Sam McBride: "Building RXBAR" | Talks at Google

Sam McBride:

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But. We would love to know a little bit more about you before we get into our X story so talk, to us a little bit about where. Was Sam before our X bar and how did you land at our X bar yeah, so. I grew up in the western suburbs outside Chicago, ever. Since I was a kid I loved, business. And when. I graduated from college the best way to pursue that was through finance and so I started, my career in finance doing healthcare M&A and pretty. Quickly realized I didn't want to stay in finance, it just, wasn't, I had, no edge I wasn't the best finance, person, it just wasn't the right path for me I learned, that very fast, and. So. I call the guy who'd been a mentor for me and he, had found a home, security business to buy and it was a consumer, business direct-to-consumer. Home security concept. Basically. A hundred percent digital and, so. His interesting concept, and that was my first, foray. Into operating. And really entrepreneurship. So we, bought a very small company west of Topeka and, Kansas. Rebuilt. It as a completely, new concept called live watch home security and had, a great, successful. Run there. Ultimately. That company was acquired by a strategic, buyer and I. Thought a lot of the a, lot of the concepts we'd used at live watch I thought actually could apply. Well to a food company and Jared. And Peter who we'll talk about they had founded our X bar, and. So, that's how the conversation started and that's how I ended up at our X bar was sort of talking through the. Connection, between how we built a home security business, it actually applied to a food. Company, so. I think we'll get into that but yeah absolutely so I, don't know if all of you know this but our X bar is more than just bars right so they have grown to be an international company the app right in the United States Canada. And, the UK so they've got the bars they've got nut butters they also have the, arc skid line so if you haven't had an opportunity you, probably, do on your chairs but they're also in a store near you so. All right so. So. You. Have this prior experience, and they start talking to you so what was your first job did. You even as an HR person did you have a job description that you agreed to or yeah. So our first, office was actually down the street and this was before you all were here so. This. Is like maybe 10 blocks west of here which i think is technically, West Loop but it's not like the cool part of West Loop that you guys work in and. We. Worked out of our warehouse so, we were surrounded by pallets, it. Was Peter. Who's our CEO Jared who's Peters co-founder, myself.

And Jesse Stewart and Jesse. Is also, a childhood friend of ours so all four of us have known each other since grade school and. At. That point everyone's. In sales because, the. Only thing you're doing is thinking about how you get the brand out there and how you get the product in people's hands everyone's. Sort of in marketing but marketing is really not. It's. Not a conceptual, thing it's really fundamentally. To drive sales it's like really cause and effect kind of marketing not like brand building stuff and. Then. Peter. And Jared had a lot of familiarity, with the supply, chain manufacturing. Process because they built, the business manufacturing. By hand so long, answer is not, really, when, there were four of us everyone kind of did a bit of everything. And the, business was very simple, it was make. Bars. And, sell. Bars, and. That was basically it and then, like in between there hopefully, there's enough cash to, buy. Enough raw materials, to make more bars the next time but, that was essentially, the business and it was it was really, not much more complex than that at the time so. Jack-of-all-trades probably, would have enough the top of that javascript probably everyone's, yeah. So. You talked about it started by hand a little bit more about the innovation. By hand part yeah yeah so. So. Peters, family's in the food space and so he had deep. Intimacy with the food just growing, up with family, in the food business and. The. Basically. What Jared, and Peter saw, in the market was that there. Were clean, bars, but, there really want clean protein, bars. The question that they asked and the problem that they solved with with, our X bar was, why. Isn't there a protein, bar that's clean and so. The. Original, way that they manufactured. Was taking. A 5, quart mixer like you have at your house putting. In dates at, the time it was half a fig some. Egg white, and. Then depending on the flavor you, would have almonds, and blueberries, or you might have coconut, or some cacao, all. The chocolate flavors used to be called cacao but, no one knew what cacao was so. We started calling them chocolate people like what's cook OA oh my god this is not good. But. So they they manufacture, them by hand hand press them into bar molds put them into resealable, pouches and, then. Initially. Drove them around across with gyms in the area and then, later, in a next, version the business actually shipped, some product, around, the country to different CrossFit. Gyms mostly, and then direct to people's homes but the, business, was built in its infancy, on two. Guys hand. Forming, with their thumbs. Protein. Bars wow, that. Brings, some some interesting pictures to light and surprise some trial and error happened, in that kitchen yes that kitchen could talk yeah mrs. ray hall was I still. Call her mrs. ray Hall cos. She. Was the first person fired from the company she, was, putting front. Labels, on both sides, so. But. Yeah a lot of trial. It's. Fun, to see how smile started so, you, know one of the biggest things that, we the Peter AHA so what the founder, talked about an article, recently was Forbes was just of an naysayers all the challenges and people all the doubters so you, know you are just coming off of a pretty successful experience. Prior to joining rx do you recall kind of like how did you guys get over those hurdles how did you get over that hurdle to, join the organization yeah. So it's actually become cuz so, my first experience operating, in home security, and the. Home security company, was what, like 50. Miles maybe, 100 miles west of Topeka in. Kansas, so how, many people have been a hundred miles west of Topeka back, in Kansas, yeah okay so and out of time, so the small you know rural, area and I, still, remember my wife was working for a private equity firm, at the time and I would go to their meetings and you know private equity people are pretty cool and so. I would tell them like yeah I sell home security systems, from Topeka, and, they're just like wow like who is this loser. But. It actually, has become a filter, for me so I think any kind of early-stage company, or product if, it's not met with enough people that don't get it or if, it's not like kind.

