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How Leaders Lead with David Novak
#260: Nick Green, Cofounder and CEO of Thrive Market – The business model matters
01:10:19
Listen to this leadership podcast with Nick Green, Cofounder and CEO of Thrive Market, and discover the power of the right business model for your big idea.
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- [00:00]
Nick Green
There were definitely times, honestly, where I overshot and I was out of my depth and things got like, messy and chaotic. There were moments where I just thought, what have I done? What kind of mistake did I make?
- [00:15]
David
Now, you grew up in Minnesota, and you know, I actually lived in Crookston, Minnesota, Detroit Lakes, Minnesota. And you know, I went to the state fair and seems like everything you get, the state fair is you get food on a stick.
- [00:28]
Nick Green
It's on a stick and it's fried.
- [00:30]
David
Okay, so what's your favorite food to eat on a stick?
- [00:34]
Nick Green
All right, well, this is starting out in a very unhealthy direction, but they have deep fried Oreos, which are, I mean, exactly as you'd imagine. But my favorite is actually deep fried pickles.
- [00:47]
David
There you go. Well, okay, we're going to segue now. We're going to move to healthy food. And I checked your food out and these, these green pitted olives, I mean, God almighty, these are like, they're addictive, you know, and, and then these, these, these kettle sweet potato chips. I mean, how in the world do you make food that tastes this good? Okay, that's healthy for you?
- [01:12]
Nick Green
Yeah, I mean, the answer is we use real food and we keep it really simple and we source from really high quality suppliers. So those two products that you just pointed out, those are under the Thrive Market brand. We also carry, you know, hundreds of third party brands that we curate and hold to ultra high quality standards. But on our own brand, the cool thing is we're able to go up the supply chain and work with, you know, amazing producers directly with farmers and kind of reinvent products. So the olives that you have there are super simple, but they passed a very important test even beyond our quality standards, which is that my wife, who is from Spain, where they eat a lot of olives, approve them, and so they are, you know, they're great tasting and then they're really high quality. Right. So you're going to have an organic standard, you're going to have high, high quality supply chain. The chips are a really interesting one because that's a product as, you know, comes in a bag that size. It's a snack. It's a salty, you know, oily snack. Like, those are usually really unhealthy products. But you swap out a standard potato with a sweet potato, better glycemic index. You replace unhealthy seed oils with avocado oil or coconut oil and you reduce some of the other additives that are in there and all of a sudden you have something that is really, really tasty, but also healthy.
- [02:25]
David
Well, I got to tell you, you kick butt on both these. These are freaking good. I mean, these are really good. And I love olives and. Unbelievable. I don't really like sweet potato fries and chips, but these are damn good. I mean, you really, really met your challenge here. I can't wait to hear how you're leading Thrive Market. But take you back to your beginning. Tell us a story from your childhood that shaped the kind of leader you are today.
- [02:50]
Nick Green
I mean, the story that shaped my journey to Thrive Market is really a story that starts with my mom. So I grew up in Minneapolis, Minnesota. The state fair is like the pinnacle of unhealthy food, but there was plenty of unhealthy food back in the 90s. The memory that I have as a kid, which at times was an unhappy memory, to be totally honest, was being that one house on the block that didn't have sugared cereal, that didn't have soda on the kitchen table. You know, where my mom was reading the ingredients, reading the labels. And, you know, we always thought it was a little bit crazy. And at the time, you know, compared to others, it really did seem that way. But she was determined to make healthy choices. And I remember, you know, going to the grocery store, and she's going up the aisle reading, Reading the labels, looking for the right products. I remember, you know, the way that she would just monitor what was in what was in the fridge at home, what was on the. On the table, Always looking for recipes to make the food palatable so we, as kids would eat it. And I just saw how hard she had to work. And so that was. It's not a single anecdote, but it was an ongoing memory for me, that one. It was one example of where I was seeing how hard my mom worked in general to do things right, to make a difference for her family. And that, I think, was her leadership, which inspires my leadership. But then, very specifically, it got me realizing healthy food makes a difference and made a huge difference in our lifestyle and our health outcomes. My mom came from a family where a lot of folks had diabetes and obesity and hypertension and other stuff, and our family was able to get past that by having this healthy lifestyle. And then on the thrive side, it really inspired what we ended up building, because the whole goal of thrive is how do we make it easier for people, for moms, basically, and heads of household and individuals who just want to get healthier.
- [04:38]
David
Now, that's a great mission that you've got there. And I want to get to that, but I got to ask you first, tell us a story of how this kid from Minneapolis ended up at Harvard.
- [04:51]
Nick Green
Well, again, the stories all go back to my mom. So the two things she cared most about were healthy eating and education. And she had kind of a, a perfect pupil in me. I was a very conscientious kid and I would be the kid. I would go to a sleepover and I'd be afraid to eat anything that my mom wouldn't approve of. And then in school I was a very studious, conscientious kid. I can remember even as an elementary school kid, if I got a grade that wasn't good or I didn't do well on a test, I mean, I would feel literally viscerally ill about it. And so I have a lot of memories like that of just being just wound up even at a young age. And that's interesting as it relates to my entrepreneurial career because in a sense going to Harvard was the start to my entrepreneurial career because I started a company called Ivy Insiders, helping other kids get into places like Harvard and get better test scores at affordable prices. But it also was in a way, I think the thing I had to unlearn to be an entrepreneur and to be a great leader. When you're trying to get into a place like Harvard, you're always trying to be perfect and that is absolute the death knell if you are trying to build a company or you're trying to lead other people. And so I've often described that I was an accidental entrepreneur. I would say I also had to unlearn a lot of the things that I prided myself when I was a school age kid in order to be an entrepreneur.
- [06:18]
David
So what made you start this business in college? I mean, you're at Harvard. Most people maybe go get a job somewhere else, but you know, you said, hey, I'm going to start my own company. Even back then, yeah, well, I was.
- [06:31]
Nick Green
I mean I was a pretty self, self motivated kid. Again, I was like that from a very young age. And I think my mom was a major inspiration. She was super self driven herself and kind of set that tone in our family. And so I had never had a real job to be honest. I had mowed lawns, I had a lawn mowing business when I was a kid and saw how that scaled up and I was big into savings. It actually was before I even went to Harvard that I had, I did real well in the sat and I said, I'm going to start you Know, I'm going to start tutoring and pretty soon, you know, kids would refer other kids. And all of a sudden I had too many students to have individually. So I had a class. And once I had a class, I needed to create a curriculum. And this is where I say I'm an accidental entrepreneur, because one thing led to the other and all of a sudden I'm working with literally was a couple hundred kids in my hometown the summer after my freshman year at Harvard. And it was the coolest experience because I came from a place where there was a handful of kids that would do Kaplan or Princeton Review. But generally speaking, if you're middle class in the Midwest, you're not spending $1,000 on test prep, let alone the hundreds of dollars an hour that a lot of wealthier kids are spending to do individual tutoring. What I ended up doing was basically chopping the price of Kaplan and Princeton Review and eventually it was in half, but initially it was like in a quarter and just making a really accessible program that got kids better scores and then ended up hiring other undergrads, first from Harvard and then across the Ivy League and then eventually across 20 plus colleges and universities to basically go home for the summer and run what were essentially franchise businesses for Ivy insiders.
