2 Years To $100M: How A Niche Brand Grew Without Fundraising w/ Moiz Ali

Hey, capitalists. We are proud to announce that Moise Ali will be speaking at this September's Capitalism Conference. That's right, it's happening soon. Capcon 5 is happening in Austin, Texas in September 2021. Yeah, like a couple weeks from now. Moyes is the third nine figure entrepreneur that we've added to this year's lineup. As the founder of Native Deodorant, which sold for $100 million in just two years, he cleared the way for entrepreneurs like us to be taken seriously. He did it without raising a bunch of capital or building a big team. And on today's podcast, we're leaking this talk from a previous Capitalism event where he shared his story. Despite his massive success, Moyes has never been too busy or too successful to help those who are still up and coming. And you can spend two days with him this year at the Capitalism Conference if you get your ticket. Now before we sell out, that's August 23rd and 24th. Go to capitalism.com capcon5. That's cap con, the number five. And we'll see you there.

Thanks so much, Ryan. My name's Moise and I'm the founder and CEO of Native. Native is a direct to consumer personal care company. We make safe, effective, non toxic products.

That adults use in the bathroom every day.

When I launch the business, I build.

Ourselves as the Honest Co for adults.

But in reality, we just have one product. We only sell deodorant online right now. Has anyone heard of Native before this weekend?

Awesome.

Okay, great. Okay, wonderful. You don't need to carry it in your purse. It'll last all day.

In any case, we've got one product. We have a deodorant. We sell it through one channel. So we don't sell on ebay, we don't sell on Amazon, we don't sell in any brick and mortar stores. We only sell it through our own website and we sell in one country, the United States. So we're really focused on what we do today. You know, in the history of CPG, we're a pretty young company.

We're three years.

We're three years old. I launched the business in July of 2015. We sold the first part of Native then and I was the only employee at the company for about the first 12 months. So I did all of our operations, I did all of our marketing, I.

Did all of our customer Service.

During that first year, we raised about $300,000. After we hired our first employee in June 2016, about a year later, we got our millionth customer and Then In November of 2017, we were sold to Procter and Gamble. It was the first acquisition they made.

In about 10 years. And it was incredible.

We ran a really competitive process. And, you know, I remembered when we were going through the process, I texted.

One of my investors. Our first investor, he's this Asian guy named Wei. Go.

And I was like, hey, I need.

To chat with you tomorrow.

Because he didn't know what was going.

You know, we didn't keep him apprised of the process.

And I said, hey, Wei, I need to chat with you.

Do you have some time?

And he's like, is it urgent? You know, is it, like, really important? And I said, yeah, it's really important.

I'm gonna need you to sign some documents tomorrow. I gotta give you an update on the business.

So I called him up, told him what was going on.

He was obviously really ecstatic. We had turned his $50,000 into a million dollars in about two years.

But I'll tell you the line that he told me, which I'll never forget in my entire life, he's like, the reason I couldn't chat is because I'm.

Actually at the hospital. My wife is about to give birth to our first child.

But this is the best news I've gotten all day.

He's great. I love that guy.

But in reality, Native started, much like.

Every other e commerce business started. It started on my dining room table.

You know, the first day that we.

Ever had any sales. I wrote thank you notes to all of our customers.

I tweeted this image out to Ryan.

Hoover at Product Hunt, you know, thanking him for his support because we sort of launched the product hunt.

But in reality, only the top five.

Sheets of paper here are thank you notes. The rest are just blank.

I wanted our company to seem much.

Larger than it really is. And so.

And like, I could never write that.

Many thank you notes. Like, look at how many that is.

So I just took the ream of paper, put it under the three thank.

You notes that I had, and tweeted it out.

And much like most of you guys, or the guys at least, that didn't start on Amazon. We did our own fulfillment from my dining room table.

This was after a few months of being in business. I'd hire a task rabbit at this point. We'd have this many boxes, and then I'd pack them into these white bags and carry them down to the local post office.

And this is how we made deodorant in 2016.

It was on another dining room table. And it was two women pouring deodorant by hand.

And in 2016, we started seeing a.

Lot of growth, so we bought a lot more dining room tables, and this is what our production facility looked like.

There were more than 100 people here pouring deodorant by hand, and we were.

Making tens of thousands of deodorant bars every day.

And this is what it looks like in 2018. So today we have genuine equipment.

We have process engineers. We have a real facility. We've invested the capital.

We're starting to grow up, which is really exciting. But, you know, this is how our company has grown. It was insanely fast. We never had enough people. When we sold the business, we had.

Probably eight or nine people on our staff.

It's almost a year later.

I think we have 12 people on our team now.

So we kept things really lean.

We kept things really efficient. We were generating.

A lot of cash.

Flow, and things were just going really well. And when people ask me, they're like, how did this business grow so fast?

You know, we sell a $12 product online, and we offer free shipping, so.

There'S not a lot of room for marketing expenses.