Of Uncomfortable for, you it a little bit embarrassing, to explain what you're doing probably, too many people are already doing it and so, when, I think about live.watch that was for sure true and the same thing was true in a different way for our X bar we're. Number. One the first reaction, is like why do we need another bar, there's, hundreds. Of bars, and. Then and then from there, once. You explain like hey there actually is a product, position here, then it's like okay how are you can actually execute, none, of you are from food you don't know what you're doing, and. Then when it came to the packaging, this is my favorite, one so the packaging is what were famous for now you know we get we weren't awards for it people are like oh my god the packaging, is genius and, when, we first did the reheating, them in the old packaging, there's probably like a couple yeah. Yeah. Well the reseal around first and there's a second version but if you look them up online, they're not good looking and. It, was only because we were marketing to a very very specific, niche that it worked but. When we made that change we showed people the new packaging, that you see today. Everyone. Everyone. Was like this is the worst thing I've ever seen like, this is terrible we, even showed it to buyer retail, buyers who we were ultimately gonna have to sell to and they. Were like we. Will never like let me I can't be clear about this we will not take your product if. It looks like this and, but. So it's just another example where, we were, so confident, in it because we were so close to the consumer, and we. Were selling direct consumer, we were taking their phone calls answering, their emails when they had problems we were so, tightly, connected to consumer, that, we knew. We. Knew that it would resin we knew at work so even in the face of people literally saying like I'll never buy this product from you, we. Still did it but I think it goes to the theme of like people, who are doubters sometimes, that can actually be a good signal, and. So how did you win, the hearts and minds of them of the retailers and eventually clearly, have bought your bars so, ultimately the, retailers. Are servicing, their customers. And so, if there's enough customer, demand they're. Gonna respond to it and and we knew our customers, intimately. And when we think of customers we think of individual, people not retailers, I mean retailers are our customers too but it really the consumer, and.

So The consumer, responded, so, well to the product, and our, customers, were buying online or, who were posting, on Instagram they, loved it you could just see that they were, so excited about the packaging, and so eventually, the retailers came around yeah yeah. Number, stuff great. So. You know I mean you kind of hit the nail on the head it was a really saturated, market when you guys decided, we're gonna take out this charge yeah so like did you ever imagine you'd be this successful and, yet and what, really suit the packaging was great you know but what really distinguishes the, rx far from you. Name it yeah. So. I think one. Of the key distinguishing number-one the product does, solve a clear problem so. There. Peter, and Jared's insight was right that there wasn't a protein, bar that was as clean as what you'd get out of like sale Larabar, which, just doesn't have as much protein but is a clean product so. So the first thing is the product, just it totally. Solved the problem, and, we always talk about it now if you if you're solving a problem with the product you're, running downhill you. Know that, is like, essential. But. Then the big differentiating, factor for us was that we, spent. About. Two and a half years. Exclusively. Selling to CrossFit. Gyms other, fitness. Studios and then direct-to-consumer. And. So, we. Understood, our products. And value, from the perspective. Of our. Customers. So. Intimately. That. We, we. Had a great instinct, for the business, and, it was because we were talking directly to the people consuming, it so if you think about if you go a traditional, route and you sell in the grocery stores first you're. Selling to a distributor, and then a grocery store and then, someone's walking in and eating it and most. People like who's ever called an 800, number for a food product that you bought in the grocery store nobody, no one does that so. You don't get any feedback and so we were so tight, with. The consumer, that we, understood, it intimately. And. So the big differentiating, factor was when we went into the, traditional, channels in grocery. We. Went in a way that. Was. Speaking to our consumers. Really, clearly, the, packaging, being the biggest the biggest one, so. I, think that was the biggest differentiating, factor of the business we, thought it would be successful, but, we. Didn't we, didn't have we never really like set out what are our expectations but. If. You'd asked us four years ago for, sure this is faster, and more successful, than we would well, then we would have bet back then okay so. One last question related to the early days and then we're gonna move forward a little bit to kind of where you guys are today and what's happened in the last year or so, if. You can what. Was what, were some of your early it's like just funny memories of like oh my gosh I can't believe we made that work or oh my god I can't believe I had to do this but we pulled it out off like just what are some good memories in the early days. So. My favorite, and this is this speaks - it. Speaks a lot to the company culture but, it's just also a good, story so we we, went to Expo West for our first time in 2015. An Expo, West is the biggest, food convention. In the country every, natural brand that you've ever heard of is that, Expo West I think a hundred and fifty thousand, people were. There last year so, it's like the Superbowl of food, and. So we're still in the old packaging. We. Have no retail, distribution at this point so we're a dot-com business, and we're really thought of as a CrossFit, brand by anybody who's heard of it but most people just hadn't heard of it so, we're like not on the map at all and we've, rented this 10 by 10 space. And like. Our next pose has like a city block and there's like fireworks, going off and rollercoasters. And we're just like oh my god like we're massively, outgunned, here, and. So. So. Peter and I flew in the day before and, we. We didn't even have a booth so we had reserved the space but, we're just running so fast at that time that we didn't even have time to like design and build a booth and so we. Had like a backdrop, that had the bars and like a little you, know slogan. Or something like that and we're, like I will fly into LA a day ahead and we'll, build this booth like we'll go to Home Depot and wherever, else and. So. So. We built the booth and it was honestly decent, like it wasn't you. Wouldn't be super impressed by it but it wasn't terrible and so. The night before we. All huddled up and we were and so it was Jesse Jerrod Peter and I at the time and we.

