Scared Money Is Exactly Why You're Not Growing (ft. Michael Brandt)

If you want to sell your company for a billion dollars, you're going to have to chew on more glass than the average person. Period.

Michael Brandt is the CEO of Ketone IQ, the brand that locked in Joe Rogan, Jon Jones, and US Special Ops on the idea that ketones are the future of human performance. A lot of people get lost or it feels like you're busy. What you focus on expands. Everything is a fractal. So, if I actually put all my creative energy into ketones, there is lifetimes of work to do inside of that. He's cracked a partnership playbook so powerful that over 50% of their 8-figure marketing budget goes to humans, not Meta.

Rome wasn't built in a day. There's fundamental pain involved. Entrepreneurship is a long road. Takes a lot of discipline, a lot of pain, a lot of things that don't get your way. And you get up and you do it again the next day anyway. You keep finding ways to compound it.

You have partnerships with Diary of the CEO, Jon Jones, and recently Joe Rogan. What percentage of your marketing mix is partnerships?

It's over 50%. Partnerships are a huge part of what we're doing because what we're creating is so new that you need that high-trust third-party partner to really get it across.

Transparently, for everybody out there listening, we were at dinner like a month ago and I was talking to your CMO. That blew my mind. For everybody out there, all of the guests, all I've seen is I would say as high as like 85% of spend on Meta. I'd say at the low end like 70%. So 50% was like absolutely mind-blowing to me. And for context for everybody out there listening, you guys are mid-8-figure brands. That's millions of dollars you guys are spending on this.

I was going to wait to get into it, but we might as well just get into it right now and just give people context. Like, what is a ketone? What is ketosis? The ketone diet? Just dive right into us and just give us, at a fifth-grade level, what is it?

Yeah. So, my background is I'm a competitive marathon runner. I run a 2:35 marathon as my PR. That's a 5:57 mile pace for the whole marathon. And I studied engineering in undergrad at Stanford. And I married this engineering mindset with my human performance passion, curiosity, and I started looking top-down. What would be the biggest lever we could pull inside of human nutrition that doesn't already exist? I was always really inspired by the Gatorade story of how they invented electrolytes that no one was doing what they did until the 1960s. These scientists pull up at the Florida Gators and start measuring people's sweat, start seeing that it's got all these things called electrolytes in it, and hey, let's replenish people's electrolytes. And now electrolytes is a, you know, multi-multi-billion, tens of billions of dollars category. To me, that was super cool. I was like, what's the next nutritional primitive thing that we could invent in the pantheon of human performance? When I started looking through the literature, the word ketones kept coming up. And personally, I was running. I'd been doing a ton of intermittent fasting. I was really early in the biohacking scene a decade ago and doing blood finger pricks. And I kept seeing when I would do my blood biomarkers that my ketones would go up. Whenever I push my body to my limits, my ketones would go up. If I fasted for a day and a half, my ketones would go up. If I went on a 10-mile run, my ketones would go up. And I was like, what the hell is going on? Your body makes this superfuel called ketones whenever you're pushed to your limits. So, wouldn't it be cool if you could go to the store and buy a shot of ketones? And so, humans, every 8 billion people on planet Earth, have the ability to make and use ketones in their metabolism. And your brain especially uses a ton of them. It's, it's brain fuel essentially. And it turns into cellular energy really efficiently. And that's that's the hallmark quality of it.

Just energy in general. I feel like that's like the key. You're just driving more energy to your brain and your body.

It's what's cool about it is it's actually a new macronutrient. So when you look at fat versus protein versus carbohydrates, ketones don't actually fall into any of those buckets. It's a new macronutrient. Macronutrient meaning it has calories. Fat, protein, carbohydrates all have calories. Ketones have calories. They don't go into those buckets. So it's actually a fourth macronutrient. And we've created something really new. It's, it's again, it's like the Gatorade story of, you know, once the world knew about electrolytes, Pandora's box was opened. And that was just a fundamental fact. It's not that Gatorade discovered electrolytes, like electrolytes was already there. It's like, did Columbus discover America? Like, America was already there. Ketones has always been a part of our human physiology. We discovered the way to create it outside of the body exogenously and at scale so that people have access on demand to tap into this natural super fuel.

That's when you know you've made it. We can look on back in this on a decade and we can say fats, carbs, protein, and ketones. When people are basically tracking all of their micronutrients every single day, that would be a win for you guys when you're the number four.

That would be huge. I see ketones going as big as creatine, collagen, these other nutritional primitives in the pantheon of, you know, what someone has in their pantry. Ketones are at that level, maybe even bigger just because of how fundamental it is to human metabolism.

Appreciate that. Now that we have initial context, I want to rewind back to the partnerships. What is your overall kind of holistic approach on like how you pick a partner?

We love partners who are the best at what they do. That there's something to hang their hat on. If it's Jon Jones, he's the GOAT of the UFC. If we're working with Dez Lydon, she won the Boston Marathon. We're working with Rogan, he's the best at what he does. Diary of a CEO, Steven Bartlett, the best at what he does. And so, we like working with people who are the best, who command excellence. A lot of what we're doing is creating a market. I sell Ketone IQ. And what the hell is a ketone? I need partners who have high trust with their audience. So when they say, "Hey, I tried this product. I love it." They talk about it for 20, 30, 45 seconds, that that lands. And so it needs to be people who have that demonstrable excellence and can really move units and and move their audience.

In both sport and science. I think getting these people that at the top of their field to accelerate the education of ketones, whether it be like very kind of granular and scientific like you said, or probably someone like Jon Jones, more can keep it super super simple.

What do these deals look like? How are you structuring these deals so it's a win-win for both parties?

That's a great question. You know, I always start the very zeroth-order thing is it's always vibes. And that sounds maybe funny because we're putting a lot of money to it and I know you're a very, you know, technical, rigorous thinker on ads. I always start with vibes. Like if we're working with Jon Jones, like I want to talk to Jon. I don't want to go through the agent, through the business manager, through. But I get it that people have teams around them. I totally. I have a team around me, but at the end of the day, it's principle to principle. We have to be on a congenial texting direct basis. I feel that way with any partner that we work with. It's super important that the the vibe is there. A lot of people, you know, they're too, they're very Hollywood or they're very fancy. You can't be reached. Go through my agent. Go. I don't like doing those deals because everything else I'm about to say requires that there's that direct human-to-human interaction. We work with people in a creative way. We make content together. We I'm literally in the content with them. Like one of our most viral pieces is Jon Jones and I go to Sprouts. Carries Ketone IQ at Sprouts and there's only one left on the shelf and and Jon and I both reach for it at the same time. And I, of course, challenge him to a fight. Like me, you know, 5'6" skinny guy, marathon runner. I'm challenging the baddest dude on planet Earth to fight over the last shot of Ketone IQ. And then that piece just goes ape [ __ ] viral. It gets tens of millions of views. And it's very creative. I can't even take credit. My, you know, team came up with a concept and developed it and everything. But the point is that we're really leaning in. Like on our shoot days, we're not doing like normal ad stuff. It's like I'm in there as the founder. We're doing fun things together. We're doing very creative one-of-one things that like another brand couldn't exactly do because that's so much of the arbitrage in this day and age. You got to do something different.

Is this the one where we'll pop it up with you putting the ski mask on and going inside, or is that a different one?

That was a different one. That was Jon and I went to a vitamin shop to rob the vitamin shop of all the Ketone IQ. And then at the end of the the skit, there, we get stopped at the door. Vitamin shop says, "Hey, actually, you don't need to steal it. There's a 'Get Your First Shot Free' campaign going already." And so that was awesome. That got, you know, tens of millions of people aware that we're in Vitamin Shoppe and that we have a first shot free promo. Just scan the QR code on the shot.

Which we're going to get into that too. I think that's like low-key one of the most genius things that you guys have done that like no one else has done is just get your kind of first shot for free. We'll get into that after the fact, though. I want to dive back in on the Jon Jones side. So, obviously, there has to be a level of relationship and comfort to be doing these type of ads. From a deliverables perspective, what are those other kind of key things you're looking for outside of just content in general?

It really depends on who we're working with. When we're working with Diary of a CEO, Steven Bartlett, he has the number one business podcast in the world right now. And so when we're working with him, being on the podcast is part of it. Having him shouted out to his audience is that's a big part of the appeal of that type of partnership.

So, ad reads.

Yeah. So, ad reads, you know, when the you know as well, you do you're the best at this as well, is like the ability to do it authentically, to weave it into a conversation, to be able to have guests on the show where it comes up organically. Stephen will have metabolic health experts or brain health experts and ketones will come up organically. That's actually how we got in touch to begin with is we started getting referral traffic from Diary of a CEO because he had experts on who were talking about ketones and then people would Google ketones and find us. At the end of the day, it is an ad read, but there's something really authentic and that if you're really baked in and and it's part of what topics that someone naturally covers and part of the the topics that guests are bringing to the table organically as well. That's where we we start and then we move on from there, which is that, you know, we have four full-time editors on the team. So, we're always chopping up those ads. So, we'll we'll do a shoot day together. We'll do a ad read partnership and then we'll chop that up, you know, 16 jillion different ways. Like we'll we'll make a bunch of ads out of the initial raw material and then that populates all of our mid-funnel and late-funnel stuff. And it's a nice continuity of messaging as well. And when you think about, okay, you heard about something on a podcast. Later on, you're scrolling Instagram and it's that podcast you just listened to, but now you're seeing a a still or you're seeing a video or you're seeing something that's further down funnel. Maybe it's saying, "Hey, subscribe now and save 30%, get a free gift," but it's like with the picture of the podcast host that you just listened to and you click through to that and then you're on a website where it's like more information about how that exact person, that exact podcast host loves our product, interacts with our product. So, this nice continuity of messaging. So, we make sure to structure our deals where we're able to tap into all of that. It's not just this spray and pray. Hey, shout us out on the podcast. It's this full-funnel development when we think about partnerships. And it always starts with that zeroth-order thing that I said at the start, which is like we got to be tight. We got to actually click on a just person-to-person level because we're going to be doing a lot together.

You said two things there that I just want to put a pin on that I think is so important. I think first and foremost, I call them native embeds where people just organically talk about stuff. For the people out there that want to sponsor content or podcasts, some people are just absolutely brain dead that they would rather an a long ad read as opposed to an organic even 15-second back and forth. You will push through so much more product and drive so much more traffic if it's just done organically. And then talking to your CMO at dinner, like the fact that you guys are looking under a long-term lens doing like year-plus deals, people don't understand as well too is the frequency. Like if it just keeps coming up, like we all know that you need to see something what 10, 15 times before you even potentially think about buying it. I feel like not enough people are looking like it has to be long-term because if you go a little onesie, it's just not going to work.

It's totally true for so many reasons. The onesie, it doesn't seem real. People have [ __ ] detectors. If someone talks about it once, it's like, okay, like what the hell is that? People want to hear that that a partner is authentically using the product, talking about it in different ways, not just this like one canned ad read that's obviously a one-off ad. People want to hear about that like ongoing relationship over time. And when you think about it from a, you know, where you're putting your dollars, I think about it as you're you're dropping properties onto the internet that are going to live forever. A lot of how you think about your content that you make, like you're making these evergreen episodes that when you're interviewing someone, like someone's going to listen to that in a year, two years, 10 years. So it's, you're not making content that is flash in the pan. You're making something. When you think about how Huberman makes podcasts, he makes podcasts where it's like, this is the episode on alcohol.

That's it.

That will live for, I mean, someone in 10 years will be looking at that episode.

We think about it like a Wikipedia article. It's just there forever. Okay, here's the episode on on balding, whatever. And so then if you're baked into that episode, great. I hope it pays off in the first day, first week that it's there, but you also have to have the long view in mind. And I think a lot of times people get real antsy. It's like, oh my god, the episode dropped, like, do we, do we pay back our investment here? What's the exact ROI? I maybe it was that way too, like earlier. I there's other signals to look at. What you're going to end up doing is is clipping a lot of the long-term value and then you're just not going to be able to do as many deals because the whole game of being an entrepreneur is you is putting dollars to work. Like my team, we're not here to just like sit on our hands. I the way I I lead my team is we, you got to spend money to make money. Scared money don't make money.

You got to put capital to work. So, you have to spend money and you have to like, you know, really squint at deals and and make sure that they make sense and that you're doing all the right things and that you have the right long view in mind. If your payback period is, I it's got to work in the first 48 hours the podcast is up. Well, maybe you're you might be working with the wrong types of partners or you might be working with the right partners, but just thinking about it the wrong way. You got to have a much longer view in mind. I mean, so we just candidly, we worked with Huberman for a while around when we launched. He got, I don't want to go too much into the politics, he got kind of locked up with exclusivity with another partner. So we had to stop working together. But we had these podcasts from like three years ago, four years ago.

Say it's slow. I already know the answer. Still driving sales, huh?

Still driving sales. Like significant. Like a couple percent.

Yes. On our post-purchase survey because it's because it's the balding episode or the whatever. It's because it's that canonical episode that I mean, shout out to him for his content strategy because he's put these things on the internet that they're just showing up top of Google search, top of YouTube search. I mean, YouTube's the second largest search engine in the world after Google, right? So, he has these encyclopedia articles and we're baked in there forever.

Yeah. And for for brands out there listening that are talking to people like me to do different partnerships and sponsorships, what you just said when we were talking about kind of the native embeds, like this will live forever. Having a logo on screen will live forever. The native embeds will live forever. But those ads, YouTube is slowly getting smarter and smarter where they're going to make those ads dynamic that you can actually change those over time. So if I sell someone my back catalog and the ads, I can actually change that out. And that's great for people like me that create content because I could just keep selling it and selling it and selling it to new parties. But if you get the native embed on the actual core content, it stays there forever and you get what you're getting with Huberman right now. I will say from my point of view, I price it differently if it's a dynamic insertion versus a baked-in that because there is that forever value. If you go to someone, you say, "Hey, I want to buy a million impressions, but they can be dynamically inserted versus someone guarantees you a million impressions, but they're baked in." You can make a a bet on that partner of, okay, are they making encyclopedic quality content that's going to be around forever? And if I'm baked into that, maybe this gets two million views over the next, you know, couple of years. Maybe it gets more than maybe gets maybe it's around for a decade that there's like unbounded upside on it. So it's not that it's like never, we never do dynamic, but I will say we we price it differently. And I think I think a savvy marketer should think about that.

And that goes back to to do long-term deals. You get more shots on that. It's like why do you invest in the S&P? Because there's diversity across your portfolio. It's the same thing is a random episode could go absolutely bonkers. You want to make sure you're getting those at-bats.

That's a great reason as well to not just do one episode and like see how it does. That you got to you got to get a few shots. You got to get a few few tries on the net and see what's actually performing.

Let's talk about the elephant in the room. So 50% plus on partnerships. And then something that you guys are very very savvy about that a lot of people talk about but they're not doing it like you guys are doing it is whitelisting. You guys are absolute animals at that. As far as in your Meta account, what percent of like your Meta ads is is partnership ads? And for people listening, that's just funneling content through third-party pages. Is that a big percent?

