From Losing Everything to a $4 Billion Comeback — Guy Oseary

How did you end up— and I don't know if this is a good starting point, but I'll throw it out there as an example. Your first consumer investment, Vita Coco. Well done.

Thank you.

I don't know if that was your 10th investment overall or your first, but how did you end up edging into the world of investing, whether it was CPG and consumer stuff or tech? How did that even come to be? Wow.

Well, the original, original, original was, I was on a plane to Milan for MTV Awards. And I don't remember how old I was, I was in my 20s. And I was reading in a magazine about Sky Dayton. And it said he started EarthLink and he was worth $100 million. And he was really— I'm like, wait, what? You can, wait, what is he doing? And how old is he? And so I go, when I get back home, I wanna meet this guy. So I came back and it took me a while, but I finally tracked him down and we went to have lunch at Four Seasons Hotel. And he was like, wow, if you're impressed by me, have you ever heard of Bill Gross?

Yeah, Idealab.

And I go, no, who's that? He goes, well, he started an incubator and he's launched $3 billion companies in one year. And I go, Sky, I like you, but can you just, can you get out of the way? I wanna—

This time has been great.

time to move on. I need to talk to this Bill Gross guy. So he sets me up with Bill Gross. Bill Gross ran an incubator called Idealab in Pasadena, and I just loved it. I love the idea of a lot of ideas reminding me of the record label where you had all these artists and you had all these project managers.

Or the independent producers.

A version of that. And you can walk in and out of different rooms and you can say, oh, okay, what are we doing here? What are we doing here? And so he was building all these different companies, and I would go in and out of ones that I could be helpful to. And I would learn about it. So that was like a, oh, okay, an incubator. I really fell in love with that idea. And there's bad news to this story, but it's like all things, it worked out in the end.

Wait a second. My listeners are going to kill me if I don't follow. What was the bad news?

Well, I mean, the bad news is that I worked there for a year helping, and then one day someone I really trust that They don't know it to this day, but they're an incredible human. And I was lucky to sit with them at dinner one night, and they were telling me how Bill Gross is one of the greatest investments they've ever made.

Mm-hmm.

So I called up Bill and I go, Bill, I wanna put money into Idealab. And he goes, well, you know, I was gonna surprise you and I was gonna put, you know, X dollars in for you from bottom of my heart for all the work you've done here. And I go, oh, what is that worth? And he's like, you know, he told me what, He thinks it's going to be worth when it comes out. And I was— by the way, it's worth a lot. And I go, that's not enough. I'm thinking to myself, that's not enough. So I go, Bill, I want to put more in, a lot more in. And he's like, hey, for you, I'll let you do whatever you want. And he did. He's a really, really sweet guy. And that's the bad news. He let me do whatever I wanted.

What year was this?

It was before the crash. By the way, it wasn't a year before the crash. I think it was like an hour before the crash. Okay? So I put every dollar I have plus dollars I didn't have. I picked out 3 investments at that time. Idealab, because of Bill Gross. Bill was the first guy in, I think, in LA to have the BlackBerrys. So I was the first guy from Hollywood to even know what the hell BlackBerrys were. So I ended up buying 400 of them.

Wow.

And I gave them to all the people in Hollywood so I could connect when I needed to and talk to them. And so I made a deal with Jim Balsillie to be an advisor because I was the guy that put it in everyone's hands. This is smartphones before anyone else was doing it. And then I also, my friend Seth Rodsky brought me Vitaminwater.

Yeah.

So those were going to be my first 3 investments. What happened was, is the Idealab thing, once I put that money in, And I don't know the timeline because I tried. It's almost like something you want to wash away from your mind. Right.

It collapsed. It's like a fever dream you're trying to forget.