Huddled, Up and we were like alright we. Don't really have that great food nobody. Knows us we have no retail distribution to speak of but, if we, we. Had walked the show the night before another. Show that was adjacent and. We were like if we bring good energy and, we engage people and, we share our product, and we share the story and we're like genuine they're good to be around it'll. The. Booth it won't really matter what the booth looks like right and one. Of the key things that I see Megan smiling she knows what I'm about to say so one. Of the key things that we figured out was that when you walk up to people's booths. Often. They will look at your badge figure. Out whether or not you're worth talking to, and then, either talk to you're kind of like dismiss you and we, were like god that's like it's so rude you know there's sizing, me up based on my title, and company, and whatever and so, we came up this rule that morning we were like alright we, are not bad. People because. Like that's what's happening, their badge. You and they decide whether or not they want to spend time with you and sort of like this is like a hard rule for the company like no badge. And so, we have this little sign that hangs in our booths today that says no, badge. With a little red, thing am I allowed to swear. This. Whole recording, might be just thrown out. But. Equal. Opportunity, to anyone who came to your booth is what I'm here yeah exactly. But, so that was something like number, one the. Scrappiness. And entrepreneurial spirit to just like go out there and build this thing, the day before but. Then also to think about like okay who. Are we engaging, and, and what's the right way to engage, them and remembering that every single person that we met was a potential, consumer even, if they weren't Kroger's. Buyer they. Might be somebody, who goes into a CRO grand buys bars who, ultimately is actually more important, than Kroger's buyer anyways so, that was that's one of the early stories that I think like we still think a lot about. Know. So you know I think right humble roots right that's a theme here and, that's just what's so inspiring about this story is you guys we're literally in the trenches figuring, it out as you you were learning as fast as you were doing right and, clearly. Some good learnings on, that first trip so let's, talk a little bit more about the product so we've talked about the, packaging, is amazing, it filled in need you, know so and how have you guys kind of evolves a product, when you think about innovation specifically. The bar and kind of what's continuing, to distinguish it in the market yeah, so the bar itself, is, very. Close to the original. Formula. The. Big, difference is is we've replaced half. A fig with cashews, and the reason for that was we kept hearing from consumers that hey it sticks to my teeth and so. One of the ways to help mitigate that was to replace fig, with cashew but. In. A larger sense we're always looking, at like how, do we make the product incremental. Incrementally. Better so we're, always improving. The, bar even if the ingredient, isn't changing, we're just thinking a lot about like how do we make those small incremental improvements. And. Then when we think about new innovation, like the nut butters that. Were on your chairs, we. Really think about it from the same lens that we looked at the bar category, which is is, there a crowded category.

Where. There's, an opportunity to add value so, adding, protein, in. To a category, that maybe doesn't, have that offering, or. Is there an opportunity to add simplicity. And simplify. A. Category. With a product like our X bar that was significantly, simpler, from an, ingredient, standpoint. And. So, congratulations, on the nut butter launch it's very great and pretty sure our family might keep it in business but. They're delicious so please everyone try them they're fantastic. You. Know the. Market, has changed consumers. Are changing so there's a lot of GMO, this non non this non that you, know different diet, trends vegan, keto, all of those things, how. Are you guys thinking, about that one kind of poetry are you taking, yeah. So, and. Especially on so our early adopters many, of them were either doing, a whole 30 which is a type of nutritional. Reset, maybe. Their paleo, eater, so. A lot of our early adopters, they. Are cutting-edge, eaters, in the sense that they'll experiment, with different diets, and figure out what works well for them, so, we we definitely pay attention to it Instagram, is an amazing. Source of information, when, it comes to that like you can just see trends and you can see how people talk about it so, we watch it closely. But. We don't overreact, to, any trend. Because, and and, the packaging, actually reflects that so it, would have been very easy for us to put paleo, on the front so that we would attract, paleo, consumers, or put gluten-free, on the front so we'd attract food, and free consumers. But. We, kept the. Labeling. Extremely. Simple because we wanted to, appeal. To people who wanted clean simple ingredients and, our thought was if you're, a paleo consumer, or a gluten-free consumer, you're gonna see the ingredients, and know that you can eat it we don't really need to spell that out for you and so, so we keep an eye on trends. We. Don't overreact to them but we think generally. The. Trend that's here to stay and will grow significantly is, really just clean, eating and whole. Food ingredients, really, trying to simplify. The. Foods that people are putting in their body so we'll, always be tied to. Whole. Foods clean. Simple ingredients and sometimes. We'll hit a trend, but it won't be intentional. To just like chase a trend sure yeah and, turned us a little bit how do you have come up with you know the flavors, right so pumpkin, spice is the the fall one but talk to us a little about the innovation, and you know you guys have stayed pretty consistent on the core, bar. Flavors, so what brings about maybe let's introduce, another flavor into the market so. Honestly. It's a lot of just internal experimentation. So we have a team at, our office here in Chicago, that. Experiments. With different flavors, and one. Rule that is, just. Has been a firm rule since, day one is that it has to taste good so we're. Not gonna look at it the category, and say hey we're missing you, know, X Y or Z flavor and just say we have to formulate that flavor and you have to get it out by March it's, it's, really driven by the product, and because. Our roots are digital, and direct, to consumer and direct to independent. Like. CrossFit gyms. We. Don't necessarily, build. Flavors, for, a retailers, reset, schedule which is a very common thing in big food companies we. Once, the food is ready and it tastes great and we feel really good about the product we, can launch it on our website before we go into a retailer, so the, process, is it's, it's. Really designed around the food and when. Something tastes great that we feel awesome about then we'll launch it got it there are some favorite flavors in the audience, who's, a chocolate sea salt person. Peanut. Butter chocolate that's. Me who's. Loving the new blueberry, in the MKS. Yeah. What. Is the number one seller chocolate. Sea salt yeah. Sweet. And salty gets. Us every time.

