The Exchanges

Q What did you learn about pricing from RS bars?

A In American market, at least in the bar category, there's a real threshold Getting to a 99 cent or a dollar 49 price point really unlocks the mass market. So like a lot of Americans are not willing to pay anywhere north of a dollar 99 for a bar. The real, real massive market is in the 99 cent and below. Um, you think Nature Valley, like the big, big, big brands all have an offering that's pretty low. And another interesting thing about price is with like kids products. So in the survey data, If you asked a mom just pricing questions, it would show up as like, yeah, I'm willing to pay for my kid. But in the actual data, they are not. And I thought that was really interesting because no one wants to admit that they're, they don't want to spend too much money on their kids. Right. But in the, in the actual behavior, they absolutely do not want to spend a dollar 50 for a bar for their kid. They want to spend 49 cents. So that, that's one of the things with like, partially I don't like survey data because you can get bad data.

AI assessment note: “Getting to a 99 cent or a dollar 49 price point really unlocks the mass market.”

Q What made you say that? Sorry, it's interesting because I see it everywhere now.

A The TAM in food and beverage is pretty clearly defined. One 61, I was like, we could probably get to 300 or two hundred fifty million in sales, but I didn't see a very clear path to like five hundred million. The product portfolio that we could do was defined by quantifiable whole food ingredients. So our design, that famous design of our X-Bar, really was a constraint on where we could innovate. Because you had to formulate stuff that could be communicated on the front of PAC. That, to me, lowered the TAM. So as a CEO, I'm responsible for the vision. I didn't see a path to like five hundred million or a billion in revenue. So therefore, it sort of made sense to get it to the big guys.

AI assessment note: “I didn't see a path to like five hundred million or a billion in revenue.”

Q start on the Rx journey, I've been stalking the shit out of you. As you know, I listened to all of your prior interviews. And I really like to focus on like moments which cause big changes. Your father said, shut the fuck up and sell a thousand bars early on, very early on. Can you tell me the story of that and how that changed your go forward mindset?

A This was a little bit of context. I was in Chicago. The startup scene was emerging and it was sort of like default was like, you have an idea, you have to go raise money. And so my dad's more of an old school guy. He's like real business fundamentals. And I remember putting together a deck, had this idea. And I remember asking him like, do you know any, you know, rich people that would be interested in investing? And he said to me, you know, Peter, you really need to like, shut the fuck up and just try to sell a thousand bars. And left it at that. It's obviously call it bull or direct or vulgar or whatever. But in that messaging was like, Really just make the product, focus on what's important. And it was a message of prioritization. And so instead of spending my time having lunches or whatever with high status people, really, and using that time to do that, I should have been formulating making the product. We just totally stopped doing investor work and went straight to just actually designing and making the product. And so instead of raising money, I went to PowerPoint, which at the time, that's all I knew to like design the labels. Printed them. Went to my parents house in their kitchen and started formulating.

AI assessment note: “We just totally stopped doing investor work and went straight to just actually designing”

Q Yeah. You should be for or against them. I do not ever think you want to be. So which brand do you then most respect and admire and why?

A Red Bull. And the reason why I think that they've just been so disciplined with it, they associate themselves only with sports and activities Where death is a real possibility. And I think that discipline is really cool. That's all they do. So things, sports and activities where you can die, they're there. And another one is for loco. You know, this is an, it's an America. It's a really great case study. It was started Ohio state university and it mixed caffeine with malt liquor and went viral. Like one of the first viral products and basically, and then like the FDA came after him and like, Banned mixing caffeine with alcohol. And then it like got total setbacks and then it stayed alive, but its positioning is so clear and its customers are so clear. So like, if you see someone drinking a four loco in America, you know, they're going after it. Like it's going for a wild night. So there's just such a clear position. Everything they do is like ludicrous. Like it's really absurd, outrageous. And it's one of those things where it's like, College kids, their demographics so clear. So perhaps it might not grow to be ubiquitous outside of its core market, but it is such a clear, clear position.

AI assessment note: “Red Bull. And the reason why I think that they've just been so disciplined”

Q What did you learn about pricing from RS bars?

