Will Nitze (IQBAR) | Blitzscaling Brain Food to $50M+/year

[00:00:00] Will Nitze: I'm a solo founder. I was intensely lonely at the outset. I think it would be fun to do stuff with friends and people you like and respect and think are really operationally great. I didn't have that. I would like to have that because it becomes less about how many times are we divvying up this pie?

And it's just like, no, I just want to work on cool stuff with friends.

[00:00:20] Joe Lemay: Welcome to eating glass. It's a podcast where at each episode. We ask startup founders the questions no one else will. Our goal? To reveal what it's actually like to start, scale, and [00:00:30] exit a company. I'm Joel LeMay, and I bootstrapped my reusable notebook company Rocketbook to a 50 million exit.

[00:00:36] Will Nitze: And I am Will

Nitze, founder and CEO at IQBar, a nutrition company I took from 0 to 40 plus million in annual revenue. For better or worse, we are your hosts. Eating Glass is sponsored by IQBar, which is my company, so be nice to it. What do we do here? We make IQ Bar Plant Protein Bars, IQ Mix Hydration Mixes, and IQ Joe Instant Mushroom Coffees.

All of which are special [00:01:00] because they are the only thing in their category that centers on nutrients good for your body. Protein, electrolytes, things like that. As well as things that are good for your brain. So, magnesium or lion's mane to name a few. They are all delicious. Uh, most functional foods and drinks taste like crap.

Ours taste good, and taste matters. That is despite them being super low in sugar and super clean label. There's no weird stuff on our labels. Uh, and by the way, they're affordable. Functional stuff is usually price gougy, and we are not. I will [00:01:30] not be offering a discount code. I will instead ask you a favor.

Go to amazon. com search for IQ bar IQ mix IQ, Joe, or some combination of the three, find a non sponsored listing, click on it, buy it, wait for it to arrive and leave a review. And that is the only favor I will ever ask you. Thank you very much. Eating Glass is also sponsored by Rant. Ramp is a corporate card and spend management software that we at IQGuard use for five years now, I think.

And I actually reach out to them about [00:02:00] sponsoring, not the other way around. I love them for three reasons. Number one, simplicity. Everyone on our team gets a physical and a digital card. Replacing cards, pausing cards, putting limits on cards, insanely easy, setup takes 10 minutes. Number two, cashback. 1. 5 percent cashback, you don't have to deal with points.

If you're messing around with points, you are wasting your time. Just get cashback. Number three, they are better at categorizing spend. So we not only save money on the cashback side, we save time on closing our [00:02:30] books because they're just better at classifying. They give us an incredible offer for you guys.

250 free dollars when you sign up for Ramp today. Go to ramp. com slash glass. That's R A M P. com slash glass. Cards are issued by Sutton Bank and Celtic Bank. Members FDIC. Terms and conditions apply. Final sponsor is gorgeous. G O R G I A S. This is the helpdesk slash customer service app we use at IQBAR, we've used it for years.

Similar situation, I reach out to them about [00:03:00] sponsoring. And we actually started on Zendesk and moved to Gorgeous. Our customer service had forced us to, basically, and I was like, Why did you force us to do that? Why is Gorgeous so much better? And he said, number one, apps and integrations are just better.

We have a customer based on Shopify, Amazon. We want to be able to take phone calls, all of that filters into one dashboard and it makes his life easier. His user experience is easier. There's less clicking, less typing because of all the automations inherent to the gorgeous [00:03:30] platform. He just has to do less, click less, have less tabs open.

And the final thing is it's really good for consumer brands. So returns, refunds, things that are centric to a business like mine are made really, really easy via the gorgeous platform. Go to gorgias. com. Again, that's G O R G I A S. Request a free trial. Mention us, Eating Glass. You will get preferential treatment, and you'll be up and running in 15 days.

What's up, man? Good to be here. It's gonna be a [00:04:00] bit meta. It's gonna be a bit weird, potentially, but Should be fun.

[00:04:03] Joe Lemay: So where should we start here? I think I just want to hear you talk a little bit about IQ bar. Like why why'd you start it? What's the genesis here?

[00:04:12] Will Nitze: I Was not always entrepreneurial. I think the whole kind of lemonade stand type motif was not really true for me I was What I would say is I was, I've always been obsessive about things.

It was sports growing up. I was obsessed with soccer and [00:04:30] then chess. I was obsessed with for a while. I would travel around and do chess tournaments and stuff like that. And then it became soccer again in high school. And my whole goal was I want to get recruited to play soccer in college. And that was like my life.

That didn't come to pass, but, uh, I got into a good school and frankly, it was partying a lot. And, uh, you know, the social piece was important to me at that period of time, but then also academics were super important to me. And I, I started thinking about like, what do I actually want to do [00:05:00] with my life?

Probably junior year of, of college. But so, all my frie You know, we're sort of a product of our environment. All my friends were doing banking, finance, uh, consulting. And I knew for a fact I didn't want to do those. Why? I talked to enough people who are 5 years out of college who did decide to do that, and like, none of them were happy.

Not, like, I don't think a single one was happy. I don't care if you're making a ton of [00:05:30] money, like, I don't want to do that. I got really, really into psychology. I worked for a Harvard Business School professor of, uh, organizational behavior, which I thought was a cool intersection of psychology and business.

So I was like, hmm, maybe I'll do something there. That doesn't really map to a career path. A job or career though. So I literally just by default took a job in software. I, it was one of the jobs. I, on the Harvard career services, you check like 50 boxes of places that don't require you to do like a cover letter and a bunch of extra [00:06:00] stuff.

You just upload your resume and check a box. That was one of them interviewed, got the job. And I was like, all right, I got to experience what it's like to work in the real world, have a boss, have a boss's boss. The company was not small, but not huge. It was like 200 people. Six months into that is when I knew I wanted to be an entrepreneur because I hated it.

Um, I actually love the people I work with and I got really good at my work, but I just like, didn't [00:06:30] like software and I didn't like oil and gas, which I didn't know going into it, but I quickly learned. You had that clarity early on. I always thought I could do something better in certain cases, and it annoyed me that I had to like toe a line or a series of lines over time and just kind of do what you're told and, uh, and do it well.

