Soylent Co-Founder John Coogan

I'm Robin.

And I'm Wayne.

We're investors at VMG Partners, and we help build iconic consumer brands.

Every day, some of the world's most fascinating founders share their stories with us before they've made it.

There are highs and lows, mistakes and triumphs, but always extraordinary results.

And now we're sharing these stories with you.

This is Unfinished Biz.

It's not always all your best friends and your family eating a perfectly huge meal. And it's enjoyable and it's wine, song and all this other stuff. So, you know, sometimes there are just meals that are terrible and like, let's get rid of those.

On this episode of Unfinished Biz, we chat with Soylent co founder and former CTO John Coogan. Soylent is a beverage that replaces a meal with 20 grams of plant based protein, making up what Soylent claims be 20% of your daily vitamins and minerals. And it's become a household brand, especially in Silicon Valley, where long hours and a need for quick sustenance is the norm. But scaling Soylent from a clever name to an actual beverage was a rocky road.

We'd launched this crowdfunding campaign. It was very big. And then, you know, we'd kind of delayed the shipping a couple months. We originally told people that they'd get it in three months. It took us a year to produce. It was dropping off, and we were generating less and less revenue every month. So I was looking at the graph and it was down. There's no regression that you can run that makes that look like it's up and to the right, which is what you want as a startup. Graph.

Find out how John broke into the San Francisco tech world, why hiring executives changes a scrappy company culture for the better, and how crowdfunding made Soylent a reality. Unfinished Biz starts now.

Robin. This is a really fascinating story of an entrepreneur who wasn't seeking to solve a specific unmet need. Rather, he was trying to pursue a dream of starting a tech company. But he didn't know what it would be. So he ended up moving to Silicon Valley, the center of innovation, where he figured he'd just find it there, but to an extreme, where he ended up locking himself up in an apartment with his roommates to keep trying until they found what's that big tech idea gonna be?

I mean, these are tech guys who created a CPG product. And honestly, it was born out of a desire to actually stop eating ramen and have just a healthier option. And that really was the creation of Soylent. And John Joined us in our LA offices to tell us more about his story.

My first kind of tour into trying to make something out of nothing was actually in, I want to say middle school. I was into music and particularly DJing. And I figured out that there was a big price arbitrage opportunity in selling American made DJ equipment internationally on ebay. So I would. How did you find that out? I mean I was, I wasn't very good at DJing, but I was extremely into the technology and extremely into this is a theme, but extremely into the gear. So I had done all the research, figured out what products were popular and what products were, you know, kind of gaining acceptance within the DJ community. And so I would buy them and then I just would search on ebay and I would see that people would comment on certain postings like, hey, will you ship to Australia? I'll pay you $300 extra. Like they're paying $300 for something that only costs $500. So they're going to pay $800 in total and I can ship that for $50 if I just use the right thing. So I started doing that in middle school and I think a little bit of that came from my dad because he worked in the dot com bubble or dot com boom at a startup. And I kind of saw he was originally in the film industry. And it's not like he made a ton of money in the dot com boom, but he was able to transition into a technology role and then eventually work at Disney and some really, really big companies in technology. So what startups for him allowed him to do was really learn an entirely new skill. And I think that was something that resonated for college. So I went to college Northeastern in Boston. I studied economics and kind of thought that I would go into finance and you know, just kind of get like a good steady job, be able to, you know, like pay the rent, that type of thing. But then once I got kind of closer to realizing what that would entail post graduation, I had a great kind of career advisor that recommended that I look into something a little bit smaller scale. I'd worked at a small venture backed company that was about 50 people.

Like an internship at the time?

Yeah, it was an internship at a company called Vlingo, which was a Siri competitor and they were kind of venture backed, I think they were series B at the time, raised maybe $20 million, something like that, 50 people, all tech. And kind of saw that environment and saw that it was a little bit faster pace than some of the other jobs. That I worked. I really thought that there was an opportunity to kind of really take a self directed course of study post graduation with an entrepreneurial journey. And for me that really meant focusing on learning how to program. So I'd taken some computer science classes in college, but the curriculum was, you know, a little bit antiquated in the sense that instead of, you know, you know, kind of the modern programming language like Python being taught, they were teaching Visual Basic and yeah, C and Java. So it wasn't as practical as I like to be and entrepreneurship really afforded me that. So upon graduation, I grabbed one of my friends from high school who had gone to Harvard and studied biology and was thinking about going to medical school, was doing kind of a post baccalaureate. And I said, hey, you know, we should move out to Silicon Valley. I've been reading this guy Paul Graham's blog and I think one of my friends gave me a copy of the four Hour Work Week and I was just kind of like, you know, this sounds like a really interesting opportunity to just be able to explore any intellectual discipline for as long as you need to basically do that until you can make money from that. So instead of one of the people that I emailed kind of when I was leading up to this kind of taking that leap was a guy named Ezra Callahan, who was the first employee at Facebook and we'd actually gone to high school together. I didn't know him at the time because he was a bit older, but I emailed him and kind of asked him like, hey, you know, I have this economics degree, I went to Northeastern. You know, it's an okay school, but it's not Harvard. Like I can't just go and jump into like an amazing career at Google or something really, really awesome because that's kind of like what I thought would be like, you know, amazing, which is wrong on so many levels, but. And would have been a very bad fit. But yeah, so he basically kind of broke this down for me that, you know, Facebook now is very different than the Facebook of the one that you read about and that these companies are very large and bureaucratic at this point. And if you're the type of person that wants to, you know, really move fast and learn a lot of different things and wear lots of different hats, that entrepreneurship might actually be the right path for you and you might not be able to, there might be no large entrepreneurial company that can satisfy that. So anyway, I grabbed David, my eventual co founder of Soylent, as well as co founder of this first company, and we moved out to Silicon Valley.

And he was your buddy that was at Harvard.

Yeah. Or went to Harvard. So we went to, so we actually went to preschool together and then we went to middle school and high school together and then we both went to college in Boston and were internship, were interning at startups both in kind of Cambridge area at the same time.

Got it.

