How to Teach an Old Dog New Tricks - Breaking Through as a Challenger Brand in a Dominating Industry with Michael Landa: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. podcast network, the audio destination for business professionals with great shows like Finding Founders. Today, we're pulling a timeless EO Fire episode from the archives so the giveaway may not be active and we'll be breaking down how to teach an old dog new tricks, breaking through as a challenger brand in a dominating industry. To drop these value bombs, I brought Michael Landa into EO Fire Studios. Michael was taught never to take on an industry where four players control over 80 % of the market, and that's exactly what he did.

0:41And now his company, Nulo, is one of the fastest growing brands in pet food and fire nation. Today, we'll talk about not compromising on providing highly differentiated product and value to end customers. We'll talk about getting traction, and then you'll be scrutinized by competitors. Just stay focused, go slow to go fast, and stand for something, don't deviate, and so much more. And a big thank you for sponsoring today's episode goes to Michael and our sponsors. One of my favorite conferences to attend each year is HubSpot's annual Inbound Conference and is coming up fast. Join us in Boston from September 5th to the 8th, 2023 for an event like no other.

1:25Inbound brings together leaders across the business space, including sales, marketing, customer success, and operations teams. The goal at Inbound to help you discover all the latest trends and tactics you can implement in your business right now. Learn, be inspired, and walk away with practical tips to help you tackle your next challenge, supercharge your sales and marketing, and ignite your customer service. Inbound is featuring many must-see speakers this year, including Reese Witherspoon, Guy Raz, and Neil Patel, just to name a few. Whether you choose a general admission ticket or go the VIP route, you're sure to leave Boston feeling on fire.

2:03Visit inbound.com to get your tickets today. Michael, say what's up to Fire Nation and share something interesting about yourself that most people don't know. Probably if you were to ask people in my office, they would not know. I was trying to think earlier is the one thing that they definitely would not know about me. And that is that up until about, I'd say probably a couple of years ago, I could still do a standing back flip in my office. So, yeah, I kind of grew up as a competitive gymnast when I was in high school. And then I was an all-American swimmer. So, I mean, swimming was really my main sport.

2:44But I competed a lot on the floor exercise and gymnastics as well, which is something people most people don't know about me. I've just always had this feeling that if I ever tried a standing backflip, I would immediately tear my MCL. I mean, that's just a thought that I have. I don't know why I had that thought. Yeah, that's why I said four years ago, I won't try it today. It's not going to happen. So Fire Nation, as I shared in the intro, we're going to be talking all about teaching an old dog new tricks. And my guest today has launched a company called Nulo, which is a combination of the words nutrition and love.

3:19So that's super cool. Nulo. And why, Michael? I mean, you went to business school. Why did you decide to start a pet food company? Before the pet food company, kind of the genesis of the food company was a company I started before Nulo. I'd spent the early part of my corporate career working for big companies. I used to work for Xerox and then General Electric and then most recently with Universal Studios. And it was around 2001 that I was in L.A. and I was taking a quick break. And I found, I don't know how many of you have been through the experience of trying to find a pet sitter for your pet.

3:59But I went through an experience. I'll spare you the detail. But it basically led me to leave Universal and start what became the nation's largest at-home pet sitting and dog walking and training business. It was based in Los Angeles. And we, you know, I spent about a decade running that company. And, you know, it was in and of itself was a really cool business. We had about 185 pet sitters and dog walkers doing roughly 11 ,000 visits a month all over greater LA. And, you know, the significance of that was I was, you know, we were on the front lines of feeding a large population of dogs and cats while their parents were traveling.

4:40And over the course of the decade, I really started to see a huge demand for pet sitters who could administer at-home insulin shots. And this is for diabetic dogs and cats. And we eventually started to stress the business where I couldn't hire vet techs and train my sitters to give shots fast enough. And, you know, one thing I was trained academically as a biomedical engineer, so I can kind of be annoying in my ability to kind of dig for root causes. And that's exactly what I did in this case is, you know, I started asking myself, like, what's happening? Why are so many pets getting sick? Why are so many dogs and cats getting diabetes?