And eventually I was just like, Hmm, I don't really like this. I just wanted more leeway. I wanted, I wanted more of a blank [00:07:00] canvas to paint myself. Then it was like, all right, I'm going to start something. What do I start? What can I start? I got really into nutrition and like I said, I was interested in psychology.

I also read a couple of books that are formative that on, on consumer goods and nutrition. And so all of that rolled up into like, I'm going to start a food company. You're

[00:07:20] Joe Lemay: at the moment where you're like, I want to start a food company. Were you employed at the time? Were you unemployed? Like what was, where were you in life?

I think you're

[00:07:29] Will Nitze: crazy [00:07:30] to dive right in. Like there, especially as a young person, I was 26 when I started IQ bar. I didn't have much money, but I had the ability to get my lifestyle to like, zero ish. So what I did was, I got this idea from my boss funnily enough, or ironically enough, which is, I walked into my boss's boss's office one day and I said, What if you cut my salary in half?

And I work half the hours. He knew I wanted to set out on my own, in [00:08:00] some way, shape, or form. And I said, look, I think I'm really valuable. I think I'm hard to replace. I think I can deliver a lot of value for you. But I want to work half the hours, and I want you to pay me half the money. And I'm sure your patients will run thin at some point on that arrangement, but it'll give you six months to hire a replacement.

And will you do that? He's like, give me, give me a day. And then he came back a day later and he said, okay, that was a game changer for me because first of all, I was working like 60 hours, you know, it [00:08:30] wasn't like 40 hours, but on paper you're working 40 hours according to HR or whatever. And so it went from like 60 hours.

Not down to 30 hours, but down to 20 hours. Cause it was like, all right, 40 over two, 20. And I was not working more than the 20 hours. Like I was like, all right, 20 hours is up. I'm done. Right. Cause I'm not trying to get promoted or anything. I'm using this as a way to survive while I work on something else.

[00:08:54] Joe Lemay: Was it hard to context switch to. Close the drawer on day job and open [00:09:00] the drawer on entrepreneurship.

[00:09:02] Will Nitze: Totally. I mean, it sucked to be, cause once you got going on the entrepreneurial thing, you're like, Oh, you know, I have to work on in this prior life. Almost you're, you're living a double life in a way.

The alternative is far worse, not having a paycheck. They knew I had one foot out the door, and so I mean, it was amazing they did that for me because you're always off on timelines. So that allowed me to stretch out the timeline of ideation, creating a prototype, all [00:09:30] those nitty gritty things that you think, oh, this will be a three month project, and it turns out to be a year project.

That's okay when you have a salary. It's not okay when you don't, but it took a full year of me doing that to get to a point where I was, had a prototype I had incorporated. I thought I had a decent initial roadmap and I was going to run a Kickstarter, which was how we kicked everything off.

[00:09:54] Joe Lemay: Was it IQ Bar out of the gate?

Was it called that? Was it a similar product to what you have [00:10:00] today? Or did it evolve a lot?

[00:10:01] Will Nitze: No, the product was radically different. And this is another, I think, interesting topic of like, there's this thing about, oh, I want to be my own consumer and people fall in love with the initial product. I made the product for myself to solve my own need.

I think that's, B. S. for the most part, or it's not B. S. Like I bet you did, but it's short sighted because the product's going to evolve so much to where the end product's not going to be recognizable relative to the initial product. So you should fall in [00:10:30] love with like building a business and all the processes around the product, but the product's going to change radically.

Because you're going to listen to what the market has to say about it and hopefully make changes. But the initial product was not anything like what it is now. I think it had eight grams of sugar. So it wasn't keto or, you know, ultra low sugar, low carb. You know, we just, I didn't know how to make a product.

And so we kind of co formulated with the contract manufacturer. And, uh, I was like, can we get lower on this and

[00:10:58] Joe Lemay: that? And they're like, nope. [00:11:00] Where do you start? How do you, do you reach out to a friend and be like, Hey, I want to make a beer. Bar, do you know somebody who like manufactures this stuff? Do they, do they come to you?

Do you give them like some vague specifications and then they come to you with a recipe that they could manufacture? Or do you come to them with a fully baked thing? Like, how does that work? That early, that first prototype making?

[00:11:22] Will Nitze: I don't know how most people do it. I'll tell you how I did it. So my, and I, this is a philosophy I have with almost everything, which is [00:11:30] Just find someone who already did it, and ask them how they did it, and then copy what they did, for the most part.

So I was like, alright, who's made a bar before? And there's actually a couple local people in Boston who had made bars before, and so I connected with them. I was like, hey, can I buy you a coffee? And I just asked them a million questions. And they were cool with you, even though you might be a competitor?

Yeah, which is a weird, weirdly good and an awesome aspect of Food and Bev, which is everyone's very collegial, and in some cases even, Competitors or [00:12:00] potential competitors are collegial, which is not the case in like almost every industry. But for whatever reason, it's super, everyone's super collaborative.

People will give you advice. Now they might've thought like this kid's going nowhere, right? Um, I don't know what was going through their mind, but point being they were like, all right, here's where we manufacture. You're going to want to think about your, your weight of your product this way. Your cogs should come in roughly here.

You aim for this gross margin, and then I was like, [00:12:30] Oh, okay. This is how roughly people formulate something. And so I literally use the, I went to the co packer that they, that first bar company used. And I was like, Hey, I want to make a bar. Will you make it for me? So this was a learning for me. You have to, you can't just like formulate something in a kitchen and then say, Hey, go make 30, 000 of these.

You have to take that to the co packer and then they have to say, well, We're going to run into XYZ issues on our manufacturing line, but because of the way your formula works. And [00:13:00] so we need to tweak it in these ways. And then you almost have to like reformulate it or modify the formulation so that it machines on their equipment because half the battle is, is making it at scale.

There's like the formulation itself. And then there's the, how it plays out. When you need to be spitting out hundreds of bars

[00:13:21] Joe Lemay: a minute. I remember when we were making, you know, notebooks and just getting the time of day of some sales guy who works in a, you [00:13:30] know, printing press to spend time with us and educate us or do a first run, things like that.

