Building and Scaling Challenger Brands with Daniel Hoare

0:01You know, it doesn't matter if it's sports, nutrition or consumer goods of any sort that, you know, someone launching a beverage brand looks at Red Bull and says, I want to be like Red Bull.

0:11Daniel Hoare:And while some of the core basics, you know, come into play, you're not going to have rapid growth or adoption or breakthrough by being a commodity brand. Well, welcome to Brave Bold Bullet. I'm here today with Daniel Hoare, who is the founder of Rocket Fuel Strategies. Nice to see you, Daniel. How are you? I'm brilliant. Glad to be here. Ready for a great conversation ahead, I think. Yeah, absolutely. So you're actually Australian born, but you are in the north of the UK now in sunny Leeds, which is where I went to university actually many, many, many years ago. So how did you end up in the UK from being over in Australia, Daniel?

1:00Daniel Hoare:Yeah, look, long story. I can't tell you how I ended up being in Leeds because I'd never heard of Leeds in my life before I came over here. Yeah, I, you know, growing up in Australia, I, at a young age, a lot of Australian kids have a bit of pressure on them when they hit their teenage years of pursuing sports or education. I chose the sporting route, not the education route. So I kind of got myself into a position in Australia where I had, I guess, no tertiary education and was, you know, good at sports, but wasn't going to be a professional to the, you know, multi-million dollar deals level.

1:42Daniel Hoare:I was, you know, good at what I did but I was also very interested in business and at the age of 20, 21, I kind of hit my ceiling of, you know, where I was in the sports nutrition category in Australia and thought to myself, well, the only way I can really reinvent myself was going overseas and British ancestral history off I went you know bypassed my my year in Canada tried to live in America a bit didn't work and yeah I came to London and you know spent two years there and randomly I always came from the sports nutrition industry and one of the biggest online retailers and distributors was up here in Leeds.

2:32Daniel Hoare:One of the guys I was training with at the gym in London after a year of knowing him said, oh, one of my best friends owns this business up in Leeds. And I was like, it took you a year to tell me this and you know why I'm over here. So yeah, that's how I ended up in Leeds. And it's been 10 years kind of on and off now up here in Leeds between, you know, London and Luxembourg and, you know, rather international life. But, yeah, that's the long story of how I ended up here in sunny Leeds. Well, from London, Luxembourg and Leeds, we've got the three L's to match the three B's of Brave Bold Brilliant.

3:12I see what you did there, Daniel. Nicely done.

3:15Daniel Hoare:Purposely, yeah. Excellent. So, sports nutrition. then daniel i mean it's a massive segment isn't it and like you say i guess you got into it because as a sports person yourself and you know with everything you were striving towards it's not just around the physical training is it and the kit it's actually what you're putting in your body and presumably that's where you kind of learned your craft um from being a sort of participant and wanting the best nutrition right um it would that is that how you kind of feel you found your way into it Daniel from being a sports person first and foremost yeah 100 % I was a you know I'm a rather obsessive person I live in extremes basically and you know growing I was working in a gym from the age of like 13 so sports nutrition the interest became you know great you know of great importance to me but what actually you know really allowed me to you know thrive in this industry in particular or that industry in particular I'm sort of grown bigger than it now is I probably saw more interest in business than what I did specifically sports nutrition but I was very lucky that I could pursue business within sports nutrition the market itself so I yeah I wasn't just a you know sports nutrition fanatic I was you know obsessed with you know retail and customer and shopper within that space in particular.

4:46Okay, yeah. So actually, the business interest kind of sparked something in you and that kind of entrepreneurial world that you've been in. And, you know, you've really worked, Daniel, on the brands, right? The brands that you support today and the brands that you've built yourself. And, you know, I think you've built and scaled brands in one of the most competitive industries in the world, right? I mean, that's clear. What's the, what do you think is the sort of the one big mistake that, I don't know, 90 % of founders make that kind of kills that brand growth early on? Because I think it's a really fascinating area.

5:24How do you scale a brand? And how do you do it in the right way?

5:28Daniel Hoare:the biggest mistake every founder makes um and i would have made this many years ago as well is they try and they try and be like the the current incumbents of the category you know it doesn't matter if it's sports nutrition or consumer goods of any sorts that you know someone launching a beverage brand looks at red bull and says i want to be like red bull and while some of the core basics you know come into play you're not you're not going to you know have rapid growth through adoption or breakthrough by being a commodity brand, like that's their position in the category. Let them go and do that.

