💀LIQUID DEATH Founder+CEO!💀 GUEST!! Mike Cessario on Secrets to Content, Growth, and Marketing! | Ep. 434

0:00Welcome to Do This Not That, the podcast from marketers. We share quick tips, things you can do right now, and then we add a little bit of chaos at the end of every episode. We also keep it short, like this intro. Let's check it out. We are back for Do This, Not That podcast, and we easily have the coolest guy or girl or human that we ever had on the show. It's not even a question. So who do we got here? We got Mike Cesario, who is the founder and CEO of Liquid Death. Now, if you don't know what Liquid Death is, you're a nerd. It's just that simple. So I'll tell you what it is for those of you who don't know.

0:34And if you do know, then you're not a nerd. That's the litmus test. Liquid Death is one of the fastest growing beverage companies and brands of all time. I can't even believe this because I feel like I've known Liquid Death forever. But this thing only started in 2019. And by 2023, it had reached$263 million in retail sales. And expanded to over 133 ,000 stores globally with a valuation over$1.4 billion. dollars and it's all Mike's fault. Okay. And he didn't grow up in some sort of consumer packaged goods company. And he just rose up through the ranks. The dude was a skateboarder. He was in punk bands.

1:10He was doing all this, everything you couldn't imagine. But then he did go in the agency route. He knew all this stuff and he created this monster of a community, of a brand, of a thing. And we're going to dig into all of it. So Mike, welcome to the show, man. Thanks for having me. Awesome. All right. What did I get wrong? Is that, how did, how did this all happen? How did Mike become Mike? What did I mess up? Yeah, I think you got it pretty close. Yeah, I mean, I grew up outside Philadelphia and Delaware kind of area and yeah, was playing in bands since probably seventh or eighth grade. uh the when i was in seventh grade the green day dookie album came out and that was what like was the pathway to punk rock and no effects and all of that that i think kind of like shaped my path and then being in a band i was the guy that was silk screening the t-shirts and just you know making the album covers because i was the guy who could draw and all that and um then eventually I had a career in graphic design that led to advertising where it was more about conceptual things, making funny commercials, which then led to, you know, when YouTube and the internet was really becoming this hotspot for marketing, we started doing viral ads on YouTube and the internet for companies.

2:33And we got pretty good at that. And then I launched Liquid Death as sort of my way to get out of the advertising industry because I just like really wasn't happy there and kind of hated my life most of the time. Just because, you know, dealing with clients and like a services business, it's not about what's good. It's about who's on the other side and what are they willing to buy or not buy or understand. And it just feels like you're constantly trying to convince people to do stuff that's good. And at the end of the day, like, you know, they're going to do what they want to do. So my idea was, well, let me start my own product that I could be passionate about.

3:10And then I'm the client and I can kind of control how the thing is marketed and market it in a way that I think brands should market in the modern day, basically. And when you looked around at the planet, okay. And you're like, where do, where can I, where can I make a difference? Where can I have impact or whatever? And you decide, how did you decide on, on water to start with? I know you do a lot more than water now, but how'd you start on water? Well, right before, or as I was coming up with the idea of Liquid Death, I was working for a small little nine-person marketing agency in Chattanooga, Tennessee, called Humanot, actually.

3:50And we started doing some of the first funny, irreverent marketing for the organic industry. and um that i think opened up my eyes a bit to yeah why is it that stuff that's healthy or better for you is marketed in such a like quiet boring kind of way whereas beer is really funny candy is really funny soda fast food all that stuff is funny and irreverent why can't healthy things market in that same sort of entertaining funny fun way and um yeah i think that's ultimately then what led me to water and i started thinking about okay well what's the healthiest possible thing you could drink and it's pretty much water and then you know as you started going down you know the homework path okay let's do some homework on water and it's like oh wow bottled water just passed carbonated soft drinks for the biggest beverage category it's like okay wow huge category then And it's like, look at all the brands.

