How One Founder Beat Billion-Dollar Competitors With Zero Funding | Ep 280 with Blake Niemann Founder of Levels

0:04so blake you have an amazing story and i always like when people come on who have bootstrapped their way to success and have really been in the trenches been through the mud and the other end of the really creating a movement in an industry that I have personally been in and I've loved since I was probably 14 years old, taking supplements, actually studying. And I took a few classes in college about physiology so I could learn more about supplementation. But I want to go back to when you started in your New Jersey apartment, your Jersey City apartment. What was going through your mind in that moment when you decide to start Levels?

0:54Yeah, sure. So I appreciate you having me on. And yeah, in 2016, when I founded the company in my apartment, I had been kind of tinkering around with ideas. I was always sort of a kind of a hustler and entrepreneur growing up. I was a techie. I wasn't into fitness or I was in fitness, but I was an athlete. Like I went to the gym and then played video games. So I grew up with like the dawn of the 486, you know, broadband and so forth. So when I was younger, I built computers and built websites for like small businesses. And I was really always trying to make product and sell things. So it was pretty, pretty ingrained with me early on and also had a strong work ethic.

1:33But I was trying to figure out exactly kind of how to, you know, make my mark in the world. And so, you know, like I said, I was going to the gym and I was consuming protein and I started just researching the category protein powders particularly whey protein i mean whey protein sits in the sports nutrition category um and it's always been the for lack of a better way to say like the king of the category like out of all the supplements it was the tried and true it was the biggest but in 2016 everything that was there was a lot of things happening in natural and organic foods uh that was seeping into the grocery ecosystem where you know even companies like costco were bringing more organics and more natural.

2:14And I was looking at the supplement set digitally and I was like, why does everything look black and synthetic and like bro meathead-y, like pharmaceutical neons and ice creams and artificials? Like this is dairy. Why don't we make it look like a food, a natural food? So that was sort of the thesis is like, I'm going to make this look like dairy, like a bottle of milk would with an infusion of like sports nutrition in branding. And the category was so big and, but it was super sleepy. Like everyone in supplements was, is usually focused on, um, the new shiny thing. So if there's a new supplement comes out, everyone's like, I want to make greens.

2:53I want to make creatine. And so at that time it was big, but everyone's eyes were focused on something else. So I, uh, was like, Hey, I'm going to make a product that's affordable for the American consumer, but feels premium. I'm going to formulate it with the least amount of ingredients and also make sure all those ingredients are natural. And even if I'm wanting to put ingredients that are natural, that sound artificial, like for example, xanthan gum, which is a natural ingredient, just not going to put it in there. And I'll launch it online and test it digitally, see if like there is product market fit to, you know, if the consumers want this.

3:27And, uh, that was the thesis at about 10 grand in cash. Um, and, uh, I launched it from there and kind of built it brick by brick over a decade. And, um, I bootstrapped it the whole way until today. I mean, I've never taken venture money or private equity. And now we are the preeminent protein brand in the United States. We have distribution in every major retailer, Costco, Walmart, Target, Kroger's, ATBs, you name it. And we're the number five whey protein on Amazon overall in the entire category against even conglomerate incumbents. So that was kind the beginning and the thesis to start it. It was a shot at trying to build a business.

4:10I mean, that's amazing. Like you're saying, you went with a mass product, you made it better. But when you do a mass product, the competition is fierce because they have ginormous budgets. It's funny when you talk about the supplement industry, how everyone goes to the shiny new object. Cause I've seen that over the last 20 some odd years of just taking supplements and it's like, Oh wow, this new thing. And then next week it's like, Oh, now this is a new thing. And now there's a new molecule or I don't even know if any of them even work. Right. Um, so that's fascinating though, of how you really focused and honed in on, on protein, just being how big protein was, but how crowded it could be.

4:52Now let's talk through what was your strategies because you had these giants that you were facing. I mean, to be number five on Amazon, I've sold on Amazon since about 2012. It is hard. People don't realize how hard. You don't just put something up and it sells. It doesn't work that way. So to get to that point, I mean, that's massive in the retailers. So the fact that you didn't have to take outside funding, You started with 10 ,000. How did you compete with these giants? Honestly, great product. I know it sounds crazy. So, you know, my personal belief, when I found it, I still had a full-time job.