It's a big percent. I can't say the exact number, but it's significant. And that's something that we work out with our partners is that we do an ad with Jon Jones. I'd rather it's coming from @JonnyBones, his handle, versus if it's coming from my brand account. It's perceived differently on the end customer. It's just seen as more real when it's coming from the actual person who's in there versus from the the brand. There there's a a right place in the ecosystem for the brand to have a voice and for partners to have a voice and just being smart about you want it to be coming from them and their own account in their own words, their own caption and then we as the brand we're putting the dollars behind it and we often structure it as well where a partner is getting a portion of the spend that we're putting behind those whitelisted ads. That's what's in it for them. And it's a whole ecosystem of making sure that like people are getting hit with partner ads. We do our own branded ads. It all works together. It all kind of comes together in the magic of the Facebook backend algorithm.

Yeah, I think that's great too for the partner that you're giving them a percent of the spend because that incentivizes them to a create more content to deliver to the partner, you to keep testing, testing, and testing so you can find those winners. And then B, it's kind of a double-edged sword. It goes both ways from a maybe like an overexposure perspective, but like if you're someone that's looking for exposure and let's just say I do a deal with you and you're spending tens of thousands of dollars on content that we're doing here now, I'm getting all of that top of the funnel awareness. You're driving me views to my brand and getting me followers.

Exactly. That's something that we definitely pitch partners on is that, hey, we're going to blow up your face. We're going to make you look credible to your following. We're make you look credible to other advertisers who want to come on. With Jon Jones has been interesting, right? Because he's the baddest dude on planet Earth. He's been in the UFC since he was what, like 19 years old, heavyweight champ, and and he's undeniably amazing in that arena. When if you're him, that's what you've been focusing on for like a decade and a half. If you're him, you're looking at Shaq and you're looking at Shaq hasn't touched a basketball in like 20 years, but he's still somehow relevant. Shaq, I don't know. Shaq owns Wingstops. Shaq.

Everywhere, bro. I see him in like Office Max. I'm seeing him Gold Bond. It's incredible.

I'd look at the gummy candy at next to me at checkout is Shaq's face. The Gummy Shack face. You He might be over over-spread. I don't know. But the point is that Shaq has figured out how to commercialize and be a highly successful business person in his post-athletic career. And a lot of athletes are in that spot where to be the best in the world, you're probably not doing a bunch of side deals and spinning up LLCs and doing commercial shoots. You're probably just doing your thing, grabbing the easy money where you can from sponsors and focusing on your game. And then when people get more towards the end of their career, they start pulling their heads up and saying, "Hey, like what's next? Like I want to be a A-Rod is a billionaire under his, you know, assets under control. He's got he's got a lot going on. How do I be like that?" That's what a lot of athletes are thinking about. And one of the ways that we're able to work with athletes is say, "We're going to help put you on. Like, we're going to help we're going to be a great partner. We're going to work together. We're going to show you and that you can take to your other potential partners that you can deliver because we're really flexible, really we're really creative. Our stuff's going to perform and then you can take that to the second, third, fourth other partner and you can really start building something together." So that's been a way that we we sometimes work with people because look, I don't have the the budget that Gatorade has or that Nike has. So, I have to have some other X factor. And a lot of times, it's that personal like really understanding their what they're looking for with besides just dollars in the bank, but like we're actually going to like support and nurture and help develop you as a person that other brands want to work with as well.

Well, there's that third bucket, too. So, you're giving cash or percent of spend. And then how important is some of these people to become investors in your company? These people putting their own dollars.

Yeah. They're banging down the door to to get equity as well. I'm always trying to conserve like because you know today's equity is going to be worth twice as much a year from today. So I'm not like eagerly handing it out, but it's definitely on the table when there's a conversation there. If someone's really leaning in as a partner, that's definitely on the table. I like it because it aligns incentives. Let's all blow this up. If this thing sells, if we sell this thing for a couple billion dollars and you help make it happen, like hell yeah, you should get a piece of the upside along the way.

Casual billionaire. Where we at right now from a valuation perspective? Just throw it out there. I know that you guys raised a bit ago and you've had some more growth, but where we at?

Our latest public was $110 million. We had a a great set of investors that came in that Steven Bartlett invested in that round. We had a a bunch of great folks who participated in that round. The business has made a good amount of progress since then. We continue to grow. I continue to, you know, just keep my my nose down. I don't we're not we're still early. So, it's all just data points along the way. I was on a ski trip recently with Steven Ellsworth who just sold Poppy to Pepsi for $2 billion. Like I what I consider like my peer group is folks who have had massive outcomes selling or taking their companies public. I was hanging out with Mike Jones earlier this week at Science. They're the biggest investor in Liquid Death. Like that when I think about my peer group, I'm thinking about people that are just taking really big swings. And yeah, these are, you know, 10-figure plus exits a lot of the time or IPOs.

What do you think, just to put like a bow on all of these kind of partnerships for people out there that are looking to partner with the Rogans of the world, the Jon Jones of the world, what do you think are the biggest kind of red flags and or mistakes that they make to get these deals done? Like, how are you closing these deals? These are massive deals.

Rome wasn't built in a day. You don't just on day one go work with Rogan or Jon Jones. I I don't recommend it. The issue with that is you got to come correct. Those those deals are expensive. These are seven-figure deals. So you got to come correct. There's not a lot of room for error, especially if you're really early. So we're at a spot where a a seven-figure deal doesn't break our bank account. It's a portion of our spend. So we can have some misfires. That's helpful. We don't have a lot, but like it's one of many bullets that we have. And so we're able to we're not we don't feel like we're betting the business on Jon Jones or on Joe Rogan or on Steven Bartlett or we just signed with David Sinclair. He runs the Harvard Longevity Lab. Has a podcast called Lifespan.

Intermittent fasting God.

He's intermittent fasting God. Yeah. He's he like reversed aging in mice. Reversed blindness in mice. He's the guy's going to win a Nobel Prize. Like he's on the cover of Cell and Nature. You don't you don't start with those folks on day one usually unless it's like a, you know, celebrity co-founder deal. That's something that we haven't done. I I don't have a celebrity co-founder. We have a portfolio of partners that we work with. We're not we're not like overexposed. When you think about portfolio theory, it's like, do you want to put all your money into Nvidia right now today? That's what I feel like is the case with the celebrity brands where like you have you better have picked the right celeb co-founder who's going to blow this the f up because what I what I'm in a position of which I I think is has a lot of advantage to it is I have a dozen and then when we get down to like, you know, middle or smaller influencers and a lot of those people are going to be bigger. They're going to be the the biggest ones in in a year and a few years. It's portfolio theory.

I don't know why people don't stack the deck. I just think taking that one bet, it's just you're not covering your downside. Like what you're doing right now, especially that the fact that you brought in a lot of these people at a strike price, you guys already had some runway, you guys were doing tens of millions of dollars already and you didn't go too late either. See, these people come in at a fair valuation and if they see this thing being a billion-dollar plus company, like they can still 10x their money.

And I feel like and I feel like people don't look at it that way.

Yeah. Look, if you go to Vegas and you put all your money on lucky number 14 and you hit big, you look like a genius. If your celeb co-founder is Hailey Bieber and I mean she did her thing with with what's it called? Rhode.

Yeah, that exited for a billion dollars. That had an insane exit. That was amazing. You look at that, you're like, "Wow, I want to do that." That was just so much value creation in such a short amount of time. Perfect product, perfect celeb co-founder. Boom, boom, boom. Everything lined up. That's a lot of survivorship bias. There's a lot of brands where it's like not quite the right partner, the product market, founder, celeb fit wasn't quite right. And then where do you go from there? You've if you've given half your company to someone and it's not the right dynamic, maybe they get maybe that person gets distracted. Maybe that person gets interested in other stuff. Maybe that's maybe they're into it, but they're just not the right fit for the product that you're trying to get out into the market. So, it's just putting a lot of chips all on one bet. And I like to stair-step into it more. So, it's like before we work with with Jon Jones, set a multi-year partnership, like we'll do a more limited thing with him. And then before we even work with him, we'll work with like smaller athletes in and around the space just to kind of put a toe in the water of like, hey, is MMA even interesting? Like, does that perform for us? So, like before going like all the way deep.

There's a lot that you learn by working with the like micro-influencers, medium-sized influencers. Yeah. And then and then you build the conviction, you build the actual business, the muscle around it, so that when you go and work with an A-tier celeb, like you're you're good. You know your [ __ ] because you already did it with like a long list of, you know, I don't want to call people B, C, C, D, but you know what I mean? Like

So pick the big pockets. Like for you guys, sports, science, entrepreneurship. Pick someone smaller, smaller influencer, go big with them, and then incrementally start with a small test with someone big. And if that works out, then you go big with them. And then you're making just that big bold bet into that pillar, which is kind of what you guys are doing with these three pillars, right?

That's right. And also a lot of the difficulty is how do I even get in touch with that A-lister? But the thing is like a lot of people are trying to get in touch with Rogan, but like you know what helps with getting in touch with Rogan is like, well, if you're already working with Jon Jones, if you're already working with Cam Haynes. He's a good friend. He's the guy that put Joe Rogan on to bow hunting. So he's been on Rogan like a dozen times and they're boys.

This is the brilliant. Go deeper into this. This is the brilliance right now is what you're saying right now. This flywheel, people don't see it.

You get this flywheel going, you know, like on day one, if you you want to work with whoever your superstar is, like you want to work with Justin Bieber. How do you get into Justin Bieber? Like it might be hard even to get his agent to pick up your call on day one. You're not going to be taken seriously. But you can start thinking about, okay, who does that f person follow? Like what, if it's an athlete, what's their coach or trainer? What other brands do they follow? Who else do they collaborate with? Kind of build out the ecosystem, which like we were just talking about, it helps you as an entrepreneur because you're able to take those baby steps, those iterative steps to test and learn. You're not betting the whole farm. You're you're bet sizing up in the right way along the way. And then also, you're you're saturating the awareness around that person that you're trying to get to. So when they hear about you, when when you're actually in touch with them, it's like, oh, I actually know who you are. Like the people I follow have actually talked about you before. And then you're not just coming out of left field talking to whoever it is. You want to Tom Brady is like probably helpful if someone in his sphere of influence because he's a human too. If someone that he follows or someone that he's influenced by has talked about your product, you have a lot more chance of doing a deal together.

Go to the doctors, go to the stylists, stuff like that. Kind of these ancillary people. What you guys have done too is just again the sports science and entrepreneurship. The the the crossover between each of them is like what is going to happen when Jon Jones goes on Joe Rogan? That's going to be just [ __ ] explosiveness. That's that's guaranteed to be explosiveness and you're going to get content on both sides. He's talking, both them are talking about it, whitelisting everywhere. It's going to be a colossal tornado like that will dominate. Partners working with partners is definitely part of the secret sauce. Yeah. Getting your science advisor to go on podcast partners' podcast, getting mixing around the ecosystem, that is a for sure special sauce in what we do and it's untapped. I think there's even more to do. There's some brands that do amazing job at this of, you know, getting all their partners really inter-co-mingling together and I think there's a lot there. Yeah, that's, uh, that's a huge chico that not enough people really talk about is just having your partners co-mingle. They just layer on top of each other on the marketing side. Before we get off, that is there anything big that you want to touch? Obviously 50% on partnerships. Any like big key learnings from a channel perspective, whether it be Meta, Apploving, CTV, anything else that you've seen lately that you want to talk about?

We touched on it briefly earlier, but on every shot of our product, we have a QR code where you can scan and get your first shot free. And that does a few things, which is retail is notoriously hard to attribute. Right? Someone goes and buys your product off the shelf at Target, you have no freaking idea how they heard about you. Like I I did a big podcast spend last month. I don't know like what what's actually motivating someone to go to Target. We put this QR code on our bottle where you get your first shot free. It does a couple of things. One is it lets us do sampling and trial at scale. So instead of me being in a cart or someone on my team being at a sampling table at every grocery store in America handing out shots of Ketone IQ, that's just always on. You can always go and scan a shot of Ketone IQ and get it for free. And then we ask a one simple, one-question survey. It's like a post-purchase survey. Hey, how did you hear about us? And then we're able to see, oh, okay, well, people are hearing about us in retail. We know the attribution and it's a different it's a different fingerprint from our DTC. Of like, this is nothing, everyone does a post-purchase survey on DTC. It's interesting to see the similarities and differences inside of Sprouts versus Target versus Vitamin Shoppe versus our DTC. And because of this first shot free program, we're able to collect data and we're able to know what's actually working inside of retail, which again, notoriously hard to get retail analytics.

Guys, this is probably the biggest. This is one of the biggest cheat codes I literally think in the. I don't know anybody else doing this. This is literally the CAC arbitrage from another lifetime. You're cutting the labor costs. So, I I would only imagine like you probably have to pay like co-op marketing to go in into Whole Foods and set [ __ ] up and give people shots. You're cutting that and then you're also seeing I mean, you're seeing which retailers are running. You're probably seeing what are the best customers from an LTV perspective. Which retailers are they shopping at? You're seeing everything. I can send out a text blast. Say I'm trying to blow up my Target numbers. We just launched there. I want to make sure the numbers are good. We can send out a text blast to all of our customers or a segment of our customers and we say, "Hey, here's a special thing to go get BOGO at Target. Buy one get one at Target." When they go and do that because how we have it instrumented, we're actually seeing like the checkout data. We can say, okay, that text blast led to X number of conversions in store. So, okay, I did 200 sales inside of Target from that text blast. And the ability to operate omni-channel like that, basically, there's a lot of game on DTC. A lot of people know a lot of the arbitrage. I would say I should say like the specific skills that it takes to succeed on DTC. Retail is two decades behind. It's super old school. You're painting with a super broad brush. No one knows how things are attributed. I see that as a major arbitrage opportunity where we're basically take we ramped the business significantly on DTC before going into retail. And we're now just taking our DTC hats into retail and seeing like how can we make this retail business look like our DTC business. It's not good enough for me to just say like vibes based do a big billboard campaign and hope and pray that our Target numbers go up. We like to be as as attributable as possible, be as scientific as possible on retail, which is just like not done. Like retail people just assume that it's going to be more of a mystery box, less attributable. That wasn't a good enough answer for me. Like I wanted to get our DTC motion in retail. Because why? Why? Attribution is important because you got to know where to spend. Our whole mojo with everything we do is I'm always saying it's 0x or 10x. If something is working, like if you like it a little bit, you should love it at 10x. If you like having one share of Amazon, you should want to have 10 shares of Amazon. If you don't like having one, drop it down to zero. This isn't our culture. We're always pressure testing everything. And so, if we love doing a billboard, let's do a bajillion billboards. If we like showing up at a marathon and doing sampling, let's do 10 of those. Let's do one every weekend. And the ability to actually capture attribution in retail lets us move a lot quicker than we would otherwise. And when you think about CPG, when you think about food and beverage, I know we're so digitally savvy here, but like 90% of food and beverage happens in retail.

In retail.

Retail and or Amazon. It's a black box. It's no longer a black box. You could do anything you want with this information. So, from a a data collection perspective, I mean, I would think if I can just kind of reverse engineer your numbers, you probably have like a couple hundred thousand. I mean, you probably have like a million phone numbers because you're getting all of your buyers in store as well, too.

It pays for itself. I'll say that because of course we capture the phone number when someone gets their first shot free and then they're in our funnel. They're in our SMS funnel.

