← A Bit of Optimism
A Bit of Optimism
What Happens When You’re Naive Enough to Try with KIND Founder Daniel Lubetzky
00:54:52
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- [00:00]
Simon Sinek
Where did, like, the drive for peace come from? And. And what are you doing to make that naive vision real?
- [00:11]
Daniel Lubetzky
It started when.
- [00:13]
Simon Sinek
I mean that as a compliment. Right.
- [00:14]
Daniel Lubetzky
You're right.
- [00:15]
Simon Sinek
But, you know.
- [00:16]
Daniel Lubetzky
No.
- [00:16]
Simon Sinek
No. I mean, no, I do. Which is. Which is the ones who succeed are the ones who are naive enough to believe that it's possible.
- [00:21]
Daniel Lubetzky
I know I was teasing you.
- [00:23]
Simon Sinek
We often think of being naive as a weakness, something we want to avoid. But what if naivety was actually a superpower? Naivety describes the willingness to believe that things can be better, even when the world around us suggests otherwise. I firmly believe that naivety is essential for anyone who wants to build something meaningful in the world. My guest today is Daniel Lubecky, and he proves this. Many people know him as the founder of Kind, the maker of Kind bars. But what really drives Daniel isn't just building a successful company. And it's his belief that we can leave the world better than we found it. And he's just naive enough to believe it will happen, which I love. Daniel has since stepped away from Kind and is now working on his next naive project, the Builders Movement, an effort to channel curiosity and compassion into solutions that can reduce polarization in our media, our societies, and indeed in the world. The conversation you're about to hear was actually recorded in December, before the recent developments in the Middle East. And because this episode touches on peace building and polarization, I wanted to share that context before you listen. I also reached back out to Daniel and asked what's been on his mind since we recorded, and he shared this message. In this conversation, he said, you'll hear about my life's mission to pursue peace in the Middle east and build bridges across the world, including through business cooperation and civic activism. I hope what you draw from this conversation, he continues, are tools to navigate differences between people and even differences within us to learn to wrestle with complex issues that have no easy answers. This is a bit of optimism. I just met you for the first time five minutes ago, and I have to say, from the minute you walk in, you exude warmth. You know, when you meet the founder of a company? In my world, the ideal brand is a reflection of the founder.
- [02:26]
Daniel Lubetzky
Do you know any world where it's not that case that the person's personality does not create the culture?
- [02:33]
Simon Sinek
It always starts that way. But success is the biggest obstacle. And then whether it's through outside influence or poor management or any number of factors, or just taking your eye off the ball or being distracted by different goals and objectives, you know, very often it Starts to dilute. And so when you meet somebody who has literally started a company called Kind, right? And you. And I've never met, all I know is you started a company called Kind and you walk in, you're like. And you're just like, yep, you know, it's a very nice experience when it happens. And you just happen to exude warmth,
- [03:10]
Daniel Lubetzky
which is, we should just acknowledge, if you don't mind me sharing, that I came into a very warm place and you have a lot of fun, fun gadgets and things that maybe connect very quickly with your warmth. And there's a candle that you walk in, it smells really good and there's little tiny Meyer lemons and there's a lot of fun things around.
- [03:28]
Simon Sinek
I can tell you from experience that lots of people come in here and this setting is always the same, but their response is it's all over the place. So I'm gonna receive your gratitude and, and push it back on you that it's really, it's really you. The bar category is a frickin mess. There are so many players. I don't know how anybody differentiates themselves. I have friends who are trying to get into it and it's so hard. Was it luck of timing or is it something that you did that you've become Kind bars are one of the gold standards of the category. You know, you were one of the better known brands in the whole category in people. People refer to other grain bars as kind bars even when they're not.
- [04:21]
Daniel Lubetzky
That's a dangerous situation. But I get it. But when we were designing what became Kind, we never thought of ourselves as a bar. We thought ourselves as solving for a problem to help people snack helpfully. And even today we try to think of Kind as kind, not as a kind bar. But the deeper answer to your question is I didn't know how hard that space was. And I was lucky that I didn't think about it. And the more that I look back at life, a lot of the things that I've accomplished, I'm lucky that I wasn't fazed because I didn't know what the hell I was getting into. Rabbi Brown Lurie once told me, daniel, you know what I love about you is that you're so naive. And I got furious that he called me naive. And I'm like, why are you calling me naive? I'm just determined and I'm not naive. So I mean it as a compliment that you don't know what you don't know. And that's why you try These things out. Took me decades to take that compliment. But it's very true that a lot of entrepreneurs would not pursue the paths that they pursue if they would know how hard it is.
- [05:43]
Simon Sinek
I think naivete is a very undervalued asset.
- [05:48]
Daniel Lubetzky
Yeah.
- [05:49]
Simon Sinek
And I, I fit that category also. I, I firmly believe that one of my greatest values is that I am naive. I was an idiot with an idea, with no following, you know, no commercial success of any particular note, you know, no book, no nothing, but had this wild belief that I could profoundly change the way that business worked. And that's all I had, was the naive belief that I could. And if I stopped to think about it for a minute, I wouldn't have done half the things I did.
- [06:21]
Daniel Lubetzky
But I, I struggle with, you know, every word, in addition to the word itself has a connotation. Right. Like, that's why, for example, I say that we don't have employees or what I used to run kind, I sold it recently. But I say that I, we didn't have employees and we don't have employees in any other organization. I don't mean that we don't literally hire people that work with us. The word employee has the connotation of a master servant relationship.
- [06:47]
Simon Sinek
It's a hierarchy.
- [06:48]
Daniel Lubetzky
A hierarchy that's a negative hierarchy. And for me, I want to have team members where all of us are equal and are working together, not just because it sounds good, but because it helps empower people to challenge language, has power and to. And to debate with you and to create the structure. Words matter. Everybody has a. Can have an opinion. And so naive. For me, I was having a conversation with Martin Barsavsky, who's a very dear friend of mine who started like 12 companies. He's one of the very few people that I know that have created many multi billion dollar companies from scratch in different industries. Very rare to do. And by the way, the fact that almost nobody has done it right. Reminds me how much luck plays into it. We all think we're so special.
