← Masters of Scale
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- [00:01]
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- [00:49]
Reid Hoffman
Hey
- [00:49]
Jeff Berman
folks, Jeff Berman here. Exciting news. Applications are now open for the Masters of Scale Summit. It's happening October 20th through October 22nd in San Francisco. And it is a really special event. Please join our curated community of founders, innovators and leaders shaping the future. Expect ideas that challenge your assumptions and connections that move your business and maybe even your life forward. It's an experience that can change literally everything. Apply now at mastersofscale.com apply26. That's mastersofscale.com apply 26
- [01:33]
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- [02:07]
Eric Ryan
When I told my mom I was gonna do this, she's like, I've never seen you make your bed. Are you really the right person to start a cleaning products business?
- [02:16]
Jeff Berman
Well, that was a fair question from Mom. But it turned out that Eric Ryan was exactly the to found method the cleaning products powerhouse. Eric scaled the company to incredible heights before selling it. But then he faced a new question. What to do next?
- [02:35]
Eric Ryan
I felt kind of rudderless. I was not happy. And I realized I had lost my identity as an entrepreneur, which I viewed myself since the third grade as somebody I aspired to be. And the second I decided to start my next company, I like snapped out of it and, and I was like, okay, I've got purpose again. I've got a dream.
- [02:59]
Jeff Berman
This is Masters of Scale. I'm Jeff Berman, your host. This Week on the show, Eric Ryan. He's the brilliant serial founder behind companies like Method and Ollie, whose bright, bold branding has probably caught your eye many times as you've strolled down the cleaning and vitamin aisles at your local store. Eric has successfully sold both Method and Ollie and but he still has an insatiable entrepreneurial itch. In this episode, he shares his winning formula for blending artists and operators into companies capable of disrupting entire categories.
- [03:34]
Reid Hoffman
Eric, welcome to Masters of Scale.
- [03:35]
Eric Ryan
Thank you for having me. I've been such a fan of this podcast since it launched, so this is a thrill to be here.
- [03:41]
Reid Hoffman
Well, longtime customer, happy to be first time conversation with you. I'd like to go back to your ad agency days. How did you end up in the world of advertising?
- [03:51]
Eric Ryan
When I was in high school, I read every book I could on entrepreneurship and I knew the odds of launching something particularly the first time and being successful were so incredibly low. And at heart, I'm a fairly risk averse person. So the idea of actually having a career first and creating that safety net as well as hopefully useful skills that I could do as an entrepreneur but was really important to me even though I was constantly dabbling with ideas, even, even in college and I went to do an internship in London and just got lucky that I knew I wanted marketing and I was given an internship at an agency and I absolutely just fell in love with that agency culture, working across every element of a brand from packaging design and that agency world.
- [04:36]
Reid Hoffman
What did you love about it?
- [04:38]
Eric Ryan
I love the problem solving when you start to work on a brand, whether it's a something, a piece of business that that agency already won or for the Don Draper fans out there, like the thrill of the pitch I just loved. But it's all about problem solving, reframing, finding ways to tell stories differently and so that challenge I truly love. But then being around artists, I was always hanging out in the creative studio and with the design teams and I have zero gifts in that area. But to be around the people who did have those gifts, I just got such a high from and then walking grocery stores in London, it's just like to me it was like the super bowl of capitalism. And I realized in that moment I just, I love the way brands get expressed through physical product.
- [05:26]
Reid Hoffman
What did you see walking through the supermarkets in London?
- [05:30]
Eric Ryan
You know, I think it's still arguably my best tactic for developing new ideas is to be in a foreign market, ideally with a creative or a couple creatives with you so you can sketch as you go. Cup of coffee in hand, incredibly jet lagged, nobody can bother you because you're on a 12 hour time difference. When you walk through a foreign retail store, you just look everything a little differently, particularly if you can't read the language. So you have to rely a little bit more on like form and graphic design. And I also think better when I'm in motion. We were just in Sicily and first thing I hit was a grocery store. We landed there. I still find I get so much inspiration from being out there versus ever flipping through Instagram or, or anything else that just feeds you up. Lots of ideas. There's just no, no substitute for me.
