'm going to
43:41spend 25% on OPEX. I'm going to I need
43:45to reserve 20% for taxes, so I'm not
43:47stressed out every tax season, so I just
43:48want to put that and you basically
43:50literally just create four separate
43:51accounts. You create a tax account, a
43:53checking account, so automatically 20%
43:55gets go goes in there and that's waiting
43:57for it's in a like a money market
43:58account until tax season. You have your
44:00OPEX account and so now your team has to
44:02run on a budget. It's like, this is how
44:04much you have to spend. You don't get to
44:05just spend whatever and keep eating out
44:07of profits. And you set a profit
44:09threshold where you say, I want to have
44:1150% profit. So it basically
44:12pre-allocates to you as every dollar
44:14comes in, 15 cents will go to the profit
44:16bucket, 25% 25 cents will go to the OPEX
44:19bucket. And it's it's actually kind of a
44:21life-changing idea because it forces it
44:23forces discipline. You think you're
44:25running pretty lean until you actually
44:27have a hard cap on expenses and then you
44:29realize like, oh, actually there was way
44:31more fat I could trim. I actually could
44:32have been this profitable yesterday. I
44:34just I let it be an output rather than
44:36an input. But it but unfortunately
44:37there's not an easy way to do so. Very
44:39you have to like
44:40set up seven accounts with your bank and
44:42then you have to tell your accountant,
44:43hey, keep doing these sweeps every two
44:45weeks. Have you guys heard of Simp Do
44:46you guys remember Simple? Uh
44:48I loved Simple. It was really cool. I I
44:50don't I think it's gone. It got it was
44:52one of the very first Silicon Valley
44:55um
44:55uh banking
44:56>> Neo banks. company yeah, neo banks and
44:58it was I don't even think neo bank was a
45:00description.
45:01>> system where you like put digitally
45:03money into different envelopes.
45:05>> and like I didn't I didn't make a lot of
45:06money at the time and I was like, but I
45:07want to like fly home to St. Louis to
45:10see my Yeah. family and so like it said
45:11it would take me four months and so I
45:13automatically when it would come into my
45:14bank account, the way it would visualize
45:15it, it was still one bank account. It
45:17was like, well, this is this is how much
45:18is left, you know, that you have 350
45:21bucks in your
45:22spending account, but you have another
45:24400 in your vacation account. So like
45:26don't touch that money. It was pretty
45:28cool.
45:29So so Sam, the here's what I love about
45:31this idea and Sean, you're bringing up
45:32actually why I think this is even
45:34potentially more compelling for
45:36businesses because if you're changing
45:37the way that the P&L works, I mean,
45:39venture capital firms want that because
45:41now there's more discipline around the
45:43money that they're giving.
45:44>> Totally. The the small founders who are
45:45making 5 million a year who want to pull
45:47500,000 out, they want it because now
45:50it's like, oh well, I'm forcing myself
45:51into that discipline to pull 500,000 out
45:53every year. Like that's a huge use case
45:55that I wasn't thinking of. In in terms
45:56of personal, the problem with budgeting
45:59today is it's done I I grew up in a
46:01family where at the age of six I was in
46:03Quicken.
46:04And like I had to take every receipt,
46:06scan it, type it in back in the you
46:08know, the old days.
46:10>> made you do that?
46:11>> taught me budgeting, yeah. Um, and in
46:14like we were so against debt and
46:15everything else, but I had like I it was
46:17so it was awesome until there was an
46:18imbalance at the end of the month and I
46:20had to go search for the 20 cents that
46:22was off. Is that like a Mormon thing?
46:23Because I've I've I think I've met a
46:25bunch of Mormon buddies who are very
46:27disciplined with their monthly
46:28budgeting. Yeah, it might be honestly.
