Will Nitze 10:47
I took a very, I literally made an Excel spreadsheet. And I was like, all right, what are just the compounds that have the most scientific backing that they’re good for your brain? Like, let’s just list all of them. And so it was a ton of stuff. It was curcumin extract from Turmeric resveratrol extract from grapes, vitamin D flavonoids, which is a polyphenol, NCTs were really hot at that time, medium chain triglycerides, because it was an alternate fuel source for the brain. That was really interesting. And so, omega threes, that’s one that everyone would recognize. So basically, I just laid that out. And I was like, okay, like, what are the whole food ingredients that are highest in all of these things. So then, I had a two by two I had like one axis was all these compounds that had a ton of clinical data behind it. And then on the other axis, you had all the whole food ingredients that searches in the same. And so like for, vitamin D, let’s say would be almonds are very high in vitamin E, sunflower seeds are very high in vitamin D, for flavonoids, blueberries, incredibly high in flavonoids, and the berry family Macia in the leaf family very high in flavonoids, the cocoa bean, very high in flavonoids. So and then the question is, okay, can I make a product out of all of these things.
Jeremy Weisz 12:25
Yeah, blueberry match, blueberry match Omen, at some point you got the profile.
Will Nitze 12:32
I kind of wanted to take one. So I wanted to have each of them represented. So like, for five nights, for example, I could have a blueberry bar, and then separately, I could have a much higher bar. And so I’m hitting on that nutrient in this way over here. And then that way over there, same thing for other like magnesium or vitamin E or whatever. You can get it from different sources. So I was super naive, though, to start. So I was obsessed with curcumin at the time and resveratrol. But what you learn pretty early on is okay, it’s like science meets commercialization and consumer trends and consumer habits and consumer desires and market structures. And so for example, you can have an orange bar it’s and stain people’s fingers orange, and just doesn’t look good, doesn’t taste good. And it’s super expensive. So like, that’s just not going to work. Maybe that works in some like, smoothie and Whole Foods or whatever, it’s not going to work in a mass market bar. Okay, that’s not gonna work resveratrol, it’s just playing too expensive. It’s actually fairly, it’s like white, odorless, tasteless, etc. Great, but it’s just not expensive. No, anyone knows what it is be no one’s willing to pay 10 bucks for a bar and see like supply chains by nightmare. So you just start early on like how like realizing these realities that realities are clashing with your theoretical goals. And then yeah, you just sort of zero in on what’s feasible and what’s doable. And then again, like so there’s two paths you can take you can take like the ultra-premium route, which is like okay, I want to sell this on like goop.com or whatever and like Whole Foods and it’s going to be a premium product. I was selling high-end distribution channels and like that’s who I’m going to be and I’m going to cater to the person who really narrowed down on this stuff and is willing to pay that’s like one path. Then the other path is I want to be everywhere. I want to be sold I own a distributed as widely and extensively as possible, I want to be in Costco and be in Walmart, I want to be in Amazon, etc. And those are just dramatically different paths, everything you do is different based on which of those paths you pick. And I wanted the second guy, so you have to get to certain price points, which means you have like, there’s just so many ways you have to engineer your company, product line, etc, to be able to truly democratize the product. And I think we’ve done a decent job at that.
Jeremy Weisz 13:03
I’m looking at the screen if you’re watching this, there’s some amazing flavors, beautiful packaging. Tell me about the first version, what was the flavor? What did it look like? You said it looked a lot different in the beginning.
