How Tim Doyle Built Eucalyptus to $450M in ARR & Sold It for $1.15B

24:55So it was great to learn off him. I honestly, like it was, it was just going to be hard to see a single product business like Koala get enough market scale. And honestly, when we tried to go and raise capital for it, it was always really difficult to, to figure out the story that was going to be, um you know a properly scaled platform um you can you can you know you like an AOV of$1 ,500 is nothing to you know like that's the that's the foundation for a fantastic business but um the U.S. was kind of closed off in you know from a from a competitive sense um we didn't really feel comfortable in Europe so um it just felt like the limits were what we had and so um and I honestly like i i thought that eucalyptus could be kind of an lvmh or a unilever and and that was wrong like and and and you just i think you can't manufacture that many brands quickly enough to actually become one of those but um at least it became a place where um when big enough opportunity did come along we were well set up to take it and we were well capitalized okay now is and the koala

26:00Matt Bertulli:thing just so i'm clear this is an ltv problem right that you're hitting on it's like we've got one product, they buy it once. They probably don't buy many things after that. I saw the amount of competition coming to the space. To be honest, the other thing that I used to think, which I'm not sure I do anymore is that, and I think actually, you know, modern great consumer businesses actually have solved this problem in a really interesting way, which is just like really, really focus on the core product. But I, like we were selling the mattress and the mattress is like, you know, relatively close to a commodity.

26:29And Shopify was so good and getting better all the time that I was like, what just stops every unique brand in this space getting eaten from the bottom? And so like one of the things that was really important to me with Eucalyptus was to get away from the Shopify ecosystem, which has proven to be really powerful for us. But that was a real, a strong assumption I had going in.

26:51Matt Bertulli:Expand on that. What does that mean to get away from the Shopify ecosystem? I've never actually heard that. If the technology experience is commodified, right like completely like if you can set up a great Shopify store in and like a good Shopify store in hours and a great Shopify store in weeks and it costs under 50 grand then like you're gonna have to be a great physical product and I know that that's what you guys think about with your businesses um but at the time I like I like I've gotten trouble for saying things like this on in the past but like um you know mattresses are very undifferentiated product um you know you they come out of the same 20 Chinese factories largely.

27:24And so if the Shopify ecosystem commoditizes technology differentiation, you can't really win on convenience unless you're willing to make kind of incredible logistics investments, which very few businesses do and can. And in fact, that's largely commoditized as well. So I just wasn't comfortable with having to come up with unique products every time I wanted to launch something. And so my bet was more complexity of service experience in telehealth was going to be something that could be a foundational point of differentiation. And that has played out to be extremely true over time, particularly when it comes to complex regulatory environments.

27:58And when you think about it that way, Tim, because I think I know the answer to this, but I just want to ask, are you thinking, I am doing this because I'm thinking through the mind of a marketer, media buyer, and I want to be able to market. And so I work backwards from that. I'm like, what's going to be able to set me up to use my superpower? And it's this where I can keep more differentiation. For sure. I can't actually think of any other way to think about shaping a business's proposition than from the lens of a marketer. And maybe that's just the grounding that I've had, but it feels like if you can't craft differentiation from an initial upfront experience and then from a long-term service experience or product experience, then it's going to be very, very hard to build a business.

28:39Yeah, I would agree. I mean, I think that what I've learned in my business is that maybe I would modify that to say, I think you have to start with an acquisition mindset. But I think that that doesn't always have to necessarily be a marketing first mindset, although maybe we're saying the same thing. But I think like I just wanted to pull out the point that you've made it really clear what your superpower is. And earlier you made the point like, hey, don't try and replace yourself. You have the superpower. You're probably not going to find somebody with the same level of superpower that you have and you should get other complimentary pieces.

29:10And I think that that's great advice to founders. Like find out what your superpower is and be great at it. Be a one in a hundred, be a one in a thousand. And then you focus on that, surround yourself with talent and work backwards from your superpower in figuring out what products or markets you want to be engaged in. I do this all the time. I mean, it's kind of the idea that you choose what games you compete in and really, really smart people are just very good at understanding their talents and picking only competing in games where they're likely to win because of their skill set? There's a huge margin of safety.

29:41Like I like huge margins of safety. Like I like, I like, I don't like necessarily having to win, like in the zero sum sense. I just like, you know, like, I'm like, make me top five player in, you know, the NBA, you know, and I'm really happy. But I like, I do not want to be slugging it out in the, you know, I'm going to mix sporting metaphors here and go like the, you know, the division 10, you know, it's just too hard. Well, and like, this is one of the reasons why we'll talk about on the show, but I talk about it in my company ad nauseum. I'm like, I want to be in really big markets. I want to be in markets where if I'm number 12 in market share, I still have a great business.

30:17And it sounds like that's what you're saying. It's another way of saying margin of safety, that like the bigger the business, the more the buyers, the more paths to victory and the more cushion that prevents you from failure. because like you said, I don't really know what quote unquote winning is, but I know what failing is. And failing is when you can't carve out a consistent way to profitably acquire customers.

30:37Matt Bertulli:Yeah, Tim, I think that the thing that stands out to me is this idea that multiple nine figures in upside was not enough for you. And I want to know more about that. I want to know if that's because of the role that you were in, or if that's because of just the, the, like your view of the market and like where you could actually go and participate, or if there's something else there that we're just not even thinking of. I think what I was thinking a lot about at the time is we are in the early, early days of the DTC era. And I was probably more bullish on the DTC era than the DTC era turned out deserving to be.

31:13But what I was really thinking about is what do the great companies of 10 years from now look like with regards to building things that ship consumers' products? And I was like, the antidote to the everything store and, you know, the super long tail is like highly curated, high quality experiences that feel digitally native. And I was like, well, if that's going to happen and I'm going to do it from Australia, you're probably going to have to do multiple of them to get something of real scale. And I honestly thought that the path was like genuinely unlimited as to what it could be because my view at the time, and I think this is probably brought out to be like largely true, is every category would have new entrants.

31:53like maybe put in the show notes I my original seed deck is like public on the internet and um we had eight different products we were going to launch um in the first couple of years and um there was like home orthodontics um there was men's health there was contraceptives there was peptides there was dog food there was um female focused iced coffee um and there was maybe three or four more oh and there was prams and so like I guess we had this view and that was like crazy that there was like the length we went to but um we had this view that like there was going to be a great holding company that had um technology differentiation and marketing differentiation and we were going to be at the front of that and um you know it actually looks like extremely naive on reflection but um but I I thought the opportunity was there to build something of enormous scale and I actually I do think that like the consumer brands that will go on to be I guess like the holding groups of the next 10 years like a lot of mistakes were made in the first chapter of the DTC era but I do think we're starting to see like I actually like I find the Gruen's story like so interesting because it was like a it was like a formulaic execution of a scaled outcome which to me seems if that's possible then it's possible again and if it's possible again it means it's possible 10 times on one portfolio on one platform and so maybe we actually now that the rule book is a little bit clearer and a little bit better written maybe we're actually looking at what will be um you know the multi the multi-billion dollar outcomes in the space and I actually think like hymns is a really good example you know to um of a brand that has been able to platformize you know it has it has like I think they have six 100 million dollar u.s lines or more something like that um which is insane and it's because they got the platform technology play right, they got branding incredibly right.

33:45And then now they're doing product innovation on their platform in ways that I imagine they never would have thought possible at the beginning. So to round that entire answer out, I thought there was going to be$100 billion consumer businesses built that sold goods. I was largely wrong and definitely wrong on my front, but I think we're starting to see the hallmarks that it might be starting to happen.