A In American market, at least in the bar category, there's a real threshold Getting to a 99 cent or a dollar 49 price point really unlocks the mass market. So like a lot of Americans are not willing to pay anywhere north of a dollar 99 for a bar. The real, real massive market is in the 99 cent and below. Um, you think Nature Valley, like the big, big, big brands all have an offering that's pretty low. And another interesting thing about price is with like kids products. So in the survey data, If you asked a mom just pricing questions, it would show up as like, yeah, I'm willing to pay for my kid. But in the actual data, they are not. And I thought that was really interesting because no one wants to admit that they're, they don't want to spend too much money on their kids. Right. But in the, in the actual behavior, they absolutely do not want to spend a dollar 50 for a bar for their kid. They want to spend 49 cents. So that, that's one of the things with like, partially I don't like survey data because you can get bad data.

AI assessment note: “Getting to a 99 cent or a dollar 49 price point really unlocks the mass market.”

Q start on the Rx journey, I've been stalking the shit out of you. As you know, I listened to all of your prior interviews. And I really like to focus on like moments which cause big changes. Your father said, shut the fuck up and sell a thousand bars early on, very early on. Can you tell me the story of that and how that changed your go forward mindset?

A This was a little bit of context. I was in Chicago. The startup scene was emerging and it was sort of like default was like, you have an idea, you have to go raise money. And so my dad's more of an old school guy. He's like real business fundamentals. And I remember putting together a deck, had this idea. And I remember asking him like, do you know any, you know, rich people that would be interested in investing? And he said to me, you know, Peter, you really need to like, shut the fuck up and just try to sell a thousand bars. And left it at that. It's obviously call it bull or direct or vulgar or whatever. But in that messaging was like, Really just make the product, focus on what's important. And it was a message of prioritization. And so instead of spending my time having lunches or whatever with high status people, really, and using that time to do that, I should have been formulating making the product. We just totally stopped doing investor work and went straight to just actually designing and making the product. And so instead of raising money, I went to PowerPoint, which at the time, that's all I knew to like design the labels. Printed them. Went to my parents house in their kitchen and started formulating.

AI assessment note: “We just totally stopped doing investor work and went straight to just actually designing”

Q I think that's really interesting though. Had you been able to raise, what would you have done differently? And do you think you were actually better positioned by not being able to?

A Honestly, if we would have raised, we would have just paid ourselves. I think like we would have like been less miserable, but if, you know, if we had like two million dollars of growth capital on the balance sheet, I don't know what we would have done differently. The marketing tactics were just around trial sampling, like really fundamental stuff. You know, we didn't play the ad game because we had such a strong product market fit. And we've always had inventory issues. It was matching sales and demand or demand and supply the whole time. If we would have raised money and had grow like a balance sheet, I think we would have done stupid shit for sure.

AI assessment note: “If we would have raised money... I think we would have done stupid shit for sure.”

Q So I heard that when it came to customer feedback, you took Tupperware containers, as you said there, to CrossFit gyms to get feedback. Can I ask, what are your big lessons on getting early customer feedback and how to do it most effectively?

A Yeah, it's tricky because it can be a lot of noise. And especially in the consumer food and beverage, like you want to be getting it to the right group. So I went to a CrossFit gym. So those were clearly defined early adopters where they would appreciate a, the You know, a paleo protein bar. So their feedback to me, I waited the most. Whereas like, if I went to some of my other social circles that really didn't appreciate egg whites for protein, et cetera, I would like just discount their opinion actually. So a lot of it is very observational, but you have to filter out what's important and not, and have that discretion. Because if you just, if you just react to everything, you're just going to be confused.

AI assessment note: “you want to be getting it to the right group”

Q What made you say that? Sorry, it's interesting because I see it everywhere now.

A The TAM in food and beverage is pretty clearly defined. One 61, I was like, we could probably get to 300 or two hundred fifty million in sales, but I didn't see a very clear path to like five hundred million. The product portfolio that we could do was defined by quantifiable whole food ingredients. So our design, that famous design of our X-Bar, really was a constraint on where we could innovate. Because you had to formulate stuff that could be communicated on the front of PAC. That, to me, lowered the TAM. So as a CEO, I'm responsible for the vision. I didn't see a path to like five hundred million or a billion in revenue. So therefore, it sort of made sense to get it to the big guys.

AI assessment note: “So therefore, it sort of made sense to get it to the big guys.”

Q So I heard that when it came to customer feedback, you took Tupperware containers, as you said there, to CrossFit gyms to get feedback. Can I ask, what are your big lessons on getting early customer feedback and how to do it most effectively?

