Shadi Bakour - Co-Founder & CEO at PATH

Welcome to another CEO Wisdom Podcast. We have Shadi Bakour with us today. Shadi is a CEO and founder at Path. His headline is Let's Change the World. That's a hard thing to do, but hopefully he's advancing towards that mission with Path. He was Forbes 30 Under 30, been on TEDx and Imagine, live from Austin, Texas. Shadi, welcome to the pod. Tell us a bit more about yourself and what you're up to.

Thank you so much. Thank you for having me. I'm very excited to be here. I'm co-founder and CEO of a company called P.A.T.H. We are trying to change the world one bottle at a time by creating the first ever refillable, reusable bottled water that's packaged in a solid, durable aluminum bottle instead of single-use plastic. And we've made a lot of progress towards that mission, but long way still to go.

What's your background, right? Like, I think you launched your first venture in 2014. I think you and I were both hustling with jobs and creating like our entrepreneurial dream back then. What was your first one? Was it Exume?

Yeah, I mean, that wasn't the first. That was the first with a little bit of success. Um, but I, I mean, I grew up kind of as an entrepreneur. Um, from a very early age, I was extremely interested in business. Um, and so I've had various kind of ventures in the past. Um, everything from, uh, app development company where I taught myself how to code apps to, uh, different websites that I, you know, had ideas about that we launched. Uh, just all types of different ideas. But, um, but yeah, like studying finance and business and was actually going down the Wall Street path at first, uh, but didn't find the right opportunity for me that really like got me excited. And, you know, I was in consulting, it was very boring. I hated my life. I hate my life, but I hated the job. I didn't feel challenged. And so at that point, I was like, you know what, I'm just gonna go do my own thing. I know entrepreneurship. I know that it has unlimited upside potential. Um, and just kind of was excited to, to go through that journey. Ironically, you know, like, it's, it's difficult, it's struggle, all of these things, but, um, Those things kind of excited me.

Right. And how did you go from technology to bottled water?

It's funny, you know, tech companies— what I found growing up in Silicon Valley, the epicenter of tech, um, I found that technology companies spend so much time and resources on product. And that's exactly what we did. We had no money when we started. Our previous startup, uh, just a business idea. And we spent 12, 14, 16 hours a day building this product. And, um, what we found out is that after we had built the product up to a point that we could bring it to market, we forgot about marketing, we forgot about sales, we forgot about finance, forgot about operations, supply chain. All of these other things that you need for a business to succeed. And so when we were on to the next idea, uh, we, we had 3 criteria, 3 main criteria. Number one is we wanted something that was very simple that we could bring to the market very quickly. We wanted something that was scalable because we like big ideas. We wanted some— the next trillion-dollar idea, right? And we wanted something that had an impact tied to it. Many reasons for that, but we just, I believe like our Forbes Under 30 Under 30 was for social entrepreneurs. I was part of that cohort and just being in the world of impact is a really special place to be, I would say.

So fun fact, I just had Lumi Cup CEO today on my podcast. Do you know Lumi Cup?

No.

In Los Angeles. So they make aluminum cups, right? And they manufacture them at scale and they customize them towards their client's need, which is pretty similar to what you do. And they're like 3 hours away from you.

Wow.

It's a hard business though, isn't it? Like you've been 10 years into that. Like what's the, what's your secret to surviving and thriving?

Yeah. I heard one thing that a successful entrepreneur told me that really stuck. He said a business never really fails until the entrepreneur gives up. You can even run out of money.

That's true.

You know, you could, you could go into bankruptcy, you could close your shop, and— but the business never really fails until you say, okay, I failed, because you can always take another shot at it. You can always try to bring in more customers, more investors. You could pivot, you could— there's always another way out, right? So I think it's just that, like, the grit and the perseverance, which is, you know, it's kind of a buzzword that you hear around every day, but like, that's really what it takes at the end of the day, is like, just figure it out. And, and changing your, you know, why can't I do something, to how can I do it? How could I? Yeah.

Yeah, and you have 2 facets to your business, right? Like one is DTC, so I guess you're like in retail stores. Maybe if you can tell me a bit more about that. And the other seems to be like B2B, right? Where I could buy a bunch of bottles for my own corporate event, right? And be sustainable and have my swag in my employees' hands.