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34:47Matt Bertulli:Go to nineoperators.com slash applovin to give it a shot today. You'll also get access to the live operators mastermind that we ran with over 25 e-com heavyweights, plus our step-by-step playbook to channel expansion. That's all I got for you. Let's get back to the show. there's uh the collective knowledge of consumer is has been expanding very rapidly in the last call it like five six years i mean it's part of the reason that we do this damn show right it's just like how do you expand the the sort of like community knowledge base and i do agree i think that the i think we're going to see uh very successful holding companies in consumer um we said we tend to forget as an industry that these things take time to build like consumer is largely a brand and a culture exercise and if you look at the very large holding companies they're they're all made up of really old ass brands in big categories to what mike is saying so i i just think we we as an industry we tried to speed run holdcos uh instead of just like oh no wait you know all large holdcos are many many decades old in pretty much every category.

35:56The only thing that gives me pause and fear about it is brands seem so moment in time now. They rise and fall so much faster than they've ever risen and fallen. And so because of the density of categories now, is there any brand, you know, do we actually, you know, of brands started in 2025, what percentage of them become household names in 2050? I like, it could be zero. You know, I don't know. This is actually my thing, Tim, and going back to what we were talking about earlier. This is why I think if you just look at it through the lens of a marketer, the problem increasingly is that the diffusion of the insight happens so quickly.

36:33You know, like there's so many tools that can immediately say, OK, give me all their creative. Like, what exactly are they doing? What are the playbook? What are all the flows? And where I'm starting to think a lot more structurally. So I'll give like an interesting analogy because we keep bouncing back and forth with sports. So the NBA, and I'm kind of aware of the NBA as a product because the fundership. The NBA had the highest viewership in the regular season in 26 years this year. And the playoffs had the highest viewership in 33 years. And the question is why? And I think I know the answer.

37:06I think it's actually pretty clear once you do a little bit of analysis. At a surface level, it's not obvious because it's like, well, there's no dominant storyline. The best team in the league is the funder from like the second or third smallest market. The Spurs are the second best team in the league. Again, small market. There's just like no good narrative. Why? You know what changed year over year? The TV deal. And you know why that mattered? It mattered because now Amazon is pushing the games and NBC is pushing the games and ESPN is pushing the games. You have more of these multinational corporations putting a lot of weight behind pushing the games.

37:41It's not even easier to watch the games. It's harder, but because of the simple fact that structurally you have so much weight pushing the league, it's taken the league to a level we haven't basically seen since Jordan and the Bulls. And so I'm starting to think about consumer a lot more structurally. If you're going to win, part of how you're going to have to win is you're going to have to be aligned with the interests of the 800-pound gorillas. because if you're not, anything you do is duplicable and you don't get built into the structural fabric of the machine. And so that's what I'm trying to do.

38:15And I think sometimes I'm a little bit insecure about it because I'm like, man, it seems so cool when people are doing all this stuff that's more kind of marketing funnel dependent. But I think if you're talking about what is durable and you can count on in 10 years, I think anything where you get in there like a freaking tick on these 800 pound gorillas and you're part of what they want to sell.

38:33Matt Bertulli:Well, how does that work, Mike? That's such an interesting theory. There's two theories right now that I'd like to unpack. First, Mike, is yours, that like, how do you sort of like position structurally? And then, Tim, we'll bring it back to you, this idea that you came at things from a technology and an experience perspective, as opposed to, like, typically in consumer, there's like, categories is how people think, right? Like, which category or which market do I want to be in? So, Mike, I don't quite follow. I think I get the theory of this idea. I want to position into these large 800-pound gorillas, these big structural tailwinds.

39:09Matt Bertulli:But what does that even mean? How do you do that tactically for people listening? I think the most simple way I could say it is that what you want to do is create something that structurally makes Amazon want to sell your thing for you and makes Walmart want to sell your thing for you. And this is not how most people think. They think in terms of like, what is the hook where I can get people to want to buy it? But if you actually go upstream and say even more than I want individual customers to buy it, I want the megacorps to want to buy it and to want to push it. Because if I'm successful at that level, then it is clear that whatever Amazon wants to sell people, they are going to buy every day.

39:47This is proven out by our lives. Why do you buy the things you buy on Amazon? Because they put it first on the algorithm, not because you did some kind of extensive research. You pulled it up, you bought the first or second thing on there. And you bought it because of the reviews on there, which I could go on a whole thing about how Amazon calculates its reviews. It's not nearly as impartial as you think it is. Amazon sells what Amazon wants to sell, and then we buy it. It works this way in physical retail even more extremely because there's only limited spaces on a shelf. And so I've just kind of moved upstream in who is the main customer that I want to focus on.

40:19And I think that that's how you create durability. Because we don't have the benefit of time to kind of backtest this, but we do know the consumer brands that have been around, as you said, Tim, for 10, 20, 50 years, this is exactly how they did it. They went through the behemoths. Yeah, I agree. I mean, there's this great business out in New Zealand called Zuru, which I think literally all they do is they go to Target and then they go to Walmart and they go, where is there a dated brand that you want competition to? So they've got a competitor to the nappies, in the nappies category, they do really well in toys.

40:56I think they've got a few like a competitor to like the Kinder Surprise. Like they're just like little chocolates and things. Just every subcategory, they'll go and produce a competitor if Walmart needs it. And I think it's turned into a multi-billion dollar business. Yeah, to take it even a step further, we have had major mass retailers come to us and say, hey, we're not happy with so-and-so. Create something so we can buy it from you. Yeah, this is what really happens is how the sausage gets made. And so sometimes it's just like looking at, hey, who's vulnerable? Who's not doing a good job of serving the retail customers, like the big wholesalers?

41:30And sometimes it's like, they'll literally come to you and say, if you had this, we would love to buy it from you.

41:35Matt Bertulli:I want to jump into the eucalyptus thing then. So you're at on this note of like how Mike is thinking about just positioning, right? And, and who you're actually selling to. So eucalyptus, you're at Koala, you have this sort of like this thesis, right? That's forming on what limits the upside to Koala. So then you have a new thesis, which brings you to eucalyptus. and ultimately like you enter into a series of categories that are actually quite complex and there is no like there's not a lot of playbooks built I guess when you started this uh particularly in the the telehealth thing so what was definitely happening was um uh like the technology was filling the gap between patient prescriber and pharmacist um and so like you had curology in the US really ripping, you had HIMSS really starting to rip as well.

42:24And so it was pretty clear that if you could solve the friction, both regulatory and consumer of connecting those dots and like being able to being the technology layer that connects practitioner to patient and then through to pharmacy, that that was going to be a great experience. But I was more excited about it because I thought it was going to be a platform experience. I was like, this is going to scale to you know, end categories because, um, because they're all going to be different experiences, but they're all going to have the same kind of core fundamentals. And so, um, that was what, I guess the original insight when we went in was, and, and, and I really felt like that was going to be big enough to build a really good business.

43:02Matt Bertulli:Where I'm a little lost him. And I don't, I want to just get you to expand on it is there's a big difference between like prams and, uh, like schedule for drugs like the the so when you're hitting on like platform you know where i'm a little stuck is you want to get away from sort of the shopify thing but then like sort of build your own kind of like platform sort of business could you kind of give us the give us the like the pitch why did you think this because obviously you've you've like since changed now you're quite focused Yeah, I've led you down two different versions of the original. So the prams and stuff was, so we raised like one and a half million dollars US pre really starting the company.