5:22And, you know, I just went out and started talking to vet schools and scientists around the country. And, you know, what I learned wasn't, I'm going to say it wasn't really rocket science, but it was, you know, essentially that our pets are living in their own version of a fast food nation. We have, you know, we have a country where four large, large conglomerates control over 80 % of the pet food sales in the United States. And, you know, these are the very companies that make candy, chocolate, jelly, and cereal, right? These are the four that control 80 % of our pet food distribution in the U.S.

5:57So, you know, really the majority of these foods are really low in meat. They're high in carbohydrates. They use high glycemic ingredients. They're marketed very well. But unfortunately, you know, dogs and cats can't choose the food for themselves. Otherwise, they choose products that are high in meat. So that's one of the reasons, you know, before I even gave it much thought, I was leaving Los Angeles, moving to Austin, Texas. And I started Nulo with the objective of creating a food platform that's more species specific for dogs and cats that's high in meat, low in carbs and low glycemic. I'm loving all of this because for one reason, and this is something that Mike and I were chatting about beforehand, I am now the proud owner of a four-month-old golden doodle.

6:40Myself and Kate made this life-altering change two months ago. So Gus has been in our lives for two months. By the time this goes live, it'll be a couple months after that. But, you know, it's just like you walk into a food store and you're like, you're overwhelmed because, you know, you've got to buy collars and leashes and, you know, plastic poopy picker uppers and all these chew toys and this and that. And it's just like you're exhausted and you're like, oh, yeah, we can get food, too. And then there's just like rows and rows and rows and rows and rows of like pet food. And you're just like, oh, my God, they're all like looking the same.

7:13They're all colorful and they all like claim that they're the best thing, you know, ever. So, you know, frankly, it's just overwhelming. And I just feel like, you know, I really love how you took all this on because the pet food industry, it's dominated by a handful of billion dollar brands. So what challenges did you face trying to break through that with Nulo? Gosh, lots of challenges and could not agree more that, you know, I mean, I think one of the things you just mentioned, which, you know, is a whole conversation of itself is just the fact of the sameness in the pet food stores. when you look at bags.

7:49I mean, there are foods on the shelf which are very, very low meat, high carb that are, you see salmon falling from the sky and it looks so fantastic. And it's like, why wouldn't I feed my pet this, right? And it was one of the aha moments I had when I was in LA right before I moved to Austin. One of my biggest clients at my previous pet sitting company, she would pay us anywhere from$6 ,000 to$7 ,000 a month to walk her dog four times a day every day. And she was feeding, I won't mention the brand, but it was one of those brands that was, you know, actually had an incredibly high amount of carbohydrates with almost no meat.

8:26And I asked her about it. And she's a physician. And so she really, she said, well, look, look. And she was pointing at the bag and she was showing me, you know, the salmon and the pieces of fruit and vegetables on the bag. And, you know, really struck me then that, you know, here's somebody who's highly educated. She's in the medical industry, and she still has no idea what's in her dog's food. And by the way, she would pay anything to feed her dog had she only knew. But so anyway, this industry is – the marketing that happens in the pet food businesses, these billion-dollar brands that you mentioned have hundreds of millions of dollars in marketing at their disposal.

9:06The one thing that was really in order to break in was there's a couple things for a small brand trying to break in. And I call it like the David versus Goliath. But it's the tension that exists between channel exclusivity on one hand and scale on the other hand. So everybody you sell your food to wants you only to sell it to them. And that's it. So it becomes difficult to get any kind of scale. And so usually the life cycle of a premium pet food company starts in the independent pet food space. So a lot of these neighborhood pet stores that you see, they, you know, they will discover a brand and the brand will promise them that they will never, ever sell their food anywhere else but the independent channel.