There's not a lot of room for Facebook ads. There's not a lot of room to make a ton of mistakes or to have a huge team or to have.

A really nice office, none of which we really do. All we do is we focus on the customer. And people would say, well, how do.

You go up against P and G? How do you go up against Unilever or Colgate, Palmolive?

My answer was always the same. I said, I never think about those guys.

Those guys don't pay us any money.

I mean, I think about P and.

G now, but I didn't before.

Those guys don't give us any money, and the only people we care about are consumers. So you never, like. We never were in the press before. Like, you know, when we raised money, we were never in the press because.

Our business is doing really well. We were never in our. In the press beating our chest, talking about how we had bootstrapped this business, and it was going really well.

The only thing we focused on was the customer. And when I say the customer, I mean three things. I mean, we focused on marketing, we.

Focused on product, and we focused on customer experience.

You know, when we were marketing, we got really data driven. So we would run some Facebook ads and we'd say, you know what?

Women's health called us the best natural deodorant in the world. They called us a miracle.

And buzzfeed called us life changing. So we thought, hey, which one resonates more with customers? Which one is something that customers are.

More likely to buy?

And if you can see the number.

Of reactions, you'll know it was the BuzzFeed one because we just spent a lot more money on that ad. There's 2.9 thousand reactions on that ad and I think 1,100 reactions on the Women's Health ad.

And it was because the buzzfeed won one.

And so we started spending more money on it.

We were incredibly data driven when it.

Came to this marketing.

One of the things that we realized early on on our website was we started accumulating customer reviews.

We have something like 8,000 today.

But a lot of customers were suspicious.

Of the reviews we had. They had read articles about Amazon reviews, they had read articles about Yelp reviews. And so they weren't always trusting of the reviews that we were generating from users.

And so then we started asking customers for video reviews.

And now we have hundreds or thousands.

Of these video reviews of people reviewing.

Native deodorant at home. And this is what it looks like. They're in their bathrooms holding up native deodorant, talking about the product.

And not only is this great from.

Like a user generated content perspective, not.

Only do we use this with Facebook.

Ads from a prospecting campaign, but it's.

Also great from a conversion rate perspective.

People see this user generated content and they trust that our brand really works.

We were also really good at marketing to the press. Believe it or not, deodorant is not the sexiest industry. And so it was really hard for.

Us to get in the New York Times or the Wall street journal or refinery 29.

It's just not an industry that people.

Want to talk about.

And so what we did was we did outrageous things to get in front of them. So we launched a rose scented deodorant.

The first day of summer, July 20th or June 2017.

And all of a sudden we were in the Today show. We were in Good Morning America, we.

Were in Refinery 29, we were in the Wall Street Journal. Every September, we launch a pumpkin spice latte deodorant.

And they do well and people love them.

And some people will buy 50 or 100 bars, which is crazy and doesn't make sense to me.

But it's also really fun. Like, it's fun for our team to do it, it's fun for us to.

Create advertising material for it. It's fun for us to get the press for it.

It's Just a win win all around.

And so we really love that.

The other things that we did is we thought of our website as our.

Main marketing arm because that was the only place that you could buy Native.

So when you try and add a bar of Native deodorant to your cart, this is what it looks like. You get a popup and we encourage you to subscribe. We say, hey, Native is great.

Why don't you subscribe and save $2.

So not only does this get a ton of people to subscribe, you know.

This increases our customer lifetime value because subscribers are almost always more valuable than non subscribers.

It actually increases our conversion rate.

This popup makes it not only more.

Likely that you'll be a subscriber, but.

More likely that you'll be a buyer of Native.

And I can tell you this wasn't really intuitive to me.

When we tested this, we kept the test on for an extra two or four weeks than we should have. Even though we had statistically significant results saying that this was better just because in my heart of hearts, I didn't believe it.

One of the things I've learned from a marketing perspective is I never what's gonna work? We'll run. People will show me two creatives for.

Facebook ads and they'll be like, which one is gonna perform better? And my answer is always, I have no idea.

The reality is, you know, I personally.

Spend every dollar of Facebook that our company has ever spent and that is millions and millions of dollars. And the reality is, despite all of that information and despite spending all of that money, I still don't always know what creative is going to work because you're not everybody, you're not the customer. So we always test it.

The other thing that we test a lot, and this is a little unusual, is product. We're based in San Francisco and so.

We'Re iterating on our product like software companies iterate on software.

You won't see one of those itunes.

Pop ups where you have to accept it, you'll just get it.

So early on. When we launched the business in 2015, we realized that we had a pretty.

Mediocre repeat purchase rate. It was somewhere around 20%. Our reviews were coming in and they were about an average of 4 stars.

It was pretty clear that we weren't.

Going to be able to build a sustainable business on four star deodorant and a 20% repeat purchase rate.

And so what we did is we.