Have you seen anybody else? I've never seen anybody else do this. Is anybody else do this?

I haven't seen it. We're probably going to see a lot of it now that we're talking about it. So I'm I'm in the back of my mind I'm like, "Oh [ __ ] should I be keeping this a secret?" But we've had it out there for a few years. And you know what? Steal like an artist. That's very much baked into our DNA as well. Everyone's borrowing. I I love how Grunes does their first subscription discount. I love how Everyday Dose does their thing. Like I we're all I think sharing game with each other. That's a big part of why I was excited to be on here. So yeah, it's it's I think a little bit of an arbitrage that we've had is you know doing that first shot for you. I I think people if you want steal like an artist on it.

I mean, you have to have massive LTV. I mean, you're losing. So you're saying basically the retailer is obviously capturing the sale and then what are you doing? You're just refunding directly to the end customer that you have their information.

That's right. Retailers love it because they're getting the full ring. If you're Target, the ring is happening. You're getting full dollar amount there. I'm Venmoing the customer back. The the cost of it.

Actual Venmoing.

Venmo or PayPal is how it comes through. It's all automated. It's not literally me. It's just you take a photo of your receipt. You scan the QR code. It walks you through it. You take a photo of your receipt and then just instantly we're PayPaling or VMOing you back the the $4.95 that you paid for the thing at Target. So, it's a little expensive in the sense that if you if you do a coupon through Target, you might get reimbursed some of like the distributor fees and other fees and what we're paying basically the full sticker price to rebate someone the full retail price that they bought it for. So, it does hit our pocketbook a little heavier, but the speed at which we can roll it out, the fact that it's permissionless, like it just baked onto our packaging, the fact that retailers love it, they don't have to set up a coupon clearing house, whatever. It's just on, it just works. They get the full ring. And then everything we've been talking about, the quality of the data, the ability to have always-on sampling, the fact that we remarket the phone numbers that we get, it it more than makes up for the fact that it's an expensive transaction for us to rebate the full thing at face value from the receipt. Maybe that's why more people haven't done it because it feels expensive. But the

I feel like you just got to let it play out. Like if you let this, you guys have been doing this for years, so obviously you crunch the numbers and it's working clearly.

And it's one of those things too where it's kind of a meme now. Like a lot

Of people know you can get your first shot free of Ketone IQ. And if you love it and you're telling your friend about it, and they're like, "I don't know." People just elbow their friend, you know, it's free. Like, use your phone number, you can get the first shot free. Whenever it's actually for every flavor, too. So like, when we launch new flavors, people can try the first new one free. And so I, I like it as just a meme. Like, we started out as a campaign, but then I got thinking, instead of just doing it, you know, for a few months or whatever, like, I actually want it to just be a core part of our DNA that we're just known as a product that you can, anyone can get the first shot for free. Cuz I felt like that's really confident to say as a brand that we're so confident that if you try it, you're going to love it, that we'll just bake it into the packaging. Anyone with any phone number can get the first shot free. You know, it's tied to the phone number, so people can't abuse it, and you can get your first shot free.

It sounds counterintuitive, but it actually makes a ton of sense if you actually think through it, which is wild. There's definitely somebody out there listening that in the next three to twelve months is probably going to execute this at a high level. Make sure you guys reach out to either Michael or us, and we'll highlight you. That's amazing game that you gave back. Obviously, it's out there. Anybody can know about this, but like understanding and knowing what goes into it. I appreciate you sharing that.

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You briefly mentioned Target. I know you guys are in Target, some kind of like sports lifestyle type retailers as well, like the Equinox and the Lifetimes of the world. Why don't you walk us just through like, what does that retail kind of pitch look like under the notion that, hey, maybe not everybody knows the science behind ketone quite yet? What does that look like?

Yeah, I think you're tapping on a really important nerve of how our company operates, which is we're doing something super inventive and new. We're creating a category around ketones. Or ketone.com, or ketone on social media. It didn't exist. This wasn't a category a decade ago. Like, we very much created this, and we're first tracks in the snow, which creates a ton of difficulty in what we're doing. It's a lot easier to sell coffee in the sense that everyone knows what coffee is. It's a lot harder to sell coffee because it's a freaking crowded marketplace, and you're up against, I don't want to be competing against freaking Starbucks and everyone else in the arena. A lot of what we're doing is from this playbook of like, it's literally Gatorade explaining electrolytes to people for the first time ever. Or, you know, one of our investors is Kurt, who started Vital Proteins, and they made collagen a thing, right? Like, it was a smallish thing, and then they just, they were one of the first to work with influencers, they worked with Jennifer Aniston, started just dropping off the pallets at Costco, and just, you know, they were doing hundreds of millions of dollars a year and just focused on collagen, just making collagen a thing when it hadn't been a thing for. And so a lot of our decision-making process as a brand comes from the fact that we're, we're really creating something new. So we lean a lot into education. We probably have a much higher customer acquisition cost than most other brands, but because we're the only show in town, we have a lot higher LTV as well. So a lot of the ways that we move, I always caveat it to say, we do it in a way that's unique to our style, which is again, inventing a new category. Not everyone's doing that.

What about like from a positioning perspective? Before we dive into retail, I want to talk like a little bit about that. So, you're talking about educating, getting product in people's hands. How like are you understanding and knowing like when you're actually getting traction on stuff? Like understanding and knowing when people are actually liking the product?

That's a great question. How do we know when people are loving the product? That's an area where I love DTC. So, I think about us as a true omnichannel brand. We truly have a blend across DTC, Amazon, retail, different channels of trade within retail. You know, Sprouts is different from Circle K, which is different from, uh, uh, Costco. We're not in Costco yet, but it's in the roadmap. All these channels behave differently. I like DTC because of the immediacy of what you get. You know, if someone bought it, you know what the retention rate is. You know what the churn is. You know what's working. So, right now, DTC is the largest portion of our business. As we scale, we start looking more like a Five-Hour Energy, which is mainly in retail. It's not that our DTC shrinks, it's that our retail just grows so much faster, and there's so much more headroom there. And because that's a developed category within the retailers.

Exactly. When you think about where does someone want an energy shot? They want it at the moment of need. They want it at the gym, they want it at the convenience store, they want it on the go. As much as we're continuing to grow on DTC, there's a lot of headroom there, and there's 10 times more headroom inside of retail. What I like about DTC now and 10 years from now is that it provides that immediate signal. It's pretty hard to know if you launch a new flavor into Target, how much are people loving it. It's going to take weeks, probably months to get that data back, and just, it's important data. You need to look at it, but you could do that on your website and know it within like, you know, minutes. You can make an ad on your website for a flavor that doesn't exist yet and see how that performs. The quickness of DTC is is 100 times quicker than what you're going to be able to do in retail. So I like DTC as a learning platform. You just have that direct connectivity with your customers. You can survey them. You can see the analytics and using that as the innovation engine so that when you launch it into Costco, you come correct.

So, nothing net new in retail. It's always first.

That's very well said. I think it's a great lesson that like, you don't want to experiment in Costco. Like, Costco, when you launch it, should be a $50 million a year business. Like, don't be experimenting. Like, that is the whole point of DTC is you should be making easy, quick, like A/B a million zillion A/B tests on ads, on messaging, on landing pages, on offers, on flavors, on everything that you possibly can iterate on cheap. And then once you have it all dialed, that's when you bake that in. In Costco, you should know exactly what your unique selling point is and exactly how to talk about it, and exactly what's your best performing flavor, or is it a variety pack? Or you got to come correct. You got to highly recommend, measure thrice, cut once. Most retailers have a standing rule that if you get discontinued, like if you show up and your product falls flat, you're done for at least three years. And so that's three years of no revenue from that retailer. If you, if you're trying to, you know, fundraise or sell your business, they're going to look at that giant black mark of, okay, well, that's not only is that a zero, but it's going to continue being a zero. You're better off to not even have launched. Straight up, you're better to not even have launched. If you're trying to sell your business because someone can, who's buying it, they can use their imagination to say, "Oh, this could be really big at Costco." If you launched at Costco and you failed, you're going to be in a really tough spot. You're going to be seen as kind of having a a black mark on the resume. So the question I asked, it might have kind of sounded like a dumb question to some, saying like, how do you know if like it's working or not? I, I want to put a caveat on that, make sure people understand that for someone that's creating something that's pseudo new like you guys, when you say you're going and testing on DTC, it's really about you don't want to put it because these retailers, the buying decisions are so much different. You're talking about convenience versus GNC versus Costco. It's testing on DTC and understanding and knowing if that cohort of customer in that specific retailer would like that. And you guys are doing all of these crazy surveys and understanding credit card and you're doing everything like that to understand and know if that specific person at that specific retailer would like this specific product.

That's right.

Yeah. And you got to, you got to come correct again, because if you put a display shipper into a retail store that's going to sit there for 30, 60 days, you're not A/B testing that. You don't have a chance to. If it doesn't do well, okay, come back around next year and relaunch it. So, like, set up your retail merchandising using the best practices of what you learned online. And you're absolutely right, like what works in GNC, it's going to be different from what works in Target, it's going to be different from from what works inside of a Sprouts. And you got to be smart about it. And I, I like using DTC as a learning engine for what you're doing in retail. You shouldn't be learning in retail in general. You should be coming in with expertise.

That's a low-key bar right there. Should not be learning in retail. I completely agree. What are some of those big things that you've learned in retail? You know, you guys are in tens of thousands of doors.

You know, one thing that's fascinating on DTC, that DTC actually lets you get away with is DTC lets you spray and pray with the way that the algorithm works. You can make 20 different ad sets that say 20 different things about all the benefits of your product, all sorts of different people. And hey, maybe half of those will work, or maybe five of them will work. A bunch of them will work because the algorithm is really good at taking this creative and getting it right in front of the right person who's going to be converted by that creative. In retail, you got to, you got to keep it way, way, way simpler. If you think about a brand like Halo Top or RX Bar, they're not saying 20 different things. They're not even saying five different things in retail. They're saying one thing. They've just figured out that laser precise message to what to say at retail. And so it's a little bit of a different motion than online where you have more creative freedom. Ketones do a lot. It's true. There's, we could go into the whole science behind it. When I, when I keep it focused, I just talk about brain fuel because that's what we talk about in retail. But if you actually looked at our Facebook ads library, we have a lot of different things that we say. It helps to control your appetite. It helps to improve your athletic performance if you have a big run or big day on the bike. It helps with your with your recovery, but it also helps with your performance. It helps with your long-term metabolic health. It supports all these different things. And on Facebook, we can, we can make a bunch of different landing pages, a bunch of different ad sets that that say all these things in the right language. But in retail, you got to pick one. You have a, you have a shipper, and you're dropping it in a Vitamin Shoppe next month. What's it going to say? You have to be really sharp. And a lot of times, I think what's hard for DTC operators is that it feels like you're cutting off an arm. It's like, man, there's all these things I would love to say about my product.

Got to be direct response to say that one thing.

Yeah. Yeah. And and and you can't say the five other things. You can't have five different shippers. Like, there's one shipper that's going to Vitamin Shoppe, and it's got to be good. And we can go into this, but you know, this, it's part of the reason that a lot of DTC companies don't necessarily automatically cross the chasm into retail. I think you can. We're doing it. I don't think it's automatic though. There's a lot of businesses that get pigeonholed as DTC, and these can be big businesses, businesses bigger than mine, but they sometimes cannot cross the chasm. We saw with Dollar Shave Club, for instance, and they got bought by Unilever. Unilever could never figure out how to cross the chasm. What worked at on Dollar Shave Club, the way of messaging it, the offers, all that stuff, they couldn't figure out a way to translate that into retail. A great DTC business doesn't automatically make a great retail business. There's a lot of people love the, you know, startup within a startup kind of term. It is that it is the, you're really reinventing and like relooking at your DNA and figuring out how to how to put that into a new arena that moves pretty differently. You can learn a lot from DTC, but you really got to like condense down, simplify down the messaging when you go into retail, and it's a little bit of a different motion.

Yeah. I think for people out there listening, when I look at your stuff, I feel like if you had kind of all of these, let's just call it value props that you're testing, you guys went with the singular. I mean, you could interchange the word value prop that has the biggest TAM and fits the most within the merchandising with where you're going. It says energy shot really big for the people out there. But that's not to say that you're testing these other value props, whether it be curb appetite or improve your athletic performance, and then if improve your athletic performance starts crushing it, maybe you put that on the shot in Equinox or in Lifetime. So you can actually just test and test and test in there, but then change your product in retail.

Yeah, the retail landscape is just a lot slower, right? So like, you, you gotta know what you're doing before you make the launch. Updating your packaging takes months, weeks, sometimes longer. Updating your display shippers, all that stuff. It's a much more expensive operation than just going in the Facebook Ads Manager.

What's your thesis on timing from how big do you have to be or when is the proper time to go from DTC to retail? Because you guys were DTC only for a bit.

That's a great question. It's something we talk about a lot internally. When you look at our set at, let's say Target, when you look at our set, we're next to the electrolytes and the protein powder. When you look at our set at Target, everyone that we're next to is an e-com killer. It's Liquid IV. It's Seed Protein. It's Armra Colostrum. All of these are formidable DTC businesses. You asked a few questions ago, what do we pitch when we pitch to a retailer? A lot of what we pitch is our already installed base of customers, people who already know. We pitch our DTC business to retailers. That's maybe an area actually that's changed in even the last five years where retailers used to feel more threatened. "Oh my god, you're a DTC company. We have to compete with your DTC." Now they welcome it. If you're in Target, they want to hear that you're already doing, I would say, minimum 20 mil annual on on DTC.

I agree with you.

I don't think it's a mistake to do 50 or even 100 on DTC before going into something like a Target, because think about what that implies. If you're doing 100 million in topline, you're probably spending 30, somewhere between 20 and $40 million on marketing just for your DTC business. That means a lot of people know about your business when you pull up into Target. And that's a lot of awareness that you're just getting from a halo, probably underwritten already by your DTC business, that you're getting as a free marketing halo that's going to move product for you in Target. And the buyer at Target wants to hear that.

And not all people that buy on your.com are obviously doing subscription. They might be doing one-offs and they need other convenient spots to purchase.

Dude, yeah, I've really realized that I might be a huge nerd that loves buying a lot of stuff on the internet. That is not where the world is today. Even in 2026, like 90% of food, beverage, people are buying it out in real life. It's a very niche buying behavior that someone wants to buy a month's supply of a supplement off the internet and wait three to five days for it to show up and be on subscription. Look, it could be niche. You could still have millions of customers. It's a big country. It's a big place. I'm not saying you can't build a big formidable business inside of there, but the universe of possibility that's available inside of retail is just 10 times larger.

There's people going to Target. They're going to Walmart.

Exactly. I'm from Chicago. I have a lot of just that kind of, you know, tap into the heartland of America kind of thing. Like, yeah, people are going to Target.

It's still 85% plus. I've talked about that before. 85% plus transactions are in retail. And on the retail side, too, we didn't mention at the beginning. I mean, you guys have the ultimate weapon where like you could go into a retailer and Jon Jones could do a skit with you for that retailer. He could post about that retailer. Is that like an ace that when you're going and talking to these retailers that you can pull? How big of an ace is that?