9:48The retailer gets behind them, they grow the brand, they promote it. And eventually what happens is the national retailers come knocking and the brand, you know, moves over to national at lower pricing. All this excitement happens. The independent channel kicks them off the shelf. And, you know, the cycle just continues and continues and brands kind of go around and around. And so when I first, you know, entered the industry, I just didn't want to do it the same way. I wanted to, I knew that in order to be able to communicate the nutritional benefits of our food and to be able to compete against these large companies, we were going to have to have scale.

10:24But we were going to have to do it in a way that we could coexist in multiple channels without having all these conflicts. So what I did is I went and sat down with some of the thought leaders in both national and neighborhood pet segments and ultimately came away creating two separate lines, sub-brands, if you will, of Nulo. One called Nulo Metal Series, which is sold only at PetSmart nationwide. And then Nulo Freestyle is sold in the independent channel at neighborhood pet stores. And so we went with that strategy and launched that in May of 2014. and it's just been really, really successful for us as, you know, from day one, we just sort of did it right.

11:05And the independents have really gotten behind the brand, the national retailers gotten behind the brand, and we've grown, you know, north of 50 % compound annual growth rate since we launched in 2014. So, so I think that that's, you know, been one of the driving forces of being able to grow quickly and to get scale. And then, you know, you know, now it's really about getting our message out to consumers and, you know, helping them navigate and sort through all the choices they have available to them. Now, I don't want to go down a rabbit hole because we have a lot to cover still, but I did notice while I was looking to order some Nulo that you have Michael Phelps as a sponsor.

11:42Can you tell quickly how that happens? I mentioned earlier that I was an athlete. I kind of grew up my whole life as a competitive swimmer and always thinking about, you know, what food I'm putting into my body, how I'm feeling my body for performance in the pool. And, you know, I was in 2013, I was actually swimming. I swim Masters still today. I still compete and train four to five days a week. And in 2013, there's a really good Masters program here down the street. And Aaron Pearsall, who is a five-time gold medalist and world record holder in the backstroke was swimming with me. And he, you know, after workout, he pulled me aside and said, hey, I hear you're involved in this pet food company, and I just got this dog, Judo, and I have no idea what to buy, Judo.

12:24Can you kind of help me out? And I started rattling off the things I was so proud of with our platform. It's high meat, it's low carb, it's low glycemic, and we've got a patented probiotic that's spore-based, survives cooking. And Aaron was like, check, check, check. I can see the checks in his head. But what really struck me was he converted instantly. He asked me, in fact, if I had any food in my car. I remember that. I was laughing, thinking like, no, I'm not a distributor, but I can tell you, I can certainly get you some. But he had heard those things. And because that's the way he thinks about food, he converted instantaneously.

13:01And so that was my aha moment back in 2013 was like, athletes are like the perfect ambassadors for this brand because they understand how peak performance is really governed by the type of food and ingredients that they put in their body and they understand that it translates the same for their pets so we did a video with Aaron Pearsall back then and um you know he's he was a great ambassador and we got such an incredible response from the video we started building this portfolio of athletes and we actually have over 20 25 or 26 Olympics, Olympic and elite athletes. Michael Phelps came to us a couple of years ago and we engaged him with a conversation.

13:42He loved the brand so much that, you know, he actually invested in the company. We were doing a round of financing and he wanted to invest in the company. So that was kind of a unique partnership we have with him and both of his dogs. And so, you know, I think that's really worked for us. And it's also allowed us to have really good conversations with, you know, even places that people don't expect to see a pet food company, right? So as you compete against these huge conglomerates, like, they play this game of, like, no this, no that, no corn, no wheat, no soy, no byproducts. Well, no kidding.

14:18Like, you know, if you're going to be a premium pet food company, you have to do those things, right? If you're going to call yourself a premium pet food. So we didn't want to go that direction. We wanted to turn that shame game on its head and rather inspire people to feed better food. And if you go to nulo.com and you look at our ambassadors and their network and watch their videos, they'll hopefully inspire you to think a little bit differently about what you're putting in the bowl. Fire Nation, so much value coming out. And again, you can apply these principles to your industry, to what you're doing, to how you're building your brand, to how you're differentiating.