It's kind of tricky. Um, did you just like find somebody, a salesperson, a business development person who just like was generous with their time, believed in you? How did you like get their attention when you're. You're clearly just a dude with an idea and they probably see a bunch of those people every year fall by the wayside and they learn not to waste their time with them.

I always say this, like, that's the first sale

[00:13:58] Will Nitze: you have to make is your [00:14:00] co packer. So you have to convince them, to your point, why, like, why am I taking a flyer on this kid with an idea? Because, yeah, also to your point, Nine out of 10 of those flame out and they're not really making money on you until the second, third, fourth production run.

And then it's kind of nice for them. It's an annuity every time you produce, they're making a good margin. But if you flame out in the first six months, it's not a good use of their time. And I don't know how to, how else to put it other than you have to be a good [00:14:30] salesperson. Like you have to sell your vision just like you were selling it to an investor.

Hey, here's why the idea is unique and great. Here's why I'm unique and great. Here's how we're going to scale. I'm a loyal customer. I'm not looking to bounce around. And then also it helps to have someone vouch for you. So that first bar company like vouch for me, Hey, well, as a smart guy, you know, what should a gross margin be?

I mean, it's so your, your financials are so upside down when you start in any consumer good, other than, Perfume or something. You [00:15:00] know, there's some things where it's just like you're going to get an 80 percent gross margin at the gate, but like vast majority, you're going to be upside down. It depends.

And people will give you a benchmark and there's always going to be exceptions. Uh, in food, you want to get to 50 percent and we're like just now just above 50 percent and we're six and a half years in. So you're going to lose money. There's just no question about it. It's a question of how much money and how quickly can you get to [00:15:30] scale?

Because consumer goods is all about scale. Scale solves all problems. Now it creates new problems too, right? As you scale up, mistakes are amplified, they're multiplied, but you'll take that all day long relative to the problems it solves. Consumer goods, it used to be the case, at least in food and Bev, and really Bev, you could scale really fast and run just massively cashflow negative businesses.

And sell, you could exit that business for a good number. And so the focus was always on [00:16:00] sales and marketing sales. And so ops was always subservient to sales and marketing in every way. That is like more or less inverted. Today, ops, like the best, the companies that are gonna win, I believe, are all ops first.

Were you doing that from day one

[00:16:16] Joe Lemay: or did you have that aha at a certain level of scale?

[00:16:19] Will Nitze: No, I would be lying, I wish I was, uh, but I didn't, I would be lying if I said I was doing it day one. This is why I think it's also different to start a business in this era. Then it was [00:16:30] when I started in 2018, there was more money in the ecosystem and we were still super capital efficient and always have been, but damn, if you're starting a business now, you got to be an operational monster from day one.

Because like I said, there's just not that much money. But I'm

[00:16:44] Joe Lemay: imagining you're not just obsessing over. Like what the customer wants, but also like how can you make something that is even at parity with what you have, but costs 10 cents less, right? I'm imagining that you're evolving the product for procurement reasons too, right?

[00:16:59] Will Nitze: [00:17:00] Yeah. Like the worst thing you can do is make the product worse because the worst thing for not necessarily uni economics, but just overall economics is have a low repeat buy rate. Do you never want to deprecate product quality in the name of. Expanding gross margin. That's like a cardinal sin, even though you'll want to, right?

You'll be like, Ooh, but I could expand margin. Generally though, if you deprecate the product and expand margin, [00:17:30] your union economics improve, but your overall economics, get worse. And there's so many ways to reduce costs. This is why I say scale solves all problems. A lot of this is hard to do when you're only buying 10, 000 pounds of almonds, and a lot easier to do when you're buying 100, 000 pounds.

But now once you have that scale, okay, who are all the almond providers? Can I contract with them? Can I lock in a price and I can guarantee demand to them and they're going to give me a 15 20 cent per pound break? But so much too is then on the labor side. Like [00:18:00] the labor is roughly one half of the material cost.

Material cost is a lot less elastic than labor cost. So you can shave a little bit off. Labor you can shave a lot off. I mean you can get a 30 percent reduction in your labor cost with

[00:18:18] Joe Lemay: volume. You said something that's going to stick with me and that it's about your Your repeat purchase rate being make or break for your consumer product company makes a lot of sense.

But when you're selling through like a Costco, even [00:18:30] Amazon, like how do you even have a gauge of that? How do you know what your repeat purchase is? How can you measure it? Like a heartbeat? So that you can try to make, do things to improve it. It seems like a core metric for your business, yet it seems like it's really hard to measure.

[00:18:45] Will Nitze: Jess, my wife slash RCMO slash head of e com could answer that a lot better than I could. No, I mean, you can do the analysis via website data. I think fairly easily, um, or at least she can, [00:19:00] like she can crunch the numbers on that via just Shopify data. And to your point, it is tricky, right? Because they might buy on Shopify and then they go to, they make their second purchase on Amazon.

So you lost that person and it'll appear as if that person did not repeat buy. The more omni channel you get. To your point, the harder it gets to get like fidelity in your metrics, like repeat purchase. I mean, the holy grail is how the subscriber, because, okay, you subscribed. For the most part, you're like locked in as a repeat [00:19:30] purchaser.

And again, that, that is the holy grail. If you can build a big subscription business, I think 40 percent of our website sales are subscribers, something like that. Is that really big for a CPG

[00:19:40] Joe Lemay: company? That's pretty high. It's above average. All right, so operational excellence check. You still need to, like, get new customers, right?

How do you think about marketing? What works for IQ Bar? What have you figured out the hard way doesn't work? How do you grow this company other than just getting it on a shelf?

[00:19:59] Will Nitze: I mean, the [00:20:00] first way we grew it, so we did the Kickstarter. And that was like, okay, check people want this, or at least whatever it was, 2, 500 people want this.

And then we spun up a website and then some percentage of those people re bought and we were in business. And so the website was the first channel that we started selling through. And then it was like, okay, how do we grow this channel? We started doing Facebook and Instagram ads, email marketing, like all of the blocking and tackling that anyone does.

But quickly [00:20:30] after starting, uh, All of that we, we rolled out an Amazon presence and Amazon just started way outpacing our website, like not even close. And so there is, when I was starting out, there was this whole. debate, oh, do you go DTC only or do you go to Amazon? You lose all the customer data with Amazon.