- [07:29]
Simon Sinek
Yeah.
- [07:30]
Daniel Lubetzky
Luck plays so much into our success.
- [07:33]
Simon Sinek
Yeah.
- [07:33]
Daniel Lubetzky
But he was saying when we were talking, he's in his 60s and he's starting his next company. And I wouldn't say what it is, but out of respect to him because it's still in stealth mode. But why does he do it? Because he's trying to solve a puzzle. And so part of what entrepreneurs do is identify a problem, identify a solution, identify, and then try to will it into existence. And I don't think it's got that much to do with the dimension of naivete. It's true that there's a lot that we don't know and had we known it, maybe we wouldn't pursue it. But I think it's a greater truth that we just have the will to try to turn an idea into a reality. And it's our personality that likes to solve puzzles that doesn't get dissuaded by hearing no, maybe almost like you're like turned on, but like, oh really, now I'm going to really prove it. So I, I think it's a little more complex than just. It's true that not knowing how hard it would be helps you push through. But I think there's more to it
- [08:37]
Simon Sinek
than that and I think you, you're touching upon it, which is that an entrepreneur is a problem solver. Right. And I think people sometimes confuse it that an entrepreneur is a small business owner or a business owner, you know, a small business owner is a small business owner. An entrepreneur solves problems. To your point. And you can find entrepreneurs in very, very large companies where they're mid ranking people, but they're the ones who are pushing against the status quo, trying to solve problems. To your point, looking at things slightly differently instead of just following the prescription. What I think is really interesting is some universities, they teach entrepreneurship and I've always found that curious which is, is entrepreneurship a skill that you can teach or is it a, is it a mental defect that you choose to do something with the overwhelming chance of failure but you think that's kind of fun?
- [09:25]
Daniel Lubetzky
It's a beautiful question that I've asked myself for so many years.
- [09:29]
Simon Sinek
For me, it's, it's my, it's, it's very much ingrained in my personality and how I approach the world, which is, and I still think naivete is a compliment. You know, if somebody says you're naive, I'm like, thank you. You know, I, I don't know. And I kind of like that because that means I get to start clean, you know.
- [09:45]
Daniel Lubetzky
But going to your question about what makes an entrepreneur, can you teach entrepreneurship? I asked this question all the time because I trying to search for myself, did it come because I learned it from my father, from osmosis, from seeing him operate because he really was a consumer entrepreneur. And it sounds like you that too. I always ask where the genesis of that came from. I don't know if it's nurture nature. I tend to think if I have to come up with a theory that along the way when we're having Formative influences, somebody is encouraged to think creatively and that there's a reward for it. Having asked this question thousands of times of others, there seems to be something that happens in people's lives, in their early lives where them thinking outside the box is rewarded and they're like, let me do more of it and let me do more of it. And it might be very little steps. And so how can we teach young kids to take risks, to think outside the box, and to be rewarded for taking those risks? By the way, in the United States, if you look at it as a big picture, as a culture, one of the reasons why the United States has far more entrepreneurs than the rest of the world is that we have a culture where it's okay to fall. Yeah. Dust it off and stand up. In some cultures, in, in most cultures, if you fail, it is shameful and shame on you. And you're going to bring shame not just to you, but to your family. And so people are like, okay, I'm not going to try. And it's so liberating to be okay with trying. Because guess what? If you don't try, if you, if you're not falling. Yeah, it means you're not trying.
- [11:23]
Simon Sinek
It's one of my favorite things about America, which is people put their failed businesses on their resume. Like they literally have on their resume, oh, I started a business here. And you know, they're interviewing for a job, like, oh, yeah, I don't do
- [11:33]
Daniel Lubetzky
that because I'd be too long.
- [11:35]
Simon Sinek
But they'd be like, oh, yeah, I started a business. We had it for about two and a half years and it didn't work out. People like, okay, cool, cool. Like, it's so not.
- [11:42]
Daniel Lubetzky
And when I love people that show that, because it also shows, first of all, failures teach you more than successes. Because when you succeed, you're not 100% certain what I did. But when you fail, you have to. If you are self reflective, you're going to absorb the lessons and so you stretch yourself more and it shows that you're comfortable with that opportunity.
- [12:04]
Simon Sinek
I love to tell the story. It's you. And you talk about, like, it's, it's in you from your upbringing, from your childhood. That's where it comes from, the rewards of taking risks and things like that. So one of my favorite things about America, and this is historical, and it helps you understand how this country is so good at entrepreneurship and has so many entrepreneurs, which is we celebrate our independence on July 4, 1776. Incorrect. That is when we signed the declaration of independence. The Revolutionary war continued for another seven years. We didn't win our independence until September 3, 1783.
- [12:36]
Daniel Lubetzky
But we said, we got it, let's go.
- [12:38]
Simon Sinek
And then George Washington didn't become president. The constitution wasn't ratified for another seven years, like 1789 or 1791. I can't remember the dates. But the point is there's a full on nearly decade, like 15 years between when we signed and celebrate our independence until we actually had it, had a constitution, had a president.
- [12:59]
Daniel Lubetzky
I had never heard that. Yeah.
- [13:01]
Simon Sinek
So our independence day when we were recognized as an independent Nation is actually September 3, 1783. But we celebrate the day we thought about it, not the day we had it. And that we will that into existence. And that tells you everything about America.
- [13:14]
Daniel Lubetzky
And it's entrepreneurial spirit.
- [13:15]
Simon Sinek
It's that entrepreneurial. It's that entrepreneurial spirit with the, with the dream is ground zero, not the accomplishment.
- [13:23]
Daniel Lubetzky
I love that.
