#260: Nick Green, Cofounder and CEO of Thrive Market – The business model matters

25:23And to be honest, it's even more of a thing today because so much of our shopping experience is becoming imbued with AI and with the personalization that can happen there. If our members don't trust that we have their interests at heart, that our quality standards are real, that we're doing the homework, they're not going to use features like our AI cart builder. For example, on First Order today, our new members, over 40 % of what they put in the First Order is actually added by an AI cart builder that uses their health inputs and helps them build the right assortment. Yeah, we don't use outsource trust as the marketing phrase, but I do think that's the bar that we want to reach.

26:06Well, it's outsource your trust to us. That's the line, you know. It kind of reminds me when I heard Think Outside the Bun at Taco Bell. I thought that was a pretty good one, too, you know. Staying on Amazon for a second, you know, what's the best practice you've picked up from seeing how Amazon engages with their customers? You described it as the best retail in the world. I think everybody would say that as well. You know, what's the best practice that you've been able to incorporate into the Thrive Market model? I think it's customer obsession. I mean, that's like, that's a big thing. It's paradigmatic.

26:38And I do believe that's the filter that every decision they make goes through. And I heard an anecdote a while ago that Jeff Bezos used to have an empty chair in the conference room. He says, this is the chair of the customer. So just always be thinking they're here with us, even if they're not. And maybe that's apocryphal. But I do think it goes that deep in their culture. and one I think one thing to learn is like anything that goes that deep in a culture is super powerful and one of the things that always blew my mind like reading Bezos's shareholder letters is the themes in 1998 are the same themes that he's talking about in 2018 like it's just that clear and that deep a commitment particularly to the customer and there's other other facets as well.

27:29And so I think that they have a very clear culture. They are truly customer obsessed. And I think a lot of other companies will give that lip service, but it's not deep, deep, deep in the culture. And I'd say for us, the reason that is so important to learn from is that when your members are paying a membership model, which I guess Amazon has with Prime as well, the expectations of the customer are significantly higher. And the opportunities to let them down, if you don't meet the bar, I think are more significant. So that's probably the number one thing I've learned. What I would say is very different about the lens that we viewed the customer through is that for us, we are laser focused on their healthy living needs.

28:13And again, we're not going to be better at serving the customer across every single dimension. Again, you're not going to out Amazon, Amazon. But what we can do is be the best place, the most trusted place to find the healthiest, organic, better for you products. And particularly for families, what we're finding when you have, you know, parents, you have moms who are pulled in a thousand different directions, you know, work and family and activities and all this stuff, the ability to outsource their trust, to have a place that they know makes it easy to put the right products in their home and on their table.

28:48Um, you know, that's where we can really shine. And it's the reason why our members not only renew at a higher rate, but also are evangelists for the brand. So you're obsessed with the customer. Can you give us an example of a friction point that you identified by listening to your customers and the story of how you and your team solved it? So there are big things you'll find in your business that are just obviously detrimental to the customer. And those are the things that are actually, they're not easy to solve, but they're easy to allocate the resources to solve. sometimes the hardest things are i call them the paper cuts so it's all the little things like the points of friction that are created in your experience where you're not totally letting down the customer but the sum effect if there's every single one of those that you're piling up to some threshold where you're no longer meeting their expectations or no longer wowing them in a positive way and so that's actually a really relevant one for us recently because we, in line with our thinking big value, we have big swings every year as a company.

29:54And three to five of these that are our big tentpole, like we've planted our flag, this is what we're going to go after. And most of them are focused on adding to the Thrive Market Value proposition. And a couple quarters ago, we've been really performing well as a business. We've been feeling really great and kind of taking victory laps every quarter about how it's going. A couple quarters ago, I came to the company and I said, I want to say something provocative. This was in our quarterly business review. We're doing a great job on big swings. We're doing a great job adding to our value proposition.

30:21But I want to suggest that we are not doing a good enough job at delivering on our core existing value proposition. And we basically looked at an example of the member journey and all the different points, opportunities that you have to either come through for the member or let them down. And then we had a lineup of all the, we call them RFCs, but reasons for contact from member services. and how many tickets are we getting across each of those different areas? And if you just concatenate them along, what is the average experience that a member is having? And between an out-of-stock or an empty search result or a damaged item or an order of communication that didn't go quite right, what's the chance that we're basically hurting our members through this like thousand pay-per-cut phenomenon?