Correct, correct. Yeah, so I mean, traditional beverage is you're going after you know, your traditional retailers, Target, Walmart, Costco, whatever it may be. And so that's our initial entry point was, was going into traditional retail. We went after 7-Eleven. Um, and at the same time, we saw a different opportunity because what we're building is not just another beverage brand. It's really a platform for sustainability. And we always thought about it like sustainability first. And product first. And so what it did at some point is it opened up— we had this idea to start collaborating with different organizations and using our bottle because it's a reusable bottle and not a single-use container. Now it becomes like actually this marketing opportunity for these organizations to show that they care about the environment, to show that they're cool and trendy and all of those things that Path, our brand, is really all about. And so it just— the first one was Salesforce. An executive in Salesforce said, hey, can we put a logo on your bottle? And we said, maybe. You know, it's funny to think about, like, Salesforce is, you know, multi-billion dollar business, and we're this like small startup, and we're like fighting them. To not put a logo on their bottle or put it very small on the back. But once we did it the first time, we started thinking more about it and like, why not? Why can't we share the real estate of our bottle to showcase these organizations and really elevate them and get them away from single-use plastic? And so that was, that was the beginning of this new program that we launched called Partnering to Save the Planet. There you go. You've got it right there. Um, where we partner exclusively with some of the biggest organizations in the world to completely eliminate single-use plastic bottles, whether it's hotel groups, airports, schools. Um, you know, it could be your local, you know, it could be your birthday, whatever it is. It creates that like personal touch with either an organization or an individual where they can be part of this movement to eliminate single-use plastic.

Yeah, design looks good. Uh, do you have like a designer in-house, right? Like, I'm guessing—

We have many designers in-house. They are incredible.

Yeah, it looks good. So, but to come back to the fundamentals, right, before I touch on design and other things, it's an aluminum bottle that is recyclable. What about the refillable aspect? Because the Lumi Cup guys I interviewed, uh, they didn't recommend to reuse the cup again and again, right? It's Like throw it in the trash and recycle it?

Yeah, I mean, look, uh, if you're doing aluminum instead of plastic, that's already a step in the right direction because aluminum is the most recyclable material in the world. It's infinitely recyclable, probably some of the things that, that they told you on your podcast. Um, the next step I would say, and I think it's a big step, is going from single-use to reusable. If we can convince consumers and everyday people to start reusing more and more, and you've seen it, like Hydro Flask, Stanley had a huge, you know, thing where everybody was buying a Stanley Cup, um, et cetera, et cetera. So people are already moving in that direction, but ultimately reusability is the highest form of sustainability. It's less is more at the end of the day, right? If you can hold on to that bottle for 10 drinks, now you're saving the equivalent of 10 plastic bottles that you would have had to drink, right? If you can do 100, so it just keeps going from there. So that's really been at the center of our brand. It's very counterintuitive because if you're in a business to sell more stuff, you know, which most businesses are driven purely by money, it's a little bit, it doesn't really make sense off the bat. Once you think about it, it actually makes a ton of sense. And I can get more into that.

Right. What part of the business is bigger? Is it retail DTC or is it B2B nowadays?

We really split it between like our core products and our co-branded products. So not all of our B2B relationships are branded, special branded, co-branded. A lot of them just carry our core products, but I would say it's about like 60 to 70% is our core products, and then 30 to 40% are co-brand partnerships.

Interesting. And how do you market to these? Well, let's start with the retail, right? Like, what's your strategy? Strategy to get into retail? Is it cold emails? Connect me with this guy that you know? Like, my first company was DTC, was a supplement 10 years ago, and I had quite a hard time to get into retail. So what's your strategy for that?