- [06:17]
Reid Hoffman
Yeah. You know, I remember I was sitting with Jeff Curl from Stance a few years ago. Jeff was saying that part of where he found product inspiration was walking the aisles at Target or Walmart and looking at product categories where everything looks the same and trying to envision how something could look different. So as you're walking through these grocery stores outside of the US Is that part of what you're doing is saying what's here that isn't in the U.S. yeah, for sure.
- [06:48]
Eric Ryan
I just play this little mental game of like, what if this was this, what if that was this? A lot of my innovation approach is really just stealing that belief of like real artists steal, but I never steal from our competition. Because then you're just a hack. That's embarrassing. I try to steal from as far away from what we're working on as possible. So it could be stealing an idea in a museum that you could apply to a brand. And if you look at my body of work as an entrepreneur, you'll see that through line in everything I do. So with method, I really stole from personal care and I stole from housewares. And I mean, this is back in the, sadly now the turn of the century in 2000, when cleaner was so ugly, of course you hid it underneath the sink. Out of sight, out of mind. So stealing from personal care, bringing great fragrances and design and something was a product you wanted to use. And then housewares was really where I thought a lot about the industrial design. And if you look at method, a lot of it is designed to look like a vase that'd be sitting on your countertop. So that's always been a big part of my formula of innovating.
- [07:50]
Reid Hoffman
You could have stayed in agency world and ended up doing incredible work working at phenomenal companies. But you did make the leap. How did that come to pass?
- [07:59]
Eric Ryan
I mean, I always knew I would. I knew like that was my real love Language, this product. And I didn't know how long it would take me to write the business plan, launch it, or even if I, you know, had a great idea. But it took me about a year before I got the confidence that the way we were thinking about method was worth quitting our jobs and going to do.
- [08:16]
Jeff Berman
Why method?
- [08:17]
Reid Hoffman
Why this category, and why this company is your first step into this world?
- [08:22]
Eric Ryan
So I was spending a lot of time in grocery stores, and I just started looking at the cleaning aisle. Cause it was like this giant sea of sameness. So that was a clue. Dig here. And then going back to my planning skillset, trying to figure out, like, okay, what is the big category insight, or what I would call, like a culture shift that the category was missing. And then I realized it was lifestyling of the home, that you look at these products more than you actually use them. Like dish soap has prime real estate in your kitchen, you know? And I was like, why can't those be objects of desire? Versus it's like really designed to be bought, but not to live with. And I was really into home design and decor. And so it was kind of connecting the passion of that of like, okay, well, what if we reframe this category as really part of lifestyling of the home? And then Adam was my roommate. We lived with like six guys. This dirty flat in San Francisco, like, this is not the Martha Stewart story by any means. And my roommates called me Marvin. Cause I didn't like to clean. I think when I told my mom I was going to do this, she's like, I've never seen you make your bed. Are you really the right person to start a cleaning products business? And then as Adam and I started formulating the product, you know, we were in our 20s. He had a degree from Stanford in chemical engineering. And we realized, like, wow, like, cleaning is a dirty business. You pollute when you clean. Use poison to make your home healthier. So we are lucky enough to be successful. Essentially, our business plan was to leave pretty little bottles of poison sitting on everybody's countertop. Which there was just no way we were going to do that. So we realized there was a second culture shift, which was really sustainability and wellness. And so I guess I'm going to take credit for it because nobody's told us they've done it first of really combining high design and deep sustainability. And Those were the two trends that that brand still today, 20 some years later, drives this growth off of.
- [10:01]
Reid Hoffman
Makes sense. Like we can kill two birds with one stone. Here was it all instinct and this honed understanding of consumer behavior from the agency and consulting world. Or did you have research against this as well, buttressing your assessment of the opportunity?