Will Nitze 15:56
I mean, for one, so basically the way you, I don’t know how other people do it, this is how our process evolved. Basically, you find a co-packer or contract manufacturer who will make your thing and you have no leverage over them. You also, if you’re me, you have no knowledge of the space, food formulation, any of that. And so the first character I went into, there was a woman named Liz and she made products like she was a formulator, in addition to being an owner of the manufacturing setup. And so I was like, hey, I want to do this, this, this and this, can you help me? And she’s like, yep, here’s like, a block of consulting hours. And I can make it and I was like, well, can I be there with you in the lab making it she’s like, sure. And so basically, we did it together me just like watching her do it. And again, I was super naive at that point. But I didn’t know what I didn’t know. And I didn’t know where to push back and yada yada, but and the first products were great. It just would have never been commercially feasible, because the shelf life wouldn’t have been long enough. You know, because there she’s using certain coconut that would go rancid after six months. And we need this thing to last 12 months as a random example that the certain ingredients, were just too expensive, because the supplier is just an expensive supplier, and you can get the same quality product for half the price. And so there’s just all these things where it was like the bar spits out and that’s whatever it is, a buck-25 and cost of goods and to be really mass market. You knew that to be literally half. So yeah, I mean, but at that point, you’re just you’re in idea validation stage. And is there a product market fit here? Or a semblance of it or a path to it? And we check that binary box. And then it was just like alright, now how do we make this like a viable business?
Jeremy Weisz 18:07
How many flavors did you launch with from the Kickstarter?
Will Nitze 18:11
Three. But there are those another good lesson like they were super esoteric flavors, it was too big to remember it is blueberry, sunflower walnut. Matcha, Chai hazelnut and cacao almond sea salt. So like, for example, that was a very intentional naming convention. So cacao instead of chocolate, right? That’s very intentional. You’re going after a certain crowd. Most people don’t know what kick cow is. And then look now chocolate sea salt, right, right down the fairway. So basically, what you learn is, and this is I think a mistake a lot of people make is that they build products for either themselves, or, like the perfect consumer quote, unquote. And then they realize, oh, crap, there’s just not that many of those people. Or I’m going to hit a ceiling really quickly. And if I did this over here, I could still get that person by the way, and get all these other people. And so anyway, that goes all the way down to that flavor titling.
Jeremy Weisz 19:28
I’m curious will at the time when you did the six or what was life like? Were you working a job? Were you in between jobs? What did your personal and business life look like at that time?
Will Nitze 19:42
I had a girlfriend but I had no kids. No, debt. I had nothing like the walls were not caving in in any meaningful way such that, frankly, I don’t. Everyone talks about oh, it’s such a big risk to start a company at that point in my life. If I was 25, 26, I didn’t even view it as that big of a risk. I just viewed it as something like I was going to start a company. If ever, there was a point in my life, that was the point. And I just need to figure out how to survive while I start this. Like riskiness was never in the equation for me, because what’s the worst that happens? You fail, and then you just go get the same job or a better job. Because, frankly, people are like, startups are cool now. And you took the initiative to do this thing. And that’s valuable to people now. But how I did it was I walked into my boss’s office one day, and I said, look, I know that, you know that. I want to start my own thing at some point. Now, it’s kind of the time, here’s what I would propose cut my salary in half, cut my hours in half. And then I’ll help you find someone new to replace me. And luckily, at that point, I was good at my job, I had developed enough skills, and it was pretty hard to replace me. And so I knew I had some leverage there, and knew I could bind myself six months’ time. I mean, of course, he could say, pack your bags and get out. But I was pretty sure he wouldn’t say that. And so I said, are you open to this arrangement? And said, Give me a day. And then day later, he said, Yes. So that allowed me to where I was only working 20 hours a week, but I was making enough to survive. And then I could work a full time job, you can work 100 hours on top of that. And so it was like the perfect arrangement. And I did that for a year, and then did the Kickstarter. And then I was still making $0. So even after that, I moved into a friend’s parents basement. And did that for a year. So it’s like, super unglamorous. It was a rough couple years. And by the way, I was a one-man band, like there is no co-founder, I tried to find people to start it with me. It’s kind of a hard sell, like a protein bar startup is just not like, that’s not a sexy enterprise. For most people. They’re not, they’re not going to quit their job that, you know, Boston Consulting Group and take a flier on you. So, and of course, like, it’s a blessing in disguise, in retrospect. I am actually firmly in the solo founder camp having done it that way. So it was chaotic. But it was fun. It was like I was working way more than I was before. But there was something really invigorating about doing your own thing.
Jeremy Weisz 22:55
I love hearing the non-glamorous stories, because, you know, we see all like, Will’s made it, we don’t see the sleeping on the couch in the friend’s basement, you know, seen? You know, what were you doing for that year? You said that year you were part-time? And before you launch the Kickstarter? What were you preparing and working on in that year before you launched the Kickstarter up until that point?
