$500M Founder: “This is the biggest opportunity in the US today”

22:37I'm much more interested in like, why are people uniquely getting sick in today's, you know, environment and what in our environment is poisoning everyone. I think Brian Johnson is amazing. And like, I think it's awesome that someone is willing to try so many risk on gene therapies, crazy peptides, like all the shit that he's doing and talk about it publicly. But I, unfortunately, like, I will be very interested to see what happens to him over the next 20 years. But I think 20 years of trying very out-on-the-wrist-curve therapies, it's quite possible something doesn't go so well. Yeah, maybe I just have a preference for the autistic biohacker rather than the content creator influencer with a DTC brand underneath it.

23:21I've just seen a lot of that. And the first thing he was doing felt very original. Let me ask you, you had this great phrase that I think we should bring up, which is, or maybe it was you or it was Callie. I don't remember. Maybe it was your co-founder. But the other thing where you said, if you had a fish tank and then all the fish inside suddenly started getting sick, you wouldn't drug the fish. You'd clean the tank, right? You would assume that there's something that's causing the fish to get sick. And for some reason, we have this instinct to just drug the fish. The fish is sick. Why are all the fish getting sick?

23:52I don't know. Just drug all the fish rather than maybe the tank is dirty. Maybe there's something in the tank that's causing them to get sick. Maybe it's what we're feeding them. It's their environment. And I love that metaphor of cleaning the tank. Yeah, no, you capture it perfectly. And the only thing I would say is that I don't actually think we have an instinct to drug the fish. I think that we have a$4.3 trillion industry. That's job it is to propagandize people to think the only way to fix the fish's health problem is drugging them. Like that to me is the insane thing that we're, you know, the same situation we find ourselves in is everyone is getting sicker, you know, overweight, everything.

24:28I think I asked ChatDBT recently. I think it was something like 60 % of people have taken pharmaceuticals in the last 12 months or had a prescription. Something crazy like that. It's crazy. So the first one you had was kind of the cleaning the tank, right? Check up for the house. Find ways that you can make your home environment healthier for you and less interfering with your health. The second one you have, a modern butcher shop. So this is about feeding the fish. I love this. What is the modern butcher shop opportunity you see? By the way, Sean, do you remember I told you actually last two episodes, I think my two predictions for two of my predictions was people were going to have more plants in their homes because it's kind of nasty.

25:06And also I was like, there's something about the meat at Whole Foods that I actually think is crap nowadays. Totally. Yeah. I'm not saying you're right or a genius, but I'm not saying it either. I think I've hung out with Justin before, so I'm sure I stole that. Yeah, I mean, so at a very high level, this is one of the things I'm most excited about. There's actually one coming in Austin in January, which I'm super stoked for. But it's the first one that I've seen that goes as far as I would like. And basically, let me set the table through an analogy. I think that in the 80s, coffee was basically like Folgers.

25:43It was burnt. There was no differentiation on sourcing. It wasn't very good. There was no coffee culture. And Starbucks came along, and that was big second wave kind of coffee. and now there's like craft, you know, comatier and like small, like cool roasters and coffee shops in every major city that you go to. I basically think that meat today is where coffee was in the 80s. Like you go to the grocery store and you're buying meat. You're buying like steak. You're not, no one is differentiating on how is this dry aged? What is the cut? What is the genetics of the animal? You know, how was it raised?

26:18Was it regenerative? Was it not? Was it fed, you know, soy? Was it massaged until it was killed? And did it drink IPAs until its last day? All these sorts of things are actual differentiators in buying meat and buying steak. And people are aware of them, but the market has not caught up yet. And have you ever bought from Snake River Farms or heard of this company? Yeah, I bought from Snake River. What's their store? I just kind of had an instinct when I saw it. It was almost because it was the only branded meat that was there. It's like all the other meat, the branding was like 80%, 20%, right?

26:51Like they had the fat percentage. And then there was one with like a brand name on it and it sounded like a place. And I thought, uh, maybe this is the higher quality. Are they legit? What do they do? Yeah, they're super legit. So they are one of the few companies in the US that have an American like Wagyu. And so they have a Wagyu line. They imported, I believe from Japan at some point in the seventies or eighties. And they've been like breeding this Wagyu line, if you buy Whole Foods best ribeye, you're probably going to cost you like 20 bucks a pound or something like this. If you buy like the best ribeye from, you know, from Snake River, it's going to be like 60 to$70 per pound.

