Impact Theory with Tom Bilyeu:

“The Truth About Why Sustainable Startups Fail | StartUp Theory (Fan Fav)”
Guest: Jesse Dao, Founder of Grit and Diamonds
Release Date: July 9, 2025

Episode Overview

In this fan-favorite deep dive, Tom Bilyeu sits down with Jesse Dao, founder of Grit and Diamonds—a startup bringing a sustainable, compostable-packaged coffee scrub to the cosmetics industry. With Jesse in the midst of a Kickstarter campaign, the discussion moves from actionable strategies for startup growth to the deeper vulnerabilities founders face. Tom and Jesse explore why sustainability-focused startups often fail, hiring essentials, best practices for equity, the pitfalls of perfectionism, and the core necessity of authenticity in both product and messaging.

Key Discussion Points & Insights

1. Jesse’s Founding Story & The Sustainability Challenge

[02:27 – 05:35]

• Jesse spent 10 years immersed in the coffee world before pivoting to beauty, leveraging coffee’s exfoliant properties.
• Disillusioned with plastic-heavy, wasteful cosmetics packaging, Jesse designed compostable “coffee bag” packaging with non-toxic labels.
• Motivation: “If a small startup based out of Vancouver can introduce a cosmetic line...and eliminate waste, then why can't some of the bigger organizations?” – Jesse Dao [03:13]

2. From Corporate America Burnout to Entrepreneur

[03:49 – 05:35]

• Jesse left a successful coffee sales career, tried a service franchise, and quickly realized Corporate America was soul-sucking.
• “It took, yeah, maybe 90 days to realize, fuck this, it's not for me…It was more about what you were doing in a day, not the quality of what you were doing.” – Jesse Dao [04:31]

3. Reaching Audiences Through Authentic Influencer Marketing

[06:36 – 14:08]

• Jesse asks how Tom used influencers to launch Quest Nutrition.
• Tom’s core advice is to identify real customer “problem solvers” and connect with authentic influencers—not just those with the largest audiences.
• “You don't want to be in the business of having to explain this to people…The moment that you have to be sitting there explaining your features and benefits, you're really, really in trouble.” – Tom Bilyeu [09:47]
• Go for influencers with truly engaged followings (not just big numbers); authenticity and connection matter most.
• “If you’re not trying to control the script, then you’re going to set yourself apart from all the other brands.” – Tom Bilyeu [15:53]

4. The Power of Long-Term Relationships and Value-Add

[16:56 – 18:43]

• Engage with influencer communities genuinely—like, comment, and share.
• “The people that are active, I see them, I know who they are, I know their usernames...They're ever-present in our community.” – Tom Bilyeu [17:23]
• Play the long game: real value and connection take time.

5. The First Hires: Working On vs. In Your Business

[18:58 – 22:11]

• Jesse asks about hiring priorities in a new startup.
• Tom recommends reading Michael Gerber’s E-Myth Revisited for the “work on, not in your business” concept.
• First hires should relieve you of low-value, time-sucking tasks—often, this means finance/bookkeeping if you’re a sales/marketing founder.
• “Sales solves everything...Those need to be the focus beyond the product.” – Tom Bilyeu [20:03]
• Consumable product businesses have a compounding advantage through repeat customer touchpoints.

6. Equity, Incentives, and Avoiding Founder Regret

[22:11 – 27:44]

• Common equity pool for founding teams: 10–20%, but Tom cautions against giving away voting rights early.
• “You do not divorce the same person that you marry...The likelihood of them seeing things the way that you see it are virtually zero.” – Tom Bilyeu [25:44]
• Use vesting schedules and pre-signed agreements to prevent messy breakups.

7. Founder Vulnerability: Writing & Dyslexia

[27:49 – 34:40]

• Jesse reveals his struggle with written communication (dyslexia).
• Tom reframes it as a superpower: “The way that a dyslexic mind works is that they see problems much more holistically and they're able to make connections that other people don't make.” – Tom Bilyeu [32:16]
• Leverage copywriters for critical writing; focus on unique, big-picture skills as a dyslexic entrepreneur.