- [08:12]
David
That's fantastic. And as I understand it, you grew that startup up to 500 locations in 43 states in under three years, which is amazing. What's the biggest lesson you learned about growth that you think about today as you make decisions at Thrive Market? You know, you look back at that experience and is there anything that you really took with you?
- [08:34]
Nick Green
Well, there was, there was some advantages I had in that business that I didn't fully appreciate then. But in retrospect, in retrospect, I realized how valuable they were. One was it was not a capital intensive business, so very capital efficient business. It was a services business, low startup costs. And because we hired these undergrads to kind of run their own businesses, it was very scalable. And so I think the benefits that I had from just kind of stumbling onto a model that didn't require raising outside capital and that was very scalable, was super, super valuable. One of the lessons that I learned early on was about scalability. And you know, what does it really take to make a model scalable? And in theory, you know, when you're doing like a franchise esque model, you know this better than anyone, I'm sure, from, from your young days. But you got like that restaurant, if you get that single unit dialed, you should then be able to just replicate it cookie cutter style in practice, it's a lot harder than that. And the more you can simplify and iterate and test into and hone that the unit model, the easier it's going to scale and the more kind of dummy proof it's going to be as you grow it out. And so we had a lot of growing pains, to be totally honest, that were related to my assumptions about how easily it should scale and then the practical reality of what does it mean when we try to do this 100 times over in a single summer.
- [09:57]
David
But she did know that you had to scale it and that learning was very powerful, right. That she said, hey, the only way we're going to be able to do this is to, is to scale it well.
- [10:05]
Nick Green
So I think one of my, like, again, I made a ton of mistakes, but I think one of the things that has always been a quality of mine is I think big. It's actually one of our four core values at Thrive Market is think big. And when I think think big, it's not like a percentage bigger, it's like an order of magnitude bigger. Right? So how. And, and I don't know, the phrase is like, you know, shoot for the, shoot for the moon, land in the stars. That's been, I think, kind of the story of my career where I just, I, I go for it. And in that case, there were definitely times, honestly, where I, I overshot and I was out of my depth and things got, like, messy and chaotic and, and sometimes I, I remember, like in the early days of that business, especially once I graduated and turned down real jobs to go do that, do my, my company. I mean, there were moments where I just thought, what, what have I done? What kind of mistake did I make? But I do think that was another thing that I learned and ultimately built confidence around was that if you, if you go for it, there's always a path to making it work. And it may not work out the exact way you expected. It may not be quite as successful as you had, you know, imagined in your wildest dreams, but you will end up doing something that is pretty spectacular.
- [11:13]
Kula
Hello, friends, it's Kula. Stay tuned to the end of the episode because David and I are going to debrief some of the concepts that he talks about with Nick Green. So if you're curious what does David think about this, or I'm curious what he did at Yum Brands, what's his perspective on this topic? Going to talk about all that stuff at the end of the episode we did it last week, you guys loved it. So we're doing it again. Stay tuned to the end of the episode so you can hear the debrief.
- [11:36]
David
And well, you end up selling this company and you moved to LA and But did you know, thinking of, speaking of thinking big, did you already have, have this next big idea in your mind when you, when you moved out to la?
- [11:47]
Nick Green
Well, so I, it's interesting. When I sold the company, I think I sold it too early and it was, it was one example where I maybe wasn't thinking big enough and I was tempted by a great financial outcome and a quick win and a success. I was three years into building that business post college and then I moved out to la, like sunny Southern California. I'm on an earn out. It was sort of the perfect thing. I was in my mid-20s, I should be really happy and I was miserable. And so the motivation for me at that point was I don't want to do a quick flip again. Like if I'm going to invest in building something, I want it to be the thing I'm going to spend that I could spend the rest of my career building. So I want it to be something even more scalable. I want it to be an opportunity that's even bigger. Test prep was it's big market but it's not as big as most people think. It's like the total size is only single billions. So we were already, we were much smaller than that. But the market size was a constraint there and I wanted the mission to resonate even more deeply. And the only thing for me that felt more fundamental than education was health. And the interesting thing, when I moved out to la, I had spent the prior few years running this business out of Boston, working out of the dorm room when I was in college. And my mom would be horrified if she knew what I was eating at the time. But I'd pounding Mountain Dew and doing whatever it took.
- [13:13]
David
Come on.
- [13:13]
Nick Green
Mountain Dew's good.
- [13:14]
David
I sold a lot of that my day.
- [13:16]
Nick Green
I mean I agree it's good. It is so bad, but so good. But yeah, that was, I mean I kind of lost touch with my health and wellness roots, let's put it that way, and got back into it when I came to la, you know, it's like I came out, there's Erewhon, there's farmers markets, there's just this whole health and wellness lifestyle. Like this is amazing. And yet I also knew that for millions, for tens of millions of Americans like my mom and like where you know, around where I'd grown up. It wasn't really an option yet. And there was just so many barriers. The whole idea of Thrive was, let's break down those barriers. Let's bring this health and wellness lifestyle to everyone.
- [13:55]
David
When did you have that aha moment? Or did you. I mean, you know, were you driving down, looking at all these things, hey, here it comes, you know, when did you have that moment?
- [14:05]
Nick Green
You know, I wish that, I wish I could say I had the moment because I feel like there's so many entrepreneurs that like the light bulb goes off. But I, I didn't actually have that moment. I was primed though. And then I met my, I met my co founder. So Thrive Market was his idea. And it started out he was, he wanted to build Groupon for healthy food was the original idea, but with the same mission, make healthy living easy, accessible. And so the light bulb moment for me was when I, in that first meeting talking to him and actually initially he was pitching me as an investor and the, and the idea was like he had an exec summary. We're like going through it. And by the end of that meeting, I was pitching him on doing it together. Just because that mission resonated so deeply. And it was this coming together of my time growing up, what I was looking for in a business, the lifestyle. I was now embracing myself in la. And I said, I don't like the business model. I think the Groupon thing doesn't make sense, but I love this mission. What do you think about doing something together?
- [15:02]
David
I gotta ask you what was like, here you are in your mid-20s, you got somebody pitching you to invest in their company. I mean, that's pretty heady stuff. I know, I know you went to Harvard, but what was that like when you sort of got flipped? You know, you were selling the company, now you got somebody selling you.
- [15:17]
Nick Green
It was, it was a period of time that I made a lot of mistakes. I'll say that like, you know, it. It's so easy to have a little bit of success go to your head, especially if you have it early and you don't understand. You maybe think it's easier than it than. Than it actually is. So I will say, like, I made a lot of bad investment decisions right after selling my company. And I enjoyed, of course, being able to think, all right, I'm like going to make investments and most of those decisions. By the way, it's interesting. And this is another lesson, for whatever it's worth when I'm. If you're stuck in your Head thinking about business, you can kind of rationalize anything. And so I find if I'm thinking too hard about an investment or a business decision or whatever, it's usually I'm trying to convince myself of something where the best decisions, I would say strategically in our business and in my life personally, whether it's like getting married, having kids, business partner, business ideas, they're actually like emotional decisions. And so I think I made a lot of bad decisions in my head. And that interaction with Ginar, that first conversation was the most heartfelt. Whoa, I'm energized by this. And you know, for your listeners, like when you feel that feeling, that's special and follow it.