14:55It's these key partnerships and these key differentiators that's going to make you stand out. And we have so much more coming up as soon as we get back from thanking our sponsors. The Product Boss, hosted by Jacqueline Snyder and Mina Kuno Seteb, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Take your physical product sales and strategy to the next level to create your dream life with hosts Jacqueline and Mina as they deliver a workshop-style, hour-long episode filled with social media and marketing strategies so you can up-level as the boss of your business.

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16:47So Michael, we're back and let's be honest. Like most industries, the pet food industry has evolved. How have you adapted? I'd say that the days of like pet parents wanting to just simply pour kibble into a bowl and walk away are kind of are leaving us. Thankfully. Yeah. And so, you know, I think in general, people are more interested in engaging with their pets at mealtime. And so creating, you know, I call it more of a culinary experience, if you will. And I noticed this trend and this shift happening a few years ago in Europe, and it's definitely made its way here to the U.S. And things like freeze-dried toppers, functional bone broths, meat toppings, and things have now made their way into the bowl along with kibble.

17:34So there's been a little bit of a shift for people looking to feed differently. So I often tease people with different dishes that Nulo is able to make for their dog, like a salmon kibble, for example, with freeze-dried lamb and raspberries hydrated with chicken bone broth and topped with wild mackerel and mussels. That's something that I'll feed Max every once in a while. I mean, it's a great way to start with a really high-meat, low-carb kibble, and then add more meat. I mean, think about freeze-dried meat is 95 % to 98 % meat, and then you're adding 100 % meat, like wild mackerel and mussels, to the dog's food.

18:13It's very, very good for them, and I find it really encouraging. So as the industries continue to evolve in this direction, we've really taken a leadership position responding to creating this program. We call it Mix-It Meals. We were probably the first mover in the U.S. on creating this type of program. And Mix It Meals for us is, you know, much like our athletes in that program work to inspire pet parents, we partnered with food ambassadors like Katie Lee and Ted Allen of Food Network. And we were official pet food of New York and South Beach Wine and Food Festivals and began having conversations about feeding this type of food and the benefits that it has for dogs and cats.

18:55Everything from just providing more meat, more amino acids, better hydration, things like that. So, you know, I think as things have evolved, we kind of shifted and responded. And now Nulu is really, really known for our Mix-It Meal program and providing kind of these alternative type toppers for kibble. So you've had success with Nulu. Why do you feel like you've been able to have not just initial success, but continued success, even though there's been a ton of other competition by smaller companies trying to kind of wedge their way into this space? There's probably three things I could point to.

19:30One is, you know, we, as a brand, we actually stand for something, right? So what I, a lot of times what I tell people is don't, don't spend time writing fancy vision and mission statements about pets and then put them on your walls and then provide or sell food. That's totally a disconnect from what that promises to consumers. So, you know, you can fool people with marketing for a little while, but eventually it's going to catch up with you. I think what we stand for and we have integrity in everything we do. From our nutritional platform from day one, if you think of the genesis of how we started and what we were seeing in terms of diabetes and what we discovered from the previous business I had, we are true to that and we stay true to the brand.

20:12So what we stand for is in every product, whether it's a treat, whether it's a canned food, whether it's a freeze-dried product or a kibble, we're high meat, low carb, low glycemic. And so I would encourage companies like, you know, as they get out there and they're trying to compete in their space to make sure that they carve out something that's differentiated and make sure that they stay true to that. Just as a quick example, a couple of days ago I was on the phone with one of my senior buyers at a major account. And, you know, I was talking about a new line of stews that I'm going to be introducing here in a few months.

20:46Their meaty stews and bone broths are like really exceptional. They're human grade. Her first response to me was, you know, we've seen the stews that we sell that have pasta and rice in them are doing really well. And I mean, that goes against everything we stand for. If you know anything about Nulo, you know, having unnecessary like high carb, high glycemic ingredients just to chase a buck because it sounds good to somebody that, you know, actually thinks their dog is a kid and not a carnivore. That's not something that we will do. And I think brands that deviate from their mission can find themselves in trouble if they don't stay true to who they are.

