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- [00:00]
Jonathan
And he told me that someone that works for him was eating meal one about a year, a little over a year ago, and introduced it to him and started to talk to him about, like, how much of a priority he puts on his health. And this guy, his cholesterol was at 240. Like, his doctors were like, you got to make some changes. And he grabbed a bag of meal one and tried it and really loved it. And that ignited a journey for this guy. Dwayne. Dwayne, if you're listening to this, I'm incredibly grateful for you sharing your story with me. Now he's a year into his journey and he's down like 40 or 50 pounds.
- [00:42]
Johnny Yarms
That's awesome.
- [00:42]
Jonathan
His cholesterol is at 180. He's not on statins, and he eats meal one every day and so does his wife. And they're incredibly conscious about what they put into their bodies. And so, like, that story is like, our mission.
- [01:00]
Michael Chernow
I'm Michael Chernow and this is the Creatures of Habit podcast. Our habits will make us or break us. It's just that simple. I've lived on both sides of the tracks and have learned that the decisions we make on a consistent basis truly define who we are as human beings. On this show, I will be interviewing some of the most inspiring, motivating, and high performing humans I've encountered to share their daily habits, routines and rituals that help them stay on top of their game and ultimately happy. So sit back, relax, and pay attention, because what you hear over the next 30 to 45 minutes could potentially change your life.
- [01:42]
Jonathan
Let's go. What up, everybody? We are back with Creatures of Habit. What's really happening? I think we missed a month. We've been busy and things came up and we're back in the studio. Johnny Boy and I are gonna give you the and a quick purge of what's happening. Johnny Yarms, why don't you kick it off?
- [02:05]
Johnny Yarms
Yeah, we've. I actually couldn't remember either what the last one. I was thinking that we might not have done any in Q3 if I remember correctly, but I could be wrong. I could be wrong. There could have been one. But I started thinking back to, like, what had, like, Rich Roll Podcast in the beginning of July. And I was like, wow, that felt like two years ago. But we had a solid third quarter. Um, I think we came in a little lower than where we wanted to be. But in just looking quarter over quarter, we were up 10%, which is pretty good. Um, and like, the big drivers for us were Amazon prime day. We gave away free mocha with every purchase. And then we, of course, had the sale for your sobriety that was, I want to say, like a little less than double the prior year in terms of the overall numbers that we did, which was awesome. And so we also had a. So like the performance wise, those two things were big drivers. And then we've obviously made or are in the process of making some changes to kind of ramp up some of the new customer marketing efficiency, which, like, we weren't as happy with throughout the course of the quarter. And so some of those changes now coming to fruition, I think we're already starting to see some of the results of that, which is, which is really cool. And there's a lot of exciting things ahead for us. So it is helpful to kind of look back and see where performance was and, and what we did throughout the course of that quarter. But yeah, we've got some big things that we're tackling right now, as per usual, that should hopefully, or will hopefully elevate the business.
- [03:34]
Jonathan
Yeah, I mean, we also, in the beginning of August, spent some time at my house and I don't know. I can't remember. I can't believe. I can't remember if we shot a podcast of what's really happening after that or not.
- [03:49]
Johnny Yarms
No, definitely not after that.
- [03:50]
Jonathan
We didn't.
- [03:50]
Johnny Yarms
No.
- [03:50]
Jonathan
Okay.
- [03:51]
Johnny Yarms
Cause I think that was right before you went on vacation.
- [03:53]
Jonathan
Right. So we really sort of looked at our previous goal and tried to back out the best possible plan to get there. And then we also created an alternative sort of target. And the two of us both, after 48 hours of kind of talking about it, decided that we were going to actually tackle the alternative target. And what that target is, is building out the brand as long as we possibly can without going into ret and trying to keep the company direct to consumer for as long as possible. And that could mean all the way through acquisition or that could mean all the way through we decide to change our minds. Right. But ultimately, I think what it did was give us an opportunity to kind of button up a bit. Right. And honestly, mainly in part to your guidance and your direction on what you think is going to make us scale ready. And I'm like, super inspired by the things that you've really been working on with bringing on a new ops person and really sort of like making sure that all of our agency partners are the right partners because we definitely need as we scale, because we're ripe for scaling, we're ready to be in this scale. Stage and 2025 for us is going to be like, that's where we're going to really push the gas. And 2024 for the most part has been really sort of like shrin burn as much as we possibly can. And obviously thinking about new customer, obviously thinking about marketing, but really where we've really shined is in our margins and what we're bringing to the bottom line. And I think that that is something that both of us had agreed to, we were going to focus on. And yes, we had higher hopes for the year in overall gross sales. But in a weird way, I'm happier with the performance that we've been able to produce in the bottom line than having these super sexy, you know, bigger top line numbers that we had gone towards.
