← The Peel with Turner Novak
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- [00:03]
A
Peter, welcome to the show.
- [00:04]
B
Hi Turner, thank you for having me.
- [00:07]
A
Thanks for coming on. This will be fun. You real quick for people who don't know you actually started two companies but the company you're running right now, David, can you just real quick give us some 30 second context on it?
- [00:17]
B
Yep. So at David, our mission is to design tools that help you increase muscle, decrease fat. And we do that through a protein bar that has the highest protein to calorie ratio on the market. So that, what that looks like is a, is a tool that's 150 calories, 20 grams of protein and zero sugar. So that's that, that's our, our hero products is the protein bar. But then we also have protein ice cream which is really incredible. It's tastes like the full fat, your, your kind of favorite naughty ice cream but with incredible nutrition. So 30 grams of protein, 260 calories and 2 grams of sugar.
- [01:06]
A
So that's a pretty bold claim. Healthy ice cream.
- [01:10]
B
It actually is like from a strictly speaking nutritional profile it's like a post workout type of product. So that's David, we make protein different, different protein products that maximize this concept of like protein to calorie ratio. So anywhere between 75% of the calories to 50% of the calories coming from protein.
- [01:37]
A
How unique is that? Like what, what do food like protein foods normally have or just generally food in general?
- [01:43]
B
Yeah, I mean on protein bars. So our gold bar is 75% of its calories coming from protein. So the rest of the market would be around 45, 45% of its calories coming from protein. You know it's, it's pretty easy to calculate. 1 gram of protein is 4 calories. Carbohydrates and fats, fats are 9, carbohydrates are 4. So it's actually just like a way to objectively measure food in a way versus the subjective. Like clean, bad, good food's quite a barbed wired ideological place. And so really one of our missions at David was to make it more intellectual and evidence based rather than sort of like you have these heuristics that sort of aren't that sophisticated.
- [02:41]
A
Yeah, it's interesting the way the food is always branded. Yeah. To your point, clean or it's like non GMO or free trade or something. It's like oh, what does that even mean? Tech? Like you just say anything you want. It's like greenwashing.
- [02:53]
B
Yeah, completely like clean can mean anything. So yeah, like our, one of our, I just was, my first business was RXBar which one of the frustrations I had was like this. There was this utter confusion around nutrition and it was, it was like there was no definition and total misinformation. It's not a real science.
- [03:18]
A
And
- [03:20]
B
yeah, it just led to people sort of like these massive swings in nutrition culture. So wanted to build something really robust that was like really evidence based.
- [03:32]
A
And it's kind of crazy because, I mean in terms of like how big food is, it's just like a thing, like a market, like a category. And every single person eats probably, I don't know, two to six times a day we spend in the U.S. it's like 2 to 3 ish trillion a year depending on like how you measure certain things globally. It's like a lot of people, it's like 10% of their daily income or like 50% of their income is just spent on food and eating. And it also, it's like goes in your body and it impacts how you grow. Like it's just everything, food like is down, is like upstream of everything. Everything flows from what you eat. And to your point, it's like we just kind of make things up. Like, oh yeah, this is healthy, don't worry about it.
- [04:14]
B
Yeah, yeah, it really affects like, you know, it's like how is it organized? It's a macronutrients, micronutrients, calories and like those things all matter more than the ancestry. So.
- [04:28]
A
And what's, what's kind of the scale of David like today? Like how do you talk about just like the current scale of the business?
- [04:35]
B
Yeah, like my first business, we were really secretive about it all and now I just sort of say everything. This is our second year. We'll do over 300 million this year, which is incredible. It's been like dog years here. It feels like it's been five years, but it's only our second year. So we're just domestic in the U.S. and yeah, we'll grow 300% this year.
- [05:07]
A
Nice. I think, I think I saw you're thinking it'll be about 300 million in revenue this year or in, in year two, I think is what, what it said.
- [05:15]
B
Yeah, yeah, north of that.
- [05:17]
A
Nice. And, and I think that probably like the most interesting thing just like about you is like you talked about you built our X bar, you sold it and then I think you basically had to wait on non compete and then just you immediately just started almost the same kind of company again. Why did you do it?
- [05:37]
B
Personally, as an entrepreneur, I needed to go back in the arena and going on the adventure, I tried investing and it just wasn't. I don't have the temperament for it.
- [05:50]
A
What's so hard about investing for you?
- [05:53]
B
The feedback loop is really slow. You have no control. You don't. I didn't find myself. I didn't get mastery or, like, learning anything. It's kind of. I think, like, investing is nice because you have. It's good for lifestyle. You do get to study a lot of different markets and learn, but I'm someone who gets obsessed and likes to go really, really deep on something. So. Yeah, so investing wasn't for me is. I just want to have another adventure. And then second, like, I looked at other, like, a bunch of different industries and categories, but, like, the one thing I really, really, really, really know well is food. And it's like my whole family's background. So it's like, you know, it's like when I die, that's like what it will say on my grave. Like, the bar guy or something like that.
- [06:49]
A
Yeah, the protein bar guy.
- [06:50]
B
Yeah. Like, that's, that's. And I'm like, I'm like, okay with that.
- [06:54]
A
Yeah.
- [06:54]
B
So just like, self awareness and then just. And then, like, I understand the market. Like, I, like, people want the most. Like, people want a product that. That can help them build, increase muscle and decrease fat. And I think the market wasn't offering that well.
- [07:12]
A
And I think there's something to be said too about just, like, doing what you're really good at. Like, for example, I did not really want to be an influencer. Like, it just. It just kind of happened. And I've been. I just kind of, like, have accepted. Like, I mean, I guess I'm pretty good at this, so I'll just keep doing it and lean into it. Like, why would I just remove all that skill set from my, like, repertoire of what I'm doing? Like, it's kind of a. It's kind of dumb not to do what you're good at. And like, like, you know, you, like, let's say you started, like, I don't know, like a trucking company or something. I mean, like, I'm sure you do fine or whatever, but, like, you don't have all the same connections. Maybe you do in food. Like, maybe you can leverage all the connections you made for the trucking company or whatever, but, like, just the nuances of all that. I'm sure you'd have to start from scratch.
- [07:59]
B
Yeah. Yeah. And, like, I started when I was like, 12 years old. Really, like, just listening to my dad and then My first jobs were, you know, internships were doing supply, raw material supply and then. Yeah, so like shifting a career is pretty expensive. And I think the world's so competitive, you just gotta. It just compounds all the knowledge. Compounds. And the knowledge is what's really valuable. I think it's where like a lot of entrepreneurs like look at Elon and say like, oh, look, he shifted from this to that to this. And he's just like an n of 1 and I can't learn as fast as him, so.
- [08:38]
A
Well, and it's Also not like SpaceX started a couple years ago. Like he been, he's been doing it for over two decades now, so. And it wasn't like it was successful right away either. Like it took him, I don't know, almost 10 years. I forget exactly like all the timelines, but like it took him like 10 years to just get one to work in the first place. No, it still took a really long time.
- [08:57]
B
Yeah, totally. But he did, he did go from the Internet, two Internet companies to just straight complete pivots.
- [09:04]
A
Yeah, fair, but, but it's also, I think it's also an argument for like, you should do things that are actually really hard. Like, you know, you don't just like in food, you see a lot of people, they maybe just like work with a contract manufacturer, take up existing all ingredients, makeup, brand that kind of looks like what's already out there and you just like make, make, shopify, store and you like, you pay some influencers or whatever. I probably like didn't describe this right. But like it feels like that's what everyone kind of does and they don't do anything that's different or harder. Like you're not really inventing anything new per se. And I mean, I feel like it's like that in every category. Maybe, maybe I'm wrong, but. Or not just food, like every, every business, right? Like you got to do something that's like unique and difficult.
- [09:50]
B
Yeah, for sure. And at least I can speak on food is there's sort of like no more white. There's very little white space in food and everyone has the same materials. Your kind of like only differentiation is art, which is brand, which is super abstract. So yeah, in food it's super, super hard.