School of hard knocks, as they say. I mean, at the beginning, we just went door to door to 7-Eleven because we realized that 7-Eleven, the franchisee owner has the ability to control 20% of the products they put in the store. So once we realized that, We're like, okay, we're going full force after 7-Eleven. And that started to get us some early momentum. We did it throughout California, throughout the West Coast, literally just sitting in the parking lot of the store until we see the store owner show up and we go in and we make a deal at all costs. And that was the beginning. And then over time, you know, you build, you, you start to bring in team members that have existing relationships. So that's very valuable. We leveraged a broker, the largest food and beverage broker in the world approached us and said, we want to launch your brand. So we partnered with them and they helped open up a lot of doors, get those meetings. And then from there, we just continued to build on that.

And direct-to-consumer on the website, did you crack that part again or is it still a big hustle and quite hard?

Uh, for online, you're saying?

Yeah.

Online, uh, yeah, I mean, we're continuing to play around with it and, and find new ways to drive efficiencies, but that's— the online business has been driven actually more by our presence out in the marketplace, at retail, with our B2B relationships, etc. So they kind of feed into each other.

Interesting. And B2B, uh, wouldn't that be like more outreach directly via LinkedIn, you hiring a sales rep to do that? Like, how does that work?

You know, it's funny, like, once we started doing this co-branding, for the first several, several years, most of the co-brands that we got were actually inbounds. So there are actually people reaching out to us. You know, if you go to any Chanel store in the US, You'll find you ask for a bottle of water, they'll give you a bottle of Path. And Chanel reached out to us, SpaceX, same story. The list goes on and on and on. So it's only like relatively recently that we've actually started to shift that towards what are our target customers and how can we reach them? And yeah, we'll reach them in any way possible, whether it's LinkedIn, LinkedIn. We'll just scrub LinkedIn and, you know, hunt people down. We'll leverage our existing network. We'll create target lists, send it out to everyone we know. Hey, does anyone know someone that can help connect the dots here? So it's really just every single angle and avenue. But we do have a solid presence, at least in the US. And so that helps a lot.

Is there a lot of companies doing what you do in the Bay Area?

No, there's really nobody that does exactly what we do, which is the reusable, durable reusable container, because we have a special relationship with the only manufacturer that can produce this, this type of beverage container that's actually meant to be reused. There are definitely a number of sustainable bottled water Brands out in the marketplace. Um, but today, PATH owns the majority of, of the market and just continuing to expand that gap between us and all of our direct competitors.

And what's special about the water that goes in that bottle?

Uh, it's really high-quality water, so it goes through a very intensive 7-step purification process. We add electrolytes back in the water to increase the mineralization of the product. Um, and yeah, I mean, it's just really good water in a, in a superior vessel. You know, we're trying to get away from like microplastics, PFAS, BPA, all of those chemicals and, and contaminants that, that hurt your body. Um, so it's, it's really like a holistic approach of like We're a brand that has a really high-quality product that's setting out to do something bigger. And I think that's, at the end of the day, what the consumer connects with.

And producing that water and transporting it is sustainable, I guess. You got that part figured out too?

Well, I mean, look, at the end of the day, any product has a carbon footprint. Can't avoid it, right? If you're producing a product, it's going to cost energy, it's going to be transported. What we did is we actually have always been thinking with that in mind. Again, sustainability first. So we actually started as a spring water and we switched to a purified water for exactly that reason, because we can produce anywhere in the world and have the same exact consistency of product. And so that consistency allows us to localize manufacturing to distribution, right? We call it water miles. How far is the water traveling to get to the customer? We want to shrink that as low as possible, right? So if you think of some of the other big, uh, big brands out there that are source dependent, right? Some of the more premium brands, things like that. There's a lot that you could list off. Like those waters, If you're drinking, you know, spring water from the US, for example, and you're drinking that in Europe, well, that water shipped from the US to Europe for you to be able to consume it. It makes no sense, right? So we always thought from a global standpoint, how can we minimize the carbon footprint? And in going to that purified allowed us to do that.

Got it. And how does that purification process differ from classic water brands like Aquafina, Dasani, Nestlé?

Yeah, I mean, it's definitely like, um, a higher, let's say, quality purification process. I mean, we've seen a lot of the reports about like some of those brands that you mentioned having like an acid— low, like high acidity, low pH, uh, just having all types of issues. So this was very important to us in terms of product quality, uh, from day one. And what we did is we went and partnered with the number one premium water manufacturer in the US and had them become a partner in the business. And by doing so, it gives us full R&D capabilities. to be able to play around with formulations, to launch new products, and, and just to, to make sure that we have the best quality out there.