- [06:03]
Johnny Yarms
Yeah, yeah. I think we've definitely proven to ourselves that we do have our finger on the pulse of the business. Like even if we fall short of our top line goals, we don't seem to drop off in any of our discipline around efficiencies. Right. Like, we don't start chasing the top line goal just so that we can say whatever we were 50% more quarter over quarter and hope that nobody looks at the bottom line. Because at the end of the day we know that when we go look at the bank account, like we have to work off of that so we can't just burn that all away. And yeah, I think one of the things that maybe in the past was a shortcoming for us was and was alleviated when we trimmed the team down is that because you and I are so closely involved, we like see the vision. Right. And when you bring in more and more partners who also are working on more and more clients, if you don't like outline the vision for them, they're not going to be kind of like in the room with you riffing and understand everything. And so that was a big takeaway too for us from our meeting in August which was like, let us get like perfectly aligned on where we think the business is headed and then give that visualization to our partners and everyone internally. To say if you're doing something on the day to day, it's to get us towards that next goal and beyond.
- [07:15]
Jonathan
And I also think something that you, that you did that now it being in action for close to a month has made a deep impact on the company and also on me is like, we've restructured our meeting cadence and schedule. And not that we were like meeting constantly, but like you've restructured it so that each department has their own meeting. And those meetings are very structured with agenda. The meeting that we have as a team, like the core team together, has no agenda. And it is truly just a meeting for all of us to talk about, really brainstorm. It just feels so much better. It feels like. It feels like we're getting actually more stuff done in those meetings because there is a deadline, there's a. There is a hard stop on that meeting. And it's not like it's just meandering off in one specific agenda point for the whole duration of the meeting.
- [08:07]
Johnny Yarms
Yeah, I think that's the irony too, of, like, I think you can overdo structure, which is, like, typically how I would like the position that I would end up being in, because I think that way. And that's like one of the nice takeaways. Right. Which is like the team. The internal team meeting kind of has no agenda. Right. And they've actually been very productive by comparison to the ones where we had the bullet points, which would seem like, you know, you come in and everything is listed out and prepared. It would be more productive. I think when there's like that open space to think and just like, riff on stuff, it just creates more productivity, especially in a remote environment, because you don't get that, like, water cooler talk like we've talked about if you're in an office with people. But the same thing applies to me, and I think it's, like, important to note is when we set out like this longer vision for the business, there's kind of the same philosophy that you should apply, which is, like, it helps to have the structure of what you're going towards. But, like, all that does is enable you to more easily pivot if you need to. It doesn't just mean, like, okay, this is exactly what we have to do at all times. Like, we had a conversation yesterday about repositioning a couple of things or introducing something that we haven't talked about in a while and was not part of that plan. Right. And it's like, but if it makes business sense and it kind of pops up and it's like, maybe that's something you should execute towards. And does it slightly deviate from the plan or disrupt the plan? Probably like, not, you know, and even if it does, it's like, that's the plan now, you know, but it's. There's no confusion around everything that surrounds it. So you can introduce new things more easily because everyone already knows what direction they're headed in. And you can kind of like, the way that I think about it is if, if you have all these agencies that are kind of dialed in and producing in a way that it's easy for them to execute, when you introduce an unknown, they're ready to then execute against that in the same way that they have been not all of a sudden it's like, well, where does this fit into everything that we've already discussed?