- [10:14]
A
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- [12:27]
B
Yeah, so quickly on RXBar. Pretty resource constrained. So me and my co founder Jared started it. We each put $5,000 in and kind of built a business the old fashioned way. Like started in my parents basement, you know, made 100 bars, sold it locally, took those, made 150 bars, et cetera. So really like brick by brick.
- [12:55]
A
How did you, how did you like convince people to use it and try it in the early days, like walk into the store, give it to them, they'd place an order.
- [13:05]
B
The market we started was CrossFit gyms which was really Uncompetitive. So it was like a perfect early adopter market. And so the strategy was let's dominate that market, be the protein bar for that market and then figure out across the chasm to the natural food channel and mass market.
- [13:28]
A
It's kind of the thing I think about a lot is like, can you figure out a new distribution channel? So like that was a distribution channel that probably didn't have a product like that that you could basically slot into. Yeah.
- [13:39]
B
But it was totally uncompetitive and it was all like just product market fit. Like we, we didn't do anything marketing wise, no ads, it was just trial sampling and getting awareness. So you know, we got to like 10 million there and then crossed into. So we've rebranded, repositioned and then went into the natural channel and took off from there, had product market fit and then sold in four years to Kellogg for 600 million. And then I had a five year non compete. And then the story of David, from RX to David is a bit of my own journey through nutrition. So RX bar was really ideological. It was a paleo protein bar, sort of like this ancestral idea and ideology. And then with David it's really more about nutrition and evidence rather than ideology. So it's like a fundamental different positioning. And the reason for that is like at our expo, all the early adopters of ours that were doing Paleo had all those consumers and customers moved. Like two years later they're doing keto, then they're doing Carnivore. And so they just. I saw all that and it was really a vulnerable position. And so, yeah, I wanted a position that like just was really based on nutrition, like actual science and evidence, not just like, yeah, the ideologues of Paleo. And so, and then with David. So the product, like if you design a protein bar from first principles, like what people actually want is the most protein, least amount of calories and then it has to taste good. And so we just designed that and through designing that we encountered a fat technology called epg and that completely changed, just enhanced the product tremendously because you have these choices of do you want to use palm oil? You need fat for taste, texture. It's funny, you don't realize how important fat is in food until you remove it.
- [16:09]
A
Yeah. And then there's these like no fat. Wasn't like no fat and like fat free, no trans fat. It's been all these like diet trends over the years is actually removing it.
- [16:17]
B
Yeah. And they removed it and added sugar,
- [16:20]
A
just like way worse.
- [16:23]
B
Yeah. But the thing about fat is, like, that's the biggest driver of calories. And so you do you. You like the. If you look at the. The highest level from like a public health perspective, not so much in Ann Arbor or in New York, but the biggest issue is over consumption of calories called energy toxicity. And so most negative health outcomes come from that problem.
- [16:56]
A
From eating too many, consuming too many calories.
- [16:59]
B
Yes. And so it turns out if you just don't overeat calories, most of the negative health outcomes are mitigated. So. And then. And then obviously, here comes, you know, GLP, GL. The GLPs and why they're so popular. So anyway, we designed the product with that in mind, because when you think about nutrition bars, like, you're not eating them for pleasure, you're eating them for very much a nutrition goal. And typically, it's body composition, increasing muscle, losing weight, body fat, typically, that's the only weight people really want to lose. And so that was what we focused on. And yeah, I think we have a really killer product and we got product market fit. So it's pretty hard to do that in food, to be honest.
- [17:52]
A
Yeah, it sounds like. So the biggest thing you did or one of the big things you did differently was thinking about it almost from retention perspective. Like, keep making sure your customers would continue to come back. If I'm getting this, like, super. I'm not taking away all the romance of it. It's like, basically, like, will the customers, like, not churn? Essentially is like what you were trying to crack and figure out with this.
- [18:17]
B
Yeah. Why the customer churn. But it's all. Actually, the main. The main thing is like, studying why do people not eat protein bars.
- [18:28]
A
Interesting. I love protein bars. I eat them too much to the point where it has probably not been healthy for me as a person from eating too many bars.
- [18:37]
B
Yeah. So you find some people are like, it's kind of binary, like, oh, I eat them and I love them, or I just don't really eat them. And so if you look at the reason why people don't eat them, it's usually around taste, texture, and then the second would be nutrition. Like, you can kind of have. You can really beat the nutrition on a protein shake ready to drink or a protein powder. And so what David was able to do is actually, like, incrementally grow the market. And so around 40% of people that eat our product are, like, previously not protein bar consumers. So. And that's always just a reflection of value and serve, like people that order
- [19:24]
A
on our website, you just like a pop up question.
- [19:27]
B
Yeah, pop up question. And anecdotally you see it as well.
- [19:31]
A
So then what else did you do differently? Because you, you could argue you started like a new CPG brand and like it hits all the same things you run into with other CPG businesses, like in food businesses. Like what did you do specifically to say like, oh, this is going to be like a lasting, durable company.
- [19:47]
B
The main thing is our product differentiation. It's just so strong and then going into different categories. So diversifying outside into ice cream, we'll have other categories we're going into. And then we actually are migrating the business to a different organizational structure. So the parent company is actually called Medici. And then we'll have multiple brands underneath Medici and sort of a hybrid model. So the first brand is David, which is all about protein to calorie ratio, really high performance. We make a high tech ice cream, high tech protein bar. And then the second brand we're launching in September is called Hall Pass, which is better for you confection. So think of it as like, so chocolate has a lot of calories from cocoa butter. It's all fat. So we make it low calorie, low sugar, like tastes amazing, low price chocolate. So wafer sticks, peanut butter cups. And so the way to grow when you think about the brand, a brand is just a human. It has an identity. So David has its categories and its identity where it can go. And you really have to let that asset be. So there's a ceiling on David and it's between a billion and 2 billion in revenue. And so what's really important is not forcing that, forcing certain products into that brand and just letting that asset be and then creating multiple assets with different identity to pursue different consumer needs. So Amadichi will be creating multiple brands that do.
- [21:40]
A
That would be an example of messing up the David brand. What do you think you probably shouldn't do under this? Understanding the limitations and not straying too much.
- [21:50]
B
Yeah. So David is all about protein. So building tools that help you increase muscle, decrease fat. So maximizing calories from protein. Something that would not be in that identity would be like doing gummies or like anything. Not protein. Like. Yeah, like even. Yeah, so. So anything. Yeah, so the parameters would be just maximizing calories from protein, calories coming from protein.
- [22:21]
A
So it's sort of like what's, what's like the brand staple. And like if a product doesn't f. Fulfill that like promise and you almost like create a new promise somewhere else that you Then build around and then once that reaches its limitations, you almost like make another brand promise with to fulfill something else, whatever it is.
- [22:37]
B
Yeah, exactly. Because ideally you want a portfolio that sort of serves a broader population. And with Hall Pass, there's no protein in it. It's really fun for you products like why do you eat candy? It's like a pleasure thing. And I think the analogy is like Hall Pass is what Coke Zero did to soda is very much like that. And if you look at Coke Zero, great product, it's really a pleasure, it's a treat for you. It doesn't have much utility other than like kind of a little self reward. And so yeah, and it's that that discipline is important. And you, and you probably, I'm sure you see examples of food companies doing that. Like at some point you just like throw a bunch of shit against the wall. And like the good example is Doritos protein Doritos. Like, you know, Doritos is all about bold flavors. It's a huge business. I think it is like $6 billion in the US and then they did that. And I don't think it causes harm for them, but it just won't. I don't know if it'll really work. So yeah, the brand identity, it sort of defines where you should go and how you should go with your products.