And I always thought that was so silly. It's like, why would you not take the sale? Like what matters is top and

[00:20:53] Joe Lemay: bottom line. I'm curious to get back a little bit to your Kickstarter days. Like it seems to me that you were able to prove a little success [00:21:00] early on on Kickstarter. Kickstarter to me doesn't seem like the place.

where you would sell or prove that you could sell like a protein bar. How did you wrestle with even deciding to do that? Turning those, whatever it was, 2000 sales or so into evidence of success and turning and going to raise funds on that. And how did you turn that into more momentum? Because I'm imagining you get a little bit of Kickstarter success.

Great. The campaign's over. Where do you go from there? How do you turn that into a company? It's

[00:21:29] Will Nitze: [00:21:30] not the best category for Kickstarter. You did many Kickstarters and, and you know this space way better than I do, but board games, electronics, things like that are, are better categories. They just are. Food and beverage is not a great category.

That being said, there's only one Kickstarter. Either it's worth doing or it's not. And then what is the alternative? You can put up a landing page and collect email addresses over time. And it just was always better than the alternative. We knew it was not the best category, but it can be a pretty good [00:22:00] category.

And then we set 50, 000 as our target because we thought if we can hit 50, 000, that's a great proof point. And people want this product. And if we can't, then it may be like the market again, it was also just a test of does, is this idea terrible or not? Yeah. Yeah. When I first realized, okay, I need money to start this business.

I'm going to need sales probably to justify a valuation that I want to be able to get. And so it's that chicken or egg [00:22:30] problem. I don't have money, but I need money to generate sales to go get more money. And Kickstarter solves that chicken or egg problem because it's all pre order. So between Kickstarter and Indiegogo, which was like spillover revenue, we sold 90, 000 of products.

And then we turned around to those same people who gave us the 10k little 10k checks up front and said, Hey, we just turned your 30 grand into 90 grand of sales, like a month [00:23:00] later. What do you think? And then they wrote 200, 000 checks. These are people I actually didn't even know. I got like networked into them through a friend of a friend and they're like, okay, damn, that was impressive.

You have this really good proof point

[00:23:12] Joe Lemay: and you have sales. Now you've raised a good amount of money beyond what you were just talking about. How did you think about other fundraising? How did you keep, um, dilution to a minimum? How do you think about it moving forward? What are your thoughts on fundraising?

I mean,

[00:23:25] Will Nitze: the goal was always, and I think this is a good strategy for most things, just work [00:23:30] backwards from your desired end goal, which for me was own more than 50 percent of the business. If I drop below 50, I'm an employee. By definition, I am not the decision maker. Unless you have some separate share class of voting shares or something like that.

But let's just say I'm now an employee. I don't want, I didn't get into this to be an employee. I want to own more than 50%. I want to call the shots. That's what makes this fun for me and worthwhile. And that's why I'm going to work 100 hours a week for years. [00:24:00] So, okay, if you want to own more than 50%, how much money is this going to take to get to a point where you're sustaining yourself off of internal cash flows or exitable?

Well, we need to get to this point. Okay, we're gonna probably have to raise this much here and roughly that much there. And you can kind of map it out. Of course, things will change. You'll always need more money than you thought you did. Things can go wrong. Expensive mistakes can happen. But it's worth charting it out and then [00:24:30] just readjust, readjust, readjust.

So yeah, so we raised that 35k or whatever. And then shortly thereafter, the 625k. And then a year after that, we raised a million. That was our first price round. A million on a 12 million valuation. Because we were doing, we were charting a path to over 2 million that year. 6x multiple, but then a year and change after that we raised 2.

775 million, just kind of a random number, but that was our first time we raised from VCs, and that was at a 20. [00:25:00] Two years after that we raised 5. 5 million at a 50 million valuation. But point being like we raise less money more often, and so each time we're diluted, a very small amount to where now, you know, I still own just above 50 percent of the business.

10 million later, we've been in cases where we were out of going to be out of money and we had to pull a rabbit out of a rat. There's no question. So just pick that and less dilution or,

[00:25:27] Joe Lemay: or the alternative as you're [00:25:30] growing, right? I've noticed a couple of things about you that I've always wanted to ask you, but here's the opportunity, right?

Um, one is, you know, there's often a I mean, you're still a young company, uh, and someone might advise you to focus on one thing and do it and do that the best you possibly can do. You're in three different categories now. You're in protein bars. You're in a, an instant coffee with some [00:26:00] mushroom brain element to it and you're in the electrolytes business, too.

Was that a good decision for you? Now, in hindsight, do you think that's the right strategy? Why is it? Like, what are your thoughts on that? This is

[00:26:10] Will Nitze: one where you can't get too dogmatic, I think. So, one dogma is You need to focus, focus, focus. And I actually agree. Focus is incredibly important. You don't want to be dogmatic about that.

First of all, you need to understand. What kind of a company am I and what [00:26:30] trajectory am I on with my first form factor? So for us, that's bars. Can we scale just bars to over a hundred million in revenue, take a stranglehold on a subset of the market and then sell for some huge number to some strategic entity?

If the answer is yes to all that, you just, you just go with bars. You just focus on bars and you ride that form factor. But the answer is probably no to that. If the bar business can grow at this clip, And we want to be growing a little faster, what [00:27:00] would happen if we layered on hydration? Non cannibalizing, you're not consuming this instead of that, you're consuming this and that.

And in fact, it might be synergistic. Consuming this might want, make you want to consume that more. And then, you know, we added coffee. And so, three different occasions throughout the day, no cannibalization. all complementary, and then all have that consistency of brain and body nutrition, satiate, hydrate, caffeinate.

[00:27:28] Joe Lemay: They seem to be all, [00:27:30] for me anyway, they're all products that battle brain fog, right? And so that's just something that I want to battle every day, and these are my weapons to do it.

[00:27:39] Will Nitze: Totally. And, and another thing is like, we're an e com first business. So I think a lot of the focus, focus, focus people, are thinking about that in a brick and mortar context.

When you sell to people online, especially through your website, you want to build the biggest basket possible. You have different stuff [00:28:00] that you offer them. It's just like being a mini Amazon. When you go to Amazon, they want you to build the biggest possible basket. And so you're going to get toilet paper and toothpaste and LaCroix and whatever.