6:04Daniel Hoare:Your position as a new brand and founder is to add value and be incremental and theater and wow to a category. Otherwise, why would a retail buyer, for example, take a skew of Red Bull off to put you on to do the same job? It's not going to happen ever. You know, that's the biggest mistake that every early stage founder makes. And, you know in all brutal honesty if they do not you know make a change unless they have a billion dollars sitting in the bank to compete um they're not going to be in a position to win yeah i think it's really interesting because as you were talking one of i was fortunate enough to interview one of the co-founders of grenade which you'll you'll know very well from the world of sports so juliette barrett her and her ex-husband alan started the business way back with with nothing and it was interesting because what Juliet was talking about was you know they very much sort of niched down into that kind of caffeine based um you know sort of fuel injection if you like for training and they their brand came about because they were bouncing ideas around and a friend over dinner I think said my gosh that went off like a rocket or something like that went off like a bomb went off like a bomb I think they said and that's where they the name good aid came from But it was from that sort of innovation and try.

7:19And obviously, they sold that business for 200 million. Right. So they did a very, very successful exit. But again, speaking to Juliet, it was very much around the passion and the love, but actually landing on a simple name that people just went, wow, that stands out in that segment. So I think as you were speaking, then I was referring back in my mind to the conversation with Juliet.

7:39Daniel Hoare:Exactly, yeah. And I was there during those days when they first brought out Grenade and it was quite a very simple masterstroke, which was they saw what the category was doing, it was boring. And so they did something absolutely wild. And, you know, then they further obviously built their business through, you know, penetrating the chocolate market, to be honest, they became the number one or two selling chocolate, you know, confectionery product being a protein bar was, you know, absolutely insane. so before we continue i want to speak directly to those of you who are listening and thinking i know i'm capable of more but i need structure i need some help because here's what i've actually learned after gosh more than three decades in business you know ambition without clarity creates frustration.

8:32And motivation without structure, it really does fade very, very fast. So that's exactly why we created Rise Academy. And Rise Academy, it's not theory. It isn't fluffy motivation, although you will be motivated. And it certainly isn't another online course that you never finish. It's actually a fully structured growth environment for ambitious entrepreneurs, leaders and founders who absolutely are ready to do all of these things, sharpen their strategy, elevate their leadership, increase revenue with intention and build businesses that actually support the life that they want. And inside Rise Academy, we focus on the foundations most people skip, leading yourself, leading your teams and leading the business.

9:22It's about clarity, standards, decision making, commercial intelligence and execution. Because scaling, it really isn't about doing more. It's actually about doing the right things and doing the things right consistently. So if you're serious about stepping up into your next level of your leadership, your business life, and not just consuming content, but actually implementing it, then Rise Academy was absolutely built for you. So you can find all the details on our website. Go to www.brave-bold-brilliant.com. And now let's get back to the show. This world of brand and business, you know, we're more interconnected than we ever realize that we are.

10:12And, you know, for you, Daniel, with Rocket Fuel and everything that you're doing today, Rocket Fuel Strategist, Talk us a little bit around the business because you founded that business. And I know you have the title CEO, but founder is arguably more important when you're actually a business owner as well. So when you focus on strategy brand, talk about the business a little bit and how you help your clients.

10:38Daniel Hoare:Absolutely. So, you know, one thing I specialize in, I'm really passionate about is either localizing U.S. brands here into the U.K. market and European markets. But then secondly is challenger brands. You know, I think there is such an important position for them in the market that they need to be invested into. And when I was at Congo Brands, it was, you know, quite evident, you know, what a category-breaking brand can do and the role and responsibility that it has. And I had a lot of brands coming to me and asking for support. But obviously, you know, working 24 hours a day for a billion dollar company was always difficult to put that time in.

11:23Daniel Hoare:And, you know, when I left Congo Brands, you know, I wanted to be of value to these great challenger brands that were coming through. And the one thing I really noticed was as a challenger brand, you're growing like that. And they always will ask like, oh, what's our first hire? like what should that be and when you're growing at such extreme rates let's say you hire a national account manager of sorts you know they'll they'll come in here and they'll probably fill their role but like your growth trajectory is so so fast that where you bring people in you know that first one to seven million and then seven to fourteen like they they they are not going to be you know far developing fast enough for your business.

12:15Daniel Hoare:So I thought to myself, what if I gave these brands the opportunity to have someone come in at this level when they're growing on that level and take over their commercial department and put in some really strong strategic operating mechanics and tactics and actions and drive their entire commercial department, take over it and deliver it's at that scale at that pace instead of you know having to come in and you know they're stepping up continuously with hires i can come in and offer them something which is at that level they need to be at in five years time or two years time because they have heavy you know vc backing or capital behind them um it's you know in a more and just work on effectiveness like i'm not bothered about I never want to speak about employment.