Started asking customers for feedback. We're like, why aren't you buying this again? This is a deodorant. You were willing to spend $12 on it once. What's preventing you from buying it again?

The answer was a resounding application.

Back then, people didn't like the deodorant applied under your arms. It was really flaky. And so we spent the first year of the business trying to solve that issue. We're like, how do we make this thing apply to your arm easier? And at the same time, one of the things that we were focused on was, like, staining. Nobody wants a deodorant than stains.

So I literally would ab test products.

To see if they'd stain. I'd rub them all over my t shirts, throw them in the wash, and see what would happen.

And so we'd iterate on our product all the time. In May 2016, we launched a new formula of native that was just infinitely.

Superior to our old one. We saw Reviews go from 4 stars.

To about 4.7 stars. We saw repeat purchase rate more than double, and we knew we had a winner on our hands. And that's when we really started scaling the company. We still do that product testing today.

So today what we'll do is we'll send the Ryans of the world 1.

Formula and the Moises of the world another formula, and we'll send 5,000 or 10,000 bars to each.

And we'll look at the reviews six.

Weeks after they make their purchase.

We'll look at their Repeat purchase rate.

12 weeks after they make their purchase, and we'll say, okay, is Ryan's formula.

Better than Moyes formula? We actually have a number that can tell us we can look at repeat purchase rate.

And we're operating at a scale where we know whether one formula is superior to another.

So we're able to test crazy things. Now, we can tell you whether a.

Certain percentage of coconut and vanilla is better than another percentage of coconut and vanilla in your fragrance.

We can tell you the particle size.

That baking soda should be in in a deodorant in order to optimize repeat purchase rate.

So, you know, we've. We. By. By the end of 2016, we've tested.

We had over 24 variations of native.

Today, we're certainly in the hundreds.

And we've lost track. We lost track a long time ago, actually.

But in reality, our goal here was.

Just to maximize customer satisfaction.

How do we get the highest repeat.

Purchase rate that we can? How do we get people to love our product? How do we get people to talk about it online?

The final thing that we really were great at was customer experience.

When you buy deodorant from the shelf at Target or Walmart, you'll pick up a bar of Old Spice or Secret or Degree or Dove.

And if you don't like it or.

You have an issue, there's a number on the back of it which I'm sure nobody has ever called. I'm not sure why they put that number on there.

But for us, we wanted to provide.

A really human experience when you bought a bar of our deodorant.

So if you purchase from us, we sent you this order confirmation email. That's really funny.

We say our entire office has erupted in applause. We're playing Party in the USA and we're popping bottles of champagne because you're a customer.

When your package ships, we send you another funny email.

We say your product was inspected and polished by our polisher who used to work at the Tower of London polishing the Queen's jewels.

We say that we've reserved a parking.

Spot for you out front and called you the world's best customer.

And so we try and give you.

A really human experience when you purchase from us.

In addition, when you purchase from us in almost every single box we've sent.

Out, and we sent out millions and millions of packages, we include this card that says, take care of your.

Your body.

It's the only place you have to live.

We think it's a great way that.

We think it's a message that really embodies our ethos. You know, this customer framed it and sent us a photo. And I love that. And so I've always kept it.

And I think the one thing that we also do really well is we're.

Human when you contact us. So if you shoot us a customer service email because your package didn't get to you or we messed up in some other way, we.

We take responsibility for it. One of the metrics that we always.

Track is how quickly do we respond to customers. We have a weekly meeting about this.

How quickly do we get back to you?

If you email us, the worst it's ever been has been 24 hours. And the best it's ever been, on average, 24 hours over the course of a week. And the best it's ever been is about four hours over the course of an entire week.

And when I say four hours, I.

Don'T mean four business hours. I mean you email us Sunday at midnight, we will respond to you within four hours. That's the best it's ever been. Our goal is 12 hours.

Also, when you email us, we don't.

Respond with a Zendesk like software response. We respond with an email that looks like it's coming from Gmail, from someone sitting in their living room responding to customer service messages because we wanna put a really human face on our brand. And so we've intentionally shooed Zendesk because it doesn't give us that human face.

And we've done a good job of this. So these are word clouds that we.

Sourced from Amazon of other brand and our own reviews.

So if you look at Old Spice.

It'S got strong and lasts. And if you look at Secret, it's got works and powder. Fresh Toms is just a terrible deodorant.

It's just bad. Don't use it. They have reapply and ineffective poor guys.

But if you look at ours, they're really emotional. They're not utilitarian like Old Spice. Look, we're owned by P and G.

And so I love Old Spice as.

A result of that. But it says strong and lasts. Secret is also a P and G.

Brand and it works, and I'm sure it does.

But ours are very emotional, ours are lasting.

A godsend, a miracle.

Unbelievable.

Love Savior. Best amazed.

And it's because we've harnessed a brand to be intentionally human in a category.

That has virtually no human beings.

And I think that's really why we've.

Been so successful at what we've been doing moving forward.