That's a great outcome for them because they're amortizing that shipping cost over many things. And so there's just no world where you're going to buy 500 bars. I mean, maybe you will if you're a gym or something, but most people won't. So how do I get you to bump that basket size up? Well, I can sell you hydration and I can sell you coffee.

And [00:28:30] now your ring size is 50 bucks instead of 20 bucks. There are downsides though, right? You have operational inefficiencies. We have to have two co packers instead of one. You're, you're starting a new startup in a way, every time you start a new form factor product line, we knew bars really well. We had to learn powders.

You're going to have separate consumer bases. Now you got to juggle a couple of different audiences. But overall, I think it makes for a better, stickier, more resilient brand that has a

[00:28:59] Joe Lemay: [00:29:00] higher basket. I also found, I mean, in my technology notebook business, I wanted to be in different stationary categories because I wanted people who were looking for legal pads to find Rocketbook.

I wanted people who were looking for, Sticky notes, notebooks, all of them to find Rocketbook and then have the discovery about our brand and then when they go out and buy the next product. You know, I really did look at Amazon and I was like, where are we, what is [00:29:30] Amazon selling the most of? And then using that to drive whatever product we were doing next.

And using just Amazon as a, as a brand, not just a product discovery engine for new customers, but a brand discovery. engine for new customers too, right? So, I've seen you just do it differently, and I think it's rather brilliant. Maybe, maybe because I relate to, to the strategy as well.

[00:29:52] Will Nitze: And then also, you can decide how to constrict any given form factor.

So, with Bars, we're omni channel. We sell on website, [00:30:00] Amazon. Costco, Wegmans, Sprouts, like many brick and mortar retailers. With hydration, we only sell website and Amazon. With coffee, we only sell website and Amazon. So you can sort of constrict the channels you're selling other components of your platform to.

It just is the case that hydration stick packs don't sell well in grocery. Fine, we won't sell them in grocery. The downside being, you gotta juggle three different [00:30:30] go to market strategies, but whatever,

[00:30:33] Joe Lemay: no big deal. You do go to market in general a little bit differently, right? I mean, what are your counterintuitive thoughts around that?

[00:30:39] Will Nitze: There's a

[00:30:39] Joe Lemay: playbook, quote

[00:30:40] Will Nitze: unquote, that is disseminated by, uh, industry veterans all the time. Which is, there's a right way to grow a food and beverage brand. And generally it goes something like this. Start in natural, and start local. So if you can get in your local region of Whole Foods, do that. [00:31:00] That's your starting point.

Do well there, get velocities as high as possible there, get a loyal cult following behind your brand, and then grow that concentric circle geographically. To other natural, once you've saturated natural as a channel, natural grocery, now you can go to conventional, meaning Kroger or Meijer, whatever. Once you've done well in conventional, now you can go to big box.

So you can go to Walmart or Target. And once you've done well in big [00:31:30] box, you can go to club. Meaning Costco, Sam's Club, BJ's. That's generally the playbook. Usually when people talk about the playbook, e commerce is not the playbook. All that baked into it. Because most of the purveyors of the playbook don't know e commerce.

It's a relatively new phenomenon, at least in food and Bev. Obviously it's, I, e com has been around for a while, but it's really only picked up in food and Bev as of the last 10 years. We inverted that. So we [00:32:00] started with e commerce, which you can do if you're a bar, because it's the price point to weight ratio.

And the price point to dimension ratio is very favorable for selling popcorn. It would be much less favorable because of the dimension issue. If we were selling seltzer, it would be very unfavorable because of the weight issue. But we're selling something that happens to be light and small. That was the first sort of different thing we did was just, let's just build a big e commerce business first.

But then [00:32:30] also, you know, we tried to get into Whole Foods. We didn't get in because actually we used this ingredient called allulose. It was a banned ingredient, which is silly, candidly. But, um, so we're like, huh, okay, that, that playbook's not going to work. What do we do? And our first big retailer was Kroger, which is conventional.

And they would say, You know, the, the playbook purveyors would say, that's crazy. Well, you can't go right to conventional, but it, it worked. Maybe part of that was luck. Maybe part of that was, I don't think [00:33:00] it was all luck though, because we had already built a big e commerce business out by that point. So anyone who shops at Kroger very likely saw us on Amazon or on our website, all the sort of goodwill that we would have built up being in Whole Foods and Sprouts we already had just in an online context.

So we kind of like hacked our way into skipping a few steps, rungs of the ladder. And then we went into Walmart early. Almost everyone would tell you, No, you [00:33:30] can't incubate a brand in Walmart. If you get on shelf and it doesn't work, that's going to kill you. And the opposite was true. We did started doing

[00:33:36] Joe Lemay: really well in Walmart.

Were you scared at first? Because you heard people saying, Hey, if you make this move, it could, it could be your last chance. I'm most scared of not

[00:33:45] Will Nitze: growing. I'll harp on this again. Volume solves everything. How do you get volume? You work with big retailers. Yes. Is it scary working with. With Walmart, it is scary.

Is it scarier [00:34:00] to not have volume and have bad unit economics and have bad company economics and be hemorrhaging money? Yeah, that's scarier to me. Walmart gives us a path to make top line and bottom line. And ratchet up volume. Let's figure out, can we make that work? If so, let's make that work. Let's do everything we can to make that work.

I mean, Costco, same, same deal. People would say, don't go to Costco, because they can bankrupt you. And I had the same [00:34:30] mentality. What if we don't go to Costco? What if we can't get to a certain volume by a certain date? That's way scarier to me. And this, by the way, the, when we were having the, this thought process around club and Costco in particular, there was a massive tectonic shift in the market to where you had to get profitable.

You have to, it was basically an impossible ask of companies like ours, grow really fast still and get profitable. Yeah. How do you pull that off? Like I said, scale is the answer to almost any [00:35:00] question. And so we were like, okay, I had that same thought process that we had. with Walmart. If we can make this work, we have to make this work.