Will Nitze 23:21
Yeah, I mean, knowing what I know, now I could shave that down to like, three, four months, I just didn’t know anything, right? So this is the crazy thing about being an entrepreneur, you have to be an amateur accountant, you have to be an amateur lawyer, you have to be an amateur trademark specialist, you have to be an amateur food scientist, if you’re doing food, you have to be an amateur website builder, you have to be an amateur brand, or you have to be an amateur marketer, you have to be amateur social media marketer, it’s like, you actually have to become somewhat proficient in like 30 things. And if you don’t, and by the way, I was coming from b2b software sales, which was relevant to none of that. So I was starting at true zero on everything. And so it’s just a lot. It’s just a steep learning curve, when you aggregate all that together. That was a year of just like figuring that out, like, do I incorporate as an LLC or a C-Corp? Well, there’s these reasons to LLC these reasons to do C-Corp. Okay, I’m gonna need a C-Corp for this reason, great. Like, I got to file all this paperwork. And it’s just each one of those nodes. I had to like, figure out and just put one foot in front of the other until finally at the end of the year, I was like, okay, I have a name. I filed for the trademark. I’ve incorporated the company. I have a functioning website like bla, bla, bla, bla, bla, bla. And I just takes a lot of time if you’re one guy who knows zero.
Jeremy Weisz 24:56
Yeah, I want to talk about growth and profitability, right? Because like you said, at that point, even when people are selling, let’s talk about the profitability point for a second. I know lots of you do, too. The more you sell, the more you need an inventory. So how do you manage the eventually, okay, at some point, I just need to work on this full time. I can’t even spend, as you get busier and busier, you can’t afford to spend the 20 hours working this other job because there’s a huge directory of growth for IQBAR. How do you manage that piece when I think you’ll tell me e-commerce and CPG seems really difficult, because you have to keep reinvesting.
Will Nitze 25:48
Yeah, yeah. So that’s like a fundraiser. That’s a twofer. That’s a fundraising and profitability, one which is good. So I’m firmly in the camp that you should raise money for consumer goods, specifically outside of, let’s say, 80% plus gross margin product. So like beauty products, shoe jewelry, things like that. Think you can swing it without raising money, everything else, it is technically possible. But I would say highly advisable to not raise money. Of course, then the question is, can you raise money as a non-dilutive way possible, which was always my goal, but I knew I needed to raise some money to your point, you need to manufacture real things that cost real money. And by the way, your margin is going to be terrible to start, it just is your volumes going to be really low, you’re not going to know what dials to twist to get suppliers to give you better pricing. Bah, bah, bah. So it’s just gonna be not profitable. And God forbid, you need to make a salary and feed yourself and all that, right. So it’s just you just need money. So the way I looked at that was upfront was basically, okay, I’m gonna raise just enough money to run a really good Kickstarter, this isn’t maybe an unintuitive thing. Really, you want to have something like 10, 20, 30, 40 grand to run a really good Kickstarter. And then maybe another non-intuitive thing is that the goal of Kickstarter is not to get money to make product to start your business. It’s to do all that, but mostly to validate an idea, such that you can then raise money on that idea in a way that is de-risk for investors. So the people don’t really view like that is the true way, in my opinion, to best leverage a tool like Kickstarter, people don’t think of it that way. But so that was always the plan raise, I raise, I think it was 30k from a random now, board member and good friend, but at the time, random guy I got connected into really successful guy in the agricultural space. And you gave me 10k as just like a flier, and then his buddy gave me 10k. And then I got a third person to give me 10k. I was like, cool, I have 30k ran the Kickstarter, that was a success, I turned her back around to them. I was like, all right, I want to raise half a million bucks. And we just had, in our first two months, we sold 90k a product. And they got all excited about it. Because we had that proof point, we weren’t just coming to them with a PowerPoint deck, we were coming to them with sales. And so then that first guy wrote a $200,000, check. And then the second guy wrote a $200,000, check. And then the incremental, we actually ended up raising, I think it was like 625, the incremental to 25 was easy at that point. And so, yeah, we just needed money. And then, as our whole goal has been to scale fast, I mean, the definition of a startup is a fast-growing, ultra-fast growing, nascent business, you’re not really a startup, you’re not growing fast. It’s the whole point of the enterprise. So we’ve always tried to go 100%, or at least 75% every year, and that just at a certain growth rate in CPG, in certain categories, you’re just gonna have to keep raising money. And so again, the question is just how do you make it as non-dilutive as possible? And so yeah, over the course of years, we’ve raised actually now 10 million I believe, and raise almost exactly 10 million at this point, but still control more than half of the company because we kept showing really good results, justifying great valuations and raising as little money as possible to get us to the next tier. But to your point profitability at some point you have to flip the switch and be a self-sustaining entity at some point, you have to live off what you kill, so to speak. So that is like now this year is our first profitable year. But we didn’t get there until we got to like, over 25 million in annual sales didn’t get to meaningful profitability.