- [24:02]
A
One thing you specifically mentioned, I don't think we were recording when you talked about this, but food businesses usually suck. They're terrible investments. But you went out and you actually raised a good chunk of money. I think it was maybe within the past year. So why did you go out and raise money? And how did you convince people that they should invest in a food business when they're. Historically, it's not the greatest. When you can build anything, Amplitude lets you know how to build the right thing. Use human language to get complex answers about your products. No more manually selecting events or building charts or dashboards. Just ask. Use agents to sense changes in customer behavior, decide what's causing them and ask you if it's okay to fix it. Continuously in the background while you work. Get the answers you need while building directly in the tools you are already in. Like Claude Cursor, Lovable and more. And for the first time, understand if your agents actually work. Measure quality, debug failures, experiment and measure their ROI with agent analytics, Amplitude with AI analytics. All you have to do is ask. This episode is brought to you by Merge the Connective infrastructure for production AI. The hardest part about building an agent is everything around it. Connecting to the tools your team and customers rely on. Letting agents take action with the right permissions and keeping everything reliable and cost efficient. Once you're in production, Merge handles that all for you. It connects agents to thousands of tools, handles permissions and LLM routing and lets teams move faster without building it all themselves. OpenAI, Dropbox and Ramp all use Merge to move faster and build AI right? Visit Merge.devTurner to start building for free. That's Merge.devTurner to try Merge for free.
- [25:44]
B
Yeah, like CPGS businesses are not really venture backable. Like statistically you just look at how many. They're just really hard, you can't really differentiate. It's hard to get a billion dollar exit. But that all changed for us when we acquired the, our one of our suppliers that had the IP around the fat replacing technology, EPG certified peroxidic glycol. So that just changed our trajectory completely. So vertically integrating that technology and then building a platform across different brands using that made our business venture backable because now we can go build multiple brands. We have something that makes really differentiated products. We can get product market fit across different things. And so the, you know, the TAM just completely changed for us.
- [26:50]
A
But couldn't you have done that without acquiring the supplier? Like why did you have to acquire them?
- [26:55]
B
One, they weren't able to scale this. They needed capital to scale the manufacturing. And so yeah we needed, we needed capital to buy them and scale it. So it took a lot of capex to get their the capacity where it needs to be.
- [27:12]
A
So then how do you think about maybe vertical vertically integrating in other aspects of the business? Like what do you, what should you be doing internally as a, as a food company versus outsourcing?
- [27:24]
B
A couple factors to think about is like how difficult is it? Meaning are there other. So like manufacturing for example, is it. Is that of commodity process? Is it something that's. There's a robust market for it where there are a lot of players. So for example bar manufacturing there's a lot of people that there's a lot of capacity out there. You could lock up a line. You don't really need to capex. So that one doesn't make sense. It will make sense once you get to mega scale and then you do a hybrid approach. But it's just not a good use of capital to be honest. On the ingredient side, it probably only makes sense if it's proprietary because if you're, if you're, if you're in the like right now, being in the, in the Dairy protein business, it's a really great time. Dairy like whey protein is like 14 bucks a pound. Historically it was like six or seven. So they're like making a lot of money. But the problem with agricultural products like that is you, you really can't control the demand. Like they just, they're really volatile and so it wouldn't be a good use of capital for us. But the reason to buy vertically integrate raw materials is to secure supply typically. But it wouldn't be like where we make money and what we're good at is just making brands and making finished product for consumers. So anything that helps us do that better you can justify. But yeah, it's not a capital efficient I think just to buy stuff, just to integrate certain things.
- [29:06]
A
Yeah, it almost seems like it's, it's like about wherever there's like limited supply, like with the raw materials it sounds and the manufacturing capacity there just like wasn't enough and you just kind of needed to. Need to capture what was out there and then also make it, make more of it.
- [29:20]
B
Yeah. And they had, they had ip. So buying ip, if it's real IP is super valuable.
- [29:27]
A
And is it when you talk about like the other tent pole brands you're going to create, is it relevant across all of those or just specifically to protein?
- [29:35]
B
Yeah, yeah, yeah. They'll all utilize EPG for the near term.
- [29:44]
A
So then what's the context of the name Medici that you mentioned?
- [29:48]
B
The Medici family? Take it back to history class. There were they were responsible or they created the conditions to get Europe out of the dark ages. They were really credited for creating modern banking and the application for us. So why the name is they were the patrons of both Michelangelo, who made the masterpiece the sculpture of David, which is our namesake, but then also were the patrons of Galileo who developed the scientific method. So the cool thing about our business, which I love, why I love working here, is it's a combination of both the arts and sciences. Like if you look at our organization, we have chemists, we have team of food scientists, but then we have like creatives, artists, all in the same world. So yeah. So the way our parent company works like Medici organizationally is where the cash is, it's where the talent acquisition or people are and it's where the product development is in the sciences. So and then so Medici creates the conditions for all that magic to happen. And then the business units underneath David hall pass and svelte the other one, the ones that make it happen and bring it to life.
- [31:24]
A
It's kind of like bringing food out of the dark ages, maybe, where we're like, we kind of already talked about it, but it's like, maybe there's better times ahead.
- [31:36]
B
Yeah, there should be. I think a lot of the food entrepreneurs are predominantly Luddites. So that's our contrarian sort of view, is like, no, technology is the opportunity to advance society and make products and foods that solve problems for people. And so we're kind of the only ones doing that, actually.
- [32:00]
A
Why do you think that no one's really done it before? Because, like, it kind of seems. I don't know, we're 30 minutes into this. Like, kind of seems like it all makes sense. Like, why isn't this more common?
- [32:11]
B
I think a lot of talented entrepreneurs just don't go to food because it's hard and it's. It's not obvious how to differentiate. Nutrition science is not a real science. So therefore, you have a lot of, like, confusion in the market. Like, for example, you can't study. The economics don't work to study the effect of a potato on the human body. There's just not enough money in potatoes to justify the R and D budget to learn about potatoes. And so there's actually not a lot of money going into research and science of nutrition. And I think Peter Thiel is a quote, is like, if you ever put science behind something, it's not a real science. And so, like, nutrition science is not a real science. And, like, it can be, but, like, there's just no money in it. And so, you know, what is food? It's like, it's really. It's understanding biochemistry, like, and so it just doesn't exist. I think it's probably driven by the economics of it. So I think that's the main reason. And I mean, hopefully it will change in the future.
- [33:25]
A
Do you think? So is it like, the food companies are not profitable enough? Like, they don't have enough free cash flow to just start investing in the science to develop this out? And, like, they don't make enough from it.
- [33:38]
B
The big food companies have a different. They have, like, a different structural problem, is they're all public, they're all massive, they're all really profitable. And the reason why you buy the stock as an investor is for consistent earnings per share and a dividend. So you have this innovator's dilemma. So for them to actually invest in something innovative, that it would be a dilution of earnings per share, and then the CEOs would get fired, the stock would plummet, and they would get fired. So they're just not structurally set up to do much innovation.
- [34:14]
A
They acquire usually. Right. They just acquire anything that seems to be working.
- [34:19]
B
Yeah. And what they're really good is to scale and running multinational global supply chains. That's what they're really good at. And so they're just structurally not set up to invest in R and D in a meaningful way. And the point is, even if they did so just take their HERO skew makes a 70% gross margin. So then are you going to disrupt your hero skew? Like. No, you're probably not going to. That takes a lot of courage to do that. And the point is, the actual people who own the stock don't want that. They want the gross margin, they want the dividend. They don't want to dilute earnings per share. So structurally they're just set up for acquisition. Mostly.
- [35:09]
A
I feel like anytime I meet someone who's legitimately proud to be a shareholder of one of those big CPG companies, it's a great grandma that like lives off the dividends or something.
- [35:18]
B
Yeah, yeah, exactly.
- [35:20]
A
And then I mean there's, there's probably like these like more passive funds that own it. I feel like there's. Everyone's always trading in and out based on like factor analysis and momentum and like whatever kind of exposure you want. But yeah, there's just like not very many people that are like dedicated long term shareholders of like a big publicly traded CPG company. Like what you usually see is, I feel like every year or so there's like a. Some activist hedge fund that comes in and like we gotta spin all this stuff out. And that's, I mean that's the extent of like the dedicated investors that actually want you to do stuff. And it's like destructive to building a bigger business. It's like splitting it apart and you know, maybe you increase shareholder value, but it's. But not, that's not what you want, David.
- [36:04]
B
Yeah, no, no, totally. And that it's. It has to be very difficult to manage those big CPG companies like Pepsi's going through right now. I think, I think they have Elliot trying to break up the Frito Lay business. So imagine that like you're just distracted by all these things versus really focusing on technology or innovation that could provide value in five years. So like that lays the opportunity for us.
