Feb 12, 2024 · 1h 11m · how-i-built-this
Magic Spoon & Exo: Gabi Lewis and Greg Sewitz
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Entrepreneurs Gabi Lewis and Greg Sewitz recount their journey from pioneering cricket-protein brand Exo to building Magic Spoon, a high-growth healthy cereal company. The interview highlights the critical lessons in food science, branding, and product-market fit that turned an early startup struggle into a category-defining success.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 34.2% of the talking time here. How this is scored →
Guy as informed peer 4.4 Guest teaching 3.0 Guest disagreement 1.2 Guy pushing back 1.5
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 54:14 Playful disagreement over breakfast preferences
Gabi openly rejects Guy's premise that health fanatics are completely satisfied eating savory eggs and avocado every day instead of sweet cereal.
Hardest push from Guy ▶ 53:15 Host questioning sweet cereal appeal for health fanaticsGuy pushes back against the core customer thesis, arguing strict fitness consumers would avoid anything resembling sugary breakfast cereal.
Biggest teaching moment ▶ 1:02:56 Educating host on extruder physics and dairy burnsGreg explains the delicate manufacturing science of high-protein cereal extrusion, describing how dairy proteins catch fire under standard cereal temperatures.
Guy holds their own ▶ 49:44 Host detailing sugar alcohol and sweetener chemistryGuy demonstrates deep food science expertise by distinguishing allulose's metabolic properties and taste profile from stevia and monk fruit.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| College Friendship and the Original Paleo Bar Concept | 5 | 2 | 1 | 1 | Guy Raz demonstrates industry knowledge by contextualizing their initial paleo bar idea alongside early brands like RXBar and Cliff Bars. Gabi and Greg agree and elaborate on their college experiments and initial concept. | |
| Discovering Edible Insects as Sustainable Nutrition | 6 | 3 | 1 | 1 | Guy highlights specific sustainability metrics regarding livestock emissions and cricket protein density. Greg and Gabi validate his points and discuss positioning cricket powder as an edible insect Trojan horse. | |
| Kitchen Experiments: Baking and Grinding Live Crickets | 3 | 4 | 1 | 2 | Greg explains the practical mechanics of sourcing crickets from pet feed suppliers and freezing them to prepare them for roasting. Guy asks clarifying questions about whether food-grade human standards existed yet. | |
| Turning Down Corporate Careers to Pursue Exo Full-Time | 5 | 2 | 1 | 1 | Guy references Gabi turning down a job at Bridgewater and jokes about Ray Dalio's management culture. Gabi outlines the cultural analogy between normalizing crickets and the historical rise of sushi in America. | |
| The Exo Kickstarter Campaign and Early Buzz | 4 | 2 | 1 | 1 | Guy details their Kickstarter crowdfunding campaign numbers, while Greg and Gabi explain how the media buzz helped prove demand despite the initial lack of long-term manufacturing infrastructure. | |
| Sourcing Human-Grade Crickets and Finding Co-Packers | 4 | 4 | 1 | 2 | Greg explains the unexpected manufacturing hurdle of shellfish allergen cross-contamination from crickets and building dedicated organic cricket farming rooms. Guy probes how farmers reacted to their large-volume requests. | |
| Mid-Roll Break: Listener Spotlight on Tim Leatherman | 0 | 0 | 0 | 0 | This is a mid-roll break featuring a listener spotlight voice memo about Tim Leatherman and an invitation to submit listener stories, scoring zero across all metrics. | |
| Direct-to-Consumer Launch and the Early Adopter Ceiling | 5 | 3 | 1 | 1 | Guy recognizes chef Kyle Connaughton and paleo influencer Mark Sisson. Gabi explains why organic paleo influencer endorsements drove far higher early conversions than conventional press. | |
| Supply Chain Bottlenecks and the Reality of Insect Farming | 4 | 5 | 2 | 2 | Greg and Gabi walk through the harsh economic realities of cricket farming and why low-margin cricket bars could not scale into pure protein powders. Guy questions their pricing and unit economics. | |
| Selling Exo and Pivoting Away from Failure | 4 | 2 | 1 | 1 | Guy reflects on how fear of failure stops entrepreneurs, while Gabi honestly describes the psychological challenge of untangling their personal identities from being 'the cricket guys.' | |
| Identifying the Stagnant Breakfast Cereal Opportunity | 5 | 4 | 3 | 3 | Guy pushes back on targeting cereal by pointing out it is an eleven billion dollar declining category. Gabi counters that the category was only shrinking because incumbent brands failed to adapt to modern nutritional expectations. | |
| Formulating a Low-Carb, High-Protein Cereal Recipe | 6 | 3 | 1 | 2 | Guy demonstrates detailed knowledge of keto diet macros and net carb calculations. Gabi and Greg explain how they formulated protein guardrails to appeal to low-carb consumers. | |