How sustainable is e-commerce, right? Uh, shipping products to the consumer rather than having them go and buy them at the closest market?

I would say it's similar. As our business continues to grow, you find more and more efficiencies, right? Because you can, again, localize manufacturing to distribution. But in order to localize manufacturing to distribution, you need to have a certain volume for it to make sense. So you build a market, and as that market builds, you have more stock inventory in different places around the country, so you're not shipping again long distances. Um, so I would say it's similar between e-com and just picking it up at the store. It still, you know, has to travel. Um, and, you know, again, as we scale, we'll look to minimize the distance that, that any water is traveling.

I also see you partnered with brands like Nickelodeon, uh, with SpongeBob. Will, like, you do other brand partnerships and sell it as your own?

Yeah, so these are, um, these are partners, right? We've We've been able to secure partnerships with Hasbro, Nickelodeon, Barbie, I Love New York. That's the state of New York. A lot of sports teams. So you'll see those sports bottles like the Lakers, etc., in retailers. And so what we do is we're not selling it as our own. It's a partnership. So for example, SpongeBob, it'll say SpongeBob on one side and it'll say Path on the other side. Our logo, our name, everything. And in the middle, on the back of these bottles, we'll say, partnering to save the planet. So it's that, you know, how can we make 1+ 1= 11? And that's really how we think about it.

And who unlocked these partnerships? You have someone internally that's in charge of making these happen?

We have a whole team. We have a whole sales team. Definitely from a licensing standpoint, you know, there were a few key people that helped us develop that, that had those relationships existing with some of the big organizations. Um, so yeah, it's, it's a, it's been a team effort for sure.

And from the options I see on the website, Alkaline seems to be a more popular product nowadays. Like, can you tell us the difference between this and Still?

It's, it's pretty even, I would say, actually, between the white and the black bottle. Still an alkaline. Um, alkaline is just a higher pH. Some people prefer it, some people just prefer, you know, the pH of our bodies, which is like 7.4. Some people want it closer to 9, 9.5. So it's more of a preference thing, and we saw a need in the market for both, and that's why That's why we offer both. Yeah.

Interesting. Um, yeah, I see a bunch of partnerships here on the website. It's quite, uh, uh, intriguing. The Made in USA also one seems to be like getting lots of traction. Like what, uh, what happened there? I mean, it's Made in USA since forever, right? But you see there's lots of patriotism in the States nowadays. So I guess you're getting lots of people to buy that.

Yeah, I mean, for us, it wasn't anything like political or anything like that. It was just, we're continuing to bring jobs to the US. We're proud of the country that we live in. You know, no matter what the landscape looks like, we're proud to be here. We have an opportunity to, to, you know, live in a beautiful country. And, and we just wanted to take a moment to like really showcase that. And that's something that we've done year over year over year. You know, at one point we were number one selling water at Walmart with that Made in USA bottle. So definitely there's a lot of great customers that, you know, feel a reason to want to engage. But yeah, just, it's one of our many limited time edition bottles. We also do like autism awareness. We're doing breast cancer awareness right now that just launched. We're doing a holiday bottle that gives back to the hungry and the homeless. So just different cause-based, you know, organizational bottles.

Right. As a CEO this year, what are your main objectives? What do you want to achieve soon?

I think we just want to continue to grow in every avenue. So we're seeing a lot of growth in sports. We're, we're the exclusive bottled water for the Dallas Mavericks, the Dallas Stars, the Colorado Avalanche, Denver Nuggets, and the list goes on and on of all these teams, new partnerships. We're signing on some really large organizations today that will eliminate single-use plastic bottles. Um, and just continuing to grow at retail and find our, you know, find our way to, to continue to expand that channel as well.

Nice. Well, thanks for coming on, Shadi. Where can people talk, find out more about you?

My personal Instagram is just my name, @shadimakour. Our our company is @pathwater on Instagram, drinkpathwater.com or drinkpath.com, and find us in almost every major retailer in the U.S. today.

With Shadi and Charles for another.