21:25A lot of great stuff here. And you've already kind of given us a couple things in this direction. But for our listeners who are thinking about, hey, I want to take on a dominant industry or like my idea, I think I have a great one, but I feel like there's already these billion dollar entrenched companies that are just crushing the market and like own everything. What advice would you have beyond what you've already shared? When I was in business school at UCLA, one of the first things they taught me back then is you never enter an industry where four players control 80 % of the market, right? That's exactly what I did.

21:59And I'm not going to say it's been easy, and I'm nowhere near being done yet. But I definitely think that I have some words of advice for people that are thinking of doing something similar. You know, I think not compromising on providing, again, just a really highly differentiated product and value to the end consumer. So figure out what it is that's going to be differentiated and how you're going to deliver it and deliver on it. And don't compromise because doing things the same or having a product that is either cost optimized or commoditized, which is often a temptation for companies, it's just the kiss of death against companies that have really deep pockets and multimillion dollar marketing budgets.

22:44So, and I guess the last thing I'd probably mention is just the whole notion of perseverance. You know, entrepreneurs, once they get traction and you're on the radar with your brand, you're going to get scrutinized. You're going to get targeted by entrenched competitors that, you know, and I always tell people, just stay focused. Go slow to go fast. It's a philosophy I learned working for Jack Welch back in the 90s. And I found, for me anyway, that that really works. It kind of keeps me in check. It keeps, you know, as everything comes flying my way each and every day, it's a really good thing to remember is to go slow, to go fast.

23:23And it's possible to take on these industries. I mean, I think for me, being an athlete has helped me in a lot of ways. And I think if you ask anyone around me, they will tell you that at my core, I generally just love to win and hate to lose. And that's exactly how I run my business each and every day. So it's definitely possible. It's just going to require perseverance and some fortitude to get it done. Michael, with everything that you shared with us today, what is the one biggest takeaway that you really want to make sure Fire Nation gets from all these value bombs? Really stand for something.

23:58And for us, it was being advocates for pets. It's feeding better nutrition and don't deviate. And I think that if you can stay true to your brand and your original mission, that will get you really far. Stand for something, Fire Nation. Be proud, be loud. And Michael, how can we find out more about you, about Nulo? Give us a call to action if you have one. This is the spot. You can find us at nulo.com. So Nulo is N-U-L-O.com. We actually have, my marketing team just slipped me a note saying we had 25 % off any order on nulo.com. so if you go to nulo.com backslash fire and enter a promo code fire you'll get 25 off anything you order on nulo.com do you shift to puerto rico yeah i'm pretty sure we do i'll test the theory please do we do have three and a half million pet lovers on the islands just to note we've done some great work in puerto rico because pet smart is one of our partners in puerto rico so you can find us there.

25:02Very cool. Loving all of this. And I just want to say, Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with ML and JLD today. So keep up that heat. And if you do head over to eofire.com and type Michael in the search bar, his show notes page will pop up with everything we've talked about. Of course, your call to action for all you pet lovers out there, newlow.com slash fire. Use promo code fire for 25 % off your first order. Awesome. And hopefully he ships to Puerto Rico. And I just want to say, Michael, thank you for sharing your truth, knowledge, and value with Fire Nation today.

25:42For that, we salute you and we'll catch you on the flip side. Excellent. Thank you, John. Been a pleasure talking with you. Hey, Fire Nation. Today's value bomb content was brought to you by Michael. And one thing that I've identified over the years is that successful entrepreneurs, they're productive, They're disciplined. They're focused. That's why I created The Mastery Journal. It is a gorgeous faux leather journal that will ensure you master productivity, discipline, and focus in 100 days. It is my best work ever, Fire Nation. So visit themasteryjournal.com. Use promo code podcast for a$15 discount as a thank you for listening to my podcast.