43:49And that was very portfolio oriented. So like we could do a whole range of things in a whole range of categories. Then we built our first brand, which was Pilot, which was primarily ED, very similar to what Roe and Hems were doing at the time. and then we built our contraception management brand which is called Kin and then it had kind of some fertility extensions off the back of that and that's when the platform thesis really started to emerge for us was like oh my god this was so easy to build like doing this again was so remarkably easy can we do it again and we did like skincare maybe six months later and so we had three in the first 18 months and so that was like this realization that oh my god like these things can be laid on top of each other really easily.

44:36And we can basically break up the pharmacy space by kind of specializing the service experience. The big aha moment for me was when we built our fertility business, we had all of these young women coming through getting the contraceptive pill from us and like 35 % of them were having their prescription changed from one pill to another. And that was because doctors were prescribing like old versions of the pill. And so we could essentially build a better version of the experience, get patients like more up to date on what the medication choices actually were, solve huge problems for them, and then have this incredibly retentive kind of follow up off the back of that.

45:18And I was like, oh, my God, we've got three businesses now with, you know, fantastic margins, like, you know, 50 % plus nine month retention. And I was like, this doesn't look like a consumer business at all. And the cost of technology here is we can invest more engineers than we would otherwise be able to because these things are compounding. And so I was like, this is actually the best shape of consumer business that I've seen because we have different experiences, all scaling, all on one technology platform, all in interesting and different subcategories with like different LTV profiles that will get better over time.

45:53And so we thought we really solved it. And then COVID ended and we ran into like the world's biggest brick wall.

46:00Matt Bertulli:so what's the world's biggest brick wall just the like the snapback of covid yeah like so at the same time um retention drops cac rises across the entire portfolio suddenly um you know three or four month paybacks become nine month paybacks um the technology platform is uh like fracturing because different experiences are slightly different and it needs more investment than we'd hoped. But we were maybe hitting the TAM of some of these smaller subcategories. And so it just hit the wall because all those are correlated assets so quickly. And so luckily, what it allowed us to do is we were able to slow down a little bit, kind of figure things out.

46:43And then once we started in weight loss, it was transformative in three or four months.

46:49Matt Bertulli:There's like two businesses on the internet that have forever been the best it's like porn and weight loss those are like the two areas that you could ultimately go into and they've always crushed uh i am so curious how the you navigated or thought about all the regulatory frameworks early on and like getting into telehealth in like 2019 like today i think there's enough people out there doing it that like we've had um we had jack on from Muesli, right? And they do it mostly in skincare. How did you know where you could sort of push the envelope versus like, uh-oh, like we're running into lawyers?

47:30Matt Bertulli:Yeah, yeah. I mean, so we got kicked off Stripe maybe six weeks into the life of the business and like we're off Stripe for like, off Stripe for like maybe four months. So it was like near business killing experience, like day one. If you haven't been kicked off of a transaction processor, then have you even really lived? Do you even really e-com, bro? We one time had a reserve. Sam, you'll appreciate this. We had a reserve on a business I ran of$5 million. They literally held on to$5 million in reserves because of our chargeback rate. It's like what we learned pretty early on was that compliance could be a real advantage if we got it right.

48:11And so we have had a big legal team, you know, from very early on, have worked with regulators from very early on and kind of tried to like chart the path to what compliant telehealth was going to look like. Because, I mean, you know, and maybe actually I'm wrong here, but I like I felt like on in a 10 year timeline, if you didn't do it in that way, there was no way you're going to be able to do it at all. and I actually think like like it's been so interesting watching Medvi get the coverage it has over the last couple of weeks and months because like they do a very similar version to what we do but they make every non-compliant decision as opposed to us making every compliant decision and so you start kind of questioning you're like geez like that that business makes an insane amount of money have we have we made the wrong calls here but then you you stretch forward another 10 years and you're like well no like these are going to be firstly like that thing's going to blow up and obviously has.

49:05But these businesses are going to be very intertwined with governments over the next 10 years. And so to have taken the sensible steps early on, definitely a sacrifice on what could have been from a speed of growth perspective. But I always felt that it was going to be like the path through this thing being there was going to be a leap that we're going to eventually have to take, which was from private pay, cash oriented business to part of the system. And unless we had our like I's dotted and our T's crossed, that leap was never going to happen. And so it always felt like the right call, but it's been an expensive call for sure.

49:41Matt Bertulli:What does it mean to be part of the system? Can you go deeper there? I think like governments will eventually pay some money for the subsidization of these medications, but they probably won't do that without some care model wrapped around those medications. And so we've built the care model And like, you know, not very many data safe businesses have done kind of 20 pieces of peer reviewed research. And so it's kind of structural bacon that I'm talking about. Like, that's perfect example that like, OK, the UK offers subsidies for GLPs, but only if you are on this list. And guess what? You're on the list with Eucalyptus because you've done the work and you've done it the right way.

50:18And now all of a sudden, basically, the government of Britain is pushing people to buy from you. Like that's the kind of like structural, like that you're looking for. Yep. Perfect summary.

50:28Matt Bertulli:And then I guess when I look at the whole journey here, Tim, right now there was, I guess like by the time the acquisition happened, there was two brands left. Right. Are there, are there any that you wish you hadn't spun out or shut down? Like, is there any of the house of brands that you're like, man, that actually was a good one. We should have kept it or gone deeper or something else. Yeah. So compound our, our men's longevity product. it's like, it got a lot of things right when we started it in 2024. It just was going to be a different technology experience. Like the diagnostic piece was going to be more complicated than we were used to.

51:07So the way that it was working is you would do a DEXA scan, a VO2 test, a blood test, a whole lot of other kind of like a mobility test. It had a large in-person experience basically and as a result the the AOV was kind of two thousand dollars a month for the first three months and um and at subscale it was like fantastic um and we were like okay let's make the investment to scale this um and we just got a little bit timid and and to be honest like one of the hard things about managing a portfolio is um our women's focused weight business was going so well that taking any resource away from that felt a little bit insane.

51:48And so we were trading, doing Germany, and our German business is now really substantial versus doing this longevity business. And the reality was we just went with the rational short-term decision. And I know that's been the right decision on an 18-month timeline, but I think it'll probably be the wrong decision on a 10-year timeline. And maybe actually, to be honest, I don't have to think in 10-year timelines anymore. But if Eucalyptus had been a standalone entity for the next 10 years, I think we would have regretted not having that thing mature because it feels like where the world is headed.

52:26Matt Bertulli:Is the advice in hindsight then to spin a company out and give it its own space? Maybe. So I think about this thing all the time, which is like, how do you start new s curves like in a world where um you know like amazon does it uh very few other businesses do it effectively um without natural advantages and so i like i i don't know the model because i'm like i've tried i've tried small discrete resourcing um and it takes too long and it's too slow and the execution bar is often not high enough because they don't have the resources that they need i've tried like intentional high talent carve outs i've tried like platformization?

53:08And I haven't answered it. Like I think like we, the thing that we do really well is roll our main thing into new places. And so I don't know if I have a good answer, but I wish I did because it's pretty imperative if you're going to build a platform business that you're going to have to be able to start these new things. And I think like the great US platform businesses do it, right? Like DoorDash is an example of, you know, multiple different S-curves, whether it's advertising, the kind of core food delivery business. I think there's like a logistics platform behind it. Like there's enough there, right?

53:42And that's how you make the leap from billions of dollars of enterprise value to tens of billions of dollars of enterprise value. And I like, we just didn't do a great job. And so...