It's huge to be able to sell to retail your whole marketing plan. I'm not just selling them a Ketone IQ shot. I'm selling them the entire aura around the business. I'm selling them the fact that we have an eight-figure marketing budget that is already pumping tons of demand. So I spend, if I'm in a half an hour retailer pitch, I'm spending like five minutes or less on the product. The product needs to like check some boxes. Okay, cool. That's a healthier, better for you version of 5-hour Energy. Cool. Bing, bang, boom. Okay. What's a ketone? Okay, great. I'm spending the next 25 minutes and we're talking about the marketing program together. We're talking about, hey, how are we going to make eight figures inside your stores starting from launch?

Sell-through.

Sell-through. It's all about sell-through. And the, I, the best thing you can say to a retail buyer, someone told me this and it's 100% true, is you got to look them in the eyes and say, "I'm in the business of bringing traffic to your store to buy my product." That just has to be the feel. They have to believe it. You have to believe it in your bones. A lot of people, they, you know, pop champagne, bought. Oh my god, I got into Target. Pop the champagne. That is not the finish line, ladies and gentlemen. That is the start line. When you get into Target, that's when the work begins. And either you already have the latent marketing going, you're already spending eight figures on DTC, and that has a halo that's moving your product in Target, or you're going to be doing Target-specific stuff. Probably honestly, a mix of both. Maybe you launch and you have an end cap. Maybe you're, you have different stuff, you know, stuck to your packaging to draw attention to it in store. Maybe you have your influencers, your partners, like specifically shouting out people in Target. You mentioned, yeah, it's Jon Jones. We're always whenever we do a shoot together, we're always thinking, okay, what's our like latest, hottest, biggest retail partner, and we go there and we do a skit together, we're selling that in. So, we're telling Target, hey, I'm taking the GOAT of the UFC to Target. We're going to get 20 million eyeballs that know about our partnership with you, and they're going to be driving people into Target. Target loves that. And then we had a lot of fun making the skit. Another like kind of sneaky thing that works well too is that if you make an ad creative at Target, it can still perform really well for DTC.

When you think about psychologically what's going on, if someone sees an ad, it's just like some product floating out on Instagram, it's okay, cool, I might buy that. But when they see it that it's on Target shelves, social proof, there's something psychological about that. So I don't even see it as an either or. When we're talking to their marketing team about, oh, should this be a Target ad or should this be a DTC ad? It's like the best ads can actually do both. You can have absolute DTC banger that's literally a product photo of your product on shelf at a legit retailer because, as you said, the social proof. I have not like thought about or read like old like marketing textbooks in a long time. I haven't talked about like a SWOT analysis in a long time. You guys are so good at integrated marketing. For people out there, you should go Google what that is. You guys just have this like web where everything is working so, so well. Like what you just said, I've never heard that before of someone taking ads in store and then winning on DTC. It makes so much sense. You'll see some of the TikTokers will figure that out organically, right? If you have like an army of 3,000 TikTokers, like some of them have figured that out that they'll just go to a store if they're doing ads for a brand, they'll go to the store and they'll find it on shelf at the store and they'll do their creator piece right there in the store. So, I, I don't need credit for inventing this tactic. All I can say is that it it works. And if you think about the psychology about it for two seconds, it makes sense.

Yeah. And you could straight up just back POS and say like, you guys do this PO, we will get X person to post. Yeah. I mean, it's literally that simple. I also too, going back to this QR code too, is you can activate any zip code anywhere you want. They could have bought this or or hit the QR code anywhere and you can activate them wherever you want. The QR code thing is is is mind-boggling. We're going to take a 15-second break right now and rip a Ketone IQ.

What's that one? Apple.

Grapes. Amazing. We're going to get into product development now, guys. This used to taste so bad like four or five years ago. Three, four years ago.

Tasted like battery acid.

It tasted so bad. But it's ironically it was very, I this was formerly when you guys didn't have caffeine. I would look at it how I look at espresso shots. I just take it for the fuel. That's how I was taking the original ketones without the caffeine. Now these, I like, I actually like the taste of specifically of grape, and they have caffeine. So I have a lot, I have a lot to say there on product development because, you know, one of our inspirations in the early days is is, you know, Birkenstocks. They had an ad that was like a photo of Birkenstocks and said, "Ugly for a reason." And the whole thing is like, Birkenstocks are kind of funky, crunchy, granola looking shoes, but they're so comfortable. Anyone you know who loves their Birkenstocks is like, it molds to your foot.

I love my Birkenstocks.

Yeah. You don't care that you look like a freaking hippie weirdo. It's like, it's ugly for a reason. It's the shape of my foot. There's a lot of power inside of that. Like owning it. We always just say that our product is formulated for function, not flavor. Or we say it tastes like it works. And in the early days,

It tastes like it works. That's nice.

Yeah. Yeah. It's like, why the hell am I drinking this? And what's cool about shots in general is that that's just true. Like, if you're having a ginger immunity shot, or if you're having a gut probiotic shot, a lot of shots taste pretty. Even a 5-hour Energy shot, a lot of that stuff tastes pretty crazy. But that's not why you're buying it. You're knocking it down in one go. You're having it because it does something. It's almost like a Tylenol, or you're drinking it because it does a thing. It's not a coconut water. It's not a refreshing soda. It's, you're not having it with a meal and expecting refreshment from it. You're having it because it does a job. And there's almost this believability in it when it tastes crazy. Red Bull, I, Red Bull tastes crazy. I mean, coffee tastes crazy. Like, I, you know, I have a four-year-old daughter. Like, she doesn't like the way that coffee tastes or alcohol tastes. Like, those are all things that we developed at some point in our lives. And then you develop. No, no kid is born liking the taste of gin. At some point in your life, you psychosomatically develop that, like, oh yeah, gin and tonic at a happy hour on Friday, like feels really nice.

You know, a true psycho if someone orders a decaf coffee. Who the hell likes the taste of coffee?

I'll hit a decaf. Yeah.

You're a psycho person. You're literally a psycho person.

I'm going function or dessert with a vanilla latte. It's one of the other.

Well, I think my brain is just hijacked to believe that the taste of coffee is good. And when I drink it, because I don't, I don't want to overdo my caffeine. I don't have caffeine afternoon. I really do limit myself to one caffeine beverage a day. So I'll have a shot of Ketone IQ with caffeine, or I'll have a a cortado in the morning. And so in the afternoon, if I'm going to have coffee, I'll have a a decaf. And I liter, when I was in college even, I didn't like the taste of coffee. It was gross. It's towards the end of college I got into coffee, and then now my brain just links it up, and I, I like tricked myself into liking it like a freaking like, I think we all did, like a Pavlovian rat experiment. Like, we've taught ourselves that it feels good. We like the feeling from it, and so then we think that it, it tastes like productivity. It tastes good. Like, I don't think anyone's born liking the taste of coffee or red wine or any of this stuff. I think we just wrap our minds around it because we like the way that it, we like the place that it takes us to. I'll try like a decaf vanilla latte this weekend to see if you're not a psycho or not. I'll let you know how that goes. Um, yeah, it might just be a placebo for me. Who, who even knows? Um, but, but how are you balancing kind of like, uh, well, how did, and how are you now balancing kind of speed to market with the actual, I'm not going to say product quality, but like the product taste? Because there's a lot of people out there that are early in CPG, and it's like, you know, this is not a digital product where it's like, ship it early, ship it early. This is like, you have to invest there's a, maybe it's going into retail. How do you find that balance?

That's a great point. There's a significant investment.

It's not a social media post.

Exactly. Exactly. A lot of social media posts, it's like, "Who cares? There's no downside. If no one saw your post, great. No one saw your post. Get up and post again." Like, there's no downside. That is not the case in CPG. You're ordering $50,000 of product, and if it doesn't sell, like, you're cooked. And and that's a small batch. A lot of batches will be five times as big. It's a balance. You know, in the early days, we were a small, lean team. We didn't have a full-time formulator. I had a product who's amazing, and she did her best to make it taste pretty darn good. Ketones are made in a fermentation process. So they, it tastes fundamentally crazy. If you think about kimchi or kombucha or anything that's vinegar, anything that's

Fermented. Kimchi is terrible.

Yeah. It all has a very strong taste to it. Ketones are the same way. It's fermented, and when you, when you drink it straight up, it has a crazy taste to it. Period. And so in the early days, we did some light formulation with it, made it taste reasonable. We ended up selling a ton of it. I think this answers your question, which is like, how, how good does it need to taste in the early days? Well, look, I didn't have the budget at the time to have four full-time food scientists on staff and one of, one of who is a full-time formulator who worked at Ghirardelli and Trani Syrups and knows all of the organics of how to make something taste wonderful. In the early days, it's, oh, there's like six of us. It's like, hey, who here is on the team is best at making something taste reasonable and like, okay, like, let's go and do so. The answer is, it has to be good enough. A lot of judgment call that I think that's part of the magic of being an entrepreneur is, how good does it have to be? The earlier version of anything is really limited. The early version of Amazon just books. The early version of Uber, it wasn't even an app, you're just like texting an address and hoping a a car shows up. A lot of products in the early days, you launch it, good enough, you get your minimum viable product, whatever that is, and you get, you get that out to market. We have the plus and the minus of, we invented ketones, so no one knew what it what it could or should taste.

Could I think today, if look, if you launched an electrolyte powder, it's got to taste good. There's not a lot of forgiveness. If you launched electrolytes now and it didn't taste good, like you're, you're cooked. If you're inventing something new that gives people a novel feeling like what we're doing, I don't know. I've eaten some weird tasting stuff that got me feeling a novel type of way. And the market will forgive what you're doing if it's unlocking something new that hasn't been unlocked before.

From a function perspective.

From a function perspective, whether that's a CPG or an app or whatever, if you're letting people do something new, I remember the early version of Snapchat was always just like crashing. It crashed half the time, but it was cool. It was the only thing that let you send disappearing photos. If you're unlocking a new chamber of the world that people never got access to before, people will deal with a lot of friction. People will deal with some [ __ ] texting some number to get a black car to show up if that, if it's, you know, 2010 and that service never existed before. And that's the first version of Uber. People will deal with friction to get to a unique function that didn't exist before.

If you're launching a protein powder though today in 2026, that [ __ ] better taste like cookies and cream.

Yeah. Yeah. So, it, it really depends on how you're coming in. I mean, I had the cough syrup in Arizona. I used to row in my right in the middle of the garage, and I would just chug these, and they did not taste good, but I did it from a function perspective. And you guys sold tens of millions of dollars of that OG V1 product that did not taste anywhere close to as good as it tastes now, which I love it. Now, for founders out there, when you're thinking about product development, you know, we touched on just a bunch of things real quick from like batch perspective, ship it early. What are kind of the biggest mistakes that you're seeing founders make directly in relation to product development? It could be things that they're overseeing from a 3PL perspective, co-packs, anything like what, what are the big mistakes people are making?

I've got a good one for you, which is founders launch too many products. Invent the flying shoe. Invent the killer product. And if you don't have a killer product, make a killer product. If you're still launching your 10th, 20th product, and you don't have a clear one that's running up to 100 million plus topline, I have a couple things to say. Maybe you should keep launching products until you have that thing. There's something to be said for, you know, searching. Maybe it's the 21st product, the 22nd product. Or maybe you need to revisit your portfolio. Maybe your vanilla OG, whatever, it's not yummy enough. Focus on your vanilla. Maybe the banana sundae one ain't it. Like, focus on your core stuff. The mission is to have a core product that really freaking works. I do not love the kitchen sink approach. I'm not just talking about flavors here. People that have different functionals, different this and that. You want to find a hero product that works really freaking well. And you don't want to have a bunch of complexity to manage across different formats, different what. That's my advice is really focus. There's a lot of complexity to manage across a broad portfolio. And realistically, when you look at the, look at Raising Cane's, look at In-N-Out. They, Raising Cane's just figured out how to make the best damn chicken sandwich. In-N-Out, best damn hamburger. Raising Cane's doesn't sell hamburgers. In-N-Out doesn't sell chicken sandwiches. Southwest Airlines only flies 737 airlines. Like, some of the biggest, best businesses in the world, they're just so freaking focused on their core product. That's what you got to do. You got to have like, what is, what is the thing that's going to take your company to 100 million, billion dollars of topline? You don't tend to see those businesses built by having a a portfolio of 20 different products that are each doing a few million dollars.

And you get obviously the economies of scale and anything and everything. The learnings leveraging against the vendors, LTV, I mean, a zillion different things that we can talk about with that.

Absolutely. You want to make a perfect product. Yeah. If all you're doing is purchasing one product, your your cost of goods are going to come down. You're going to get really freaking good at marketing that product. When you're in retail, you're going to be dealing with one buyer. You're not going to be dealing with buyers who are across a bunch of different aisles inside of the store. There's a lot to be said for for focusing. And I think sometimes honestly, it's cope. I think when you make a product that's like pretty good, and then you launch another product and another product, another, it's like, you need to either be like honest with yourself that you're still searching for your hero product, you're still pivoting, or you maybe need to revisit one of your earlier products and make that into your hero product.

Yeah, I would say like the counterpoint to that, just for people out there listening, is I think that there's LTV products and non-LTV products. You guys are obviously LTV product, but like someone like Sean from Ridge, like if you buy a wallet, you're probably not going to buy another wallet. So that's when you have to kind of potentially start expanding into other categories. But if you have high LTV, someone like you, someone like AG1, like go all in on one product. You have no excuse if you have LTV.

That's a great point and appreciate the nuance there. I would say in Sean's point of view, he probably has like the main ones that bang down the door.

And those are also doing like, they were doing pretty heavy volume each one of those.

Yeah. It's not like they're doing like 5 million. They're doing like 50 million each one of them.

Yeah. I bet he's at a certain volume where he can bend a lot of the rules because, yeah, he probably has multiple 50 to $100 million SKUs. And that's just a different game from someone who's doing $10 million across 10 SKUs. It's, it's different when you're at that scale. And I bet if you looked at Sean's ad library, that he's mainly acquiring new customers with a small handful of his best SKUs, and then and then the other products are LTV filling in once the, the key first skew person.

Understanding which SKUs drive people into the funnel and then then winning on the back end. What about like data and metrics to like inform your products? Because like right now, it's really just these core products, the regular ketone and the one with the caffeine. So like all these flavors and stuff, like how are you making these decisions? Is this subjective decisions? Is this taste tests? Are you pulling the audience? How you guys going about that?

It's, it's a few different things. We keep our eyes open to what's going on in the market. You know, what's, it's, there's a fashion component to it too, is like, what's the next trending flavor? What's the next season going to be? We're at that spot where we're thinking through a lot of LTOs. You know, what's, is there a cool partnership?

What's an LTO?

Limited time offering, like licensing. I know we've had some fun conversations around licensing, like what can you do that is, it kind of lights up what's in the zeitgeist right now, like what's a cool movie going on right now, or is there a cool celeb? Or sometimes flavors just trend, like blue raspberry is really hot right now, so we have a blue raspberry flavor. It's kind of reading the tea leaves, what's going on in the broader culture. I think the first thing first is like, launch the evergreen flavors. If you're doing a beverage, like probably you should have something that's like lemon-lime flavored. We have a raspberry lemonade, right? Like, figure out the evergreen flavors. Make sure those are good. And then you can start getting creative with the fun stuff that is kind of a, you know, cultural touchpoint. Maybe it's a collab, a limited time offering, more fanciful. Like, maybe we should make a salty pickle flavor, cuz like most people are going to hate it, but some people are going to freaking love it, and it'll get a conversation going. Like, that's, that's how we think about continued flavor development.