31:07So long explanation, but the upshot of this was we created a BHAG this year that's cutting our service tickets per order in half. There's no single project that will take, you know, that'll even move us a step of the way there. It's a bunch of micro steps that are happening. And I actually believe that's the like devil in the details that many companies, certainly that our business, has not done a good enough job at and that we're getting better at. So thinking big, and you call it the BHAG, which is a big, hairy, audacious goal, I think from Jim Collins' good to great book, you know. And now here you are, you've got 1.6 million members in Thrive Market Club.

31:47I mean, that's a hell of an accomplishment. You know, looking back, what do you think was the single biggest strategic decision you've made in the past 11 years that's had the biggest difference? I think the biggest, besides the focus on the mission itself, I mean, that's the filter for everything we do. The biggest strategic decision was to do membership. that's the core and the core model that we run on and around which so many flywheels in the business really turn again it's our we have our one-for-one membership the annual membership gives us a full year to show value it front loads the cash it improves our cash flow dynamics it offsets marketing costs it's a forcing function for delivering real value because you know that member is going to come up for renewal.

32:36It gives you very clear feedback if you're not coming through for your customers in the right way. So I think that is, if I had to pick one, it's that decision to structurally focus on the membership. But honestly, there's been so many, you know, there's been a lot of, honestly, there's been a lot of things that we've done, we've made mistakes on and then come back and fixed. You know, like we, we for a long time had a trial membership, which was, you know, really great for getting a lot of people in the door, not as great for building commitment and quality in our, in our membership. So that's like something that we changed.

33:09How do you think about that? Because that's really a good, good, good thing you just brought up there. You know, how do you think about bringing in new members and, and also retaining the members you have? Where do you, how do you, what do you spend the most time thinking about? The things that you do to retain the members you have are improving your value proposition, which actually over time will bring in more members, right? So as we deliver more value to our existing members, that also creates more value for any new members that come in. The other thing is, as your member base gets bigger, a larger and larger percentage of your new members are coming in, as I said before, referred by existing members.

33:46So that existing member base is basically an asset for customer acquisition because it's free or near free referrals and word of mouth. And on the flip side, if you're not doing well with your members, you have sort of a double whammy of one, your churn is going to be high. This is the number one reason why membership-based or subscription-based businesses online have not been successful over the last decade. And there's like too many to name that have kind of gone up and then churn just really takes them down. You can grow really fast for a while with a high-turn model. But at some point, if you have a high percentage of people leaving each year, that starts to just be this like leaky, I call it leaky bucket syndrome.

34:32But it's like the leaks are too fast to be keeping the water level rising. But then the double whammy there is one, you lose members. But two, they tell about those experiences. And as I said before, if you let down someone who paid a membership fee, they're going to talk about it. like in a way that they wouldn't if they hadn't paid that membership fee. The wrong kind of talked about marketing. The wrong kind of talk. But you get the other side is true too, right? If you come through for them and particularly for us, like we find our members, not only, you know, we come through that for them on a practical way and that they're getting value from the membership, but we also align with their values.

35:07So there's a pride aspect where they actually want to share Thrive Market because they're proud to be Thrive Market members. And so, yeah, I'd say, look, we have a fantastic customer acquisition engine. We use health and wellness influencers. We're really, really good at creative iteration on paid media. We're very proud of that effort. But by far, the most important thing and will be increasingly important as we scale is how much value we deliver to existing members. You mentioned earlier that AI is giving you the capability to personalize a lot of information with your members. And, you know, how are you thinking about AI and its impact on your business?

35:43Yeah, well, I mean, like every business, it's going to create incredible leverage for teams. So we're seeing that just in spades in terms of the ability to create content, creative output, testing on our landing pages, funnels, marketing in general. We also are seeing benefits to AI when you think about the way that you can manage supply chains and do predictive analytics and understand and forecast your business. But the number one thing that we see that I think is kind of unique to consumer business is the ability to create personalized user experience. And for us, with that focus on health and wellness, the stakes are even higher because health is different for different people.

36:29right and i think so much of what people struggle with is these like generic prescriptions that say oh you need to go do this diet or you need to reduce the calories here or the key is protein and that's like it's not one size fits all for every for every person and so our ability to you know we have an onboarding assessment that our members take and then we map their responses to all of our existing members and then create from the very first instance a personalized recommender engine. And that AI driven recommendations has gotten so good now that we're actually helping build the cart on behalf of the members in the first order.