5:32I was working high tech and I didn't leave my full-time job until the company was generating, I think, like$3 million in revenue. So I was doing it solo. So we were generating a couple million in revenue. But we did it organically. We launched the product through customer reviews on Amazon. we found out what they liked, they didn't like, you know, every little detail and refined and refined. And it was built review by review. And to be honest, like people think I'm lying, but we didn't even spend money on paid ads till we did like 3 million in revenue. It was just organic snowball growth off of reviews.

6:08And Amazon's ecosystem is like, the more reviews you have, the more sales you have, but you have to get more sales to get more reviews. So the beginning is very slow, but then it starts to snowball. And I would take screenshots like a new milestones, like early in the days of like, we did$7 ,000 this week. And like, I've saved those. And now we're like, we're doing millions of dollars a week, we just took that approach. And we were really thoughtful about, you know, doing it like brick by brick and investing for the long haul, if you will, and not and taking the kind of mental stance that success isn't overnight, It's a decade.

6:46And that's really where we succeed as a brand. We're maniacally focused on our flagship product, our whey protein brand. And that focus started really, really early. And I think that was part of the success. So it was just organic to answer your question. Some of the most successful people we've talked to use that word maniacal. So when you went, it sounds like you started heavy on digital online e-commerce, and then you went into retail stores. That is a whole nother thing in itself. I mean, retail can make or break companies in my experience and talking to enough people we've heard people go on Shark Tank.

7:24It's great. It actually destroyed their company because they couldn't afford to then get the inventory and it didn't sell in Walmart. So Walmart shipped it back. I mean, I've heard I've heard nightmare stories as well as, of course, great stories. But how is that process when you went into retail or retailers? and what lesson did you learn about that process? Yeah, a good question. We waited a pretty long time. So we almost waited six to seven years into the company's history to even go into physical retail. Now, we did that one because I was a little risk adverse because I was bootstrapping and also we were making good money.

8:01I was pretty happy with what we were doing. But also to go to that next phase, you got to have everything really in place. Like, do you have the supply chain? Do you have the manufacturing? Do you have the right person to lead your sales organization? So I just, when the time was in like right where I felt it was right, that's when you made the move. But you're right. The physical retail world is highly complex and much different than digital. Both of them have their pros and cons. Physical gives you, you know, a massive amount of distribution points and can take your brand to the next level. but definitely the thing you need to be able to have is enough cash to invest in those retailers out of the outset so you should try to be profitable day one or call it month one but you need to be able to really invest in that retailer to drive velocity and success if that's couponing if that's discounts once a quarter if that's you know off shelves and experiential or whatever else because you need to succeed there and you need to get trial going with consumers at that specific retailer so that you stay in.

9:08So you need to have an arsenal of cash. And the way we did it is, we were profitable at every retailer, but we had this huge portion of our business that was already digital and really tried and true. And so that part of the business was funding the new part of the business, if you will, for lack of a better way of saying it. And so you really need that to make sure that you have the cash, but also like you've really proven out the product. I think if you launch digitally, you need a couple of years. It might not have to be seven, but three, maybe five. Really get the company in a sophisticated place before taking the next stages.

9:47I think if you're not a perishable food, if it doesn't have to be refrigerated and you can make the economics work, I would always start digital. It's just an easier route to market to figure out if the customer even wants your product first. and then two, to refine your business before going to the next stage. Because the next stage is the hardest stage out of everything. It's scaling and hyperscaling. I remember doing Costco roadshows all across the US. Fond memories. We'd see the ladder guy and then we'd see the mixer guy or person. And we'd all be traveling across the US. And we have like the megaphone, like trying to sell.