- [10:04]
Jonathan
And I also think we had our first arguably ever full all hands meeting last month where every agency, I think there was like 20 something people on the call and, and I was like, wait a second, we've got a real thing here. Like, it felt like there was like, it was like there was a lot of people on that call. Everybody was able to get an opportunity to share and you know, and I think sort of we just, we were able to really express what we're gunning towards to the whole entire unit. Right. That like, this is where we're, this is where we're headed, this is what we're hoping to do. And realistically, you know, I think our new sort of target is totally attainable. Obviously not going to be easy by any stretch, but like, it's not like, oh yeah, we're, you know, we're, we want to, we want to be at $150 million in revenue in three years.
- [11:06]
Johnny Yarms
Yeah, you know, that's the thing that you really have to, it's so hard to balance but like smack in the middle of us having the conversation around the long term vision for the business. Right. We see, oh, it's overnight raises, $35 million in a series B. Right. Like we're literally having a conversation about the future of the business. And that's a piece of our conversation, like them aside. But the future value of the business, if we're ever to exit the business. All these, anything that happens in 27, 28 is a byproduct of the decisions that we're making now or the people that we're bringing in now. So it feels crazy to be thinking three years out, but it's like if you want to create the most value for a company, you have to understand the formula that you want to use to actually create it and then the people who are going to execute against it. And I think that's what is so valuable to me about that conversation. If you pause and actually structure that for people like you. Begin with the end in mind, interrupting.
- [12:01]
Unknown
This episode to share with you how we keep this podcast going, and that is by you supporting us through trying out or subscribing to meal1 on creatures of habit.com I am giving a 20% discount on your first order or your first subscription order which is a serious discount. Meal 1 is a superfood meal. It is a blend of gluten and glyphosate free oats. It is packed with 30 grams of plant based protein, omega 3 fatty acids, a probiotic, digestive enzymes, vitamin D3. It also has chia seeds, flax seeds, pumpkin seeds and a little bit of pink Himalayan Salt. There are 37 grams of healthy carbohydrates and anywhere from 7 to 10 grams of fat depending on the flavor. You will be full for hours, people, I promise you. We developed Meal one to help you perform at your absolute best to get that incredibly healthy and convenient edge on the competition. There is not a better, more convenient meal to start your day with or use as a pre or post workout meal. The macros are perfect and sourced with the cleanest ingredients in the game. Take your performance to the next level. Make your life much easier by saving time. Be able to eat healthy without sacrificing flavor and all while staying full for hours. Making your urge to snack far, far less. Hop over to creaturesofhabit.com that is creaturesofhabit.com and use promo code K O H P O d the number 20 for your first order of meal one today. Back to the pod.
- [13:26]
Jonathan
I think anybody who's an entrepreneur or aspiring entrepreneur listening can agree that you set plans and plans change, right? Like you create a vision and you know, ultimately the vision tends to stay the same, but the route to get there tends to. If you have a vision and we do, the vision tends to stay the same, but the route to get there tends to change and multiple times and I think it's totally normal and it's totally okay. And I'm not a full transparency. I'm not the greatest acclimator to change. I'm just not. And that's something that I need to work on personally and as actually not as well.
- [14:15]
Johnny Yarms
I'm very much a creature of habit. I like, I like routine.
- [14:18]
Jonathan
Yeah. And so, you know, we've made, you know, not a significant change, but we've made a change, right? Like things are, are doing differently. Like I am not at all on multiple calls that I used to be on. And I think that that's probably the best thing for those calls, right? Like at first that was like when you would propose that. At first I was like that I felt like a little stab in the heart, right? Like I was like, oh man, you know, I'm I'm a problem in those meetings. And when I really sat back and thought about it, I was like, yeah, you're a problem in those meetings because it's not what you do day to day, you know, And I think, like, it doesn't make sense for me to be on those calls if I'm not in the trenches in those things because what I have to say is irrelevant potentially to what is actually happening in the, in the moment.
- [15:14]
Johnny Yarms
Yeah. I mean, it's like the same goes for me and for anyone really, in terms of the replacement costs. Like, I can add value. If I spend a half hour doing something where I have a little bit more specialty and expertise, I can add so much more value than if I'm on a social media call for a half hour. Like, I might have opinions, but realistically, like, those two half hours are not going to be equal in terms of the value creation. And so when you do spend your time on something where it's like, I have a voice in it, but maybe I'm not making it that much better, that comes at the expense of potentially moving something exponentially forward. And so every week, every meeting that you do that you just accumulate all of this, like, low value creation time and trade it off for something else.