So, Um, it's been a busy past. Year for you guys I don't know if anybody is aware we probably are but you guys had, a pretty successful, 2017. Being. Acquired by Kellogg's, for a mere six, six hundred million dollars so congratulations, on that something. To be very proud of but. It's a big change so my, previous career was in CPG, as well and you, know have gone through kind of a acquisition, experience, and, so we'll just love to hear, your perspective and, you know Peter and Jared what were you guys thinking when, you thought about kind. Of going public and. Joining. A bigger brand yeah. The. Biggest thing that we were thinking about was values alignment so we. Learned early. In the business so, because we'd all known each other we grew up together it's kind of like you never sit down with your family and write out your core, values you know I mean they just sort of like are what they are and, everybody, knows them. And. That, was how it was in the early days for us because we'd all grown up together so. It was easy but once we got to a certain number of people we, realized we really needed to be, really. Thoughtful about core values and, and make sure that we, all knew what they were we were communicating consistently. We were hiring around it we were firing because of it promoting. You know all that stuff and so the. Same thing was true we went through the sale process we, spoke. With anybody. That we spoke with we were really clear, about what our. Values, were that we felt like alignment, was really important, and. Then Kellogg, had had, experience. With Kashi where, they, bought Kashi and. Ended. Up integrating, Kashi sort, of taking Kashi back out of Kellogg, and making it a standalone and through, that process. They. Were really, committed to keeping our X bar as a standalone business so. That was a huge thing for us as we taught to Kellogg because they had had experience, that they didn't want to repeat and so, they were really thoughtful. About, communicating. With us about maintaining. Our X bars autonomy, and ability, to operate as a standalone business so that was a huge thing yeah and so something that strikes me you know you guys are so principled and as well you guys really think and listening to your consumers you. Know, becoming. Part of a much larger organization is, really impactful actually to the consumer, potentially, so how did you think about talking to your consumers, as well as your employees, who kind of started, with this entrepreneurial, loved, what they were doing and like significant, change probably for them even though you'd remain a standalone. How did you guys think about that yeah vacation, yeah so it had to be it's. A so, it's a tricky thing because you get a lot of advice on it and competing. Competing. Advice. But. Ultimately it came down to we we, had to be so your values, and your principles are tested, not. When, things are easy and good but when there's a tricky, situation, and so we. Lean on those and we, built a culture that's extremely. Transparent. We, talked about authenticity a, lot and so, it would have been totally, against, our culture had. Like you know we showed up on a Thursday morning and like hey. Kellogg. Has brought us the announcements, happening tomorrow and so, we brought the team along from, the early stages so everybody, at that time we were a hundred people or so. Everybody. Knew about the process, we would update people. On where the process was at generally, without. Disclosing anything confidential, but we, were really transparent with the team I think way, more transparent, than then. A typical, company it's during an acquisition, process, and.