Kind of sharing notes on like how to use Excel as interns and kind of, you know, just, just contribute something at these amorphous jobs at these startups. And then, so, and then he's been my business partner for the past like seven years basically.

So what was his take when you were like, hey, we should do this, we should move out, you know, and west coast and.

Yeah, so that's a really, really funny point because I, so I gave him this pitch and the pitch was terrible, embarrassing in hindsight and it didn't work. Okay. But essentially it was something based on like behavioral economics, which is what I was studying. It was going to be some sort of like tool to incentivize students to like track their homework and stuff. And it really just made no sense. But I told him and he was like, that's the best idea I've ever heard. We're going to be rich. You know, just immediately like so enthusiastic. And I'm really thankful because like it put us on this track.

Right.

Even though that idea was awful. So we, so we, so we started talking about this, having kind of like weekly calls and kind of doing like the very basic things like setting up a website. But I think what, what I'd really learned online was the importance of getting to a prototype stage as fast as possible. And there were lots of people that I'd interacted with in the entrepreneurship community in Boston that had ideas and then would go and look to find investors first or find employees first or kind of putting the cart before the horse instead of proving the value. So I started, I'd done some coding. My dad was a programmer as I mentioned, so I'd done some programming as a kid and then in the upper levels of economics classes there's some application of programming, but I'd never really kind of built a full application from start to finish. So I started doing that.

And did you, did you take classes for that or is it more self taught or.

Definitely self taught. I found some really, really good books online actually. Some. I've actually gotten to like meet a lot of those authors now and kind of like buy them a beer and say thanks. But yeah, so I built this like very, very Hacky, very like barely functional web application to kind of like do this. And then I told David, you know, like, hey, you're like the business guy on this one, so like you need to get people to use this. He went and like kind of browbeat a few people into like using this terrible piece of software that really provided no value. But, but it was like enough to prove that we could both actually build something functional and force people to use it, which is kind of that beginning cycle. So, so what, why was he, why.

Was he sort of the business guy? He was, he was the pre med guy, right? Or was that.

So the reason was. I mean first, it's just that we had this shared history. So I think that's super important in any co founder relationship is just to have a long standing understanding of how each other function. And that's served us super, super well for decades.

So you remember how you guys interacted in preschool and extrapolated that?

Yeah, I mean, I think it wasn't just preschool, but I think, you know, in middle school we'd do like our math homework together. And then in high school I was like a football player, he was a soccer player. So we were actually kind of like rivals in a way. But we, but we still, you know, like ran in the same social circles and I think most importantly we kind of had like a shared respect. And then. So I.

So were you guys out? Had you moved to Silicon Valley at this point or were you guys still in Boston?

So we were still, we were still in Boston, actually. I was in Boston. He was in LA doing a postbac at usc. And Northeastern is a five year program and he graduated from Harvard in four, so he was doing an extra year. And that's kind of another reason why he was like available. And a lot of our other friends who had done four year programs and gone straight into jobs were like, hey, like this banking thing or this consulting thing, like it's really not all it's cracked up to be. Right? So we kind of got a taste of that when we talked to them and we're like, oh, you're working really long hours, it's brutal. Maybe we should look at something different. So we, so we took that kind of, that prototype and. Oh yeah, back to the reason why he was like the business person. It was literally because we were. I had, I kind of identified education technology as kind of a trend at the time, which is like the complete wrong way to think about entrepreneurship. But it was kind of like, you know, people were talking about it on Twitter. And there were some big investments in it. So I was like, you know, maybe that's something I could do because I'm. All I've done is be educated. So at least I'm deeply intimate with that. And his parents, both of his parents were PhDs and professors. So I was like, okay, well, at least, like you have that perspective from your parents. Maybe if we need to network in. Your parents are very well networked in the, in kind of the academic community. Maybe if we need to sell this in through academics somehow. Didn't have any idea how you would sell this thing. But anyway, more importantly, he was a really good, just like good person to partner with. So.

So we take someone to sell it.

Yeah, exactly. So we take this prototype and we go out to Silicon Valley and we apply to Imagine K12, which is now part of Y Combinator. And Imagine K12 was interesting because they specifically focused on funding education technology. Okay. And so same format as yc, but they. So for the listeners that aren't familiar, it's a three month program. They give you. At that time, we got $17,000, which is not a lot of money to start a company, but it was enough for us coming straight out of college and having very low expenses. And then at the end, you have a demo day where they bring some investors and you're able to pitch your product, show the traction that you've gotten over the last three months, and then hopefully raise more money. So we go through this program, we pivot three or four times in, you know, in as many months. I'm coding like a whole new application every week, learning a ton. Right. But really, I mean, we didn't make a single dime.

Was it just the two of you?

Just the two of us. And we're running out of money. Right. And nobody wants to fund this because we have no users and our apps are broken. It makes no sense.

The sales guy's fault, obviously, because you built it.

I mean, it was flawless. I mean, we did have moments where we were like, well, we don't have anything to sell. So, David, you're going to read this book on C or you're going to learn how to program Code two, right? Yeah, exactly. And I think that wound up helping him later on because he then, you know, had a further understanding of how these systems work.

What year is this, by the way?

So this is 2012. Okay, so 2012, summer, we move out to Sunnyvale. Nothing really works with our first business, but when we're there, we're looking for places to live. And we go on. I want to say padmapper, which was like an app to help you search Craigslist by location. And they'd actually just kind of broken their Craigslist integration somehow, so only Airbnb listings were on there. And we found one that was by another Y Combinator company. And we were like, oh, this is perfect, because they're going to have, like, the same kind of schedule. They're going to understand that we're living, like, really cheaply. It's not going to. They're not going to ask us, like, do yard work or something. We're, like, staying in their nice house, right? So we move into this house and we do the program for there. They're building this wireless networking company, and they're four Georgia Tech engineers. Very different business, but similar schedule, similar kind of stage of life. You know, let's take this entrepreneurial chance. And out of those six people that became the Soylent founding team, because both of those ideas wound up failing, neither team raised any money after demo day. And then it became this discussion of, like, okay, well, you know, we don't have anything. No VC is going to fund this. Because one was a broken education technology app that was changing every week and didn't make any sense, and the other one was a very, very capital intensive, intensive new wireless network. Basically, the pitch was like, let's go put up cell phone towers everywhere. So, you know, you're talking about millions of dollars. These are guys straight out of college. It didn't make a lot of investments.