Jeremy Weisz 30:27
Profitable is just tough in I think in the CPG industry because like, you have to keep fulfilling orders as you sell more. Right. So it’s I think it’s really difficult, because you’re always having to pour money back into the inventory to sell more, right.
Will Nitze 30:43
Totally. Well, yeah. So there’s two like concerns there’s profitability and then cash flow. To your point, that’s a cash flow concern. And yes, that that is like you live and die by your cash flow, you can actually be profitable and have terrible cashflow, and go out of business. Meaning just what you said, you have to spend money before you get money back. And that delta keeps growing and growing and growing because you have more and more demand. So yes, those are two things you have to be juggling, there are some creative ways that you can bridge that gap today that didn’t exist, say 10, 15 years ago, there are ways to finance like, for example, we had a giant Sam’s Club PO, we had to borrow a million dollars, we didn’t have the money literally to make the product and fulfill the order. So we had to borrow a million dollars. But luckily, if you have good POs from reputable retailers, that lender knows that Walmart is going to pay that PO, cost you a little bit of money to finance it. But you can bridge that gap. But yeah, so I add that to your list of hats you have to wear you have to be a financial engineer as well to get by unless you just raise just a boatload of money, right? And then you don’t have to do any of it because you just have so much padding, but now you just sold most your company. So yeah, but also like the market has shifted, right. So there used to be this dynamic where growth at all costs was rewarded. The inverse of that is became true. And Q1 of 2022. It was kind of stark, the shift. And tech, of course, got whacked the hardest, but CPG got whacked pretty hard, too. And all these brands that their DNA was built on growth, growth, growth, and it’s okay to lose $5 million a year. Overnight that became eminently not okay to lose $5 million a year. And so that’s really hard to change your fundamental DNA really hard in some cases near impossible. Fortunately, we had always built into our DNA, that path to profitability. And so we were alright. And I can get into how, what are the levers we pull to be profitable, but that’s just the normal that we’re in.
Jeremy Weisz 33:21
It’s not an easy journey. I’m talking about the growth, because there’s channel growth, there’s also product growth. Talk about what you did, from a growth perspective.
Will Nitze 33:35
We were Omni channel from a pretty early stage, we created a website after the Kickstarter, we layered on Amazon after that Amazon very quickly started outpacing, like four or five to one our website and so we very quickly realized the power of Amazon. And by the way, keto at the time was exploding, and we were a beneficiary of that in the early days. It’s now sort of tapered off but…
Jeremy Weisz 34:01
People still look I mean, on your packaging, Paleo was and is big especially in certain groups and keto.
Will Nitze 34:08
Yep. Yeah. So but it’s just the number of…
Jeremy Weisz 34:11
I had Loren Cordain. On the show, who I know his book is the Paleo Diet, literally, so it’s think it’s still big, still certain groups.