You know, we. We know the opportunity ahead of us. Tide was.

Tide was launched in 1946, I think in 1948, it became the number one selling category, number one selling product in its category. It has not lost that mantle in nearly 75 years. It's incredible.

Every, like, it has an amazing amount of market share and that is the.

Company that we want to build. That is like our North Star.

When I think about Tide, I think.

About my mom doing my laundry and making sure that I smell good before I go to school.

It's not just a brand that resonates.

With me because it cleans my clothes, it makes me feel closer to my family. And that's the type of brand that we want to build here. We know we have that opportunity.

We know we have a lot more to lose today than we did three.

Years ago as well. Three years ago, we didn't have any sales. We were just shooting for a home run and willing to risk it all every time we came up to bat.

Today, we can't do that today.

We've got a lot more to lose. We're a lot more careful.

It's why in three years we haven't.

Launched into a single new category.

We're not crazy.

We've thought about selling toothpaste. We've thought about selling body soap and bar wash and sun care and shampoo and conditioner.

All of those products which we're going to get to. We will be a mega brand under.

The P and G portfolio.

We just haven't gotten there.

We're taking our time because we know the opportunity that we have ahead of us.

If it was $100 million business ahead.

Of us, we would be out of the game already. We think we have a billion dollar business ahead of us.

In any case, the one lesson that.

I've learned this is my second startup. I had another e commerce business that I sold to a family office. This is my second one. Much larger than the first.

Is really get your hands dirty. We're growing our team, but still trying.

To be really lean. Every week we have an hour where every person on the team, including management, spends doing customer service.

We know that being able to talk.

With customers is really our competitive advantage. It'll help us understand where the pain points are in the business. Are you getting your product quickly? Are you enjoying the sense that we come out with? What are the other issues that you're having with Native? So an hour every week at the same time, all executives and all customer service staff will do customer service.

I still continue to run Facebook ads.

Because it's really important for me. It's a great way to understand how customers are responding to our messaging.

Facebook is one of the drivers of.

Our business or one of the drivers of our marketing. And so I think it's really important for me to do it as well. If I'm going to be the CEO and I'm responsible for the growth of the company, I should know what I'm doing when it comes to Facebook ads.

So it's one of the things that.

I try and preserve at Native and.

I know it's one of the things.

That P and G really likes as well.

They call it get your fingers on a keyboard.

Don't just hand this off to an agency. Don't just hire an agency to optimize or fix the problems that you have. Get your hands dirty yourself to solve that issue.

Anyway, that's me. This is my Twitter handle and my email handle. If you guys have any questions, please.

Feel free to contact me. I'm around.

Thanks, Zali, everyone. Boys, thank you so much. I have a list full of questions and I Would love to run by you. So.

Would you clarify your. What was your primary way of acquiring customers? And there can't be all that much margin in deodorant. So I'm curious how you were able to do that profitably because your Ebitdas were healthy when you were acquiring. So could you clarify that a little bit for me?

Yeah, great question. I don't think that there was a single.

There's not a single answer to that.

We advertised on Facebook.

We advertised on YouTube, on Pinterest, on Snapchat. We hire influencers.

We have a healthy refer a friend program.

So if you refer me, you get something and I get something.

Were you managing all of this as a one person show for 18 months when you were the only person?

Yeah, I was managing Facebook and Pinterest. In fact, I have like this Excel.

Spreadsheet I show to every marketing hire.

That we have where I'm like, this.

Is how our Facebook ads and our Pinterest ads ran every single day for the first two years. And I kept track of it on a daily basis to be like, look, we have to be really disciplined when we spend money.

And I was really disciplined.

And I want the people that we hire to be really disciplined as well.

So I think that the answer to the question is I was certainly managing Facebook and Pinterest.

In fact, I still manage Facebook and.

Pinterest, but we were at a lot.

Of customer acquisition channels. So I wouldn't say it was just Facebook, it was just Google, or It was just YouTube. It was a number of channels that worked for us. We were disciplined about the spend. We really encouraged our customers to talk about our product. Like those video reviews that I showed earlier.

You know, we asked for them and.

Thousands of customers provided them.

And so they were really vocal.

And it's shockingly a product that people share.

Like mothers will share it with their.

Daughters, and today more often, daughters will share it with their mothers. So it worked out really well for us.

There's certainly an element of luck to.

The business, and I do think that we are at the right place at the right time, and that's something that doesn't always get communicated.

Okay, so are you just a freak at being able to manage all of that craziness going on? What's the singular skill that you were able to leverage?

I don't think I'm a freak. I hope I'm not a freak.

I think that we really just prioritized.

What mattered and didn't listen to other chatter.

Say that one more time.

We prioritized what mattered and didn't listen.

To any other chatter.

So one of our investors was like.

You need to launch into other product categories. No one will buy a single product category business.

And the way I thought about it is, look, this thing is going so.

Well, we're generating so much money that.