- [15:57]
Jonathan
Yeah. And honestly, like, you've been way better at me at like, being on the calls and since day one that you're going to add the most value to. And, and I just, in my mind, and this is me again, like, learning. Right. Like, I'm like, oh, you know, I founded the company. Like, I should be on the whatever. I should be in every single, you know, packaging, email. Right, right. Like, it just doesn't, it doesn't make sense. It doesn't make sense. And you've done a great job at like, being like, yo, you know, you've got the PR stuff. Like, I'm not going to get involved in that. And. And you didn't from the beginning. Right. Like, and so it's definitely made an opportunity for me to actually, which I've recently found something that I think is incredibly fulfilling and I think will ultimately be a real catalyst to our community building and ultimately retention of customers. Is I now I'm calling customers every single day. And I call customers anywhere from two to four hours a day, depending on what my schedule looks like. And If I make 100 phone calls, maybe I get to speak to 10 or 15 people. But those conversations have been absolutely incredible. Every single one of them. Not a single one. Actually one call. I had one call. Where, where a woman was like, oh man, I. I totally forgot to cancel my subscription. I. Can you cancel my subscription? And I was like, sure, no problem. Of course, like, you know, we're always here for you. But every other call outside of that call, you know, I had a call and I told you about it. I think I had a call with a guy named Dwayne who has, he is a. He makes mugs and plates and bowls for. It's. He like makes memorabilia. Right. And really just kind guy, 65 year old guy, just absolute entrepreneur at his core. Hardcore son's running like son does. Has the business with them. They've got a big factory. And he told me that someone that works for him was eating Meal One about a year, a little over a year ago and introduced it to him and started to talk to him about like, how much of a priority he puts on his health. And this guy, his cholesterol was at 240. Like, his doctors were like, you got to make some changes. And he grabbed a bag of Meal one and tried it and really loved it. And that ignited a journey for this guy. Dwayne. Dwayne, if you're listening to this, I'm incredibly grateful for you sharing your story with me. Now he's a year into his journey and he's down like 40 or 50 pounds. His cholesterol is at 180. He's not on statins, and he eats meal one every day and so does his wife. And they're incredibly conscious about what they put into their bodies. And so like, that story is like our mission.
- [19:05]
Johnny Yarms
Yeah, right.
- [19:06]
Jonathan
And it's not. And, and honestly, I've had a number of conversations like that over the last few months, talking to customers and people in the community that have been so eye opening because I just didn't know. And I've spoken to a lot of people that are, you know, in the 55 and older age group.
- [19:23]
Johnny Yarms
Yeah.
- [19:24]
Jonathan
That really love meal one. And I just didn't know that we were that. That people were finding it in that, in that demographic. So, you know, I'm, I'm like, there's a part of me that wants to keep this little secret to myself that like, I get to like, I'm doing this, you know, all the time. Because at first I was like, man, is that really going to be like what I'm gonna do? I'm gonna talk to customers all day. And then once I started doing it, I was like, oh my God, like, this is what I should be doing. This is where I should Be spending the brunt of my time.
- [19:56]
Johnny Yarms
It is the most important thing. Like I mean I know that people can, I don't know that like the customer is always right is like something that everyone accepts. But like ultimately we get to do what we do because they believe and buy into consuming this product and they like it. Right? So like to what we were talking about, about like having opinions, like their opinions really are what matter most. You know, like that guy sitting in whatever the lunchroom, cafeteria, the office. His opinion mattered most to Dwayne. Maybe Dwayne has seen some of our ads or seen our social and doesn't convert, but someone who's a customer sells him on it. To me that's where you really, if you want to check if you have brand market fit and product market fit, that is evidence to me that's what's motivating. Obviously the game is a lot of paid media advertising and it becomes a bunch of numbers on a screen. But that's like a movement.