37:06Over half of our orders now are on a scheduled basis. They're like auto ship orders. And so that's using AI to predict when people are going to need which items. That to me, I think is the real future of AI for shopping. And what's exciting for us is that we have a data set for the health and wellness-focused consumer and the health and wellness-focused assortment going back now a decade than no one else has. And because it's on membership model, those members work with us or engage with us over a long period of time. The data is really, really rich. And my third co-founder is our CTO. So we are a retailer, we are a CPG brand, but we also are a tech company and we've had that data capability since day one.

37:48So yeah, I'm incredibly excited about AI in general, but specifically the ability to now, you know, when we think about making healthy living easy, that one of the hardest things is how do you personalize that? Not everyone can have a nutritional coach, right? Or a concierge shopper. But with AI, we can get to a place where Thrive Market, you're going to have something very, very similar. Before I move off AI, you know, it's such a hot topic. And you're obviously a very current leader and you're on top of what's happening in the world of business today in a very contemporary way, what are some of the ways you're personally using AI to make you an even more effective leader?

38:32I mean, what kind of advice can you give people on how to really get good at AI? I don't know if I'm the best person to give advice on how to get good at AI, but I will say I use it a lot. And, you know, I started out, my business career started and my strengths early on were never as a leader, as always as a doer. I was not good at delegating. I was not patient. And I wasn't, I wasn't great at developing people. I had a real interest in it, but I wasn't great at it. So leadership for me has been an acquired skill. And I still look around and there are leaders that for me are touchstones and always remind me how much further I have to go.

39:09But the way that I've gotten better at it over time has been working at it, like actually just having a practice of getting better. And this is going to lead to AI. But one of the things is I've, throughout my leadership career, worked with coaches. And I just find that so helpful, whether it's on a weekly or a monthly cadence, to be getting feedback. You don't always get it from your team. And the coach can facilitate that. They can also just talking through, give you different perspectives on situations and help you reflect and reframe and mirror what's going on. So I have actually found AI.

39:45and this is going to make me sound like a little bit of a crazy person, but I found AI to be a great coach. And with like with ChatGPT, the more you talk to it, the more it knows about you. Yeah. The, you know, as the prompt space has gotten larger, you can give it a lot of context on a given situation. And, you know, it can veer into the kind of, uh, glib, uh, uh, kind of, uh, axioms. It can be a little bit sycophantic. So I think all those criticisms are really valid, but I do find it to be pretty uncannily precise on like, what are the issues at play in a given situation? What are some things you can consider?

40:24And even if it doesn't get you all the way there, I think it's great for thought starters and it's great for thought partnerships. I agree. It's been good for me too. I went on and said, how can I make How Leaders Lead a better podcast? And it gave me some good things to think about, you know, and I was shocked at just how much coaching I got and how relevant it was. You know, you mentioned earlier, one of your core values is to think big. You know, you really want people to be step change thinkers. You know, what's the single biggest cultural core value that you're really trying to make happen across your organization today?

41:00Is it think big? Well, I mentioned at our quarterly business review two quarters ago, the kind of flag I wanted to plant was actually a member first, which is another core value of ours. and in a sense, as I told you about that BHAG, it was actually to say, we need to think smaller. We need to think about these paper cuts. So I would maybe flip it a little bit and say, we're actually really good at thinking big. We take big swings. And as I told you at the beginning of this conversation, that's actually a towering strength for me. I naturally think big. And I do think businesses tend to reflect the values that their leaders have.

41:39And that's one that comes naturally to me and I think has come naturally to our organization. The kind of stretch that we're in right now is a little bit of complementing that or maybe creating some dynamic tension between thinking big and doing the next big thing and really solidifying the core and the foundation of what we do, specifically from a member-centric lens. And I think for us right now, at the scale that we're at, continuing to grow very fast, We've been profitable the last few years and are expanding the profitability meaningfully. We're building a really real long-term, hopefully generational business that can transform healthy living in this country.

42:18The stakes just keep getting higher. And so I do think for us, thinking about how do we make sure that in that context, we are doing it, we're not losing sight of the number. It's so easy in business for metrics to become an abstraction, to become focused on all these that kind of financialization of your business performance. And it's not that that stuff's not important, it really is. But that it needs to follow from delivering value to your customer, not be a zero sum where you're extracting value. And so I think the most important value for us right now, and we just hit last year, we hit our 10-year mark.