27:28And so the kind of like skew in pricing and the amount that people are willing to pay for really, really high quality meat is massive. And I just think it hasn't made its way into retailers, hasn't made its way into butchers. and so I think there's this massive opportunity to build like what I'm calling like the blue bottle of the modern butcher shop that caters to people that really care about sourcing, flavor, cut dry age, you know, all of these things that you're not going to be able to get at Whole Foods So there's actually like, it seems like there's two opportunities. One is to create like another Snake River Farms a brand that is elevated in some way that would go sell through grocery stores and so just the way we've had you know, you know, you have Oatly selling oat milk, you got, you have all these brands that come in new brands that come into existing categories and start selling things that are niche in some way, alternatives in some way, or premium in some way.

28:22What you're saying is a premium brand. There's like that, that's one idea, which already sounds like a big idea. And I could imagine, I could totally imagine somebody who takes a, like, a content approach to this. So let's say you were doing this. If you go on TikTok and Instagram and you're at YouTube and you're telling your story about the unique things you're doing with your, the animals there and why it's premium. And maybe it's how you're raising them. Maybe it's how you're feeding them. Maybe it's, maybe it's like a version where you're genetically selecting in some way, the sort of premium or you're, you're, you're breeding in some way, the more premium.

28:54That seems like one opportunity. And then the other one you had is the butcher shop, which is like you said, like blue bottle coffee and blue, blue bottle sold for what? Like 500 or$700 million. $700 or$800 million. Yeah,$700 or$800 million. And I don't know if anyone, how popular is Blue Bottle nationwide? Because I had never heard of it until I moved to San Francisco. This is like 10 plus years ago. I think it's like a big city thing. It's like SMLA. It seems like a rich guy pet project. All the VCs had invested in Blue Bottle because they liked having meetings at Blue Bottle and Blue Bottle was cooler than Starbucks.

29:23It wasn't like it was elevated above that. And it just seemed like a passion project. And then I see that it sells for$700 or$800 million. And wow, that thing really worked. So this is like, to me, this is a 10 out of 10 idea. This is an amazing idea. I agree. I mean, I think it's a super exciting one. I also think that the reason I would personally, if I were to start this, start with like a butcher shop or something like that, is that with a butcher shop, you can actually have a pretty wide range of pricing. You can tell the story. You can try it, like do small samplings. You can talk about the aging and stuff like that.

30:01If you took a$60 steak in the Whole Foods and just plopped it on the shelf next to a$20 one or a$15 one, and there's no story ability there, that thing just won't sell, unfortunately. Are quality meats and cows, I guess, being grown and you just have to source them? Or do you have to go and do this yourself? No. So there are small farmers that are growing really, really high-quality meats. They're selling at farmer's markets. They're just hard to buy from. Like it's hard to aggregate enough supply that Whole Foods is like, yeah, put it in the 500 stores or whatever, or, you know, it can fill up a meat case in Austin.

30:37And so this really only works where if you're a butcher, you can buy probably an entire herd or an entire amount of farmers or ranchers cattle and sell it through your store over the course of a couple months. that is worth your investment from a relationship and like amount that you're going to make on that standpoint. For Whole Foods, it's like, yeah, we're never going to work with a small, interesting operator that might just have 50 or 100 head of cattle leather selling. And can you freeze and store like beef and it still be great months later? Yeah, you can. I mean, the better thing though is that you can like dry age it.

31:15And this is the other thing that if you're taking this like hyper premium approach, you can actually just hang meat in these meat lockers and stuff like that. And actually cures, gets like a richer flavor and the like, the more you age it. The reason that they don't, obviously, is like the more that you age it, the less amount of like cash that you're cycling through because you're not selling it as quickly. And so it doesn't work for the retail model. But if you're doing a really, really high-end thing, like a butcher shop, it could actually work. How big is this business, you think, Snake River Farms?

31:47I would imagine it's in the like two to 300 million in revenue range. Wow. I think it's probably massive. Are they raising, but they're raising their own beef though too. I mean, they have like photos of cowboys. Yeah, yeah. I mean, they're vertically integrated. They've been doing this for a long period of time as far as I understand. But I think that there's enough operators like that that don't have the Snake River Farms branding that aren't shipping on dry ice all over the country, but that could really like sell into a butcher shop in Austin, Nashville, San Francisco, LA, New York that just does really well.

32:19I'm frankly shocked that the only butcher shop that I know that is doing this is in Austin, and it's opening in a month. And is he trying to just make one, or is he trying to make it a nationwide type of thing? I think there's bigger ambitions, but yeah, starting with just one, let's make it work, figure out the economics, figure out this business. That's an amazing idea. It is amazing. It's so expensive, though. Totally. A lot of this is centered around beef only. Because I've always wanted to get healthier chicken, because I just don't love eating lots of beef. So previous, again, like 80 years ago, the food system had diversity.