- [36:31]
A
Well, and that's probably like the argument of why founder led businesses usually outperformance. Because you have somebody who owns a majority stakeholder who controls the business and will get fired if a quarter doesn't go well, but then you also have the incentives of like playing the long game of like this is like a ten year thing but like we're gonna win and like I'm incentivized to get this done. And if like two like you see it with trying to think of like companies that have maybe gone through it kind of recently under like, I mean like Apple, right? Like Steve Jobs came back. It's like his company is like objectively like not doing very well and to the point of like destroying hero products. They like didn't they shrink the SKUs down to like basically four products and they just like simplified everything and now it's one of the most valuable companies in the world. I mean maybe not a perfect analogy, but I feel like they're like that's kind of what you have to do.
- [37:24]
B
Yeah, I totally agree because like yeah, being a public company CEO, getting hired to a legacy business, that is enormous. Like what are you going to say? We're going to risk it all for something that's not proven? It actually doesn't make sense. But they do have. Coke's a good example. As a brand and a beverage. The beverage companies seem to be doing really, really well at scale. But I'm sure they have problems. But like Coke has grown. Coke and Pepsi both have grown pretty well over time.
- [38:05]
A
What do you think is different about the, the liquid like does the lick. They basically just sell sugar to people who then bottle it. Like do you have higher margins or is there like more? Is like there's like something that's easier about that or like are they more like defensible in some way or so
- [38:22]
B
with difference in food and beverage. So with beverage the cost of shipping is so high that you have real power and just being able to control distribution and think about beverage. Like if you go to, if you go to a, if you go to a restaurant or you actually don't have a choice, there's like Coke products are there. You know what I mean? It's not like whereas in a grocery store you have, there's a more of a full market. So that's called like a push market where the products are being pushed to you. And then with beverage, LTV is really good. You don't get fatigued on beverages. So the distribution is really expensive. If you can control that, you have a moat. But then the second thing is you don't get product fatigue. And so I don't know what beverages you like, but you kind of like live, you live with them your whole life. Whereas food Items you sort of have fatigue and you move around. Like you. They're less. The LTV is not as good as in beverage. And the reason is liquid. It's just harder to get fatigued on it. Whereas food. You. The. You sort of. It's easy to get fatigued because of the sensory experience.
- [39:43]
A
It's kind of interesting because when you explain that, like, the. I'm assuming, like, beverage maybe has lower margins or more fixed costs necessary to like, distribute the thing, which is then actually more defensible. Like, it's more capital intensive, but it's actually more defensible because it's harder to displace that.
- [40:05]
B
And then, like, if you look at. From an investor lens, beverages have the best outcomes historically, but have been the most capital intensive. Like, very. Like, you got to get them to scale. And they're usually really, really expensive to get to scale. Yeah. Because the gross margins are terrible in the beginning.
- [40:24]
A
Interesting. I mean, have you guys weighed then getting in a beverage, like a protein drink? I'm sure would be. I think those already exist.
- [40:32]
B
Yeah, we're looking at it.
- [40:34]
A
So then how do you decide what to launch? Like, how did you go through this process of. Within David. But then also building, like, other tent poles that you're doing? Like, how do you. How do you do a. Like a project of, like, figuring out what to do?
- [40:46]
B
Yeah. So obviously we started with the. Our gold bar. That was just because I knew it the best. And then so one. One factor is just like, can we make a product that's materially better than what's on the market? And I say, like, subjectively, like 30% better. And in all factors, taste like customers want. Customers always want three things. Better taste, better texture, better nutrition, and better pricing. So if we can deliver those things, we have a good shot at product market fit. And then that's one framework. And then the other one is where are their products that are dependent on a lot of. Where are there products or items that have a dependency on fat to taste
- [41:38]
A
good because you have the tech to replace the fat.
- [41:42]
B
Yeah, fat and sugar, basically. So I just have a nose for fat and sugar. So where there's a lot of fat and sugar, those are the areas we can really innovate. And the products that have a lot of fat and sugar are usually the best. So perfect example is ice cream. It's cream and sugar.
- [42:00]
A
There's like pure fat and pure sugar. Yeah.
- [42:03]
B
Like, one pint can be 1400 calories. To give you an idea, it's like, it's a lot so that's like, that's why our ice cream products, probably our best product we have is because it's, that item is so dependent on those things and we can, we can do that. And so chocolate is an example. It's mostly fat and cocoa butter and then mostly sugar. So high calorie, high sugar. We can make a low calorie, low sugar. And the other one is frying is a, is an interesting space. So we can fry an EPG and we can make a tortilla chip that's half the calories.
- [42:42]
A
Interesting. So what, what other fry? So this is frying like you deep fry to then crisp and store and ship it. This is not like a, like chicken nuggets. Are those deep fried in some way?
- [42:56]
B
Yeah, they're breaded and fried. Yeah. The best foods are like a donut's, like it's fried sugar bread, basically. So it's probably the worst thing you
- [43:05]
A
could eat, but the best tasting thing you could eat.
- [43:08]
B
Yeah, fat and sugar is the best. So we can remove a lot of calories from the American diet doing that. And that's the opportunity.
- [43:19]
A
I mean, that's basically what GLP1s are kind of doing.
- [43:22]
B
Right?
- [43:22]
A
Is it just removing calories from the diet? So you're almost like doing the same thing where you're just like, you can still eat your donut, but it's just half the calories. So you either eat the same amount or you eat twice as many donuts. Either way, good benefit for you. You get more of it or you get less calories.
- [43:37]
B
Yeah, and that's why, like at the highest level, public health wise, like, if you just don't do that, most of your negative health outcomes are, are like mitigated.
- [43:47]
A
I mean, that seems extremely simple. Just eat less calories and it solves all the problems. Like, why has that not.
- [43:53]
B
Because it's so hard. Because evolutionarily we've never lived in like abundance in the same way. Like the most disciplined person. It's, it's very hard to resist the like the hormonal response of to eat. So I mean, even like. Yeah, that's why GLB1s are just such a breakthrough. Like now it's arguably a choice, like once it becomes affordable or more affordable, it's kind of like in 20, less than that, maybe like 10 years, we'll look back and be like, remember when people like obesity was a thing?
- [44:32]
A
And so how do you think that's changed? But then going to change the economy, like, how do you think through second, third order Effects, especially with what you're doing selling food to people. Because you could argue market shrinking. This is a terrible space to be in. In theory.
- [44:47]
B
Yeah. On the food side. So if you look back at the history of, like, nutrition culture, what do people eat? Like, it was really driven by weight loss, at least in America. And so diet as an intervention for weight loss will no longer be the main intervention. GLP1s are the main intervention and they're about a thousand times more effective. So the idea that someone's going to go on January after the holidays onto a keto diet versus taking a GLP one is like, that's. They're just not going to do that anymore. So that what happened is like the. Yeah, so like, diet trends are over in that sense of being the main intervention. So you're used to being in the food business. You'd see these volatile swings of, oh, carbs are in, carbs are out, starve yourself fast, eat six small meals, low fat, high fat, paleo keto. You saw this just volatility. Those days are over.
- [45:55]
A
So why did we do that? Because, like, don't you go, okay, I've been through five of these diet trends. Like, I'm done with these. These don't work. But people just keep, keep doing them. Like, why did it, why did it work?
- [46:05]
B
Yeah. And well, and they, they like, they kind of work. So, like, these elimination diets is. Which they are, is like, don't eat this. This is good, this is bad. They do work. They're just not, they're not. You have to be really compliant and being compliant super hard. And then you just go back. So. So I think diet trends are over to the degree in which they were these massive cultural swings. And another funny, I think effect is, this is a funny one socially is I think people are going to have more sex. So sexual activity, I think, goes up actually broadly because people look better. Right. If you want to have sex with yourself, you're going to want to have sex with someone else. So, yeah, those are the two big effects of GLP1s is. And our portfolio is perfect for GLP1s because you have David for when you're on them because you need protein or else you're going to get the negative effect of muscle loss. And then when you're off of GLP1s, you realize, oh, calories do matter. I don't want to get fat. And so you're going to be more conscious of nutrition. Yeah.