42:59As I think about the next 10 years, the one thing we cannot lose sight of, we will continue to think big, Another value is being tenacious. We will always be tenacious. Our third one is authenticity, which I think also comes pretty naturally. But the one that we cannot lose focus on is member first. That's great. And, you know, speaking of authenticity, there's a person now in the lead in your industry to a certain extent in the government. What's your take on Robert F. Kennedy Jr. and what he's doing in the industry right now? You know, I don't have a take on RFK specifically. Well, he's got a take on a lot of things.

43:34So there's things that I think we think are good that they're doing, but a lot of things that maybe, you know, we don't have as much of an opinion on. I think when it comes to food specifically, I think Maha is a reflection of where the consumer is today. Like, I think fundamentally it's a consumer movement, right? It was a grassroots, bottoms-up, like largely parent and mom-driven movement. And so while it's now become a political endeavor and I think could actually do a lot of good in changing nutritional standards and reforming quality standards and putting a real emphasis on getting away from ultra-processed foods and getting away from chemicals and foods, the fundamental thing came from consumers waking up and saying, these things are important to us.

44:25And what we've seen in our business is they've been voting with their dollars well before this became a political issue in that direction. And I think Thrive Market has proven that it's not just people in LA and New York and San Francisco. It's not just affluent people. It's not just liberals. It's all across the political spectrum, the socioeconomic spectrum, the geographic spectrum. People want to get healthier. And I think it's now undeniable that ultra processed foods and chemicals and foods are not conducive to that. Yeah, I don't think, you know, we're not embracing Maha wholesale. And there's a lot of things that RFK is taking a stand on that have nothing to do with our mission.

45:03But specifically on the get chemicals out of food, get ultra processed ingredients out of food, clean up the food system. I think it's a conversation that needs to be happening. And it's been taking place with people adopting businesses like ours. It's exciting that it's now happening in the political lens as well. Yeah, well, Maha, make America healthy again. You know, that's a trend that you're obviously leading on. Yeah, and I think, again, there's a lot of, we can quibble with a lot of the different factions that are in Maha and are they doing exactly the right thing. But the general focus, I think, is it should be something that transcends politics.

45:41Like everyone should be able to agree that we should have less artificial chemicals in our food system, that we should be have fewer ultra processed foods going to our kids. You know, there's a study came out a few days ago that 60 percent of the calories that the average kid in America gets are from ultra processed food. You know, kids eat more ultra processed food than any other age group in this country. That has to change. You know, and you mentioned earlier that you you really appreciate coaching. You look for coaching. What's something that you've done lately that's really stretched you as a leader?

46:17Maybe a practice or discipline that's been hard, but it's been worth it for you. Well, I've been working with a coach who's been fantastic. On the ChatGPT side, one thing I would encourage people to do, this is very important, is when you get feedback, explicitly tell the AI, give it to me straight. Don't pull any punches. I want your candid feedback. And then whatever feedback they give you, it gives you, make sure you get like, give me the opposite take. So I always push it to give you multiple perspectives because it's very persuasive at whatever it's saying. But I would say, honestly, the thing that's challenged me most, so coaching is great, but the best source of, it's not coaching with a capital C, but I'd say it's like coaching with a lowercase c that I get is actually from my fellow executives.

47:07and we talked about Amazon earlier. Over the last two years, we've hired three ex-Amazonians to our executive team and actually brought over other Amazon folks throughout the org. And we found despite how different the businesses are, the DNA is really, really valuable and the caliber of talent. Like just to have gone through the filter of Amazon in the case of our execs been there for 10 plus years. They're just really talented people who have learned a lot. And it's been very humbling for me. But also, it's like, I'm on the steepest part of my learning curve that I've been on a long time, because I'm around these brilliant people who are at a great best in class company, who don't pull any punches, you know, as part of the part of the Amazon culture.

47:54And it's forcing me to get better. So that's, that's probably the most recent, most recent and biggest impact thing for me. You got a mission that lights people up. And now, as I understand it, you're primarily a business that's run remotely. How have you kept that energy in a remote workload? Well, part of it is not giving up on the in-person interactions. You just have to acknowledge there's certain things that you can't do on a Zoom screen. And so we do, we have the exec team is onsite once a month, leadership team is onsite once a quarter, whole company is onsite twice a year. And then the teams, smaller teams do in person so that nobody is going without in person interaction for more than a few weeks.