13:08Daniel Hoare:I want to make sure that Rocket Fuel Strategies is seen as a pure profit center in a business. We come in, we take action. Myself, my team, we deliver on pillars that we hold important to success, but we make sure that challenger brands are treated like challenger brands and they are different. They're weird. They're absolutely asking really hard questions of the category and they're going against the grain. Otherwise they're not going to cut through yeah so so it's almost like so how big's the business daniel obviously it's not just you you've got that you've got the team supporting you as well but are you kind of quite compact and bijou still or are you are you on that scale up journey yourself with rocket fuel strategy as well as the clients that you help where are you on the journey we are on the on the scaling up there's three three myself and three at the moment which is growing some people um based in uae as well but as as and when you know there's lots of new businesses coming on board with rocket fuel and you know i just make sure that we have the team in place so you know building out my team is is really important but i'd rather be really careful about that as well as a business because you know we're handling the some businesses worth multiple millions and you know we're responsible for that commercial department so i'll i'll make sure our growth is it's correct i won't ever i guess act too fast to bring on um competence yeah it's an interesting uh interesting approach because almost i think what you and your team do you almost offer you know it's almost like having a fractional cmo a fractional cco um you know for a business that would never be able to afford to hire at that level for a full-time basis yeah yeah and i'm seeing that more and more you know i mean my background is in running large global corporate organizations in the travel industry so i've been you know ceo of the travel division at saga i was the managing director of the emerging markets for so i'm used to running big footsie 100 footsie 250 and as well as like you know now i'm a business owner portfolio investor you know i've got a multiple business and i also work with with some amazing clients as well but i i also think it's it's this challenge as a as a founder scaling up it's almost like do you get the resources before you're quite ready that allows you then to drive the growth or do you you're managing cash flow right or do you need to get the clients in and almost not have the resources to deliver and it's this tricky balance isn't it whereas actually what you offer with rocket fuel strategies is kind of de-risk that a little bit for a founder that's looking to grow and I love that because I think you're solving a problem not only in terms of what you deliver but actually also just the you know the whole kind of commerciality and the finance side of scaling up because it's always difficult this time this this period I think you know you're not quite there yet you know yeah absolutely I completely agree to that and like whilst I'll I don't want to sound too negative against employment employees themselves but sometimes employment, it becomes burdensome for fast growing businesses because they have to manage a person and a, you know, that relationship internally, and it removes, sometimes an employee doesn't have accountability against performance.

16:33Daniel Hoare:And I think that is, you know, vitally important, because if they are cash strapped, if they are needing every, you know, a penny to be put in the right place. I want to make sure that their commercial department is truly effective and a profit center. Otherwise, sometimes in employment, you're managing a break even or not even that. You're expecting something to come of it. But we don't ask that at Rocket Fuel. We come in and we're expected to be held to account. Yeah, yeah, yeah, exactly. And I mean, listen, at the end of the day, I think it comes down to sort of the experience of the leader.

17:13Right. And as an entrepreneur, as a founder, very often, I mean, this is what we found with some of the businesses that we support is that, you know, someone normally starts a business because they're really passionate about the sector or there's been a gap that they've actually needed to fulfill in their own lives. You know, you see a lot with charities where maybe, you know, a parent has had a particular, you know, a poorly child and there was nothing there for them and they set up a charity. You know, so it often comes from a need or a gap that they've seen themselves. And that's great because you have the passion and the energy.

17:45But what that often means is that, you know, founders often haven't learned the basics on leadership, on strategy, on running a business. And I say that with not in a derogatory way, but just in a perspective of caring about organizations. And I think that's where often actually they need the support from people that can be there as an adjacency to the team kind of thing, you know? Yeah.

18:10Daniel Hoare:And one thing I always stress to founders and just look, 99 % of founders, unless they're like Alan Barrett's and Juliet of the world is like, I want them to embrace the fact that they're not competent in these areas. I don't, you know, if they're not experts at, you know, that commercial delivery of a brand of business, then that's our role. Our role is the how of your business. You Simon Sinek always, you know, bangs on about, like, let the founders be the why, like, let them let them be crazy, let them be that absolute why. But they need the trust and confidence that there is someone that can deliver the how, you know, make sure that their why actually gets taken to market, delivered, does what it's meant to do within a customer, shopper and consumer trading and actions and tactics.

19:03yeah yeah definitely I think that's a good the you know the why the what the how the what if the when the who we love the w don't we um but it is it's a very simple way of looking at it and I really love that now Daniel you've been you said you lived in the states for a little while and you know didn't quite work out you ended up in the UK but you understand those and of course being an Aussie right you understand the different cultural nuances we might share a language all of us but But actually, doing business and winning in those markets is a very, very different way of kind of working. So, you know, I work in the travel industry with a lot of the clients I work with.