46:30It might be something that's I mean,
46:32there's a lot of like financial
46:33discipline in general, but but to put
46:35put the headline on it, to me what I
46:37love about this idea is it solves what I
46:40think sucked about the granularity of
46:43like wasting hours a a month, a week on
46:46like typing in all my stuff. And it also
46:48solves the other end where like people
46:51they get to the end of the month and
46:52they're like, it was actually a hassle
46:53to do that. Did I change any of my
46:54behaviors based on it? I don't know. And
46:56then the other end of it's like Mint
46:58back before that got acquired or
46:59whatever and I think the other one today
47:01is Monarch, which I like Monarch. Now I
47:03like I have
47:04>> yeah.
47:04>> more money. It's like it's helpful to
47:06see, but like Monarch's not really like
47:08a proactive platform, right? It's like,
47:10oh, I'm just like getting information.
47:12>> I'll tell you how bad you're doing at it
47:14versus, hey, let me just fix it for you.
47:16What you want is a fix it for me
47:18solution. I really wonder whether you
47:21know, with agents or you know, you take
47:23the popularity of like Mercury or the
47:25kind of all the popular neo banks that
47:27are pretty product first
47:28>> Yeah. and they're more programmable, I
47:30wonder if either somebody could build it
47:32on top of one of those banks or if
47:34they'll end up releasing something like
47:36this themselves. I think you get
47:37acquired. I I think if you run this
47:39business, you're going to be acquired
47:40for 500 million to a billion in like two
47:43years. If you execute this right, like
47:45somebody out there listening right now,
47:46feel free to send me a DM when you do
47:48it. Like this this idea, the
47:50infrastructure exists to be able to do
47:51this if you execute it correctly.
47:54You you are one making a massive impact
47:56in millions of people's lives and two,
47:59you will have a financial outcome. What
48:01would be cool is then if in 12 months we
48:03have to say, hey everyone, we did this
48:04podcast with Chad. Here here's what he
48:06said and then we heard this clip that
48:07you just said and then we're like,
48:08here's the update. Um, because this is
48:11this is fantastic. This is really cool.
48:13We we we do this segment all the time.
48:14This is this is a top tier idea.
48:17You you have a couple of quotes that you
48:19sent us or like kind of philosophies. We
48:21always ask people, what are your what
48:22are the philosophies you live by that
48:23you think are not not something
48:25everybody does or not everybody believes
48:27in.
48:28You said one one of them that I like you
48:30go, access is everything. And you
48:32explained how you didn't have a ton of
48:34access early on, but you know, through
48:36Summit and Stanford, like how can you
48:38explain your access is everything
48:39philosophy?
48:40Yeah, um I think access and the
48:42privilege of having access in the world
48:45is something that when you don't have
48:47it, surround yourself with people who do
48:49and do good work for them and you will
48:50get access every time. And then when you
48:52do have it, like the privilege I now
48:54have, I see it as your obligation, my
48:57obligation to give that back to others.
48:59So explain what you what you mean by
49:01access. What's the personal story where
49:02where where this kind of
49:04resonates?
49:04>> Yeah, you know, like
49:06I'm a dude named Chad. I I worked in
49:08private equity. What you see today would
49:10not have existed without people leaning
49:12in and giving me access every time
49:14incrementally and me doing good work for
49:16them.
49:17So like if you go back, I mean, I was
49:19always curious on this cuz I think you
49:21get asked in those questionnaires, like
49:22are you are you middle income, high
49:24income, low income? And like I was aware
49:27of sort of wealth, but if I looked at
49:30sort of the income that my parents had
49:32and I have seven there's seven of us
49:34kids, so six siblings and and our
49:36income, I think I was like bottom bin in
49:38class is like how it was defined.
49:40And I'm not saying that from a
49:41standpoint of like a shame, but like I'm
49:43grateful
49:44to have lived in this area and seen
49:45these people cuz I think you can solve a
49:47lot by just giving awareness to kids
49:49about what's possible.
49:51It's like the grasshopper moment. Once
49:52they know, it's like, oh, now you can go
49:54get it. So, I get I was recruiting for
49:58the big three consulting, McKinsey, BCG,
50:01Bain through a contact who he put me in
50:03touch. I didn't get it, but I landed
50:06through another another mentor this this
50:07gig at Lazard. I did really good work.