Did you guys hit it off immediately from just a chemistry perspective or.

Yeah, yeah, yeah, definitely. I mean, we. We pulled up in our. In our 1992 Ford Bronco or something like that, or Chevy Blazer. That was it. And we go inside, we meet. We meet with them, and they're like, okay, yeah. It's like, we have one room. You guys can both live there. It'll be like $1,000 a month or something, right? Like, okay, yeah, that's fine. So when can we move in? Now. So we went to our car and we got out our mattress and our box of books, and we moved in.

You were like. I was hoping you were gonna say that. We were just gonna squat.

Yeah.

Otherwise, we're sleeping in a Blazer.

Yeah, pretty much. Pretty much.

Oh, wow.

We didn't actually spend any nights in the car, but it was close.

So when did you guys all decide to wrap up your previous ventures? And something else.

So that's the interesting thing. There wasn't really this, like, hard and Fast line of like, this has failed this, the next thing will start. Because the pivots became kind of fluid towards the end and certain members of the team would, you know, there were two members who hadn't finished graduating from college and kind of went out to YC for the summer and were thinking like, okay, if it really takes off, I'll drop out, but if it doesn't, I'll go back to school. So it didn't. So they went back to school and then there were just a few of us. Right, so still four of you, you.

And David and the two Georgia Tech guys.

Yeah, yeah. And so we started just like building all sorts of new projects. Like we built like a T shirt website. We built an app that would kind of manage social media because we were like, okay, well if we do build something, how would we promote that? Well, maybe we should build some like social media automation tool. And like, Rob was building a virtual desktop system where you could log in and use like a faster computer essentially. And nothing was really working and the money's kind of like dwindling down. So we're just like, okay, well, you know, if we really like what we're doing, like this lifestyle, although it's like kind of embarrassing, our parents aren't exactly proud of it. You know, we're living in. At that point we moved to a. Was technically a one bedroom apartment in San Francisco because one of the other bedrooms didn't have a window. So it was closet, the glorified closet.

Right.

It was only fifteen hundred dollars a month. Oh, nice. For three people in San Francisco. Incredibly cheap. It was in the Tenderloin. Yeah. So we, so we, so we're like, you know, we're like, nothing's working, but we're getting way better at programming by this time. I'd actually.

You, David.

Yeah, yeah. So living in the, Living in the house in San Francisco, David actually broke off and went to do a PhD program at Caltech.

Oh, wow.

Okay. Because so, you know, nothing was working, right? It was like, okay, well like I should go back to like kind of the academic track.

Right.

Got a great opportunity at basically the best biotech PhD program in the country. So he goes and starts taking like, you know, classes to kind of prepare for that. It's me, Rob and Matt, two of the Georgia Tech guys.

Got it.

Living in San Francisco, just building apps, basically software. And at this point we're getting pretty good. I remember Matt specifically, he's a civil engineer by background. Really didn't do any coding on the other projects. And One day I just opened up the app and I was like, oh, all this looks really good. And he had just figured out front end coding really well. And Rob was obviously doing a whole bunch of really complicated backend stuff. And I was experimenting with machine learning at the time, which was. Which was kind of becoming a trend and, like, learning a lot of stuff about this. But, you know, we weren't at the stage of, like, being able to make a product that would get traction, but we were like, if we just keep doing this, maybe eventually something will just take and then we'll be able to grow from there. So really the game is like, let's not die. And this is something that they taught us at Y Combinator was, you know, like, just don't spend the money, and then you'll be in business. Because that's like the definition of what.

Business was, generating any revenue to even pay the $1,500 in rent.

So there's no revenue coming in, basically. So David and I's company had $17,000. We ran out of that in three months. So how'd you pay rent? The other company was in YC and had $170,000. So they had a little bit more and had been very, very good about not spending it. Had basically spent it on nothing but food and rent. And that's basically it. Right. We just weren't. We weren't going out. We weren't doing anything.

Going to ask you guys, were you guys doing anything outside of coding?

Just hanging on a Tenderloin.

This is a bunch of college guys. And, like, there were months when we wouldn't have a single beer, like, no alcohol, because we'd be like, there's nothing in the budget for that. Right. Doesn't make sense. And. And we. Yeah, I mean, we would just, like, eat, like, ramen and corn dogs. And you can kind of see where this is going. Right, right. You know, and then when we moved to San Francisco, we didn't have a car because there's no parking anywhere. So very hard to get to Costco and buy Ramen in bulk. We couldn't get things even delivered online because it would just get stolen off the front porch. And so we started thinking about, okay, well, how can we reduce this cost? So Rob, who'd been, I think, a little bit talking to David about biology, since that's David's background, Rob's a computer scientist by background, had kind of started reading more about biology and really thinking about the human body from a computer science perspective. And the way you think about Things in computer science is, you know, input and output functions. You know, I write a function that takes a number and it multiplies it, and you get this output. And the human body functions kind of the same way in the sense that you take certain ingredients, you put them into your body, and you produce energy, and that's calories, and we can measure that. And there are certain ingredients that your body needs for certain functions. And if you kind of break all that down, you come to a recommendation for what products and what ingredients you should be consuming. And that's how the FDA comes up with the Nutrition Facts Panel and the Recommended Daily Values. And the FDA actually partners with the Institute of Medicine and a number of other academic research groups to aggregate all of the research on zinc or copper or vitamin A or protein. And that's where that recommendation comes from. So there's actually a lot of interesting science there. And for Rob, you know, and I mean all of us, but especially Rob, you know, he's a. He's, you know, extremely interested in just reading scientific papers and getting to the bottom of, like, the hard science. And so Soylent was kind of a way to experiment with the science of human nutrition firsthand. You know, it's. You know, it's completely. To run a clinical study or something on a new product is extremely expensive. You have to hire all these people and have oversight. But to run something on yourself is free.

Right?

So when did that leap actually happen from coding to almost biohacking?