48:38and the key is because you have so much less time in person you have to basically be more i think you have to be more deliberate and it can end up being a it can feel a little bit forced because you sort of have to do things explicitly that you'd rather have to happen naturally but we just developed that capability sometimes it's it's doing like icebreakers and go deep activities that get people to personal personally connect uh in those settings um and then the other side of it is online, like how do you create communication that fosters authenticity and like intellectual honesty? Because there's a lot of, when you don't have the relational fiber, which invariably you will not have across some subset of the teams, there's stuff that doesn't get said that if you were in person every day would.

49:26And so it's like, how do you grease those skids in a remote environment? And like the other, the last part I would say is you have to accept that there are certain things It just won't be as good. And you have to make up for that by having just extraordinary talent. And that's the single biggest benefit of being a remote first is you can hire anywhere, literally anywhere. So like our CFO, who is the first Amazonian that we hired, he's 15 years ex-Amazon. He lives in Seattle. There was no world. He's got two kids in middle school. There was no world where he would have come down to LA. But had we not hired him, not only would we, he's like an extraordinary leader himself, but we wouldn't have hired all these other Amazonian, ex-Amazonians that have changed the trajectory of the business.

50:08So I do think like, I don't know how popular this perspective would be. I do think kind of talent trumps all and remote is a superpower for talent. Nobody has ever said that on this podcast. That's a great point. You're a really young guy. Do you have a hard time managing and leading people that are older than you? You know, it's funny that you mentioned that because I turned 40 this year and I've always felt like I was the young one in the room. And sometime in the last like two or three years, I don't know if it's having kids or turning 40, but I don't feel so young anymore. So a lot of my career early on, I did feel that.

50:42How'd you get over it? I guess you can't. I mean, it was legitimate, honestly. Like there was a sense in which it's a little crazy, you know, if I've got 10 years less of experience for me to tell someone I know what they should do. So I think I didn't really get over it. I was just open-minded. did. I would have, I would come in with a perspective, but make sure it didn't, you know, it didn't, it's preposterous for me when I was 30 to be, to come in utterly, like totally convinced that I knew what I was doing. But to be honest, I feel the same way at 40. So it's interesting because now I feel the same way at my age.

51:17It's not like I have it all figured out now, but I'm a little closer in age to my execs than I was at the beginning of Thrive. But again, And it's like, yeah, it's still equally humbling. So, you know, this has been so much fun. And I want to have some more with my lightning round of questions. Are you ready for this? Let's do it. All right. The three words that best describe you. Intense, ambitious, caring. Your biggest pet peeve. Indecisiveness. Who would play you in a movie? I've been told that the actor Sillian Murphy or Killian Murphy. That's a pretty good one. What's the Thrive Market product you order the most of?

51:53The olives are a staple in our house, but the olive oil, which is, there's a whole story on that. It's fourth generation farm in Crete. This is the oldest olive producing region in the world. That is my go-to product. And I literally will do a spoonful of it every day. What's the thing you appreciate the most about growing up in Minnesota? People are really nice. It's a great place to be a kid. Minnesota nice. I had a guy who was our CFO. I called him Minnesota nice. What's the one thing you do just for you? I read. I read a lot. Besides your family, what's your most prized possession? The thing that comes to mind is actually going back to Minnesota, spending time in Minnesota.

52:29It's not a possession. But honestly, it's family, family, family. And then those roots in Minnesota. If I turned on the radio in your car, what would I hear? Silence. I don't listen to the radio. What's something about you few people would know? I mean, this probably isn't going to be a surprise, but most people don't know it. I'm an absolute health nut. So in my personal life, I'm like, you know, every supplement, every new product on Thrive, I try every new like diet and exercise trend. I'm I'm investigating. What's one of your daily rituals, something that you'd never miss? It's reading again.

53:03So I read when I wake up like in bed and is like not advice, but on my phone, I read every morning in bed and I'll actually like open Kindle and just like read. And I do the same thing when I go to bed. And for me, that disconnection, and it's always fiction. It's something that I never let go of. Fantastic. You're out of the lightning round. Good job here. You know, I got to ask you, you know, what advice would you give aspiring entrepreneurs on how to find the big idea to pursue? I mean, it sounds really cheesy, but you're not going to find it. It finds you. And I think that the important thing is understanding yourself.

