How He Built A Business Off a Fruit Peel, The Shocking Moment of Getting into Retail, and How One Chat Changed His Trajectory with Matt Weiss Founder & CEO at Rind Snacks

0:00Here's the one mistake I made in doing all this though. So naive. On the back of every bag in the first run. I wanted to get that. So I had an email address that went directly to me. uh so i had my own and then i had like a hello at and i put a google phone number that was like 802-828-RIIND which called my cell phone forwarded to my cell phone and i was like what could what could possibly go wrong and it was effectively like putting your direct number and your email on every bag and then expecting, you know, the occasional complaint or compliment or whatever. That was a wild time. I had to change my phone number, divert this.

0:51And I was like, I still wanted to read every consumer email that came in. And I am a big believer in founders making sure they do that. So they're not, you know, they're not unaware of any blind spots, but phone number, do not do that.

1:34to receive all the fundraising updates from the past week in consumer, and as well as emails about when a new episode is dropped. All content and episodes are for informational and entertainment purposes only and is not investment advice. Thank you, Brett Simon, for the introduction to our guest today, Matt Weiss. Matt is the co-founder and CEO of Rind Snacks. Rind Snacks makes craveable whole fruit snacks. We discuss the inspiration behind creating a brand and a product that focuses on the peels of a fruit, how he first got into retail, an encounter, a chance encounter at an exhibit that changed his brand's trajectory, and much, much, much more about his approach to building Rind, including why he was part-time with it for two years, what was kind of the moment that he switched to doing it full-time.

2:25This is a really wonderful story about his approach for building Rind. Without further ado, here's Matt.

2:35Matt, thank you so much for joining me here today. How are you? Psyched to be here, Mike. I'm doing great snowy weather outside, but it's warm and toasty in my WeWork, so I'm ready to roll. Oh, that's good. I'm glad that it's warm and toasty in your WeWork. I'm in LA, so always sunshine, always sunshine, pretty much. Let's start at the beginning. What What got you into finance and why did you decide to leave finance after being in finance for over two decades? Like a lot of people at age 20, 21, when you're graduating college, I didn't know what I wanted to do. I didn't want to sleepwalk into a career, especially with a decision I'd made at that age.

3:18I honestly think people graduating should have a ton of exposure to lots of different things before they pick a career. So what I did know was I loved the creativity and the power of ideas and creating something out of nothing but a concept in your mind that taps into a big idea. So I had my first taste of entrepreneurship in college, and I was also taking the LSATs at the same time, again, back to that sleepwalking into becoming a lawyer. And instead, I gravitated toward the open ended, you can kind of do anything, chart your own course of business and finance. And I knew I, after school, I wanted to really build and develop the skills of how commerce works, right?

4:08how do businesses evolve from, you know, the early stage to becoming an established, you know, entrenched business with competitive advantage and moats and all that stuff. And what does it take to get there? Because all brands started zero, but, you know, zero has given rise to Nike and Coca-Cola, but they were zero in the beginning. And I just wanted to understand that. And I ended up at a mutual fund right out of school, and I had a front row seat to amazing entrepreneurs and founders that were raising capital for their businesses. And that got me hooked. That's awesome. That's really cool. And so why, I mean, in college, so what was like the business that you actually did start?

4:55Yeah. So I had no technical skills. I still don't. But it was the time where, and I'm dating myself, but Napster came around. This was like the late nineties and the ability to just pirate any song through a T1 internet connection of colleges was like a bold new frontier. And it gave rise to all these dorm room entrepreneurs. And it was individuals who grew up at the dawn of the internet that were coding, that were in computer science labs, engineering, and they lacked the professional bridge to actually raise capital for their businesses, be taken seriously, avoid a lot of pitfalls because they were, they could easily be taken advantage of, but have some incredible skills.

5:44And what our initial concept was when I was still a college senior was to develop a dorm room incubator, a college conduit, if you will, for students that were grinding away on really unique technologies strategies that were happening on campuses and helping them graduate, as we like to say, from the dorm room to the boardroom. And that was an amazing, it was like a business school experience for me the year and a half that I ran that. That's awesome. Cause it also seems like maybe like a little bit ahead of, ahead of its time because a lot of like the universities now have like, have like their own incubators and also like VC funds, for example, have, I think there's like the dorm room fund that, um, at, that our first round capital, um, uh, does, um, as well.