- [16:34]
David
Yeah, that's a great story, you know. So give me a snapshot of Thrive market and the business that you lead today.
- [16:40]
Nick Green
Yeah, so, you know, it started with the same mission that we are working at today, right? Which is we want to make healthy living easy, affordable and accessible to anyone. We, you know, basically wiped clean that business model. So we were initially thinking Groupon. So group buying events, we started to iterate around how can we make healthy living?
- [17:00]
David
Explain Groupon for everybody. Just.
- [17:02]
Nick Green
Yeah, by the way, Groupon was a household name at the time. Some people today probably haven't even heard of it. It was, it was basically a, a sales event site. So you'd go on and get a daily deal. And our idea was, all right, if we can. The power of Groupon, by the way, was that if you pool a bunch of people together, Groupon then has the buying power to then get better pricing with a local event provider or a local store. And so there's a lot of local based events and deals and you'd get pretty fantastic savings. And so the idea was, could we take this to national organic products where the price premium is typically 25 to 50%. And by pooling people together, we can do big sales on individual brands. People sign up and buy the things they want and then we get a wholesale account and buy the products. The big challenge in applying that model to groceries is, you know, to, to fulfill on that. You basically need the time to run the event, the time to then purchase the product, procure the product, and then you need to do the fulfillment to ship it out. Nobody wants to wait a week or two or three or more to get, get product. That's basically like everyday essentials. So we ran some tests on that. We had some mixed success. And the fundamental thing we were trying to solve for was actually price. How do we bring natural organic products at or below the price of conventional equivalents so that middle class middle America can afford this. And the model that we landed on was membership. And the playbook that we studied was Costco, where you know, you pay $60 a year, you get access to a hyper curated assortment. And by simplifying the assortment and concentrating the purchasing power and driving margin to the membership as opposed to product sales, they're able to offer a very, very accessible price point. And so that was the initial impetus for doing the membership model. We've since discovered all sorts of other benefits to the membership model which has structurally the core of what we do. One is that every paid membership can sponsor a free membership for a low income family. Another is that it front loads our working capital for our cash payback for marketing. Another is that when people invest in a membership, they tend to be evangelists for that membership. So over 25% of our new members come in referred by existing members. But at the time all we knew was we need to make it affordable. And that's what did it. So the model of thrive to fast forward to today is still fundamentally the same. You pay an annual fee $60, you get access to a curated assortment of the best healthy, natural, organic products that you find at a health food retailer. You then have another mixed in set of products that we have curated ourselves. So about 600 thrive market branded products that are over 20% of our sales. Where we raise the bar even higher, we do a bunch of innovation. You pointed out a few of these products at the beginning of the call and then you get it shipped to your house at better than retail prices and with carbon neutral shipping in two days or less. And so there's a bunch that's been a lot that's been added to that. But that core of the E commerce like Thrive market membership experience is the same. The difference now is we're a lot bigger. So we have over 1.7 million paid members. We have scaled to hundreds of millions of dollars in sales and we're I think say still early, but on our way to achieving that mission of making healthy living accessible to anyone.
- [20:30]
David
I love how you went to Costco, saw their membership model and then did the pattern thinking, said okay, how can we apply it to our business? I think that is so cool that you did that. And then obviously Whole Foods is obviously a major player in your space and then the best online retailer of all time, Amazon, acquires them. Can you share a story about the pressure you might have felt?
- [20:59]
Nick Green
Yeah, it's not might have felt, it was, I Did feel like very acutely and like we had all of our investors basically emailing us the next day saying what are we going to do? I think that was in 2017, right. So we were at that point two, two and a half years into since post launch. And you're right, like Whole Foods for us was a total touchstone in terms of the quality. They had been the leader in the natural organic movement and the only challenge they'd always had was their price points weren't accessible and they were located basically and still are in affluent areas that have the population density. So most people aren't within driving distance of a Whole Foods. And so when, when Amazon bought Whole Foods, it's like, oh my gosh, you know, they're going to roll out Whole Foods stores everywhere. Like what's, what's going to happen? But I think that the, the truth is we've never, like Amazon is also a touchstone for us in many ways. Right? Like Amazon is the most customer centric company in the world. They are the undisputed leader in E commerce, arguably the best retailer in the world. And nobody can out Amazon. Amazon. Right. And I think one of the things that we did right from the very beginning is that we didn't try. I think so many businesses that have tried to compete head to head with Amazon, it just doesn't work. Like Amazon is too big, the culture is too strong, the Head Start is too significant.
- [22:22]
David
Well, how'd you go about rallying your team around the strengths that you had and the reasons that you thought you could win?
- [22:29]
Nick Green
It was the mission. Right? So you're never going to beat Amazon on a utilitarian game of just pure convenience and assortment. And so we're Amazon Zigs. We zag. Amazon is the infinite assortment, right? They want to be the everything store. I sometimes call this the un everything store. Right. So we have a thousand ingredients that we restrict on the site. We have more than 700 ingredients that we ban. We're exclusively non GMO across the entire catalog. We're like 98, 99% organic. So by having these high quality standards, we reduce the size of the assortment. We're not only a lot less than, than Amazon, we're like an order of magnitude lower. SKU count on the same categories as a traditional grocery store would be. But in the case of healthy living, that's actually a benefit to the consumer because they're not looking to see 40 options of almond butter. They want to know which one's the best. They want to find the one that's the highest quality. And so they can outsource their trust to us. It's very different than Amazon but it's actually a stronger value proposition for healthy living. So for us, like that's one example. But everywhere that we, that everything that we do goes through the filter of how do we make healthy living easier? And that's something we know will be better than Amazon at. That's something that we know that would be better than anyone else at. And I think actually one evidence, one piece of evidence there is that Amazon bought Whole Foods. You know, seven or eight years later we're still better at that than Amazon is. And what Amazon has done with Whole Foods, which is there's something wrong with this. This is I think probably their intention. They've kind of Amazonified Whole Foods. So at Whole Foods you can now buy Amazon Echoes. You can buy Honey Nut Cheerios. They've Nash, they've centralized the buying, they've loosened the quality standards a bit. It's still, you know, by all means a great, great grocery store for quality but they've made it more Amazon esque. And it's actually opened an opportunity for us to step in and be that place that new brands launch first. That is really known for innovation where the quality standards are sky high and the members look forward for trust.
- [24:31]
David
You know, it's interesting, this could be on your website and it could be a marketing line, but you said this and I always listen to things and you said outsource your trust to us. Outsource your trust to us. Is that a big part of your marketing pitch?
- [24:48]
Nick Green
We haven't used that word.
- [24:50]
David
It kind of rhymes a little bit.
- [24:51]
Nick Green
You know, I like it. Yeah. I say it because I think that's, it's a very high bar. It's like what do you have to do for a consumer, in our case a member to be willing to fully trust you to say I don't need to worry about whether this meets my gluten free diet or whether this will be safe for my kid who has a nut allergy or whether this will meet the keto diet I'm trying to do for the next month. They can just know if I use the filter for any one of those things on Thrive, it's going to filter down. And to be honest, that's, it's even more of a thing today because so much of our shopping experience is becoming imbued with, with AI and with the like personalization that can happen there if our members don't trust that we have their interests at heart that our quality standards are real, that we're doing the homework. You know, they're not going to use features like our AI cart builder that, you know, for example, on first order today, our new members, over 40% of what they put in the first order is actually added by an AI cart builder that uses their health inputs and helps them build the right assortment. Yeah, I don't, we don't use outsource trust as the, as the marketing phrase, but I do think that's, that's the bar that we want to reach.