Even if no one buys us, this.

Is still a great business.

And the only thing I can do when I launch another business like deodorant has become a home run.

And it's clear to us, if I.

Launch, if I get into toothpaste right.

Now, or if I get into bar soap or sun care or something like.

That, what are the chances it's going to be a home run? Even if it's a triple, it's a.

Failure compared to the business that we have today.

So we didn't listen to a lot.

Of that other stuff. People were like, why aren't you selling on Amazon? Target approached us. Whole Foods, Costco, Sephora, Ulta.

The number of brick and mortar stores.

That approached us is 200 pages long.

And at first we started chatting with.

Them, and then we're like, you know what?

What we've got is working.

So let's not mess with that.

Let's not add other variables into this.

Equation when this equation is doing what we wanted to do.

So we just stayed laser focused on.

What we were good at.

We weren't really good at pr.

And so when we launched this deodorant, this pumpkin spice latte deodorant, people started.

Writing about us, we started using that, and we're like, great, we did it. We weren't intending to do it, but.

Now that we have it, let's use those assets.

So I think what we did was we're like, we've got something that's working.

Let's double down and triple down on this and not get bogged down by the dogma of other startups in the valley.

When, in your first startup, were you also operating it yourself for most of the time? Is it kind of a similar story? This one just happened to be right product at the right time, or were they very, very different approaches?

They were very different approaches. The first startup I had a co.

Founder who is great, his name's Steve. I love that guy.

And we both were like, we both didn't know what we were doing when.

We started the business. And so we were both like, flabbergasted and like, it was 90% passion and 10% actual intelligence that got us to where we were this time. It was probably 75% passion and 25% intelligence. Like we. I learned a lot, a lot of lessons from my first startup. The first startup, you know, we were just getting pr. We were doing flash sales because that was hot back then.

This startup, we just, I mean, there was certainly an element of luck to it. But when we figured out what we.

Were doing was right, we doubled down on trying to improve a better formula, talk to customers, respond to their requests. And so that maniacal focus on the consumer is really the key to what made us grow so fast.

What advice would you give to the entrepreneurs in the room who are teams of four or under, who are 5 million or under and haven't had that hockey stick growth? What would you tell them? What would you tell. At least you said you were focusing on the right things. What would you tell the room to focus on?

Yeah, I'd say two things. One is don't be embarrassed by it. I was often embarrassed by it.

Our site was built on WooCommerce. Does anyone know what WooCommerce is?

It is the worst e commerce platform.

In the history of commerce, and it's.

Still built on that. We like, we have literally 10. We'll have more than 10,000 orders today.

And we'll get them all through WooCommerce.

We're making a switch from platforms.

But I was really embarrassed by the fact that we were using this legacy software. We had a team of four people.

You know, we were in San Francisco.

Every startup in the world had. The night I'd walk into a startup.

And I'd be like, this is the.

Nicest office I've ever been in in my entire life.

A person had launched a business and.

Had an executive assistant and office manager.

And I'm like, how are you able to do this? You don't have any revenue and you have an executive assistant and office manager. So I was like, embarrassed. And I was with my first business.

And my second business as well. And maybe not embarrassed, but maybe a little ashamed about the size of the business and the size of our team.

Now I look back on it and.

I'm like, that's a real badge of honor, staying that lean.

And it really allows you to have.

A much more profitable outcome. So it's something I'm really proud of. But during that time, I was really.

I don't know if I was ashamed.

Or embarrassed, but I was certainly cautious about telling people about it.

In terms of, like, more, you know.

Being more business savvy.

I'd say do what's working for you. You don't have to pick up the.

Phone every time someone calls you. The number of agencies that contact me every day is probably 50 or 100. And all of those emails get thrown away.

You don't have. You don't have to listen to all.

Of the noise that's in the world.

Whatever is generating your four or five.

Million dollars, whatever you're. Whatever job your team is doing and they're doing well, double down on it.

That's where you're generating revenue. Think about numbers, think about what you're.

Doing well, and ignore everything else.

The number of. Like for instance, we didn't do any influencer marketing for the first year and.

A half of the business.

And people were like, what are you doing here? This is, you know, a direct to consumer company. Everyone else is doing influencer marketing.

If you're not doing influencer marketing, you're doing this wrong.

And we're like, okay, I guess we're going to do this wrong. We don't really. Like, I wouldn't trust what these people.

Said because I was like, I'm in.

The deep, I'm in the thick of it.

And you're not.

So do what you're doing is do whatever you're doing that's right.

And like, trust your gut. You don't have to listen to everybody else.

Don't listen to me.

I certainly don't have the answers for your business.

So whatever you think is right for.

Your business and whatever, whatever is working, whatever is generating revenue, double down on.

It in two years. It's not like you could have professionally gone to market. So when and why did you feel like it was the right time to sell or sell a piece to Procter and Gamble?

Yeah, that's a great question. And.

