← Success Story with Scott D. Clary
Success Story with Scott D. Clary
Lessons - From Innovative Idea to Multi-Million Dollar Acquisition | Dan Cohen - Exit Strategy Expert
00:12:34
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- [00:00]
Scott
Prolon is a success story partner. Now long weeks and busy weekends, they can leave everybody feeling depleted and tired. We work nonstop and that's why I love Prolon's five day fasting mimicking diet. I love this company. Let me explain how it works. Basically, they have a fasting mimicking diet that rejuvenates you from the inside and out. They deliver plant based soups, snacks and drinks that keep your body in a fasting state while giving you nutrition. And when your body's in a fasting state, this triggers cellular renewal and it actually works. This is why I loved intermittent fasting for so many years. This is the magic of Prolon. And the exciting news is that they just launched a new next gen five day program. So it has all the benefits that they had before, but now they have 100% organic ingredients in their food, better taste and ready to eat meals that make the whole process easier. I've tried the original Prolon program. I felt fantastic whenever I do it. I personally cannot wait to try this new and improved version. And if you've never tried them before, you're in for a treat because the old one was great. I can't even imagine how good this new Prolon five day program's gonna be. And for a limited time, Prolon is offering success story listeners, all you guys 15% off site wide plus a $40 bonus gift. When you subscribe to their five day program, just go to prolonlife.com Clary that's that's P-R-O-L-O-N-L-I-F E.com Clary to get your 15% discount and your bonus gift. Prolonlife.com Clary A huge shout out to Bamboohr for supporting today's episode. Let me share something I've learned from building multiple businesses. Your time has a dollar value and if you're spending hours on HR tasks, you're literally burning money. That's why I'm fired up about bamboohr. This isn't just another software tool. This is Strategic business optimization. Over 34,000 companies are already using them because it transforms those time consuming HR tasks into streamlined processes. Here's what makes it different. It's actually built for entrepreneurs like us. Simple to use, easy to implement, and it scales as you grow. No complicated onboarding, no HR degree required, just pure efficiency. Listen, if you want to operate like a true CEO, reclaim your time, do what I did. Check out the free demo@bamboohr.com free demo. See for yourself all that Bamboohr can do and how truly Affordable it can be too. That's bamboohr.com free demo bamboohr.com/free demo. This isn't just about HR. It's about strategic growth. In this lessons episode, discover the high stakes launch strategy that made a brand new nasal strip a runaway success. Learn why trusting a felt sense of the market can outpace conventional research. Learn how targeted press and athlete endorsements created instant credibility for an unheard of product. And learn how unconventional distribution tactics forced retail gatekeepers to give shelf space against all odds.
- [03:17]
Bruce
How did you know that this was going to be so. I mean, you're in the sleep space.
- [03:22]
Scott
But how did you know that this.
- [03:25]
Bruce
Particular product, which would force someone to slightly modify their behavior to actually adopt this product? I mean, because nobody's using it at this point already. It's not like you're, you know, you're not like bringing a different type of coffee to market when somebody's already drinking coffee every day. No one knows what this is. Nobody has any experience. It's a very weird experience the first time you put it on because it's like literally nothing else that you use in your day to day. So how did you know, looking at this product that this was going to be a hit?
- [03:55]
Dr. Cohen
You know, sometimes you just got to go with your gut, all right? And, and I think too many people don't do that. You know, they don't have a belief in themselves. They don't have faith in their ability to get something done, even though they don't know how they're going to do it. And they're, you know, they're low on the scale of risk taking. I mean, when you're an entrepreneur, you are a risk taker after all. And one of the things I think most people don't understand is thinking versus feeling. Okay? I mean, you know, you just asked the right question. How do you, how did you know knowing is a felt sense? It doesn't come from up here. Everybody thinks knowing comes here, comes from the gut. It's like, oh, I just know this is going to be successful. I mean, when, when Bruce handed me that nose band aid, immediately in my head, I, I saw football players wearing it. I, I saw the design of it. I, I saw the stock market chart climbing in my head. I mean, there was this immediate knowledge and so that's why I just went with it.
- [05:00]
Scott
So, okay, so your board is not.
- [05:02]
Bruce
Super happy, but you don't care. You're going to figure it out anyways, right? So how do you take this to market?
- [05:07]
Dr. Cohen
I literally conceived of a Plan that I thought we could implement. Okay? And the plan was ultimately, get it on football players. But before you get it on football players, and remember, this is pre Internet. You can't go on a podcast and expose this to a million people. Right. You had radio interviews that I felt like I was talking to the cows in Montana in some of those interviews.
- [05:36]
Bruce
And also, radio doesn't work so well when you're trying to describe something that nobody's ever experienced before, like a band aid on your nose that helps you breathe.
- [05:42]
Scott
It's a little.