Will Nitze 34:27
Yeah, yeah. No, it was paleo. And paleo is still big, but then keto, kind of like surpassed it and then can then keto, it’s like there’s like boom and bust cycles for every diet. But there always going to be that big, still big loyal following of those diets. So yeah, well, our biggest growth sort of, like inflection point was just Keto intersecting with Amazon and just a zillion people searching for keto products on Amazon. We happen to have a Keto-compliant bar and it was kind of wild, you were just selling 20k a month and 40k a month 80k a month and 100k a month. So, and still today Amazon’s our biggest sales channel but then pretty quickly we thought like, okay, we want to be Omni channel we want to start diversifying as early as possible we don’t want to just be an Amazon it’s just so risky to be an Amazon only brand or a DTC only brand. And so we went in to actually CVS was our first retailer, and that was not great. Learn a lot of lessons.
Jeremy Weisz 35:41
How did you get into CVS?
Will Nitze 35:44
Well, they’re local-ish. There, I’m in Boston, and then they’re in Providence. So like, 45 minutes away. And then I just knew a guy who had gotten in. And then I got a contact number, and I called it and it was a guy who was a Category Manager for this news set, it was like functional foods and supplements and pitched him and we did a pilot and did well in the pilot, and then went into 3000 stores. So that was a wild moment, because that took us from manufacturing, like 20,000 bars, a clip to like 200,000 bars. We had to change manufacturers. It was wild, it was really wild. A couple of months, very stressful, but we did it. And ultimately, we don’t sell in CVS anymore. It wasn’t really a great fit for like the set really was the main issue is kind of in the back corner. And it’s just replaced. Yeah. And we weren’t in the bar set. And we were in like a brain set. And so anyway, it didn’t work out. But that was our first like, foray. And then we got into Kroger and then we got into Wegmans. And then we got into sprouts, and then we got into Walmart and all these other retailers and really substantially diversified the business such that now today, it’s basically 50/50 commerce in brick and mortar. But we did that I think earlier than other brands would have and I’m glad we did not because we’re geniuses or anything, honestly we just wanted more revenue. But in retrospect, the diversification benefits are just are just giant. So your question was on growth like growth? It’s just you’re growing within channels, but we’re always trying to sell like add new distribution and it’s just such a big pie like even just even in America alone forget international there’s just so many people that buy in so many channels that it’s almost endless.
Jeremy Weisz 37:55
Are there any channels now that you haven’t gotten into yet but you it’s kind of on the roadmap?
Will Nitze 38:06
Yeah, I’m very interested in so we have a hydration product called IQMIX, which is things like liquid IV minus sugar plus brain nutrients and be like the quick pitch and I think would do really, really well in field-based like oil for oilfield services mining, wireless carriers construction. Like anything with a field-based team where you’re out in the heat and you need hydration like you just need it and you need many several servings a day. I really want to break into that market for hydration and coffee to have a coffee product called IQJOE which is like an enhanced on the go in coffee. No one really talks about those channels by the way. They’re like the you’ll never see him on pitch decks. No one’s posting about them. And yet they’re gigantic. The amount of volume that flows through like think like FEMA, right? There’s a hurricane and whatever Florida all the people in the field need to be hydrating. That’s like 1000s and 1000s and 1000s of servings needed. So it’s just there’s all these places where I think our products can do a lot of good and we could realize meaningful sales that are just not conventionally talked about like this.
Jeremy Weisz 39:44
So where would people have those like when you say that it makes me think of the National Convenience Store Tradeshow NCS for some reason and I picture like truck going into a gas station and getting like an energy drink or something like that, right? Where would this IQMIX product be for those individuals so they can grab it other there are a couple
Will Nitze 40:11
like really big distributors. So a Granger and fast and on. And then staples distributes to like offices and WB Mason locally in New England. And they’re typically everything runs through distributors. So you can cut deals directly right with whatever FedEx let’s say, could do an RFP for hydration products. And you can just go direct with FedEx, and then they’re distributing it to their own field tax, let’s say. So it depends. But generally speaking, it’s running through a distributor.
Jeremy Weisz 40:11
Yeah, yeah, I remember my sister works for Salesforce. They had stalked. I had the founder of Hint Water on and they stuck in water. So she knew about I think more about hint water before a lot of people like it mainstream, because like you said, it went into Salesforce has offices, and she knew about it, and they had it there for them. So I’d love to hear your thoughts on distributors. And I know you have certain thoughts on conferences that I think are trade shows that are a little bit counterintuitive.