- [26:06]
David
Outsource your trust to us. That's, that's the line. You know, kind of reminds me when I heard Think outside the bun at Taco Bell. I thought that was pretty good with too, you know, staying on Amazon for a second. You know, what's the best practice you've picked up from seeing how Amazon engages with their customers? You described it as the best retailer in the world. I think everybody would say that as well. You know, what's the best practice that you've been able to incorporate into the Thrive market model?
- [26:34]
Nick Green
I think it's customer obsession. I mean, that's a big thing. It's paradigmatic. And I do believe that's the filter that every decision they make goes through. And they, you know, I used to, I heard an anecdote a while ago that, that Jeff Bezos used to have an empty chair in the conference room. He says, this is, this is the chair of the customer. So just always be thinking they're here with us even if they're not. And maybe that's apocryphal, but, like, I think that's, I, I do think it, it goes that deep in, in their culture. And one, I think one thing to learn is like, anything that goes that deep in a culture is super powerful. And one of the things that always blew my mind, like reading Bezos's shareholder letters, is the themes in 1998 are the same themes that he's talking about in 2018. Like, it's just that clear and that deep a commitment, particularly to the customer. And then there's other, other facets as well. And so I think that they had a very, they have a very clear culture. They are truly customer obsessed. And I think a lot of other companies will give that lip service, but it's not deep, deep, deep in the culture. And I'd say for us, the reason that is so important to learn from is that when your members are paying a membership model, which I guess Amazon has with prime as well, the expectations of the customer are significantly higher and the opportunities to let them down if you, if you don't come up meet the bar, I think are, are more significant. So that's probably the number one thing I've learned. What I would say is very different about the way we, the lens that we view the customer through is that for us we are laser focused on their healthy living needs. And again, we're not going to be better at serving the customer across every single dimension. Again, you're not going out Amazon, Amazon. But what we can do is be the best place, the most trusted place to find the healthiest, organic, better for you products and particularly for families. What we're finding, when you have parents, you have moms who are pulled in a thousand different directions, work and family and activities and all this stuff, the ability to outsource their trust to have a place that they know makes it easy to put the right products in their home and on their table. That's where we can really shine. And it's the reason why our members not only renew at a higher rate, but also our evangelists for the brand.
- [28:57]
David
So you're obsessed with the customer. Can you give us an example of a friction point that you identified by listening to your customers and the story of how you and your team solved it?
- [29:09]
Nick Green
So there are big things you'll find in your business that are just obviously detrimental to the customer. And those are the things that are actually, they're not easy to solve, but they're easy to allocate the resources to solve. Sometimes the hardest things are, I call them the paper cuts. So it's all the little things like the points of friction that are created in your experience where you're not totally letting down the customer. But the sum effect, if there's every single one of those is that you're piling up to some threshold where you're no longer meeting their expectations or no longer wowing them in a positive way. And so that's actually a really relevant one for us recently because we in line with our thinking big value, we have big swings every year as a company and three to five of these that are big tent pole, we've planted our flag. This is what we're going to go after. And most of them are focused on adding to the thrive market value proposition. A couple quarters ago we've been really performing well as a business. We've been feeling really great and taking victory laps every quarter about how it's going. A couple quarters ago I came to the company and, and I said, I Want to say something provocative? This was in our quarterly business review. We're doing a great job on big swings. We're doing a great job adding to our value proposition. But I want to suggest that we are not doing a good enough job at delivering on our core existing value proposition. And we basically looked at an example of the member journey and all the different points opportunities that you have to either come through for the custom the member or let them down. And then we had a lineup of all the we call them RFCs but reasons for contact from our from member services and how many tickets are we getting across each of those different areas and if you just concatenate them along what is the average experience that a member's have having and between an out of stock or an empty search result or a damaged item or a member an order communication that didn't go quite right, what's the chance that we're basically hurting our members through this thousand paper cup phenomenon? So long explanation but the upshot of this was we created a BHAG this year that's cutting our service tickets per order in half. There's no single project that will take, you know that'll do, that'll even move us a step step of the way there. It's a bunch of micro steps that are happening and I actually believe that's the like devil in the details that that many companies certainly that our business has not done a good enough job at and that we're getting better at.
- [31:33]
David
So thinking big and you call it the bhag which is a big hairy audacious goal I think from Jim Collins good to great book, you know and now here you are, you've got 1.6 million members in Thrive Market Club. I mean that's a hell of a hell of an accomplishment. You know, looking back, what do you think was the single biggest strategic decision you made in the past 11 years that's had the biggest difference?
- [31:58]
Nick Green
I think the biggest besides the focus on the mission itself. I mean that's like the, that's the filter for everything we do. The biggest strategic decision was to do membership. That's the core and core model that we run on and around which so many flywheels in the business really turn. Again it's our, we have our one for one membership. The annual membership gives us a full year to show value. It front loads the cash. It improves our cash flow dynamics. It offsets marketing costs. It's a forcing function for delivering real value because you know that member is going to come up for renewal. You it gives you very clear feedback if you're not coming through for your, for your customers in the right way. So I think that is, if I had to pick one, it's that decision to structurally focus on the membership. But honestly there's been so many, you know, there's been a lot of, honestly there's been a lot of things that we've done, we've made mistakes on and then come back and fixed. You know, like we, we for a long time had a trial membership which was, you know, really great for getting a lot of people in the door. Not as great for building commitment and quality in our, in our membership. So that's like something that we changed.
- [33:10]
David
How do you think about that? Because that's really a good, good, good thing you just brought up there. You know, how do you think about bringing in new members and, and also retaining the members you have? Where do you, how do you, what do you spend the most time thinking about?
- [33:24]
Nick Green
The things that you do to retain the members you have are improving your value proposition which actually over time will bring in more members. Right. So as we deliver more value to our existing members, that also creates more value for any new members that come in. The other thing is as your member base gets bigger, a larger and larger percentage of your new members are coming in, as I said before, referred by existing members. So that member, that existing member base is basically an asset for customer acquisition because it's free or near free referrals and word of mouth. And on the flip side, if you're not doing well with your members, you got to, you have sort of a double whammy of one, your churn is going to be high. This is the number one reason why membership based or subscription based businesses online have been, have not been successful over the last decade. And there's like too many to name that have kind of gone up and then churn just really takes them down. You can grow, you grow really fast for a while, a high turn model. But at some point if you have a high percentage of people leaving each year that starts to just be this like leaky, I call it leaky bucket syndrome. But it's like the leaks are too fast to be keeping the, the, the water, water level rising. But then the, the double edged the, the, the double whammy. There is one, you lose members but two, they tell about those experiences. And as I said before, if you let down someone who paid a membership fee, they're going to talk about it like in a way that they wouldn't if they hadn't paid that membership fee.
- [34:52]
David
The wrong kind of talked about marketing.