| Securing a Manufacturing Partner at an Industry Expo | 5 | 3 | 1 | 1 | Greg shares how they bluffed with off-the-shelf samples at a Las Vegas trade expo to locate a co-packer. Guy unpacks the food chemistry of mixing whey protein, cassava-derived tapioca starch, and chicory root. | |
| Raising Seed Capital and Crafting Adult Nostalgia | 4 | 2 | 1 | 1 | Gabi outlines their deliberate strategy to raise institutional capital upfront from Collaborative Fund rather than bootstrapping. Greg describes tailoring brand messaging specifically for nostalgic adult consumers. | |
| Flavor Formulation, Allulose Chemistry, and Renaming Magic Spoon | 7 | 3 | 1 | 2 | Guy demonstrates strong food science literacy regarding monk fruit, stevia aftertastes, and allulose's metabolic properties. Greg explains how allulose acts functionally like real sugar in industrial coating machinery. | |
| Targeting Modern Health Lifestyles and Overcoming Skepticism | 4 | 4 | 3 | 4 | Guy challenges the premise that health-conscious consumers would choose sweet cereal over savory meals like eggs and avocado. Gabi directly challenges Guy's taste preferences, noting many consumers find eggs boring. | |
| Strategic Packaging Design and Institutional Capitalization | 4 | 2 | 1 | 1 | Gabi and Greg explain choosing inefficient cardboard boxes over pouches to preserve retro cartoon nostalgia, and building a massive initial war chest to preempt big cereal conglomerate copycats. | |
| Founder Roles, Influencer Equity, and Rapid DTC Scale | 5 | 4 | 1 | 2 | Guy questions what celebrity investors like Nick Jonas and Questlove know about cereal. Gabi and Greg explain their novel influencer equity pool structure and Questlove's authentic obsession with cereal. | |
| High-Temperature Extrusion Disasters and Manufacturing Scale | 4 | 5 | 1 | 1 | Greg shares vivid technical disasters of dairy protein burning inside high-pressure extruders and handpicking rose petals out of chai powder. Guy explores why retail expansion was deliberately delayed. | |
| Retail Distribution Nationwide and Category Expansion | 4 | 4 | 1 | 1 | Guy notes Magic Spoon's absence from Whole Foods, prompting Gabi to explain Whole Foods' specific ban on allulose. Gabi details their rapid retail expansion across Target, Walmart, and new snack lines. | |
| Reflections on Timing, Luck, and True Product-Market Fit | 4 | 3 | 1 | 1 | Guy asks the classic closing question on luck versus skill. Greg and Gabi give measured answers balancing favorable macroeconomic timing with genuine product-market fit learned after Exo's failure. |
Statements from this episode (29)
Lewis: Early protein bars were mostly candy bars masquerading as health food
“The main idea was that let's just create a protein bar that is legitimately good for you, unlike at the time what was mostly a sea of candy bars masquerading as health bars.”
Lewis: Protein bar businesses are easy to prototype at home
“The amazing thing about developing a protein bar business is you can make a basic version in your kitchen. You're just mushing ingredients together, forming it, and you can make lots of different iterations of it.”
Sewitz: Crickets consume far less feed and water for equal protein
“Crickets consume far less feed, far less water, and produce equal amounts of protein, but the hiccup, obviously, is that they're crickets, and we have no history or tradition of eating insects in America”
Sewitz: U.S. cricket farming originally existed entirely for pet store reptile feed
“The whole cricket farming industry existed to service Petco, PetSmartz, and the reptile feeds of the world, basically.”
Lewis: Novel foods mainstream when hidden in familiar formats like California rolls
“There's a long history of foods that at one point were viewed as bizarre in the U S you could look at sushi, for example, which 50 years ago, eating raw fish was a little bit strange to most Americans, and the way it became popularized was that a chef in LA cr…”
Lewis: Kickstarter excels at generating press and concept validation over capital
“Yeah, in hindsight, Kickstarter probably wasn't the easiest way to raise money, but it was an amazing way to get attention and get press and prove the concept.”
Sewitz: Novel food products succeed on taste and utility, not intellectual interest
“You also had to really convince them that it was going to taste good and also meet the nutritional needs they were looking for from a protein bar, because ultimately the product was going to live or die on whether people kept buying it for the use case that we…”
Sewitz: Crickets share an allergen overlap with shellfish
“Crickets
Have an allergen overlap with shellfish.”
Lewis: Tim Ferriss, Robb Wolf, and Mark Sisson invested in Exo
“We were able to leverage what at the time was almost all of the names in the paleo world, whether it's John Duran, Mark Sisson, Rob Wolf, Tim Ferriss, all of those people who came on board as advisors or investors in the business.”