I guess so. So it was pretty, pretty quickly. So we. So summer of 2012, where we're in our respective Y Combinator programs, nothing's really working. Then there's kind of a real, like, trough of sorrow, which was actually pretty fun because we were building new things basically every day. And that was in the fall, winter. Then we go home for winter break, visit our families, come back to San Francisco. Now that's in January, and Rob starts experimenting with Soylent. He posted the first blog post kind of talking about his idea on, I think, Valentine's Day. So February 14th.

Okay.

And so it was pretty quickly, but it still took some time for us to really, you know, like, mothball all the other projects that we were working on. But it was pretty quick because as soon as that blog post went out, it got a lot of attention from the online kind of tech community, which is where we'd been posting everything else. But the tech community was inundated with, oh, there's a new application for this. There's a new app for that, which is what we had been doing.

Right.

But they had nothing around food or health or nutrition.

Was there a reason why you guys decided to post on that type of platform versus, like a wellness platform or.

Yeah. So, I mean, I think those are your people. Yeah, those are our people. Yeah. It was just extremely natural that that's where we'd want feedback from.

Right.

And that's where we would post things. So Rob had actually written other posts about different kind of programming concepts and different analyses, and we'd all kind of blogged and written, and it was just kind of a natural thing. In the tech community, when you write something posted on Hacker News, which is why Combinator's forum. And so that was just kind of the natural way to share. Yeah, exactly. Place to share that. And. And then from there, you know, there were a lot of comments and a lot of people, you know, asking questions and it. And it became kind of an interesting thing. And then, most importantly, Rob had been so dedicated to this that he actually lived on the initial formula for Soylent for an entire month straight.

Wow.

With nothing else.

At this point, when he was posting, was it called Soylent or was it just an idea at the point, or.

That's a good question. I think he had the name by the time he wrote. Okay. By the time he wrote the blog post. But I remember we were meeting with a friend and kind of going to cook some dinner. And he was like, no, I'm not going to have dinner. And Matt was like, oh, you haven't heard, like, what Rob's doing? And I was like, oh, no, I've just been coding the last week. And I thought he was doing the same thing. He's like, no, he's on this liquid diet. I was like, why are you on a liquid diet? It doesn't matter what we look like. It matters how good our code is. And he was like, no, we don't go anywhere anyways.

We're just sitting in this place box.

Pretty much super dark here.

It's like, yeah, yeah, no, pretty much. But we. But yeah, I mean, then he started talking about, like, well, you know, if you're healthy, you'll actually be, you know, more capable of writing better software.

Right.

You know, also it will be saving money and time. And it made a lot of sense like, that, you know, you'd actually be more productive. And this is obvious.

Was he just cobbling ingredients together on his own to make the first one? And.

Yeah. So he had a spreadsheet where he kind of looked at every single nutrient that the body needs. So that's everything that you're. That's all of your macro ingredients, and then your micronutrients, all your vitamins and minerals. And then he looked at. Okay, how would I get each one of those?

So you worked backwards, basically.

Basically, yeah. And it becomes kind of this, like, convex optimization problem where you're iterating over the variety of ingredients until you find something that's efficient. And. And then there are other parameters that you put in there, like price and calories, and you try and get to something.

Oh, that's interesting. So he would actually put that in as well, into this.

Okay. Yeah, exactly. And then order, like, very large bags of the stuff on Amazon or on Alibaba. They would arrive, and then he'd mix it together.

He was doing this himself. He wasn't working with, like, a food scientist.

Nothing. We didn't even. There was no concept of that. Like, we didn't know that they're formulation houses or flavor houses.

We didn't know that.

They're like, we were so naive to this business. It's a blend software. Yeah. So the. So, yeah, he would. He would mix it up. I don't even know. I think he would just stir it. Yeah.

Like, there was no blender.

There was no blender for a while. We eventually got blenders.

So were you. Did you start taking these shakes at the time? This is just Rob's thing.

So this is pretty much just Rob's thing. And. And I'm kind of confused by it. But then I remember we were at this dinner, and. And he was like, no, I'm not gonna have anything here. I was like, why? Like, this food's free.

Not only that. You should eat more of it and box it up.

But he was like, no. Like, I'm really like, I'm doing this experiment. And I was like, wow, okay. And I was like, do you have a name for it? And he was like, I'm calling it Soylent. And I immediately got the reference. And I was like, we should sell this. And I just immediately was like, okay, this is a product now. Because before that, it was just like. It was this wacky experiment. But as soon as he had that brand, I just. I got it all. It all kind of clicked in my mind. And I was like, wow, this is like, really? Really. This is. This is really cool and really interesting. And I could see other people doing this. And then. I don't know.

But did you see more? So when you saw the brand, or in your mind at least, did you have, like, an idea of what the tribe for that brand would be. Would it be sort of more people like you? Would it be.

Yeah, I mean, definitely, definitely like us, you know, just like, like people that were aware of science fiction and that was, you know, within the tech community, community, very popular. And I just really like that idea of injecting this ironic joke into something as kind of sacrosanct as food. And it's just something that I'd never heard of being done before, embedding what is essentially a cannibalism joke into the core idea of a food product. So that was very funny and just controversial to me. And I thought that was very exciting. And then. Yeah, so we started trying it more broadly and there was a little bit of a ritual around kind of like everyone has to go through the experience of actually making it from scratch, because that was kind of important to really understand the process that went into this, to really kind of build your own formula and think about how that would, how you would kind of express yourself in that way. And then we started all kind of slowly working together on a single formula that could really be like the Soylent formula.

So it was. Did it end up being sort of a group effort into coming up with sort of the final final, or was it.

Yeah, yeah, yeah, yeah, definitely. So, I mean, the final final is, you know, multi year story because the, the company was built on these software development principles of iteration. So the idea that 1.0 was a.

Lot, it can always get better.

But we very quickly, I think a month later launched 1.1 and then launched 1.2.

So what was the timing at this point?

Sure, sure. So we're talking about February of 2013 at this point.

And was David back in the mix at this point?