- [13:24]
Simon Sinek
I love that too. One of the reasons I think other nations don't have the same quantity of entrepreneurs is all these things, which is we're dreamers. We love people who try. Even if it doesn't work out, we think that's great. So then the question it raises is, is America as a nation, and I mean this for the past 250 years, is America naive? Does it have, does it, does. Does the nation embody the characteristics of the entrepreneur? The risk taking, the dreaming, the grit? But is there a naivete to the nation?
- [13:57]
Daniel Lubetzky
And can it lose it?
- [13:58]
Simon Sinek
And can it lose it? And I would argue it does have the naivete, like the naivete that this one nation can help bring sort of, you know, democracy and capitalism to around the world. And we stood up to the Soviet Union's view of how the world should work and say, no, no, no, we think there's a better way and we think everybody should have this because it's pretty awesome. Now, whether it's misguided or true or not, you know, and how they went about it, these are all different questions.
- [14:21]
Daniel Lubetzky
I grew up in Mexico, so I lived in Mexico from 68 to 70 to 84, 16 years. And the narrative that a lot of Latin American people had around those times was of the United States as an oppressive regime that was taking advantage of. When I came to the United States, I discovered a country that I love so much. And we are at risk of losing some of what makes us very special. We need to not take it for granted. But still, rule of law, better than in most places, democracy better than in most places. Kindness, civility, respect, free markets, freedom of expression, all of them under threat, but better than in most places. And it's a gift that I don't take for granted. And I do think to your point about naivete, when I arrived in the United States, and most of my experience in the United States has been people that do the right thing, even when people are not watching for the right reasons. Which country in the history of humanity went and reconstructed all of Europe after World War II? Liberated Europe. My father was liberated by American soldiers. So you had countless people who sacrificed their life to liberate another continent. And then after they sacrificed so much, they invested in the Marshall Plan in rebuilding Europe. And by the way, it paid off. Amazing for the United States. Right. It helped take us to a different level. But I do believe that it was done for the right reasons to prevent that cycle of.
- [16:01]
Simon Sinek
Yeah, it was. It was. It was done so to prevent them from rebuilding, becoming our enemies again.
- [16:05]
Daniel Lubetzky
Yeah.
- [16:06]
Simon Sinek
We spent our money to make them our friends.
- [16:07]
Daniel Lubetzky
Yeah.
- [16:08]
Simon Sinek
So you. You're no longer. You're sold Kind.
- [16:10]
Daniel Lubetzky
I sold last December.
- [16:12]
Simon Sinek
So I. Are you worried that. Who bought it?
- [16:17]
Daniel Lubetzky
Mars?
- [16:18]
Simon Sinek
This has nothing to do with Mars. This is a philosophical question. But you controlled Kyne to be in your image, to maintain your values. Are you worried that it will break? Because I have so many founder friends who sold their businesses, whether they went public or they sold their companies or private equity took it over. And within a few years, the ingredients were replaced with cheaper, shittier ingredients. The culture was eviscerated, and some of them, the companies ceased to exist. I know one right now. The company just shut down. Yeah, because they get eviscerated and destroyed
- [17:01]
Daniel Lubetzky
by these all the time.
- [17:05]
Simon Sinek
There's nothing you can do about it.
- [17:06]
Daniel Lubetzky
There's some things I do about it still today to try to help them. But. But for example, you saw I came home and I came to your place and I brought you Kind bars. I don't own a stake in the company, but I love Kind so much that I still give them out. And I negotiated my contract that I would continue being. Having allotment. That was important to me. Yeah, I care a lot about Kind. I'm slightly less worried about the product integrity because I think Mars is sophisticated company that understands that if they do that, they'll destroy the product. But it's very difficult with the best.
- [17:41]
Simon Sinek
And this has nothing to do with Mars.
- [17:42]
Daniel Lubetzky
Yeah, Any company. It's actually the broader, more interesting question is the same thing that brings entrepreneurs to bring something into existence that didn't exist Where? To your point, how did you dare have the chutzpah to try to create a Kind bar in a space where there are already so many other bars? By the way, most of the other bars are no longer in existence. The ones that were leading the way when I launched Kind, you might remember the names, but they, for example, Balance Bar, Power Bar, they don't exist anymore. They're minuscule. I haven't seen them in years.
- [18:12]
Simon Sinek
I mean I remember Power Bar, they were kind of one of the OGs.
- [18:14]
Daniel Lubetzky
Yeah, they're I. Every entrepreneur has that compunction to do things and will something into existence and then they also. I don't know any entrepreneur that does not think they can defy the laws of gravity. So when we do that partnership, we think we're going to be the one that's going to suspend all of those laws and that we are going to be able to preserve everything. And the reality is that an entrepreneurial culture and a gigantic conglomerate, it's not easy. It's not easy. I think that it's not a question about the partners. The people that I work there are very, very high integrity. It is very difficult to preserve that entrepreneurial spirit. I like to invest in founder led companies because I noticed that when the founders no longer around, slowly but surely you were asking at the very beginning about the founders personality, values and culture imbuing the culture of the company. It's fascinating to me to notice. I've met a lot of founders and they look at their company's cultures and it's incredibly interesting how much that person's personality is in the culture of the company.
- [19:21]
Simon Sinek
But this is part of the problem with business in the modern day, right? Which is these founders build these beautiful brands where there's very important rules of integrity and ingredients and all of these things. And these larger companies that buy these brands, they don't really care about the ingredients, they're buying the brand. I mean we could list off the names. Aveda, Burt's Bees. I mean Aveda was this little Minneapolis company that built this wonderful brand. It was bought by a big company and they've changed all the ingredients. And everybody thinks because it's Aveda, they bought the brand, they didn't buy the ingredients.
- [19:52]
Daniel Lubetzky
But you even ask yourself, you know,
- [19:54]
Simon Sinek
why we still buy these products thinking that they're magical, because they were magical and they're not magical anymore.