I had no idea that there was like trending flavors. You're the, you're the first person I've ever heard that from. I didn't know that was a thing. It's apparently these these pickle flavors are are trending right now. I want to get into, you sent me over some of these kind of internal principles at Ketone IQ. I thought they were absolutely amazing. I want to walk through a few of them just to list them all out. Just I'll probably pop them up here on the screen. Play to win, growth mindset, customer obsession, ownership, communicate clearly, think in bets, healthy debates, teamwork. Those are the eight. I want to just riff off some of the stuff. You have this rule internally. You talked about that 10x or 0x. We touched on it briefly. What does that look like in actual practice?

There's nothing at our scale that is moving the needle to do it at 1x. If we put $1,000 or $10,000, even $100,000 to to work on something, it doesn't move the needle. But that's occupying a big chunk of someone's brain. And so I'm always pushing, okay, how do we get that to a million dollars to spend min, or ideally even more? Otherwise, stop doing it and find something else that you can push up to that level. You should always think about your poker chip size. If you're doing a million dollars a year, your poker chip is 100k. It's, take your total, whatever you want to call it, your total revenue base or what's in your bank account, let's let's say revenue base, and just divide it into 10. Those are your poker chips. That's what you should feel comfortable with. putting 10% of your bankroll into something. That's a real bet. If you go too small, think about your personal stock portfolio. If you buy Intel and you buy one share of Intel for $45, and it 10xes, congratulations, Mark. You made $450. Is your life changed? Like, it doesn't change. But meanwhile, you're going to be on your stock portfolio checking Intel every day. And that's a huge amount of overhead.

Overhead in your brain, too. Wasting your time. And you're talking about you could buy a hundred of these Ketone IQs for the cost of that.

That's what I mean. Is a huge amount of mental overhead that if you're going to make a move, if you're going to invest into Intel, put 10% of your portfolio in it where if it doubles, okay, cool. That one poker chip became two poker chips. That's real. So, if, if you have a million dollar net worth and you have high conviction on something, put 100K to work on it because if that doubles, that's meaningful. Like, it should feel like a high conviction bet that you're making. I like thinking about that even as you scale. So if, if you're operating at a level where you're making a million dollars, maybe 100K is your, is your poker chip size. A new product launch or a new partner launch, like putting 100K to work on that feels, you know, comfortable. If that works well, if that 10xes, holy [ __ ], I doubled my business. If it, it 2xes, okay, I did all right. If it goes to zero, okay, I lost a bullet. I still have nine. That's a good framework for thinking about how you're

Like venture. It's just like venture.

Yeah.

We're all managing portfolios. What's the job of a CEO? Is a resource allocator. You're figuring out where to point resources on a, you know, wherever you're at. You could be at Amazon scale, you could be at our scale, you could be at, you know, trying to make your first million dollars. It's finite, and you got to think about where you're placing bets. How big? You don't want to be in a spot where you're placing your entire company balance sheet on a bet.

He's not telling you to do that, guys.

Do not, do not do that. Take whatever you're at, put 10% into, maybe if you have really high conviction on something, put two poker chips in, put 20% into it. You go too small on the bet sizing, it doesn't move the needle. You go too big on bet sizing, and you run the risk of going bankrupt if it doesn't work out. And so whatever you're at, you, you readjust every few months. Your business gets bigger, then hey, your poker chip size gets big. So we're at a scale now where a million dollars is a poker chip around that size. So if we go and sponsor the OC Marathon and we put $20,000 to work, and we're having calls about it, our CMO is on the call, I'm on the call, blah blah blah, like we're figuring like it's an active waste of time because we're only putting $20,000 to work. And so the narrative you're asking like, how do we put this to work on the call? The narrative inside of the team is like, is this so good that we're going to 10x it? If the OC Marathon works, I want to be in every freaking marathon every freaking weekend. How do we systematize this so that we can be at a scale where we're putting real capital to work? Because from my point of view and my CMO's point of view, from a strategy point of view, it doesn't take any additional work. Like figuring out how to strategize to make our product succeed in a marathon, that's one.

Yeah. Then you're you're compounding off the learnings there for sure.

Exactly. It's basically what you did with partnerships. You had success with partnerships, and now you're going ham on partnerships. Most people are doing this on Meta. You're doing it on partnerships. I think the other thing too is just to make sure I

mean you said you made the example of like 20k. It's like if you have your sea level team working on it for even two weeks, if you just back into the burn rate of their salary, you're actually losing money on it. So it's like, it's just about committing real resources. Like you have to make big, bold bets. And it's so funny, man. This is probably, I don't even know, I've shouted out like three, four times. I want to have months so bad. You ever amp it up? Frank Slutman: It's all about like, incrementalities for losers. And you guys, you guys are not incrementalities about it. You guys are [ __ ] going for the [ __ ] home runs. No singles or doubles. You're going for home runs.

That's right. You're striking out or you're going for a home run. And then you know you're going to hit a grand slam next.

A lot of people get lost in the singles and doubles where it feels like you're busy. Feels like, oh, we're doing this collaboration with this. We're doing a this over here. We're doing this. And you look at it, it's like it's a lot of overhead for like a $20,000 project or a this or that small thing that like, say that succeeds wildly. That's a question I encourage people to ask themselves. Like, say that that doubles or say that that 10x's. Does that change the outcome of your business? If not, you you don't have enough skin in that game and should stop doing it, or you should do 10x as much of it. Why do we do a 1x effort? You do a 1x effort because the data, the data is valuable, and the data should indicate if you should 10x it or 0x it. But usually when you're doing that, that 1x value, you nailed it. You're burning so much time, so much salary time, so much attention on the overhead of even doing it. This just, it's not worth it.

Nothing is ever static in business. If it's working, you should be absolutely jamming more resources into it. And if it's not working, you should absolutely be stopping it. And you have to have that that energy every single day on every single plane of attack across your business.

And is there any like frameworks what you're looking through to see this? Like again, I keep iterating, which I love that. When I looked at anything with you guys, I kept finding it. It was sport, science, and entrepreneurship. I would imagine like probably sport and science are kind of like your lead cohorts that you're going after. Are you guys just looking at these are kind of our three pillars and we're just looking to drive distribution and sales through those three pillars? Like what, what is the POV that you're looking to take these big bets in?

Yeah, we we know partnerships works for us. So that is not a a experiment anymore. We know partnerships works and so within partnerships we have kind of sub bets inside of there. We know the verticals that we perform really well in. We perform really well in endurance sports, marathon runners, triathletes. We perform really well in MMA. We've performed really well in the cognitive entrepreneur world. We perform really well in the longevity world. Golf, I don't know. We haven't really touched golf too much yet. So, that would be a next up experiment to we rerun it again from scratch. We start working with some of the smaller influencers. We see if it's pickup. You're going to change your marketing message a little bit to meet that audience. You're definitely going to want to work with different people who have authenticity in that market. So, it basically fractals out to like, we know partnerships work. We have a general partnerships playbook and then we'll apply it to a new vertical that we maybe don't have experience with.

I like that. And yeah, when I was looking at kind of all of the people that you're partnering with for people out there listening to, you're doing a great job of going leader, macro, and then niching down. Like you say Jon Jones and MMA. I'm a big MMA guy. So I saw that in BJJ, the guy Mikey that was on Rogan that eats like intermittent fast and just has like a pizza for dinner. What's his name? Mikey M.

Mikey Machine.

Mikey Muend. Exactly. He's like a legend in a subset of MMA in BJJ and that's like a new sub pocket that you guys are going to win in.

Yeah. You know, ball.

Um, I'm big into MMA. One of my first companies was a mixed martial arts apparel company like

2012, 14 years ago.

So cool. Yeah.

Yeah. It's a sports taking off and it's actually super interesting. A lot of the biggest pacemaker thought leaders are into it. Lex Freiedman, Rogan, Zuck is into it. It's got this interesting maybe what, what we're just talking about golf and like golf is kind of has that rep of being the affluent executive sport. I feel like that's still partly true, but I feel like a lot of those guys have gotten into

future is going to be a flex. That's like a different type of

a different type of flex.

Different type of flex.

Because I think I think once you're like command the boardroom and whatnot, if you're a bajillionaire, the next thing on your mind is like, yeah, I want to have that presence just like in real life as a human. And you get into combat sports. I think Zuckerberg is like lowkey driving that whole net new cohort in MMA. Like he's like front row in like the UFC fights and [ __ ]. I think that that he's gonna and Lex Freeman is another one and Rogan, but I'd really say Zuckerberg is huge there. And another thing too is I love it because I would imagine and I'm not talking about other people's money here, but like you probably get a great deal with that guy Mikey because that's like an asymmetric bet. He's the Michael Jordan of BJJ. The Kager is probably going up. It's probably a growing market, but it's still like kind of small. So you're getting like the Michael Jordan in like a new growing sector.

Yeah. We we're bigger than we used to be, but we're nowhere near the size of like Gatorade. Our budget's, you know, less than a percent. So like we have to find those arbitrage moments. We can't just go to Peak LeBron and like do a deal. That's your entire. We're just talking about poker chips. That's all your poker chips. So like you got to find there's riches and niches. You got to find, yeah, find the Michael Jordan of no gee Brazilian jiu-jitsu, right? Like find, find the right people to work with.

That guy's an interesting character. We're going to pop him up. Some more of these principles. I love your line to your team. Everyone should be selfishly aligned. What does that mean in practice? I really, really like that. I love the word selfish because it really grips you. It's like, what do you mean selfish? Like it's not usual that you hear a leader telling people to be selfish. I'm honest with people. I know people are not waking up in the morning thinking, gosh, how do I make Michael Brandt rich today? Zero people on my team are thinking that. Everyone on my team is thinking about their own family, their own bank account, their own career, and I'm honest with myself and with them about that. So, if you're joining my team and you're running design, I know that you selfishly want a great career as a designer. You want to get the bag and you want to have growth and you want to do cool stuff. So, how do we take that selfish intent that you have with what we're trying to do as a business? And you know what? I see a ton of overlap in those ven diagram of those two circles. Let's talk about that and let's have a really honest conversation. I think a lot of leaders come in and it's just so myopic. It's like, here's what the company is doing when they're interviewing new candidates. The candidates's got to, you know, march in and pretend to tow the company line. And yes, like I've always dreamt of [ __ ] out 20 Facebook ads a week for you, sir. Like it's like, I know that you have like, don't [ __ ] me. Tell me what you actually want to do with your life and your career and let's talk about where we're going as a company. Let's find that overlap and like, I want to see you get promoted. I want to see when you eventually spin out and start your own company. I want to be the first C check into that. Like having just that real conversation as a leader that you're working with humans who have their own passions and and drive and interests and and they're there for a reason. They're there to learn. They're there to to save up some money. They're there to to have a certain lifestyle. And just being really real about that and finding that overlap with what the company's going. I just find it makes things like real clear. It also helps you find the right people, too, because you don't want mercenaries. If you're hiring a designer, you want someone who's like waking up and like scrolling through design inspiration.

Missionaries, not mercenaries.

Exactly. Yeah. You want missionaries, not mercenaries. You want people that, you know, if you're working with someone who's in partnerships. You want someone who's like just super friendly, extroverted. If they didn't work for your company, they would still be making their business, to be on the scene, to be shaking hands, to be having fun, to be social, to make a lot of friends, to make connections, to go to different events, to mix and mingle. Like, you want someone who's doing that on autopilot already because that's their own selfish intent. Like that's that's what that's the just kind of human that they are. And then, okay, how do we pair that with, you know what, someone with that kind of energy, given the amount of opportunity that we have on partnerships, they're going to be an absolute stud on this team. So, let's talk about how we can make it really work together.

Yeah, I love that. And I think for people out there listening that have maybe a smaller team of three, four, 10 people, it's something that I've had to get better at and I have gotten better at and it's I know that people care about it that are on my teams is making sure, like you said, a cadence to check in and talk to these people. Like I have these conversations often with people on my team like, what do you want in life? What do you want to do? It's funny that you just said like cranking out the creative like an example is like Taigga who's our editor. It's like, okay, what else do you want to do besides editing? And now we kind of have this like 80/20 where 80% is editing and then 20% is kind of this net new creative because he wants to do random creative stuff. So one day a week we're doing that. That goes such a long way. And if you don't like systematize that, it could get lost in the sauce and before you know it, it could be seven, 8, 10 months and you don't even ask the people on the team like, what the [ __ ] do you want with your life? And right now, it's like, you know, we're having the conversation like often, bro, because this AI [ __ ] is obviously crazy and stuff is changing so much. It's like, where do you see this going? What do you want to do with your life? Like, these are just such important questions that I I think it's like the number one most important thing as a leader is to check in on your team.

Totally.

Uh, a couple more of these operating principles I just want to touch base on. I listened to a pod and you said something that every problem is two problems. I'd love for you to just like break down that framework again. A lot of this stuff guys is sounds simple, but it's not easy and they're just good frameworks for you to process in all your decision-making. So what does that mean to you? Every problem is two problems.

Meaning that say that a pallet of product didn't get picked up on time. That's a problem. Let's get that product picked up that is due to Target next Tuesday. Get that pallet picked up. Then what's the problem that caused that problem? What happened systemically? Who didn't pick up what phone call or check what email or what system isn't in place? Why are we missing pallets, guys? What's the problem that caused that problem? So, every problem has the problem. We call it the meta problem as well. So, there's the direct problem and there's the meta problem. And if you're really serious about building a system that self-improves over time, like you want your system to get better and better. A lot of systems when you have more people, more dollars, more products flying around, they get more chaotic. The universe tends towards entropy. And so if you don't have this baked-in cultural value of hey, when we see problems, we fix the problems and we also figure out what caused the problem. You want to be getting more powerful. You want your organization to be self-healing as it scales. And especially as a leader, as you scale, you're not there to solve every problem. Certainly, you're not there to even ask the meta question of like, what's the problem behind the problem. So you really want to build that language into your team. It makes people move a little bit maybe in a sense you move slow, but it's one of those things where like, you move slow to move fast. Like we're going to really harp on why that pallet pickup didn't happen so that it never happens again because I don't ever want to have this conversation again.

And then it's you want to write that down, you want to document it, you want to systematize it, and then that just drives everything faster.

Exactly. And that by spending a like what feels like a lot of time on that specific problem and the meta problem behind it. Well, the good thing is you're never going to have to face that again if you create the right system around it.

Good internal check to everybody have in their brain. Just when something goes wrong, just think a layer deeper. And again, sounds very, very simple, but it's not easy. It's just looking underneath the hood. What's up, guys? My vision with Open Residency is to bring the world's best operators and entrepreneurs that are currently in the business arena to share their principles, frameworks, and tactics all to you guys for free. 85% of you guys are not subscribed. Make sure you subscribe below and you won't miss an episode. Enjoy.