Lewis: Exo did roughly $1M in revenue in its first year
“The first million dollars or so, which was roughly what we did in the first year after launch, was faster and easier than anybody would have predicted for a company selling cricket bars.”
Sewitz: Thailand has over 20,000 cricket farms
“And so we actually ended up going to Thailand, where there's over 20,000 cricket farms. There's a Long tradition of raising crickets in backyards”
Sewitz: Insect protein industry could be viable in 10 to 30 years
“And I do still believe that on the time frame of 10, 20, 30 years, it was totally something that could be viable as an entire industry”
Lewis: Selling Exo felt like a failure because his identity was attached
“It definitely felt like a failure for a while. And I think not only in the sense that we hadn't achieved the mission we set out to achieve, but we also self-identified as the cricket guys. We'd go to Expo West and trade shows, and we'd have our t-shirts that s…”
Lewis: Legacy cereal brands are declining because they ignore modern consumer demands
“So the cereal category is, Is enormous, about eleven billion dollars, and it's been declining slightly, and people would actually say that to us as a reason for why we shouldn't go into that category, and we said to them, hey, why has nobody created a cereal, …”
Lewis: Magic Spoon raised $1M pre-launch from Collaborative Fund and influencers
“So we raised a million dollars pre-launch, half of it from this VC fund, collaborative fund, and half of it was actually from Health Amonis influencers, who wrote small checks into the business and could then help us eventually launch it.”
Sewitz: Magic Spoon could not have launched 10 years earlier
“10 years ago, we really couldn't have launched this business with a formulation that we felt was close enough to really make that trade-off worth it of, you know, nutrition for flavor.”
Sewitz: Allulose enabled Magic Spoon to use standard cereal manufacturing equipment
“And it can coat the cereal in a similar way, and so we were able to use a lot of the same equipment that regular cereal manufacturers use for our cereal.”
Lewis: Early investors told Magic Spoon founders to avoid the word 'cereal'
“You know, some investors we spoke to were so anti the idea. They actually said to us, okay, you can do this, but don't use the word cereal. That's a dirty word. You've got to call it clusters or rebrand cereal somehow.”
Lewis: Impractical cardboard cereal boxes beat resealable pouches by evoking childhood nostalgia
“When you think about it, a cardboard cereal box that doesn't reseal at the top is actually not the most practical packaging to use. A stand-up pouch that you can reseal from a purely practical perspective Perhaps makes more sense, but that doesn't create the s…”
Lewis: Magic Spoon operated exclusively direct-to-consumer for almost three years
“And we ended up running this business purely direct to consumer for almost three years.”
Lewis: Magic Spoon gave influencer investors bonus equity based on attributed sales
“Actually, what we did when we founded Magic Spoon is we created an equity pool for these influencers who are investors in the business, and based on the revenue they drove through their sites or email lists, we divided up this bonus equity pool Amongst them af…”
Lewis: Magic Spoon exceeded its year-one monthly sales target within days
“So our first month, I think we were hoping to maybe do a hundred grand a month in sales towards the end of our first year. We blew past that after a few days.”
Lewis: Magic Spoon raised over $100M across four years
“We've raised a little over a hundred million over the course of four years.”
Lewis: Half of Magic Spoon's 2022 funding provided liquidity for early investors
“It's also worth mentioning that we've raised a little over a hundred million, but the most recent round, which was about a year and a half ago, about half of that round went to some early investors to give them liquidity.”
Sewitz: Cereal manufacturing requires massive scale and capital intensity from start
“There's no way around the fact that you have to be running these machines for eight-hour shifts, you know, pumping out tens of thousands of pounds of cereal to even make it worth anyone's while, and so it's just, The whole product category operates at a much l…”
Lewis: Magic Spoon is excluded from Whole Foods due to allulose ingredient
“Actually, currently, Whole Foods doesn't have products with allulose in them, so that, that's the reason we're not in Whole Foods currently.”
Lewis: Same influencers generated 10x more sales for Magic Spoon than Exo
“Even down to the first month of Magic Spoon, we did a post from one of the same influencers that used to promote XO, and whereas at XO, if they did a post on Instagram about us, maybe generated a few hundred dollars, with Magic Spoon, that same influencer was …”
Lewis: Magic Spoon quickly became the best-selling cereal brand on Amazon
“We then launched on Amazon, very quickly actually became the number one best selling cereal on Amazon.”
Lewis: Magic Spoon outperformed Exo primarily due to product-market fit
“The truth is, we're doing some things differently, but we're doing a lot of the same things, and it's working so much infinitely better now, partly because we've learned from some mistakes from XO, and we spent five years banging our heads against the wall, bu…”