- [10:19]
Eric Ryan
Yeah, no, definitely both. So I was trying to de risk it in every way that I could, but it's still to the way I work. I try to set like what is a vision and kind of back into that vision, see if I can prove it. So I do. Top down and bottom up in the way that I develop concepts. And so what I did was I wrote this concept book. I gave it to the 20 smartest people I knew across a wide range of industries. And I didn't tell them, like, you know, hey, tell me if you like it, because nobody's gonna ever step on anyone else's dream. They're always gonna like, be like, yeah, it's great. Good luck. So I gave them the assignment. Come back with three reasons why you think it's gonna fail. So that way I empowered them to like beat up my workplace. And nobody could come back with a really tangible reason why it would fail other than it just seems odd that given, you know, you have these huge mult multinationals, which were the first multinationals like Unilever, Procter and Gamble, and that none of them are doing this. So I was like. And that was my point of insecurity. I was like, this seems so painfully obvious. Why is nobody else doing it?
- [11:19]
Reid Hoffman
Why couldn't P and G or Unilever at the time see the opportunity and beat you to method?
- [11:25]
Eric Ryan
You know, I think big companies where they struggle to innovate is in areas that is going to compete against their core brands. Of course. Right. The innovator's dilemma. And, and the way I also thought about it was I couldn't create a new brand. I really had to create a new category to be successful. When you're building a brand, if anybody else can line extend their way in and compete against you, you're really going to struggle to compete against a big company unless you create a huge lead. So that's the way I thought about it. It's like, I'm not creating a new brand. I'm creating this new category that I call premium home care. And it was premium because it was good for you, good for the planet, but yet formulas that worked, but also really the design and the fragrance. So trying to elevate the who experience.
- [12:07]
Reid Hoffman
How did you and Adam go from business plan? Beaten up by 20 smart people, asked to give you the reasons it'll fail to actually launching the company? What's the inflection point that actually gets you there?
- [12:19]
Eric Ryan
So we, and this is the same advice I give entrepreneurs all the time of just break it down to like little bite sized steps. Like at the beginning, like, you don't have to worry about how to start a company. You just gotta figure out, do I have a good idea? And that's the process we followed. And I always recommend other entrepreneurs to follow. So step one, like I said, dreamed up the concept, made sure there wasn't a blind spot on that concept that we were missing. So that gave us a little bit more confidence. So the next step was we created the prototype products and we gave it to friends, family, asked them to use it. And when people were asking for more and coming back and us using it ourselves, we realized like, okay, we've got a really great product. So gave us a little bit more confidence. Then what we did is we started going to all the local Bay Area, in San Francisco, upscale grocery stores, the independents, where you can go in 6am you track down a really grumpy store manager, you've got like 20 seconds to give him the pitch while he's stocking a shelf. And I didn't know how to sell a product. Like, we just had to figure it out. And then I realized like, okay, they're saying yes because they realize our persistence. We're just going to keep coming back till they say yes. And then, you know, we got in about 20 stores. Adam and I would take turns hand delivering every week, putting the shelf, writing up a little invoice and seeing how it would turn. And so each step just gave us a little bit more confidence to keep going.
- [13:38]
Jeff Berman
The company was growing, but not fast enough. Method was still losing money on every bottle it made.