53:43and not to say that you get all the answers about who you are and exactly what you care about but I like the concept of revealed preferences like feel into what energizes you not who you'd like to be or what you've been told is right or whatever but like what are the times that you feel just absolutely lit up and if you know what those things are and you're attuned to that feeling you know what that feels like and you get out and have the meetings talk to the people explore the opportunity space, the opportunity will come to you. And, you know, for me with Thrive, it took over a year. Like it was a year of kind of bushwhacking through the jungle, looking for the right next opportunity.

54:22But when it hit, it was, it was utterly clear. I can't believe it. I almost forgot to ask you this, but you know, you, you were the first online grocer to accept food stamps. You know, what did it take to make that happen? Was that a big, hairy, audacious goal for you? That was a BHAG. It was a big swing. It was a thinking big, and it was a long time. That was literally a 10-year process. So we, in 2015, we petitioned the USDA to accept food stamps online. We got 300 ,000 signatures in under three months. And our whole thing was, it's crazy that you can go to the corner mart and buy soda with your food stamps, but you can't buy healthy food online.

55:01And we thought, this is so obvious, like it has to happen soon. And it wasn't until 2024, the beginning of 2024. So like eight years after we did that petition, nine years after we did that petition, that the USDA finally opened it up. And we became the first pure play e-commerce retailer to be accepted. So that's why tenacity, tenacity is one of your core values, right? Tenacity is one too. Like that one, we was like, it felt like beating your head against a wall, like for years, but so rewarding to see it happen. And like, you know, our hope there, We obviously want to be part of it, but our hope is that a lot of other e-commerce players get into the mix and sort of change the landscape.

55:40That's fantastic. And, you know, if you don't mind sharing, you know, just can you tell me a little bit about your immediate family? And, you know, I'll ask you this question in so doing, you know, what's something that you've learned about work at leadership that you try to bring, try to bring home? I met my wife in college. Um, I don't think I would have started my first company or had the courage to start this business. Had we not been together? Um, I'm one of those people. It's like having, having that part of your life solved and having someone that is your rock that understands you, that is your, your partner through everything.

56:15I just, you just can't overstate what a different, at least for me, what a difference that has made in being able to be bold and take risks and be an entrepreneur, be a leader. So my wife and I have been together almost 20 years, been married for more than 10. We have four kids. Our oldest is eight. Our youngest is six months. It is a constant balancing act. And I think, you know, I have so much empathy for the parents out there that are also trying to start businesses because a business is a child in its own way. I think the challenge of being an entrepreneur, being a parent is that, you know, you can't be in two places at once.

56:53And there's just no, you know, there's some zero sumness in the time side. But I think the advantage of being an entrepreneur is if you're doing something you care about, you love, like on those days that I come home energized from work, and it's not every day, but it's a lot of days, I am a better parent. Like I am the best version of myself. I have the, you know, what kids, I think what kids need is just adults that are fully themselves, right? And that are having fun with life, that are engaged in what they do, that are curious, that are still learning. I'm not always that way. No parent is.

57:26But when things are going well at work, that actually is something that I bring home. Is that just like kind of that optimism and that passion? Last question here. What's one piece of advice you'd give to anyone who wants to be a better leader? just work at it. I mean, it actually, that sounds really basic, but there are some people that are just talented that maybe are magnetic or charismatic. There's some people that are real empaths and are able to just naturally do a lot of it. I feel like for me, it really was an acquired skill. And I feel really proud of the fact that I've worked at and I've gotten better.

58:00And if you compare yourself to, you know, your touchstone leaders, you'll feel bad about yourself. But if you can compare yourself to your former self, and every year you're getting better, It's like any other domain. You know, that's kind of the key. And I think the cool thing today is there's so many resources. It's like I said, you can, like, ChatGPT can be your coach. You know, you can interact with the best leaders in the world on YouTube, right? Like, there's just so many resources if you want to get inspired and build that skill set. So, yeah, just go for it. Well, I got to tell you, Nick, I wrote this book called, you know, How Leaders Learn.

58:35And it's all about active learning. It's not enough just to be an avid learner. You want to learn and do something with it, you know, and you've provided so many good insights on how you've learned and then put it to use and made big things happen. I think that's actually a great, it's a great point. Like the conversation with ChatGPT or a coach isn't enough. Certainly watching a YouTube video is not enough. The way that you learn is it's like it's one of those in the arena activities, right? Yeah. Well, you are in the arena. You're making it happen. And I personally found you very inspirational.