4:55They're all exactly the same. And it's like, oh, wait, they're all in plastic bottles. So all of a sudden it started becoming a better and better angle to kind of start at least by going into water. Now we've since evolved and we've made a lot of other things. And plain water is actually a much, much, much smaller portion of our sales than it's ever been and will be going forward. But, yeah, that was kind of where we started. it. So for all the listeners out there, maybe they work on a, in a boring B2B category or a consumer category. And they're like, well, well, I want to break through as well.

5:27And don't take this the wrong way. I'm sure your water is the healthiest in the world or who knows what, but when I look at like, you know, Avion, if it's from the Alps or this, I don't even know what the hell's going on. Really. It comes down to, I like liquid death because I feel cool, you know, when I hold it, it's the packaging that really, and the vibe that gets me going. is that at the core of how you found success? Do you think that this idea of the packaging, whether it's a service product or a consumer product or a business product, is that at the core of how you break through now? I think it's essentially what you're saying is mostly true.

6:05And I would say it's mostly true for any category of product. Because I think what people underestimate is almost every product category is a commodity. The differences between them are molecular in a lot of cases, and no one's really picking one brand over the other purely because of some small functional benefit or difference. Brand, packaging, all these emotional reasons that are not really rational reasons are why people choose things. It's like, why is Nike shoes better than Adidas? They don't make commercials talking about, we use 794 stitches per shoe and Adidas only uses 527. It's like, they're about their brand and their idea where they just assume.

6:53Most people believe that most shoes from a quality standpoint are probably pretty similar. But it's like, why do I want to give my money to this company? Why do I feel like this brand fits me better than another? And then obviously, aesthetics are big too. Oh, this looks cooler. This is more aesthetically pleasing or cooler to me than this one is. And that's completely subjective. Everybody has a different point of view on what they think is cool or interesting looking. So yeah, I would say that packaging and brand matters more than most people realize in a majority of product categories. And isn't it, do I have this right though?

7:34Like when you started, you put something out, I don't know, on Facebook or something like that before you even had a product to like see if it would gain traction. I mean, that right there shows you it's not really about the product necessarily. Yeah, I mean, and that was more, I think there's a lot of entrepreneurs or people that want to be entrepreneurs who will say, hey, I have this great idea. And then they're like, let me go pitch my idea to people with money. And people with money are like, we don't want to invest in an idea. We want to invest in a business. So how about you go figure out how to start your idea and generate some kind of money or traction or something, then come to us because you've de-risked it a little bit.

8:19So knowing that I was like, okay, I have this idea for a brand and it's kind of a crazy idea for a brand. So let me figure out a way to just test it first? Like, how do you test it for not too much money? So that's what it was. It was a Facebook page where, Hey, I can get some buddies together, shoot a little funny video for 1500 bucks. You know, I come from the creative marketing world. We can put together a Photoshop render of a can that looks real and we can make a Facebook page, make it seem like a real thing. And just see how people react to it. Cause I think big companies, and I used to work, you know, as an agency in agent in agencies for these big companies, you know, they want to use things like focus groups.

9:04We've got this clinical environment where you're asking people their opinions on things and people don't behave normally in clinical environments. There's some stuff you can glean from that, but not how funny your commercial is or what they think of it. It's like, you need to find a way to test it almost in market where you're getting people like they, their real reaction to it. So that's kind of what we did with the Facebook page. And yeah, like, you know, after about eight months of having the page up, the video had 3 million plus views. The page had 80 ,000 followers, which was more than Awkwafina.

9:40We had like hundreds of comments of people saying, how do I get this? Or I'm a distributor. Can I talk to a salesperson? And then I use all that traction to then actually go raise real money to make it real. You know, what's amazing about Liquid Death is that in a lot of ways, companies are now trying to have a media component to their business to fuel their businesses. In a lot of ways, you're a media company, whether you call yourselves one or not, because you're putting out all this content that people just, you know, love to consume. And when it comes to your content, it does feel so over the top.