So, That was the biggest thing was being transparent, and we did the same thing with, our customer, so we thought. You. Know we. Thought the exact same thing we're like you know we're proud of this we think it was good for the business we think it was the right thing to do and so, why, wouldn't, we tell the most important, stakeholder, in the business which is the people that eat the bars and so. We sent out an email that was so. Just. So on brand, for us that, was just super direct and I think the subject line was, Kellogg. Bought us or something like that but. It was just super direct, and we weren't gonna like you, know hope, nobody heard about it or something like that we, were really proud of it and so the, whole process was really driven by thinking. How can we be. Totally. Transparent and. Authentic and. And. Overall, it was received really well and. You. Know that level of transparency, that's something that we share similarly, here at Google and so just curious you know what, were you guys looking for in deciding, to join a larger, organization you, know assuming, things are on scale what we're experiencing, is we continue to grow but. What does Kellogg brought for you yeah, so I mean they're you. Know a hundred plus, year, old global. Kellogg, was really, one of the first food companies, to be a global company and so, they, have international, expertise. That's, second, to none and in, basically, every corner of the world and so, they, brought a global, perspective that, would have been really hard to build internally. Really, hard to build as fast as we needed to build it so, that's. One of the biggest things they just bring an incredible, global, perspective, for yeah yeah absolutely, and curious. You know what do you think you have brought to them right cuz you guys have had some great successes and some learnings and that a smaller group is able to kind of fail fast and you, know again one, more CPG, it's slower, to respond, to yeah so what do you think they're benefiting from having you under their wings yeah so, they. Kellogg. Is used to operating, in a, world. Where the brands are huge, and they're fully distributed, and they're global and. Most. Of our time until, the last 12 months or so we, were a small. Challenger. Brand that was coming into a set that, was operated, incredibly. Lean, and. Went, to market in a unique way and so when. They're thinking about new brand launches, there's a lot that they're able to glean from us because that's really where we're really strong yeah. And you. Know from. What we've heard it's gone really well right which isn't always the case sometimes you, know you're kind of the case study the poster child for successful, acquisitions, so you know they've kind of allowed, you to remain kind of your own operating. Business. If you will but what else is going well or what is it day like at. Our X bar today may be different or similarly than it was a year ago yeah. So. It's, different than it was a year ago but not because of Kellogg so, Kellogg. Has been amazing. In that Dave they've. Really. Done everything that they said they would throughout the acquisition. Process but. The companies. So the, company's twice, as big as it was when the acquisition happened, which is about a year ago and so, the. Day-to-days changed, just because we're a bigger organization I mean it's nothing like like you all but we, have, 250.

People. Were. Now, sold in international, markets, there. Are more people on the team that have, specialties. Than we've ever had before, so, the business has changed but it's all just sort of it would have changed whether, or not we were required by code got it and what, are what, are some challenges that you guys are maybe dealing with today that having. Greater scale has presented that you know two years ago wasn't something maybe an on your radar. Challenges. Were dealing with today because, of scale yeah just as you continue to grow it was easy well. We. Have more. Customer. Stakeholders, now so we're, sold in almost. Every, retailer, we're sold in Canada the. UK, and. Working on more, and more gos, and so the. Business just takes more coordination, like, if you picture when there were four of us in a warehouse it's. Just easy because you know what everybody else is doing and essentially, there, are companies shared goals and there's four people and so each of those four people have one top. Priority for the day let's say so, you have four organisational. Top priorities, so, once you have 282, ball now, even, though everybody's marching in the same direction. There. Are more stakeholders and more people working on a project so, I think the biggest change has been coordination. Internally, yeah and so how has it changed, how you've had to lead or the leadership has had to leave the business differently yeah so, in the in the early stage I always think of it as a, continuing. And there's like execution. And strategy, and this, isn't perfect but in the early days you're, like 95, execution. 5 strategy, you know you you know it at a high level where you're going but, really all you're doing is executing, and then, as the business grows you, have, to spend more time on strategy, because now, you're. You're. Driving a much larger, organization towards, a goal and so. That. We've definitely, shifted. A bit more and added more strategic, long-term thinking. But. I'd say that's that's probably the biggest difference yeah. It. Takes it's a different muscle right I mean you're growing, and your leadership the whole team it's oh I'm sure it's been a pretty interesting journey hopefully have some good HR around you yeah and as a leader it's different because you. Go from being able to touch everything, to. Almost being, able to have. Your hands on nothing, almost. And. So there, you have to be able to trust your team. Empower. Them, but. You just can't you you literally can't, micromanage it, and so I think that's one of the hardest things as a leader is making that transition from hey, I get to put my head down and just go do stuff and, doing, stuff gives you instant gratification like you, go and sell it into Costco, region, and they say yes and you're like yes like in the moment you know but. The, other side of it you get very. Little instant, gratification and, it's almost all. Setting. Things in place to hopefully, make things work, six, or twelve months from now and so, that's a very different, thing and, especially just that feedback loop is, a little harder to digest honestly.

Because The instant gratification feels. Good. Yeah. Absolutely so kind of while we're on the topic of just people in town we'll come back a little bit more to the product in the business. You. Know my. Understanding is that you guys take your talent, and the development, very, seriously, which is something that's really important to us at Google but, I hear you've got some interesting, maybe, people talent, development practices, @rx, that would be interesting, for the group I think to hear in terms of so we're on the timing a bit of transparency yeah. Yeah so. So. As I. Sort of briefly, mentioned before we. Got to a stage where we could feel like wow we are like. We've outgrown our clothes basically. And a. Lot. Of it was. People. Who had previously been working seamlessly all, of a sudden it was like man this just doesn't like, feel as smooth as it once did and so. We, brought in a coach, who started out as an executive coach and the, first thing that she did was had us take a. Tool. Called disk which is kind of a community I see some nods maybe you guys have tried it but are, used, you guys, yeah. Yeah and. It's like a lot of it it's personality profile, but a lot of its tied into communication. And so. That, was the first thing that helped us take a step back and sort of look at the team and the way it was built and say, okay, I can see where we might have some gaps because we have all drivers, and know people who are like, detail-oriented. And, slower right and that's not exactly what, we had but you could start to like see where the holes were in the organization, and so, that, was the first time that we used it but what that started, was we. We. Focus a lot on the, individual, employee what. They're naturally, really good at how. They show up and. Where. What are the areas that they need to be aware of as derailleurs, and so. As, a. Part of that process we want people to be vulnerable because, you, sort of have to be in order to really understand. What's. Because you know you're being. You're. The way you work, and like you as a human is being put on this piece of paper that's kind of like a nerving, and so. You, have to build an environment where people are vulnerable enough to, receive. That openly, and then act on it and then hopefully share, it and be, transparent. Enough with it to, use it and let the other people around them use it and so. One. Of the ways that we we were talking about it were like and one. Of the things that everybody, who has a direct report has one on one's weekly, with them and we, sort of felt like you know one-on-ones and reviews are probably just not going as well as they should be and part of it's probably because new. Managers, are. Uncomfortable. Giving tough feedback. Probably. People are not that good at receiving, it but there's this feedback loop problem. And. So. Peter, and I would like alright what. If we just do my annual, review in front of the whole company at an all-hands meeting, because. There. Couldn't be like a more, public. Review, and also. So in addition to me just like putting my money where my mouth is and say like hey you should be open to this and you should you, should share your flaws, and be open with them open. With the team of about them, it, also showed, them that like I have legitimate. Weaknesses, and like legitimate. Areas. Where I had to improve and, so. It was really good and it was amazing afterward so many people came up and were like that, was amazing. Like and we actually had one guy in the room who's from. Kellogg and he was like that was ridiculous.