- [47:19]
A
And invested in a company called fort. It's basically a wearable for muscle health, there's no real wearables that help you get stronger. So it works just like a whoop or ring, et cetera, more targeted towards women. And just when you do strength training, it automatically tracks your workouts, gives you data around how can you improve things you need to work on. They're in like a similar position where they're. They're like actually seeing. You've seen over the past couple years, like, more interest in just like getting stronger now. I mean, I feel like it's on, like, the spectrum of like, everyone wants to be stronger, you want to be better looking, you want to look good. That's like the, like the peak human is just like, looking the way you want to look.
- [48:01]
B
Yeah.
- [48:02]
A
Like, we're.
- [48:02]
B
We're basically social animals. And like, I always say, like, on Twitter, someone's like, you're like bicep veins, like the new status symbol, you know what I mean? For men. And it's like, I can see that. Yeah. And it's like, it's a perfect example is like, like, well, that guy Calicular, like, why did he get so popular? And it's always like, he's so extreme and vulgar, whatever. But, like, he's right. Like, there's like a truth to what he's saying, and it's like, it's just funny. But my observation, it's like it's. It's all compounded by zoom. Social media. Like, everyone's on camera all fucking day. Like, remember before COVID we used to do conference lines where you just could call into a conference. There wasn't no video, but so like, now everyone's on video constantly. So you're just like, hard not to be self conscious. And you have like this like, FaceTime culture of like, you know, like,
- [49:04]
A
so
- [49:04]
B
I think that's just all exacerbates. And now you have. So it's like our societies. So it's like our society. It's like a eating disorder because of all this stuff. And now there's a tool that makes it really easy to achieve that and it's getting more affordable. And so, like, I just don't see a world where that just doesn't continue. But it's really interesting, like, to like, anthropologically, to watch it all happen.
- [49:31]
A
Well, I've seen like the, like, the thesis or whatever is like, just look at what's happening in South Korea. And we kind of were a couple years behind them, and I saw a statistic. This is probably about a year ago, it was something like 50% of women in South Korea, under the age of 30, had gotten plastic surgery or something like that, like kind of an insane statistic. And it was a lot of just like nose job, eye lift, like maybe smaller cosmetic things, but it's basically just like what you get from like a Snapchat filter or whatever or. And it was just like cosmetic things. Like. And I mean the, the other thing is like leg lengthening surgery. Like that's kind of a thing that you can kind of do now.
- [50:10]
B
Yeah, yeah. Everyone wants status and attract a good mate. Like these are fundamental human things. So like now there's technology that's getting like. So people are going to do it.
- [50:21]
A
Yeah, well, and you think about like abundance of humanity. Like, I don't know, a thousand years ago we were just like, we spent 90% of our lives just like trying to get food and then eating it. And like that was it. And then now when you think of like, okay, you, you make like a million dollars a year. You're not going to spend a million dollars on food. You'll spend like whatever, whatever you need. And then it's like, okay, you go from making 1 million to 2 million a year. Like what do you spend that on? You're just like, get a bigger house, you, you get another house. Like you pay for your kids to go to a better school or like being healthier. Like you'll get the $10,000 a year like on call doctor or something like, or like, you know, you get to the point where you like, you have a private jet and you just, you can get things faster, you can get places quicker. Like it's all about, we don't spend on those like basic needs anymore. We always, like, as you get more resources, you just spend on things that are either like personal achievement, like status type things or just like making your life easier, giving yourself more time, essentially.
- [51:23]
B
Yeah, it's like how you travel where you put your head down at night.
- [51:26]
A
Yeah. How comfortable that is.
- [51:28]
B
No. Yeah. And I just see with anecdotally, with my like entrepreneurial friends, like 10 years ago they weren't into health. Like, no one worked out. And now everyone's like optimizing and. Yeah. And trying to look good and be healthy. And so it's a new status symbol for sure.
- [51:45]
A
But it is, it is like pretty crazy though that even 10 years ago it's like, hey, if you sleep three hours a night, you're not going to be able to function properly. Like if you get, if you like drink a lot of water, you work out, your brain is Better. Like you get a lot of sleep. Like you will perform better. It's just kind of nuts that just now it's a thing like, why did we not care about this 10 years ago? It's just kind of fascinating that it wasn't a thing when it probably should have been.
- [52:09]
B
Oh, it's so obvious. It was actually like when I first started being like getting in the workforce, it was like cool not to sleep really.
- [52:17]
A
Okay. I was feeling shit when I don't sleep, like I can't function.
- [52:21]
B
Oh yeah. It's really, it's super counterproductive. But. And like, and you think about like the importance of health. Like sleep's number one. If you don't get that, nothing else fucking matters. Second, I'd argue is exercise like movement. Even mentally. For me, it's like the most important thing. And then three, then it's like nutrition. And nutrition's just about not up. Like, don't you know? I mean, it's like managing the. It's like asymmetric meaning. Like if you just dial in everything right nutritionally and spend all this time, like the benefits that. But nutrition's about not up. Like the downside's enormous if you overeat, if you just bad, bad macronutrients, not enough micronutrients. But like the real energy should be on sleep and exercise and the nutrition just don't, you know, it's pretty simple framework to follow. You don't. It's not rocket science.
- [53:15]
A
I feel like nutrition can flow into that though. Like if you drink a bunch of coffee at 9 o' clock at night, like you won't sleep. So you do have to kind of.
- [53:23]
B
But that's like, that's format, that's pharmacology. That's not even nutrition. You're taking caffeine. You know what I mean? Like my, my point is like whether you eat a chicken or tuna or like doesn't like these. Some people obsessed over like the total optimization of little things. And it's like you just got to get your macronutrients right, your calorie balance right, and then make sure you cover your micronutrients. And there's like fiber, other things, but it's. If it's not that hard where people get in trouble. Nutrition is like over consuming certain things. Like, you know, the dose makes the poison and, and I just see people like obsessing over like the little things and then they're not dialing in their sleep or exercise. It's like, like you should wait sleep and exercise Way more than anything else.
- [54:11]
A
Yeah, that's a good point. So then I guess, like a slightly different topic, but I feel like you it most people listening to this or watching, they probably heard of David before they pro. Like, just because you guys are good at getting attention, like, how do you think about generally marketing? Like, what is your approach at a high level? And then we can maybe get into more like, tactical stuff. But how did you think about marketing a product?
- [54:38]
B
I would start with marketing a brand.
- [54:43]
A
Maybe it's creating a brand in the first place. Yeah, yeah.
- [54:46]
B
So it really is like, that's the foundation. So you really need to create a brand is what is a brand? It's just an identity. And the analogy I use, it's like a human being. And so. Right. Like, what does it look like? What does it wear? What's its religion? Who are its friends? What if its belief system? What if it's personality type? So like defining just like a person, you wanted to have a clear definition of what that is and that. That identity. And then when you think of so. And you think of like, you know, I'm sure you have friends that are just like super boring. Right? Like, there's. Those aren't good brands, Right. Like, they're just. They might have some other purpose or whatever. But, like, great brands are usually like this polarizing thing or they have a strong point of view on the world. And if you just look at our, like, human role models as an example, like the ones that are like, bold or have a strong point of view or polarizing are typically the strongest. Brands like Trump's a perfect example of that as like a personality, like, super polarizing, super strong brand. Everyone's heard of them, like, the most. Yeah. So. So brand as an analogy is like, just think as a human, right? And so you have to define that human, and then that's the foundation for your marketing. So for David, for example, like Michelangelo's masterpiece, the Sculpture of David, our symbol's the chisel. The chisel is a symbol of intelligence, discipline, and beauty when you apply the chisel. But the chisel's like this really rugged tool. It's like it's just a nail, but you can create a masterpiece with it. And so we have all these values and identity in it. And so from that, it's easy to market. So our param or our framework for what we do is everything should be around discipline, intelligence, and then beauty. So if you look at our image or identity and some of our marketing, it's usually around those three values as A brand. And so that's when in the brand world, there's nothing more toxic than saying, oh, that's not on brand or not on brand. And that's usually. It's like. So it needs to be very clear what is on brand. And so for us, we have these, like, these values that make it. It just makes it easy. Like, so then the whole team can be like, oh, no, that's not. David. That's not like. That's not what we do. And then, you know, there's performance marketing, brand marketing, and then there's just a framework I use is like, it's really like poetry and riddles. Like, great branding and brand marketing. It's like. And so it just can't be obvious. Like, and for example, like, so. So for example, the most obvious. Like, we always get candidates doing case studies. And like, there's the same ideas come up, which is like a golden ticket. Like Willy Wonka or something. David and Goliath, like, do a meetup with all these Davids. Like, people named David.