50:09And Lazard's an investment bank. So, in
50:11New York City, one of the top premier
50:14investment banks working on mergers and
50:16acquisitions. That mentor, I'm still
50:18close to him. I went and visited him,
50:20right? So, he gave me access and that
50:21access then landed me at Summit
50:23Partners. At Summit Partners, I did
50:25phenomenal work for them. I deployed I
50:27literally invested like 30% of that
50:29fund, a $5 billion fund. Like I invested
50:32that. I sourced the deals that made them
50:33the money behind that. I did really good
50:35work. And there's this moment when I got
50:37into Stanford that I was like, oh man,
50:39like should I feel bad because I know
50:41how this works. Like I only got in. Like
50:43yeah, I've had a ton of accomplishments
50:45added to a 3.95 GPA. I've worked at
50:48great places. But this white dude named
50:50Chad, like should I feel bad about this
50:52that I got into Stanford? And what I
50:54came to appreciate is like,
50:55no, I shouldn't feel bad knowing that
50:58the reason why I got in is because, you
51:00know, two people who are very close to
51:02the Stanford folks sent a text and a
51:04nice letter of recommendation for me. I
51:06shouldn't feel bad about that cuz
51:07they're not just doing that.
51:09Right? They're doing that because I did
51:10good work for them. I made their lives
51:12easier. I earned their trust. And so,
51:14maybe I wasn't born into that access
51:17where my dad can send a text to Stanford
51:18and say let my let my son in. But you
51:21can earn that by doing good work for the
51:23people who do have that access. And
51:24they're they're so eager to help you
51:26have that sort of accomplishment. So,
51:28that's how I think about access. And
51:30it's part of when, you know, I got asked
51:31recently like, what's your legacy you
51:33want to leave on the world? And I'm
51:34like, I you know, I'm like 33 years old.
51:37But the way I think about it is like,
51:39I want to give that that access that
51:41I've sort of like either been granted or
51:43earned over the last many years. And I I
51:46want to ensure that more people have
51:47access to that who who spend their their
51:50lives working with me and putting good
51:52work.
51:52Dude, you're you're awesome. You are so
51:55cool. I think that um when I was
51:57younger, I met this really successful
51:58guy named Scott Belsky who was the chief
52:01product officer of Adobe and
52:04an amazing entrepreneur,
52:06maybe a billion billionaire. And he used
52:08this word with me that I never heard
52:10before. This idea he used he said, I'm
52:12going to invest in you and you need to
52:13be a steward of my capital.
52:15And I was like, I don't know what is
52:16that word steward? I never heard of
52:18that. It's just like this idea that you
52:19need to be the vehicle that that
52:21protects and passes on like a little bit
52:23of greatness. That's kind of how I
52:24interpreted it. And you are that person.
52:27So,
52:28my friend Austin Reef, do you know
52:30Austin Reef?
52:31>> He's the
52:33one of the Morning Brew. Yeah,
52:35started and sold the company for
52:36hundreds of millions of dollars when he
52:38was 30 years old. He was texting me
52:39about this new idea that he was working
52:41on or brainstorming. And I was like, do
52:43you think it's going to be successful?
52:44He goes, it can be successful if I want
52:46it to be.
52:47And I love that because what you and him
52:50both said something very similar. You
52:52have this similar mindset. But I find
52:54myself being around him and people like
52:56you and it's contagious.
52:59Yeah, you know, when I thought about
53:00whether I should be
53:01I've tried to figure out whether my
53:03impact on the world is more narrowly
53:05focused on the people who spend hours,
53:07thousands of hours with me working
53:09inside of rooms or if I should have more
53:11of an impact publicly trying to relay
53:13some of this message. It's hard though,
53:15you know, like to relay all of this
53:18these experiences that I've had in in a
53:20public forum that allows for millions to
53:23to learn. But you're totally right, Sam.