10:15Oh, wow, that really breaks through it all. But is there like a science to it? Do you have a whole content strategy? Like we have these seven versions and then we do this and we wait to see this much traction. Like, is there like a whole process to what comes to be what we see at Liquid Death? As much as there can be. I mean, I think we do think of ourselves as an entertainment first approach to marketing. Like we are there. We want to entertain people in service of our brand. Um, we don't want to just pump a sales met like a boring sales message at people. Um, and if you think about the way entertainment is created, there's not a perfect science to it.

11:04I mean, you look at, I brought up this analogy a ton of times before, but if you look at comedians, like even the most famous, you know, veteran comedians, the bill Burrs, the Jerry Seinfelds of the world, they still don't know what jokes are going to land. They have to go shop their material around at small clubs for the better part of a year to then put together their 60-minute sort of stand-up special that everyone ultimately ends up seeing. Not like we take that kind of approach, but it just goes to show you don't always know what's going to work or not work. And you've got to build a little bit of a framework so that you're never investing too, too much into one thing that you just hope is going to go really well.

11:52So we kind of operate on this idea of small bets where, you know, I mean, we're, you know, we're getting to be a decent size company and we don't really spend more than 150K on any one commercial or asset that we produce. Wow. Which for really small companies can be a lot, but you start, I mean, we had a production company because we were getting so busy. We have our own internal production company that we call Death Machine, but we were so busy. We said, Hey, let's maybe just go get an outside production company to maybe handle this one quick little idea for us. Cause we just don't have the bandwidth right now.

12:33And they came back with their bid. They said, Hey, we're going to do it for you basically at cost because we just want this on our reel so we can have like a cool liquid death thing on our reel and they came back it was like six hundred and fifty thousand dollars well guys so that we just said you know we're going to do it ourselves we'll just like have people double up a little bit of time and we did it ourselves for 125 so it enables us to do a do a lot of things and if one thing doesn't totally work it's not the end of the day. And if something does really work, the ROI is insane. And you're looking at it from a circulation standpoint, right?

13:11It's not like, oh, we did this cool video and our sales went up in the Denver market by X, Y, and Z. It's more of, it continues to build the awareness of the overall brand. Yeah. And we have a very sophisticated media strategy. We have a chief media officer, his name is Benoit Viteri. He's like basically a genius. And we really think about how the message is getting to people and when it's like we have a strategy of hey we've got top of funnel which is really important it's where most brands probably lack focus then it gets down into more mid funnel where you get into that performance media kind of realm and then ultimately down to conversion but if you're only focusing on the lower part of the funnel you start running out of people and it gets really expensive trying to convert those people into customers.

14:03Whereas if you can invest in the top of funnel, huge, broad awareness and reach through a combination of television, media buys, connected TV, organic social, paid social, influencers, all of that, then you have more people coming into the funnel where you can then start targeting those people that saw that ad with a product specific message, whether maybe they're on Instagram or maybe they're on Amazon, or maybe they're watching a connected TV spot and we're literally targeting them because we have the data that knows they buy sparkling water at Kroger. And we can target that person on their television set when they're streaming and hit them with a very product specific message.

14:52And you might have to hit those people three, four, five times before they actually end up converting into a customer. So that's kind of how we think about the whole mix as it comes down. I think it's so important whether you're even a direct-to-consumer marketer, a business-to-business marketer. I don't think enough people are thinking of providing value and good stuff to create that big top of funnel. Because to your point, they're just chasing people that are in market. And that's a very hard thing to chase to even know if they are in market or if they care about you. So I think that's super valuable.

15:20But along those lines, in terms of content and all, you know, AI, you know, the one thing about your content is that if you rewind a few years ago, you said, make somebody whose head's falling off or whatever crazy thing. And, you know, your team would be able to pull that off and figure out how to make that look right and whatever. But now with AI, you can go and, you know, say, hey, make this crazy video. And it could look not as good as one of yours, but, you know, in the realm of it all. So how does, do you stay up at night saying, how is Liquid Death going to stand out from a content and brand standpoint in this age of it's so easy to create this stuff?