53:50Matt Bertulli:Can you go deeper on the S-curve thing for the people listening? Yeah, yeah, for sure. I've not heard many people talk about this in the way that you are. Yeah, so like if you think about wanting to build a multi-billion dollar business and you very few of them don't start with without the first one being a you know several hundred million dollar business but then you've got this several several hundred million dollar business in our case like let's call it a 400 million dollar u.s revenue business and you're looking at it and you're going like look this is great but it will have a natural ceiling or it will have you know unit economics pressures and we should be trying to create the next business lines whether it's from a selling to the same customers, selling to new customers, expanding the brand, like there should be new ways to grow.

54:39And those new ways to grow is going to have S curves, right? Where it's like, there's going to be a pain at the beginning where it looks shit and then it's going to slowly mature and then eventually it will look great. And so the question is, is like, how much pain are you willing to endure? How are you going to staff it? You know, how much capital are you going to put into it? And I have both been short-termist and timid in my approach to that. And I think like actually being a part of the HIMSS business, well, like not yet, but being eventually being a part of that business, I think like they've actually really thought about it in a long term and deliberate sense.

55:13And the example that I'll give is like, you know, they've bought a whole lot of manufacturing and kind of lab infrastructure because they've gone well over 10 years, it's going to be very important to get diagnostics right or labs right. Whereas, and it's not a business that's, you know, particularly massive for them now. But as they think on a 10 year timeline, they've made the infrastructure of investments to be something differentiated to allow that to mature. And I just like don't think we did that very well. And I think very few businesses do it well. And so I guess like, I think we would have been a better business or would be a better business if we'd been bolder with the way that we'd staffed and funded those bets.

55:54Matt Bertulli:So can you then expand on that? Can you expand on the capital raising part? So like you have, you raised a little bit of money at the beginning and I think you raised 50 million before you guys sold. That was the last round in 100 US. Okay, there we go. What was the capital used for? Was it just depth then? Like in the things that were working really well as opposed to trying to start these new S-curves? I mean, in the capital, in the fundraising decks, we often talked about new S-curves. And I think like probably didn't deliver as well as we should have on some of those. I think like if you think of new markets as we delivered on one type of S-curve, which is a new market.

56:36And we did that really well. So, you know, we're the most multi-market telehealth business in the world by some distance. And so I think like that one we solved. but and then the other one yeah the thing that consumer founders don't really get when they try and raise money is you cannot spend those dollars on growth like you just can't it's like a it's a disaster if you do nobody wants to fund growth like nobody wants to fund a cohort hole like you have to have a story where you are investing the dollars for material changes in your unit economics based on a short or long-term investment and so I'll give you two examples and so one is like we have probably the most retentive weight loss program in the world.

57:20That's not magic. That's a whole lot of technology investment over time. And so what we have funded is the technology investment. And so that gives us a unit economics advantage on the retention side, which gives us the advantage on the CAC side, which gives us the growth that we have. The other example I'll give you is David, the protein people. They took 70 million bucks from Green Oaks. That's not to put more David bars in more stores. Like they bought that ingredient that they then cornered the market for. They started doing fish. Like they are looking for margin expansion, unit economic shifts, major capital investments that will yield over time.

57:59I see too many decks from consumer founders that are like, yeah, we need this money because we're going to go from$50 million to$500 million. And it's like, well, without a material shift in your unit economics, it's hard to believe that people are going to fund that. I mean, it's such a good point that if you're trying to raise money just to turn around and give it to meta. That is an insane idea. And I just want to triple underline what you said. It's like, you have to be turning around and buying something that gives you a durable, competitive advantage, or you should not be raising money. Do not take money from somebody else unless you know that you can turn that into a durable, competitive advantage.

58:33You will live to rue the day that you did.

58:35Matt Bertulli:Yeah. It's so true in consumer too, because it's a hard industry to underwrite in the beginning, at the start of it, right? Our margins are not, I guess, what SaaS thought their margins were. Back to Mike's stock-based comp thing. But, you know, it automatically, we're handicapped and we get discounted. So as an industry. Tim, you basically went from that last raise to sold pretty quickly. Oh, no, we canceled that. So... Let's give a couple more questions. We signed a term sheet. I've got a good relationship with Andrew Dudham, the HIMSS founder. We spoke all the time. He was like, did you just sign a term sheet?

59:16I was like, yeah, we did. He was like, oh, maybe now is actually the time that you join us. And so they approached really late in diligence. They came pretty aggressively. And so we ended up kind of canceling the round and getting on board with the HIMSS team, which is, I mean, I'm really excited about it. it's going to be like, you just don't get many chances. That brand is so incredibly strong that I'm just like, it's, it's excited to take it around the world.

59:40Matt Bertulli:One of the things I heard you use the term window washing when it comes to fundraising. Can you tell, tell us what, what window washing is? Yeah, I, this was, you know, overly, overly open podcast guesting, I guess. I was, I was, I was being interviewed by two young VCs and I was making the point that I don't think there's a worse job to take early in your career than being a VC. Because your job is to lie to companies and the company's job is to lie to you. And so you actually never really see the nuts and bolts and the decision making that goes on inside a company because you see a window washed version and you present a window washed version and the whole thing is a window washed version.

1:00:18And so the point I was trying to make was one of essentially being part of a sales process the whole time. But the way that it was construed was there's lies all the way down between companies and investors. And I think like, that's obviously not true. It's just the best version of the truth that gets presented in all cases. And so one for learning for sure.

1:00:40Matt Bertulli:Well, Tim, we're, I don't know if you know this, but we live in a world where we're not super great at nuance anymore. Yeah. It's funny that that's a, yeah, it's a different time, right? I think, yeah. And also like the rewards for more extremism with regards to like, even how you talk about business is just, it's really surprised me how much that's become a thing. I know. It's why I think, I don't know, I can't speak for Mike, but it's why I like doing long form conversations like this as opposed to, you know, 15 second, 30 second short form content. It just because those, your incentives are just to make something extreme because that's what gets views as opposed to like quality of conversation and like leaving somebody with something that's valuable.

1:01:23Yeah, like AI creative. It's just like, it's like, it's all a big, like nobody's making great AI creative yet. Like nobody, nobody's changed their business trajectory fundamentally with a static generated by one of a slew of startups that are rappers on top of the models. Like they're just not, it's not quite there. And that's cool. It's not quite there. Like it's going to get there. We should be excited. We should be testing lots of stuff. It's not quite there. And, but you know, if you see the 15 second versions of it, there is, you know, a thousand hustlers on, on X being like, this is how brand one went from, you know,$1 to$100 million in nine hours.

1:02:00And I'm just like, it's such a hard, like, I feel for young people trying to figure it out because the lessons are the lessons are the ones that sell, not the ones that last. I mean, the long form versus kind of clipping culture, I think is a broader thing, which is if you're going to be successful in the years ahead, you're going to have to be countercultural and develop the ability to hold a thought for an extended period of time. And most of our culture is just not going to be able to. I mean, there is research out there that the kind of TikTokification of our brains, like watching TikTok for 15 minutes harms your brain.

1:02:35There's not even a lot of debate about this right now. And people are losing the ability to really think deeply about a thought at the same time that AI is kind of lulling people into a sense of trust where they don't even think they have to consider the worthiness of a thought and or the accuracy of a thought. And so one of the things I'm telling my kids is like, listen, if you think for yourself, if you can look somebody in the eye and have a good conversation with them, congratulations, you're top 1 % in your generation probably. And I do like this about long form content that it's like, I don't know how many people are listening to the podcast at this point, but I would bet if you graphed it out that if you're still listening to the podcast, you're probably one of the more successful people that's listening to the podcast.