53:25Like at the end of the day,
53:27why why was I able to build what I
53:29built? It's cuz I knew it was possible,
53:31right? Like I saw it done many many
53:33times by others. And if I ever had a
53:35question, I could I could go ping those
53:37people. And so, network, experiences,
53:40awareness of what's possible. I think
53:42there's a
53:43maybe a different way to say what you
53:44just said. You know, the way you just
53:46said it was kind of like, hey, I got I
53:47was pretty fortunate that these things
53:48happened and I did my part, but they did
53:50their part. This happens a lot with
53:52entrepreneurs as we sort of stumble and
53:54fumble our way to success. And
53:56afterwards, you can actually look back
53:58and realize like, oh, there it wasn't
54:00complete random. It wasn't complete
54:02chance. And in fact, you could have
54:04recreate the conditions of success more
54:06reliably knowing what I know now. And
54:08so, I would just point to three words
54:10that you just said. The first one is
54:12exposure. You really can't imagine what
54:14you've never seen. Your brain won't go
54:16anywhere if you don't have any exposure
54:19to things. I
54:20was talking about this with Ben, my
54:22business partner, about my kids. I said
54:23my kids have never been exposed to so
54:26much in the world, right? Like we
54:27literally keep going to the same
54:28resorts. And I was like, they've never
54:30seen a third world country. They've
54:31never seen I started bringing them to
54:34just do adult stuff with me cuz I used
54:36to do kid stuff with my kids. And now
54:38what I realize is, let me just bring
54:40them along for life. And kids actually
54:42love it. They like doing laundry. They
54:44like cooking. They work out with me now
54:45in the gym every day. They like going
54:47with me to to meetings. They like you
54:49know, they they actually kind of enjoy
54:50that because they're getting exposed to
54:52new stimulus that they've never really
54:53seen before. And even if they're 5 years
54:55old and they can't fully grok it,
54:57there's some part of it that just breaks
54:59some fence that they had around what the
55:02world is and it starts to poke holes and
55:04it lets new things in. Growing up, I
55:06didn't know any entrepreneurs.
55:08I didn't know anyone. In my entire
55:10family, my mom has nine siblings. My dad
55:12has four. Out of all of them, there were
55:14zero entrepreneurs. Every single one of
55:16them was an engineer.
55:18Like typical Indian family. And so, the
55:20highest calling was you get a good job.
55:22What's a good job? A six-figure job that
55:24has health insurance. So, that was all I
55:26knew. I was all I was exposed to of what
55:28was possible. And then my senior year of
55:30college, I took a class called getting
55:32rich. And in the very first class, he
55:33brought in a speaker and it was a girl
55:34who started a t-shirt company. And then
55:36the next class, he brought in a guy who
55:38started his own hedge fund. And I just
55:39thought I looked at them and I said, why
55:41are these guys having all the fun? This
55:42sounds awesome. Maybe I could do that
55:44instead. I was finally exposed to the
55:46thing, you know, when I was 21 years old
55:48and it changed the trajectory of my
55:50life. Had I not had the exposure, it
55:51literally would have just not happened.
55:53And so, the first is exposure. How do
55:55you get yourself in a position to see
55:56new things
55:57or help other people see new things? The
55:59second is access. And then
56:01the way I would put it for you is earned
56:03access cuz you said something very
56:04casually. Like I did good work for them.
56:06You know what? I bet if we peeled back,
56:08there probably is a lot there. I bet you
56:10over-delivered. I bet you didn't get
56:11paid proportional to what you did and
56:13you didn't whine about it. These are my
56:14guesses. You can tell me if that's true
56:16or not. But the access is earned through
56:19showing that you're somebody who
56:20deserves greater opportunities and
56:22greater access. And you sort of delay
56:25the payoff of those actions and you just
56:27have faith that I'm going to just I'm
56:30going to kill it right now. And I I
56:31trust that, you know, the ball will
56:32bounce my way over time. And I don't
56:34need to immediately tit-for-tat measure
56:37what I'm getting versus what I'm putting
56:38in.