6:35So that's, that's super cool. That's awesome. I think we were in a window where we were, um, I like to say probably looking for like Mark Zuckerberg at Harvard when he was probably in like second grade or somewhere, somewhere in middle school. And it was just like, man, if we had kind of synced up that timing a little bit more, um, would have been different, But nevertheless, I found my way from finance to fruit, you know, somewhere along the way. Finance to fruit. Yeah, absolutely. I want to talk a little bit about like maybe some of the inspiration behind Rind and as well as the timing of it in terms of why you started when you did after, you know, two decades of finance.

7:19I know that your great grandmother was a huge inspiration for you and the reason why you started your company. But talk to me a little bit about Thalma, like also from a, well, obviously we'd love to hear about her and, and why she was such a great inspiration, but also as well as why you decided to do this, you know, when you were kind of mid-career after, um, after two, two decades in finance. Yeah. Right. I think they call it the seven year itch. And if after 20 years, it was like three seven year itches. Uh, and I needed to, I needed to pay attention to that. And I am a big believer in, you know, there's, you can be an entrepreneur and reinvent yourself at any point in life.

7:59Age is not a constraint to, for creativity, for risk taking, for expanding your network and horizons. And, you know, that notion of continuous learning, as trite as it is, like that happens at every age. and I am naturally curious. I loved what I was doing for those 20 years. I had, again, like I was meeting with incredible owners of businesses that had gotten to the ultimate stamp of approval where they become public companies. And here I was listening to them talk about the businesses they were running, the opportunities, the challenges. And then I'd go to my desk and try to model out and predict, wow, where's this company going to be in five years?

8:49And what are the trends? And what will profitability and margins? And I realized in that exercise after 20 years that I didn't know anything practical. I knew theoretical how businesses became good stocks, but I didn't understand how ideas became businesses in all the messy middle that happens, that's not glamorous, that's not talked about, that separates fast-growing, surviving companies that become durable from the 80 % of the other businesses that don't make it after two years, three years. And I knew I needed to roll up my sleeves and learn some of that if I ever wanted to understand what it meant to be an operator of a business.

9:39And so on nights and weekends, I was moonlighting starting in 2017. I decided to scratch that itch. And I was at the time covering the food and beverage industry for the fun. I gravitated to that because of my great grandmother and a healthy sort of halo in our family of whole foods and nutrition. And that's where I found my tribe. I fell in love and it wouldn't let go. and I decided I had to throw my hat in the ring. I love how you kind of phrase that in terms of the skill sets that you've learned through finance. One of them wasn't, how do you actually take an idea and form it into a business?

10:27And you know roughly, okay, these are maybe a great margin profile for this business or whatever, but if there's even a bad margin profile, what's the reason why it's bad? How do we actually get to that point? And so I guess my question is, when you actually founded Rind and you were starting to build a business yourself, what were some of the biggest surprises from the very beginning that you found with turning your idea, Rind, into a full-fledged business? Yeah. I mean, it's one of the biggest eye-opening takeaways in the beginning was just how when you're shaping an idea and the idea doesn't exist, you're willing something into existence, the zero to one, the market will not tell you what you need to know.

11:19You have to tell the market how this product should be positioned, how it should be priced, why it needs to exist, and what is its future. And there's no analog for it. And so little things that are so basic, like what do I price at, right, that's on you to figure out. And there's no science to it. I mean, you want to do your research, understand, and not come out way above market or below market, so you can't be profitable. But that was amazing. When I first developed and got line time and built 1 ,200 units of fruit snacks, one pallet run, and then all of that product showed up to my apartment building in New York a week later from a delivery truck in California, I had to move this product.

12:13I had zero customers and I had a whole lot of motivation. And I took it to the first bodega, you know, in my neighborhood. That was like my favorite spot. And I told them I had this awesome new fruit snack. It's just lighting the world on fire. It wasn't anywhere yet. And I dropped off samples everywhere. And one of them called me back and they said, well, take six cases. How much is the case of, how much does the case cost? And I was like, I forgot to figure out what I should price this at. I was like, so surprised. I got the call like, okay, we like your stuff. We'll take it. Like what? Okay.