- [57:57]
A
Like, that was all. Makes sense. Like, I get all those.
- [58:00]
B
Yeah, no, yeah, yeah. And they're not. They're not like, funny. Like, they're not like. And so it's like, how do you find something that is true? That is like, not. Is not obvious? It's really actually, like, contrarian thinking applied to this riddle. Or branding or like, so that's like brand marketing. But then there's like tactical performance marketing, which is in our business, it's just getting trial and getting product in people's mouths. So there's all these different levels to it. But the fun stuff's brand marketing.
- [58:44]
A
So you think that humor is like a big piece of it or like, oh, 100%. Do not enough people do that? I mean, I agree with you. 100. I'm probably like, one of the. I'm very serious about what I do, but I don't take myself that seriously, if that makes sense. Like, I think I host comedy shows.
- [59:01]
B
Like, oh, yeah, it has to be. So here's like, all right, how does. On the Internet, how do things travel
- [59:10]
A
in the group chat?
- [59:12]
B
Yeah. So it's either. It's the. So there's two ways that, like education or, like, informative. But we're entertaining, which is funny. So like making educational stuff. Travel is pretty fucking hard. So humor is what travels. Like, so to me, yeah, it's all about having a good sense of humor is like, mission critical for a growing brand. I think, like, you know, if you're like Coke Zero Coca Cola. It's like a different game. It's like, it's basically preservation. Like, don't fuck up. And it's. Everything's working really, really well and we have a hundred plus years. But when you're a growing brand sort of trying to take attention, a share of attention, I think it's like, how do you get things to travel? It's humor, cleverness.
- [59:59]
A
I feel like humor is kind of risky too. So, I mean, you have to take risks if you want to grow. So. And humor is because, like, I could say something that I think is funny, but it actually really offends a lot of people and maybe gets me in a lot of trouble. And that can, that can be good, but also like, that could be really bad, like, to exponentially detrimental to the brand potentially if you do it wrong. So. Really? Yeah, if you're Coke Zero, it's like, don't do anything funny. Just throw the. Yeah, just throw the Coke Zero brand on a, on a soccer jersey and like, that's, that's your marketing.
- [60:33]
B
Just get impressions. Totally. But if you're like, you know, we're like, we're disrupted. We're like trying to enter the market. So it's a different game. But yeah, like, once, once we like have market share or we're at like our equilibrium, then we probably like risk off a bit.
- [60:47]
A
Right?
- [60:47]
B
Like, that's a natural thing.
- [60:50]
A
You could probably just like sponsor some athletes or whatever and be like, this, like, this guy's just the epitome of like, brand and protein. And like, we're, we're associated with him and like, we're safe. Whatever. It's like what Nike does, Adidas. They just like, you know, they sponsor like Steph curry, give them 100 million bucks, and like, that's, that's the branding or whatever. Just like do some commercials.
- [61:09]
B
Yeah. Well, I guess back to my approach to marketing. I. We always look for mispricing. Like, just. And. And you brought up athletes, which made me think of it. Athletes are totally not mispriced.
- [61:22]
A
Like, they're optimally. Did you think they're overpriced? Probably massive.
- [61:25]
B
Massively overpriced.
- [61:27]
A
Because they. I mean, I feel like, especially in fitness, like, it's probably extremely. Because you're just competitive, right? It's like a supply demand thing.
- [61:38]
B
Well, and I. Here's what I like. When I was growing up in the 90s or early 2000s, like, athletes were like the main role models. We're in the Midwest, right? So like today there's so many More famous people. So, like, the proliferation of famous people. Like, Jack Welch was, like, the only CEO that was, like, cool from GE. Like, now there's, like, all these really cool CEOs that are, like, public figures.
- [62:05]
A
I could probably name more cool CEOs than, like, anything else. Like, Than athletes.
- [62:10]
B
Yeah. So. So. So the proliferation of who is famous, like, social media exacerbated this. So I think the markets are so different. And then athletes still get paid a lot, so their cost, they're just expectations high. And then the second thing, it's for the consumer. Like, you and I, like, we're fucking desk warriors. Like, you know what I mean? Like, an athlete is just so. They're, like, genetically gifted. They're not relatable. I can't. I don't. And there's not. There's not. There's no one like Jordan. Like, the days of, like, a real, like, icon slash religious figure. Like, they're not the same. It's like, either all of them are so good that there's no outlier in the same way. And then the second fact is, like, they're just so gifted in what they have that it's not really relatable to me. So for all those reasons, I think they're just mispriced. And then you have someone like Andrew Huberman, who's a real expert in his world, that is now a celebrity who is trusted. It's just. It's just. He's just competing, actually, with other athletes from. From an endorsement perspective.
- [63:23]
A
Yeah. So then how do you think about, like, how do you spot mispricings or opportunities?
- [63:29]
B
Okay, so there's, like, this, like, a vent. This is a venture one. So you know the new movie Obsession, that's like.
- [63:35]
A
Yeah, the one that's in theaters, I think, still. Yeah.
- [63:37]
B
So someone on our team saw that, and the actress Indy was just not, like, just emerging. So this was very much a venture thing. So he reached out to their agent and did a commercial with her right when she was about to be super popular. And so that's like, an example of, like, we took a risk on her, but it was very clear. She's super talented. And that movie is amazing. It's like a national headline. So that's an example. You underwrite it. Like, it's just like investing. Actually, it's very much like underwriting an investment. It's how we approach it.
- [64:17]
A
Yeah, that's because I've had. I mean, I do sponsorships in the podcast, and a lot of people feel like, you know, I feel like you're, you're, like your podcast is kind of undervalued or whatever. Which, I mean is the person that owns a podcast. Like that kind of sucks, I guess. Like I should be, I should be appropriately valued. But, but, but, but I do think it, I mean personally, I think it's true. I'm like f. I think, think. I think these, these turn out pretty good. A lot of people tell me actually the most common feedback on this is it was actually pretty good. Like I wasn't expecting, I was expecting it to be good, but they actually was pretty good.
- [64:48]
B
That's the definition of like happiness is expectation minus reality. So. So better than that, than the other way.
- [64:54]
A
Yeah. I feel like maybe like Caitlin Clark maybe would have been a recent example. Not right now, but probably a couple
- [65:00]
B
years ago we looked at her. She's like, she's, she's properly priced, but yeah, for sure, like she's great. You just got to get her at the right time. Because what happens is that you get like, you get the Coca Cola money, you get the, you get the big brand money coming in and just drives the price up.
- [65:17]
A
So you almost have to find things that are like too risky for them still.
- [65:20]
B
Yeah. Like here's a perfect example. We wouldn't do this, but some, someone's going to do this and we can do it. And I don't suggest us doing it so clearly. But porn stars, former porn stars, no one's gonna, they're like mispriced.
- [65:38]
A
The only reason I know about this company is because they, they sponsored, they did a commercial with Bonnie Blue or someone else. There's these like two year, these like UK only fans models who just like they broke records for like most sessions in a day or whatever. And they did a commercial with her. I think it was called Air. It's kind of like a Dropbox like file storage thing. I have no idea what the product even does. But it was a big deal that they worked with her and yeah, it was probably pretty undervalued for sure.
- [66:12]
B
So you're right about like there's this risk. It's just like investing.
- [66:17]
A
Yeah. So you almost have to figure out like what are some contentious, risky, attention getting things that are happening or going to happen that I could become attached to or do something with or just
- [66:34]
B
like you just like, like a barnacle, like you ride it and then get off.