A Yeah, it's tricky because it can be a lot of noise. And especially in the consumer food and beverage, like you want to be getting it to the right group. So I went to a CrossFit gym. So those were clearly defined early adopters where they would appreciate a, the You know, a paleo protein bar. So their feedback to me, I waited the most. Whereas like, if I went to some of my other social circles that really didn't appreciate egg whites for protein, et cetera, I would like just discount their opinion actually. So a lot of it is very observational, but you have to filter out what's important and not, and have that discretion. Because if you just, if you just react to everything, you're just going to be confused.

AI assessment note: “you want to be getting it to the right group. So those were clearly defined early adopters”

Q What do you think that position and identity is?

A So our namesake's the sculpture of David, Michelangelo's masterpiece, the biblical hero. And one of the symbols we use is the chisel. We use it very subtly. The chisel when applied, it's the, obviously the artist's tool, but when it's applied, it creates beauty. And if you double click on the meaning of a chisel, it's actually discipline and education. So when you think about like the rigor of a sculptor, you have to know exactly where to hit. You have to repeatedly hit it. That takes a lot of discipline, but then you have to be very smart about it. You can't just be unorganized. You have to have a holistic picture. So the brand's values are defined by those components. And so they're around discipline, intelligence, and beauty. That's how we want to show up in the world. When you consume the product and you consume the brand, we want to always reinforce those three values or traits.

AI assessment note: “the brand's values are defined by those components. And so they're around discipline, intelligence, and beauty.”

Q I think that's really interesting though. Had you been able to raise, what would you have done differently? And do you think you were actually better positioned by not being able to?

A Honestly, if we would have raised, we would have just paid ourselves. I think like we would have like been less miserable, but if, you know, if we had like two million dollars of growth capital on the balance sheet, I don't know what we would have done differently. The marketing tactics were just around trial sampling, like really fundamental stuff. You know, we didn't play the ad game because we had such a strong product market fit. And we've always had inventory issues. It was matching sales and demand or demand and supply the whole time. If we would have raised money and had grow like a balance sheet, I think we would have done stupid shit for sure.

AI assessment note: “Honestly, if we would have raised, we would have just paid ourselves.”

Q Why did you, sorry, I'm so jumping around. I'm just so, I'm so love this. Why did you do, you can also tell it's like a real passion of mine, and I love the product. Why did you do COD? That felt, no offense, like untied together.

A There's a lot of layers to it. So I'll give you the background. Starts with why we made the product. So with the, for the questions, like why do people eat protein bars and what do they, what do they really want? People eat protein bars for protein. And so what they want is the most amount of protein With the least amount of calories, like a, just a protein delivery system. And so one way to measure that was be through this objective measurement, which was calories coming from protein. So what percentage of your calories are coming from protein? That should really define objectively a good product or not in the protein bar space. And in general, for processed foods and broadly, the value of a processed food should be measured by calories coming from protein. And so we created this metric. It's on our package called CFP calories from protein and we're at 75%. And so then we were with our chief science officer, Peter Atiyah, And he was like, well, we can't just compare ourselves to just other bars because it's like, and showing that you're number one isn't cool. So he's like, we got to find something that's better than us. And the thing we found, the food that has the best protein to calorie ratio is boiled cod. And it's funny because it's unappetizing. So on our comparison chart, we put boiled cod, and this was from when we launched. That's what we were comparing ourselves with.…

AI assessment note: “the food that has the best protein to calorie ratio is boiled cod”

Q Why did you, sorry, I'm so jumping around. I'm just so, I'm so love this. Why did you do, you can also tell it's like a real passion of mine, and I love the product. Why did you do COD? That felt, no offense, like untied together.

A There's a lot of layers to it. So I'll give you the background. Starts with why we made the product. So with the, for the questions, like why do people eat protein bars and what do they, what do they really want? People eat protein bars for protein. And so what they want is the most amount of protein With the least amount of calories, like a, just a protein delivery system. And so one way to measure that was be through this objective measurement, which was calories coming from protein. So what percentage of your calories are coming from protein? That should really define objectively a good product or not in the protein bar space. And in general, for processed foods and broadly, the value of a processed food should be measured by calories coming from protein. And so we created this metric. It's on our package called CFP calories from protein and we're at 75%. And so then we were with our chief science officer, Peter Atiyah, And he was like, well, we can't just compare ourselves to just other bars because it's like, and showing that you're number one isn't cool. So he's like, we got to find something that's better than us. And the thing we found, the food that has the best protein to calorie ratio is boiled cod. And it's funny because it's unappetizing. So on our comparison chart, we put boiled cod, and this was from when we launched. That's what we were comparing ourselves with.…

AI assessment note: “the food that has the best protein to calorie ratio is boiled cod”

Q Yeah. You should be for or against them. I do not ever think you want to be. So which brand do you then most respect and admire and why?