- [13:45]
Eric Ryan
These are categories of scale. And the only way this company was going to be successful was to get a national customer. So I assumed it was, it was going to be Target and we were raising our next round. Of course, I shut off my mouth and I'm like, Target's going to love us. Like, they're about design, we're about design. They're guests, our customers. Like, it could not be better, more aligned. And, and the first meeting, we piggybacked off of a distributor who got us a meeting. And the merchant didn't like the name. I'm like, you're Target. How do you not like the name? Method. He didn't like the size of the bottles, he didn't like the coloring. And he looks at us, he's like, guys, he's like, I hate to say it, but it's a bit of a snowball's chance at hell. And, you know, Adam and I are, like, dumb and dumb, and you're like, so you're saying there's a chance
- [14:32]
Reid Hoffman
as
- [14:32]
Eric Ryan
an entrepreneur, like, the road backwards of failing is always so much scarier than the road forward, so you just gotta keep figuring it out. So at the same time, I was trying to hire an industrial designer. So at this point, like, our first line of spray cleaners, I found, like, this camping fuel bottle in Norway. We just kind of knocked it off. But I was a big believer that we needed industrial design one to be able to, like. Going back to what I was saying of, like, embodying the brand through product in the love of product design. But also I realized, like, the barriers to entry are so low that if we didn't bring in industrial design, graphically, it'd be much easier to knock us off, which did start happening. So I had this list of, like, the most famous industrial designers, and I was just gonna go through down the list until someone said yes. And top of that list was Karen Rashid. And Karen Rashid talked a lot about democratizing design. And I loved his shapes. He did a lot of stuff in housewares. Like, he was perfect. So I sent him a cold email pitching him this idea to do a hand wash for us in a dish soap. And I was like, you know, these are products that sit across every sink within the landscape of America, and they sell for under $3 and a chance for you to, like, really? Because most of his stuff was quite expensive still. And shockingly, he got right back to me and agreed to take it on in the meeting. And I probably looked 12 at the time when I went in to brief him. So we then used Caram to get a meeting with the marketing team at Target, because they were doing the Fleet Stark line at the time, and we knew they wanted to work with Caram. So I used Caram as my carrot to get a meeting with Target Marketing, who then invited the merchants. Worst thing you could ever do is go over a merchant's head, right? And we spent so much money on blowing out our vision for this category. Our first Caron product, which was this inverted dish soap, so you don't have to, like, a stapler. You just pick it up, staple it. That's where I got the idea. So instead of flipping it over each time you go to, you know, to use it, you just, like, squirt from the bottom. That prototype showed up in FedEx that morning, and the buyer who said snowball's chance in hell, when it got to him and he squeezed it, he goes, oh my God, even I would use this. And that was the point where it's like, okay, we're going to live to see another day here.
- [16:42]
Reid Hoffman
There's so much to love about this story, including kind of the bank shot approach of being like, okay, what do I know about my, no pun intended target customer and what might get them over the hurdles that they've put in front of us. Right? And the idea that they want to work with an industrial designer who is now your partner on the product. It's a really interesting approach to give yourself a better chance than the snowball in hell.
- [17:06]
Eric Ryan
Definitely. Part of what my success has been as an entrepreneur is relying on the gifts of others. Where again, I when we play Pictionary as a family, my kids can't stop laughing at how bad my drawings are. And I think also the way I've always been attracted to being around creators and design talent, but I'm not a threat to them because I can't do what they do. But then leveraging and being able to connect the dots has been a big part of my success.
- [17:37]
Jeff Berman
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- [18:12]
Reid Hoffman
to either one of them.
- [18:14]
Jeff Berman
Creative Planning was built to fix exactly that. One integrated team of tax professionals, estate planners, investment specialists, all coordinated by a dedicated wealth manager who sees your full financial picture and keeps every piece working together. Proactive tax efficiency, estate strategy, investments all under one roof. Creative planning where wealth works together. Learn more@creativeplanning.com Masters of scale
- [18:45]
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- [19:35]
Eric Ryan
There's going to be two types of companies. Those who are great at AI and those that went out of business because they weren't.
- [19:40]
Bilt Advertiser
How do we build a future that is human centered?
- [19:45]
Rana El Kaliouby
I'm Rana El Kalyubi and on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur and investor, I know what it takes to build AI that works for everyone. Every week I sit down with the pioneers shaping our future and we take you behind the scenes of the AI that's transforming our lives. Find Pioneers of AI wherever you tune in.
- [20:16]
Jeff Berman
Welcome back to Masters of Scale. You can find this conversation and much more on our YouTube channel and be sure to check out the show notes to find a link to our newsletter.