59:07And so thank you for taking the time to be on this podcast. I really appreciate it. It's a real honor.

59:18Well, David, it's time to debrief your episode with Nick Green. At the end there, you said that you personally found Nick to be super inspirational. I did too. But I'm curious, what struck you so much about your conversation with Nick? I just love the fact he's such an active learner. Yeah. You know, I think he really goes outside of his own person, his own business, to learn from other people and to learn from other businesses. And he's ended up with a company that's thriving, no pun intended. He's doing great. I mean, I love those green olives of his. They're fantastic. But I love it when I see people who are so passionate about what they do.

59:59They want to get better. and they know that they get better by learning. And I also like the fact that he says, you know, you got to work hard at it. If you're going to be a leader, work hard at it. And that means learning. And that's what I loved about him. And that's what inspired me. I get inspired by people who want to get better. He was so forward and somewhat vulnerable saying, like, leadership doesn't come naturally to me and I have to work at it every day. And you kind of just intuit that that's the case for most leaders. But I think it's rare that you find someone who says, hey, this is a really hard thing for me.

1:00:33And I have to intentionally carve out space to do it. I mean, everyone does it. But the way that he's so aware and forthcoming with, hey, this is actually really hard. And the great news is it's a skill that you can learn, develop, and get better at. So I'm with you. I think it's so cool how he has kind of created his little coaching mechanism for getting better at leadership. And the way I said that he's, you know, that he has to work at it. It doesn't come naturally. It shows vulnerability. And, you know, vulnerability is a big buzzword when you talk about leadership today. But I think there's a reason for that.

1:01:06When you open yourself up, people know that you know that you're not perfect. And that makes them like you and that makes them want to get behind you. And I'm sure he has a lot of fans at his company. Oh, there's no doubt about that. I love some of the kind of main themes that Nick continued to bring up in the conversation. it's really clear that Nick is the type of leader who likes to take really big swings. He dreams big. He says, you know, that old adage, shoot for the moon. Even if you miss, you'll land among the stars. And he really finds resonance with that and lives that. And I love in the episode, he says, instead of thinking a percentage bigger, you got to think an order of magnitude bigger.

1:01:47And I think that that in and of itself is an innate skill that a lot of people have. So, and that some people don't have. So David, I'm curious, you know, as you think about dreaming and casting vision and taking big swings, how do you know when a goal is big enough? Well, I think so many times we set goals that are incremental. You know, they're just a little bit better than a year ago, or frankly, just as good as you were the year before. If you grew 3%, you're going to go 3 % this year. And you kind of get into into that rut you know and i i actually found yum brands to be in that rut for a while and i felt we needed to break out of it and i met this guy named john o 'keefe was from the uk and he had worked at procter and gamble but he put together a training program called achieving breakthrough results so he had a lot of really you know big ideas and training tools to to get people to think about how you could get more dramatic results and break out of the incremental.

1:02:52And one of those was, are you a step change thinker or not? Okay. And his whole thing was, you know, that you don't set these little tiny goals. If you're growing 5%, you say, okay, let's, let's, let's think about how we could grow 15%. And then if you think about all the things you'd have to do to grow 15%, you're certainly going to get at least five. Okay. Yeah. But it really makes you, you know, think bigger and, and, uh, and dream bigger and think about the things that if you did these, you, you could grow a heck of a lot faster. And, you know, that's how you get breakthrough results. So, you know, I think I was always a big proponent and we always talked about having step change goals, you know, not those little tiny, tiny incremental moves, but how do we do something that really takes a step change as a brand?

1:03:44And I think that's what he's getting at. And I think it makes a lot of sense. Absolutely. And the conversation with Nick, you brought up a really interesting point, which is that they're in this health food space, right? They're an online retailer where you become a member of Thrive Market, and then you get access to all of their high quality, healthy foods. Well, their biggest competitor is Whole Foods. Whole Foods gets bought by Amazon. And you asked Nick in the episode, like, what do you do when the biggest retailer in the world suddenly invests in your biggest competitor? And now all of a sudden, healthy food is accessible everywhere.