I want to go into fundraising. You've raised a [ __ ] [ __ ] ton of money, over $13 million. So, you've raised from A16Z, Steven Bartlett, Joe Montana, John Jones, Jake Paul, some CPG founders, Vital Protein, KA Lollipop, Hugh Chocolates. What do you think is the most important lesson that you've learned from raising that $13 million?

We have some really cool people on the cap table. I'm thrilled to have along for the ride and look forward to continuing to pump their bags, make them make them really happy with their decision to invest. And there's a few different lessons I've learned along the way. It takes thick skin. If you're going to invest, you got to be willing to get a lot of nos if you're going to if you're going to have conversations with investors. And it's going to hurt because you're going to open up your entire business, your life's work, and a lot of people are going to say no for reasons that have nothing to do with you. People are, it's not the right fit for their portfolio. They don't have liquidity. Is this, is this, there's a million reasons. Even if you're a great. It's like in baseball, right? If you're an amazing hitter, you're hitting like 300, right? By the way, baseball players make amazing salespeople for this exact reason. Because if you think about the dynamics of baseball,

Interesting. You're good at baseball if you're like three and 10 connecting with

programmed to lose seven out of 10.

Exactly. And getting back up, being professional, doing it again and again. Other sports like basketball, like you're making more percentage of your shots.

85% of your free throws. Yeah.

Not to say we love athletes in general. Just something interesting aside about baseball. And for fundraising, one of the key lessons that I learned early on is that you're not just selling your product. You can't sit down at the table and start being like, "Here's a ketone and here's how it works and here's the metabolism behind it and here's how we discover the product." Is only a portion of the business. You got to speak like a PE bro, a private equity bro. You got to speak like a finance professional. You got to speak like you're selling a company. You're selling shares of a company. You got to talk about the cash flows of the business. You got to talk about the moat of the business. You got to talk about how this exits for a billion dollars in the future or IPOs. What's the optionality around it? You got to be a a private equity professional around the business that you created, which creates some detachment. You have a lot of ego. I I have a lot of ego and the idea of the business I created. It's my baby. You got to totally detach it. So, the ability to sell a product, which you get really good at when you're making landing pages and ads and you're talking about the the unique selling propositions, all that stuff. You got to have a a wider aperture on the conversations that you're having with investors. It's not just about your product. It's about everything around it. The total addressable market, the moat that you have around it, the team that you're building, the IP that you have. You're telling a whole all-encompassing story. Yeah. How, how does this ultimately exit? That's a big one. If someone's investing in your company and it's worth $10 million today, like how credibly do you sell the business for 10x that or 100x that in the future and who are you selling it to and why would they buy it? And being able to speak in those terms, that took some learning for me that isn't it's not obvious if you just like have a hit product to be able to talk in in those terms that investors expect to see. You need at bats on that because I mean, you always learn at least one thing from each pitch and it's again, you could be like eight pitches deep and you're like, you look at the first one, you're like, what the [ __ ] was I thinking? I'm going to quickly go to Brooks Brothers right now, throwing a suit. Come back. We're back in the PE world right now.

What are those big numbers, metrics, KPIs that really gets people excited? I think you know you mentioned TAM. What are some of those other kind of big ones? I always like to hear because everybody has like one or two different ones.

I always work backwards from the TAM, the total addressable market. I start every conversation with an investor talking about the $85 billion energy drinks, energy shots market. Talk about how Monster is a $30 billion publicly traded company. Red Bull is a private company that's the same size, maybe bigger. Celsius is a 10, 12 billion publicly traded company. Five Hour is private, but it's significant. You have in the last couple of years, you've seen Ghost, C4, Alani New, all three of those exited for a billion dollars plus. They got bought up by Kirk, Dr. Pepper, and by Celsius. So, I always paint the picture that there's a lot of money flying around in this space. Who doesn't want more energy, right? Like 8 billion people on planet Earth could use more energy. And that's evidenced by the fact that you have this $85 billion of energy products that are consumed every single day. So, I plant it's a fundamental human need. There's a lot of dollars flying around on the consumer side. There's a lot of people buying energy drinks. And then there's a lot of just big public companies and companies that are buying other companies that is an inquisitive active market. And that paints. Look, if I have like a frozen mochi ball startup in my, you know, it's my grandma's mochi ball recipe.

Frozen mochi ball. I don't even know what the [ __ ] that is. What's a frozen mochi ball?

Exactly. You see some crazy stuff in CPG world. It's it's the opposite spot where it's like, what's the TAM? Like what, where does that go? Who buys that? What is there a billion dollars emoji? Is there a million dollars emoji balls going around in the world? Like where does that go? Like you want to be tapping into a really large vein so that it feels like, oh man, this person's crazy, but yo, if this person gets like 1% of the energy drink market, this thing's worth a billion dollars. Like you want that sense of there's just the energy behind it. There's a giant wave that this person is serving, that this company is surfing. There's a giant amount of tailwind to it. You don't want to have to feel like a bunch of miraculous things need to come true. Like no, you

very realistic your situation like when we've talked about it, it's very realistic this thing could be a billion dollar plus company.

Totally.

A very, very clear path.

If I come to you and I'm selling like, I don't know, walnut milk. Like, what's the market for walnut milk? Like, what is like, you, you might have to tell a lot of do a lot of gymnastics about like how that becomes

Sounds like a gymnastics exercise.

Yes. You want to come in, you want to maybe, hey, maybe walnut milk is a great idea. If I was pitching walnut milk, if I was pitching walnut milk, I would come in talking about the size of the milk category and about how I don't know, 30% of people who buy milk fart too much and walnut milk makes you not have to fart. And you know what I mean? Like you, you still try to anchor it to the overall milk and why is it better than almond milk and oat milk and all the other alt milks? Like the point is work backwards from the opportunity.

Yeah. Get people's eyes lit up from the opportunity of how big it could become and then talk about, okay, yeah, right now today, here's where we're at and here's the credible plan to make a real dent in that total addressable market. You know, it's a good ninja play that you have too. It was actually, I don't even know, episode two or three with Manny from Slate Milk, but his thesis was combining TAMs. You have the same thing like you're talking about the energy shot space, but then it's also, I mean, you're in the wellness or sports nutrition category, let alone, I mean, if it becomes the fourth micronutrient. And then there's going to be a third big category for it'll just be like ketones and it'll probably be absorbed through different things outside of shots. So you have all these kind of hedges on these other growing temps. It's absolutely correct. People want to feel like, you know, how when you're landing an airplane on an aircraft carrier, I've never done this, but you know how in the videos of people landing airplane on the aircraft carrier, there's a couple hooks. If you miss the first hook, there's the second, there's a backup hook. You want to give investors that sense of security that that you're overlapping in a couple different large markets or a couple of different mega trends that are going on right now where if the first one isn't true, the second one will be true. People want to feel like

they want the hedge, but when it comes to where this goes in the future, you want to hear from a founder that they're really good at creating optionality. That, hey, I could sell this company to Coke or Pepsi or Kirk Dr. Pepper or Nestle or Unilever. And here's how we're building it out and they could all be interested for different reasons. You want to paint the picture for how you're actually creating a lot of exit optionality for down the line because ultimately people are investing. They want to get a return. It doesn't need to be tomorrow. People can be patient, but they want to hear eventually that there's a credible plan to how this thing returns. Is this thing going to be big enough that it goes public? If not, that's fine. But is it going to be big enough that it sells to a large strategic company that pays hard cash for what you've built here? A lot of people, I don't blame them, but a lot of people, they get started out of the passion. It's it's known as, you know, special recipe that they're that they're now making at scale. And what I would always encourage that person to do is really think it through from it could be a decade from now, but like think through, have a credible plan for how your thing exits.

Plan to the end.

Yeah. Plan to the end. And you don't have to start doing it. You don't, you're not trying to sell the company next week, but like be pointed that direction, right? If you're lost in the middle of the woods, like know generally where the clearing is that you're headed towards. Like, I I talked to Stephen Ellsworth at Poppy about, he like, when did you start exit planning? He's like, "Yeah, a year after starting the business." And I'm like, they weren't anywhere near selling it yet, but he started thinking like, what needs to be true to sell this company for billions of dollars to Pepsi.

Smart man. And then you start building towards that general direction. And there's a lot of that helps you filter a lot of decisions, helps you focus. A lot of what we've talked about kind of inherits from that. Like we were talking about before about, you know, I don't love being in too many different formats or too many different SKUs. When a company goes to buy you, when Pepsi goes to buy you, the way that acquisitions take place is usually by desk. It's like there's someone who's buying bars.

Yeah.

There's someone else who's buying shots. There's someone else who's buying something. I will just say it's a harder transaction if you have more more products. You want to be deep and narrow and give them meat on the bone to then take this and put it in a different format and they can put it elsewhere.

That's right. When you look at like RX Bar that exited to Kellogg's for $600 million, like all they had was the bar. And then after they got bought by Kellogg's, they started launching like an oatmeal and a this and a that. That's awesome. But to get there, someone at Kellogg's woke up one day and was like, "Hey, we're underindexed on bars. We need to go buy the fastest growing bar company in America." And if your company was part bars, part this, part that, part the other thing, they're going to that buyer is going to discount your other things if they're not interested in them. I'm not saying it's not, I have my own point of view on the world. Like, there's everyone, there's going to be people breaking every rule that exists. So if I say it's a rule that you need to focus, someone's going to show me, you know, CPG family farms that was in every aisle of the grocery store, frozen foods, chips, whatever, and they just had a great big exit. So it can totally happen. I was just saying my point of view and what I think generally increases your optionality for an eventual exit is deep and narrow as you said.

Because they, if they need help in that one category, they get the second hedge too. You could fill the gap for that one category and then they can take you, i.e. Rxbar, into other categories as well. So you get both the hedges.

There's a lot to be said for leaving white space on the table. I look, I haven't sold my business yet, so I'm just here talking flapping my gums. Is something I think a lot about. So I can I can bring that credibility that if you've looked under every possible stone, if you've tried every retailer, if you've tried every possible format that your product could go into, your story's kind of done. Like you've explored every possible outcome versus if you stayed really focused. So you have like some really well-performing SKUs. You're not in every retailer under the sun, but the ones that you're in, you're doing really freaking well in. Think about what that implies for the buyer. They look at that, they're like, "Wow, so much white space." They're inside of their spreadsheet dragging out. Okay, you're in 50,000 doors. Well, okay. When once you once I buy you, I'm Coca-Cola. Once I buy you, I'm going to put you in 500,000 doors. I'm going to 10x your business. Oh, you haven't launched this product, this product, this product. Oh, cool. We're going to launch those. That's also going to 10x your business in that dimension. So, there's a lot to be said for leaving the right amount of white space on the table, which then goes to the point of

be really deep and narrow in in a really compelling area. So that all things considered, if you say you're making $100 million on your business, you'd rather make it on like less things than a broad set of different.

I never understand why, you know, someone has an apparel company and they're doing $20 million in men's apparel and they go into women's. It's like, bro, run that up to $100 million in men's apparel and then either a sell the company and give them the women's and or do women's and then you can come up with a third category to sell them on. I don't get that.

I completely agree. And you put out Ridge earlier, which has been in the back of my mind here. They're just at a different scale. I think people need to know that that like

hundreds of millions of dollars, guys. If you're selling $100 million in men's apparel, then cool. Start thinking about women's apparel. That's the right way to think about it. Don't start thinking about it when you're at $10 million. Like figure out what's the key. What is your key? It's probably a shirt that everyone is obsessed with and that's why everyone's coming to your brand. Like sell them that. Sell them men's apparel and then maybe event, maybe not. Maybe you just only just be the best at men's apparel. You don't need to be everything to everyone. You're better off like if you're selling to men, sell to men golfers and then sell to men tennis players, right? Like, like find where the existing opportunities that you've executed on this on the business have given nutrients into the soil for the next thing that you're about to do. Don't go to the other side of the garden for because you're just ADD. I think a lot of founders ADD gets the best of them. And I say this is someone who's pretty ADD.

Guys, I got ADD a little bit. ADHD. I focused on the test though and I did not I don't have ADD or ADHD.

Dude, I think it takes real like meditative work to like control the the beast cuz you and me, man, and I'm sure everyone listening, we're really curious. I love the way the world works. I'm curious about AI technology. I'm curious about just whatever, everything. There's a lot going on in the world. What I think about though is like, what you focus on expands. Everything is a fractal. So, if I actually put all my creative energy actually into ketones, there is lifetimes of work to do inside of that. Talking about Ridge earlier, like if Sean goes and obsesses over wallets and like the related areas, you know, carrying stuff around with you, there's a universe of possibilities inside of there. And don't get too distracted by the shiny thing on the other side of the world. Just it takes almost like a meditative state to like, okay, I'm curious about all these things, but how do I how do I focus that into this one really narrow corner of the world and see that there's a universe of possibilities. It's like when you look at something under the microscope, it looks like a fleck. It's like nothing there. But when you look inside of it, it's like there's entire like active life of a million little microorganisms playing around inside of there. And business is the same way.

I want to tie a bow on just fundraising and we've gotten all different types of advice from all different types of people. Well, if you could just distill it down to kind of one fundraising principle to share with the younger generation, what would that be?

You have to leave people with the impression that by investing in your company, they're going to get rich. It sounds really obvious when you put it that way, but you really got to think about it. Chill out on getting people so excited about your product, about your this, about your that. Think about it as an asset that is going to return money to the person investing in it. If you can achieve that, that's the thing that's going to make someone leave from being just, okay, I like that person, but I'm not I don't have high conviction. You want someone to believe that you're going to triple their bag, 5x their bag, 10x their bag. Focus on that. Give a really credible story to how you're going to make them money. People aren't, I'm sorry to say, people are not mainly investing in your mission. That's part of it. We like missionaries. We like people with high conviction. We love good products. We like that. But tell that story full circle of how that person when they invest 50K into your business today. How does that become 250K in their bank account in 5 years? Be really sharp on that would be my advice.

Love that. Everyone's got different advice. I like that one. We haven't heard that yet. I want to talk a little bit about team and culture. You're obviously at like, you know, a pretty mature scale, mid minute figures. What's the most important lesson you've learned about leadership at scale? Because things just drastically change from 1 million to 5 million to 10 to 20 to 50 to 100. What's the biggest learning lesson?

You change a lot as a leader as your company grows. And a lot of the growth of your organization is endemic to your own personal growth. That the things that it takes to get your first million dollars, you got to be willing to do everything. And then as you grow and grow is you got to get out of your own way. You got to hire people way smarter than you. You got to convince them to work for you. You got to be a talent magnet. My role right now, the most valuable thing I can do right now is indicate who on the team should be making a decision. In the early days, you're making every decision. You're the smartest person in the room. As a business growth, the most helpful thing I can do is say, "Hey, Mike Lee, our CMO, this is your call. Multifactors on this. There's a more expensive way, a cheaper way to do it. Maybe it's more impactful, not impactful, multiple decisions. You're the most equipped, you're the best position to make this decision or our head of retail is going to make a call." Like the most effective thing I can do as a leader when we're in a conversation and there's a lot of voices is nominate who's going to be the decision maker. And note that I'm not saying that I'm the decision maker. I I see it as a flaw. If I have to be the decision maker, there's a very small set of decisions at the company at this scale where I should be the decision maker. It's like fundraising and key hires and a handful of smaller things. If I'm making the decision on like what the next new flavor is going to be, I've lost my way. Like we're at a scale where that should not be a CEO level decision. And I So my job is who on the team has the most believability on knowing what the best next flavor to launch is going to be and empowering that person and telling everyone else on the team to listen to that person. So, a lot of it is talent selection, talent development, and then just really empowering people, giving them the spotlight once something comes up and making sure it's really clear who I'm delegating the decision to.