12:53I mean, pen to paper, understand. I knew my unit economics. You would think someone with a finance background would have thought that through, but I was so focused on like getting a product into market and learning how to sell, um, or just create and then figure it out, okay, here's how to shape the foundation of like a financial model that can work. Yeah. I mean, what's, what I think is really interesting about that, about that story too, is that I think that it, it seems like at least, you know, you thought it would take a few more runs on the sales side to actually get the first sale where it's like, okay, like, let's just like build this muscle build this sales muscle and actually get to you know go to a bodega whatever but it seemed like you know like the first one you actually close which is amazing it's like okay what do you actually then do next um when it comes to actually pricing it because you thought it would be like a lot longer in terms of gaining it so you kind of had maybe a bit more time what i did know it's exactly right was that as soon as i got that first yes the adrenaline rush was like nothing Yeah, like nothing else I'd ever felt.

14:02And that was like a drug. I was like, let's rinse and repeat and get this product that I gave rise to that I love that was like an extension of me and my story into the world and into consumers hands. It had a real functional story. We can get into it about why the rind. And that's where I started to feel like I had tapped into something, given how quickly I was getting feedback that was consistent and similar to how this all started for me, which is a great grandmother who shared her real, you know, timeless wisdom with me about the power of the peel. and it's really cool. So I learned quickly that having a product that has low barrier to education where people really kind of get it intuitively and it's not some newfangled thing that they've never seen before, but it's a new twist on something that's familiar, but still novel, that felt really good.

15:04Would love to expand on the story and talk a bit more about the product as well. Cause then we kind of like jumped here in terms of like the sales and kind of how you actually were able to get into retail or your first real-time shop, which is awesome. Talk to me a little bit about the origin story in terms of why you felt so compelled to actually find Rind, why you felt like it was different or maybe a part of the fruit that is underappreciated that has a lot of value, and also where you learned that from. Yeah, I think there were a lot of cross-currents that I was paying attention to when I was an analyst.

15:45And while, you know, the product came together and I had to figure it out very quickly, there was a lot of thought I put into making sure there were some really good tailwinds. And I was going to be tapping into a growing market or be on the right side of generational change seeking a product like this, a snack like this. And that's exactly right. What was really abundantly clear to me was that dried fruit, it's like the original snack had been around for thousands of years. But what it, unlike a lot of snacks, it really didn't evolve. You know, yes, you had raisins and you had a little bit of dried mango, but it was still raisins and figs and dates and everything from like, you know, the Middle East where they grow and dehydrate beautiful fruit.

16:34But there had been no new innovation around the types of fruits, a focus on the functional benefits of certain parts of the fruit that are often discarded. And all it was was the epiphany of like, bring a new twist to a classic snacking category that's always been one ingredient. Reclaim the category from candy makers who had since transformed a very simple snack into something disguised as fruit, but really was candy. Whether it was a gummy or a roll up or, you know, added sugar. and that felt like a big enough idea to go after. The notion of the rind and why it all came together in this one big concept was a lesson that I had learned from my great-grandmother.

17:28Her name was Helen Seitner. She was a matriarch in the family and she lived to 100, so I really did get to know her as a kid. And when someone lives to 100, you pay attention. And she was a a picture of vitality even into those, into those late nineties. And she used to tell us stories about her own health food store that she owned and operated in the twenties and thirties in Michigan. And I wanted to learn more. I was just riveted by her story. That's awesome. That's, that's, that's amazing. And I totally agree. I mean, when, And when somebody lives to 100, you certainly pay attention because that is an incredible, I mean, that's incredible longevity, incredible life in terms of being able to live that.

18:19So which fruits did you want to explore as the first?

18:28And how did you also think about how many SKUs to actually launch with? Yeah. What I wanted to also do in terms of being unique and not, you know, by focusing on the skin of the fruit, the rind, which had been overlooked, that was differentiator number one. You know, number two was use different fruits that historically haven't been dehydrated at scale. A lot of the dried fruit category is full of, you know, easy to process, cheap inputs, whether it's dried cranberries, raisins, again, nothing against this, but against them. But a lot of them, they add sugar to to lower the ratio of fruit to other ingredients and make it cheaper, easier and faster to make.