- [20:51]
Jonathan
Someone said to me yesterday, I had dinner with an old friend last night and he's a really smart guy and he said, you know, everybody pays so much more attention to the data. Like the data is like gold, right? Like it's all about the data. And he said something that was like truly groundbreaking for me. He was like, but the thing is, is that behind the data is people. People make the data and a lot of people stop at the data. There's the only way data exists is the people that are actually consuming, right? Like that is how you are able to create data to research. And a lot of people stop at the data. And I was like, oh my God, that's so, so smart. You know, because like data is human behavior, right? Data is actual activity from humans or the data that we look at anyway. And you know, I just think that like with your intelligence and ability to really navigate financials and overall operations and my hospitality background and passion for. And you're obviously also passion for this, the wellness world. But there are passions for the wellness world and your skill set. And my skill set, My skill set kind of like really coming to fruition now after just like, you know, after the creating of it. For me, really feeling like I have to be the hospitalian in this digital brand. I don't know, I feel really positive and optimistic.
- [22:27]
Johnny Yarms
Yeah, Yeah.
- [22:28]
Jonathan
I mean I always felt really positive and optimistic. But now I think because I have this, this piece that I was looking for this, like this, this, this thing, this super fulfilling component of it outside of just like the ultimate goal right of our brand. Yeah, it's. It's awesome.
- [22:47]
Johnny Yarms
Yeah, it feels like there's a consistent why behind a lot of what we're doing and that also partners that are involved are understanding of that why and skilled in their own right in executing towards it. And it definitely adds a positive boost to like we've shouldered a lot together to get to this point and have always said throughout like this isn't going to scale if it's just us focusing on that. But getting other people to buy in and watching them succeed in their areas is so rewarding because it just gives you license to kind of offload some of that burden that comes with trying to think and ideate in those areas that there's people that are better experts in and allows us to think forward to.
- [23:33]
Jonathan
I haven't looked at the sales in actually the last 48 hours and. Or the new customer ROI. Where are we at new customer ROI right now?
- [23:41]
Johnny Yarms
You should take a look. I think in October it's actually like three and a half right now. So yeah, there's a slack message waiting for you that has a summary of some of that stuff. But the paid team has been like, I think in terms of like build, measure, learn and what has been a pain for us at points in the past and part of the reason that we made the switch on paid, which I think was something that you astutely pointed out, was the people spending the money and the people creating the content. There's too much gap between the two and I think that has really tightened under the new agency that we're with. And I'm seeing very frequently what's being tested and they're like slight iterations. Right. It could be the same static image five times, but one of them is like busy mornings and one of them is high protein. Right. Or it could even be even simpler than that. And they're like this is the one that's resonating and then spend goes behind it. That thoughtfulness is now coming through in having the ability to scale. And so yeah, there's been a very positive trend in what's happening on platform and hopefully I'm ahead of what your follow up question would be. But I did reiterate to them that if you're seeing the efficiencies, don't be afraid to spend. Like see how far you can push it and then we'll figure out making sure that we can support it operationally. But yeah, it's been a nice. And I think we maybe they did themselves a favor by Lowering expectations for October because of how much money was going to be spent towards politics and advertising. So we maybe had kind of, you know, yeah, lower expectations for what the performance would be. Could that change throughout the month? Of course. But at least what we're seeing right now and, and you know, for the month of September, it literally came in at 2.00 new customer ROAS. And like our goal was to get back to the two new customer. And so yeah, it just feels, it feels good. And again, it's dangerous to like live and die by that. Like, hearing the three and a half is kind of like, oh, it's great. But then if you show up tomorrow and it's two, you're like, oh, what happened to the three and a half? You know, that can be, that can be a dangerous game. But it's, it's. So what matters to me about that is the number is really good. But to what you said about like, there's actually people behind the data, I feel that there's a greater understanding of why that number exists as opposed to like, awesome that the number is on the screen. And so that is where I feel we're really positioned for success is because a lot of people, if you talk to them. I recently had a conversation with someone in like a very different business channel, but most of their marketing is done on paid. And he was like, we struggled for like two years and then one content or like one way it was positioned hit and we can't stop spending money against it.