Yeah. I think so many people with all the [ __ ] that's online now, it's like understanding and knowing and having good judgment on who to believe and who to take advice from. I think that in itself, I mean, people are using the word like high agency now. That's like the new buzzword. But it seems like you're just saying is you're you just have to make the decision of who makes the decisions and it's just your judgment on that ultimately. That's what it comes down to.

Yeah. You know, you try to make it obvious, give people areas of responsibility, make it really clear on people's title. Like a lot of decision is automatic. Okay, we know that. Where things get interesting. A lot of times when things come across my desk, it's because it's it's a jump ball. It affects multiple different parts of the org and that's why it's come up to me. I'm always trying to push it back though. I'm always trying to say, "Oh, interesting." like, well, for this specific decision, for decisions that look like this, Alice, Bob, whatever, you're the owner on this because I'm always I I can't be I can't be in the day-to-day. There's too much decisions going on. I thought I could in the early in the early days, you can. It doesn't matter what your IQ is. I'm, you know, smarter than average, but there's a lot of people smarter than me. So, like, in the early days, I thought I could handle a lot of load. And it whatever you're at, it's going to break at some point. I don't care if you have 200 IQ. There's a certain point where there's just like too much decisions flowing across and you need to be really good at delegating to the right people around you. There's almost an advantage Mark to being a little dumb as a CEO. There's so many names that are going through my head right now of people that are that exact DNA and that's a winning DNA.

Yeah. It's like you're focus you're self-aware to know that you're not super smart. On the other side of the coin, there's a type of person that's like too know-it-all and you end up choking yourself where it's like if I asked you, hey, would you rather have like an IQ of 150 or an IQ of 110? You'd probably say 150. I want to be smart. But I think a fallacy that a lot of smarter people run into is like they're so they're the smartest kid in their high school. They're smartest at solving all these problems. And they're just their go-to answer to solving everything is like, well, what do I think we should do? Versus there's a way of being of just like getting out of your own way. Like you almost want to be the IQ 110 person who's hiring the IQ 150 people. I mean, they always there's always that joke of like, like people who go to Yale or whatever end up working for the the guy that went to state school dropout.

The college dropout. Yeah. Like the A student works for the C student. It's it's not a a joke. What I would say is I've like learned to get out of my own freaking way that like however smart I think I am. There's someone else who had the time to think about this deeply can be a subject matter expert has been doing this for a decade and my job is to get that person. My job is no longer to be making decisions. My job is to get the right talent on the team, develop them, make sure that it's really clear what decisions they get to decide. Make sure they have mandate when those decisions come. The best thing I will do is like, hey, Christine said this, I'm the CEO, so we're all doing what Christine says. So, do you see what I'm saying? It's not me saying like, hey, I thought about this and I'm the CEO and we do this. Is I'm using my mandate as a CEO to get behind someone else on the wheel smarter than me.

And then you got to listen to me because I don't I'm the boss. But like, you don't you're not listening to me because it's my idea. You're listening to me because I'm telling you, the smartest person on the team says we're doing this. The smartest person on the team at this type of decision is has has decided. So, we're all going to rally behind that.

For people out there listening, that works 1,000% of the time. Empowering that person. They feel real good about themselves and it creates clarity in in who makes the final decisions. I think, man, like I think IQ's I mean, it's basically done. I think the new IQ is going to be who can see around the corner and what's coming because of how much change is happening right now. It's like this sounds kind of crazy to even say, but it's like who can take the time to really think through the sequencing of if then situations of if this happens, then this will happen and really, really look and take a lot of time to see all the different scenarios that could happen. That's what I think the new high agency person is. That specific skill set, what is coming down the pipeline quite frankly, specifically with AI. That's what I think I think that's the best human right now to have in your team.

I think it's right. I think being able to predict the future with high resolution is still a fundamentally human skill and

I don't think it was really that relevant like three years ago or maybe three years ago to know what was happening right now.

It's interesting, right? Because AI can do kind of the bottom 70% of your work now, like plus or minus. It can do a lot of the menial stuff. So there's an increased value on that higher order thinking. Like it's not that valuable to just like munch through spreadsheets or something like AI can do that. Now, if you have a job, your job is to be doing the higher order stuff. It's like back in the day when it's what to work on.

Exactly. Yeah.

It's it's taste. It's selection of types of problems to solve. What's worth solving? Maybe unexpected combinations of ideas and solutions coming together that you know AI is really good at reading the fact pattern of the past, but I think humans still have a a spark of ingenuity of knowing where things are headed, especially on a cultural level. Like what's going to be the next thing that's going to take off and why? You had a nice bar there, unexpected combinations of different things. I completely agree with that. How to mesh kind of different worlds together. I just want to finish on just team culture and leadership. Just last quick question is what do you think is the most surprising thing you've learned about just like team dynamics and culture?

I got a good one for you, which is that

I got into my position as a founder as a leader because I get along with all sorts of people. I went to public school in Chicago and it was just a mixed bag, all different types of people. You had your like IB AP honors students. You had your high school dropouts. You had kids walking around the high school pregnant. You had you had the full. And I and I end up I I end up being class president of this like insane melting pot of a high school. And so I get along with kind of everyone. I get along with the the the nerds. I was on the math team, chess team, but I was also varsity soccer. Like I got along with a lot of different types of people because you call it code switching or whatever you want to call it. Like I can kind of hop into a lot of different areas. That's a superpower as a leader. I thought because I can bring in this person and that person that what I've gotten bit by as a leader a few times is like sometimes they don't get along with each other. And there's actually, I don't know the full answer here. There's something to be said for if everyone you hire in your company is like real homogeneous, they're all going to get along with each other. If you actually just only hang out with

Hockey players and everyone that works on your team plays hockey. Like, you kind of all have the same language, same way of being, same priorities, same. But like for me, I like, I have a really easy time with a lot of different types of people. But then they, they don't necessarily always know how to >> you need a healthy debate between everybody. I feel like >> that's what I benefit from is I get very different vantage from very different people. But then maybe they've never had a friend like each other. So then once they're both on my team together, I have to make a concerted effort to help sometimes break bread between people. I don't have this fully resolved because I think it is fundamentally good to have >> diversity >> diversity of of thoughts and different types of people on your team. But there's something interesting about it doesn't always come by come together in this beautiful like kumbaya moment. There's a lot of, there there can be a disconnect between people and it's something I'm still actively working on. I don't have it like fully resolved. I think it's one of those things where it introduces a fundamental tension into the org. And maybe that's just a good thing. And maybe that's partly what my job is as a leader is to collate those opinions down together and and go forward with it. And maybe maybe that just is what it is. There's no world where everyone's just perfectly speaking each other's language.

I'm going to tell you something and I've said it to you guys a thousand times, bro. Personality tests undefeated. A thousand for a thousand. If you got, if you have not done personality tests, insane. They cost $25. Get a cheap one. It's called workinggenius.com. Make everybody take it. It will blow your mind, bro. You'll get a 20-page PDF about you. There will not be one word on that 20-page PDF, Michael. That is wrong. >> Amazing. >> I feel my team's energy because I've said it a thousand times. It is a thousand percent every single time. Do it with your significant other. Do it with your f. Do it with everybody. It's insane, bro. And then you put it into an LLM with all the different people and you start saying, "This person gets along with this person. We're missing this type of skill set." Mind-blowing. I love this, bro. It will change, it will change your whole entire business. You're implementing this on Monday. I'm telling you right now, it will change your business.

>> I want to go into personal development. You most definitely are going to be the most fit human that quite frankly will ever step foot on this podcast. And it's very, very bad to make like a one-way decision like that saying that without knowing who's going to come on. But you do a sub-6 minute pace for a full marathon. I cannot do one mile in sub-6 minutes. How does that bleed? How does the the sports and the running bleed into into business? How has it changed your life?

>> First of all, I think you're being far too kind. I'm sure we both know you're going to have pro athletes on the pod within the next few months, if not sooner. So, I'm an advanced, you know, it's still a hobby to me. My main job is my main job, but I do run every day. I run 10 miles every day, going for a run right after this. And I'm a competitive marathon runner. And it definitely ties into what I'm doing for like, there's no world where I'm running my business without also being a runner for so many reasons. Like the way I even came up with the idea for ketones was because I was pushing myself as an athlete and pushing my own personal metabolism and started testing around things. That's just on like, the literal science discovery level. And then on the day-to-day level, it's just where I go to blow off steam. I have so many good ideas when I run. It's the one time of the day where I'm like reliably not on my screen, out in the world. I'm actually just marinating. There's so much input flying at me every minute of the day and that running period is a time where I can really coalesce, get everything down and let my subconscious mind chew on things. I get so many good ideas. And then there's just this visceral thing where when I'm running, sometimes sometimes it's hard. I mean, I run fast, but you, it's it doesn't get easier. You just get faster. Like, when if I go to the track, I'm ripping. I It hurts just like anyone else. Like, I'm just, I'm pushing the limits of my capabilities just like anyone else. It's just as painful for me, maybe even more painful. I'm out there for longer. Like, it's it's really freaking painful. But then a couple things happen which is like, later in the day, just the aura that I bring to other activities is like, well, I've already whooped my own ass today and yesterday and tomorrow. Like, there's nothing that someone can say that's going to be more painful. Like, oh, we don't, this deal didn't go through or this didn't happen. That like, I already voluntarily put myself through an extremely painful experience. It just kind of zens out the rest of my life. And it also teaches me that, you know, everything is painful. That like, there is no progress without pain. That comfort isn't the way that anything ever got done. You don't get better as a runner by chilling out on your couch. Like, there's fundamental pain involved. If you want to sell your company for a billion dollars or a million dollars or any like, if you want to create something outside value in the world, you're going to have to chew on more glass than the average person, just period. And so getting yourself, there's something about running in particular. Or there's something about just being an athlete at a at a reasonably high level where you just at an animal level, every morning, you're baking that lesson into your mind that you have to go through pain and that pain is progress. And I mean, entrepreneurship is a is a long road, takes a lot of discipline, a lot of a lot of pain, a lot of things that don't get your way and you get up and you do it again the next day. Anyone you you keep finding out a way to compound it. And so to me, I feel like I have a book to write about running and running a business and how they stack on one one another.

>> What does that look like from like a scheduling perspective? You just running 10 every day? Is it 10 on zone two and then you're running track stuff fast? Like, what does it look like for someone out there that's looking to get faster?

>> Yeah. If you really want to get into running the science of being a good runner, you're you're throwing different kinds of miles out there. So, at the start, you're throwing a lot of volume. Like, no one ever got good at marathoning without doing a lot of volume. That if if you want to get like a decent marathon time, like you're putting many multiple dozens of miles out, just you got to run a lot to be good at running marathons. And then within that, there's different types of runs. So I'm in a spot where I'm running every day. I don't necessarily recommend that for someone going from zero, you know, start running three days a week, four days a week, five days a week, build up to it. I'm in a spot where I've been in the sport and to where my body can can handle it. I'm running every day and different runs are different. Some runs, you call it, I think, pretty well, which is like, sometimes I'm going to the track and I'm doing absolute anaerobic stuff. I'm doing 400s, I'm doing 200s. I'm working on just how do I move my body faster at that peak speed? And it's a lot of your your mechanics. How are you driving force into the ground? How are you just getting like faster at your top end? And then other days, it's it's zone two, just getting miles. you know, your your heart actuates at the full capacity even when it's only at 60% of your maximum heart rate. Meaning, basically, you're getting a full rep of your heart muscle when you're at zone two and when you're at like a light jog type.

>> You're just looking to improve that base.

>> Yeah. You're looking to improve that base and you're actually not trying to to cook overly hard because you want your hard days to be hard. You want your track days to be hard and then you want your easy days to be easy where you're still getting some exercise but you're not like you're actually de-loading because it's it's relatively easier than your your harder days. And then there's the long runs. You can't be a marathoner without doing, you got to put up some like two-stack runs. Get get the 20-mile runs in on the weekend. A lot of times mix inside of there, you'll do like a tempo where you're doing, you know, stretches of three miles or five miles and maybe repeats of that at like a faster pace. Maybe it's not your full track speed, but you're maybe you're getting zippy with it. Like you're moving at a fast pace that's maybe a little bit faster than your marathon pace. And you're training your body to be able to move with good speed for an extended amount of time. And so it's all, it all comes together. It's a you're hitting different systems of across your body from anaerobic to to neuromuscular to aerobic long-term stamina, metabolic flexibility. You're kind of hitting those in different ways on different days and is stacking it up. It's fun. It feels like you're kind of a sculptor, like building yourself into a a different type of human when you become a runner.

>> I've never heard that analogy. All right, I'm going to ask you a million different questions on Quick Strike. Let's get into it. Uh, one word to describe Jeffrey Woo.

>> Iconic. That's my co-founder for those who don't know. He's a one of one human. He's one of the smartest people I met at Stanford. And when it came time to start a company, I had worked at YouTube for a couple years. I was on the technical side. I was a product manager back in like, you remember Gangnam Style?

>> Yeah. Yeah. That's when I worked at, that was the time I worked at YouTube. I left YouTube and Jeff in that period of just a couple years out of college had already gone through Y Combinator and sold his company. We had a great exit. And when I was thinking about who to start a next company with, we got together and we were both really curious about human performance optimization. And that's when the whole adventure began.

>> What is the biggest misconception about Shark Tank?

>> That you have to win in order for it to be a really great business experience. I think a lot of people go on Shark Tank, they're trying to do a deal. Like if you go on and you don't do a deal, it's still a prime-time ad for your company. That not just once, but like it replays multiple times. It's it's a truly evergreen piece of content and it's a great, great story for cocktail hour. I had a lot of fun going on Shark Tank.

>> I think most of the deals are bad. Sorry. Sorry, Shark Tank. Most of the deals are bad. Let's just call it a spade spade here.

>> It's true. They they can be pretty aggressive. I'm surprised at the deals that some people take on Shark Tank.

>> Agree. Um,

>> you know, half of those deals fall apart afterwards, too.

>> 100%. I mean, they don't talk about any of like the actual core deal breakers of anything. Yeah.

>> Of anything.

>> Yeah. So, a lot of times after the curtains close and they're doing diligence on the business, a lot of times they fall apart on both sides. A lot of times I think one savvy way to maybe game it, I don't think Shark Tank would like hearing this, but that like do go on and do a deal, get the optics of winning and doing a deal and then afterwards like >> get caught up in >> I mean, that happens. That happens pretty often.

>> Yeah. It's like, oh, sorry, I don't know. Sorry, like, I don't know Mark Cuban. I don't know if, but like, diligence them back. Like, I don't know if you have the right amount of time to actually commit to this. I'm getting, you know what I mean? Like, back away from the deal after doing it, getting the optics. They might [ __ ] delete your episode, so don't listen to my advice. But, uh, there's something there. I'll just say that.