The funny part is, the day afterwards, I remember having lunch with somebody. We were like getting.

We were like celebrating and I was.

Like, do you think I could have gotten more money?

And he's like, I knew you were.

Gonna ask that question.

Because he's like, everybody asks that question as soon as they sell their business.

I still don't know the answer.

I'm like, thinking about it right now.

I think you did okay.

The real answer was that, like, we had grown an immensely profitable business. I knew how to build a business.

From zero to $50 million. And I knew I had that skill set.

I was not sure, and I'm still.

Not sure if I have the business to build a $50 million business into a $250 million business.

I'm not sure if I should be.

Running that business or if I should be reporting to the person that runs that business.

So that was one of the reasons I wasn't sure I had the skill.

Set to take us to the next level of really playing with the big boys.

You know, what happened is that we actually got an inbound interest, not from.

P and G, but from another company. They knocked on our door and they.

Said, hey, we're interested in partnering with you. And partnering with you really always means buying you. And so we're like, okay, great, let's chat. And so we started chatting. And at first it wasn't that serious. We had started rejecting all VC funding.

We're like, okay, we're not even taking these meetings, but these guys were interested in acquiring us. So we started having longer discussions.

And once the interest seemed real, what we did was we're like, okay, if.

We'Re actually going to sell this business, we need to hire a banker and run a real process.

So we hired this banker.

We created a list of, you know, 100 companies that we thought would be interested. We X'd out companies that, you know, like Tom's, that I didn't want to be a part of.

And we're like, let's go talk to.

All of these companies. And so we did like 16 management presentations. We introduced our business to 16 people.

Really fell in love with the P and G folks. So I guess the answers are twofold. One is somebody came knocking on our.

Door and like the inertia was keeping my business, you know, private and privately owned. But then that inertia changed.

And the other part was that like, you know, we'd raised $500,000 when we launched the business.

Only a small portion of my wealth was tied up in Native. By the, you know, by 2017, the vast majority of my net wealth was tied up in Native. I was a 90 some percent shareholder of the company. And so I was like, what is the difference between 100 million and $250 million to me?

And I'm like, I'm not sure what.

The answer is to that.

I know the difference between 100 million.

And 10 million is a gigantic difference. And so it was really playing it safe.

So by all of that do you mean that you had take the money that you had received from your previous exit and you had used that to fund the scale and the speed at which Native was growing. And so at that point you were basically 90% deployed from your previous exit. And then the right opportunity showed up. Is that what you mean by your.

Tied up cost, like 500 bucks.

It was the cheapest thing in the world. What I mean is that, like, you.

Know, that's a good return on investment.

That was a good return on investment. Owning 100% of a business that's doing something $0 in revenue is worth virtually nothing. And so all of my wealth was not.

None of my wealth was tied up in Native when we launched.

By the end of the business, owning.

A, you know, owning a significant share of a business that was generating a ton of EBITDA means that all of my wealth was tied up in the equity of Native. And so then it was a question of, hey, do we like, you know.

Do we want to double the size.

Of this business and try and try for a $250 million exit at the risk of possibly seeing a 10 or $20 million exit? Or do we just want to get out now, play it safe and, like, not have to worry about this anymore?

So we took the second route.

Is that going to be enough to live on, do you think?

I hope so.

How did. So I mean, you launched it with like 500 bucks. How did you launch product from like the get go? I mean, if you. What I'm hearing you say is that you bootstrapped it.

Bootstrapped it. Yeah. So what happened is that we launched on Product Hunt. Is anyone familiar with Product Hunt here? So Product Hunt is this website in like San. That's really big in San Francisco.

It's now owned by another company.

And what you do is when you're.

Starting a new company, you put it on Product Hunt.

And the most entrepreneurial of entrepreneurial entrepreneurs.

Go on this website and like, up and up, vote or downvote your business like you're on Reddit.

And they do this on a daily basis. There's so many startups launching in San.

Francisco that this happens on a daily basis.

So on day one, I was like.

At the bottom of Product Hunt. And I was like, and we sold one bar. And I was like, I'm turning this business off. I hadn't bought a single bar. I hadn't made a single bar. I was just like, forget it. We'll refund this customer. This business isn't working.

And then one of my friends is like, wait, I know the guys who.

Work at Product Hunt. I can get you closer to the top on day two.

And I was like, okay, whatever, this doesn't hurt.

I'm shutting this business down anyway.

Do it.

It doesn't hurt me.

So day two, we sold 50 or.

60 bars and I was like, okay.

Maybe this is A real business now. And so that's what really launched us.

Out of the gate was Product Hunt and a friend of mine, John Rushworth, because he's going to love that I dropped his name.

Like putting us on the front page.

Of Product Hunt and getting us those 50 orders.

And once we had those 50 orders.

We actually bought the first hundred units.

So we sold the first 50 some.

Bars without having any inventory.

And anyone who bought from us was always getting, like, getting products that was.