- [34:54]
Nick Green
The wrong kind of talk. But you get the other, the other side is true too. Right. If you come through for them, and particularly for us, like we find our members, not only, you know, we come through that for them on a practical way and that they're getting value from the membership, but we also align with their values. So there's a pride aspect where they actually want to share Thrive Market because they're proud to be Thrive Market members. And so yeah, I'd say, look, we have a, we have a fantastic customer acquisition engine. We use health and wellness influencers. We're really, really good at creative iteration on paid media. We're very proud of that effort. But by far the most important thing and will be increasingly important as we scale is how much value do we deliver to existing members.
- [35:32]
David
You mentioned earlier that AI is giving you the capability to personalize a lot of information with your members. And how are you thinking about AI and its impact on your business?
- [35:44]
Nick Green
Yeah, well, I mean, like every business, it's going to create incredible leverage for teams. So we're seeing that just in spades in terms of the ability to create content, creative output, testing on our landing pages, funnels, marketing in general. We also are seeing benefits to AI when you think about the way that you can manage supply chains and do predictive analytics and understand and forecast your business. But the number one thing that we, that we see that I think is kind of unique to consumer business is the ability to create personalized user experience. And for us, with that focus on health and wellness, the stakes are even higher because health is different for different people. Right. And I think so much of what people struggle with is these like generic prescriptions that say, oh, you need to go do this diet or you need to reduce the calories here or the key is protein. And that's like it's not one size fits all for every person. And so our ability to, you know, we have an onboarding assessment that our members take and then we map their responses to all of our existing members and then create from the very first instance a personalized recommender engine. And that AI driven recommendations has gotten so good now that we're actually helping build the card on behalf of the members in the first order. Over half of our orders now are on a scheduled basis. They're like auto ship orders. And so that's using AI to predict when people are going to need which items. That to me, I think is the real future of AI for shopping and what's exciting for us is that we have a data set for the health and wellness focused consumer and the health and wellness focused assortment going back now a decade that no one else has. And because it's on membership model, those members work with us over or engage with us over a long period of time. The data is really, really rich. And you know, my third co founder is our cto. So we are a retailer, we are a CPG brand, but we also are a tech company and we've had that data capability since day one. So, yeah, I'm incredibly excited about AI in general, but specifically the ability to now, you know, when we think about making healthy living easy, that one of the hardest things is how do you personalize that not everyone can have a nutritional coach, right, Or a concierge shopper, but with AI, we can get to a place where thrive market, you're going to have something very, very similar.
- [38:14]
David
Before I move off AI, it's such a hot topic and you're obviously a very current leader and you're on top of what's happening in the world of business today in a very contemporary way. You know, what, what are some of the ways you're personally using AI to make you an even more effective leader? I mean, what kind of advice can you give people on how to, how to really get good at AI?
- [38:37]
Nick Green
I don't know if I'm the best person to give advice on how to get good at AI, but I will say I use it a lot. And you know, I started out, my business career started and my strengths early on were never as a leader as I was as a doer. I was not good at delegating, I was not patient and I wasn't great at developing people. I had a real interest in it, but I wasn't great at it. So leadership for me has been an acquired skill. And I still look around and there are leaders that for me are touchstones and always remind me how much further I have to go. But the way that I've gotten better at it over time has been working at it actually just having a practice of getting better. And one of the things this is going to lead to AI, but one of the things is I've throughout my leadership career worked with coaches and I just find that so helpful, whether it's on a weekly or a monthly cadence, to be getting feedback. You don't always get it from your team and the coach can facilitate that. They can also just talking through, give you different perspectives on situations and help you reflect and reframe and mirror what's going on. So I have actually found AI and this is going to make me sound like a little bit of a crazy person, But I found AI to be a great coach. And with like with ChatGPT, the more you talk to it, the more it knows about you. As the prompt space has gotten larger, you can give it a lot of context on a given situation and it can veer into the kind of glib kind of axioms. It can be a little bit sycophantic. So I think all those criticisms are really valid, but I do find it to be pretty uncannily precise on like, what are the issues at play in a given situation? What are some things you can consider? And even if it doesn't get you all the way there, I think it's great for thought starters and it's great for thought partnerships. I agree.
- [40:30]
David
It's been good for me too. I went on and said, how can I make HAL leaders lead a better podcast? It gave me some good things to think about and I was shocked at just how much, how much coaching I got and how relevant it was. You know, you mentioned earlier, one of your core values is to think big. You know, you really want people to be step change thinkers. You know, what's the single biggest cultural core value that you're really trying to make happen across your organization today? Is it think big?
- [41:02]
Nick Green
Well, I mentioned at our quarterly business review two quarters ago, the kind of flag I wanted to plant was actually a member first, which is another core value of ours. And, and in a sense, as I told you about that bhag, it was actually to say we need to think smaller. We need to think about these paper cuts. So I would, I would maybe flip it a little bit and say we're actually really good at thinking big. Like that's, we're, we take big swings. And as I told you at the beginning of this conversation, like, that's actually a towering strength for me. I just like, I naturally think big and I do think businesses tend to reflect the values that their leaders have. And that's one that comes naturally to me and I think has come naturally to our organization. The kind of stretch that we're in right now is a little bit of complementing that or maybe creating some dynamic tension between thinking big and doing the next big thing and really solidifying the core and the foundation of what we do, specifically from a member centric lens. And I think, I think for us right now, at the scale that we're at, continuing to grow very Fast. We've been profitable the last few years and are expanding the profitability meaningfully. We're building a really real long term, hopefully generational business that can transform healthy living in this country. The stakes just keep getting higher. And so I do think for us thinking about how do we make sure that in that context we are doing it. We are not losing sight of the member. You know, it's so easy in business for metrics to become an abstraction, to become focused on all these, the kind of financialization of your business performance. And it's not that that stuff's not important, it really is, but that it needs to follow from delivering value to your customer, not be a zero sum where you're extracting value. And so I think the most important value for us right now, and we just hit last year, we hit our 10 year mark. As I think about the next 10 years, the one thing we cannot lose sight of, we will continue to think big. Another value is being tenacious. We will always be tenacious. Our third one is authenticity, which I think also comes pretty naturally. But the one that we cannot lose focus on is member first.
- [43:17]
David
That's great. And you know, speaking of authenticity, you know, there's, there's a, there's a person now in the lead in your industry, to a certain extent, the government. What's your take on Robert F. Kennedy Jr. And what he's doing in the industry right now?
- [43:30]
Nick Green
You know, I don't have a take on RFK specifically. Well, he's got to take on a lot of things. So there's things that I think we think are good that they're doing, but a lot of things that maybe, you know, we don't have as much of an opinion on. I think when it comes to food specifically, I think Maha is a reflection of where the consumer is today. Like, I think fundamentally it's a consumer movement, right? It is a, it was a grassroots, bottoms up, like largely parent and mom driven movement. And so while it's now become a political endeavor and I think could actually do a lot of good in changing nutritional standards and reforming quality standards and putting a real emphasis on getting away from ultra processed foods and getting away from chemicals and foods, the fundamental thing came from consumers waking up and saying these things are important to us. And what we've seen in our business is they've been voting with their dollars well before this became a political issue in that direction. And I think Thrive Market has proven that. It's not just people in LA and New York and San Francisco. It's not just affluent people, it's not just liberals. It's all across the political spectrum, the socioeconomic spectrum, the geographic spectrum. People want to get healthier. And I think it's now undeniable that ultra processed foods and chemicals and foods are not conducive to that. Yeah. I don't think, you know, we're not embracing Maha wholesale. And there's a lot of things that RFK is, is taking a stand on that have nothing to do with our mission, but specifically on the get chemicals out of food, get ultra processed ingredients out of food, clean up the food system. I think it's a conversation that needs to be happening and it's been taking place with people adopting businesses like ours. It's exciting that it's now happening. The political lens as well.