So Rob went to David and started talking to him about, you know, like what, like how he could help, how he could be involved. And we, but we were still kind of like, okay, we don't really know where this is going. More importantly, the press started picking up on this story of this crazy guy in Silicon Valley who had lived on this weird thing for 30 days straight. And the hook for this was how I, how I live, how I stopped eating food. Right, for 30 days, which is very sensational and very. And very kind of thought provoking and also very offensive to a lot of people.

Were you guys, were you working with a PR agency or was this completely organic?

Find out about this guy.

Yeah, so because the posts were getting traction and there were actually a series of posts announcing like the formula and sharing more details and sharing blood work and kind of all the different data that Rob had collected and analyzed because those posts were performing well on Hacker News, I think then press started reading about it and thinking that they wanted to write. We certainly didn't have a PR agency. We didn't have strong. We didn't have any outstanding relationships with reporters. It was more. They were coming inbound. And then it just kind of naturally rose up the chain. So from Business Insider, it went to Vice, and then it went to an interview, and then it went to the BBC, and then it just kept going. Because it was such a interesting story about, you know, like somebody developing a food product for essentially like all the wrong reasons in traditional sense.

Right.

Or it was turning it on its head for sure.

Yeah, turning it on its head is definitely the right thing. So the next few months, we're really thinking about how to just how to satisfy the demand. We weren't even really thinking about it as, you know, a business or thinking, you know, we were kind of actively part of this entrepreneurial community and running this business, but we weren't really. We were more thinking about just like, wow, people want this and that's awesome. Let's help them get it. So, I mean, Rob made some, like, of the first batches and delivered them by hand. Right. And. Yeah.

And like, was there a package, like. Or was this like, like a nondescript.

Yeah, sometimes it would just be a Ziploc bag. And then we. And then we.

In powder format or.

Yeah, this is all that doesn't look suspicious at all.

Yeah. And flying with it was very. Exactly questionable. And. And then from there we, you know, started setting up kind of like a beta testing facility with a few friends to, to, you know, to do smaller, like a beta program. Right. And we scaled that to, you know, like a few hundred people. And then we learned more about, like, the packaging and the various, like, you know, we'd be able to test like, the flavors and the. And the different ingredients and get a feel for how people were consuming it. And that's kind of where we came up with the idea to, you know, that this should be like a subscription product that should be kind of like a fast moving consumer. Good.

So how are you getting feedback? Because it sounds like you kept improving. It was continuous improvement.

Yeah. So one of the first things that Rob did, I mean, he was getting a ton of emails because on the website it was basically just his email. And then he put up a feedback form. And the feedback form was extremely long and very, very interesting in the sense of like, it was. The way it gauged a potential customer's interest in the product was very deep. Like, we asked questions like, you know, would you participate in getting your blood work done and sending us the results, or would you share, like, your 23andMe data with us?

Pretty invasive. If you want, you got to opt in to really do it.

I mean, we never went that route and never needed that data just for massive customers. But the fact that customers were willing to give that to us and wanted to be on the journey that much and wanted to help make a better product really told us a lot about the dedication. And this was just night and day from anything that we'd done previously. So we put up a website that was just collecting emails, terribly designed, no marketing or branding whatsoever. And we'd get 10,000 emails just organically. Wow. And then we put up a survey and 10,000 people would respond to it. So it was just like, okay, this is really, really a thing. Right. So then we started thinking about how to, how to really take this to market. And, you know, we didn't have, you know, enough money to really go and produce it anywhere. So we knew that we wanted to gauge, you know, the level of interest and the level of, like, real interest. So that's where Kickstarter kind of came to mind. So we started trying to go on Kickstarter, but at the time, Kickstarter didn't allow any food products on the platform. They've since changed this and there's actually been spin off Soylent products. Like, somebody launched, I'm making Soylent brownies on Kickstarter. And you're like, how are they making Soylent brownies when they're just like, when we couldn't get on there, Right. But we wound up partnering with this other startup who was building kind of a crowdfunding platform at the time. They really helped us out and put together this crowdfunding platform. And we were agonizing over how much to. How much to raise, because if we put it at $10,000 and only $9,000 shows up, story's over. And it's like we have this thing and it feels like this could be something. And we don't want to go back to just the drawing board. We finally have this thing.

Keep up the momentum.

Yeah. And Rob was just so optimistic because, you know, he'd been talking to all these customers and really understood. And I think it for me, you know, I'm just a little bit more conservative in general. I was, I was hesitant. But we wound up setting it at $100,000, which is a lot for, for a crowdfunding campaign, and we wound up hitting that in an hour.

Oh, wow.

I think. Yeah, I think it was like an hour.

Was that as was that? I mean, you guys are agonizing over it. So is that a bit of a surprise that it was going to. That it was that successful?

Yeah, definitely. Definitely a surprise to me. I mean, I think now that I've talked to a lot of companies and I understand just kind of benchmarks for, you know, email open rates and conversion metrics. Like I could have backed into that.

Now, but not many people ask for blood tests and things like that.

Yeah, exactly. But like, if a company came to me with the same data, I would be able to extrapolate much stronger. But we had no data points. We had no idea. So. And then we went on to raise $800,000 in a month and I think 3 million over the year.

On the same platform.

On the same platform, which I think is still the largest food crowdfunding project.

It's almost 4 million in total.

No, 3 million in total.

Got it. Okay.

Yeah. And then that really helped us get validation of the market, which helped us raise a seed round. So some angels from Y Combinator from that network came in and then Andreessen Horowitz put in a million dollars and helped us kind of like close out that round so that we weren't spending those pre order dollars on salaries.

So at this point, you're still. People are pre order is product being shipped at all?

I mean, very, very limited quantities of a beta product. We're talking about like 100 people that are really just testers. But we know that for the, for the, for the first run at this point we've, you know, we've networked with people who are more, you know, versed in the space. Right. So David had a connection to he. At this point, he's kind of our, you know, he wasn't full time yet, but he was kind of like business development kind of helping us with just kind of being that business person and networking. So he met the, this former CEO of Muscle Milk who was acutely aware of what it takes to manufacture a powder. And he had introduced us to some people and we kind of understood that, you know, we would need this large, like the idea of a minimum order quantity and, you know, a need to have a set amount of money to go to a manufacturer and get the first run done. And so he. So we, now that we had this money, you know, we wanted to Go to, go to, you know, get it to scale. Yeah, get it.