A Red Bull. And the reason why I think that they've just been so disciplined with it, they associate themselves only with sports and activities Where death is a real possibility. And I think that discipline is really cool. That's all they do. So things, sports and activities where you can die, they're there. And another one is for loco. You know, this is an, it's an America. It's a really great case study. It was started Ohio state university and it mixed caffeine with malt liquor and went viral. Like one of the first viral products and basically, and then like the FDA came after him and like, Banned mixing caffeine with alcohol. And then it like got total setbacks and then it stayed alive, but its positioning is so clear and its customers are so clear. So like, if you see someone drinking a four loco in America, you know, they're going after it. Like it's going for a wild night. So there's just such a clear position. Everything they do is like ludicrous. Like it's really absurd, outrageous. And it's one of those things where it's like, College kids, their demographics so clear. So perhaps it might not grow to be ubiquitous outside of its core market, but it is such a clear, clear position.

AI assessment note: “Red Bull. And the reason why I think that they've just been so disciplined”

Q Do you not agree if you don't understand what the ingredient is, it's bad? Monotriglosseride or dot, dot, dot, dot.

A Like salt. Okay, so sodium chloride. People probably wouldn't, you go on the streets, be like, hey, sodium chloride, good. People would be like, no, I don't know what that is, but it's just salt. Like it's idea like chemicals are bad. No chemicals are good. It's like everything's technically a chemical. So on the processed food argument, most things are pasteurized. All things have to be pasteurized for food safety. So like that's a process. Things are packaged. That's a process. Like brushing your teeth is a process. So it's not a really sophisticated way of saying, oh, all processed things are bad. Now this is where like calories coming from protein. So if you're looking at processed food, like an RX or a David protein would be processed. And then a potato bag of potato chips are processed. Those are the same category. They're wildly different. And it's like a net positive thing to get protein unequivocally. So to lump them together because they're processed is not really that sophisticated. And my point is like an objective way to review processed food would be to measure its value through Calories coming from protein.

AI assessment note: “sodium chloride. People would be like, no, I don't know what that is, but it's just salt.”

Q What do you think that position and identity is?

A So our namesake's the sculpture of David, Michelangelo's masterpiece, the biblical hero. And one of the symbols we use is the chisel. We use it very subtly. The chisel when applied, it's the, obviously the artist's tool, but when it's applied, it creates beauty. And if you double click on the meaning of a chisel, it's actually discipline and education. So when you think about like the rigor of a sculptor, you have to know exactly where to hit. You have to repeatedly hit it. That takes a lot of discipline, but then you have to be very smart about it. You can't just be unorganized. You have to have a holistic picture. So the brand's values are defined by those components. And so they're around discipline, intelligence, and beauty. That's how we want to show up in the world. When you consume the product and you consume the brand, we want to always reinforce those three values or traits.

AI assessment note: “they're around discipline, intelligence, and beauty. That's how we want to show up”

Q At this stage, sorry, I'm so sorry to interrupt. Are you not like making a lot of money yourself at a hundred and sixty one million?

A Uh, we just weren't paying or like not that type of money. Yeah. We were doing good. Started doing some bonuses and stuff, but not like that type of money. But the big reasons to sell was financial freedom. And then second, our expert did belong in a broader portfolio. These, a single brand company really belongs in a portfolio of things. And then the thing that the big food companies are really, really good at that can't be understated is like mega scale. I view it as like my job as a CEO is get this thing to scale, build a good brand and good product, good supply chain, and then hand it over to someone to take it to the next chapter. But I do think like great companies don't sell. It's true. Like Peter Thiel says that my position with David's a little different.

AI assessment note: “we just weren't paying or like not that type of money. Yeah. We were doing good.”

Q Do you not agree if you don't understand what the ingredient is, it's bad? Monotriglosseride or dot, dot, dot, dot.