- [19:59]
Daniel Lubetzky
And you ask yourself, why would a big company pay so much money if they're not going to preserve it? It's like this Because I noticed that up front from other observations, we're talking about power bar and balance bar. So balance bar have a value proposition that they were about a balance between protein, carbohydrates and fiber. So I think something like that, it had like a formula, it had three circles, whatever. And then it got acquired either by Kraft or Mondelez and they gave it to a junior manager. And the junior manager needs to put their stamp. And they find out that around that time organic is big. So they create something called balance Organic. Now, balance, the original bar, is a very functional bar. It looks like astronaut food and it's very functional. And all of a sudden balance organic, nobody believes it's what is a brand. A brand is a promise. And a great brand is a promise well kept. And all of a sudden you're doing the exact opposite because you have balance organic as opposed to the balanced original. And they have nothing in common. And then they launch, they see kind coming up with ingredients. You can see pronouns. They come up with one called, I think it was called balance, bear, and B, A, R, E. And then they come up with the other one because there's the keto diet and then there's the functional diet and there's this. And have like eight different versions of balance bars. And the consumer stops understanding what the brand stands for. That business went from like 250 million to 50 million to. My bet is that it's zero now or close to zero. I haven't seen a balance bar in a long time. And they trade. Every junior manager does the same sins. Every junior manager, they don't teach you this is the essence that you need to respect.
- [21:47]
Simon Sinek
They teach you, hey, line extension, line
- [21:50]
Daniel Lubetzky
extension, and make a difference and be relevant so you can get promoted. And these guys get promoted by short term results. And so whatever mess they're creating in the long term by destroying the brand, nobody notices it because by the time it happens, it's too late.
- [22:04]
Simon Sinek
But we kind of got to this point in American business that I find a bit depressing, which is that, that companies aren't built to last. They're built to be sold. Right.
- [22:13]
Daniel Lubetzky
And, and, well, not all, not all companies.
- [22:16]
Simon Sinek
I mean, your company. How many years did Kyne. Because I would say that it was longer than most before they want to have their.
- [22:23]
Daniel Lubetzky
Yeah, but I wasn't, I wasn't being defensive about mine, but I'll answer mine. But then we should expand it. The interesting thing about my company is it I started in 1993, what was then called Pieceworks. And my investors Came into Pieceworks, but they didn't like the pieceworks aspect, so they spun it off. But that same my employee identification numbers was 1337-66029. Because I used to write all the checks, I used to file all the tax forms, I used to do all the accounting. So I still remember my employer identification number from 1993. And I was doing the accounting, the bookkeeping, the collections, the deliveries, everything. Every job I was doing at the beginning. And there were two of us, then four of us, then two of us, four of us and four of us, then eight, and then before you know it, hundreds. When I launched Kind, I did not. I personally, I promise you, I did not think, if only I could build something to sell it. It never crossed my mind. That's why Kind succeeded, because Kind was just agreed, trying to fulfill that vision of something amazing. But just to your question, there are gigantic companies like the Amazons of the world. They do lose their way for other reasons. Yeah, but they're not trying to sell. I think the stock market has a bit of that problem when you're trying to. I think one of the bigger questions is why do you always need to want to grow, grow, grow? Because when you are growing, growing, growing, and you need to demonstrate that measurable growth, I don't have a better solution. But eventually you're going to value optimization and things that start destroying the brand in the. In the long term.
- [23:57]
Simon Sinek
This is the real root of the question. Right. And I think you're articulating it better than I did, which is it's not so much about the sale. It's about you're building it to sell, or you're building it to go public,
- [24:09]
Daniel Lubetzky
or you're building it to extract, or
- [24:11]
Simon Sinek
you're building extract in the short term, you know, and all the great businesses were built for the joy of building it, for the thrill of the build. And if you decide to sell it or, you know, go public way, way down the road, that's a different conversation. But the number of businesses that literally, whether it's their own desire or the pressures they have from their investors, that there has to be this liquidity event. And that's the other thing that annoys me about the ipo, which is the whole reason of an IPO was it was one of the mechanisms available to an entrepreneur to raise money should they need it. You can take a loan from the bank, you can raise money from friends and family, or you can sell some of the equity of your company to the public market so that you can Raise money to reinvest, but that's not what it is. Now, an IPO is a way to cash in, pay yourself, and pay your investors. And it has nothing to do with a cash infusion to reinvest back in the business. That has nothing to do with it. And that is one of the downfalls, I think, of the modern American business, which is all of the companies, even the good ones, are built. So many of them, too many of them are built simply for the short term.
- [25:13]
Daniel Lubetzky
And to make matters worse, a lot of the value that's being, quote, unquote, value that's being created is just financial engineering. Right? There's a lot of companies buying over other companies, squeezing everything they can, then leaving them near dead, and then going on to the next one. Like a lot of private equity companies, what they do is this is like the model that's been used over the last 10, 20 years is they identify pool maintenance companies that are such a disrupted, the more fragmented, the more they see the opportunity. So they start buying all of the pool companies or the roof. There was an article, the New York Times, about the roofing companies. And they identify others. Tens of thousands of small business entrepreneurs. They're not finding synergies. Let's start acquiring all of them, Roll them up and then make them more synergistic, which means fire all the people. Just hire a smaller group of people, use centralized branding. But they're not thinking about creating value.
- [26:08]
Simon Sinek
No.
- [26:08]
Daniel Lubetzky
By the way, if you acquired all of them and you introduce best practices and elevated the game, fine. But they don't want, they just want to turn it around. And so they, they buy them at 3x profits, they sell them at 6 profits, then the next guy buys them at 6x profits, sells them at 9x profits, and then they go public at 12x profits. But along the way, you're killing entire companies because you squeeze so much value out of them and then you no longer trust them because they're just worrying about the money.
- [26:39]
Simon Sinek
So you built the, you said you wanted to make a food product that was a healthy snack. Right? There was a reason to build a company. Right. And your business was the delivering of a healthy snack. That was the business. The companies that we're talking about, the private equity companies, their business is making money. Exactly like their only product is to make money, not to make anything that has value to anyone in the world. And if I hear another finance person tell me that the value they provide is they provide employment to an economy and help drive an economy, then why do you Promote layoffs.