Be able to manufacture it.

Yeah. And really make sure that we were following good manufacturing practices, having an fda, usda.

So this way Rob's not stirring it.

And. Yeah. And then the demand, you know, we were talking about I think tens of thousands of people. So you know, we couldn't scale up that facility.

What's Matt doing at this point?

So Matt is actually running our operations group. So he's really focused on the manufacturing. David basically put him in touch and you know, at the early stages everyone's kind of doing everything and there's a lot of like decision by committee and whatnot. But I think the real focus is Rob focusing with PR because just bigger and bigger outlets would come every week. And so he was doing a great job of that as well as fundraising. And then also the formula, like he was really, really deep in and really had some convictions about the formula that was really beneficial. And then David was kind of exploring different sales channels as well as business development, thinking about how we would. And then just kind of filling in on formulation and manufacturing. And then I was doing all like the website stuff, anything that required like data or analytics, so everything from like accounting to our actual e commerce site. And then Matt was really focused on operations.

Was there anyone who was more sort of brand focused or thinking about sort.

Of what was this going to look.

Like and what emotion it was supposed to evoke and all that stuff.

So now I've worked with great agencies and I'm familiar with the process and we did not follow any of that and that kind of worked to our advantage because we, we had this like you know, techie, scrappy, anti brand that now companies like Brandless are trying to kind of bake in a little bit. Right. I think Red Antler's done a little bit of this with kind of minimalizing or minimizing some of the, some of the brand traits. So it feels a little bit less in your face. But we were just doing that because we, we came from like the Y Combinator school of of like thought is focus on your product. Focus on your product. Right. And we didn't think of a brand as part of the product. It of course is, but we were really thinking of let's just make the best formula possible. Let's just make the best product possible. Let's make it cheap, let's make it healthy and convenient and let's, let's make a great customer experience which in itself is a brand new. But yeah, so we did Work with, like, a. An artist in New York to get a logo done. And we did a brand book eventually, but it was pretty. It was pretty light.

But you're in. So you're in 2014 now at this point, right?

So, yeah. So raise your seed round. Yes, we raise our seed round towards the end of 2013, and we're going into manufacturing in 2014. So we shipped the first package, I think, May 1st of 2014. Okay. And we were very, very fortunate to be able to time that up, just luckily with a New Yorker story that was actually on the COVID which was insane. Like, you can't. You can't buy those stories. It's like, there's no PR firm that can just put you in there.

Well, at this point, did you have a PR firm or still no.

Still no.

That's impressive.

Yeah, people reach out to Rob.

Yeah, people reach out to Rob. And I mean, Rob is just. He's a very, very interesting person to talk to. And he just. He's incredibly. Just interested. And there's a great quote about, like, if you want to be interesting, be interested. And he will just. He'll just research and research on any topic. So that's just like a reporter's dream. Right. And there's just no filter.

Right.

Like, there were reporters that would spend whole weeks with us. The New Yorker reporter literally went to the gym with us at one point. Oh, wow. Just to, like, kind of understand our routines. Right. She also came to what we. What we called at the time a journal club, where we would have PhDs that were our friends and a few that became our business partners. In the future, we would have them come and everyone would read Nature and pick an article and do their best to understand it and then come and kind of summarize it and then ask questions, and everyone would kind of, like, share. And sometimes the conversation would go into, like, the, you know, like, the business implications of it. But a lot of times we would just kind of just drill the PhDs to explain to us what's going on with, like, topics like crispr, which are now very popular, and gene editing and whatnot. So, yeah, that. I think that authenticity and that transparency really was refreshing to these reporters. So Rob did a great job of that. And that piece really launched with us as, like, now it's available to ship. And so we had put up at that point, we'd launched a website that could take kind of orders that didn't look like pre orders anymore. They were sometimes delayed still because of manufacturing constraints. But for the most Part, they were. For the most part, we would try and shut them as fast as possible. And then we'd also allow people to subscribe, which was really important to the business and revenue projections, as well as just giving the customers an even more convenient way to kind of optimize or streamline their diets. And then once the New Yorker piece launched, then Stephen Colbert called and wanted to have Robin the Colbert Report, which is, you know, obviously he said no.

He's like, nah, I got bigger things to do.

It was very. It was just an amazing experience. So we all went out to New York and got. And Rob did that show. And I think. I can't, like, absolutely confirm this, but I'm pretty sure that our site got so much traffic after that, and we were on Shopify at the time. I'm pretty sure that we brought down all of Shopify for at least. For at least, like, a few minutes, while their team, like, kind of, like, got. Yeah, they were like.

I'm sure they're dealing with a spike or something like that.

Exactly. But, like, because of the way Shopify is designed, everything went down, which is just like, you know, one of those, like, crazy startup moments.

And so how many flavors were you sort of selling? Just one.

One sku. And, I mean, that was a great decision in the sense of being able to streamline, but it was also just part of the mission of, you know, what is the most convenient thing? Like, just have one product. You can consume this and all the time. Yeah, exactly. And also, we weren't trying to create something that was, like, this insane flavor. We were very interested in creating something that you could have every day and never get sick of. So that meant a little bit of a learning curve. And a lot of the early reviews were negative around the flavor, but the people that really, you know, figured out how to work it into their life, I think got, you know, they. You know, that's not a flavor that they get sick of.

So how did it scale up from there? Did you start building a team?

Yeah, yeah. So at that point, we probably had, you know, a few people in customer support. We'd actually hired our first customer support person, who's a friend who kind of grew into, you know, running a lot of our marketing as well. David took over a lot of marketing. We were actually still kind of distributed between San Francisco and Los Angeles because David had moved down here for that PhD program. Julio, who is our first employee. And what's Julio do? So he eventually became the creative director and focused on kind of brand he Ran our Instagram in some really interesting ways early on and did a lot of photography for us.

One quick question, because you guys are so product focused, how did you guys come to the decision that you needed a creative director?