- [20:26]
Reid Hoffman
There's this theory of organizational growth in factors of 1 and 3. You're one company, one person at 3, at 10 and 30, 100 and 300, etc. And in particular in that kind of 30 to 100 growth phase, it feels to me like it's increasingly difficult to maintain and grow culture in the right direction because most companies literally create things called divisions.
- [20:52]
Eric Ryan
Right? Right.
- [20:53]
Reid Hoffman
I mean, it's crazy, right? We're going to intentionally separate ourselves rather than unifying ourselves, uniting ourselves. And look below 30 kind of everyone knows what's happening in the company, right? Just by nature of how you work, especially in an in person world, given how important culture has been for not just method but your companies and for you personally as a leader, how have you managed through the scaling journey, keeping the culture heading in the right direction?
- [21:20]
Eric Ryan
I think, you know, it goes back to advertising where I recognized that was an industry where your assets went down the elevator every day. And I was lucky enough to work for, for an agency like Fallon where they cared so much about the culture. I mean, the joke was if you don't show up Saturday, don't bother showing up Sunday. Like it was a hard working culture and at that stage of my career, like I loved it. But I recognize within advertising how important culture is and I always carry that forward with everything I do. So for me as an entrepreneur, I have two things I care most about, it's people and products. And I feel like if I can get the people right, which is just culture, and I get the products right, generally everything else will get easier. And I also think about the products are just really a souvenir of the people. And if you want to be one of those companies that truly leads and does things differently, you have to kind of create for yourself. And I think the best company, if you look at like Apple or Nike, the best companies create for themselves. I don't know how you can't lead the consumer if you aren't the consumer. And then within cpg, that goes back to why so many of these companies can't innovate is because they have to rely on the consumer and consumer research to be able to make decisions and drive their vision, which is always going to be a rearview mirror. And you know, at the end of day I want to go to a place and work around people that really are energy giving and we're having a lot of fun together and it shows in the work.
- [22:42]
Reid Hoffman
I want to ask you one other question before we get to selling method because you referenced your experience at Fallon where the culture was if you don't come in Saturday, don't bother coming in on Sunday. Jeffrey Katzenberg's famous line is that where they stole it from, he may not have originated it. He gets attribution for it. And if we don't give him attribution, we'll hear about it. It sounds like you and I had similar formative experiences where we're making a living wage, but not much more than it in our early, the early days of our careers. And you know, you're putting in 80 hour weeks as a norm and a hundred hour weeks are not unusual. And I'm not saying that that's the healthiest. I'm not saying we can't have better integration of work and life or work life balance. But I learned so much in those years, not just from getting more reps, you know, go back to Gladwell and 10,000 hours and all of that because I got to be in the room watching other people do it and usually do it incredibly well and learn from that, but also learn from where they didn't and try to pick the things that could work for me and figure out how I shaped the things that I knew wouldn't. And one of my challenges and my concerns right now, leading a largely remote company is how do we give our more junior people the exposure, the opportunity to learn, to grow, to mentor them, even the walk to the coffee shop after the meeting where you can debrief. And I'm just curious how you're leading through this era having come up the way you came up and clearly invested in the success of your people.
- [24:12]
Eric Ryan
No, and I agree. And we were talking about earlier with like my daughter at nyu and just like I was always such a believer of the role of in person. And we did Remote Fridays at Ollie got long before COVID ever showed up. Just because I always thought it was important to give people one day to work from home. And we were so efficient doing it. But one thing that I think people find also surprising about me is I'm very right brain, left brain, like, so I call it creating cultures of artists and operators. So I want to build organizations that are incredibly innovative, that are creative, but also have operating rigor. Because if you operate the business well, it gives you more time for the fun stuff on the creativity. And so I use this OKR system and we write these like really rigorous operating plans every year and then we go starting January 1st, execute the crap out of this plan.