- [66:39]
A
How do you know when to get out of like a marketing trend? Like I feel like for example, you know the people who climbed the Empire State Building with the Flag. And everyone was, like, editing the flag to, like, say their brand's message. I started to see people being like, this is the most uncreative, not, like, not. Not exciting branding I've ever seen anyone do. Like, so how do you think about if a marketing trend is worth, like, not doing or getting unattaching yourself from the.
- [67:08]
B
The. The comp is like April Fools, you know? Like, everyone does, like, some stupid fucking April Fools thing. Like, don't do that. You just got to be original. If it's not cool, like, don't do it.
- [67:21]
A
Like, yeah, it's like, coolness is also, like, a big factor of this.
- [67:27]
B
And, like, what is cool? Like, how do you define cool from, like, high school? Who is cool? Like, cool. I. I view it as, like, right. Like, thinking out loud is like, it's like someone who's funny, unique, or original. Like, like, why there. Why is someone likable like that? Right? Like, what makes someone likable? And I think there's like, a uniqueness or originality to them, and then they're, like, funny in general. Like, I think. I don't know about you. Like, growing up, all the cool kids were just, like, funny actually, or entertaining in an authentic way. So that's the parallel I would draw to it. And so, like, the flag examples, like, that was easy, kind of like pirating it. Like, taking. It's just low effort.
- [68:20]
A
Yeah. I feel like something that's happening more in, like, this is, like, kind of driving me crazy. So, like, I. I first started making memes on Twitter, like, seven, eight years ago, and it was, like, very novel and unique. Like, nobody really, like, made jokes on tech Twitter. And now that's, like, all that it is. So, like, I've been trying to figure out how I. How I have to modify my approach because I still enjoy doing it. It's just, like, not quite as effective, so. And I almost have, like, a barbell strategy now where I still do, like, memes and jokes. And the podcast is. It's mostly serious. Like, it's, like, laid back, but it's like a very serious. You know, you're learning. It's like edutainment, I guess, is how I think about this. But, yeah, it's so hard to just think about from marketing. There's so much competition. I feel like you gotta try new things.
- [69:09]
B
Yeah. You gotta be bold and you gotta take what makes a good meme. Like, if you analyze that. Because memes are, like, such powerful forms of communication.
- [69:19]
A
Yeah. What I found is it's something that everyone Understands, but no one's talking about. That's how I usually think about what the best ones usually are.
- [69:30]
B
Or.
- [69:31]
A
And it's something new too. Like, I think you're like, the first one to like, it's. And I think feel like it's a lot of, like, mashups, like pretty much everything at this point. Like, no one can ever do anything that's like, new. Everything's already been done before. So it's like some kind of. You're. You're combining different ideas and making something that is relevant today or. And then that's. That's kind of timely. Like, you usually have to do things that are. That are happening now. Otherwise no one gives a one thing. So when you guys did. You did this, like, viral launch for the can of fish, I think was like the most recent thing. How did you. How did you, like, approach going into that moment? Like, I think it was kind of this, like, pretty serious. Like, she was at the gym and then she just like, randomly just like, started eating fish off of a plate that was in her locker. I don't know if you did other videos related to, but, like, that was kind of funny, but it was like, pretty serious. But it was also like, I was kind of like, what the heck? Those kind of.
- [70:26]
B
I'll give you the whole story since we got some time. So we were making a comparison chart of our product versus, like, the market. And we just like, win on everything. Like protein to calorie ratio, sugar protein. And then actually Peter Attia, we were like, going over with him, and he's like, you can't trust a chart. You don't like when you see a deck, right? You never trust a deck where it's like, you're the best. You're the best. So I was like, I don't want a chart where I'm like, winning green in everything. And so we're like, well, what's better than our product? And the only thing that was better was boiled cod. So on our launch, on our website, we put boiled cod at the best protein to calorie ratio. It's about 85% of its calories coming from protein. And then we put our bar, then some other comparisons, and we just left there. It was like a quirky, dorky thing. And it's just funny. Like, COD is. Sounds like God. And it's actually like, bodybuilders love COD because it has this protein to calorie ratio. So this niche population loves this thing. But anyway, people would pick it up on Twitter. You'd Be like, oh, so it was like a riddle that people. Or, like, call it Easter egg. That's someone song. And then, like, in our launch, we were doing well. I'm like, I like, we got to do something funny. Like, we got to. I don't want to just sell another flavor, like. And so they were like, well, how about we sell boiled cod? And they're like, let's do it. And it wasn't just a stunt to, like, oh, it's just like, pretend it. Like, no, it's actually like, go sell
- [72:02]
A
frozen cod so I can go to the website and buy it.
- [72:05]
B
Yeah. And so we did that the first year, and then it was, you know, by measures, it worked financially. Like, we didn't sell much cod. Turns out it's really inconvenient and expensive, which is why you want a protein bar. Actually, like, it just, like, enforced our products, so there's a lot of layers to it. So, like, it's so, like, in our values of, like, that was like an intelligent marketing thing. And then, like, for me, I like. And then the next year, I'm like, all right, what's the iteration of this? How do we improve on it? And so it turned into can cod. And so that was our next innovation. And it was interesting, like, comparing the two. The can cod wasn't as successful, like, from an impression perspective as FrozenCAD COD1, COD2. And the reason I think the novelty is, like, not there. Like you mentioned, like, it needs. There's newness that needs to happen, and it just wasn't as new, so. But it was a good. It was a fun thing. And we still have. We still sell cod. It's part of our portfolio. Yeah.
- [73:14]
A
Yeah. We haven't. We haven't tried the cod, the David cod yet, but my wife actually buys canned sardines. Like, she just buys, like, canned fish and eats. Because it's just, like, an efficient way to do it. It's got good nutrients in it. So one thing that actually, that would be pretty interesting to talk about.
- [73:31]
B
You.
- [73:31]
A
I think you maybe hit on this a little bit earlier, but you had a lawsuit a couple months ago that. I'm not actually sure the full story, but I think people. It'd be interesting people to kind of, like, heard or to hear more about just how. How do you approach that? Like, if this happens to you as a founder, like, how do you navigate that?
- [73:50]
B
Yeah, it's really important learning so to bit on the context of the suit. So, like, what makes EPG great is that it tastes like it's full fat and calories, but the body doesn't. Can't metabolize it. And so one way of measuring calories is through a bomb calorimeter, which is essentially putting it in a chamber and burning it and seeing how much energy is in there. So for example, allulose fiber, those carbohydrate non nutritive carbohydrates would show up for calories, not zero, four or zero point or two. So that's not how I actually measure calories for the human body is not through burning them. However, the bomb calorimeter is one way to do that. So if you burn our bar, some of these ingredients will show up full calories. So they had a lot of litigation leverage so they could sue us. We couldn't counter sue. So anyway, total par for the course in food and in consumer brands. This happens all the time. Happened to me at rx. So when it happened, it happened. And it didn't go public. It wasn't like it didn't go viral. But so on TikTok, a really funny creator made a cultural video about Caitlin bars, which is from this movie, Mean Girls, which I had never seen, but it was like culturally really relevant because in the mean Girls, this one, the mean girl gives bars that make you fat.
- [75:31]
A
Okay, yeah.
- [75:32]
B
So culturally, like this creator made like connect the dots that like, oh my God. And it just went viral on TikTok. And then TikTok's this animal that things just really, really, really, really accelerate there. And the media cycle is like a week, right? What is trending and cool happens fast and it moves on to the next thing. But then Good Morning America, all the conventional or traditional media picked up the story as well. And like the headline's terrible. Like, you know what I mean? Like, you know, media is like, they just, they just going for clicks. So it's like there was no alleged. It was just like David's lying about their calories. So the way you have to handle, like you have to move super fast and you have to go direct and communicate. So our approach was like, the next day we immediately went into action and this was typically a TikTok problem. And then so like, right, how does information spread? So there's like education and then there's humor. So we did one video with One of our PhD chemists, Mitch Kohler, who's really great. So he just set the. An education video. Of course that doesn't go viral. Like, right, like no one's gonna sit for that. But that's there as a foundation for people to land on. And then the second one was like a rumors video. That's really good. If you go to our tick tock, you can see it. This is basically like all the rumors that aren't true about the company and that went viral. Got like 16 million impressions. So you just got to communicate and I think you have to use the truth and, and then you got to use humor. And back to that, like how do things, how do things travel? It's like it needs to be a. It needs to be travel. Like it needs to be able to travel. Needs to be a story too. So. And the good that's crazy is like we got 120 million impressions that week.