- [45:22]
David
Yeah. Well, Maha make America healthy again. That's a trend that you're obviously leading on.
- [45:29]
Nick Green
Yeah. And I think again, there's a lot of, we can quibble with a lot of the different factions that are in Maha and are they doing exactly the right thing. But the general focus I think is it should be something that transcends politics. Like everyone should be able to agree that we should have less artificial chemicals in our food system, that we should be. Have fewer ultra processed foods going to our kids. You know, there's a study came out a few days ago that 60% of the calories that the average kid in America gets are from ultra processed food. You know, kids eat more ultra processed food than any other age group in this country. That has to change.
- [46:06]
David
Yeah. You know, and, and you know, mentioned earlier that you, you really appreciate coaching. You, you look for coaching. What's something that you've done lately that that's really stretched you as a leader? Maybe a practice or a discipline. That's, that's, that's been hard, but it's been worth it for you.
- [46:22]
Nick Green
Well, I've been working with a coach who's been fantastic on the chatgpt side. One thing I would encourage people to do, this is very important, is when you get feedback explicitly tell the AI give it to me straight. Don't pull any punches. I want your candid feedback. And then whatever feedback they give you, it gives you. Make sure you get like, give me the, give me the, give me the opposite take. Right. So like I always push it to give you multiple perspectives because it gets very, it's very persuasive at whatever it's saying. But I would say that honestly the thing that's challenged me most. So like coaching is great. But the best source of it's not coaching with a capital C, but I'd say it's like coaching with a lowercase C that I get is actually from my fellow executives and we talked about Amazon earlier. Over the last two years we've hired three ex Amazonians to our executive team and actually brought over other Amazon folks throughout the org. And we found despite how different the businesses are, the DNA is really, really valuable and the caliber of talent to have gone through the filter of Amazon in the case of our execs, been there for 10 plus years, they're just really talented people who have learned a lot and it's been very humbling for me. But also it's like I'm on the steepest part of my learning curve that I've been on in a long time because I'm around these brilliant people who are at a great best in class company who don't pull any punches. You know, it's part of the, part of the Amazon culture and it's forcing me to get better. So that's, that's probably the most recent, most recent and biggest impact can make for me.
- [48:00]
David
You got a mission that lights people up. And now as I understand it, you're primarily a business that's run remotely. How have you kept that energy in a remote workload?
- [48:12]
Nick Green
Well, part of it is, is not giving up on the in person interactions like there is. Like you just have to acknowledge there's certain things that can't do on a zoom screen. And so we do, we have, the exec team is on site once a month, leadership team is on site once a quarter, whole company is on site twice a year. And then the team, smaller teams do in person so that nobody is going without in person interaction for, for more than a few weeks. And the key is because you have so much less time in person, you have to basically be more, I think you have to be more deliberate. And it can end up being, it can feel a little bit forced because you sort of have to do things explicitly that you'd rather have happen naturally. But we just developed that capability. Sometimes it's doing like icebreakers and go deep activities that get people to personally connect in those settings and then the other side of it is online. Like how do you create communication that fosters authenticity and intellectual honesty? Because there's a lot of when you don't have the relational fiber which invariably you will not have across some subset of the teams. There's stuff that doesn't get said that if you were in person every Day would. And so it's like, how do you grease those skids in a remote environment? And like the other, the last part I would say is you have to accept that there are certain things that just won't be as good. And you have to make up for that by having just extraordinary talent. And that's the single biggest benefit of being a remote first is you can hire anywhere, literally anywhere. So like our cfo, who's the first Amazonian that we hired, you know, he's 15 years ex Amazon, he lives in Seattle. There was no world, he's got two kids and in middle school there was no world where he would have come down to la. But had we not hired him, not only would we, he's like an extraordinary leader himself, but we wouldn't have hired all these other Amazon ex Amazonians that have changed the trajectory of the business. So I do think, like, I don't know how popular this, this perspective would be. I do think kind of talent trumps all and remote is a superpower for talent.
- [50:17]
David
Nobody has ever said that on this podcast. That's a great point. You're a really young guy. Do you have a hard time managing and leading people that are older than you?
- [50:26]
Nick Green
It's funny that you mentioned that because I turned 40 this year and I've always felt like I was the young one in the room. And sometime in the last two or three years, I don't know if it's having kids or turning 40, but I don't feel so young anymore. So a lot in my career early on I did feel that.
- [50:42]
David
How'd you get over it?
- [50:44]
Nick Green
I guess you can't. I mean, it was legitimate, honestly, like there was a sense in which it's a little crazy, you know, If I've got 10 years less of experience for me to tell someone I know that I know what they should do. So you. I think my, I didn't really get over it. I was just open minded. I would have, I would come in with a perspective. But make sure it didn't, you know, it didn't. It's preposterous for me when I was 30, to be, to come in utterly like totally convinced that I knew what I was doing. But to be honest, I feel the same way at 40. So it's interesting because now I feel.
- [51:15]
David
The same way at my age.
- [51:18]
Nick Green
It's not like I have it all figured out now, but I'm a little closer in age to my execs than I was at the beginning of thrive. But again, it's like it's still equally humbling.
- [51:27]
David
So, you know, this has been so much fun and I want to have some more with my lightning round of questions. Are you ready for this?
- [51:34]
Nick Green
Let's do it.
- [51:35]
David
All right, the three words to best describe you.
- [51:38]
Nick Green
Intense, ambitious, caring. Your biggest pet peeve, Indecisiveness.
- [51:44]
David
Who would play you in a movie?
- [51:45]
Nick Green
I've been told that the actor. Cillian Murphy or Killian Murphy.
- [51:49]
David
That's pretty good. What's the thrive market product you order.
- [51:53]
Nick Green
The most of the olives are a staple in our house. But the olive oil, which is, there's a whole story on that. It's fourth generation farm in Crete. This is the oldest olive producing region in the world. That is my go to product and I literally will do a spoonful of it every day.
- [52:08]
David
What's the thing you appreciate the most about growing up in Minnesota?
- [52:11]
Nick Green
People are really nice. It's a great place to be a kid.
- [52:14]
David
Minnesota nice. I had a guy who was our cfo. I called him Minnesota Nice. What's the one thing you do just for you?
- [52:20]
Nick Green
I read. I read a lot.
- [52:22]
David
Besides your family, what's your most prized possession?
- [52:25]
Nick Green
The thing that comes to mind is actually going back to Minnesota, spending time in Minnesota. It's not a possession, but honestly, it's family, family, family. And then those roots in Minnesota.
- [52:36]
David
If I turned on the radio in your car, what would I hear?
- [52:38]
Nick Green
Silence. I don't listen to the radio.
- [52:42]
David
What's something about you few people would know?
- [52:44]
Nick Green
I mean, this probably isn't going to be a surprise, but most people don't know it. I'm an absolute health nut. So in my personal life, I'm like every supplement, every new product on thrive I try, every new diet and exercise trend. I'm investigating.