- [27:14]
Daniel Lubetzky
So no, no, they're fervently destroying all
- [27:16]
Simon Sinek
completely full of shit.
- [27:18]
Daniel Lubetzky
That is one of the imperfections of capitalism because free markets are very efficient. And you the, the interesting thing for me because I think communism, socialism, you see their imperfections and they're greater than capitalism.
- [27:32]
Simon Sinek
Yeah.
- [27:32]
Daniel Lubetzky
But capitalism, even conscious capitalism has a lot of problems that the free market wins and the free market will always. Efficiency will always win.
- [27:42]
Simon Sinek
I think this version of capitalism, this is not the capitalism that exists today is not the capitalism that made America great. This is not Adam Smith capitalism. Right. Where the customer is the center of the value. And you know what Adam Smith said, which is the bread maker makes the best bread to compete with the other bread makers and the butcher makes the best meat to compete with the other butchers and the cheese maker makes and you get the best sandwich. Yeah, right. And that's not what has happened because of Milton Friedman and Jack Welch which is they've completely changed the capitalism that we have and popularized short termism. The metrics of incentivizing.
- [28:20]
Daniel Lubetzky
Milton Friedman popularized short termism.
- [28:22]
Simon Sinek
Milton Friedman was an economist.
- [28:24]
Daniel Lubetzky
I know Milton Friedman. I didn't know about his short termism.
- [28:26]
Simon Sinek
So Milton Friedman. So it's this common, this, this combination of theories where Milton Friedman this is what he wrote. The purpose of business. Purpose. The purpose of business is to maximize profits within the bounds of the rules. Which means make as much money as you can without breaking the law.
- [28:43]
Daniel Lubetzky
And your point is.
- [28:44]
Simon Sinek
And that's a very low bar that
- [28:46]
Daniel Lubetzky
you're destroying value because.
- [28:47]
Simon Sinek
Correct.
- [28:48]
Daniel Lubetzky
The purpose of business should be to create value in the long term. That means respect the brand, respect the consumer, respect the stakeholder. That's how came an extraordinary by the way kind created more value on a multiples basis than any company I know of. Like from the my early investors. Like we almost didn't need capital. We grew, grew, grew, grew. Because we're thinking with the right way. We created like 3000x returns for.
- [29:16]
Simon Sinek
But just think about that right? Like the current the business and you see it all the time. Make as much money as you can within the bounds of the rules. So you see these companies do horribly unethical things because ethics is a higher standard than the law.
- [29:26]
Daniel Lubetzky
But I think you're.
- [29:27]
Simon Sinek
And they get dragged in front of Congress and they all say the same thing. We broke no laws.
- [29:30]
Daniel Lubetzky
But to take it away from just the moral compass, to take it into the business compass. Your point is right. Because by playing that game in the long term, you're destroying value.
- [29:41]
Simon Sinek
Yes.
- [29:42]
Daniel Lubetzky
By playing that game. People don't trust your brand, they don't trust your business, and they don't trust the system.
- [29:48]
Simon Sinek
And I think this is where we have to take a hard look at capitalism. And I'm not talking about throwing the baby out with the bathwater. But you see the rise of populism on the left and the right, whether it's Bernie Sanders or Mandani or Trump, it doesn't matter if you're on the left or right of the political spectrum. You see the rise of populism that is mistrustful of the institutionalized powers that be and the status quo, and rightfully so, because we have traded what Goldman Sachs used to call long term greed, which was totally fine, with short term greed. It's not so Pollyanna and idealist that there's no such thing as greed. The reason communism fails is because humans are greedy, right? But to believe in long term greed, which is how can we build a company that will outlast us for the good of the long term? You actually make really good decisions. And we for some reason seem to be okay with the short term extraction at the expense of the customer, the employee, the environment, the, you know, our health. There's a very large food company who shall remain nameless. I went to this conference and they had the chief environmental officer of this company give a presentation on how much water they were saving and how much electricity they were saving. And it was a beautiful presentation about what they're doing. And because I'm a cynical bastard, I went up to the chief environmental officer at the end of the talk and I went up to them and I said, hey, love that you're saving water, love that you're saving electricity. Love that you care about the environment. Question for you. If I'm really cynical, I could say you're only doing it because it saves money. Less water, electricity saves money. But I'll give you the benefit of the doubt. You're doing it for good reasons. But here's my question for you. I love that you care so much about the environment, but how come you put chemicals that kill people in your food? You have a chief environmental officer and at your food company, how come you don't have a chief health officer? Just curious. And then the logic of what these companies say unravels.
- [31:52]
Daniel Lubetzky
I think I want to strengthen what you say and then ask you a question. When we took the fateful decision to bring a strategic partner, which is speak for saying, sell a piece of kind, which is the beginning of the process where we ended up where we ended up. But when we were evaluating it, one of the companies that presented to us literally said to us, we love that our products don't kill you. They don't make you sick. That was their standard because they were not helpful products. But their standard was like, at least our products don't kill you.
- [32:23]
Simon Sinek
At least our products don't kill you.
- [32:24]
Daniel Lubetzky
I swear to you, we were at
- [32:25]
Simon Sinek
the meeting was their definition of success.
- [32:27]
Daniel Lubetzky
When we debriefed that meeting was one of the many moments when I told my team, what are we doing? But anyway, that's a different conversation. But I have solutions about how to handle the problems of populism in the civic space. I've thought about it in the private sector and I have not come up with them. Do you have solutions like in the point that you point out to about short termism and short term value extraction, other than teaching people to be smarter and to build for the longer term, do you have any structural or any other.