So Julio was escalated to creative director, I want to say, like a year or two later. Okay. But, yeah, I think. I think it was just the idea that, you know, once we had product, at first, I thought so at first, basically our entire marketing strategy was Rob's blog, and he would write about his experiences on Soylent and he would do kind of other kind of interesting biohacking experiments, and those would get a lot of traction and sometimes they would generate press articles, but that wasn't really like a sustainable model of growth. But from my perspective, I'd never seen brands on Instagram, really. And that wasn't really a thing at the time because we're still talking about, like 2013. But Julio, you know, had. He's a photographer by kind of training and studied art. And he, you know, he was like, no, we have a physical product. Of course this is going to be huge on Instagram. Like, once we have a product to shoot. We didn't have a product at that time, so we weren't really doing anything. He was actually doing a very interesting series of these kind of striking photographs of people eating, like, really disgusting meals in awkward places. So you'd see somebody eating fast food, like, outside of their car, like, spilling everything, and it kind of showed that the whole thesis was to show that food is not always Thanksgiving. It's not always all your best friends and your family eating a perfectly huge meal. And it's enjoyable. And it's wine, song and this other stuff. So, you know, sometimes there are. There's just those meals that are terrible and, like, let's get rid of those. So I think he did a really good job with having no product still. I mean, we got like press articles about just our Instagram because it was, like, so different from what was happening. So. So, yeah, and then once, once we evolved and started generating more content for, you know, all the social platforms, it made really. It made sense to have somebody with a really great artistic eye, you know, overseeing all of that. But, yeah, so then post. Post Colbert, you know, we have a flood of. Of subscriptions now, and that gives us great kind of revenue clarity. We can, you know, really reliably scale up our manufacturing, and that's when we raise our Series A. So we. So Andreessen had led the seed, so it was a very logical process to do The Series A. And we wound up raising $20 million from Andreessen and got a few other great partners in. And then we started really thinking about how we're going to build out the company. So we got an office in downtown la. We hired, you know, started hiring people, you know, at pay grades above, like customer service, and started really thinking about our 2.0, which was going to be a Ready to Drink product, which had been in our mind for a while, since convenience was so important. The idea of removing the mixing step would, you know, save people minutes, which was important from our kind of brand promise. So we started working on that. But we recognized that the investment in a Ready to Drink product was not going to be minimal. And also the aseptic lines are very hard to come by. And it was going to take a lot of. Of just initial order, but that wound up working extremely well. And when we. When we wound up scaling up, we were, you know, I think there's always a little bit of anxiety about how you.

Changing a format.

Yeah. Changing a format and just offering like, is it going to be. Is it going to cannibalize a lot? But it wound up expanding, you know, and we wound up doing really well off of that, which was. Which was very. Yeah.

What time period is this at the.

So we launched the. So we launched the Ready to Drink product, I think in 2015 now. So basically every year is like a new. A new story arc. We go from pre orders, we go from basically suffering, getting nothing in 2012 to pre orders in 2013, to shipping powder in 2014, to shipping ready to drink in 2015, and then eventually line extensions and flavor extensions in the form of our coffeest product, which is a caffeinated line, and then other flavors and chocolate and cacao and a few others.

So what were the dynamics at the point where you're releasing the Ready to Drink? Did everybody have a more defined role at that point between the co founders?

Yeah, yeah. So everyone had essentially a division under them. Rob was running product and as well as being CEO and still doing all.

So he was. He'd be the ultimate.

But he's also head of product. Okay. And oversees a team there. And I mean, I think that was a really great pattern because, you know, he had the strongest opinions and it makes sense that you need someone with that product focus in that role. So I think that was a really great fit. So David's running marketing, Matt's running operations, supply chain, and I'm running technology. And Yeah, I mean, I think at various points we're talking about five to 10 employees per division, and the company grows over the course of Series a from maybe 10 people to 35, 40. Yeah, it's really tricky, especially for. I think it's almost harder for just the company as a whole, as opposed to the. The actual founders, because the founders are. They're always going to be founders, which is the kind of special title, Right, Right. Whereas. Whereas if you're, you know, the first employee, right. And then all of a sudden you're. You're not reporting to the founder because there's somebody in between you, and they want things done, you know, a little bit more professionally. It really can change your quality of life. So I think handling that in a humane and empathetic way is really important. This was a time. Time when essentially, yeah, all four of the co founders were on the board of the company. So it really just became like, let's think about this as a board and let's think about this as shareholders, and let's use the right tool for the job to achieve this mission. So, you know, we have this mission at Soylent of, you know, improving access to healthy quality, nutrition affordably, and what's the best way to do that? Well, it's to scale up operations and provide more value to the customer and have a clear and more communicative brand and execute and not waste money on projects that don't go anywhere. So what's the best way to do that? Well, partnering with really experienced people is a big part of that. So I think there was a lot of. There was a lot of uncertainty from a personal, professional trajectory, but in terms of understanding what's best for the company, company, I think we were all pretty aligned that we were, you know, excited that this was going to make our thing stronger, that, you know, so is now executing in retail in a way that the founders, the four founders who come from Silicon Valley, have no sales experience, like, could never have achieved. And everything about consumer packaged goods is availability. And especially with a convenience product like Soylent, like, being ubiquitous is so important. And that was something that we were really, really aligned around, was, let's get everywhere. Because just the fact that we couldn't get it in airports was frustrating to us. And we were like, there's no amount of web technology or innovation that we can do to, like, just make it get through tsa. That's not a thing that can happen. But if we get a great salesperson and a great organization that knows how to sell into these organizations, and now it's available at LaGuardia so, like, I see the way that they've and the way that this new executive team has kind of executed as being like, just phenomenal in terms of filling the gaps that we never could and building on the foundation that we built. Like, the brand really hasn't, you know, it's evolved only in positive ways. So I've been super happy.

Right after the break, we'll talk more with our guest, Soylent co founder and former CTO John Coogan.