- [52:59]
David
What's one of your daily rituals? Something that you'd never miss.
- [53:02]
Nick Green
It's reading again. So I read when I wake up, like in bed. And this is like not advice, but on my phone I read every morning in bed and I'll actually like open Kindle and just like read. And I do the same thing when I go to bed. And for me, that disconnection and it's always fiction, it's something that I never let go of.
- [53:22]
David
Fantastic. You're out of the lightning round. Good job here. You know, I gotta ask you, you know, what advice would you give aspiring entrepreneurs on how to find the, the, the big idea to pursue?
- [53:33]
Nick Green
I mean, it sounds really cheesy, but you're not going to find it. It finds you. And I think the the, the important thing is understanding yourself. And not to say that you get all the answers about who you are and exactly what you care about, but I like the concept of revealed preferences like feel into what energizes you. Not what, not who you'd like to be or what you've been told is right or whatever. But when are the times that you feel just absolutely lit up and if you know what those things are and you're attuned to that feeling, you know what that feels like and you get out and have the meetings, talk to the people, explore the opportunity space, the opportunity will come to you. And for me, with Thrive, it took over a year. It was a year of kind of bushwhacking through the jungle looking for the right next opportunity. But when it hit, it was, it was utterly clear.
- [54:25]
David
I can't believe I almost forgot to ask you this one, but you know, you were the first online grocer to accept food stamps. You know, what did it take to make that happen? Was that a big, hairy, audacious goal for you?
- [54:38]
Nick Green
That was a bhag. It was a big swing. It was a thinking big. And it was a long time. It was, that was literally a 10 year process. So we, in 2015, we petitioned the USDA to accept food stamps online. We got 3, 300,000 signatures in under three months. And our whole thing was, it's crazy that you can go to, you know, the Corner Mart and buy soda with your food stamps, but you can't buy healthy food online. And we thought this is so obvious, like it has to happen soon. And it wasn't until 2024, the beginning of 2024. So like eight years after we did that petition, nine years after we did that petition, that the USDA finally opened it up and we became the first pure play e commerce retailer to be accepted.
- [55:21]
David
So that's why Tenacity, Tenacity is one of your core values, right?
- [55:25]
Nick Green
Tenacity is one too. Like that one, it felt like beating your head against a wall for years, but so rewarding to see it happen. And our hope there, we obviously want to be part of it, but our hope is that a lot of other e commerce players get into the mix and change the landscape.
- [55:40]
David
That's fantastic. And you know, if you don't mind sharing, you know, just, can you tell me a little bit about your immediate family and I'll ask you this question in so doing, you know, what's something that you've learned about work at leadership that you try to bring, try to.
- [55:56]
Nick Green
Bring home I met my wife in college. I don't think I would have started my first company or had the courage to start this business had we not been together. I'm one of those people. It's like having. Having that part of your life solved and having someone that is your rock, that understands you, that is your partner through everything. You just can't overstate. What a difference, at least for me, what a difference that has made in being able to be bold and take risks and be an entrepreneur, be a leader. So my wife and I have been together almost 20 years, been married for more than 10. We have four kids. Our oldest is eight, our youngest is six months. It is a constant balancing act. And I think I have so much empathy for the parents out there that are also trying to start businesses because a business, it's a child in its own way. I think the challenge of being an entrepreneur, being a parent, is that you can't be in two places at once. And there's just no, there's some zero sumness in the time side. But I think the advantage of being an entrepreneur is if you're doing something you care about, you love, love. Like on those days that I come home energized from work, and it's not every day, but it's a lot of days, I am a better parent. Like, I am the best version of myself. I have the, you know, what kids. I think what kids need is just adults that are fully themselves. Right. And that, that are having fun with life, that are engaged in what they do, that are curious, that are still learning. I'm not always that way. No, no, no parent is. But when I'm. When things are going well at work, that actually is something that I bring home. Is that just like kind of that, that optimism and that passion.
- [57:35]
David
Last question here. What's one piece of advice you'd give to anyone who wants to be a better leader?
- [57:40]
Nick Green
Just work at it. I mean, it actually sounds really basic, but there are some people that are just talented, that maybe are magnetic or charismatic. There's some people that are real empaths and are able to just naturally do a lot of it. I feel like for me, it really was an acquired skill. And I feel really proud of the fact that I've worked out and I've gotten better. And if you compare yourself to your touchstone leaders, you'll feel bad about yourself. But if you can compare yourself to your former self and every year you're getting better, it's like any other domain that's kind of the Key. And I think the cool thing today is there's so many resources. It's like I said, ChatGPT can be your coach. You can interact with the best, best leaders in the world on YouTube. Right. Like, there's just so many resources if you want to get inspired and build that skill set. So, yeah, just go for it.
- [58:31]
David
Well, I got to tell you, Nick, I wrote this book called, you know, How Leaders Learn, and it's all about active learning. It's not enough just to be an avid learner. You want to learn and do something with it, you know, and you've provided so many good insights on how you've learned and then put it to use and made big things happen.
- [58:50]
Nick Green
And I think that's actually a great. It's a great point. Like the conversation with chat GPT or a coach isn't enough. Certainly watching a YouTube video is not enough. The way that you learn is. It's like it's one of those in the arena activities, right?
- [59:01]
David
Yeah. Well, you are in the arena. You're making it happen. And I personally found you very inspirational. And so thank you for taking the time to be on this podcast. I really appreciate it.
- [59:12]
Nick Green
It's a real honor.
- [59:18]
Kula
Well, David, it's time to debrief your episode with Nick Green. At the end there, you said that you personally found Nick to be super inspirational. I did, too. But I'm curious what struck you so much about your conversation with Nick.
- [59:31]
David
I just love the fact he's such an active learner.
- [59:33]
Kula
Yeah.
- [59:33]
David
You know, I think he. He really goes outside of his own person, his own business, to learn from other people and to learn from other businesses, and he ended up with a company that's thriving, no pun intended. He's doing great. I mean, I love those. Those green olives of his are fantastic.
- [59:55]
Nick Green
But he.
- [59:56]
David
I love it when I see people who are so passionate about what they do, they. They want to get better, and they know that. That they get better by learning. And I also like the fact that he says, you know, you got to work hard at it. If you're going to be a leader, work hard at it. And that means learning. And that's what I loved about him, and that's what inspired me. I get inspired by people who. Who want to get better.
- [60:18]
Kula
He was so forward and somewhat vulnerable, saying, like, leadership doesn't come naturally to me, and I have to work at it every day. And you kind of just into it that that's the case for most leaders. But I think it's rare that you find Someone who says, hey, this is a really hard thing for me and I have to intentionally carve out space to do it. I mean, everyone does it. But the way that he's so aware and forthcoming with, hey, this is actually really hard. And the great news is it's a skill that you can learn, develop, and get better at. So I'm with you. I think it's so cool how he has kind of created his little coaching mechanism for getting better at leadership.
- [60:54]
David
And the way how he said that he's, you know, that he has to work at it doesn't come naturally. It shows vulnerability. And, you know, vulnerability is a big buzzword when you, you talk about leadership today. But I think there's a reason for that. When you open yourself up, people know that you, you know that you're not perfect and, and that makes them like you and that makes them want to get behind you. And I'm sure he has a lot of fans at, at, at his company.