- [33:01]
Simon Sinek
I think it's a generational answer, right? Like it was the 80s and 90s where they were experimenting with short termism, incentivizing executives with equity, not performance of the company. Layoffs on an annualized basis to balance the books. I mean, this is all 80s and 90s. Prior to that, there was no such thing as mass layoffs in the United States unless it was for existential reasons like we're going out of business. It was popularized in the 80s and 90s. And then that style of management was taught and continues to be taught in business schools. And that's what got you promoted. And so that's why it became the standard, because a generation was taught to run a business that way. I think now with the rise of populism and the cynicism that young people have that there is a generational shift where I think young people are okay, making slightly less money to do the right thing. And I think that they like companies who are willing to make less money this quarter because we're going to make the right decision for, you know, the
- [34:00]
Daniel Lubetzky
next five challenge you.
- [34:01]
Simon Sinek
Yeah, please.
- [34:02]
Daniel Lubetzky
I, we agree 100% on the fact that if you build a brand for the long term and do the right thing for the long term, that's how you create enduring value. And what you're doing for short term, you're actually destroying value. We agree on that. On the thing about the layoffs, I ask myself this question all the time because I notice it happening. I get proposals for me to invest in these roll ups and I struggle because to your point there's no value being created or added. And my answer is well, why don't we do. To the extent that we consolidate, let's make it in a positive way. We'll create a brand that people can trust and help empower the small business entrepreneurs for them to become stronger and be part of the family and create the culture to that I struggle with that. But broadly speaking, unlike you, I don't oppose layoffs because I notice what happens when industries are not efficient and that doesn't happen. Then your lunch will be eaten by others. In other words, what's happening in Europe. Europe resists the layoffs and it's slowly but surely gonna die because it in that. That's what I, that's what I struggle with. A competitive market system that at some point somebody else is going to be and the Chinese most likely will be more ruthlessly efficient. And how are you going to compete?
- [35:19]
Simon Sinek
My friend Bob Chapman would say that an over reliance on layoffs is proof of a poor business model.
- [35:25]
Daniel Lubetzky
100% right.
- [35:26]
Simon Sinek
And so it's not that I'm against layoffs because sometimes companies are stupid and over hire. I mean we saw it during COVID the number of businesses that. Because you know, and they, they thought this would survive and last forever and so they over hired the numbers corrected and there's no way you can sustain the business. Right.
- [35:45]
Daniel Lubetzky
Your point is you shouldn't have layoffs as your business model.
- [35:47]
Simon Sinek
You shouldn't have layoffs as your business model and to embrace layoffs on an annualized basis. You know and my standard line is, you know, we missed our arbitrary projections. So in order to make the numbers work, you get to lose your job. Our arbitrary projections. We're profitable. Not as profitable as we promised.
- [36:05]
Daniel Lubetzky
Well, you're gonna have a lot of not fun in the coming years.
- [36:08]
Simon Sinek
And the people ignore the ripples. Great. You got a little. One of the companies, a big tech company made the announcement that we're gonna lay off 10,000 people. Gonna do a thousand people every month. How much productivity do you think there was that year? The stupidity of the even that strategy. And we incentivize HR leaders. An HR leader is supposed to be the voice of the people at the, at the, at the, at the desk of the C level executives. The voice and the champion of the people. Nope. We incentivize too many HR leaders. They get their bonus for. For doing the layoffs efficiently.
- [36:38]
Daniel Lubetzky
Yeah.
- [36:39]
Simon Sinek
And we eviscerated even the concept of what the value call.
- [36:42]
Daniel Lubetzky
Sure. And the. And yeah.
- [36:43]
Simon Sinek
No getting Very heated.
- [36:45]
Daniel Lubetzky
I agree with what you said in the business world because it reminds me of why, like something that I observed in the market world that bothered me and that I think we did differently, that that is connected to your same philosophy is in most of corporate America there is no trust in the system and they fire you, which means you're given two weeks notice but you're shown a box that you put the stuff in your box and you're shown the door because you're not trusted to be there. And I observed there was a very, very big problem in that model at kind because everybody that took the struggle to bring into our team and taught them our culture and they taught us and we worked and built together maybe in my entire existence there were three examples out of thousands of people that I hired there where it actually merited showing them the door. Because time to graduate, they engaged in illicit behavior or they were, they really crossed the line that really engaged in stuff that was completely. But it's three people out of thousands. Yeah. Of course in the vast majority of situations the reality is that most times when things don't work hard is because you fail to communicate with your team member and that because you failed to create a bond of trust so that people can communicate with one another. I don't know if you found this to be true, but almost always if you share feedback early on, the person can course correct and fix it. So the essence for a higher order work environment is to create trust. Because if you create trust, you can create open communications. If you create open communications, you have much less likelihood that things don't work out. That means, for example, that instead of firing people, shutting the door, we had a system at kind where if you were planning to leave or if we were planning to let you go first, you were required to have a conversation and let let the other person know transparently. Think what that takes. It takes enormous amount of trust. If I'm planning to leave, I need to trust you that you're not going to do something bad with that information. I'm telling you I'm living in one year because I want to go study for graduate school or I'm going to get married and move somewhere else or I want to retire and you don't want the company as a consequence to cut you off early. Most big companies, when we try to introduce this methodology to them, they do the wrong thing with that information. They're like, oh, they're leaving, they're no longer valuable to me and they're not going to be loyal to me and they're going to sell my secrets. Let's fire them within two weeks. So then the next person wants share that with them.
- [39:26]
Simon Sinek
Sure.
- [39:26]
Daniel Lubetzky
So instead you create a relationship trust, and you do it both ways. It was very weird at kind. Every single team member was an owner. Everybody that was there more than six months was given stock options. If you were the janitor or the president of the company, everybody was an owner. And with that ownership came the responsibility that if you chose that you were going to leave, not only were you needing to give us the notice you needed to replace yourself, you needed to find, we trust you enough that if you want to leave, you need to find your replacement. It's very hard to achieve that. But when you trust the person because you hired them in the first place, they are doing the right job. And it elevates the culture so that everybody's in there for one another. And most times it worked. Almost always it worked. Not always, but almost always. The person had the responsibility to pass the baton to train their replacement. And think about how much more synergies you get if you achieve that higher order functioning. Instead of you fired and everybody doesn't trust each other, you're hiring your replacement, you're overlapping. And then if you decide that you're going to leave, you can ask for a letter of reference, you can ask for a very warm testimonial and endorsement. And so that was, that was what we aspired for. My direct reports, guess what was their notice? They needed to give me what, Two years. Two years notice. Like John Leahy, the president of my company, like for the senior people that reported to me, it was two years. And in exchange, they had undying loyalty from me. And if I ever was unhappy, that meant also, I can't fire people. I have to talk to them, talk through them, work it out, try to work it out and do everything possible to make it work. And if not, create a transparent process so that they can start looking for an opportunity while they're still finding their replacement.