32:56There were multiple types of birds, chickens, things like that. Today, 99.5%, I believe, of every chicken eaten in the U.S. is one genetic breed, which is the Cornish Cross, which is bred for how quickly it puts on weight and the types of grains that it can basically eat. And so it's not bread for deliciousness. It's not bread for protein content. It's not just bread for like any of the stuff that you or I care about. It's just how quickly can it pack on mass and then I can like sell it, you know, and it gets eaten. I think the average life of these birds, on average, they're like born to harvest is something like six weeks.

33:30And so - Yeah. Wait, so it comes out of the egg and six weeks later, it's big enough to eat? And six weeks later, it's harvested and sold. Yes, exactly. And so this is why I think this is such an interesting opportunity is many people are like, I don't like chicken. I don't like, you know, whatever. And they just haven't had chickens that are actually like delicious. And it's funny. You can read old ads. Like there was this one, this luxury rail line in the 20s and 30s that made a big deal about how they had, they like cornered the market on this one chicken genetics and they served it only in their first class cars.

34:06and all these people were like, wow, this is the best chicken I've ever had in my life. There's stories like that where it's like, what is the Wagyu or Kobe version of chicken? I've never even heard of one. Yeah, exactly. No one knows. I mean, there's no one that is raising these for fiber. Dude, that's insane. By the way, absolute sick burn to call someone a Cornish cross. That's going to be my new thing. Until I see somebody that's just, you're just a 99, you're just like 99 % of the others. You're just trying to pack on, just pack on mass. You're a quick flip of a chicken. You're just a Cornish cross.

34:38There's this famous ad. There's a guy named Joseph Sugarman who kind of pioneered direct marketing, direct response copywriting in the 80s. And he, at the time, a quartz movement watch was already popular. Like watch connoisseurs knew about that. But it wasn't like impressive. Like it was just like a normal table stakes thing for any watch worth more than 50 bucks. But anyway, he was famous for creating these ads for this line of watches. and he popularized the idea of quartz movement watch as if it was like some like epic thing like and then all the watch connoisseurs like yeah dude they all we all have this but that's sort of like um what you're describing a little bit with these chickens is like you can actually like come up you can and if you you can invent interesting cool stories that are also true and factual but like you know i'll take a lot of like the health nuts like they're always like yeah this is standard we don't give our chickens this or that and you're like yeah yeah i know but Like most people don't know that.

35:33And so we're going to tell this amazing story about that. Exactly. Yeah. And I think like the mental model is, you know, you're having a dinner party and it's like pulling out a nice bottle of wine, but people aren't drinking. And so you're like, okay, this is this like crazy genetic, really nice steak cut. And you'll have the best steak you've ever had in your life. Like, I think that is the underserved market that you could build a real brand around. What's your food budget every month? And where are you buying? Are you buying like all of your meat from the Snake River Farms? No, not all of it.

36:04I mean, their steaks are like super fatty and marbled and everything. Like you wouldn't want to actually eat that every day. But I basically buy my meat and most of my food from local farmers around the Austin area. What does that mean? Like you personally have relationships or you go to a farmer's market? No, so yeah, go to a farmer's market. There's also like a food truck here where it's sort of this like refrigerated trailer where it's a combination. It's owned by three or four local farms and they just stock it up. and so I just go every week and that's where I buy like all of my normal staples.

36:35Are you just like not eating apples in December or whatever? Like you can't, like I guess if there's seasons, particularly in Austin when it's mostly desert, like where does that come from? Whole Foods then is where I'll get like the remainder of like the produce and stuff that's not seasonal. Got it. So you do do like some normal stuff and then you also like, you know, go to farmer's markets, which is like not extreme, but like you're putting a lot of effort into it. That's pretty cool. All right, let's do the next idea. So annual home checkup, I'm giving that a B. this blue bottle for beef, this blue bottle, the modern day butcher shop.

37:07I'm giving that an A plus. Is that because you want that to exist or you want to invest or you think it's a good business? I just see it, dude. I want it to, I would be a customer of it. I know where the demand is. I know a lot of people listen to this, but like, I'm not trying to buy a$60 steak. That's fine. There's a lot of people who are trying to buy stuff like that. I know a lot of people that are trying to do that. And I just know that when you go into a category where there is no existing brand, it is all commodity, simply creating a brand in a commodity space is like a winning business formula.