1:04:18And I loved his response to that question. He says, no one is going to out Amazon, Amazon. And so what they had to do is really focus on what they were best at, which is few high-quality ingredients and fewer higher-quality products. And I love this, you know, we're never going to do e-commerce or online retail better than Amazon does. But we can do this better than Amazon does. When a person goes shopping at Thrive Market, they're not looking for 40 jars of almond butter. They're looking for one jar of almond butter. And I just love this concept because it forces them to figure out what it is that they were really good at.

1:04:59And I'm curious, David, as you reflect on that part of the conversation, what's the real lesson there for other leaders who might be trying to be something that they're just not? I think you really have to understand who you are and understand what your differentiation is and then stay true to it for as long as you can, as long as it's working. And then if it's not working, then you've got to fine tune and figure out what else you may need to do. But he also said he learned a lot about Amazon. You know, he learned a lot from them, you know, how they distribute, how they build their customer base, you know.

1:05:35And he tried to take all the good from them that he could find and then realize that they were different. And what could they do that would keep them different? And, you know, I think that's how he's differentiating himself from Whole Foods today. And one of the things that Amazon has done with Whole Foods is they've broadened their offerings to include a lot of stuff that isn't necessarily that healthy. And so, you know, he doesn't deal with anything that isn't in the Thrive wheelhouse. And he thinks that differentiation, that purity really is a competitive edge over the long term. Well, I mean, clearly they have over 1.7 million Thrive Market members, which is crazy.

1:06:22And when you guys talked about, you know, how do you think about customer retention versus customer acquisition? He said they really focus, you know, on retaining customers because 25 % of new business comes from existing members. And so, David, as you think about other brands who might not have this membership model, what can they learn from Nick and his team at Thrive Markets' emphasis on, hey, we are serving the customers that we have because we know when we do well with those, the lifetime value of those customers increases, and over time, that will take care of our acquisition problem. So many people want to grow their business by bringing in new users.

1:06:59And that's really a noble goal, but damn, is it hard. You know, it's a lot easier to take the users that you have and cultivate them and get them to use you more often than it is to bring in someone totally new into the fold. He understands that and knows that that's the key to their success. And at the same time, you know, they're really bringing in new users. But guess where a lot of those new users come from? Word of mouth. You know, people talk, their current users are telling the new users all about it. And then that's why they jump into the fold. Yeah. One of their values is member first.

1:07:36And so this ethos around serving the people that are already our power users, to use one of your phrase, is really just ingrained in every aspect of their business. So every decision they make is filtered through how is this going to serve our members and how can we make whatever we're doing take a member first approach to that. Yeah, and they really thought through their culture. And I love that member first being one of the biggest things that they were really trying to drive as a core value. And he put the cultural values into very simple language as well, which I think is really important.

1:08:12That makes them different. Well, David, you asked Nick this in the lightning round. And so I'm going to ask you this as part of the debrief. What is your favorite Thrive Market product that you've ever bought? Well, I told you up front. I love those olives. It's the olives. It's the olives. It's the olives. Yeah, it's the olives. I also didn't know that you didn't like sweet potato fries, which was shocking to me. Yeah, but his were pretty good. His were pretty good, which was shocking to me, you know. Hey, I always believe this. If you can make really healthy food taste great so there's no tradeoff, it's a goldmine.

1:08:48It's very, very hard to do. Very hard to do, you know, because people like salt. and people like, you know, all the things that you can try. Fat, sugar. And made a lot of money on our brands by capitalizing on those things. So we didn't have any green olives at any one of our restaurants, I can tell you that. Well, that's what Nick Green and his team at Thrive Market are for. He loves the olives, too, by the way. But you know what we did have, though? You know, one of the things we did have at Taco Bell, which was very successful, and it really went after people who were looking for healthier foods, is, you know, we had like five items under the fresco menu.

1:09:25I think it was like we had five items under, you know, 10 fat grams or I forget exactly what it was, but, you know, they tasted good. And, you know, we sold a lot of it. But I'll tell you what, if you try to sell stuff that doesn't taste good, you're in deep Juana.

1:09:43Well, David, I loved this episode. Excellent job per usual. Nick Green is just a fascinating guy who is trying to make healthy living accessible to everyone on the planet. And it's such a noble cause. And I'm a huge fan of Thrive Market. Yeah, and I'm a huge fan of Nick. He's a terrific leader. And I think the best is yet to come for him. Absolutely. Well, that does it for our episode of How Leaders Lead for today. Thank you so much for tuning in. And we'll see you next week.