And we did. I could do a whole podcast on, on how we did, but basically we did road shows, got a rotation in the LA region that went well, and then got rotations elsewhere. It was a grind. I mean, incredible grind to make it work. And you had to be operationally fantastic for the numbers to work, because you're, you're taking a huge [00:35:30] haircut on your whole wholesale price, but the volume is so big that you're still doing all right.

If we zoom out though, what is taking that different approach allow you to do? It allows you to scale two, three times faster. So what otherwise would have been a 10 year journey is a.

[00:35:46] Joe Lemay: Five year journey. I think I knew you when you were sub seven figures. Right now you're pretty big. How's your team building and and specific, like I've heard you say that you believe in nepotism, for example.

How do you think about team building?

[00:35:58] Will Nitze: I think about it in a similar [00:36:00] way to the way I think the Dropbox founders think about it. I remember listening to an early interview, I forget the guy's name. One of the guys who started Dropbox. But anyway, he was basically like, I have no freaking clue how to hire.

I'm not an HR professional, and I feel the same way, by the way, I think every founder feels this way, they're like, I don't know how to build a team, what am I gonna do? I'm gonna hire people I know, and like, and trust, aka nepotism. [00:36:30] Um, because, and by the way, I still feel this way, like, you cannot, I can't emphasize how important trust is, people on your ship being bought in.

The number one, like, example of that is hiring your own spouse, which I did a couple years in. You gotta tell me a little bit about that, like, how did that come to be? We had, A little bit of traction at that point. I think we were tracking the 2 million. And so what [00:37:00] seemed like a crazy idea, it was less crazy to my wife, Jess.

We had this get together in Boston at mass challenge, this accelerator we were in where all the investors came together. It was super cool. And we were like, here's our plan for the year. And here's our financials thus far. Here's our R and D roadmap. And. It was just a really cool meeting and she sat in on that meeting and then afterwards she was like, that was cool.

Like this thing is, is real now. Like, what do you think about me running marketing? [00:37:30] And I immediately was like, absolutely. That'd be freaking awesome. Because I trust you. I know you're really smart. She actually didn't have experience in Amazon. Or D to C, but I knew she could figure it out. She came from an ad agency background.

I just knew she, she would figure it out and be great, which has come to pass. Like she's, she's sits over the biggest part of our business. What's that done for your relationship? I always try to think about things relative to the alternative, [00:38:00] not. it just in an absolute sense. So is it hard in many ways?

Yes, for sure. It's super stressful and you butt heads and it's a little weird. You wake up in the same bed, you walk to the same kitchen, especially in work from home, which we've been since COVID hit. You walk to the same kitchen, you make coffee, you walk into an office that's separated by a wall, and you get on Zoom calls that you're both on.

Like, it's weird. There's no question about it. But what's the alternative? The alternative is. me working all the [00:38:30] time. Maybe she resents me for that. And she doesn't have context into like why I needed to fly to California to do a Costco roadshow or just having context is so powerful. And she has like ultimate context because she's in it with me.

Do you talk about work too much? Yes, for sure. You don't have the awkward thing where you sit down at the dinner table and you're like, what do you do today, honey? That's not there, which I think is awesome. Because it's like, I know exactly what you [00:39:00] did today. Let's just talk about it. I love that. And, uh, to me, I see it as a streamlining, uh, a merging of work streams.

Can't you bounce your

[00:39:09] Joe Lemay: LinkedIn posts off

[00:39:09] Will Nitze: her?

[00:39:10] Joe Lemay: Is she, uh No, she doesn't, she doesn't read them.

[00:39:13] Will Nitze: She thinks I'm a goofball, uh, within that regard.

[00:39:15] Joe Lemay: How does LinkedIn, I mean, you're a maestro on LinkedIn. A lot of people give you a lot of props, but me too. Uh, why do you do it? What do you get out of it? Like, what's, there's a strategy there?

The original strategy

[00:39:26] Will Nitze: was become your own publication. Like, I am a believer in the that. [00:39:30] The consumer brand winners of tomorrow will be their own media companies in some respect. You have to have a content strategy. You have to grow organic customer acquisition at a large scale to win. The margins just aren't big enough to just dump money into Facebook ads and, and even if there were.

You're, you have massive platform risk. So the question was, how do we become our own publication? And then the other [00:40:00] thing is, do we have a brand first approach or do we have a founder first approach? Yeah. We just sat around and talked about it and I was like, look, I like writing a lot. I think the founder first approaches will work better because people like hearing from people, not brands, unless you're Nike or something with massive affinity.

No one cares. They'd rather hear from a human. So what channel could I create good content on regularly? That wouldn't feel like a chore, I would actually enjoy, and would reach a lot of eyeballs. [00:40:30] It's basically a LinkedIn or Twitter, and Twitter's so quick and is more tech focused, like, CBG is way more LinkedIn focused.

So I was like, alright, LinkedIn, let's, let's just try that. What do you get out of it over time? The people you meet is incredible, the connections you make are incredible. You get a bunch of customers, but I don't think you can justify it through that lens. I think it's like 10 different benefits that add up to make it more than worthwhile.

And just, it's important that like [00:41:00] everyone knows who you are. I, I, I don't think I've had a cold intro in like two years. It's hard to quantify, but that has massive value.

[00:41:07] Joe Lemay: And then even if they didn't know who you were, they could, they can look you up really quick Oh, Will's got 40, 000 followers and his last five posts are Yeah,

[00:41:18] Will Nitze: like also just you can learn, what's this person about?

What do they think about? What are their opinions? Just go to my profile and read 20 things and you're like, Hmm, okay. I know who this person is more or less.

[00:41:29] Joe Lemay: [00:41:30] What do you think you'll do? Let's say I came along and I wrote you a big fat check for this company and got you to sell it. How would you feel about that?

Like, how do you see IQ bar in terms of your, your career? Is this a stepping stone? Is it your life's work? What would happen if you, if you did sell this company? What are your thoughts around that?

[00:41:47] Will Nitze: For starters, the point of, not the entire point, but a large portion of the point of starting the company was to sell the company for a variety of reasons.

Number one, money. Like, I [00:42:00] think there's a lot I want to do. in my life and in my career. And I want to sort of sequentially keep leveling up the ambitiousness of the next thing I want to do. And in most cases that requires more money. Money itself is totally uninteresting to me, but it allows you to take bigger swings.