37:35And the coffee analogy you gave, I don't know what a Folgers cost per cup of coffee, but I think it's in the cents. The idea of going to Starbucks and paying$4 for a coffee that you can make at home for$0.15 or$0.10 or whatever sounded outrageous, but of course people did it because they do it for the experience, they do it for a perception of quality. So I just see the path of that one. And if somebody has the right founder fit, you need kind of like a one-of-one entrepreneur, but to me, that's a billion-dollar opportunity to do that. Whether you do it that way or you sell into retail, and like you said, you do need to tell the story of why this thing costs more, and that's why you have to tell the story on social media and sell it through retail.

38:13So you'd have to be great at content on TikTok and Instagram and then sell into retail stores that way. But to me, that's a 12 out of 10 idea. But you have another one on here. Calibrate for fertility. What is this? Yeah, well, quick. Like if anyone does the butcher shop thing, I want to invest. I think it's such an exciting, interesting thing. But so Calibrate for Fertility, you all, I don't know how aware you are, but basically everyone is having fertility issues right now. It's getting worse. You know, IVF for what's called ART, assisted reproductive technologies, are growing like 7 % to 8 % a year, and it's accelerating.

38:51IVF is the best in class option right now, and it costs like$20 ,000 to$30 ,000. It injects a bunch of hormones. It's super invasive. It's super hard, you know, on the female. And it's just a brutal, brutal thing. And so I think there is this big opportunity to almost have like a lifestyle set of interventions that are geared towards helping people increase their fertility in the key window when they're trying to actually have kids. And so you could think about it like a lifestyle or like a monthly subscription for some three to six month period where you get a combination of peptides, supplements.

39:27people do like an environmental review, make sure that you're not wearing polyester underwear while you're trying to have a kid or, you know, any number of things that actually seem to have a really, really big impact on how likely you are to conceive during that window. And pretty much just say, hey, before going the$20 ,000 to$30 ,000, very expensive, very invasive, very hard IVF route, do this like, you know, several hundred dollar a month sort of lifestyle-based fertility approach. And we're going to try and help you conceive naturally without having to go through IVF. I know men can do stuff to increase their sperm count with their sperm count being down.

40:00That's like a huge issue. Can women do the same thing? Yeah. Yeah. I mean, women can improve their fertility for sure. You know, from people even talk about this all the time, like stress is a big factor, but they're not talking about at the hormonal level, like it seems like progesterone helps with increasing odds of conception. There's a bunch of interventions that I think are just almost criminally underutilized for

40:27All right, let's take a quick break because I gotta tell you a story. Let me tell you about the first time I tried to run payroll for my team. I was using a traditional bank, and you know the type. It's got a janky interface. It's built like a 2002 tax form, and it was open only during business hours. And I hit send, and it froze. They flagged the transaction. They locked my account. They put me on hold for 45 minutes, and then they told me I gotta visit my local branch. And that was the day I started looking for a new banking solution. After asking a few founders what they were using, I found out about Mercury.

40:53And so now my payroll is two clicks. I can wire money. I can pay invoices. I can reimburse the team all from one clean dashboard. That's why I use it for all of my companies. And so do 200 ,000 other startup founders. And so if you're looking to level up your banking, head to Mercury.com and apply in minutes. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column N8, and Evolve Bank & Trust members FDIC.

41:19Justin, have you ever heard us talk about one chart businesses? Have you ever heard this thing we say on this pod? Yeah. This to me is one. So look at this chart. So this is search interest for IVF clinic near me. And just look at it since 2018. Look at the like relative search volume. It's up, you know, from zero to 75 on this chart all the way to 100 on a 100 scale of IVF clinic near me, which is pretty wild because that's not a long time. That's something you would expect to see like on a 30-year time horizon, not like a six-year time horizon. And what you're saying is there's stuff because IVF is obviously very hard on, you know, it's hard mentally, physically, emotionally, financially.

42:00Hey, what if there was an intervention step before that? You mentioned Calibrate. I've never heard of this company. What does Calibrate do? Yeah, that's a crazy stat that you have on them as well. Say that. Yeah, so Calibrate was a company. They got acquired somewhat recently, but they basically started out by being, they paired GLP-1's IEO Zempic with lifestyle interventions. And so their whole thing was like, Ozempic, people are meant to be on it for the rest of their lives. What Calibrate did is said, we're going to prescribe you Ozempic. We're also going to introduce coaching, accountability, lifestyle interventions, like this whole suite of things where the goal is to get you off of Ozempic at the end of a six or 12 month period.