>> I think that there's two tiers to it. I I think I'm in the minority on tier one. I think very few people do tier two. Tier one is like, okay, I'm I'm listening. I'm watching with my wife. Check Instagram. Is this company still a thing? And then tier two would be like, did they even get the deal? I don't even think anybody goes to tier two. So, that's a pretty good strategy. I don't know if you'll make it on camera and get that evergreen commercial, but there's a few like Scrub Daddy did a deal and Poppy did a deal also. That guy cashed out.

>> That guy, I believe, was the single largest shareholder. Actually, the Shark that did the deal ended up being the largest owner of the company because he invested twice, I believe.

>> You signed UFC legend Jon Jones as your chief performance officer. What is one thing everyone gets wrong about Jon Jones?

>> He's a really friendly, funny guy. He's the baddest dude on planet Earth, but he knows how to really control his energy. So he brings that into the octagon. Outside of the octagon, he's loose as a goose. As you'd expect, you can't be that amped up. And he actually told me this interesting way that he approaches it, which is that even in the octagon, he never goes to absolute 100% intensity. He has this alter ego called Featherman that he brings into the octagon where it's just a little bit light on his toes. He never totally goes to 100% where you're like, you know that feeling when you're like running as hard as you can and you're punching something as hard hard as you can and it's like >> everything is tensed up in your body and it's not good, 'cause you're like, you're tensing up your freaking jaw and your toes and your shoulder and it's like, none of that's helping you. So there's something to being like 90% where like, you're throwing the punch, but that's all you're throwing and you're not expanding all this unnecessary energy. So he only ever brings it up to 90% and so he stays a little bit just relaxed. For him, I mean, 90% is >> is better than anybody else's 100%.

>> Exactly. And so he's able to find that kind of float between being really freaking dialed, but not being stiff. And then yeah, outside of the octagon, he's he's a friendly guy. Yeah.

>> Shout out Uncle John. You work with tons of world champion athletes. What is the most common thing you find in world-class athletes?

>> Dude, they actually are way less nerds than like a lot of people I know who are totally glued to the data from their Whoop sensor, Aura ring, sleep score. The best athletes, they're really intuitive driven. They just know how their body is feeling. They're not going on every run and measuring their heart rate and making sure they're in a certain zone and but like they're they're going off a feel. They've probably got that initial 60, 90, 120 day kind of baseline and now feel.

>> Is that what you think?

>> I think their intuition is highly dialed. So that if their coach says, "Hey, go on a a light run or go on a tempo pace or whatever," like they know exactly how to click into that. I think that's right.

>> Makes sense. How much would you pay for ketone.com? Guys, I'm just throwing it out there. How much would you pay?

>> It was We got a It was a good deal. It was It was It was five figures, I'll say that. So, less than 100K, which I think was a really good deal.

>> Wow. Whoever gave you guys that for Are you serious? Under 100.

>> We got a good deal.

>> Whoever that is, we're going to go check up on the register. They should have held out.

>> They should have held out. Less than 100.

>> That's like protein.com or like carbohydrates.com.

>> It will be. I think that the god >> the arbitrage is it's not there yet, but you're absolutely right. That's how I think about it is that it's like buying cars.com or flowers.com.

>> That's like an actual asset that when you sell the company, it's like I have ketone.com. That's like an actual real asset.

>> 100%. I highly recommend people buying domains because of exactly what you just said. It is not a marketing expense. When you spend money on Facebook, that money is gone. That left your bank account, bought a bunch of ads, and that is no longer there. When you buy a domain, that is an asset that you own. It can show up on your balance sheet as an asset that you own. It's like if you bought property on Main Street. And in my case, if I bought ketone.com and I make the ketone market a thing and the ketone market just grows organically, the value of the asset goes up. If you bought protein.com and then the protein market doubles in size, hey, the value of protein.com just doubled, too. Maybe it more than doubled. And so, I highly recommend it. It can feel expensive. We happen to get a good deal. I think that it's maybe worth people paying even more than you think you should for a given domain.

>> Well, it's direct correlation to when you in two years when you raise a hundred million at a billion dollar valuation, they could just keep gouging gouging. Like you got to get in early before you're too big publicly.

>> Yeah. Yeah, you're right.

>> Come on, guy. Um, very curious about this one. So, you got a $6 million Department of Defense contract. How did that happen? Is that non-dilutive capital? Is that on the P&L? And like, I really want to know how it happened. And how does someone go and get these contracts?

>> We got a $6 million contract with Special Operations Command to R&D ketones as high-performance energy. It's been an absolute thrill of my career to be able to work with service members and veterans and be able to help people perform better, be able to help people, you know, make it home and they're sharper in the battlefield. They're able to succeed better, have higher success rate. To me, that's the most thrilling and one of the most personally satisfying parts of everything that we've built here has been working with the the special operator and just broader armed forces.

>> And that was in the beginning, too. You guys got that like right out the gate.

>> Yeah, that was early on when it was like very early prototype. At that time, we didn't have a large-scale supply chain. We had the product, but it was very, it was very manual, very expensive, tasted like super crazy, $30 a shot. It was a very, very much a science fair project in their early days. But >> this does not live on the P&L, right? It's like a grant like it's they're investing into the the science and the research of ketones. Correct.

>> It was a contract. So it came in as, you know, topline revenue. And then we had to do a lot of science. So we had to spend that money. It wasn't just like, here's $6 million. They basically had us do this 130-page report about ketone physiology and how it works in different scenarios. And so we owed them this research project that had seven different subtasks to it. And so we basically got $6 million, but it's not like I went and bought a Ferrari, right? It's like $6 million, then you're going to go and spend $5.9 million on research. And so that involved a lot of subcontracting because I, the way our that we're structured, like I don't own a physiology lab. So we're paying to have tests done.

>> It's like an agency deal. They gave it to you as kind of the hold code to then deploy the resources to get the answers to deliver back to them.

>> Totally. So we're the primary contractor and then we had subcontractors that we would pay to. So one of the big areas of investigation was hypoxia. So it's a low oxygen environment. If you can think about like altitude, if you're on top of a mountain or in a fighter jet or deep under sea, that that was a big area of investigation for Special Operations Command and particular interest for ketones because part of how ketones work is they turn into cellular energy using less oxygen. So it turns into ATP, the the fundamental cellular currency of all of our cells, using less oxygen than carbohydrates or other sources. And so that's great if you're at altitude. It's also great if you're if you're just exhausted. If you've been running for five miles, you you get a little hypoxic. You like you're running low on oxygen because you're you're exerting, you're in a a stressed strain scenario. And so the ability for ketones to be able to provide you with energy, especially brain energy when you're in a depleted state, that was super interesting to the Special Operations Command. And so that was the initial gist of it. As far as how to do it, it's it's one of those things that's hard to replicate because like, there happened to be a pocket of money around different grants, different contracts for >> Is this the movie War Dogs? Where'd you find it? Was it like a website?

>> Yeah, there's, you know, Small Business Innovation Research grant, but like that doesn't exactly exist in that form anymore. The US government's massive. There's pockets within the DoD, NIH. There's always money going out. A lot of it in the military goes out to, you know, weapons development. And there happened to be this big push around the human factors of okay, how do you help someone to perform better but with less cortisol spike? How do you help someone to have better target accuracy? How do you help someone have better cognitive efficiency? It takes a million dollars to train a Navy SEAL just when you all of the preparation, the years of preparation, the fact that for every one Navy SEAL, you have four that four people that went through training that didn't make it all the way and that costs money. So you have a significant expense. And so if you can actually improve and extend the performance of a single fighter, that's worth a real amount of money.

>> They need that incrementality. They need a little 10% better.

>> Totally. And they were they're in a spot where like these guys all have like all the stimulants and all the uppers, right? They're on like 600, 800 milligrams of caffeine a day. They got everything you could imagine under the sun. And so that was super interesting to the the DoD in the early days. And yeah, we continue to grow that. Like we continue to work with the DoD in a few different ways. We continue to do research. We have direct procurement where they buy directly and then we also sell on base. So like AAFES, NEXCOM, like the the on-base retail. And so we continue to work. It's it's awesome. It's like the I I think that is like the core, the molten core of how this all got started and uh continues to this day.

>> Yeah, I feel like that's like the genesis of everything. What did you learn from being a product manager at Google?

>> Being a product manager at Google was super fun. I worked at YouTube in particular not long after Google bought YouTube. And it was a fun time because they bought YouTube. Google bought YouTube for like $1.6 billion and everyone thought that was insane and now YouTube makes like $30 billion of revenue for Google a year. It was like the best acquisition ever. But I was in that kind of in-between period where they bought YouTube but it hadn't started to print cash yet. And so there's a lot of creativity in the air. And as a product manager, I what you're hired on as a product manager, you need to be able to speak all the different languages. Like you got to be able if you're launching a new feature, you're you're the one that's working with the marketing team or the PR team. You're the one that's working with designers to come up with different options for how it could look. You're technical, so you're able to dive into the weeds of knowing what's possible within the constraints or, you know, what new things need to be true in order for this new product to launch. When I was there, we were working on things like autoplay the next video. Like back in the day when that remember that when that wasn't a thing, like videos used to not autoplay and like and that was a significant stretch of resources that if you're going to autoplay the next video, like we're going to play a [ __ ] ton more videos. So like technically how is that possible?

>> Wow. Like

>> just going through all the drip on that and then obviously more views have to pay out more people. Like going through all of

>> Totally.

>> Wow. That's wild.

>> Yeah. Yeah. But the idea is, you know, if you every time you play three videos, you get to play an ad. So, if you can autoplay, you can you can generate more ad revenue. But then, okay, how do you make sure that people aren't aren't spoofing that or someone didn't just like leave the room and they're they're on autoplay? Like, how do you make sure they're actually awake and attend? Anyway, so you kind of get to be the mini CEO of a product, which was I think was good founder training where you just learn how to speak legal, speak PR, speak design, speak engineering. just learn all the different functions that it takes to get a product off the ground. And I thought that was super fun. I didn't love the big company thing. I loved a lot of the people I worked and love a lot of the projects I worked on. I didn't love just the kind of rate. It had immense scale once you launch something at Google. It was launching to like tens, hundreds of millions of people on day one. That part was cool, but it take it would take like nine months to launch something. And so that was formative for me and teaching me like, okay, I really want to go to entrepreneurship.

>> Funny you said mini CEO as a product manager. I actually was thinking that I didn't know much about product managers when I started this and I'm starting to see that's like a very good kind of entry role to kind of be multifaceted in a lot of things. Last four questions, man. I've had a great time.

>> It was fun, man.

>> Favorite book or podcast and why?

>> I had separate answers for those. I I love Diary of a CEO. I think Stephen has on just really dynamic guests. I think he's even getting more interesting and varied in who he brings on. I love the Acquired podcast.

>> Great podcast.

>> That one's awesome. They deep dive into different businesses that >> long deep dives, like three to eight hour deep dives.

>> Hell yeah. Like that. Did you hear the NFL episode?

>> That's the only one that I have listened to. That's the only one I listen to in full. I love it. It's a great podcast.

>> It's it's fun. They they break stuff down really well. As far as books, I mean, I love Shoe Dog, the Nike book. That's a, you know, oldie but goodie. A lot of people's favorite. It's It's just such a good book. It's Phil Knight's autobiography and building Nike. There's just so much inside there. I find I have a hard time honestly with like business books that are just telling you what to do. I love an autobiography or a biography where you're getting to see someone actually interacting with the world in real time.

>> Context.

>> Yeah, the context is everything. It's just like so much more enjoyable. I hate the frameworks or the this or that. It's like a business school professor telling you what to I just have a harder time relating to that than just reading a book. Shoe Dog I think is the best at it. But there's other ones like I I love the the there's a Lululemon book. The guy started Lululemon.

>> Yeah. Chip. I have not read that. I heard it's good.

>> It's called Little Black Stretchy Pants. Mark Randolph, who was the first CEO of Netflix. His book that's next on my on my docket. I just love reading like the founder story.

>> Entrepreneur or brand that you want to give flowers to and why? Think through this one. My man,

>> you got him on the podcast. I think Ross at Cadence is doing a lot of things super well. He's super sharp. Um, I think Yeah, he's he's moving really quickly. Like he started Cadence I less than two years ago and they're >> two, two and a half years ago. Yeah.

>> Yeah. They're absolutely ripping. I I love what they're doing. I think they're attacking a super interesting space and like the ready-to-drink hydration world with I think they have a phenomenal product. I there's a ton of waste space. Absolutely needs to be in every fridge in America, a ready-to-drink hydration drink. And I think they've nailed it. And I think he's just one of those people that you like would bet on almost whatever he does. He's just a a force of nature. There's certain entrepreneurs you meet and you're just like, "Okay, that person is like never going to fail." Yeah, that person's going to win.

>> And the product and brand is good. Great episode, guys. I'm gonna pop that one up. That was a couple episodes ago. Completely agree with you there as well, too. Last question, man. How big can Ketone IQ be?

>> Ketones will be as big as creatine, collagen, electrolytes, these other nutritional primitives that are just part of a daily pantry staple. I think ketones can be even bigger when you look at how fundamental it is to our metabolism. There's so much unbounded upside to how big ketones can be. I think it could be 10% of global calorie intake. Like the I think the sky is truly the limit to how big the opportunity is on ketones.

>> What about the underlying asset? We're I'm not talking about the category. I'm talking about the hold cow, the Ketone IQ company. How big can it be?

>> I think it can be big. I think that it's not crazy to sell it for a billion dollars or IPO it at that level. And I don't think it would be crazy if it 10xed from there or even then some. When you look at the size like Monster Energy Drink, Red Bull energy drink, those are in the $30 billion types of company range. I don't think that that's crazy to be at that scale. And then I could make an argument of how ketones could be even bigger than that because it's even more novel and more fundamental to human physiology. You don't need caffeine. Ketones work in a a really fundamental way in our metabolism. They help with all sorts of things. We're just beginning to unpack that like they can help with the way that your brain ages, the way that your overall body ages, that it's not just that you drink a ketone and it you feel good right now for a few hours, and it's actually just a better quality of fuel. It's like you go to the gas pump at the gas station and you you get the premium fuel. It's running your engine more clean. And so I think that there's just unbounded upside in how big it can go.

>> Yeah.

>> Billions. We'll leave it at that. Um, where can they find you personal and and the company? ketone.com. This guy.

>> There we go.

>> We got to find this guy. We're going to pop his face up over here.

>> ketone.com and Ketone on all the social media. And my personal is Michael DBrandt on everything, Instagram, X, everything. Hope you guys enjoyed the episode. We're actually going to drop down below their company's core values. We talked about a couple of them. They have eight. I love it. You sent me that Notion document. We're going to put it down below. Michael, amazing time. Love the product. Love the brand. Great talking to you and excited for everybody to learn from you.

>> Mark, it's great to be here. Thanks for taking the time.

>> What's up, guys? If you guys got this far in the episode, I would assume that you enjoyed it. If you got any value, it would mean the world if you hit the subscribe button, give it a like, post a comment, tell a friend. We could keep going bigger. Bigger guests, bigger locations, more value. See you in the next episode.