56:39Yeah, I think I I I think it's true. And
56:41frankly, I think, you know, I'm young.
56:43I'm 33 years old. I think about the
56:46impact I want to have on this world. I
56:47think it's that first one, exposure. How
56:50can I facilitate exposure to everyone?
56:53Right? Young young kids, how do they get
56:55exposure? That honestly, I think that's
56:57where my wife and I want to make an
56:58impact is making it possible through
57:02some some effort in the next chapter of
57:04my life to ensure that the random kid
57:07who's 6 years old or 10 years old in a
57:09place that would never get exposure to
57:10this, at least knows what's possible.
57:12Because if they know it's possible,
57:13maybe they'll go after it themselves
57:15over time. Hey, can I let me ask you a
57:17question that um
57:19you might not feel comfortable
57:20answering. When you're wired hundreds of
57:21millions of dollars, what do you what do
57:23you decide to do with it? Where did you
57:24invest the money? And that includes like
57:26did you decide to give any away?
57:28Yeah, TBD on it. But I
57:31one of the hardest things I have is I've
57:32thought about my my impact. Like it's
57:35the same as um I don't even know if I'll
57:37invest in other companies.
57:39And and it's not because I don't
57:41believe. It's like, what's the next best
57:43use of a dollar?
57:45It's going to it's going to take a lot
57:46to convince me that it's something other
57:48than what I can go after and do. And
57:50that doesn't mean it's always business,
57:51profits, etc. Like I don't always have
57:53to make money. But like, can I, Sam, go
57:56out and
57:58make make an impact on the world by
58:00taking my own funds and building like
58:03something special out of it? Right? That
58:05has an impact on whether it's
58:07mentorship, exposure, whatever it is.
58:09So, TBD. I mean, as you know, when when
58:11you receive money, you spend a lot of
58:12time thinking about deploying it. You
58:15don't want to rush into anything. But
58:16but I would expect that the more
58:19meaningful um
58:21deployment of my capital is going to
58:23come through some personal effort in my
58:25life that I do to to make an impact. So,
58:27well, first of all, can we let me ask a
58:29boring question. Where did you invest
58:30it? The the current money, where did you
58:31invest it? Is it just boring index
58:33funds? Is it
58:33>> Well, you you know I There's a
58:35difference between signing and closing.
58:37So, you have to go through
58:38anti-regulatory.
58:40So, we've signed, but the closing
58:41happens as soon as it's been approved by
58:44government. So, you don't have any The
58:46money's not been wired yet. But the deal
58:47is done.
58:48>> know what that I've not had a deal that
58:49was large enough.
58:51My first acquisition, they just Venmo'd
58:53me.
58:54>> [laughter]
58:57>> Yeah, we've not I've not I've not had
58:58dealt with the with the Department of
59:00Justice yet. So, that's pretty cool.
59:01[laughter]
59:02It's funny. There's a crazy There's a
59:05crazy story. You know the company Apple
59:0611? Yeah, yeah. Yeah, my my co-founder
59:08was the co-founder of Apple 11 at the
59:10time. So, he's sitting next to me at the
59:11office and they signed this deal. And
59:13I'm like, oh my god, you just sold they
59:14sold the company for I think
59:161.2 or 2 billion dollars. I forgot which
59:18the what the number was. But one or two
59:20billion dollars. And I was like, wow,
59:21dude, you did it. You sold a company for
59:23a billion dollars, 2 billion dollars.
59:24That's amazing.
59:25And I was like, should we go dinner's on
59:28you? What's up? He's like, dude, we
59:29haven't got the money. It's going to be
59:30like months. He's like, if it's over, I
59:31forgot what the number is. $750 million,
59:33a billion dollars, whatever it is.
59:35Like literally, like the government you
59:37know, the way he put it was like, it's
59:38going to sit on Trump's desk until he
59:39stamps it. The crazy thing was they sold
59:41to a Chinese company. So, there was
59:43actually a lot of risk. And so, he
59:45didn't know this at the time. He thought
59:46he, you know, it's over.