42:36Like a Noom meets, or kind of, I mean, Weight Watchers is trying to do this. Yeah, exactly. Exactly. And so they - Dude, those companies always scale fast. Noom did something similar pre-Ozempic, and they were an advertiser with my old company, The Hustle. Like within a year of launching, they were spending hundreds of thousands with us. This is, I don't know how these guys grow so big. Yeah, I mean, there's a lot of demand for this. And what Talibrate figured out is how to actually get it covered by some, to some degree by insurers. And insurers were okay with it because they're like, great, we're not gonna have to pay 20 grand a year for a Zempic indefinitely.

43:10We can actually get people off of this drug after a six or 12 month period. And so in the first two years, they got to like over$100 million in revenue and just scaled insanely quickly. It does look like Calibrate kind of went under though or something. I don't know. I was looking for their funding stuff, but it looks like they've got restructured private equity, but basically for$20 million, they got 75 % of the company now. So I think it definitely ran into some trouble. Yeah, but that means they could be bad operators, but the demand still existed. Yeah, that would be my contention basically is that they were doing this and they launched, I think, 2021, something like that.

43:48And I basically think that insurers went from, they were like early on the Ozempic Plus lifestyle thing. And then there's been this massive record amount of lobbying spent to just keep people on Ozempic basically forever, which I think probably did not do them any favors. What percentage of people needing IVF, you probably don't know this, but like the average age of the first time mother has gone up. I think it's nearly 30 at this point. I think it's 29 or something like that. In the 70s, it was 21. So it's gone up a lot. What percentage is it just because of people waiting longer to have families versus like American food system being poisoned?

44:23It's a good question. I don't know, honestly. But what I do know is from reading stats, it seems like most of the decline in birth rate, it's about 70 % of it comes from people that previously would have had three to four kids now having one or two. And so it's not like people are deciding not to have kids. They're just having fewer. And I do think that the biological fertility issues are a huge, huge amount of what is driving down the average number of kids that a family or a woman has these days. Dude, it's pretty crazy how many of my friends, my male friends, tell me that they're like, in Austin, we used to go to the sauna all the time.

44:59And I would have so many friends that are like, I'm not going in the sauna this week. We're trying to get pregnant and my balls aren't working. And so I'm trying to like, I can't cook them right now. You know what I mean? There were so many people that I knew, you and I, Justin, are friends, and they were like, I can't do this, I can't do that, I need to go do this because we're struggling and it's my fault. It's pretty wild. Sean, have you had a bunch of friends that have complained of similar stuff? They're like, my stuff ain't working. You lost me at have you had a bunch of friends. No. I think it is this under the radar thing very few people are talking about.

45:32But almost everyone I know that is trying to have kids right now has some amount of fertility challenges. And even if that's six to 12 months and then they get pregnant, even still, you know, if you do that across like two to three kids, you're basically going from you're now having one to two kids instead of like three to four. If every time it takes you six to 12 more months to get pregnant. So you've mentioned three kind of health related startup ideas. is you've started, I think, four kind of successful that I know of health-related companies. Can you describe this approach? Because I'm the kind of guy that bounces around from industry to industry, model to model.

46:12I'm like a variety seeker. And I don't think that's good. Like just when I learn about a space, I get intrigued by something I'm a beginner in and I go in and I stop the compounding of that. So I don't think that's too smart. Can you describe your approach to entrepreneurship versus somebody like me who's just bouncing around and trying to solve 100 different problems in 100 different spaces with 100 different business models. Totally, yeah. I think for me at least, what has been very rewarding is basically choosing one problem, which for me is the chronic disease crisis, that I want to spend the rest of my career on.

46:49I think that there's a massive amount of compounding, like relationship compounding, even personal brand compounding. People think of me as into health, which pays some dividends. That's probably going to be even more so over the next decade. You understand the space. You understand the problems. You understand the players and relationships. I think that if you decide this is the problem that I am the most interested in the world, that I deeply care about, that I read about for fun, and just orient your career around trying to start things or be involved in things that make that problem better or solve that problem, like you get so many shots on goal, even if they may look different.

47:26Like I started Kettle and Fire thinking like the American food system is poison and there needs to be a bone broth company. What did you read or consume that made you buy into that? And then how long were you into it before you're like, this is my thing? Yeah. So I was going to CrossFit in San Francisco in 2015 and a bunch of CrossFitters were like, you should do bone broth. I'm a terrible cook. I'm like, almost never cooked for myself. And so I basically was like, great, I'm going to go buy some at the store and no one was selling some. And so after that, I was like, seems like there's an interesting opportunity here.

47:57And did I think it would grow to like be a nine figure annual business? Definitely not. But it was a big enough opportunity that decided to take the swing. But did you get into health and wellness because you're like, that seems like a cool opportunity? Or were you like, I'm obsessed with this topic. And this is like a really good way to address it. Yeah, I was I was just obsessed with the topic, basically. Like I'd been reading about paleo and reading about all these sorts of things since I was basically in college. I was a weird dude in college who my senior year, I went paleo. And so I wasn't drinking beer, wasn't eating pizza or french fries.