Will Nitze 41:32
Thoughts in, well, I don’t have a ton of thoughts in distributors, other than they’re necessary, and we have great relationships with all our distributors, but on the trade shows, I mean, my thoughts that are kind of part of a broader, just general philosophy, which is, energy, and revenue out is really the ratio that, in my opinion, any CPG founder, I would assume any founder should really be thinking about, at least in the first five years of your business. And to forget, for the most part about aesthetics. And the thing about trade shows, at least in food and beverage is you’re often doing it because other people are doing it, you’re going to show there’s a FOMO, right, yeah. And then also you’re almost like going to show other startups that you’re there and you’re real, and you’re someone to be considered, which is so funny, because that’s not your customer. And there’s an opportunity cost to everything, as well as a real financial costs. And so when you look at something like a trade show, or ExpoWest or whatever, getting a booth and buying a bunch of people out there, and you know, spending money on hotels and dinners and the fee to do the show in the first place, and blah, blah, blah. And like the months of prep beforehand, what’s the energy in and dollars in? And, and what’s the actual revenue out? And one common, I think mistake I see a lot of people make is like, oh, well, we got this big deal out of it. And so it was all worth it. To which I would say, but you have to like AB test that against could you have gotten that deal plus other deals by just doing none of that and just cold calling or emailing or hiring a broker, whatever, there’s so many other ways to spend your time and energy to get that business and more. It just generally speaking, in my experience is terrible return on investment. All things considered. And people think it isn’t because they got some outcome out of it. And they don’t realize they could have gotten net better aggregate outcomes had they diverted all that time and energy elsewhere. So it’s a bit counterintuitive because we’ve only been to one trade show ever. And yeah, our thought was kind of like…
Jeremy Weisz 44:09
You go as an attendee or not at all.
Will Nitze 44:14
We got one booth at one show. And then no, I’ve never just gone as an attendee, that is not a bad, no question. Like, just go and walk the show. But again, I don’t know you’re flying, spending the time. I always think just like, could this have been a Google search slash three phone calls to get that same information? If yes, don’t, don’t do it don’t why? Well, I guess the one exception would be like in-person is meaningful. It is meaningful to shake someone’s hand and get face time. And so if there are certain people that you’re meeting with and that’s the place to meet with them, then okay, that’s like separate. But I was trying to meet with people on their own tariff anyway. So that is one caveat or one, like exception is like if they’re just in-person meetings that will change the game with XYZ retailer and you really can’t get to that retailer in some other way. Fair enough.
Jeremy Weisz 45:27
I’ve one last question. Will, before I ask it, I want to point people to iqbar.com You get us go to eatiqbar.com. You can check out the IQBARs, the IQMIX, the IQJOE and everything else they have on there. And you can check them out on Amazon and possibly a local grocery store. But last question is, I know you geek out on the science stuff and some of the health related stuff who are some of your favorites that you follow what they’re talking about? I know before we hit record, we were talking about Andrew Huberman and who are some other people you follow in the health space?
Will Nitze 46:00
Yeah, yeah. No, Huberman is obviously been incredibly successful. And I love all of his content, Rhonda Patrick is maybe my favorite. She’s just she rattles off clinical studies, like no one I’ve ever heard, which is just fun and impressive. I have been reading me and the rest of the world has been reading OutLive by Peter Attia. So I’ve been enjoying that. And some of the sort of counter I don’t know if it’s counterintuitive, or just counter to traditional advice he’s given there and has made me think differently about diet and exercise. So he’s big on Ben Greenfield.
Jeremy Weisz 46:43
I’ve had Ben on the podcast. He’s awesome.
Will Nitze 46:45
Nice. Yeah, he is. From everything I can tell a great guy and creates great, great content. So those are the big ones. I follow a lot of random content that’s like non-influencer II content. I just read up on a lot of different stuff, but those would be the big ones.
Jeremy Weisz 47:07
Will, I want to be the first one to thank you. Thanks, everyone. Check out eatiqbar.com and we’ll see you next time. Thanks Will.
Will Nitze 47:16
Thanks for having me.