Unfinished Biz is the VMG Partners production. You can catch up on all of our episodes@finfish.com and chat with us on Twitter nfinbiz. Subscribe to our podcast for free on itunes or any podcast app of your choice. If you like the show, leave us a review. We love Five stars. And now back to our episode with Soylent co founder John Coogan. What's next for you as an entrepreneur?

Yeah, so I'm actually starting another company with David, co founder of Soylent and first business partner.

Back to the education in preschool, right?

Definitely not education. Yeah, definitely not. Definitely not education. Yeah. I mean, we're taking a lot of our learnings from consumer packaged goods and trying to apply them to new categories that are, you know, still kind of health focused. But I really like the. There are a few kind of trends, so I can't actually announce the product that we're working on yet.

But it's a product.

Is it like a tangible.

Yeah, yeah. Okay. Yeah, it's very, it's very much similar.

A consumable product.

Yeah, but the, Yeah, I mean, some of the kind of like the, the trends that I like are kind of anti trends. Like in terms of Soylent, like the competitor, I guess would be like an insurer, which is like a medical product. It's a product that people use in, in hospitals. It's not a brand. Right. And so the, the entire category was kind of like dead. We didn't even know that the category existed versus figuring out like, okay, this ingredient is on trend and let me make it organic and this and that and combined like a whole spreadsheet of trends together to create this thing that came out directly of a boardroom. So I think that we're kind of trying to take that similar approach of, okay, what problem can we solve that we ourselves have, but is actually being underserved by the market right now and there are no established brands and there is no real competition. So that's kind of like how we're thinking about that.

Well, there's no doubt that Soylent's part of pop culture at this point. I mean, they're in the Colbert Report, what cover of the New Yorker, opening credits of Silicon Valley. I mean, that's not too shabby. It's interesting that they were able to do all of that when their company culture and structure were changing so much.

I mean, speaking of changing, I mean, I think one of the most interesting things about it is that they had the self awareness to step back as a founding group. At the end of the day, they're really tech entrepreneurs that stumbled into a CPG brand. But they were smart enough to be able to recognize that and bring in some very traditional CPG talent to take the company into this next phase. For example, this Walmart test, that's big time for them. It really proves is it going to be a niche Silicon Valley brand or is it something that go for the masses? But related to that, I mean, John has a little more time on his hands to pursue some of these hobbies now that he's taking a step back. And you'll hear more from him other than starting other entrepreneurial ventures. What do you do for fun?

Oh, yeah. So there's a few things I. Getting married. I'm getting married in a month, which I'm very excited about. I also have a 160 pound Newfoundland dog.

Oh, nice.

Who's very fun to walk and hang out with.

Powered by Soylent.

The pet line's coming up. Yeah, the dog equivalent.

And we guessed the new business.

Yeah, right there. Done.

Yeah. And I'm trying to think of what else. I play competitive video games a lot. I'm very much into kind of that scene.

What game do you compete with?

Well, I used to play Counter Strike a lot and then now it's a lot of player unknown Battlegrounds or Fortnite is kind of like the more popular version. And then I also really like creating kind of 3D animations in a program called Cinema4D. That's pretty fun. It's like what they use for visual effects in movies, but it can be used for kind of all sorts of stuff. So I like to use that for a lot of just creating brand assets. But it's also just kind of a hobby of mine. I think that's. That's probably pretty much it. I scuba dive a lot.

Damn, you're an interesting guy.

I know.

That's all I gotta say. I want to be you.

Thank you. I want to be you.

All right, John Coogan, you ready for our signature game rapid fire 60 seconds? Yeah, I'm ready to Go.

All right. The first thing you read every day is Twitter.

What's your favorite movie?

Pacific Rim.

Karaoke song you're most likely to belt out.

Hip to Be Square.

Your hometown is famous for the Rose Bowl.

What's your guilty pleasure?

Video games.

First car you ever drove.

Ford Explorer.

Runner up. Name for your business that didn't make the cut.

People chow, I think, or something. Bachelor Chow. Do you recline on airplanes? Yes, and I upgrade to extra legroom because I'm six. Eight. Yeah.

If you could drink one thing for the rest of your life besides water, what do you choose?

Soylent. There you go.

What was your last New Year's resolution?

I had, like 12, but it was. I did a book a week. I rode my bike a bunch, went to the gym a lot.

If you were stranded on an island, you could only bring one thing. What would it be?

A phone.

Last hashtag you used?

VMGSymposium. Nice.

Nice. Where's the next place you'd like to travel?

Australia.

If a movie was made of your life, you'd be played by someone tall.

Maybe the guy from Silicon Valley, the nerdy guy.

Talent you don't have, but wish you did.

I wish I was better at music.

Your most hated food?

Mushrooms.

If you could be any pro athlete, who would you be?

Ninja.

Well, our last question for other aspiring entrepreneurs. What advice do you have for them?

That's a good question. I mean, I think the first thing is to focus on something that. On just building something that people want. You know, don't get caught up in the business model or fundraising or meeting the right people or doing any of that. Until you really understand that, you know, you're going to be able to. You're going to be responsible for creating something. And I think if you go into it with the mindset of, like, there's a gap in the market and let me figure out something, it's going to be a lot harder than if you're just like, I really enjoy making something tangible and I made something that's better and I love it and I use it, so I'm going to share it with the world.

Well, John Coogan, co founder of Bachelor Chow, AKA Soylent. Thanks for joining us.

I think that was Paul Graham that said bachelor Chow. That's great.

You've been listening to Unfinished Biz. I'm Wayne.

And I'm Robin. We'll be back on the Next Episode with Nick Green, co founder and CEO of Thrive Market, a wholesale buying club online offering organic product at 25 to 50% off through a membership model, which also sponsors a membership for someone who can't afford it. But as Nick learned, even the best ideas also need the best technology under the hood or there's no actual product.

It's a total rollercoaster. Like failing to build the tech platform, wasting hundreds of thousand dollars of our own money, failing to fundraise. As a co founder, you're all in on something, and every one of those things you take personally.

That's next time on Unfinished Biz. Unfinished Biz is a VMG Partners production. You can subscribe to our show for free in any podcast app of your choice. Send us questions, comments and feedback on Twitter at unfin Underscore Biz and visit us at unfinishedbiz.

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