He's, Like we would you would never, have seen that like at a bigger company and so so it was really really effective, in, getting the idea that like being vulnerable is okay and everybody's, got pretty pretty, decent-sized. Weaknesses, so, who's signing up for that next, time around anyone know okay. Well we'll come back to that so. Let's switch back a little bit more just kind of the market and what's going on in the industry so you know technology, is changing, things so let's talk a little bit about kind, of you, know ecommerce, club, traditional. How are you guys going to mark it a little bit differently and how are you thinking about some of those things yeah. So our route to market was different so we started, with you come and we, started with building, relationships direct. To CrossFit gyms and things like that and so that's, something that's very hard to go backwards, and do because, no, matter what a. Costco. Is gonna be a bigger yeah. Right new driver than one CrossFit, gym and so it's. Really hard for companies go the, opposite, way once they've already built their Kroger business and Costco business and Walmart business I haven't, seen any companies go backwards, and decide like hey we need to invest in individual. Points of distribution that we're gonna ship directly to so. That so the big thing is that foundationally. We're built completely. Call. It upside down compared. To what normal, food companies, built. And. So. We still, think about distribution in, that same way which is first. It's the person that's going to eat it so we, think about them before, we think about. The. Retailer, that ultimately. Gets them the product and so when we roll out new products, we will go bottoms, up so we'll sell it in our direct, consumer, first we'll. Sell it to our CrossFit, gyms, and, other independents. And. We'll bring it out to retail quicker than we did for the bars but we. Still think about it in the sense that it has to, service a person eating it doesn't do anybody any good to do, a massive. Launch in all retailers, until, you know that the products gonna be well received it just doesn't make sense so we still think about it that way. So. Let's, bring. It home and look what's looking, coming. Down the line what's coming it was a future look like you guys I think one of the things you're best known at it's like you see the white space before any of us as consumers are probably even thinking there's a problem and, so you've really led some incredible trends so what, is uh what's, on the whiteboard at the office and our ideas we should be thinking about yeah so we think about the, future the. The. Way we think about it is that the, way that we went to market in the way that we've built the business which. Is also a bit unique compared, to most, food companies, where finance. Supply chain and sales have an equal seat at the table with marketing, traditionally, in big food marketing. Is really it's. Really general management in most food companies, but, so we think that there's opportunity, to. Leverage. The team that we've built and bring in more. More. Brands, that are meeting. Edge in their category, and where we think the consumer, is going and so. By. This time next year the. If we if we execute well the. Team that's running. Leading, our X bar. Should. Also be, managing. Other brands, too okay. And. So as you think about that you know the company is gonna continue to grow how do you make sure you keep the center of gravity in terms of values, and yeah, I think it's the hardest thing to do honestly. So scaling. A business, the, hardest, thing to do is to, keep the ways of working and, the values, and the principles. Keeping. Them you. Know keeping them true and alive. So, we, try to do it in a bunch of different ways the onboarding, process when. You join our X bar you spend two weeks in customer service and the.