- [26:18]
Jonathan
Another thing that I'll just say, and then we should wrap is that, you know, we spent the better part of the last eight months really focusing on trying to figure out a good retention system, right? And we built products and you know, we built, we built a few systems that we have, have finally gotten into the, into the, into the market, which is basically like we made. I mean, it sounds simple, right? Like creating a pair of socks or a couple of pairs of socks to send out to customers in their second order. But the beauty of it is now that it's actually, I mean, it's harder than it sounds to do that. And, and that's something that I'm way more sensitive to now, specifically after the conversations we've had over the last six to eight weeks, you know, everything that you want to do is, is going to snowball into a bunch of different people's, onto a bunch of different people's desks, right? But what I will say is that like the idea of sending out a surprise and delight gift to someone works. And on social media, people are posting about their new swag sock game. You know what I mean? Yeah. Like, you know, people are excited about it and those little touch points, you know, like, they all work. And I'm so much more comfortable at this point saying, like, slow and steady is going to win the race. You know, it's going to win the race. Things take time. And as long as you have a get back up mindset, no matter what, don't give up, no matter what, fight through the hard times, no matter what, you stand a chance of winning. Right?
- [27:54]
Johnny Yarms
Yeah, I would say so. I don't want to add anything else to that because I think that sums it up nicely.
- [28:00]
Jonathan
All right, y'all, that's another episode of Creatures of Habit. What's really happening? And I love doing these episodes. I love taking you guys along the journey with us. You know, Jonathan and I are definitely knee deep in Q4 getting ready for Q1 for our protein bar launch. We. I have the final samples waiting for me at the house. I've been traveling for the last two days, so I haven't. I'm really, really excited to get back home so that I can just take a bite of that unbelievably delicious bar that we've been dialing in for the last year. And we're going to be launching that in the new year, so be ready for it. The packaging is fantastic. Freaking dope. And the flavor of the bars and the nutrition facts of the bars and the ingredients in the bars are super duper clean and good. 20 grams of protein. We're so excited to introduce that to you as our, you know, newest product Drop. We haven't, we haven't launched a product and, you know, January will be two years. We launched Nightcap two years ago. And so Nightcap is also now changed from we changed the name of Nightcap to just make it easier for people to understand it's no longer Nightcap. Your new packaging. The new packages of Nightcap will be Creature Sleep. It is the exact same formula, so you don't have to worry about that. But we just changed the name of the product to Creatures Sleep, so it's very, very clear what the product is. Yeah, I mean, we've got so much fun stuff coming up in Q4 and in the new year, we will have already done our charity event will wear the weight. It's on Sunday in New York. It's a big day for the company. It's our number one focus in terms of social responsibility. It's how we give and, you know, we raise money for substance abuse prevention, and we take the money that we raise and we actually pay for people's. For addicts that are struggling, that really want help, that really want treatment but can't afford treatment. We actually pay for their treatment. So it's a massive initiative for us. And, you know, I'm not sure how much we've raised. I don't know if we've hit our goal, but I know that we still put in a lot of work and a lot of energy and it means a shit ton to the company for us to be able to provide, you know, a new life for people. It's a big deal. So I appreciate you guys. We appreciate you guys. We love you. And share this episode with a friend. Someone that, you know, thinks is thinking about, you know, stepping into the world of entrepreneurship. Share it with your D2C friends. You know, we are like an open book here. We have nothing to hide. Nothing. Nothing to. We want you guys to be on this journey with us. Really. We really think that it's a fun way to, you know, like, just. Just, you know, bring the community along every step of the way outside of just our marketing initiatives. So that's it, y'all. I hope you guys have the best day ever. Best night ever.
- [30:55]
Unknown
And there you have it, folks. I hope we delivered some valuable content for you to implement into your life on a daily basis. Please remember that our habits have the power to make us or break us. Replacing bad habits with great ones is the answer to living a life of happiness, optimism, and high performance. We are capable of achieving anything. We all have what it takes to give it all we've got. Commit to one great habit each day and truly commit. And watch how everything in your life starts evolving from good to great. If you enjoyed this podcast, please follow us. Wherever you listen to your podcasts, give us a five star rating and a nice review that will help us grow this podcast, bring on more amazing guests, and continue to deliver invaluable content on a weekly basis. Lastly, please share this podcast with any friends or family that you think might appreciate it. And always remember, want plus do equals have. Until the next one, fam.
- [32:00]
Jonathan
Peace.