- [24:59]
Reid Hoffman
And.
- [24:59]
Eric Ryan
But I use it as a way also to bring everybody along with me is one of my criticism early as a founder. You know, when you're a founder, you think about your business 24 7. You're just naturally going to be way ahead of your teams. And sometimes I would forget to communicate. I remember our CEO is like, Eric, like you're some sometimes so far ahead of us that you kind of forget to bring everybody along with you in the planning process. I really took that to heart and so I tried to design that to bring people along with me. And I find this works so well with our junior employees. So my goal is everybody in the company understands the entire operating plan of the business and not just help shape it and mold it and things are delegated down, but truly, truly understand it. And going back to that, trying to build a cross functional company. So everybody in finance knows what sales is doing. Everybody in sales understands what marketing is doing. And it's served us well as our organizations tend to be more remote to bring everybody along with us. And I've always been amazed at how many founders where everything's kind of in their head and they're a nightmare to work with because of that. And it's allowed our more junior team members to get better learning but also just be more empowered because then they can spot opportunities, be like, hey, can I take on this project or this challenge?
- [26:11]
Jeff Berman
Yeah.
- [26:11]
Reid Hoffman
All right, let's go back to method. You decided to sell the company. Why make that choice?
- [26:17]
Eric Ryan
I had a family that didn't fit into its house.
- [26:21]
Reid Hoffman
That's real, by the way. We don't talk about that enough. That's real.
- [26:24]
Eric Ryan
No, totally. And it's, you know, when 99% of your net worth is tied up in a single asset, and you ride that asset up and down. You feel every ripple. It's hard, but, I mean, the reality is we took outside capital, and so we're gonna have to provide liquidity. And this was in an era long before secondary, which has become now the norm. And there's more ways. But as founders, unfortunately, Adam and I had no way of having liquidity out of the business unless the company was sold. And we got to the stage where we were just ready to be able to buy a house for our family and have that safety net underne. I talk a lot about this with other founders, which is when you go through that sale process, you feel like you're going to wake up the next morning like you won a Super bowl, and you're going to have a parade, and, like, life is going to be great. And it's like, again, nobody's going to feel bad for anybody going through this, but it's hard. You feel this loss of identity. You've got new owners with really high expectations. Your team members are feeling incredibly insecure. But the hardest thing is, I was the Method Man. That was my identity. And then when you no longer own that, I'm somebody who generally, like a golden retriever, I wake up pretty happy most days, is my default position. And it was like the first time in my life after that sale that I felt kind of rudderless. I was not happy. And I realized I had lost my identity as an entrepreneur, which I viewed myself since the third grade as somebody I aspired to be. And the second I decided to start my next company, I, like, snapped out of it. And I was like, okay, I've got purpose again. I've got a dream.
- [27:58]
Reid Hoffman
Okay, so you've got the blank sheet of paper. Blank sheet of paper is a problem, but it's also an opportunity. Where does Ali come from?
- [28:06]
Eric Ryan
So Ali came from a very similar story, which was Target's always been a great relationship. And I was creating this program called Made to Matter years ago at Target. The goal was to help Target get credit for all of these natural brands that were were exploding on the scene, from, like, Chobani Yogurt at the time to Burt's Bees was growing and Clif Bar. I was inviting these brands to be part of this program, But I couldn't find a brand in the vitamin space that really connected at the time with Millennial Moms. So I went walked that aisle, and I was like, this aisle is so hard to shop that people are literally stressing out, trying to choose Something that's healthy for them. And before Ali, it was like, it was a dog's breakfast. I mean, the packaging was horrible. And so that was a clue. Dig here. And so I started trying to figure out, like, okay, what is that culture shift that insight? How could I reframe this category? And I was really inspired by Soul Cycle. And I realized I was like, oh, millennials view health and wellness as a lifestyle pursuit. So what if I reimagine the vitamin as a lifestyle product? And then it all just flowed. You're like, okay, well, I'm gonna steal from the beauty aisle. Cause I want it to look like a beautiful package. We're gonna not sell ingredients like Mel or biotin. We're gonna sell benefits like beauty and sleep. And everything just kind of flowed from there. That concept really quickly once I figured out how to reframe it that way. And then a year later, we launched it at Target as part of the Made it Matter program.