1:03:24because the ability to hang with things, the ability to kind of really think through things is so much of what I'm seeing in the outlier successful people right now.

1:03:34Matt Bertulli:Yeah, I mean, look, you're both, I'm gonna tie this back, but I don't know if you guys are aware of this. I guess there was a study done where they actually made AI watch short form TikTok content and it actually made the AI dumber. Like it was like performance dropped by like 17 % or something. So this works across like the human brain and neural networks, which Tim, it does bring me back to this. What, what are the things that ultimately drove to this, like, you know, step change function in your business and like ultimately getting you to this exit. So it's not, it's not this like short termism, you know, snack food, you know, that you guys did, like you clearly did some things operationally that were very important.

1:04:19Matt Bertulli:So like, could you maybe hit on like the biggest, like these are the levers. This is what we invested in. Sure. For sure. So I think like, firstly, like understanding the drivers of the unit economics of your business are like, it just like, it couldn't be, I mean, it sounds so simple, but it just like could not be more important. And what I mean by that is like different businesses make money in different ways. Like if you're selling a physical product with a, you know, three, three repeats a year or two repeats a year, whatever. and you've got to be gross margin focused. You've got to be basket focused, right?

1:04:49But like the product that we sell is, it has 150 plus dollars of gross margin every month. And the only game in town is, can you hold patients for longer and deliver them better outcomes? And so, so much of our initial investment went into, what does it mean to remove as much friction from the experience as possible? And then when you can't remove that friction, meet patients with the support that they need to be able to get them the outcomes that they need. And so like the first real milestone of us being a great business in weight loss was when we published, I mean, when we did the first bit of work to prove that we were delivering a better series of clinical outcomes than the clinical, than the trials for the drugs.

1:05:29And then that just feeds into the top of, like, firstly, that's extreme vote of confidence in what we do. And then second, that feeds into the top of funnel and the brand. And then the marketing side becomes relatively easy, right? You can then your tactics in the mid funnel have a natural advantage to them because you have something that is very hard to say for others. And so, and then once you've got like, so I guess like understand the unit economics and then from there build a retention engine that drives those unit economics. And then from that retention engine, then you become a brand and you build brand work and you do brand work.

1:06:01And I think where we, because, you know, it's the same lesson I learned from Koala, which is if you create a gross margin advantage and they did it through basket size, we do it through retention, then you actually get the capacity and the capital to build a brand. And so you can actually start to build, make durable marketing events, sorry, marketing, durable marketing investments into things that exist in ways that the rest of your category just can't do. And so we were the first ones doing the TV, the first ones doing the radio, the first ones doing, you know, the large brand campaigns. And so when this debate about GLP ones and are they safe and who are they for?

1:06:38and how do you do them and all this time and stuff was happening. We weren't running Facebook ads at that time. We were running, well, I mean, we were running a lot of Facebook ads at that time, actually, that's trite. We were running a shit Facebook ad. But we were also running the billboards. We were also running the TVCs. We were making the argument as to if you cared about your long-term health in this category, then the safe, durable place to do it was with Juniper, which is the brand that we have. But it all comes from, we built the gross margin advantage first. The marketing sizzle came very much later.

1:07:12Matt Bertulli:And this clinical outcomes thing is interesting. How did you justify the investment in that? Because up until that point, did you have any proof that that was worthy? Like that's a worthy place to invest the dollars? We were seeing obviously some very strong behavioral signal in our retention data. And so the question of then could we get that published was a pretty trivial one because it was like, well, it's going to cost us a million bucks to do the publishing here. You just put that in your CAC and all of a sudden you're like, is this worth it? And again, you have the margin of safety because you're kind of like, well, this is already worth it and I'm already spending this money in different ways.

1:07:51If I treat this as the cost of production of a high quality TVC, do I believe it's going to move the needle as much? And luckily, like our organization, I think is quite good at thinking through big creative bets, big narrative bets. We're probably better at big narrative bets than we are kind of the technical side of channel work. Like we do, we're just good at, we're good at our big, our big, our kind of big storytelling and creative bets. And so this felt like a really obvious one of those and it worked really well.

1:08:20Matt Bertulli:Do you anticipate or predict that this is going to be a more common, I guess, strategy in health and wellness that we're going to start to see far more like actual science being done? Sure. Because like, I mean, like, like in and like in the slopification of the world, you're gonna have to find new ways to speak, right? And I think like there are twofold, you know, benefits the, the, you know, the LLMs and the agents will be good customers for good, good research. And then also it's cut through brand messaging. And I think it's more about the cut through brand messaging. I think there is so much noise in wellness.

1:08:55And if you like the story of my career, I think so far has been like the cost of setting up these businesses just falling away to nothing. And so if that continues and, you know, AI was obviously only going to continue that, then the question becomes even more important of like how you cut through. and I think the era of cutting through with format is like kind of over um uh you know I think we'll continue to see new creative formats emerge but like the the returns on new formats like if you were the first one to do you know Instagram stories great if you're the first one to do street view you know street interview podcasts great but it feels like those bangers are like less common um and actually the rules of the game are kind of known and it's can you say something unique and have something unique about your product.

1:09:40And so, um, yeah, I think research is going to be a really, really big lever that people pull. Yeah. The format was like, uh, the way I explained to my

1:09:48Matt Bertulli:team is, you know, you're, you're throwing rocks in a pond and when it was a small pond, they made pretty big splashes, but now that you're throwing, you're basically throwing rocks in an ocean, uh, you're not really going to notice them anymore. Right. Um, so yeah, I completely agree. The, is there, as you sort of look forward, I mean, you've made a bunch of statements as we're talking to you around like how you think about business and how you think about categories and markets and even this technology experience angle that you come at things. I want to know, like, if you were to look ahead five to 10 years, is there something about consumer that you just think differently about that maybe the rest of us are talking about all the time?

1:10:26Matt Bertulli:Like, is there some contrarian take that you have where you're like, I just think this is how things are going to be done now. Cause man, we're all thinking about AI and its impact on sort of barriers to entry and then raising the ceiling to success. And I'm just curious how you think some of this stuff is going to play out. Yeah. The thing that I've been thinking about a lot, and this is like, so there's two things I've been thinking about. Like I like to think the mental model, I don't know if it's a mental model, but like the way that I like to think about things is if I see a trend, I try and drag that trend to its absolute extreme.

1:10:58And then I look for opportunities on either end of the extreme. And so I guess like the examples that I would think about now is like, obviously like if AI is driving down the cost of brand creation and content creation to zero, like what lives in that? And I think, you know, heritage is one thing that lives. And so like legacy brands that have been around a long time with products that are really differentiated and solid, I think like they become much more valuable. And I think like that's not a unique thesis because I think Thrive just raised like a trillion dollars to do that. But like I put my money where I'm at my mouth is I've like invested in like a small hotel, a publishing company that's trying to compete with the New Yorker.