19:15And so what I was missing in one of those cross currents that I believed was going to be big was a younger consumer coming up that was going to seek out big, bold, exciting flavors that were not overly sweet. I felt like there was a pendulum shift happening in consumer taste profiles away from super sweet and artificial toward tangy and sour and bittersweet. And you're starting to, it's playing out. Maybe it's because that entire generation has grown up putting sriracha hot sauce on everything. But they are looking for a tang, a punch in the face for the taste buds with their traditionally sweet snacks.

20:01I have found. You know, Seth Goldman's Honest Tea, just a tad sweet, was a revelation back then. And now that's where like all teas start. In fact, original Honest Tea formulation is probably too sweet now at 70 calories. So that was where I knew I wanted to be. And so long way of saying I wanted to use fruits that hadn't been done before, that were a little tart, that were a little tangy, things like citrus. So beautiful West Coast citrus, whether it's pomelo, whether it's Valencia oranges, grapefruit. I really wanted to experiment with these beautiful big slices that I was starting to see dehydrated on the end of a Kraft cocktail and wondered, could there be a snack?

20:48Could I focus on the garnish and not the liquid and make it that into a snack? I also loved melon. I wanted a lot of, you know, dried watermelon. And yeah, and it's like, you can't, back, you know, a couple years ago, you couldn't find dried watermelon. You really still can't. So that's how it all began. And I was doing it. I bought a, you know, somewhere in between a home dehydrator and a low grade commercial dehydrator for my apartment building. And it sucked up a lot of power. I got a lot of crazy looks from the co-op board, but I, you know, I barreled ahead with this idea and created a lot of stuff in that first year.

21:22So you were actually kind of, so what was that process like since you were, seems like you were like self-producing in terms of, or using your apartment as to actually test and to iterate on the product. Can you talk a little bit about like that process in terms of what you actually buying on the fruit side? Yeah. I mean, I was buying a lot of weird fruit. I grew up in South Florida and it was like a paradise of tropical fruits. And it's just an embarrassment of riches from that perspective. And there were a couple companies that have a direct-to-consumer business where they're shipping, like, overnight exotic fruits that are grown either in South Florida or brought in from, like, Central America.

22:08And a lot of that initial raw material was what I was using to make really interesting exotic dried fruit, whether it was more of a jerky before it was, like, before it was crispy or before it had a little less moisture. And I was just slicing it on a mandolin. I was just figuring, I didn't, there was no playbook. I just figured, let me learn how to operate a food dehydrator and take high quality fruit, keep as much of the skin intact. And that was, that concept was there and dehydrate these at low temps for long periods of time, low and slow, like in some cases, 16, 18, 24 hours. And the aromas in the apartment were incredible.

22:51And the yield was tiny. So I dehydrate a watermelon, and I'd end up with like a cup full of little watermelon triangles. But holy smokes, the flavor was incredible. And right away, I was like, why can't I get this at every Whole Foods in America right now. This is a snack that I believed lots of people would tap into. It has like a pizza crust from the inner rind. It's like got a nice handle. Like, man, I wanted that for myself. And that's kind of how I started and made it around that. So what, at what point, obviously, did you like find, did you, I guess, figure out like what plate, what like maybe like perfect or, you know, enjoy the product to a point where you actually took it to a co-manufacturer?

23:43How did you also find the right co-man? Yeah. What I knew was I had to get out of this production in the apartment or I'd be kicked out of the building. I started putting pieces of a puzzle together. It was what I was doing as an analyst in many ways. It was just research. I called all sorts of companies. A lot of them ended up being in the Central Valley, California region, like they call it the fruit salad bowl of the country. And I would start attending these trade shows that I'd always gone to as an investor, trend spotting. And I would start to say, I'm going to go to the halls that are less exciting and buzzy.

24:28I'm going to go to the ones where there's some suppliers. Or I would start going to the supply side shows. And I would want, I wanted to find grower partners, dehydration experts who made premium, amazing dried fruit that I could talk to and see if we could develop custom specs, try different fruits. And I found that after, you know, about six to nine months of research and dialing and visiting. And that was all done in the second half of 2017. That was kind of the product development period. I told them what I was making in small batches and what I would love to see if they could, you know, if they could handle that at a larger scale.