How can I accrue a lot of money? And thus use it to take on really ambitious challenges. Cause I love working. Like I'll never be the guy to sit on a beach or whatever. Well, [00:42:30] start a company, grow it, sell it. I actually, a lot of people get depressed or whatever when they sell their business. I don't think I would be that way.

I think there's a nice finality to it to where it's like, check, you know, this happened. Rubber stamp. You got there. You did the thing. You objectively like succeeded and no one can claim you didn't. It's right there objectively for everyone to see. I like that. I think of life in terms of [00:43:00] seasons and like that would be the close of a successful season.

Then you get into the nitty gritty logistics. You have investors. So, they don't want you to hold this thing forever. I mean, the second you take your first investor dollar, you realize like, I kinda gotta sell this thing. Kind of a dick move to, Not for these people. They trusted you, gave you their money and they want a return on their money.

And you kind of implicitly or explicitly said, I will get you a return on your money. We're never going to be a business that spits out dividends and makes that [00:43:30] worthwhile. The way you get them the ROI is you sell the business. Like that just is what it is. Now, the second time around, can you self finance and now you are your own investor and you have no strict timeline?

Yes, but that is not the case here. I want to do the right thing by, by investors. I do think there's. I don't know, you, you can speak this way better than I can, because you've actually got to the promised land and you can speak to like the void maybe that sets in if you sell your business. I'm fully expecting that [00:44:00] if we were to be so lucky to exit.

I'm fully expecting a massive void sets in and you're like, Whoa, I was doing this all day long. I was obsessed with it. Now it's nothingness. And of course, all your muscle memory is built up running at a mile a minute. And now you're running at zero miles. a minute. You're like, well, how do I fill these hours and keep myself captivated?

I don't, yeah, I guess I don't know what to do until that happens. But my best guess is you find something new and you [00:44:30] start running a mile a minute again. And I don't think this is like the idea of the set. This isn't SpaceX. And you got to be like realistic about Do I want to do this for 60 years? No.

And that's fine. That's fine. It's a season. It's not an eternity.

[00:44:45] Joe Lemay: How did you feel? Well, first of all, I'm not going to sit here and say it sucks. It's fucking awesome to have built a thing and then landed it successfully without it crashing and burning is just a giant relief. And [00:45:00] then of course when the wire hits your account, that's amazing.

It did change my living situation. I live in a nicer house. I'm not a car guy. So I still drive a Toyota. Went on some vacations, but it, it didn't dramatically change my life in some ways. In other ways it did. It seems like. People just instantly respect you because you've created something and sold it. I would say that you will probably have that just because you've done so well on social media and, and LinkedIn that you kind of already have that [00:45:30] ingredient.

You're pretty established and people will take meetings with you. I didn't really have that as much, but like building a thing and now I sold it. Now I have like this credibility and anyone will, not anyone, but a lot of people would take meetings with me. And that's, that's actually really cool. But I would say that the void of, you know, you sold a company and now you're, you're no longer with it.

I think it's just like, um, getting the wind knocked out of you. Yeah. I mean, you catch your breath. You'll, you'll figure it out from there and you'll, you'll get excited about the next thing. You'll definitely find something to get excited about [00:46:00] next, right? It just might take a little bit, a little while.

And I think taking your time to reflect and just kind of sit in the moment, um, with me. You know, connect really deeply with my kids was, uh, was really important too. I think post exit will, will thrive. I don't think you have anything to worry about there from what I know about you. If you had, you know, eight, nine figures in the bank, would you start another company that's similar?

Would you start a much more ambitious company or would you do something [00:46:30] completely different that's not starting a company? I

[00:46:31] Will Nitze: think I would like. look at all the chess pieces on the chessboard, which maybe at that point would include a kid, for instance, which is, changes everything. You know more than I do.

I don't have kids yet. Just family dynamics. Where do I live? What do I like to do? Do I have hobbies? Um, how much time a week do I want to spend on hobbies? You know, I just look at The totality of my life in [00:47:00] that moment, which is different than the moment I started IQ Bar, like radically different. Even your interests change a lot and evolve.

So I just, I think I would look at everything and I would say, I definitely want to start something, but there's so many flavors of, of a thing, uh, entrepreneurial thing to create. You could create, A startup studio, and now you're still exposed to startups, but now you have other operators running each of the nodes of that studio, and you can put some capital to work.

And so you're kind of like one and a half feet in, but you're not [00:47:30] two feet in. So you could go on a vacation, or you could play tennis at 2 p. m. on a Thursday. There's the, of course, the original flavor of just, I'm two feet in, I'm doing this new thing, I'm the head of it, I'm a dictator, you know, benevolent dictator.

in X, Y, Z ways and I'm back at it. And, and, and I think if I were to do that, it would be more ambitious. So I don't think it's any less stressful than when I started IQ bar. It might be more stressful, but I like that. So maybe that's where I land. [00:48:00] And then maybe like go to the other end of the spectrum. It could be one foot in or half a foot in, which is, well, I'm just going to kind of invest and take a few calls and be the chairman of a board of some company and be really interested in it and.

But I'm not gonna, if there's a fire in the manufacturing plant, I'm not the guy getting on the plane to fly there. I don't think that would make me happy though. Like I, I consider all of it, but I don't think that would make me happy. I [00:48:30] think I would have to be in the, that first or second camp. You know, we'll see.

I'll, I'll evaluate where we're at at that time. I think a big thing too that I lack that you have is I'm a solo founder. I was intensely lonely. When my wife Jess joined, that was when it got less lonely. I think it would be fun to do stuff with friends and people you like and respect and think are really operationally great.

I didn't have that. I would like to have that. Because it becomes less about how many times are we divvying up [00:49:00] this pie and it's just like, no, I just want to work on cool stuff with friends. And so I think I would think about that. It differently in that regard

[00:49:07] Joe Lemay: too. Yeah, I really relate to that. I actually, I have a co founder, but there was over a year, um, before Jake joined where I was the sole founder, but I really was, man, it was a struggle.