8. The 12-Month Startup Roadmap: Profit & Pragmatism

[34:47 – 41:48]

• Jesse asks how to map out his company’s first year.
• Tom: The only thing that truly matters is profitability—not top-line revenue.
• “If your goal is to sustain your company, the only way you can do that is if you get somebody to invest money in you...But if you're profitable, nobody gets to tell you anything.” – Tom Bilyeu [36:09]
• Continuously audit your time and resources; double down on what drives sales and community.

9. Walking the Talk: Living Up to Sustainability Claims

[42:04 – 47:28]

• Jesse’s concern: being called out for imperfections (“If I’m all about compostability, what about supply chain emissions, etc.?”)
• Tom: Radical transparency is the only answer.
• “Be open with people, be totally transparent. Let them know what you're about. There will be people who will hate on you for it...But the people that see that you're really trying...will love that.” – Tom Bilyeu [43:41]
• Gen Z especially will reward real, transparent brands.

10. Final Fast Facts: Production & Global Distribution

[47:50 – 49:27]

• Grit and Diamonds starting global shipping within weeks; recipes based on 15+ years’ coffee industry experience.

Memorable Quotes

• On Sustainability:
  “If a small startup…can eliminate waste, then why can't some of the bigger organizations?” – Jesse Dao [03:13]

• On Burnout:
  “It took, yeah, maybe 90 days to realize, fuck this, it's not for me…It was more about what you were doing in a day, not the quality of what you were doing.” – Jesse Dao [04:31]

• On Influencer Marketing:
  “You don't want to be in the business of having to explain this to people…The moment that you have to be sitting there explaining your features and benefits, you're really, really in trouble.” – Tom Bilyeu [09:47]
  “If you’re not trying to control the script, then you’re going to set yourself apart from all the other brands.” – Tom Bilyeu [15:53]

• On First Hires:
  “Sales solves everything...Those need to be the focus beyond the product.” – Tom Bilyeu [20:03]

• On Partnerships:
  “You do not divorce the same person that you marry.” – Tom Bilyeu [25:44]

• On Dyslexia:
  “The way that a dyslexic mind works is that they see problems much more holistically and they're able to make connections that other people don't make.” – Tom Bilyeu [32:16]

• On Transparency:
  “Be open with people, be totally transparent. Let them know what you're about…people that see that you’re really trying…will love that.” – Tom Bilyeu [43:41]

Key Timestamps

• 02:27 | Jesse Introduces Grit and Diamonds, Compostable Packaging
• 03:49 | Jesse’s Journey: Coffee Sales, Service Franchise, Corporate America
• 06:36 | Influencer Outreach & Authenticity
• 14:08 | The Power of Engagement in Brand Building
• 18:58 | Hiring Priorities for New Startups
• 22:11 | Early Stage Equity & Avoiding Pitfalls
• 27:49 | Founder Vulnerability: Struggling With the Written Word
• 34:47 | Creating a Pragmatic 12-Month Roadmap
• 42:04 | How to Handle Sustainability Imperfection and Criticism
• 47:50 | Rapid-Fire Q&A on Product Launch and Distribution

Tone & Takeaways

• Practical & Candid: Tom and Jesse tackle startup struggles and strategies with humor, directness, and realism.
• Empowering: Founders are encouraged to see their weaknesses as hidden advantages, and to embrace long-term value-building over impatient shortcuts.
• Radically Transparent: Authenticity and honesty are championed above PR spin or “strategic” messaging—especially for sustainable brands.

For Listeners Seeking Startup Wisdom

• Focus on authentic connection—both with customers and influencers.
• Prioritize profitability and core product quality over “buzz” or empty scaling.
• Build your brand through honesty and inclusion, not perfection.
• Leverage your unique challenges as founder superpowers (even dyslexia!).
• Document processes, use vesting schedules, and don’t cut corners with equity agreements.
• Play the long game: real business (and real sustainability) takes time.

End of Summary

For further details, product info, or to support Grit and Diamonds, visit gritanddiamonds.com.