48:28All my friends were like, hell's wrong with you? What's going on? And so I just got very into this idea, this secret in a sense of why is everyone getting sick at record levels and what could be underpinning that? And so it was this deep interest. And as I got deeper and deeper understanding and appreciation of the problem, I just really understood like, this is literally, I think the biggest problem in the country and I can spend the rest of my career trying to solve or take stabs at various instances of this problem, whether that's starting a brand or trying to fix like the incentives through TruMed.

49:04You know, I basically was like, I think I'm just going to try and solve or work on fixing this problem for the rest of my career. So let's go back to that kettle and fire example. So you're doing CrossFit, trying to live healthier. your CrossFitters are telling you you should do bone broth. You're like, cool, where do I get some of that? And you go, you look, there's not like an easy brand that you can just pull off the shelf and buy it. So you think somebody should do that. Now, at that time, you've got no experience doing that. You've never built a DTC product. You never built like an actual consumer brand.

49:35Can you just describe like the three or four bullets that happened that first year to like make it happen? Because I think, you know, all these ideas are cool, but you got to be the type of person that can make shit happen. You made shit happen at that stage. Can you just describe what you made happen for Kettle and Fire? Yeah, totally. So we basically, we first tested a landing page, put up a landing page with no product, started buying ads to see who would click on it, what would they pay. You had the brand name? At that time, we called it Bone Broths Co., which was a horrible idea. It sent free brand to Kettle and Fire.

50:05You just made it yourself? You just mocked up an ugly landing page? Yeah, mocked up an ugly landing page on Unbounce, paid someone on Fiverr$10 to make a terrible logo, and basically started selling a box at$29.99. And when you say started selling what? Facebook ads? How'd you get the traffic? Yeah, we did Facebook ads and Facebook and AdWords and then some Bing at the time because they were like, there was an ARB there that's much cheaper. Dude, Bing clicks back then. It was so cheap. And it converted way higher. I know. I know. I was always like, I don't know who people are, but they're in the bummer.

50:35What was that first few weeks or maybe month like that gave you the, were you looking for conviction or you already had conviction? What happened in that first month for you? that? Yeah, I was looking for conviction. So basically, we'd put in$500, we built this landing page, and I think sold like a little over$2 ,000 worth of product inside of about of a month. And so I ran the numbers. And I was basically like, okay, we can build a business. And I think just given existing traffic, we can turn this into at least like a two to 300 grand a year kind of business. And based on like what I felt the margins would back into, I was like, that should be about 100 grand, 150 grand a year in profit, which seemed like a worthwhile thing to take on.

51:15And then what, okay, so you do that. And where did it get much bigger than that? What happened to make it much bigger? So we validated the idea. The next thing is we do, we had to figure out how to make it. And so we emailed and called over 500 different manufacturing partners to just like, please, someone help us figure out how to make this product. And eventually what ended up working is my brother, who was 19 at the time, who I co-founded the business with, he emailed Mark Cuban as like I'm a 19 year old entrepreneur like please help and Mark Cuban introduced us to a manufacturing partner who we ended up working with and still work with today to make our first like version of the bone broth product and so wait what did you what did he your brother's like hey Mark we're entrepreneurs but we don't know how to make a product do you know any bone broth manufacturers and he said yes here's one he was like talk to my food person and then his food person introduced us to our co-packer was like yeah you should talk to this this group over here And just to clarify, those first$2 ,000 worth of orders, did you just go refund them because you didn't have a product yet?

52:13I emailed all of them and I said, hey, we're not going to have a product for six to nine months. I can either refund you in full right now or 50 % off and we'll eventually ship it. And people that didn't respond, I would just refund them. Yeah. Okay, great. So Mark Cuban gets you a food person. That's the second thing. Now you can get the product made? Yeah. And then basically, what I realized is the product is two-year shelf stable. I put literally every dollar of my life savings at that point, I was 25, into doing the first run of our product. They had$30 ,000 minimum runs. It was like$120K kind of run budget.

52:47So I was like, either this is going to work great or I'm going to eat bone broth for two years. Either way, I'll feel pretty good. And so we bought the first product. And year one, we basically did$2.8 million in sales. and after about six months of being in business, one of the buyers at Whole Foods saw an influencer talking about our product, reached out and was like, hey, I want to bring you guys into Whole Foods. And we basically, we did extraordinarily well in Whole Foods and got national rotation the following year and that just kind of like started our journey. I think I was with you eight or 10 months after you started it in San Francisco.