19:39They're often trying to crack the US. They've got really great businesses in the UK. They've been hugely successful. They can actually be market leading in their space. But then they want to expand into the US, which is obviously a huge market. And people think it's going to be similar because she's got the same language. And actually, you know, we're kind of quite similar, you know, but the reality is very, very different, as you and I know. So what I'm interested in, having sort of understood both those markets yourself, what do you think is the biggest mistake that UK brands make when they're trying to crack the US?

20:16Daniel Hoare:Probably trying to replicate the current route to market in the US and any country, to be honest, whether it's US back to the UK. But, you know, UK brands need to understand that, first and foremost, the palette is extremely different in the US. It's much more, they expect much more impactful flavors. The shopper itself is asking for very different things. Regulatory matters in terms of what you can say on packaging. But the most important part is you're dealing with 300 million people, a much bigger market, but a very sporadic route and distribution to market. You must have very big pockets and a great deal of leveraging partnerships and establishing partnerships through distribution in the US.

21:08Daniel Hoare:If you can't do that, then you will never hit a retail shelf in your life in that country. Just it's very burdensome. And one one singular state in the US is likely going to be a bigger economy than what the UK is. You know, take California, for example. And, you know, coming with that is, you know, very litigious parts of America as well. But in the long and short of it, you can't internationalize that localizing and localizing is going to be different in every single country in the world. Every single customer will be different. Every shopper will be different. Every consumer will be different.

21:46Daniel Hoare:And you need to be very, very prepared to make some very hard decisions to execute very well. Because quite frankly, your brand may do exceptionally well in the UK, but it may not have any childhood nostalgia to anyone in the US. So it just it loses everything that it was in the UK market because that flavor doesn't resonate. They've never heard of that, you know, in when they were growing up. It might be a different product or something like that. So, you know, those very, very basic fundamentals just don't get addressed. And it's exactly the same when the US comes over here. Yeah, although obviously it's the geography is a lot smaller and we're quite compact, aren't we, really?

22:35when we talk and especially for you come from australia i mean listen if you go on a what a five-hour drive that's huge for us whereas for you guys it's like oh i'm just popping around the corners i get a pint of milk yeah yeah so so you've got a lot of differences there so if someone if a brand if you're working with a brand and they say right okay i'm really happy with how we're getting on in the uk want to go to the us what are the sort of two or three things that they need that you would work with them or that you advise a business that might be thinking about this right now before they actually even set foot over there what should they be doing or what are the first three things you think that would be important to crack either a new market in general or US

23:12Daniel Hoare:specific if you want to talk about that yeah finance and funding is going to be first you know are your pockets deep enough or are your your backers willing to do so normally you would expect a UK brand entering the US market to have US investment locally. And I would highly suggest that that local investment is a trade partner of some sort. You need skin in the game of, you know, within the market itself. Secondly, would be before you go ahead to any market, even exploring distribution is understanding the commercials in terms of does your P &L allow it? Do you have manufacturing capabilities within the country or will you be exporting into the US?

24:02Daniel Hoare:And can you maintain the expected pricing barriers in that category? Can you meet the shopper's requirement for what is the price they expect to pay in their category? Like if you cannot meet that, it doesn't matter if the shopper is, you know, the right fit for your product in the market. If you fundamentally cannot price yourself into the category, then there's no use going. So funding, you know, operationally, can you do it? Can you meet the shopper expectations? And can you meet the actual expectations around the category itself? And that doesn't just fall under price. It falls under flavor.

24:48Daniel Hoare:falls under sizing, formatting, in terms of you might have a 12 serving product over here, but the average category for that product in America might be a 15 serving. So making sure you fit what is expected there, do not expect, you don't have any permission to be in that country. So don't try and force your current product into the market without actually addressing locally what is required. Yeah, it's great. I mean, listen, I completely agree with everything you're saying there. I mean, as I say, I used to be the managing director of the emerging markets at TUI. So, you know, I used to always say, you know, when we went into China, you know, one, it's a long game.

25:26Two, if we go in with a Western European approach, we'll fail straight away. It's going to cost us double what we anticipate. Even with the best business plan in the world, we need a big contingency. And actually, we need local talent. We need local people that actually really, you know, they're there to open the doors, understand the way the systems work. Like, obviously, it's a very different, you know, kind of world. The size of the prize is huge, but you're not going to go in and win in a couple of years. This is a 10-year plan, in particular with a market like that. Maybe not so for the U.S.