10:31It was skincare at that time. But it just brings up fond memories. So you said you side hustled this company to 3 million before you even left your job, which I love that. I think that that's amazing. And do you feel that most entrepreneurs probably should do that when they get into business? and do you feel like that might lower the risk than just going all in? Yeah, for sure. I think you should definitely hedge your risk. Building a business overall is about hedging risks and your personal income is a risk. And so if you can pull it off, do it. And the fact is you're going to have to suck it up.

11:16Like just, well, I don't want to work. You literally have to work as hard as you can to make it happen. And so you might have to work 40 hours a week at a regular job and then another 40 hours a week building what you're building. But the, you know, everything has its pros and cons. And if you want to build a business and if you want to succeed, you've got to put in the effort. And you've got to put in the effort that the top 10, 25, 1 % of the people in the country do. Like it just takes, it takes moving mountains. And it's just, unfortunately, social media makes it feel like it's overnight and it should be easy and it shouldn't.

11:56It should be extremely painful. It should test your resiliency. And if it was easy, everyone would do it. So you have to kind of build the mental state like your back is against the wall. Either it is like most folks move better or make better decisions when their backs are against the wall. Either in reality, like financially, their backs are against the wall or they create artificial walls for themselves and say like, if I don't do this, like everything's over. And so you have to create this sort of mental place where it's all or nothing. and so by having a job at the same time like you're hedging your income risk to make sure you figure it out first so I was able to accomplish it also the role that I was in I was in high tech sales so like it lent to the ability to do what I needed to do if you know anything about high tech sales like every high tech sales person since the 1980s has been a remote salesperson so like I had flexibility in my days now clearly I was in sales so like if I wasn't doing my job job, I would have got fired and also would have made no money because sales is all about how much you're selling, right?

13:05So you just got to put yourself in a position where you can do both. And then I would say, you'll know when you know to be like, I can walk away from my job and do this now. And that's kind of how we did it. I know it sounds, it was quite painful, but that was the mental state of how I was approaching it, if you will. So you're saying I can't make a course and then work 10 hours a week and buy my Lamborghini. It's probably not going to happen. But yeah. Oh, God. When I see that, I'm like, this is insane. This is fantasy. How does everyone have a Lamborghini? 1 % of the population has a Lamborghini.

13:44It's now everyone on social media has a Lamborghini. And it's always the same looking Lamborghini. I think they're renting the same one. But for you, I love that because like you said, you've got to be that 1%. I mean, because I imagine nowadays, it's almost like competition becomes the barrier of entry of a lot of things now with AI and outsourcing. And you could do a lot of things. I think the barrier of entry goes down for some things, some places. Your competition then goes up. So if you're not willing to outpace that competition, then that competition will essentially, I guess, outpace you.

14:23You talked about, you know, people having their backs against the wall and having to make these decisions in that moment. What about for you? Was there a hard lesson that you learned? Or was there a moment where you were like, you know what, screw this, I'm going to give up? Well, prior to this, like, you know, I had some things prior to levels, like I was tinkering with things that didn't really work. And I learned lessons from those, they weren't nearly as big. And they didn't like they weren't big enough for like the failure was cataclysmic, but it was enough to be to put myself in a mental state.

14:53I don't, you know, I basically remember the moment because I was watching Jack Dorsey run Twitter and Square Payments. I was like, how is this guy running two companies and I can't run one? Like that's not clearly he's not any better than I am. So I said to myself, I don't care if it takes till I'm 80. I'll figure I'm going to figure something out and make it work. So if it wasn't what I'm doing now, like if that had failed, I would have figured and tried another thing and tried another thing. Now, it doesn't mean you can't be smart about what you're doing. You've got to be sharp. It's good to have sharp mentors.

15:26You've got to spend your time researching. There's a ton of tools, like you mentioned today, like with AI that just, I mean, we use fanatically here to help get our thinking around things I didn't have at the time. So there's just more opportunity now than ever. There's a lot of people saying, well, AI is like ruining opportunity. I actually think like the opposite. There's so much opportunity and there's so much opportunity in the United States to build something. If it's, you know, an HVAC company to like a hot dog cart conglomerate to a levels whey protein brand, there's just you can do anything here.