- [61:18]
Kula
Oh, there's no doubt about that. I love some of the kind of main themes that Nick continued to bring up in the conversation. It's really clear that Nick is the type of leader who likes to take really big swings. He dreams big. He says, you know that old adage, shoot for the moon, even if you miss, you'll land among the stars. And he really finds resonance with that and, and lives that. And I love in the episode, he says, instead of thinking a percentage bigger, you got to think an order of magnitude bigger. And I think that that in and of itself is an innate skill that a lot of people have. So, and that some people. So, David, I'm curious. You know, as you think about dreaming and casting vision and taking big swings, how do you know when a goal is big enough?
- [62:05]
David
Well, I think so many times we set goals that are incremental. You know, they're just a little bit better than year ago, or frankly just as good as you were the year before. If you grew 3%, you're going to go 3% this year. And you, you kind of get into, into that rut, you know, and I, I actually found yum brands to be in that rut for a while, and I felt we needed to break out of it. And I met this guy named John o' Keefe who's from the UK and he had worked at Procter and Gamble, but he'd put together a training program called Achieving Breakthrough Results. So he had a lot of really, you know, big ideas and training tools to, to get people to, to, to think about how you could get more dramatic results and break out of the incremental. And one of those was, are you a step change thinker or not? Okay. And his whole thing was, you know, that you don't set these little tiny goals. If you're growing 5%, you say, okay, let's think about how we could grow 15%. And then if you think about all the things you'd have to do to grow 15%, you're certainly going to get at least five. Okay.
- [63:18]
Kula
Yeah.
- [63:18]
David
But it really makes you, you know, think bigger and, and, and dream bigger and think about the things that if you did these, you, you could grow a heck of a lot faster. And, you know, that's how you get breakthrough results. So, you know, I think I was always a big proponent and we always talked about having step change goals, you know, not those little, tiny, tiny incremental moves, but how do we do something that really takes a step change as a, as, as a brand? And I think that's what he's getting at and I think it makes a lot of sense.
- [63:48]
Kula
Absolutely. And the conversation with Nick, you brought up a really interesting point, which is that they're in this health food space, right. They're an online retailer where you become a member of Thrive Market and then you get access to all of their high quality healthy foods. Well, their biggest competitor is Whole Foods. Whole Foods gets bought by Amazon. And you asked Nick in the episode, like, what do you do when the biggest retailer in the world suddenly invests in your biggest competitor and now all of a sudden healthy food is accessible everywhere? And I loved his response to that question. He says, no one is going to out Amazon, Amazon. And so what they had to do is really focus on what they were best at, which is few high quality ingredients and fewer higher quality products. And I love this. You know, we're never going to out, we're never going to do e commerce or online retail better than Amazon does, but we can do this better than Amazon does. When a person goes shopping at Thrive Market, they're not looking for 40 jars of almond butter, they're looking for one jar of almond butter. And I just love this concept because it's forces them to figure out what it is that they were really good at. And I'm curious, David, as you reflect on that part of the conversation, what's the real lesson there for other leaders who might be trying to be something that they're just not?
- [65:10]
David
I think you really have to understand who you are and understand what your differentiation is and then stay true to it for as long as you can, as long as it's working. And then if it's not working, then you gotta fine tune and figure out what else you may need to do. But he also said he learned a lot about Amazon. He learned a lot from them. How they distribute, how they build their customer base. And he tried to take all the good from them that he could find and then realize that they were different and what could they do that would keep them different. And I think that's how he's differentiating himself from Whole Whole Foods today. And one of the things that Amazon has done with Whole Foods is they broaden their offerings to include a lot of stuff that isn't necessarily that healthy. And so he doesn't deal with anything that isn't in the Thrive wheelhouse. And he thinks that differentiation, that purity really is a competitive edge over the long term.
- [66:16]
Kula
Well, I mean, clearly they have over 1.7 million million thrive market members, which is crazy. And when you guys talked about, you know, how do you think about customer retention versus customer acquisition, he said they really focus, you know, on retaining customers because 25% of new business comes from existing members. And so, David, as you think about other brands who might not have this membership model, what can they learn from Nick and his team at Thrive Markets? Emphasis on, hey, we are serving the customers that we have because we know when we do well with those, the lifetime value of those customers increases and over time that will take care of our acquisition problem.
- [66:56]
David
So many people want to grow their business by bringing in new users, and that's really a noble goal. But damn, is it hard. You know, it's a lot easier to take the users that you have and cultivate them and get them to use you more often than it is to bring in someone totally new into the fold. He understands that and knows that that's the key to their success. And at the same time, you know, they're really bringing in new users. But guess where a lot of those new users come from. Word of mouth, you know, people talk, their current users are telling the new users all about it, and then that's why they jump into the fold.
- [67:33]
Kula
Yeah. One of their values is member first first. And so this ethos around serving the people that are already our power users, to use one of your phrase, is really just ingrained in every aspect of their business. So every decision they make is filtered through how is this going to serve our members and how can we make whatever we're doing take a member first approach to that.
- [67:55]
David
Yeah. And they really thought through their culture. And I love that member first being one of the biggest things that they were really trying to drive us as a corporate core value. And he, he put that, put. Put the cultural values in. In into to very simple language as well, which I think is really important that it makes them different.
- [68:14]
Kula
Well, David, you asked Nick this in the lightning round, and so I'm going to ask you this as part of the debrief. What is your favorite Thrive Market product that you've ever bought?
- [68:23]
David
Well, I told you up front, I love those olives.
- [68:25]
Kula
It's the olives.
- [68:26]
David
It's the olives. Yeah, it's the olives.
- [68:29]
Kula
I also didn't know that you didn't like sweet potato fries, which was shocking to me.
- [68:33]
Nick Green
Yeah.
- [68:33]
David
But his were pretty good. His were pretty good, which was shocking to me. You know, hey, hey. I always have believed this. If you can make really healthy food taste great. So there's no trade off. It's a gold mine. It's very, very hard to do. Very hard to do. You know, because people like salt and people. Yeah. You know, all the things that you could fry sugar. I made a lot of money for in our brands by capitalizing on those things. So we didn't have any green olives at any one of our restaurants. I could tell you that.
- [69:09]
Kula
Well, that's what Nick Green and his team at Thrive Marketer for. He loves the olives.
- [69:12]
Nick Green
But, you know, we did have, though.
- [69:13]
David
You know, one of the things we did have at Taco Bell, which was very successful and it really went after people who are looking for healthy, healthier foods and is, you know, we had like five, five items under the Fresco menu. I think it was like we had five items under, you know, you have 10 fat grams or I forget exactly what it was, but you know, they tasted good and you know, we sold a lot of it. But I tell you what, if you try to sell stuff that doesn't taste good, you're in deep wanna.
- [69:44]
Kula
Well, David, I loved this episode. Excellent job. Per usual. Nick Green is just a fascinating guy who is trying to make healthy living accessible to everyone on the planet. And it's such a noble cause. And I'm a huge fan of Thrive Market.
- [69:57]
David
Yeah. And I'm a huge fan of Nick. He's a, he's a terrific leader and I think the best is yet to come for him.
- [70:03]
Kula
Absolutely. Well, that does it for our episode of How Leaders Lead for today. Thank you so much for tuning in and we'll see you next week.