- [77:42]
A
What do you normally get a normal week?
- [77:44]
B
Well now like 50.
- [77:47]
A
Did that give you a step up in baseline going forward too?
- [77:51]
B
Probably, yeah. So like long run net positive because we educated everyone on calories and how they're calculated and we got a lot of impressions.
- [78:04]
A
Yeah. And I feel like it's another point of like with how humor, humor is like a top of funnel and then your education is more of like a bottom funnel. Right. Where someone might see the humor and like most people are just like, I was kind of funny, whatever. But then some people, oh wait, but that one rumor that's kind of interesting. And then you like get the 10 minute explainer video and then you like really, really get it and then. But most people won't see that. It's kind of like in like B2B marketing, right? You like make memes about your product and like that gets shared in slack and, and then like when the, when they're signing like a seven figure contract, like use the product, there's like white papers and like everyone's in the technical details. But like people don't want to see that right away. Like nobody about that.
- [78:44]
B
No one's got time. So communicate fast and be funny or like, you know, set the record straight. But you got to go fast. So.
- [78:51]
A
And one last question. Do you have like a favorite CEO, business or founder, just maybe multiple that you've just kind of gotten inspiration from throughout history that you've like learned from, borrowed from at Medici slash. David.
- [79:06]
B
Yeah, I mean a lot. I mean I, I've, I study a lot of them. So like in my free time I just kind of, I listened to Founders podcast, which I'm sure you know, and David Senra. And then I listened to the. I think it's a Sequoia one. I forgot what it's called. It's like the long strange road trip yeah. Long trip or something. The name, I can't, it's always in cursive, so I can't see it.
- [79:34]
A
Dysmithia, right?
- [79:35]
B
Yeah. Yeah. So I don't look at the word, but I, it's a really. I, I. So like my point is like those are, there's a bunch of different CEOs in that and I find it's actually like, I just love hearing all the different perspectives from a management and like culture perspective. I've, I've studied a lot of like Jeff Bezos and I thought he was really extraordinary. Brad Jacobs. I think he's done like managing like something I'm thinking about is like how do you manage multiple business units in a way?
- [80:06]
A
Because you're kind of doing that.
- [80:07]
B
Yeah. Like we're going to have four management teams. So like how I can't be in all those management teams. So like the relationship with time changes. Elon, obviously I just, he's just, he's just, he's not, I can't, you know, he's just so extraordinary. It's hard to like, can't really relate to. I find it hard to learn what he does because I can't do that. Because the hardest thing is how do you be a good CEO of a high growth company and a good father and husband and friend? That's the hard part I find myself in.
- [80:51]
A
Yeah. You have to pick in ways of how far you lean. And he's leaned fully into one of the directions.
- [80:59]
B
Yeah. That's like the constant unsolvable problem. I like Alex Karp just because he's so honest and at scale. Doing that I admire. And he's dyslexic too. So I'm always like, there's a chance for me. But I would say from proper management leadership was probably Jeff Bezos and Brad Jacobs.
- [81:29]
A
I feel like maybe. What did you learn the most from Bezos and Brad Jacobs? Maybe Bezos is. People have heard him before but Brad Jacobs, I mean I know who he is. I think he wrote the book about founding eight different billion dollar companies or something like that. I don't know how familiar people are with him. So what have you kind of learned from those two?
- [81:47]
B
I found. So Bezos leadership principles are so good. Meeting culture. We don't do that. Totally. Business reviews, disrupting yourself. Just strategy stuff. For example, our strategy on the food side is we know our customers want three things. They want great taste and texture. They want more affordable stuff. They always want more affordable things and they want better nutrition. So like that's Very much what Bezos I more or less imitated that with his business is like, customers want variety, they want faster shipping and they want better prices. Yeah. And so like, when in doubt, we should always be going in that direction. Like over time, we should just be always making better tasting product, better nutrition and lower cost items. And so that's an example of like just that strategy. Right. Like you just. It's very simple. It's the fundamental thing. And then Jacobs was such as an operating model. I listened to him speak on a podcast and I was like, oh. And the pattern is it's all about people. It's all about leadership and people. And what is a company? It's just organization of humans in a mission, all going the same direction. So making sure you have the right vision, operating values, operating systems and right measurements. And then, yeah, it's like people and product.
- [83:30]
A
Do you feel like, do you learn more from non food businesses or is it like.
- [83:34]
B
Yeah, completely. No, all non food, basically. I learned from. On the brand side, you learn from. I learned from the best brands, which are like, arguably, I think it's like beauty and fashion are the best brands. And then I think tech companies, you learn a lot on the management and innovation side.
- [83:59]
A
Why do you think brand and beauty or sorry, fashion and beauty are so good at brand. Is that the only way to differentiate? So they're kind of forced to.
- [84:06]
B
Yeah, it's art.
- [84:08]
A
Because you can't just make up a new material of dress. Maybe you could. Right. But for the most part, it's like, how do you position yourself with an artistic point of view?
- [84:18]
B
Yeah. So like lvmh, their portfolio. And if you want to build a really great brand, I think you just study some of their strategies. And ultimately I think the Chanel purse, for example, and it's an iconic status symbol globally. Like, globally. And so that is a really, really powerful achievement.
- [84:42]
A
I have never owned a purse. I cannot tell you anything about any of them or how they work. But I know Chanel, so it's like to me, it's like if somebody mentioned it, like, oh, yeah, I know that I think of that as high status or luxury, I guess, even if it's not.
- [84:58]
B
Yeah, Men are different with that.
- [85:00]
A
But do you feel like, do you market more towards men or is it pretty? Like men, women? It's like about 50, 50, roughly.
- [85:07]
B
We market more to women. Women set culture, I think, and at least in consumer food and consumables, women share more and men follow women.
- [85:25]
A
I think women drive like 70% of consumer spend Essentially is the number I've seen. The kind of the heuristic a lot of people say is you figure out where young teen to late twenties women, what is that general gap of 12 to 30 year olds, what do they do in there? Everyone kind of follows them eventually. They're usually the earliest adopters of things.
- [85:47]
B
Yeah, cool girls set culture, but then the gay men influence the cool girls.
- [85:58]
A
Oh really? So really you're like, you gotta influence. You gotta follow the gay men first.
- [86:03]
B
I think they're the seed.
- [86:05]
A
Interesting. Okay. Why, why is that the case?
- [86:07]
B
Do you know? It's more of a hypothesis or like loose observation. Well, like gay men are, I think they usually have really good taste. These are like the stereotype. They're usually always in cities. They're in fields around fashion, design. They do shape culture. They usually work really hard. And so popular culture is shaped in big cities by a lot of those people. So they massively out kick their population and influence.
- [86:48]
A
Interesting, huh? I hadn't really thought about that lens of it, but I guess, yeah, it does make sense to me. So I guess it's really like study what the gay men and the young women are doing and then that's how you figure out where culture is going.
- [87:04]
B
Yeah, I would say it's like some barometer of that.
- [87:08]
A
Yeah. Well, it's been a lot of fun. Thanks for. Thanks for coming on the show. This is an awesome conversation.
- [87:13]
B
Thanks Turner. Hope hope you had fun. I did.
- [87:18]
A
And thank you for listening. Thanks again to this episode Sponsors Flex, Numeral, Amplitude and Merge. If you enjoy this, please, like comment, subscribe and share this in the group chat. Make sure to check out the back catalog of over 100 episodes with investors like Gary Tan at YC, Elad, Gil Chaithan and Eric at Benchmark, and the founders of companies like Robinhood, Sweetgreen and Mercury. Tune in over the next few weeks for conversations with Michael Tanenbaum, the CEO of Blockchain lending company Figure, and my friend Shenzi Ding at Merge. If you don't want to miss any of these, subscribe to my newsletter. The split linked in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks again for listening. See you next time.
- [87:59]
B
Sat.