- [05:43]
Dr. Cohen
That's right. So. So the key was, all right, I need the press ultimately to get behind this. And so. And we had done the medical studies. You know, we were getting it through the fda, and we had to file a de novo application because the FDA said what you just said, no, there's nothing like this. So even though it's just a nose band aid, it becomes a Class 2 medical device. You know, yeah, you ought to do this testing and prove it. So essentially what I needed to do was get the press on my side. So my partner called. She got 700 reporters for newspapers in the business, business writers, medical writers, sports writers, to agree to take our press kit and not file it in the trash can, okay? And we told them, we said, look, you know, this fall football players are going to wear this. You're going to need access to this so you can write articles about it. And they agreed. You know, they didn't know. We didn't know that football players were going to wear it. We had to make that happen. And so. So we got that seated. We had to get distribution, which was really tough for a new company because the pharmacies wouldn't take it because the wholesalers didn't have it. The wholesalers wouldn't take it because no, no pharmacy was requesting it. So we literally had to close loops between the customer, the pharmacist, and the wholesaler. So I did 400 radio interviews to get 3,000 pharmacies on board, you know, so that we could get all the 10 wholesalers to take it. And then I went to Walgreens and I said, this product's going to be a success. I'm the head of the cough cold, you know, section says how much business you're going to do in the first year. I said, 23 million. And he goes, you're full of. I said, probably so. So, you know, he didn't take it, of course. And I. He. And he goes, no, I'm not taking the product. I'm not Giving you shelf space. I said, oh, you're going to take it? I said, you'll see. And so when I left his office, the first person I called was the regional manager of the Walgreens stores in the Twin Cities. I took him out to lunch. I said, how do we get this into your stores? He says, oh. He says, I have control over the counter space. I said, really? I said, it doesn't need to be approved by headquarters. He goes, nope, that's my domain. As I showed him the product, I said, what do you think? He goes, I love it. I'll put it on the counter. And so it sold, you know, anything sells on the counter right by the cash flow. And so it sold really well. And he called four of his buddies that were regional managers in other parts of the country and they took it and it was doing well. And then I get a call from the cough coal buyer and he goes, get your ass in here.
- [08:30]
Bruce
You totally went around him, totally ignored him.
- [08:32]
Scott
Whatever.
- [08:32]
Bruce
It's in your stores anyways, right?
- [08:34]
Dr. Cohen
And so he, you know, I got in there and I said, so it's selling really well, isn't it? He goes, you can sell shit at the counter. He says. I said, so why do you want to take the product now? He says, because you're a pain in my ass. I have to process all those orders from those regional, you know, stores separately by hand. It's taken up my whole day. I'm taking this product just to get rid of you.
- [08:57]
Bruce
That's so funny. That's so funny.
- [09:00]
Scott
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- [12:52]
Bruce
So again, it's not, it's not, by the way, anybody who's never put out a CPG brand, a consumer goods brand into the market, like what you're doing is exceptionally hard to do.
- [13:03]
Dr. Cohen
Yeah.
- [13:04]
Bruce
Because now it's so I, I don't, I don't think that you can just do that Same playbook in 2024. I have no idea. But probably that seems ridiculously hard to do to go unless you have the relationships. I guess that is an X factor that you can lean on. But if you don't have those relationships, it is very hard to get that kind of distribution without the sales traction or the revenue traction.
- [13:27]
Dr. Cohen
Right.
- [13:28]
Bruce
If you're at the stage that you were at.
- [13:29]
Dr. Cohen
Well, and then to get the distribution, I mean I had some independence with it and then I finally got Walgreens. I took their first order. Their first order was 200,000 to stock the shelves. And the first thing I did was that with that is I went down to the best regional broker firm in the country because they were all regional, there were no national firms. And it was the Pancal Brothers and they were known as sort of the premier, you know, group. You know, they were based in Chicago. So Walgreens, you know, was headquartered in Chicago. So they took care of the Walgreens account. I walked in there and, and then, and there were two proper gentlemen in three piece suits. And they said, well, Dr. Cohen, what can we do for you? And I said I've got a check for you. And they kind of looked at each other, go well wait a minute, we're supposed to like write you checks or, or you write us checks on this or that. What do you mean you have a check for us? And I said, well look, I got an order here for $200,000, you know, from Walgreens. I want you to take over that account and I'll give you this as a starter. And they said, well, that means you have to pay us commission on that. I said, yeah. And they go, well, okay, why are you doing this? I said, I need a favor from you. I want you to call the best, you know, eight other regional firms that are brokers and get them to meet with me. And they said, done. And so. So we uptick distribution in no time. And we were in 40,000 stores, you know. But how long did that take you? Well, you know, I'd say the whole process took about seven months.
- [15:06]
Bruce
It's very good.
- [15:07]
Scott
Very, very good.
- [15:08]
Dr. Cohen
But I mean, get it there for football season.
- [15:10]
Bruce
I was going to say, if you, if you didn't have it, if. Yeah, if you didn't have it in the stores, then none of the strategy would work. So, I mean, I'm assuming if you wanted the football players to wear it, you needed to have proof that there was a. It was like adopted by the market.