Rationale. There is when, we were back at the old office everybody. Was in customer service because we, all had the phones at our desk and when someone called the 800 number everybody's. Phone rang and we, had a rule that it was one ring it had to be answered before, that second ring and you would see people all the time running, cross the, room to go pick up a phone if we had an all-hands meeting which was you know six people, somebody. Was like next to the door to man the phones and, so we. Try to keep a lot of that stuff, relevant, like the the. Badge example. That I gave just, in case they have to cut out that segment you guys know what I'm talking about. You. Know stuff like that so we try to keep a lot of those principles relevant. In the way that we work the way people are brought into the company yeah yeah. But it but it's really tricky it's really hard yeah no absolutely and it's, one of those things you just have to continue to refresh them ya know you have to continue. To practice them as leaders and it ultimately it's every employees I can't ability to deliver them so, you know in five, years what, five ten, what, kind of companies are X bar going to be, so. It'll. Be a global. Multi. Brand company. That. The. Hope is is that actually. We learned a lot from, you, also okay. Ours was, a concept that I I know you guys are familiar with and so when we think about running, the business that's, one of the big differentiators. Over. Time it's how you actually work it might be v differentiate, over time and so, I think to the market. Our X bar will be multi. Brand and global but internally, I think, what, you'll see is some, best, operating, practices, that are pretty, common in tech that are not as widely, adopted in food so, you'd see if you're on the inside you would see that we work in a way that's, very different from a traditional big, food company. Good. Well. I think we'd love to open the floor up to you well hopefully there's some questions we will have a mic that, is gonna be passed around so, you, get two seconds, for a breather and so if anyone has a question Megan, with that one here, in this row. Is. There any kind of story around that amazing, iced tea commercial. There. Well maybe, explain what do you mean just oh yeah so okay so the iced tea commercial, so iced tea if you if you haven't seen them if you're on Instagram or Facebook or, he, it, looks like you're just looking at a bar. Then he kind of comes out of it and says something witty. And then, goes back in the bar it's like a little door. The. Idea, was that we wanted the product to be front and center which it is in those ads and then, we, wanted to take the same approach to advertising that, we've taken to. The packaging, so we say no BS on the packaging, and that's, kind of a filter for the company in terms of the way we work but, then also when we think about advertising, we wanted it to be true to. That and you. Know sort of shine some light hunts and things like I don't know if you've seen the AdWords that we're running with you guys but it's like you. Know you searched, paleo, here's. An Rx bar ad and. Just things like that where it's like very you, know sort. Of in-your-face way that we're doing it yeah. So. Obviously Google is a big data company can you talk about how you guys use data internally, to move, forward develop strategies, think, about product innovation, yeah.

So We, use data. The. Data that we that, we try really, hard and, this is one of the more challenging things, with scale that we tried really hard to. To. Build muscles, internally, for is actually, subjective, data so. One of the biggest learnings, that we ever had was when we would sample, with. With. Customers, and they, would eat the product, and depending, on how they would react that would tell us a lot and so one. Of one. Of the times that I remember most vividly Peter. And I were demoing at a condo Association meeting in River North and, a condo association meetings, like six people so we, were like tells you like we would literally devil' anywhere but. We really like trying different wines on people you know we'd say like real food protein bar whole food protein bar no added sugar or gluten free or whatever and you. Could just watch people react. Or not react to these lines and so. Now we get more of that data than ever because we have field teams out interacting. With people all the time so. That's one of the things that we're focused on really figuring out how, do we scale that behavior, because ultimately our, products, need to fill a void and we need to communicate in a way that. The people who eat them that, it resonates with and so that's one form of data and. Then we also do a pretty good job of managing, our. Our. Independent. Business so like the CrossFit gyms using. Data in terms of what, do we expect them to be, selling, are they, buying are, they using the right flavor so it's not like it's not super, complicated data, but it's one of the ways that we manage a business with thousands, of distribution, points so. Yeah, yep. Yeah. I, I, wouldn't. Say I was I mean you. Know the product, is is really, responsible. For most of it but so. The process, for Whole Foods when, we were selling into Whole Foods it. Was broken into regions, and so we. Would have to call on every single region so there's SoCal, there's NorCal there's PAC Northwest Rocky Mountain and Texas on and on and on and so, you'd have to sell into each one of those Whole Foods regions, and so our, journey, within Whole Foods went, region to region and it started in the Northeast a guy, named John Lawson saw, the product, and understood. It immediately and was like hey we got to have you in our region and then there were some regions, there was one region, that, wouldn't take us because, it said no BS and, she said I have too many evangelical. Christians, in my territory, I can't take you and we, were like I think they'll be fine but, you know, your customer better than we do. So. Whole Foods was really like a region by region kind, of thing and now they do a lot more national, buying but. Back then it was a regional, selling and so you'd have to go in and pitch to the to, the buyer and then six months later they would reset it. So we know which products you have and I'm sure you can't really speak to the products that are coming soon but what. Are some examples of products that you guys have brainstormed, in the past that didn't make it and why, did they not make it or, flavors. So. We from, a flavor standpoint we've tried we, tried almost everything. Under the Sun. Products. That we I mean so once the bar took, off and it was so the packaging, change and once we went into retail the, business like shot.