25:10And one door, as you know, leads to another, leads to another. Putting the pieces of that puzzle together was its own adrenaline rush as well. So everything came together where I was able to identify an amazing supplier that could support initial launch of three SKUs, to answer your question. that seemed to be the magic number and advice I was getting. I found an amazing co-man who could provide me with just the bare minimum of line time that I was willing to invest in. And then I found an amazing design team through a referral that was able to help bring the idea to life. And I scheduled all of that in one weekend in January of 2018 when the Fancy Food show was happening in San Francisco.

26:00And I left the show and started to do my own thing. That's awesome. That's great. And no, I appreciate you also mentioning how many SKUs you launched with a three. It's so funny. I don't know if you know Paul Vogue from Ouroboros, but it was so funny because I just got off of doing a webinar with him. And he was saying that one of his mistakes that he made from the very beginning was launching with five SKUs. and so and of course you know the retail side of it the retailers really when you when you kind of come in like they kind of want three and so um some retailers will want you know three of this skew or three of ask you or or what have you and he said it became like a whole operations nightmare because it's like okay we got three here we have a different set of three here and what have you and so um makes a lot of sense um um in terms of like launching with three and and were you able to get like when when that first bodega wanted you in their store were you able to get all three in that store yes i was um it was great i was able to like sell it in it was my first brand block i started to appreciate the power of merchandising and projecting bigger than you than you are and then growing into that reality um i learned so much paul is right you know the operational snafus you make when you don't know anything and try to then re-architect it is how you learn.

27:24And I remember the co-man, because it was easier for them, were just packing these out in 20 unit cases. And the first few accounts I was opening didn't really care that they were 20 units. But as I was starting to graduate into more sophisticated retailers and chains, they're like i nobody has 20 units per case everything needs to be like divisible by 12 you either need a 12 count case or a six count case or a 24 count case is like you get rid of this 20 i was like oh okay that makes sense so yeah it was just like let me let me switch that up let me do this let me do that and um you just learn through getting punched in the face But when you're small and you're figuring it all out, there's no mistake that can really be fatal because there's no basis to really do anything with yet.

28:17You're just saying it's like figuring out feasibility and viability in those first few months. So I guess back to when you got into that first bodega and you're figuring out, okay, great, I got a sale. This is amazing, incredible adrenaline. I can't even imagine what that feels like. How did you then think about pricing your product overall? Was it actually going through and seeing, okay, in the category, how other people are pricing it? Okay, I'm going to price mine maybe a bit higher just because maybe in terms of the ingredients that I'm using, it's a lot more premium. It's obviously less sugar.

28:50How did you think about price overall? Yeah, that's a great question. This is where having some underpinning of a research analyst position for the last two decades came in handy because I was familiar with the various layers of sort of the retail supply chain. And each layer of margin and fee, if you will, that had to be extracted before, you know, you saw anything as a manufacturer. I understood how grocery products at a high level went from, you know, a facility in transit to a distributor and the distributor to retail customer and the retail customer to the end customer. And there was a markup along the way.

29:43And so I had to work backwards and appreciate that whatever pricing wholesale I was going to provide, I needed to build in the appropriate level of margin and cushion for each player in the field, even though in the beginning there was no distributor. I was self-distributing. So I was able to price a little bit higher because there was no middleman. I didn't need to pad the margin and still offer a really good markup and margin for a New York City bodega, you know, get them to 50 % plus. But I knew that I could also live with giving up a margin eventually to a distributor, which is how this would broaden out and scale.

30:24So I knew really where kind of my like my line in the sand was where if I went below this, then I'd have a hard time with the raw materials I was using ever having a viable future. So that was intuitive. I was able to like pencil that out. It was still that shock when they were like, what does this cost? I'm like, I don't know. Let me get back to you. Let me see what I have in inventory, which was in the basement of my apartment. How many units do I have? How much did I pay? That's the whole price of that and divide it by... Let me call my ops team real quick. Pencil paper, whatever. So anyways, yes, I think it's really important to have had that grounding going in.