- [29:35]
Reid Hoffman
The lessons from Method that you applied to building Ollie, what did you keep that was critical and what did you change that was critical?
- [29:42]
Eric Ryan
Ah, such a good question. Alex Boguski said this to me once when I was leaving Method. He's like, it'll be interesting to see what they keep after you leave and what they change. That always really stuck with me. So every time I exit something, I pay attention to that. There's just great learning there. So what stuck with me was really what drove our success. The importance of culture, the importance of great products. Really building a cohesive experience across sales, marketing, product culture. Because I think of, again, going back to the idea of who you are and who you serve. You know, you want that to be as small as possible. So Ollie was all about this idea of healthy lifestyle. So we set up the offices in the Presidio because I was like, oh, my God, we can be in a national park. At our offices, we had recess. We called the office Camp Ollie. And where Method, if you walked in, people would ask me, like, you give people a tour at Method, and they're like, oh, this is the design department. I was like, no, this is the finance department. The entire office looked like a design department, because design is what mattered. And so I brought all those same building blocks over to Ali. And I have to say, it was so fun to be able to take advantage of all the mistakes we made at Method and to be able to launch this new brand.
- [30:58]
Reid Hoffman
With all that learning, Ali starts growing like crazy again. An opportunity to build a scaled independent company or sell and you make the choice to sell the company. Why make the choice the second time?
- [31:13]
Eric Ryan
I went through a divorce and it was a really tough divorce. And I was single, parenting three young kids as CEO and going through the divorce. I had protected our house to keep the kids in the house. But I gave up everything else. So everything I had created method was now gone. So I was starting over again, which is again like in all tragedy comes gifts. You just have to look for the gifts. And that was the greatest gift. And found myself suddenly in this situation. But she left right as I was launching Ollie and drove even more kind of grit into me to ensure this thing was was successful. But at the end of, you know, we scaled it to 100 million in four years. I definitely sold too soon. But it's that adage of like people have said, like, you know, people have made a fortune by selling too soon. It's better too soon than too late. And I just felt like for me and my family, that was what I needed to do. And the board and everybody was supportive. You know, it was a 10x return. It was just an amazing outcome. But it went back to another personal situation that drove that decision for me.
- [32:22]
Reid Hoffman
You know, in terms of what then came next. You twice had built brands, one brand at a time, multiple product lines, but one brand at a time. You now by my count, are working on 172 different brands. That may be a little bit of an overestimate, but it does seem like there's almost an announcement every few months that you're doing something else. How are you approaching this phase of the career and the different brands that you're building and developing?
- [32:46]
Eric Ryan
It shifted to this more of an incubator model, which is why I've been involved with so many things. So I realized I can still work really, really hard, but I needed flexibility in my life and so I can be there for every school drop off pickup, which I just absolutely love. And so I've tried this incubator model where I create the concept going back to like that's what I really love is building concepts and then trying to put together the team and the talent and the capital and then take a co founder role. Be very, very hands on, but not be the CEO. And I found I've had really limited success in that model. Welly is one of the success stories that came out of it. But we turned that into a joint venture with Unilever very, very early. And the team, there was a team I was able to promote up. Like my head of sales at Ali became our CEO at Welly, he was with me also at Method. So I've had the model work, but I've had two areas where I've tried the model. It did not work. I did a startup with Serena Williams and just found if I wasn't the CEO in it, running it every day, particularly with the dynamics, it was not gonna work. So I made the decision just to wind it down and then I tried my hand at. I've always wanted to build my own retail expression. So I launched this brand called Cast and we built three stores in the Bay Area. Nordstrom invested 2 million in us and we were on the White Lotus season two all over the ca, got really great celebrity pickup, Issa Rae got involved and everything on the brand product market fit the retail experience. All of it was working, but we were in a fundraising cycle path of profitability for, you know, building a four wall multi unit like it's measured not in years but decades and the tariffs hit and as you know, consumer funding is a tough place to be and we just realized it was just going to be too hard to raise capital for in this, this environment. So my co founder there is continuing to focus on, on keeping it going more on the wholesale and I've pivoted back to really focused on cpg. And then I most recently joined Greycroft. We're launching a new $150 million consumer fund. So that's really giving me better leverage on the venture side. And venture's a no game. And when you have to be an optimist to be an entrepreneur and so being part of an investment committee and a team and I've just got wonderful partners there and just really enjoying that journey right now.