15:55I think it's going to be very easy because at the end of the day, AI is just a cost-saving tool. You know, AI is not going to tell you what's going to make people laugh. And there's so much nuance in what makes people laugh. And ultimately, we're always going to be starting with professional, funny people that are creating all these kinds of ideas. And even then, it's hard to land on something that actually ends up, you know, moving the needle and doing what it's going to do because it's, you know, entertainment is hard. It's why there's so few hit TV shows or so few people that actually become famous influencers with millions of followers.

16:37So that's always going to be there. And we're also able to already produce content for pretty cheaply in the grand scheme of things. Like we don't need to be able, and we can control every aspect of it where yes, AI works, but you have a little bit of limitation on exactly what you can control. And sure, you might end up spending so much time then trying to perfect every little detail the way you want, that now the time investment you're making is starting to offset some of the cost. And I think there's the other thing that people aren't thinking about is like the cultural elements of what's happening with things.

17:14Like there is an AI backlash among young people on social media. Like Mr. Beast famously, Mr. Beast famously cannot, he stopped using his AI thumbnail generator because he got so much flack from people saying, how are you using AI and all of that? we put one AI static image at the beginning of a video that we did just because it was an old image of this model that was impossible to track down to get a release from. So we said, hey, let's just use a piece of AI to create something that's kind of similar looking. It's only a static image for two seconds. Put it in the spot. On TikTok, there was like 350 comments.

17:59300 of the comments were, what the fuck? You're using AI. How dare you do that? You know, so it's not just that easy, right? Like, I think there's a lot of different things that happen. And primarily, I think AI is going to be most valuable for companies and people who don't really have any sort of creative or production knowledge, capabilities, like background, any of that. It's like you can go in with nothing and get something that's like, okay, pretty easily. But actually getting to great with it, that is still almost equally as hard, if not harder than just doing it. Yeah. I love the backlash by young people on all things on social media and all.

18:44I mean, bring it on. Let's have extreme backlash. All right. So one more thing I'm just curious about. Okay. So Mike, you're starting a business today. You're just finished getting out of your band that you were in. What would you start? What would you do? And how would you go about it? Because it's not 2019. the world's a little bit different, what would you do? Yeah, I mean, it's a good question.

19:09I mean, I do think the beverage industry is an interesting one. Like I like the idea of creating physical products because something that people can hold, have while they're having fun and all these things, it's like, and I just like the idea of like making real things and not just making digital stuff that can literally be deleted, you know, in an instant. Now, I think the challenges of the beverage industry beyond just creating a brand are insane and not anything that I thought it would be before doing it where you've got to go through distributors and the distributors like they're borderline the mafia.

19:54And like you have retail buyers that they control what's on the shelf. If this buyer doesn't think that Liquid Death is cool, it doesn't matter if it's cool. You don't, you'll never be on the shelf, right? And you've got the Cokes and the Pepsis of the world that buy shelf space. And, you know, as a small brand in beverage, it's really, really hard to kind of be successful because there's so many things sort of stacked against you. But if you can kind of figure it out and you've got a cool brand and you've got something that people actually care about and like and want to talk about, I mean, you can create so much value unlike a lot of other, I think, industries, which is interesting.

20:38Well, you have crushed it. And for all the listeners out there, Mike is going to be speaking at Guru Conference. He's going to break down some of the marketing strategies that they're doing at Liquid Death, which is incredible. It's just in a few weeks. And if you are a nerd, like I talked about earlier, go to anywhere, get Liquid Death and just walk around holding it, you instantly are 40 % cooler. It's a fact. When you carry around a liquid death can, sparkling, by the way, is a blowing up category for them. So it's all big things. You can go to liquiddeath.com. Mike, I can't thank you enough for doing this, man.

21:11Really appreciate you. No, thanks for having me on. You did it. You made it to the end. But wait, the party is not over. Listen, I want to keep hanging out. Subscribe to this podcast. And if it wasn't the worst podcast you've ever listened to, give it a five star review. Why not? But you know what? I want to do even more with you. Go to gurumediahub.com and we can partner there. You could find out about all of our free events, all of our stuff. And if you're epically bored, go to jschwedelson.com and we could stay connected. You could find my newsletter and everything else I got going on. Thanks for being here and hope you subscribe.