Up Really. Fast and. So. Honestly during that period we brainstormed. Things but we really were like we. Have to execute this which. Was no small feat because we have to make you, know a physical, thing like you, know we have to make hundreds. Of or you know lots of bars right and they need to make consistent, so, during. That phase we were honestly just like let's just make sure we execute, the adult, bar and then, the kid's bar was an opportunity came after that but, there wasn't a lot in that in that timeframe that we said no to because. We were just totally focused on executing the core business. So. There's always stuff that we're playing with I wouldn't say anything's ever like shut down because it's all maybe there's like an, ingredient. Barrier so, so, for us because. We, are promises. On the front of the label in terms of the ingredients, that we'll use we. Have a relatively. Constrained. Innovation. Map. Because, we can't add just anything to the product, right so, we have to to, some extent. We. Have to innovate within a relatively, narrow set of ingredient, options so. Everything. That's in the market right now is what, we've gotten close, to it we made it work once we know it's gonna go but, anything else is we're sort of like playing with still sorry. If that was super vague. It's. So curious, in the beginning you said you're at a home security company but, you felt that there were so many learnings, you could take to a food company yeah so. The way so, live.watch home security is the name of the company and it's now been rebranded, as Brinks, so the company that owns Brinks, the armored trucks and the security, is who bought live.watch so. The way that we built live.watch was at the time very, very. Cutting. Edge for that industry so the, way the home security industry works. Is the, business is constrained, by the installer so, if you think about a traditional business where an installer has to go out to the home and put up the sensors and everything that, business is constrained, by the number of homes that that installer can go to in a day so, like the growth, of the business is literally like number of installers times, homes they can get to and that's all, they can do and so. We took the approach of taking the Installer out of the business and so. What we did was we built a in. Those, days it was called a DIY system, but we wouldn't call that because DIY scares people away it was just a home security system that you would install yourself and so. Immediately, we, were a national direct-to-consumer. Home, security business instead, of having to buy trucks and hire installers, and all that stuff and, the. Way that we went to market was, we, used digital. So, 95%, of our spend was through Google, and. Then we we. Managed. Our pipeline, with email, and we, did it in a way that was. We. We basically said we had an inside sales team that would call and, help people customize, their system close, the sale and then we had a team that would ship it out so. What we tried to do was to scale that inside sales team through. Email because we thought you know if you're a great, home security, sales rep on our team what are you doing well and and, ultimately, it came down to you're, following up with relevant, information at the right time and usually. Through email because most people don't want a call, from the salesperson, at 9:00 a.m. on a Thursday because, they're working and so. We, used email, and it was plaintext. Personalized. And. What it was meant to do was to scale that inside sales team and so, we had done two things that were pretty innovate one we, took the Installer out so we could scale fast right away and then, the second thing was we, lowered, our cost of acquisition because, our conversion, rate the, number of leads that a salesperson could could work themselves was, 10x. Well you'd be able to without this great email. Engine that we built and so. I thought. If. You. Guys are selling in the CrossFit, space, there's. Actually a good opportunity to use. Digital. Marketing and email and put. An inside sales team in it and we, could build, we could scale the business through that channel instead of going right into retail and.

Scaling. And those channels meant that we were more, profitable than we would have been going through distribution, our. Cash flow is much better because if you go through a distributor, you're, usually net 30 net 45 net, 60 terms or, someone paying with a credit card is paying you you know net negative one basically, and so. We. We talked about and we thought boy some, of those same principles could, be applied here to this food company and what was exciting about it was the same thing at live.watch which was no, one else was doing it and so, we could everybody. Oh why, another bar right it's such a crowded category. Well actually we, weren't in the category, we were just selling the CrossFit gyms and there were no bars across the gyms or we were selling straight to your home and we, were reaching you. Through. A paid ad or on, Instagram. Through influencers, and we. Couldn't use influencers, in the home-security business, because no one wants to post about their home security. Their. Home security system but, we could use influencers. Really, effectively, for food. And we. Were on the total cutting edge of influencer. Marketing no, one was doing it when we were doing it so. So. Those were the those. Were kind of the core things that we could translate from home security to food, I'll. Tell you as a funny story my wife is in the audience and so I. Used. To our influencer, strategy was, literally, like me, laying in bed direct, message in people on Instagram and. So. In our space there's a lot of like it's health and foodies right and so, there's a lot of like really good-looking fit. Women in this space so I'm like laying in bed next. Like DMing, all these like really good-looking, Fitness. Women and she's like what are you doing. Alright. We probably have time for one or. Two really quick ones I think one. Kind. Of a specific question but can you talk about dates for, a second just like I remember that's kind of like my first, my. Shin that I had when I first tried in our X bar and not really, it really grew up with dates yeah, and specifically, I wonder if like what, the supply chain looked like for dates especially as you grew and scale like whether you had an impact on the, date industry, or.

Impact. On them too yeah we're, talking about date the fruit right. So. In the u.s. basically. A hundred percent of dates are grown in the Coachella Valley in, Southern, California and. Actually. One of the things while we were scaling, this is in 2000, and. 2017. I think, we. We, used to just call date. Farmers and say hey we need you know truckload, of dates or whatever it was and. Then we. Picked up the phone and we tried. To place our order and. They. Were like that's too many we don't have and, we were like oh my god we've outgrown the, USB, supply, and. That. Was a huge eye-opener for us like we never thought we'd. Never even honestly, just never even really thought about it and so. We, one, of the things that we, knew but was hit home for us is that dates are an. Agricultural, product that is harvested, so, it's, not like eggs where, hens. Lay eggs all the time dates, get harvested, once a year and you. Either have enough, dates for the year or you don't and so. When. That happened, we realized there's no more supply, in the US so we just had, to broaden the way that we look. At that raw material and so. We. Expanded our sourcing, beyond the US and we've had to be really thoughtful about you, know where, they come from and who we work with but the, date. Industry. In particular is one where like first felt pinch. On raw materials. Well. I think that's our time today so thank you so much everyone, for being there. You.

2018-12-29 06:11

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Comments:

#LateStageCapitalism

How mindless we have become as consumers. This is totally unnecessary. Keep is simple and whole when it comes to food. Drink water often. Eat a banana before a workout. Let's stop this foolishness.

That banana isn't going to hold up that well on 50 mile trail run.

I love these bars

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