1:11:38Like I've invested like really outside of the things that I've done. And then the other end of the spectrum is if the cost of producing software goes to zero, then everything will have software in it. And so therefore, like all of the things that, you know, all of the businesses that have been denied software because the cost of engineering is too high. what happens when they get software and what happens when they get you know automation and the margins improve massively and so like I think about all of the like real world experiences that are currently like terribly janky to access like do they get much better do they get much much faster they get much easier do people do more of those type of things because software removes the friction from doing them in the same way that like Shopify has done that for commerce is there is there hundreds of examples of like low-level experiences and things that get much easier and maybe there is I haven't like gotten to the end of that thought bubble but I do think that's like if everyone has software engineers if every single person has one software engineer like what gets made and and like I used to really think this way about the no code movement like I used to think that like social experiences that had code in them were usually so shit because they'd been made by the least social people of all time like engineers because engineers naturally have to be like computers and so I'm like well if no code comes along and like truly social and creative people can create experiences, then do you get much more social experiences?

1:13:04And that hasn't come to fruition because I don't think no code actually met to its promise, but maybe AI is what actually drives that to reality.

1:13:12Matt Bertulli:That's definitely a theory, right? Is that AI unlocks actual, like basically it's like closing the gap between like real creatives in the world and technology. And like when you shrink that gap, then all of a sudden the experiences get better. I mean, I think we're going to see this barbell effect for sure. Like it's going to be like this extreme, you know, everything's going to have software and then everybody's going to want to go to a hotel in the woods that has no electricity. Like it's, that's, that's how we're going to proceed here. And, and that's going to impact brand building. But I guess, you know, Tim, as a, as a self-proclaimed media buyer, if all of this is true, does, does all margin then just not get deployed into more advertising?

1:13:51Matt Bertulli:Like is, is all this actually ultimately just distribution? distribution like so like what is distribution right i i think we've become a little bit because we because we lived a 10-year uh where meta was cheaper than it should have been um we've become a little bit narrow with what our definition of distribution is i think like um doing you know and we're actually seeing a return to um kind of own distribution being thought of as like a really important thing and you know that's why like you see these podcasts trading for huge huge multiples and hopefully that works out being a good thing for you guys and more of that type of thing.

1:14:27But I actually think like I think about creativity when it comes to distribution and then also investment when it comes to distribution. So like, you know, the lazy version of it is every company trying to start a podcast. But I think like what would it mean to, you know, to invest for us like to invest$10 million a year in events? You know, like could we afford that? Could we sustain that? Like is that a distribution channel that will actually work? Like what would it mean for us to, you know, buy a whole lot of GP clinics? Is that distribution? Should that be thought of as marketing? You know, like I think boldness with, like if you think of distribution as just like how you get in front of customers in a differentiated way, in a way that they might trust or like, then I think we're going to expand the kind of aperture of what's possible there a lot.

1:15:12And I think we're going to see less. okay i the way that i define advertising is like any any attention any mechanism to buy attention um so if you take my definition of advertising more advertising if you take the classic definition

1:15:25Matt Bertulli:of advertising probably less advertising i tend to be more aligned with what you're saying does that i guess if you look at the evolution of eucalyptus then your channel i guess like just being super nerdy here but your channel mix then is just like layering on top of each other over and over and over again, right? Because you probably started off like fairly single channel and then like it's just gotten more and more complex and now you're talking about buying clinics or places. The crazy thing about business, okay, so like we've done some incredibly creative and interesting things. Like we were like one of the huge first buyers of Grindr media, like one of, you know, like we've done some really clever, we've done some really, really clever stuff at different times in different ways.

1:16:08But honestly, like, in a category like ours, the biggest thing that we've had to do is get search right because the category went vertical. And so like, and you know how we're talking about discipline plus creativity and execution plus creativity right at the start of the conversation. Like our story is one of incredible discipline on the search side. And then wide ranging creativity on the bets that laid on top of that. But like it would be, you know, it's very easy for me to say like, oh, it's been a story of you know really interesting media buying it's been a story of really interesting landing page work um because because the category was growing and it's been it's been a really interesting story of like you know knowing when to listen to google and knowing when not to listen to google like um yeah like in the category we've been in it it went vertical so quickly that discipline discipline and execution became the things when you were just trying to hold on and now that it's stabilized more um creativity and and experimentation and big bets are back on the menu.

1:17:06But, you know, I went to a dark hole of discipline for like three years.

1:17:10Matt Bertulli:Mike has talked about this many times on the show, like the it's all these boring things that you sort of have to get really, really right in order to get scale in any I think in almost any category. Yeah. I mean, we talk about it on this podcast. Everybody gets to hear kind of the highlights. But really, I mean, success is just hours and hours and weeks of grinding away and in obscurity at stuff like i mean that's the cost of excellence the cost of excellence is that you're just willing to pour really large amounts of time at something to become truly exceptional at it and uh you know like to me this is kind of like you mentioned tim earlier young guys that are kind of coming up in the industry i think this is like how we do them in this service i've heard this analogy before and i think it's a good one that like you can't if somebody wanted to learn how to swim.

1:18:03They could read all the books about swimming. They could listen to professional swimmers talk about swimming. But you know what? That doesn't help them to swim. You learn to swim by getting in the pool. And that's what's true about any of these disciplines we're talking about with e-com is that it's like the way that you learn it is by doing a freaking ton of it, hours and hours and hours of it. And I'm not saying don't listen to people, but also you get out there and do stuff, right? I try and really avoid talking about the tactics that made us successful because the tactics that made us successful are not the things we do now.

1:18:35And like, but I do really think that like a durable understanding of unit economics, like I find it insane, insane how much coverage there is from like the big agencies on Twitter or on X being like, here's how to think about marketing efficiency. And here's how to think about cohort economics. I'm like, if you don't have that nailed in the first six hours of having your business and you're relying on an agency to tell you how to do it, it's not going to work. Get that foundation before you even make an ad. Oh, this is totally a hobby horse of mine. People want to outsource thinking all the time.

1:19:12It's like, hey, who should I use as my Amazon ads agency? And I'm like, there's nothing wrong with using an Amazon ads agency, but don't do it until you've tried to run Amazon ads for a while. Because how are you even going to know what a good agency looks like? How are you going to evaluate their performance if you don't understand anything about it? And people all the time, They're like, oh, here's this new thing that I know is important, but I don't know how to do. I just want to outsource it. I want to outsource the thinking. I want to outsource the understanding. And you just can't do that at all.

1:19:38Like you can certainly have people operate parts of your business, come in and help you. But there's no substitute for learning it. And like you said, like, man, unit economics, like some of these basics. And maybe that's, you know, like maybe we're getting religion around this stuff more and more because we're not in ZERP. But I think it's a great point that like some of these things are just fundamentals that transcend time. And knowing what you want, like I just think most companies are the function of like one number, like being better than anyone else at one number. And like you can be gross margin, it can be retention, it can be acquisition.

1:20:11It's probably not going to be acquisition. It's very hard for that to be the case. But really, really knowing where you're religiously spending your time and investing to get things better, I think like such an important skill.

1:20:21Matt Bertulli:So ultimately, you guys figured that out for Eucalyptus. leads to the exit. You've described this as like full circle, uh, for you, right. Coming, coming into the hymns, um, company, is there like, I'm just curious, is there like a version of this story that maybe, uh, full circle might be simplifying it? Like, are we not doing it justice with what you've built? Like it's, it sort of seems like you went into a lot of places and were very creative, uh, while being extremely disciplined. So, so I think like what we got right, the main thing that we got right and this is the main thing that we got right and very very few other companies get right is like we realized very early on that like the best professional services talent was about to leave professional services in huge numbers because they it was huge dissatisfaction like the startup world had changed the way that people worked but like professional service firms hadn't really changed.