25:55But I think what's interesting as you're talking, you're talking about a physical product, right, in the case of sort of nutrition and et cetera, and some of those retail products that are distributed. But the same also goes for service, service-led businesses, I would say, as well. So, you know, I've advised a big client of ours in the U.S. it's in the travel space, travel, leisure, sort of hospitality space. And, you know, even understanding the different customer dynamics, you know, so the way that a European would travel, you know, you've got more annual leave, you're more likely to maybe go to, you know, take a two-week holiday with the family, and then you might have a couple of weekend breaks or whatever, you know, or go away with friends.

26:34In the US, you know, 10 days annual leave. 10 days annual leave, and that's quite generous. so you get much shorter stays you know you you don't get your you don't get your longer durations or but when they do come to europe they're normally coming on a big trip you know and they're actually doing the whole thing so you've got to and they're interested in the long i call a long tail uh product you know they want to see the range travel agents which are obviously on the way out anyway in the uk they don't exist in america the business model is totally different you know the consumer behavior is totally different so i 100 concur with you daniel you've got to understand all of that and i love the point you make about finance and have you got deep enough pockets because otherwise it can be like pouring water into sand and it just disappears and you've got nothing at the end of it so you've got to really go in with your eyes open and it's not as glamorous as people think it is right it's a hard work it's much more burdensome and and

27:31Daniel Hoare:you know a clear example of that is you know in consumer goods for example um they might have a thousand sales people on the road going in stores daily because each individual walmart or kroger or something the manager can make a decision themselves whereas over here in the uk you have the luxury of you know highly compliant multiple door retailers um you know it's it's an expensive place to get into but obviously it can be you know extortionately um valuable if you do crack it but you know it's it's a big ask to go and do it and and what you're saying there about service industry is you know the same things will apply across that customer shopper and consumer like I'm Australian I say things that people literally do not understand and in Australia you know there's some words and phrases and colloquialisms that I've learned from the UK that they wouldn't understand either so even how you speak to a shopper and consumer needs to be different yeah and actually i mean you're in leeds right so if we go when we get outside of london and we get into the regions in particular up north i mean you could be literally 20 minutes down the road very different between leeds and manchester and liverpool and they're all within like yeah exactly i can say this as a mancunian originally you know so i'm allowed i'm allowed to but we have we have these colloquialisms different accents different words to be the same thing and even within the same language so it is complex and and daniel i'm really interested to get your perspective on sort of health brands you know and you have been in this world of nutrition and and well-being etc why do you think so many healthy products fail you know because there's a lot in there there's a lot of noise in the sector there's a lot of oh you know the next with the next diet product or the next slimming or the next get you know get fit quick or whatever it might be but there's a lot of noise and there's a lot of kind of perceptions around healthy products and healthy brands that that don't necessarily deliver the results so so yeah i'm just interested in in your perspective on that because it is an aggressive market you're in right yeah look i i there's probably two ways i look at this because vegan sugar is vegan yeah and And is that health is vegan healthy, you know, but it's promoted as being healthy.

30:00Daniel Hoare:You know, so I do think that there is a messaging issue and a trust issue around quote unquote health in this market, because, you know, probably Coca-Cola could be classified as being healthy to a vegan because it's, you know, the full sugar one. And by all means, it's not going to help with your blood sugar levels or, you know, anything like that. But I actually think a lot of it is the barriers are pretty low to entry in terms of getting a product to market and, you know, low minimums around making a flapjack or something like that, which they sort of, it's a luxury position to be in. And they still miss out on the, again, like people know me for saying this, but the customer, shopper and consumer.

30:48Daniel Hoare:Can you address the customer barriers? is can you address the shopper? Can you meet that? Can you make product turn with household penetration? Products come, they sell, but then they don't ever get that penetration and loyalty. And can they build a brand? It's very different these days to what it was 20, 30 years ago where just distribution was the one thing of getting in the doors and your brand might do well. It's a complete 360 holistic approach across brand and people feeling like they can engage and feel they're a part of something. That's always missed when it's an easy barrier or low barrier to entry into market.

31:33Daniel Hoare:So I see these health brands. Firstly, I think there's a lot of founders that are uneducated. The regulatory market here in the UK is pretty, it's very firm. So it means that innovation can't be, there's not anything really innovative around technology or format or manufacturing techniques or even ingredient level that would mean that you need some upskilled founders bringing quite innovative products to market. So there is no real top of the funnel standout position you can be in. So it makes it pretty easy to enter a category. I just don't think that anyone can really ever stay in it. It's too much effort, I feel, if it's that easy to get in.