15:59it's it's not impossible and the tools uh exist to do it now it's in such a way that um the speed to build a business plan with just your thinking and your voice in say chat gpt or other like you could build a business plan in probably you know 30 minutes um you know it's it's incredible so i think um you have to create that that moment in your head where like i don't care how long it takes it could take 100 years i love that yeah people are stuck on the i want to build in exit in 345 days and then I'm going to retire. So I was just in Europe and I always like to go to supplement stores when I'm in Europe because I feel like they're very strict when it comes to the supplements they have here, which kind of reminds me like what you're saying.

16:44There's a lot of ingredients in the US that aren't even allowed, let's say in Europe or other countries. With that being said in the US, you mentioned early on about this hype. There's all these hype ingredients or hype products. And I know there's a lack of regulations in the sense of you don't always know what's even in it. And I remember studies that would come out that said like there wasn't even what said in it, like they would test it and it wasn't even in it. Or they were even adding like anabolic steroids in the products, like the first batch would work, but then they would remove it from the second batch.

17:19I remember all these companies that got in trouble for doing things like this. So how do you see this industry going? Obviously, there's companies like yours that are doing an amazing job at this. Do you think others see the success that you're having and say like, wow, maybe we should do this? Or are just the big players in this? They're just going to continue doing what they've been doing? Yeah, I think there's, you know, every industry is right for con artists and, you know, unethical ways of doing business. But, you know, it's funny, like there's some ingredients where in the United States, like monk fruit extract here, that's a natural ingredient.

17:55We use it. It's a really great sweetener. And like Canada doesn't allow like certain amounts of it. So sometimes like these other countries like don't allow certain natural ingredients in their own, but United States is more of the wild west. I will agree. Yeah, I think there's a lot of great new ingredients that come out that are under trial and they're not pharmaceutical grade that are supplement ingredients that over time will probably come out to be proven to what they're claiming to be. And there's a lot of good guys in the industry that talk about this, the guys over at Price Plow and others who are really invested in making the industry better and talking about new ingredients and the efficacy of those ingredients.

18:41But there's also plenty of ingredients and supplements today that where like just marketing is added on that, you know, so folks can sell something at a higher price point. And I think a lot of the big conglomerates, their biggest issue is that they can't seem to get out of their own way on making like simple decisions. Like our competitive brands, you know, they continue to keep artificial like artificial ingredients in their protein powders. And I think it's just a corporate culture or the inability to move at the speed that we can move where they can't make these decisions. And right now the American consumer is yearning for clean ingredients, not only minimal, like what's the least amount of ingredients you can put in this product for me, but also are they clean?

19:30Like are they, you know, are they food ingredients? You know, most of the time we look at it as like, you know, the T's and C's of a contract today. The T's and C's that you have with the consumer is your ingredient statement. now. So your, your macros could be like, you have a ton of protein and great calories and, and so forth. But if, if that ingredient statement reads really weird, um, the consumer is just like, no, I'll move to the next one. So I think, um, I think big brands, big comrades are, are getting better, but, um, there's reasons they can't do it fast enough, uh, or they won't because of, you know, cost or, or whatever else.

20:05That's a great thing, right? You can be nimble and they're like moving like the Titanic, trying to make changes and they can't, which is always, I think, a competitive advantage of a, when I say smaller company, like a not billion dollar company compared to like a publicly traded or billion dollar company. If you're sitting in front of a class right now of students and knowing how the future is, knowing how things are going, corporate jobs are possibly being displaced by technology. And I know you were in technology sales before. If you're sitting in front of this class and they looked at you and said, Blake, I think I want to be an entrepreneur.

20:49I want to be an entrepreneur. But they're in college. What would you tell them? Job out of college today. And I know that might scare some people, but I'd leave. I think the advancements in AI plus the cost of college negates the ROI. I went to college at the University of South Carolina and I studied supply chain management, which was a very lucrative degree at the time. But I have to tell you, all those theories and things I learned in supply chain management classes, I remembered zero until it was applicable work experience that taught me things. And so, I mean, even in sales, I didn't learn sales in college.