- [34:59]
Reid Hoffman
The paradox of the modern moment is it's never been easier to develop and launch a brand, right? Everything's kind of open source. You know, you can find a manufacturer who will produce pretty much anything for you. And because the traditional walls have come down, you know, you can market through the social channels. And the paradox is it's never been more crowded, right? I mean, breaking through has never been harder when you're looking at an idea, especially when it's someone pitching you and not something that you've been developing the same way you develop method and Ollie. What are you looking for and what tells you whether this is one of those handful that might get a yes rather than a no.
- [35:35]
Eric Ryan
So for me it goes back to a lot of like where my success has come from. And that's. First of all, it's gotta be grounded into an insight so that's the one thing I'll really try to understand with the founder. Do they have a really big insight that they can be in service to as they build this business? And is that insight really grounded in what you would argue is a major macro trend or cultural shift? Then it becomes like, okay, are they the right team? So I try to get to a place where like, regardless of this team or this brand, is this idea going to be successful because somebody's going to do it if it's really well grounded, and then figuring out like, okay, now is this the right team that can go execute this idea? It's got to have a really not only clear product proposition, but highly differentiated. And particularly in this world of what you just said, where barriers to entry are so low on both the manufacturing side as well as the, you know, distribution side, I see so many new startups where the product is very surface level. There's not an insight there. And the product really doesn't have a meaningful point of difference. So I kind of go back to those core tenets and then when I think a lot about, you know, is it a team that can put together a great artisan operator culture to succeed? But at the heart of it is like, it's a simple thing, but does the founder give me energy? Am I going to be psyched? This is a 10 year marriage with this person, most likely. And every time I see a text from them or a call, like, am I fired up to talk to them? Working on a deal right now. And I ate breakfast with the founder last week. Regardless of the investment, this is somebody I just would love to work with. And so I think when you're constructing a portfolio, people often underestimate how important that is.
- [37:22]
Reid Hoffman
Really wonderful having you. Thank you so much for being with us.
- [37:26]
Eric Ryan
No, my pleasure. And we're all trying to master scale. It's never easy. So I love the show and I'm always learning from it as well.
- [37:34]
Jeff Berman
Thanks again to Eric Ryan for joining us. He shared so many incredible insights and I especially love what he said about products being a souvenir of the people who make them. I'm Jeff Berman. Thank you for listening.
- [37:50]
Eric Ryan
Foreign
- [37:55]
Bob
hey listeners. Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from the Devil Wears Production, it takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.
- [38:32]
Jeff Berman
Masters of Scale is a Wait.
- [38:34]
Reid Hoffman
What?
- [38:35]
Jeff Berman
Original Our executive producer is Eve Trow.
- [38:38]
Reid Hoffman
Our senior producer is Tricia Bobita.
- [38:41]
Jeff Berman
Associate producer is Masha Makatanina. Senior talent executive is Stephanie Stern. Mixing and mastering by Aaron Bastinelli and Brian Pugh. Original music by Ryan Holiday. Our head of podcasts is lital molad. Visit mastersofscale.com to find the transcript for this episode and to subscribe to our newsletter. And please make sure to check out our YouTube channel.