Made the previous day.

Like you saw our production facility, we.

Were making tens of thousands of bars on a daily basis. And like, if you bought on a.

Tuesday, your product would either be made.

On Monday the day before or on Wednesday the day after.

And so we were able to keep a really lean team and a really low balance sheet because we never had a ton of inventory. It's not like we spent $4 million on day one stocking our warehouses. We had zero inventory even after we made our first, you know, 50 sales.

That's amazing. How did you invest the capital once you took some off the table?

You're saying after we sold the P and G? Yeah, actually, no good ways.

The honest answer is I'm still running.

The business on a day to day basis.

And like, trying to invest capital is.

A full time job in and of itself.

And so.

Like, you know, when I.

Talk to the guys that I have helping me with this, they're like, you're the worst at this we've ever seen.

And I'm like, I guess, but I've.

Got to go back to work now.

And so nothing good. So if you have any ideas, please let me know.

Yeah, yeah. Well, I'll talk to you backstage. I know a guy who would probably help with that one.

Great.

Yeah.

All right. So in retrospect, glad you didn't shut the business down when you only had one order.

Very glad I didn't shut the business down.

And $500 into 100 million is an okay ROI.

It's a great ROI.

But now you're still running the business, so naturally there has to be some temptation to be like, I wonder if I could do this again.

Definitely, yes. I mean, like, that's the most natural urge in the entire world.

I don't know, there's a couple other.

Sure, fair enough. That was what I was going after. But in reality there is that urge. I think there's a couple things that I've learned. One is I really enjoy building businesses.

From 0 to 25 more than I do from 25 to, to 50 or 50 to 100.

From 50 to 100, it starts being a lot of meetings. It starts being, you spend all of.

Your time in a conference room, you don't get your hands over the keyboards, you don't get your hands dirty. So I really enjoy that 0 to 25 aspect of it.

I think there's a huge learning curve.

Though as we're joining P and G. Like we are thinking about brick and mortar stores today. We are thinking about new product categories. So trying to understand how to create a timeline that makes sense and balance the needs of the targets of the world. The Walmarts of the world and the Costcos of the world all are really interesting conversations I haven't had before.

The other thing I'd say is despite having like the urge to start another business, I'm going to stay at Native for a while.

I want to see this thing out. I love my team.

Like the guys that we have there.

Are all rock stars. They all work really hard.

They're more passionate about the business. Like sometimes I'll say something during one.

Of our team meetings and there's literally applause because the guys are so happy.

And I'm like, wow, you guys care this much. This is amazing. So I really love that and I really love P and G. So I don't see myself leaving anytime soon. But were I to leave, I'm sure.

I'd go on a vacation for a few months first, not immediately launch another brand.

We talked earlier today about the ups and downs of entrepreneurship. And it's easy to look at someone who has had the exit that you've had in such a short amount of time and put you on a pedestal and think you probably don't have bad days anymore. You probably wake up counting $100 bills all day long. I'm just curious if you have bad days and if so, what they look like. What are, what are your. What's your entrepreneurial roller coaster?

Sure.

Now.

Yeah. I think like, you know the hard part about being an entrepreneur and being in this. All of us share the same thing where we have. It's not a roller coaster day to day.

It might be a roller coaster hour to hour.

And like trying to be like trying.

To be mentally resolved for that is really difficult.

I remember thinking when I was running native and we were like doing incredibly.

We were just growing hand over fist. I was like, if a bus hits.

Me today, I'm still going to make it to work. I love this job.

And like, you know, those are the good days, but certainly have a ton of bad days as well, I think, like, when you sell your business, it becomes very like. Like, when Peter Thiel sold PayPal, he.

Said that he was depressed right afterwards because he went from getting something like 300 emails a day to two emails.

A day, and both were from J.

Crew.

That's. That's like, what it feels like a little bit. You go from being like this in person that, like, everyone wants to get in touch with to, okay, you're just.

A part of P and G. And, like, now you have a boss and you have people working under you and you have this huge team.

And so it is, like, really mentally challenging. I never went to see a therapist.

In my entire life until I sold the business. And I was like, I don't know what to do here. My life was tied up in this business, and I thought my life would be tied up in this business for the next decade. And now it won't. Like, now it won't be. And I have more time at home and, like, I can go home and cook dinner.

What should I be doing with all this time? Like, you know, I used to leave work at 11pm, now I leave at.

6Pm what should I do with those five hours? And I still don't know if I have a good answer to that.

Would you explain why? Is that painful?

It's not painful so much as it is, like, hard to understand. Like, a lot of us in this room are going to devote our lives to our business.

And once that devotion is no longer.

Necessary or there's more support, it's hard.

To balance that life.

80% of my life was.

Maybe 90% of it was building native for the, you know, three. For the two and a half years it was operating independently, you know, even.

Trying to build that from going from 90 to 10.

Going from a 90:10 ratio to something like a 75, 25 ratio means I.