- [41:12]
Simon Sinek
Let me change tax here. You're fascinated by peace. I mean, the original brand name of the company was peaceworks. And you are committed to Arab, Israeli peace as well in the Middle East.
- [41:24]
Daniel Lubetzky
We're working really heavily in it right now.
- [41:26]
Simon Sinek
Where, you know, where did that come from? Where did, like, where did the desire to the drive for peace come from? And, and what are you doing to make that naive vision real?
- [41:41]
Daniel Lubetzky
It started.
- [41:43]
Simon Sinek
And I mean that as a compliment. Right.
- [41:45]
Daniel Lubetzky
You're right.
- [41:46]
Simon Sinek
But you know, no, no, I mean, I Know, I is. Which is the ones who succeed are the ones who are naive enough to believe that it's possible.
- [41:52]
Daniel Lubetzky
I know I was teasing you. I appreciate it very much. When I was nine years old, my father started talking to me about what he went through in the Holocaust. He was a concentration camp survivor, and he shared horrible things that I think I impacted me more than I realized. Only in the last few years, I've processed how much those conversations, like, nine.
- [42:16]
Simon Sinek
Young.
- [42:16]
Daniel Lubetzky
Yeah. My mom said, roman, why are you telling him this stuff? He's nine years old. And he said, you know, he needs to hear this. I was 9 years old when I needed to live through it. He just needs to hear through it. And so he was nine years old when the war started and 12 when he was sent to a concentration camp. Fifteen and a half when he was liberated by American soldiers. And what's interesting about him is that in spite of the horrors of what he went through, he weighed 70 pounds and was 6ft tall when he was liberated. Wow. And, like, there's a YouTube interview of him, Roman Lubetzky, you can look it up on YouTube. And it's. It's very, very interesting. But what's fascinating about him is that in spite of all of what he went through, he just saw the kindness in others, and he lived his life with kindness. And that we named the company Kind after him. He passed away the year that we launched Kind, which was a very interesting, difficult year for us. For me, ever since I was a kid, having experienced that in Mexico, I promised myself that I would do what I can to prevent what happened to my dad from happening to other human beings. And I thought that my singular mission back then was to make peace in the Middle East. I thought that's how I was going to contribute, that. The way I was going to build bridges was by bringing Israelis, Palestinians, Jordanians, Egyptians, and Turks together. And when I was in college, I stumbled upon the field of the business of peacemaking, of how you can use commerce to. To bring people to trade with one another. And when they trade with one another, it shatters stereotypes because they're interacting as fellow human beings. They're breaking bread together. And then they're common interest. And their common interest they have cementing relationships because they have vested interest in growing together. And so I decided after law school to start PeaceWorks, a company that had Israelis, Palestinians, Jordanians, Egyptians and Turks trading with one another, run by a confused Mexican Jew. Getting all of these guys together, running a brand called Moshe Poupic and Ali Mishmumkin's World Famous Gourmet Foods. I still don't know why it didn't work out. I made all the mistakes in the world, but I was so enamored with the concept. But I launched a venture in Sri Lanka between Sinhalese and Tamils in Indonesia, between Muslim, Christian and Buddhist women in South Africa and Chiapas, Mexico. And the concept was always to use market forces and Americans, as I'm a very romantic American, to use American optimism, to use your words, to bring people together and help them discover each other's humanity. And that's been a big part of. And I still today, after this horrible, painful war, we're now working really hard at PeaceWorks 2.0, trying to find a way to help the people in Gaza and the people in the envelope on the Israeli side improve their lives and start building back working together right now. The step is just give them a sustenance and a better future and help them take baby steps. I think working together today is too much of an ask. But as an aspiration, I want to align incentives so that Palestinians, Israelis, other Arabs, internationals, to everybody can work towards the same goal.
- [45:54]
Simon Sinek
Well, what I love is you're taking everything that you've learned and you know, about building a remarkable brand and a remarkable company like kind, and you're applying that to these, to the social good, and it's all the same thing. And so, you know, I think anybody who doesn't bet on you is naive because there is empirical data here to show that you actually know what you're talking about. And if anybody can succeed in. In actually producing a lasting peace in these conflicts that seem intractable, I. I think you're the one. So this is pretty cool.
- [46:34]
Daniel Lubetzky
Thank you. So amazing. It's. The reality is that we have no other option.
- [46:38]
Simon Sinek
Yeah.
- [46:39]
Daniel Lubetzky
But to figure it out. There's a lot at stake. And so I. I appreciate you saying that. But even more important, we need to give agency to everybody listening for them to understand they have to be the ones leading the way. You have the most popular TED Talk out there. I have one that's nothing like that. But I did experience something interesting when I gave mine. And I talked about how everybody in this room, when I talk to the community, understands this problem of growing division and rigidity, but they see it on the other side. They don't see it happening to them on their side.
- [47:16]
Simon Sinek
Of course.
- [47:16]
Daniel Lubetzky
And that's, I think, the opportunity that we all have to understand that this is a threat against all of us and all of us need to join.
- [47:22]
Simon Sinek
Well, we need to get over this, this ridiculous notion that I'm right and they're wrong because everybody thinks they're on the side of right.
- [47:28]
Daniel Lubetzky
Yeah. And that was partly.