The bubble burst so fast on all of that that I didn't have the heart to invest into. I never signed my deal with Jim Balsillie and Research in Motion. And I never did my deal with Vitaminwater, which both ended up— it's just almost like the hole and rage analogy. They both ended up being massive. And I lost all my money with the first one. So I learned about a lot. I learned about diversification. I didn't diversify. I put the majority of my money in one thing and I paid the price for it. I really— for the next 2 years, I only thought about that about 15 times a day. It didn't matter if I was sitting here with you right now, back then I'd be thinking about it. I'd have a conversation with you, but I wasn't thinking about you. I was thinking about how did I lose all my money? on that one investment. Everything I saved my whole life. I was mad that Sky Dayton introduced me. I was mad at all the wrong reasons. Everyone was just trying to help me, but now I'm like, why did I even read that magazine? I should've just stayed in my music lane.

Yeah.

But what happened was years later, after my first Madonna tour, I started to think about it again. And I go, I wasn't so off really. I was off, the timing was wrong, on the Idealab part. The other 2 worked. Had I diversified, I would've done incredibly well.

You would've been fine. Yeah, you would've been great.

And so I got 2 out of the 3. And the truth is, it's not fair to Bill because he really built an incredible company. And some of the stuff that he had built ended up becoming search for Google and a bunch of amazing things, but it just didn't work out. And that's life. Sometimes they don't work out, these deals.

A lot of the time.

I think I had done 3 3 Madonna tours in a row. So I came back, all the money I'd lost, I made that back to survive. And then I had a window where I knew we were 3 tours in a row, we're going to take some time off. And I thought to myself, I didn't get it so wrong. So I'm going to try this one more time. I'm good at identifying the ideas. I'm good at identifying the talent. I'm going to do it one more time. And that's when I— so I started. And the same guy that brought me Vitaminwater, Seth Rothske.

Did he later work with Reese Witherspoon?

Yes, exactly.

Huge.

Yeah, he's done well for himself. And then he called me one day and goes, hey, have you heard of this coconut water thing? So of course I'd heard about coconut water. One, my wife is Brazilian, and my first son, his first words were like, água de coco. So we drink coconut water at the house. But the whole coconut water sector in America, if you added all the companies together, was maybe a $5 or $7 million business. It was nothing.

Tiny.

Nothing. But Madonna on tour, on the previous tour, she would have the trainer would go in different markets to find fresh coconut for her, for the coconut water. And I was like, wow, every location we went to, we had to find fresh coconuts. And so I started to hear that other people were doing that as well. Other people who cared about their health were drinking coconut water. And I started to see, again, back to pattern recognition, I started to see this thing. And then one day the New York Post ran an article about coconut water. There's a photo of Gisele drinking from a coconut, and they're talking about coconut water. And I had cut that out. I put that article on my desk. And when Seth called me and said, have you heard about coconut water? I go, you have to be kidding me. I have—

Sitting on my desk.

The only thing that I've torn out that's sitting on my desk is an article about coconut water. It's on my desk. And it's like my to-do, like, I need to figure this thing out. And here you are calling me. He goes, well, there's a company called Vita Coco out of New York. And I go, count me in. I got on a plane. I went to meet with the founder, Mike Kerben. The company was a, I think it was a $35 million valuation at the time. And I literally just, here we go. I'm jumping back in. And I went in really big. And I brought Madonna into that. I brought Demi Moore. I brought Matthew McConaughey, Anthony Kiedis. I brought a bunch of people into this thing because they were all healthy people who drank coconut water. I'm like, let's blow this thing up. And that was the first time back after the crazy run.

For people who don't know, how did that turn out?

It's a public company today. I think it's $4 billion market cap.

So you were back in the game.

Yes. It takes time.

It takes time.

It takes time. Didn't happen overnight.

What were you Looking for— how would you replay that meeting with the founder in your mind? You fly out, you meet with the founder. How did you approach that meeting?

I think I approached it the way I approach everything. It wasn't, let's think about it. It was like, I'm all in. Let's go. I want to do this. Here's what I can do. And I think they were probably overwhelmed by, whoa, okay, And we just ran. He's awesome. What he's done with the company, we went public, I think, at like $2 billion and now it's at $5 billion. He's done an incredible job.