Have twice as much personal time. And I wasn't that good at spending.

That personal time before when it was only 10% of my time. Now it's 2x that or 2 1/2x that.

So it's tough. It's a real mental challenge.

Like, I try and talk to other entrepreneurs and we network about not necessarily business things.

Certainly go to the gym way more.

Often because I'm trying to clear my head.

But it's something that I'm really glad.

You brought it up in the previous presentation. It's something I think, that doesn't get talked about in the community as often as it should, which is just mental.

Well, Being we're all doing this as.

A means to an end. And I'm sure it's easier for me to say today than it was two years ago, but this is a means to an end and not an end in and of itself.

So don't let it become your entire.

Life, because at some point, you won't be doing this anymore, and you won't know what the rest of your life should be. You'll have lost those five to 10 years.

You're in the valley where there's all kinds of peaks and valleys, definitely, in entrepreneurial journeys. And you have people who make billions of dollars and those who lose everything. And I'm sure you know both types of people, and you didn't go the route of raising a whole bunch of money. You. You're one of us. Sure, definitely. Which is awesome. And I'm just curious what it's like being in that environment where there are so many ups and downs. And, like, what your observation, as someone who's aware of your own and aware of the entrepreneurial journey, what you observe in that type of an atmosphere.

Yeah, I mean, it's really hard. And I think that's part of why.

It'S so mentally taxing.

Like, the number of times I've seen.

A brand raise money before they have a product out in the market brandless.

I love those guys.

And they seem to have a great company. They raised $50 million before they launched.

Before they had $3 in sales. $50 million, that's already a good business. Liquidate, like, issue dividends and go home. Like, that's a ton of money. And so it's hard to, like, be like, okay, I'm gonna walk into this office, and this guy has 100 people.

Here, and this office looks like it costs $45,000 a month, and ours costs something like, you know, 2,500amonth. And this guy just launched his business, and I'm sitting in the, you know, in the reception area, waiting for his executive assistant to come and pick me up so I can chat with him.

And they've done zero revenue. Like that. That is something where you're like, what's right here? Something doesn't. Something is wrong. Either I'm wrong or this.

This environment is wrong.

So personally, what I tried to do was, like, it was a lot easier.

With my second startup than with my first, was just trying to ignore all of that other noise, always, and try.

And talk with the people that I.

Thought shared my mentality, which was, okay.

We'Re going to build genuinely Good businesses. We're going to have profit and we're going to have ebitda, and we're not.

Going to have a ton of like.

I didn't want to go to VCs.

And say, every six months I have to come to you and try and raise money, and if I don't, I have to shut my business down.

That seemed like a really risky strategy, and I wasn't sure how lucrative that.

Was going to be.

My. My way was much easier. It was less like, no one will know my name. Like, they know Michael Dubin's name from Dollar Shave Club. That guy did an amazing job, but he also raised a fortune in venture capital. And it was a really hard job, I'm sure. And it was really hard to have.

As good of an outcome as he had. For me, it was much easier.

And so I took this other route.

And sort of tried to network with people who shared my values and were like, we're going to build good businesses and sort of avoid the fact that we're in San Francisco.

And that's sort of like the way I did it. I can tell you, every day I.

Got more resolved that I was doing the right thing.

Every day in my first company, every.

Day in my second company.

I mean, I still had moments where I was like, you know, I'd walk into a room. I still remember someone lecturing me about cash flow. And I'm like, I'm going to generate, you know, more than a million dollars.

In EBITDA this month.

You're lecturing me about cash flow? You don't know anything about my business I'm generating. I have more cash than I know.

What to do with.

We're going to. We're issuing dividends, so don't worry about cash flow here. But it happens. Like, people just think that they know.

How to run your business better than you do.

And so, like, every day, I became.

More resolved and entrenched in the way that I was doing things for better.

Back then, probably for worse long term.

And so just listen to yourself.

Like, you know your business better than anybody else. Venture capitalists would come to talk to me and they'd be like, these are.

The five things we think you should do with your business.

I'm like, you've been thinking about my business for 30 minutes. You think I've been thinking about it for the last.

For the last minute, for the last two years?

I know more like, I know I've been giving this thought. They'll be like, have you tried influencer marketing? I'M like what a great idea.

No wonder you're making so much money. No wonder people gave you $100 million to invest. You've discovered influencer marketing and so you just gotta like take it with a grain of salt and smile and be like no, I trust the way that I'm doing.

Doing things is the right thing to do.

And I think that's really, that's more.

Difficult than I possibly imagined when I launched the business.

Moyes, I so admire the hell out of you. I'm so encouraged and challenged by you at the same time. I think you're a hero to half the room now if not more. So thank you for.

Thanks so much. I really appreciate it.

You know, from Moiselle everybody.

Thank you.

Hey capitalists, reserve your space now while tickets last@capitalism.com capcon 5. That's cap con the number 5. See you soon.