53:23We went bowling. I don't know if you remember that. And you were telling me about this and I was like, oh, well, I'd be, it seems like you've got a really good career. Why are you throwing it away at this? I just remember thinking of like, why does he want to ruin everything? Yeah, starting a Bob Roth company in SF at the height of the tech boom was definitely not a consensus opinion. My sister, when she moved to San Francisco, she was working in a corporate career. She worked for Deloitte, I think. So she was like a management consultant. She had gotten her MBA. She got an undergrad in electrical engineering, got an MBA from a good business school, was a management consultant.

54:03And then she's like, I'm sick of this life. I need a business that I can own and not have to go to a job every day. And she was so tired of like, the consulting hours were so bad that she would come home and her kids would be asleep. And she would just pick them up from the crib just to hold them for a few minutes because she hadn't been there when they even play with them before bed. and like after four nights of that, she's like, never, no, I'm not doing this. Never had started a business before, decides to start an in-home daycare. So she kicks me out of the apartment I'm living in and says, I'm gonna use that apartment, which my parents owned an apartment.

54:39She's like, kick you out. I'm gonna use that to start this business and she needed six kids. So six kids to come to this like in-home daycare and my dad was like, you have an electrical engineering degree, you have a job that pays you whatever, 150k a year, you're a management consultant, and you're going to change diapers. And she just felt so bad, you know, quote unquote, throwing it away. And then, you know, fast forward, now she's got like three or four schools in San Francisco, and she's been able to like scale this business up. She works just like a few hours a week and has like this amazing business.

55:10And a lot of the, I say that because a lot of people will hit that crucible moment where it feels like you're throwing away this known and socially accepted thing to do this kind of fringe, weird thing from scratch on your own with no safety net. And I'm not saying that it always works out, but every time something works, it almost always has that story at the beginning of like, you're doing what? And that's totally normal, even though it feels abnormal in the moment. It feels bad in the moment. Totally. And Sam, I'd actually love your thoughts. My experience, frankly, was almost every single person that I knew who was starting a business or trying to start a business, between 22 and 25 has made it in some way, shape, or form.

55:53It's insane. Justin and I both started roommate matching companies. We were both 20. Between the ages of 20 and 25, we were in the same industry. All of our SF friends were similar age. Dude, it is crazy. I actually just tweeted about this today. I grew up in SF from age 20 to 30. It's crazy how many of our six are successful just because they're around. You know what I mean? Yeah, totally. Naval has a great phrase where he says, yes, you hear the stats about startups. Oh, 90 % of businesses, you know, new businesses fail. And he goes, yeah, startups fail, but founders don't. And I love that phrase.

56:31He said, oh, basically, if you just fast forward 10 years, any of the founders that stayed in the game, like the success rate goes from your first business success rate might be 10%. but the 10-year saga of you trying a bunch of shots on goal and getting smarter every year, the odds are now, if you just look at our cohort of friends, Sam, we were in a mastermind together back in, what was that, 2013, something like that? Our cohort of friends, which is probably 30 to 50 founders that we used to hang out with and know regularly, the hit rate's like 80 or 90 % success rate for the people that actually stuck with it.

57:03I got a couple of friends that packed up their bags and moved to Connecticut and just said, if I'm not doing this anymore, not you, Sam, sorry. I'm just thinking of a couple of friends that did that. They were burnt out from San Francisco startup culture. Those people, they didn't fully make it, but all the people that stayed in the game made it. We could wrap it up with one quick story, which is I remember Gag and Bianni started this thing called Udemy. And it was like, courses? What? This is like what Tai Lopez does. And I remember both Justin and I were like, I guess we should get in on this.

57:35This seems like a really good way to make$100 or$300 a month, which would be like life-changing. And so we both did that stuff. And I think that, you know, I could say for Justin, for sure, people look up to you. And I mean, I look up to you and I admire you. It's crazy how like, if you look at like eight or 10 years ago, which wasn't that long ago, you were doing many things that like, you know, people like will poo-poo, like maybe course creation or like buying a car and renting it on Toro or whatever. And it's like, man, the people you admire start way scrappier than you think. I know I for sure did.

58:08Yeah, I mean, I don't know that anyone admires me that's taken my keyboard shortcuts for Mac users Udemy course, but definitely I was hustling back in the day. Have you ever read Travis Kalanick, the guy who started Uber, his old blog? He had this amazing blog that he used to do. Wasn't it called like Awesomeness Bro? It was called like something silly like that, right? It was heavily broed out, but he had this blog post which was like, attending CES on the cheap, or it was like Southwest Southwest on the cheap. And it was basically like his playbook for how to have a badass time at a conference when you have no money.