Not just to get enough done, but the loneliness. was really, really, really hard. And then when Jake came aboard, just effectiveness went, went really high because he was somebody that I [00:49:30] could trust in his competency and everything. And then we, we clicked, it was, it was, it just changed everything. It just made us more successful and made it more enjoyable.

[00:49:39] Will Nitze: It's like hiring your wife or husband. It can either be the best thing ever or the worst thing ever. I know there's a common thing where. co founder strife is Maybe number one of what causes companies to fail if it's not one it's two But it's very high on the list of why so having a co founder [00:50:00] That in and of itself can take down your company on the flip side It could be the best thing ever which it sounds like it was for you So those were my trepidations about it, but i'd rather take the risk again This comes back to the nepotism thing.

I'd rather just find someone I like and know and trust And, you know, reduce the odds that it's catastrophic. Take that small risk that it ruins the friendship

[00:50:21] Joe Lemay: entirely, which it could. I don't know about you, but I found that I felt like I was a case study in getting lucky when it came to [00:50:30] discovering the right person at the right time.

Um, just, there were just, Jake was number one and a few others, boom, boom, boom. Just made huge differences in what we could do as a company and the fun that we could, we could have. I It was hard work, it was type 2 fun, but it was fun. You guys had more

[00:50:48] Will Nitze: fun than I think most people, by the way, I mean. How many co founders are dressing up as astronauts on Shark Tank?

Like, not many.

[00:50:56] Joe Lemay: Yeah, yeah, we had a lot of fun. [00:51:00] And, uh, we, we, you know, we'd also got, um, we had like a trophy case of chips on our shoulder, right? I mean, these investors said no. We got kicked out of this. These people said no. We just like, we, we just kept them as, uh, as badges. And we referred back to them at a, in a joking way.

And we just, We've always felt like outsiders, you know, like the goonies or something like that. We just, we just turned it into fun. It was great. I've got a couple rapid fire questions if you want to. Let's hit the rapid fire. [00:51:30] One of your favorite questions is the Peter Thiel question. What's an important truth that you believe in that very few people agree with you on?

[00:51:37] Will Nitze: I honestly think it would be like the nepotism thing. Like, I, like, you should put trust. above almost everything else, sometimes above competence. Often people are like, no, just like find absolute rock star quote unquote. And to me, it's not actually never about that. Obviously you want ultra competent people.

You want someone who's bought in to like a [00:52:00] abnormal degree. Usually the people who are that way, you already

[00:52:04] Joe Lemay: know. Well, two of our questions, I think, get at this, which is what's your greatest earned secret and the other, a big mistake or regret. So I'm wondering if this idea of trust, if you learn this the hard way, was there a regret?

Is this an earned secret? Give me some context. Man, we have so many earned secrets. I think

[00:52:21] Will Nitze: one that's just top of mind, cause we were, we were We were just out of Costco Roadshow is the playbook is just wrong because it lacks [00:52:30] context, the quote unquote playbook. So what, what industry vets will tell you is the way to grow your brand is almost, it's, there's no question it's wrong.

It's just how wrong. And so trial and error is a damn good way to figure out how wrong it is. I still think trial and error is the best startup strategy because things move and evolve so quickly in this space. But just a more concrete answer, channels that you think you might [00:53:00] not be ready for, you actually might be ready for.

Don't assume you can't leapfrog two steps forward. You're never gonna feel ready. And so just do it anyway, and you very well might find, Oh wait, actually I'm ready. Cool, you just saved yourself two years of time, which is massive, that's an eternity. So, so don't assume you're not ready for things that other people told you.

You would be ready for two, three years from now. All right, so what's, what's your hardest decision or biggest regret? Hardest decision [00:53:30] is, I think most, most people would say this is, is letting people go. It just sucks in every way, shape, and form. But it's true what people say, you almost never regret firing someone.

They were not the right fit for your brand and it's usually the best thing for them too. They were not going to be successful and probably not happy in your organization. So it's not just better for you, it's better for them. I think that's got to be the hardest thing. The biggest regret? Yeah, I don't have any major [00:54:00] regrets.

I think if I did have one, it would be obsessing over a product too late. Like I would have. obsessed over a product way more early on. I would have even taken longer than we did to launch. I do believe you should launch before you're ready to some degree, but in consumer goods, launching with the wrong product is deadly, which I don't think we did, but I just, we've iterated a lot and it's very painful to iterate.

And so I think I would, I think, I guess I would just obsess more on the product.

[00:54:29] Joe Lemay: Will, if you were [00:54:30] a product, what would your value proposition be? Well, would certain people dislike about the product that is Wilmetsa or even find toxic? I mean, this

[00:54:39] Will Nitze: is super cliche, but I'd be a Swiss army knife. I do, I do believe in being, you have to be a generalist as an entrepreneur.

I'm not very hireable because I'm not a specialist and generally good hires are great specialists. I do think I'm really well suited to being an entrepreneur because I like doing a lot of things and I can get 80 [00:55:00] percent competent at a lot of things versus 100 percent at one thing. What do people hate about me?

Or, what would people hate about the product that I am? I think, that's the other piece. I think what they would hate about me is what other people would like about me, which is I'm quite direct and blunt. Like, I don't like small talk. If I get on the phone with someone, I'm not trying to catch up with them.

In most cases. I would like to, like, to that point of the conversation, there's a meeting, I [00:55:30] don't want to dilly dally, why are we here, what do we need to do, this is a 30 minute meeting, we already got what we needed out of it in the first 7 minutes, like, Let's cancel the rest of the meeting. Some people don't like that.

That's more about just, and actually this carries through the metaphor of the product. Not everyone's going to like your product. Doesn't mean there isn't a giant total addressable market of people who do. It's great. I think we got to the heart of it.

[00:55:52] Joe Lemay: I think we should

[00:55:52] Will Nitze: cancel the rest of this meeting.

[00:55:54] Joe Lemay: Ha, this is great man.

That's awesome.

[00:55:55] Will Nitze: Yeah. No, this is fun. That's a wrap buddy. Good work. All right. That's a [00:56:00] wrap. Thanks for listening. And thank you to our sponsors IQ bar, go to amazon. com search for IQ bar, buy one, wait for it to arrive. Leave a review. Please leave a review. Reviews are massive. Our second sponsor is ramp. Go to ramp.

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