1:21:21And so we put a proposition together to employees that incentivized them on the upside, gave them a new model of working, dropped them into countries that they never would have otherwise gone to. So it was like the lessons of Uber at the time applied to our business. And that durable talent advantage going all the way back to like the salary cap thing was actually the thing that like made this business interesting and then made it good and then that that's what everything else was laid on top of and so like as I think about like what we were staring into was either 200 million incremental capital into the business to essentially fight hymns on the global scale on the global stage or um you know join them and and and lock in uh you know some version of that success and I think um I never for a minute thought the better path there was to fight them.

1:22:17Because the thing that was really true to me was that like, the promise that I'd made to those staff members who joined us early on was like, if you take a big bet, and you kind of do something creative and come and join us, then I'll do everything I can to turn that into an outcome for you. And so when that outcome, like kind of appeared and was real, it seemed like the very, very obvious move to make. And so now like we have this global platform that we can build from, but also a locked in outcome for for people that spent five years, like really, really pushing for that.

1:22:44Matt Bertulli:So is that, uh, does that then sort of dovetail into how the deal was structured? Right. So like, I guess with what's publicly available is like some part cash, um, and then like a whole chunk of stock, right? Uh, no, not stock. There is, there is stock, there is stock. So there's like, um, there's, uh, a hundred, a hundred mil us of, um, of stock over, over three years that's kind of split among the team but the bigger thing is that um a large part of the team are um being paid like approximately half their their their amount up front and then half in the earn out over three years um and I think like honestly that's what that's what humans are really buying right is like a team and a platform that like learned the hard lessons about like I can't tell you how complicated it is to run a telehealth business in Japan like I can't tell you how it's like it's very very complicated um and so that's the thing that we had and that we build to real scale.

1:23:36And so it's funny because like the brands, like I'm, I'm a, I'm a marketing guy. And yet like the brands that I've built, the marketing systems that I've built, they're not going to exist in three months time, four months time, you know, like they're going to get folded in and, and, um, and we're going to build their thing, but what will exist and what will continue to be really valuable is like the investments we made in the team that were capable of building a, you know, a retention engine and running that retention engine at scale.

1:23:59Matt Bertulli:What was, uh, and all of this, man, I just, I have to ask, like, what was something that you thought was impossible in maybe the industry that you were in that that ultimately proved you wrong I so there's lots of things along the way that are like changed really quickly about this industry I think like um to be honest like one that really shocked me was um how willing people were going to be to like honestly go to like the lowest common denominator version of accessing these medications Like I thought there was going to be a much more durable advantage in safety and security of that. Like I thought it was going to be our big competitors were going to be like established clinicians, established clinics, you know, like the normal path to getting care.

1:24:53But actually the emerging dominant players for a long time were like the Medvys of the world. you know, like the ones that were willing to cut all corners. And so like I was shocked and I'm still kind of processing this shock at like how price sensitive people actually are, even when it comes to medication. Like there is no category exempt from people willing to shop to the lowest possible price for things. And so I was like, I never internalized that. And it surprised me, you know, like right up until reading the Medvy article. Like in my mind, I was like these like bottom, bottom of the barrel compounding opportunity options in the U S they're going to be like some to maybe a couple of hundred mil.

1:25:37And there's probably five of them that have done 400 mil or more, you know? So it's like, um, it's insane to me that that's how it played out.

1:25:44Matt Bertulli:Dude, you know, what shocked me most about this whole industry is that people are willing to give themselves injections for sure. Like just that behavioral thing. Like the idea of giving myself a needle is like, have you, have you seen what a, um, like a non-properly administered compounded setup looks like as well. It's like you're extracting the vial from the liquid. You then, it's a big need. It's crazy. Crazy. It's crazy. And it's also very bullish because right now you can make an argument that there's all these barriers, right? That we're on first, second generations of these drugs where the side effects are higher.

1:26:18You've got to inject it. And you look at all the stuff that's coming. Man, it is going to be, I mean, everybody's going to be out on it, right? it and it's just like yeah you're gonna be able to take it orally i mean like i was talking this uh this week with some people about um the myostatin inhibitors that they've combined with these they they're pretty close to basically finding a way to give you something that like it just burns 100 fat which is wild you know like that's basically not even humanly possible like even if you fast or you like do things like you can't so like we're we're getting to like super human, what these drugs are going to be capable of.

1:26:54And then, you know, the research says, hey, you're less likely to drink. You're less likely to smoke. You're less likely to gamble. You're less likely to get Alzheimer's, you know, and you just go down the list. So it's, it's just such a revolutionary, it's such a revolution. I mean, it's probably the best product in the history of the world. And we're in the early innings.

1:27:11Matt Bertulli:Yeah, I know. It's everybody talks about AI and it's like, well, have you seen this other type of technology? Have you seen where they put the AI revenue next to the GLPs. And you're like, guys, the big story is GLPs. Yeah. Impact is incredible. It would be interesting to see on a 10-year timeline what has more impact. Because you were already seeing the life extension, right? It's going to be the anti-amphetamines of what the opioid crisis was to the US. It would be life extending in the same way that was life shortening. Yeah, I think that's a great point. I mean, like, I think that to continue to push yourself in business past a certain point, you have to believe in like the greater good, that somehow you're part of like the greater good in some way.

1:27:54And like, it's pretty easy to convince yourself of that with GLPs because it's just like you're making people's lives better. You're extending their life. They're more likely to have all kinds of good outcomes. Making the world hot again is a great endeavor to be a part of. Yeah, yeah, yeah. It's one. Yeah, it's been super interesting to me. like it's like I think about this point a lot and I um like to what to what level of responsibility do I have for making sure people go about these things the right way um and like there's the balance of like the commercial and um and like the the it's not even the clinical right it's like because like I can use behavioral tools you know like I can use like our most used feature is a weight tracking graph how do I design that weight traffic tracking graph so to get people the best chance to get the best outcomes.

1:28:39And I'm kind of lucky. Well, I mean, I've convinced myself that I'm lucky that my incentives are very aligned with the patients because outcomes equal retention and retention equals gross margin and gross margin equals marketing. But there is another way, right? There's like the MedV way of doing it. And you've really got to convince yourself and be patient. And actually, that's where venture capital has been really good because it's allowed me to play the longer game, which has led to me being more convinced that we've done the right thing. But it's certainly not written in stone that that will be the way that it plays out.

1:29:14I think this is where an understanding and appreciation of compounding is so critical because you look at some of the all-time great categories and it's just like, yeah, you could see the growth and you could see meaningful nominal sales five years in, 10 years in, But then you go 30 years in and it's just like it just dwarfs it. And I think that that's what's going to be true in this category that like so much there. I'm sure there's people doing the black hat cash grab. Right. I mean, it just feels like everybody's a compounder now. But I think that you're right. Five, 10 years from now, reputation is really going to matter.

1:29:47And the size of the price is just going to make today look small in nature. It's yeah, it's going to be it's going to be it'll be fundamentally behavior changing for a lot of the world. And so it's going, I mean, I saw the, I saw the like Instagram time on the meta time on site metrics down for the first time ever. And I'm like, it's hard to, it's hard to look past that, that at least may have be somewhat impacted by GLP ones because it's just like such a dampener on addiction. It will, there's, there's kind of, you know, Peter Thiel has this idea in zero to one of like every great startup is built on a secret, you know, that you know about the world.

1:30:24And I don't know that it's really that much of a secret, but like that the world's going to be dramatically changed by GLPs might be the single insight that, you know, the insight that GLPs and AI are going to change the world in all kinds of different ways is probably the only central insight you need to build a successful company. Now, you got to figure out the exact offshoot of that. But like, I mean, that is that is like the most obvious thing ever, as we said here. I love that secret quote. And it's like it's one that I've thought about a lot. I tell you where I often, what I often think about with regards to it is that secrets stay secret much longer than you expect them to.