- [15:28]
Dr. Cohen
Well, actually, we. It wasn't adopted yet because it was just going on the shelves. I needed proof from the head trainers, the head NFL trainers. So we started to badger them. You know, I had a guy that was literally calling every NFL head trainer every week and saying, have you used them yet on your players? Have you used them? And finally one of them did. He put it on Herschel Walker. And Herschel Walker scored a couple touchdowns. And there was a photographer right behind the goal posts, and he had a nice picture of Herschel wearing it. And a beat reporter. It turned up on page six on Monday of the sports section in the Philadelphia Inquirer. A beat reporter then called us up. She saw it on Wednesday and she says, what's the story about this? Then she wrote an article and she entitled the article Bandaged Beaks Breathing Better. Back in those days, color prints on in newspapers were rare. And There was a 6 by 9 inch on the front page of the sports section of the Inquirer. So we made color reprints of that. We sent it back to all the other trainers and we said, hey, other players are wearing this. Your players are behind. You know, And I said, post this in your locker room. And then Jerry Rice saw it and said, hey, I got a nasal breathing problem. And he went into Lindsey McLean, the head trainer, and says, I'm gonna. I'm gonna try one of those. He put it on. He loved it. And he said he wore it Monday Night Football.
- [16:58]
Bruce
And at this point, like, I mean, you're still like. But you're still running the two companies. You still have this Pubco that's like now running Both of these companies. But I'm assuming that there's a point where, where Breathe, right, starts to outpace, like all, all the traditional medical tech that you built up.
- [17:13]
Dr. Cohen
Yeah, exactly. And so we ended up selling it.
- [17:15]
Bruce
So did you sell the whole Pubco?
- [17:17]
Dr. Cohen
No, we just sold.
- [17:18]
Bruce
Just sold asleep part. How do you, how do you do that? How do you package out a piece of a public company and then sell it? What's this, what's the strategy to do that?
- [17:28]
Dr. Cohen
It was really easy because, you know, the patents were so different that the ip, you know, could be split. You know, companies back then, they tended to just buy technology and incorporate it into their, their stuff. So it was really providing them all the engineering material, you know, our sales history, the intellectual property, you know, and so it was a transaction that, you know, didn't, didn't take much.
- [17:54]
Bruce
And this was so, I mean, when you're, when you sold to. You sold the GlaxoSmith Klein in, what was it, 2006.
- [18:01]
Scott
Correct.
- [18:01]
Bruce
Yeah, that was Breathe. Right. Okay. Obviously an amazing exit. So that was for $566 million that you sold the IP for breathe. Right, and all the sort of.
- [18:11]
Dr. Cohen
And the business, I mean, there was, and there was another product, Fib Choice. We, we launched Fiber Choice chewable fiber tablets to compete with Metamucil. So, and that business was doing well. So we, at that point we had about $140 million business, but it was generating a lot of profit, even for.
- [18:28]
Scott
A consumer goods brand.
- [18:29]
Dr. Cohen
Oh, well, the margins, I mean, a Breathe Right nasal strip, you know, we were making them in the billions. And, and you know, a strip cost at that point, two and three quarters cents.
- [18:43]
Bruce
Oh, geez.
- [18:44]
Dr. Cohen
Right, okay. So you could, I mean, you know, you had a 90 plus percent margin.
- [18:47]
Bruce
Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.
- [19:05]
Dr. Cohen
Foreign.
- [19:10]
Scott
Scott here. I just want to take a second and say thanks for listening to the podcast over the past couple years. Obviously this wouldn't be possible without each and every one of you. I have a favor to ask, so I would love to get some more information about you and why you listen to the podcast and why you listen to the show and why you tune in every week. And I have put together a short survey and we are using this to help us sort of inform what type of content we want to create and the direction of the podcast past going forward. This information is not shared with anyone else, so this is just for us internally and I put together a link so scottdclary.com survey where you can go and you can fill in some information so we can know what kind of content you love. Also, for the first 100 people that respond to the survey, you will be entered into a draw for a hundred dollar Amazon gift card. So we'll be giving out one of those to the first people that respond. It should not take more than two minutes of your time to fill out the whole survey. It's really not that long and it will help you shape the future of the podcast. So I really appreciate each and every one of you and thank you for listening. A huge shout out to Bank On Yourself for supporting today's episode Entrepreneurs here's the retirement secret that Wall street doesn't want you to know. While you are pouring everything into growing your business, they want you gambling your Future in their 401k casino with no guarantees. As a business owner, you already take enough risks. Why gamble with your retirement too? It is time to discover the financial strategy smart entrepreneurs are using to protect their wealth. Bank On Yourself is the proven approach that gives business owners what they need most certainty, flexibility and control in their retirement. Unlike traditional retirement accounts, Bank On Yourself gives you predictable guaranteed growth that isn't at the mercy of market crashes, a liquid cash reserve you can tap anytime to seize new business opportunities or weather downturns. There's zero penalties or restrictions and tax free retirement income that shields your hard earned wealth from future tax hikes. For entrepreneurs who understand the value of financial leverage, here's the game changer. When you access your money, it continues growing as if you never touched it. This means your capital works twice as hard just like you do. You can get a free report that reveals how you can bank on yourself and enjoy tax free retirement income, guaranteed growth and control of your money. Just go to bankonyourself.com Scott and get your free report. That's bankonyourself.com Scott bankonyourself.com Scott.