59:48Well, 9 months go by, a year almost goes
59:51by, and the deal is still not approved.
59:54But, they've been running the company.
59:55They've doubled revenue in that year.
59:57>> Yeah. And so, instead of waiting for the
59:59approval, what they did was they went
1:00:00and renegotiated. They were like, "Hey,
1:00:02here's what the $2 billion gets you
1:00:03instead. And now it gets you 25% of the
1:00:06company instead of whatever, 8500%." So,
1:00:08they renegotiated the deal cuz the
1:00:10business had grown. So, it was the best
1:00:11thing that ever happened. And so, they
1:00:12took a minority investment, got some
1:00:14liquidity, and kept growing the thing.
1:00:16It's now it like I was a $100 billion
1:00:17company in the last the last year,
1:00:19right? So, it went 100x since then. A
1:00:22quick Google, so I haven't had time to
1:00:23read all this. I believe it's $130
1:00:26million
1:00:27is the threshold where the DOJ has to
1:00:29>> Interesting. 130? You have to notify the
1:00:32DOJ and the FTC anything north of $133.9
1:00:36million.
1:00:37Dear DOJ, I'm rich. What do you What do
1:00:40you notify? [laughter]
1:00:41There's like an official form, and then
1:00:43they they're just reviewing it as they
1:00:45should to make sure that it's not bad
1:00:46for the consumer.
1:00:48That's cool. That's awesome.
1:00:50>> thanks for coming on, man, and congrats
1:00:52again on on building something pretty
1:00:53epic. I remember when I saw the product,
1:00:56it just seemed like, oh, that's it. And
1:00:58the best products actually are simple
1:01:00like that where the proposition is easy
1:01:02for the customer to understand.
1:01:04It makes sense in the world. It was
1:01:06almost like hidden in plain sight, I
1:01:08feel, in a way. And you know, to your
1:01:11credit, you you ran with that, you acted
1:01:13on it, and you built something pretty
1:01:15incredible. Of course.
1:01:17Thank you for having me on. My hope is
1:01:19that 3 years from now we're talking and
1:01:20you guys are like, "Geez, dude, we
1:01:22didn't realize there was that much out
1:01:23of you."
1:01:24We've got so much this team wants to do,
1:01:26and so
1:01:28eager to to show the consumers what
1:01:29we've got. Platform, new products, new
1:01:31innovations, new fun, limited-time
1:01:33offers.
1:01:33>> What's the best thing on that shelf I
1:01:35should buy? So, have you tried the
1:01:36Olipop? We've got some products here
1:01:38that are launching soon, but have you
1:01:40tried the Olipop? I only ever had the
1:01:42original. I didn't I didn't even try
1:01:44anything else. I just got the original
1:01:45like subscription. That's it.
1:01:46>> So, yeah, you may you may know this, but
1:01:47we've got Kroons, which is the
1:01:49comprehensive nutrition greens,
1:01:50multivitamin, fiber. We've got Neutrops,
1:01:53which is a nootropics product. We've got
1:01:56Immune, which is like a almost like an
1:01:58immunity shot, like the 2-oz bottles,
1:02:00but in gummy form. And then we've got
1:02:02Juiced, which is this one right here,
1:02:04which is like a pre-anything energy
1:02:06product. So, I mean, we've got like 12
1:02:08innovations in the pipeline. That's what
1:02:10I'm saying, like it's so exciting. We've
1:02:12We've like done something so big, but
1:02:14like we're like maybe 5 miles into a
1:02:16marathon. Good, man. Thank you so much
1:02:18for coming on. You have an open invite
1:02:19whenever you want. You're You're You're
1:02:21a wonderful guy. We're We're so happy
1:02:23for your success, and we feel makes us
1:02:24feel good to promote you. So, thank you
1:02:26for coming on. That's it. That's the
1:02:27pod.

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