58:42And he's like, all right, here's what you're going to do. You're going to get to the airport, but never take the taxis. Here's what you can do instead. Here's what you're going to do for staying at someone's house. You know, here's how you're going to skip the event, but still get in to the after party because that's where the magic happens. When you get there, here's what you're going to say. And he had this like really scrappy approach to how to just like, you know, wedding crash a major conference on a budget. And he was 31 years old, by the way. He was 31 when he wrote that post. It's not like he was a college kid.

59:08And he also used to invite people to just stay at his house in San Francisco. It's part of the magic of a city like San Francisco. It's like, he used to say, if you're, and the reverse was, if you're coming to San Francisco and you got no money, but you're a founder, he called his house the jam pad. And he would have like people constantly just coming and crashing on his couch. And he would host people over late into the night and everyone just jamming on different ideas. And he used that to kind of build his momentum, his network, his energy. wild. Yeah, so cool. Can we finish with this Zuck story?

59:39Zuck is auctioning off his gold chain for you, for your charity? What is this? Well, I saw you tweet that, Justin. I was like, is that real? Yeah, it's real. And he totally downplayed it. You said Zuck's auctioning my chain, and it looked like no one replied to that. Yeah, I had a bad Twitter day that day. I saw people were bidding for it. How much did it end up going for? It's his gold chain. It went for almost 41 grand. Oh, wow. Who won? Do you know? some anonymous person I'm not sure but we basically probably a crypto person to be honest but yeah so a couple years ago three years ago I started something called inflection grants which is effectively just giving small like two to three thousand dollar grants to people under the age of 24 that are high potential you know it's inflectiongrants.com if anyone wants to check it out but basically someone made an offer to me when I was in my 20s when I was like graduating college where he He was like, hey, you should keep running with your startup.

1:00:34If it doesn't work, I'll just write you a check and you can use that to cover your living expenses until you find a job or whatever. Who did that and why? It was a mentor that I had built a relationship with in Pittsburgh where I was going to school. And I think he just knew that I wanted to be an entrepreneur, also saw that I didn't come for money, and I think knew at this very key time that that offer would make a big difference in my decision-making, and he was right. And so I started Inflection Grants three years ago. So since then, we've given out like 50 grants. And Long Journey, who one of the GPs is Ariel Zuckerberg, has gotten behind it in a big way.

1:01:08And so this year, Ariel convinced Mark to auction off one of his already worn gold chains. And then we had to make sure that it was cleaned, no DNA residue, anything like this. But sold, you know. Did you really? Did you actually have to do some of that stuff? Oh, 100%, for sure. Did you get to talk to him at all? No, no. But yeah, he gave it away and we auctioned off for 41 grand, which goes to charity, which is great. So that's 20 people are going to get these$2 ,000 grants? Exactly. You gave us this document before we started and I think we only touched a third of it. There's so many more cool things that you have to come back and talk about.

1:01:44A lot of people don't know this, but Sean, did you know that Justin was a co-author on the book Traction with the DuckDuckGo founder? There's like five or ten other things that you have really amazing stories behind and are really insightful on. And so thanks for coming on and doing this. I'm like literally sitting here taking notes on like inclandescent bulbs and like farmer's markets and shit like that. And you're going to be getting a lot of follow-up texts on me where it's just like, Justin, just tell me what to do. Tell people where to follow, where to get more. Yeah, so I'm substack, justinmairs.substack.com.

1:02:19I write a monthly newsletter on health and business stuff. And then also on Twitter at JW Mayors. and go read The Great American Poisoning. We didn't do it justice in this podcast, but go read that blog post. It is amazing. We'll put the link in the show notes to that specific blog post. All right, that's it. That's the pod. Thank you, Justin. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.

1:03:02Hey, let's take a quick break because there's a quote that I love I want to read you. It's that we shape our tools and thereafter they shape us. And as an entrepreneur, if you're using a bank that was built in the 90s, you're operating like you're in the 90s. And trust me, I've been there. Clunky portals, random holds on your money,$50 wire fees, and then being told, please visit your local branch. Well, that's why I switched to a different type of banking solution, Mercury. It turns your financial chores into a smooth workflow. You can do wires, invoices, cards, reimbursements, two clicks, and I'm done.

1:03:33If you're already using Mercury, respect. If you're still using one of the old big banks, I got questions for you. So go visit Mercury.com and give it a test drive. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column 8, and Evolve Bank & Trust members, FDIC.