A Like salt. Okay, so sodium chloride. People probably wouldn't, you go on the streets, be like, hey, sodium chloride, good. People would be like, no, I don't know what that is, but it's just salt. Like it's idea like chemicals are bad. No chemicals are good. It's like everything's technically a chemical. So on the processed food argument, most things are pasteurized. All things have to be pasteurized for food safety. So like that's a process. Things are packaged. That's a process. Like brushing your teeth is a process. So it's not a really sophisticated way of saying, oh, all processed things are bad. Now this is where like calories coming from protein. So if you're looking at processed food, like an RX or a David protein would be processed. And then a potato bag of potato chips are processed. Those are the same category. They're wildly different. And it's like a net positive thing to get protein unequivocally. So to lump them together because they're processed is not really that sophisticated. And my point is like an objective way to review processed food would be to measure its value through Calories coming from protein.

AI assessment note: “sodium chloride... People would be like, no, I don't know what that is, but it's just salt.”

Q What do you do now with money that you didn't do before?

A My processes, I think a lot of people go through this. When you get money, you start to like, so one, you spend it a little bit, like you indulge, maybe you increase material consumption. Cause you're like, Oh, I always wanted that, like a car or something, a house. And then you, you spends the next, you know, some period of time accumulating stuff. And then I think people figure this out at different times. And then I think you spend equal amounts of time selling all that stuff. And simplifying things. So for me, like I spent like a year, like sort of accumulating things. And then I realized it doesn't do anything for me. There's no utility in it. And then I just started selling everything.

AI assessment note: “I realized it doesn't do anything for me... I just started selling everything.”

Q At this stage, sorry, I'm so sorry to interrupt. Are you not like making a lot of money yourself at a hundred and sixty one million?

A Uh, we just weren't paying or like not that type of money. Yeah. We were doing good. Started doing some bonuses and stuff, but not like that type of money. But the big reasons to sell was financial freedom. And then second, our expert did belong in a broader portfolio. These, a single brand company really belongs in a portfolio of things. And then the thing that the big food companies are really, really good at that can't be understated is like mega scale. I view it as like my job as a CEO is get this thing to scale, build a good brand and good product, good supply chain, and then hand it over to someone to take it to the next chapter. But I do think like great companies don't sell. It's true. Like Peter Thiel says that my position with David's a little different.

AI assessment note: “we just weren't paying or like not that type of money.”

Q What do you do now with money that you didn't do before?

A My processes, I think a lot of people go through this. When you get money, you start to like, so one, you spend it a little bit, like you indulge, maybe you increase material consumption. Cause you're like, Oh, I always wanted that, like a car or something, a house. And then you, you spends the next, you know, some period of time accumulating stuff. And then I think people figure this out at different times. And then I think you spend equal amounts of time selling all that stuff. And simplifying things. So for me, like I spent like a year, like sort of accumulating things. And then I realized it doesn't do anything for me. There's no utility in it. And then I just started selling everything.

AI assessment note: “I realized it doesn't do anything for me. There's no utility in it.”

Q What do you believe about brand that most people would disagree with you on?

A It's really analogous to a human being. If you look at a human being, they have parents, they have DNA, they have a personality, they have traits, they have the dark side of their personality, they have the bright side of their personality. They have social, they have friends. So who are they friends with? They have a point of view. They have clothes that they wear in a certain style. And so when you look at what makes a human's identity and defining that, that's the best way to define a brand holistically. That's how I think about branding. It's like, it's, it's a human being. You have to define it. Don't make it abstract. It's from its religion, its point of view, its friends, its enemies, et cetera. The question is what I think is true about brands that people disagree with. Most people will. Ironically, as a brand person, I would say products more important than brand right now. Products all that matters actually brand secondary.

AI assessment note: “I would say products more important than brand right now. Products all that matters”

Q What do you believe about brand that most people would disagree with you on?

A It's really analogous to a human being. If you look at a human being, they have parents, they have DNA, they have a personality, they have traits, they have the dark side of their personality, they have the bright side of their personality. They have social, they have friends. So who are they friends with? They have a point of view. They have clothes that they wear in a certain style. And so when you look at what makes a human's identity and defining that, that's the best way to define a brand holistically. That's how I think about branding. It's like, it's, it's a human being. You have to define it. Don't make it abstract. It's from its religion, its point of view, its friends, its enemies, et cetera. The question is what I think is true about brands that people disagree with. Most people will. Ironically, as a brand person, I would say products more important than brand right now. Products all that matters actually brand secondary.

AI assessment note: “I would say products more important than brand right now.”