21:26I learned it from mentors and guys that have cut their teeth cold calling. And so I would quit. I would drop out college and I would just start either working for an entrepreneur and say like, listen, especially the younger kids who know how to use AI. I tell anybody here is if a high school kid walked in here and said, hey, I can do I can prompt anything with AI. I can get a ton done for you. Will you hire me? I'll hire you today. I will hire you today. You don't need a college tree. Come in and help us. And so I would say, you know, for entrepreneurship, it's all about resiliency and suffering and figuring it out.

22:01And I would either I would either just do something like small to get experience, like maybe sell hot dogs out of a hot dog cart. I use this analogy all the time, but like there's nothing beneath you to sell hot dogs. Like figure out how the consumer thinks, figure out how you could sell them for more. How could you add like more accoutrements to your hot dog to sell the hot dog instead of two dollars for ten dollars, you know, or go work for an entrepreneur, even if it's a guy running an HVAC company or a lady running a PR company or some group that has a small finance, fractional finance firm, like go work for them and just get involved in everything.

22:38I would say drop out of college. And I look at my kids, I'm like, there's no way. First of all, I hear what people are paying for college. I'm like, I'm never paying that. No way. No way am I paying that. I don't care how much money I have. That's absurd. And then I'm thinking about the future. And it's just the future is AI and ability to use technology and prompt and so forth. It's just it is what it is. Well, thank you, Blake, because I did drop out of college. So you made me feel better about myself. So I appreciate that. and I'm pretty sure Costco made billions of dollars from hot dogs because when I was always there, people were always getting the hot dogs.

23:23I don't think it is so much anymore, but decades ago, I felt like that was a big draw for people. Funny enough, you say hot dogs because that's automatically, when I see a hot dog, I think of Costco because they do actually have really good hot dogs. But man, this has been great. Do you want to add something? No, I was just going to say, I think of Costco and I think of Yankee Stadium, outside Yankee Stadium. The hot dog, if you've ever seen the TikToks where people, it'll be a hot dog guy who runs a hot dog cart or a potato. There's one real famous one in England that he sells potatoes, like baked potatoes and puts all these accoutrements on it.

23:59But I get absorbed by those because I'm watching these entrepreneurs at their craft. and uh it's all it is hot dogs but i'm like you can make bank just selling hot dogs you could like you could figure out how to make them fancy and sell a ton of them you know so in any case i love the hot dog analogy i'm gonna go to chat gbt after this and i'm gonna find out how it can make a hot dog stand but that's i think that's the thing that when you somebody like yourself because i can tell you're like an idea sales guy like you've been you said you've been selling stuff before it was even titled selling stuff.

24:37I was selling chocolate in first grade, expired candy that I would get from the local chocolate place. It's always fun to talk to someone and say, what was the first things that you sold? But that person remains that hustler salesperson, I think, for the rest of their life. And it really translates over. So maybe that's how you can see an entrepreneur before they're an entrepreneur. Just find out what they've been selling since they were a kid. But Blake, this has been great. If people would get in touch with you, they want to find out more about Levels. Maybe they want to get Levels in their retail store.

25:12How can they do so? Sure. You can find us at levelsprotein.com. You can find us on Amazon, in your local Walmart, Target, Costco, Vitamin Shop, regional grocers like HEB, Wegmans, and Meyer, almost anywhere in the country. And if you can't find, you're looking for a store, you can go to our website again at levelsprotein.com and go to our store finder and you can find a local store near you. Man, I think not only are you going to inspire people to be healthier through, through, you know, high quality protein and supplements, but you're also going to inspire the next generation of entrepreneurs who are going to quit college.

25:47They're going to go out there. They're going to do hot dog stands, hopefully not all of them because there might be too many, but they're going to go out there and they're going to make dreams come true. and they're going to make the freedom for their life that I know all entrepreneurs want in the end, right? But thank you so much for joining us today on Founders Story. And man, I had a great conversation even before the conversation was great. And then I knew this was going to be one of my favorites of 2025, I'm sure. But thanks again for joining us today on Founders Story.