- [47:30]
Simon Sinek
And both sides think the other side is wrong. And so until one can accept that, that I am part of the problem and they are part of the solution. You know, the reason for, for the peace movement is you can't make peace with your friends. You can only make peace with your enemies. And so to accept that we are part of the problem and they are part of the solution is the only way to arrive at peace. Because you can't get to peace with one side.
- [47:53]
Daniel Lubetzky
I notice sometimes that somebody that I respect a lot does something wrong and a tool that helps me enormously, that I, that I realize that it's a super good tool. Every time I find that, I ask how am I also doing that problem? Like for example, I was with a person that I admire enormously and I asked for time with him to consult on an issue and he started talking non stop and I couldn't get an award in edgewise and I have very important things to share that could have calibrated his feedback to make it even stronger. But it was a little senior to me and so I just listened to. But I started reflecting, oh my God, I'm that person 99% of the time because I'm with team members of mine and I need to, if I only spoke 10% less, the quality of my feedback would be infinitely greater. Every time I notice that somebody else did something suboptimal, I'm like, oh my God, I must have the same problem. And I try to detect it and find it. And it's hard, it's hard to find. It's so easy to observe in somebody else when they're doing it wrong. It takes harder work for you to find it in yourself. But that's how we grow.
- [49:02]
Simon Sinek
It's good advice for peace talks, it's good advice for relationships. It's good advice for corporate culture. And I'll go back to what I said before, which is even in a relationship, if you want your relationship to work or you want your corporate culture to work and you want your work relationship to work, I am a part of the problem and they're part of the solution. That's your mantra versus I'm right and they're wrong or I know and they don't and they need to listen and I need to talk. If you just flip all of those. I love what you said. I Could do better at that, which is talk 10% less, listen 10% more.
- [49:33]
Daniel Lubetzky
No, you're a very good listener.
- [49:34]
Simon Sinek
Oh, you're very kind. You've never worked with me. I talk a lot. I think out loud. That's part of my challenge. And so for me to process, I need to say things. And very often in a meeting scenario, it comes across as me doing all the talking, which it's not. It's me thinking. And so I have to learn that it's okay to process out loud, but I can process out loud at the end of the meeting, not at the beginning.
- [50:00]
Daniel Lubetzky
Or create the permission structure, because I have the same issue, but I haven't processed that as well as you have. Create a permission structure for people to understand that just because you do that doesn't mean.
- [50:10]
Simon Sinek
Yeah, like I say, I say very frequently I'm thinking out loud here because I don't want people to think that I'm giving instructions or making conclusions. Kindness isn't just one of your values. It's the foundation of everything you've built. Was there a moment when someone's kindness towards you made a profound impact?
- [50:27]
Daniel Lubetzky
All the time. But I feel bad to come up with a really silly example right now, but just yesterday before, for some reason, I was having a kind of, like, not a great moment or day. I was in a. How do you say, in a rot. Yeah. And one of my team members, Taylor, just said something really kind to me and he just elevated me and made me soar and my reflection again, to the point that's like, when I noticed, like, like, oh, my God, I don't do enough of that because I'm always running, running, running, running. And I don't take the time to thank team members and to elevate them. And if it had such an impact on me and I'm the boss, if I could do that for my team, how much more effective would we all be? And so I think the power that every one of us has in our lives to make this a better world is insane. And oftentimes we forget that you may be walking on the street and just look at that person's eyes and give them love and smile, and at a minimum, you've given them something positive. But sometimes that person has really dark thoughts about what they're going to do with their life or somebody else's lives. Sometimes you being kind to that person could save that person's life or somebody else's life. You never know how powerful those tiny, tiny little interventions, interventions of kindness, how big they can play much bigger than you realize. All of us have so much going on.
- [52:06]
Simon Sinek
You often say that business can be a force for building bridges. What responsibilities do you think entrepreneurs have in a divided world?
- [52:13]
Daniel Lubetzky
The way I think about it is everybody. I don't want to be preachy. Everybody has to find what gives them meaning. For me in this world, I find it imperative to build bridges because I don't want to inherit to my children something worse than what I found. I feel like our generation, and I think I'm a little older than you, but directly we're in the same age. I'm 57, but it's insane how good I've had it. And in the last 10, 20 years, I feel like things are moving in the wrong direction. And I owe it to my children and every entrepreneur, Rosa, to future generations to leave the world better than you found it. So I just think it gives you so much more meaning. Meaning, so much more agency, much more purpose. I'm not doing it to be preach. I've like, it is more fun to be solving these problems and to try to help make this a better world. And so that's what drives me.
- [53:06]
Simon Sinek
I think one of the things that you have an advantage of is you have a father who told you his story. And I don't mean because it's a traumatic story that he went through. But there's data that shows that when we understand something about our ancestry or even where our grandparents came from, that we don't see ourselves as beginning now. We see ourselves as continuing something that somebody began before us. The data shows that people who have a sense of where they come from make better long term decisions. When people say, oh, I'm doing it for my children, no, that never happens. No politician or nobody's doing it for their children, they're doing it for themselves. But when there's someone who came before them and sacrificed for them to get to this point, they don't want to let down the person who came before them. And they want to uphold that, that, that honor. And so you know that your father sat you down at 9 and said, I need you to know where you come from and what I did before you. You feel this responsibility to your own history. You cannot let your father's legacy go in vain. And I think to teach people where they come from and to uphold that legacy I think is vital for us to make better long term decisions.
- [54:12]
Daniel Lubetzky
I love that. It's very true. And it helps not just for that, it also helps for young people to reach good decisions. About their health and about their well being to understand that they have something to give and a responsibility to give it, and that they need to be mindful about how they the decisions they reach.
- [54:29]
Simon Sinek
Daniel, thank you so much. A Bit of Optimism is a production of the Optimism Company, lovingly produced by our team, Lindsey Garbinius, Phoebe Bradford and Devin Johnson. Subscribe wherever you enjoy listening to podcasts. And if you want even more cool stuff, visit simonsinek.com thanks for listening. Take care of yourself. Take care of each other.