1:31:00Like people, things are often out and like available as insight. And so you think someone will be doing that, but then the actual explosion of the category takes years. And so the secret can be held by hundreds of people for quite a long time. And then you just, by the matter of staying at it and staying relevant, you can, you can arrive relatively late and still take advantage of it. So if the secret's big enough, which like GLP ones obviously have been, then it's not about being one and done with who wins on it. It's like, you know, there are thousands of winners as long as you commit to the inside.

1:31:33You know what I think that is, Tim? It's like, if you think about the stock market, if you knew a secret about somebody's earnings, right? And that got diffused, everybody would act on it. And so like it gets arbitraged away in no time. But the reason why that's not true in entrepreneurship is because it's really freaking hard work. And so like, even for me, it's like, I'm running my business over here. I'm doing electrolytes and selling water bottles. I'm like, man, I bet I can make a bunch of money in JLPs, but it's like, I'm preoccupied. I'm busy. And, and like, and then for every one of me, like there's a thousand people that are like, yeah, I could do that.

1:32:03I'm going to get back to TikTok, you know? So like, there's just so few people willing to put in the work required to take advantage of it. And so I think that that's the reason why your insight is so true. You think, I mean, the classic misunderstanding of entrepreneurship is that the key is insight and it's not. The key is execution. Like the insight plus execution is what creates the outcome, but insights are not scarce. It's actually the people that are willing to do the execution.

1:32:31Matt Bertulli:And commodity and insights are becoming commoditized, right? Like that's actually. Yeah. And execution is, I think execution often gets a bad label as like one practice done. It's like, it's the, it's actually the balancing of a thousand things. I find like that to be often misrepresented. Like people are talking about like, well, if the cost of execution goes down, I'm like, it's only going down marginally. Like you've got to go and do a thousand, you know, the number of things you have to do to succeed just changes fundamentally. And so it's like execution across vectors, not down one that ends up being the challenge.

1:33:04Maybe the word is coordination, like even more than execution, because we tend to think about like, Like, oh, I executed this task. But like so much of building a business is like I'm coordinating, you know, I'm herding 500 kittens at once, you know, and I'm coordinating all this crazy stuff. I love that. And, and, and bet sizing across all of that coordination. Yeah.

1:33:23Matt Bertulli:Tim, do you, do you, then on that, do you think that, uh, it's like, cause you're transitioning into SVP international, I guess is the, is the formal title. Do you see that's still the job as you move from, you know, building eucalyptus to now part of HIMSS? like, or is something, are you anticipating a lot of change? I think my time horizon just shifts shorter. Like, I think like, like the same way I think about the responsibilities of my C-suite, like their job is to make sure that the business hits its numbers this year. And I think when you're a founder, you've kind of got next year in your mind.

1:33:55And I just don't think I'm going to have as much of next year in my mind. I think I'm going to have like a bit more discipline, more complexity, because I'm going to, I'm going to get a bigger P &L, but more discipline and much more, I get the sense that I like will spend more time in what will make sure we deliver numbers next month. Rather than, you know, a lot of last year I spent thinking about like whether or not labs were going to become a commodity and whether there was worth making investment in that space or not. I just don't think that's going to matter to me as much. And it's going to be like, how do we ensure that we have our retention advantage turned into a gross margin advantage to turn into scale for the next couple of years.

1:34:35Matt Bertulli:The way that we like to finish these shows on this, this is a perfect transition, is we like to do this segment called the Titan 10, where we just ask you some questions and we get like, you know, gut feel answers from you. And there are a lot about this like sort of short term, how do you actually do this stuff, right? These are like very tactical. So the first one is if I dropped you on a desert island to manage the business, think of that P &L that you were just talking about, what three metrics do you take with you? You only get three numbers to see how the business is doing. Like, I mean, my answer here is like, know which ones are important to your business.

1:35:08And to my business, it is, we are a retention business. Our retention comes from outcomes. So if patients are losing weight, we're doing well. So are patients losing weight? Is that weight loss turning into retention? And then is that driving our, like we have a, businesses need to find their pre-purchase top of funnel metric. So we have a like quiz at the start of our purchase funnel. And so I'm much more obsessed with are we creating high quality quiz starts than I am orders because I think too many people don't understand that marketing is a long term game. And so I like I'm very obsessed with our top of funnel metrics.

1:35:42Matt Bertulli:Love it. You also get to take a book or a resource, but it can't be about business. Yeah. So this is kind of cheating because it's business adjacent. So who is Michael Ovitz? The book by Michael Ovitz about Michael Ovitz. I just think it's incredible. Like I love books about managing creativity. Like my two favorite books are Creativity Inc and Who is Michael Ovitz? And it's just like, if I could be good at one thing, it would be, I would love it to be getting the best out of creative people. And I think I'm like reasonably good at it, but I think like both Pixar and CAA are examples of that insight, that ability scaled to enormous, enormous scale.

1:36:24Matt Bertulli:Do you have a contrarian belief about business that you think people think you're crazy for? I wish I'd been a little bit less focused at some times. Sometimes I wish like I just, I think that like a lot of small bets simultaneously across a lot of fields is actually the right way to do things. And then knowing the ones to double down on. Like I actually, I mean, this is gonna be a good summary of me and how I think, but it's like in Facebook ads, right? It's like there is variance, which is like creating many versions of the same ads. And then there's like variance, which is like creating many different ideas.

1:37:04And like you can trick yourself that you're creating a good account with hundreds of different versions of the same ad, but you're creating a good account when you create hundreds of different ads. And like I wish I had to spend more time and being more willing to germinate small bets so that I could then see what worked across many, many different parts of the business. You know, like doing the cohort modeling in different ways because they would produce different insights. Just like path dependency is such an important part of doing things well. But I think like I would have loved to have shaken things up a little bit more along the way.

1:37:38And I think people would think of me crazy having heard the journey that I've just described.

1:37:41Matt Bertulli:Oh, I like that. What's the single most important word in leadership then? I think it's, I honestly think it's like, this is not one word, but it's like maybe the word is confidence, but it's confidence in the people around you. Like, I've never ceased to be amazed by how good people can get when they, the best people, like how the rate of improvement that they have in them. And then like, I think it took me about two years to realize that I wasn't the smartest person in my company anymore. And then the next two years to realize that I was like, maybe in the, I just, I just, I just had more context and the ability to bully people.

1:38:16And that was all that kind of really carried me through.

1:38:18Matt Bertulli:Okay. So then what's the most single, what's the single most important word in broad business then? The thing that comes to mind is like honestly about differentiation and thinking just like what gives you like just obsessing. It sounds like, I mean, like listening to Mike here talk about it, just like it sounds like the obsession about like what I do different. Like I see so many same, same, same businesses. And I just like wonder if people are really able to articulate in a small amount of words what they do differently. and I think like if we were, if more people were able to do that, then I think we would have more healthy businesses.

1:38:54Matt Bertulli:What's the best meal of the day and why? I'm not a very good eater. So dinner because I'm like, it's probably where I eat most socially. Like I love social eating, so dinner. Okay, there we go. What's the most overrated growth tactic in consumer? Oh, like I think all growth hacks are overrated. Like I think like all of them, every single one. They're never as durable as people make them out to be and they're sold. There are more growth hacks to sell courses than there are to grow businesses. And I think that's a disaster for our industry. Okay, so then what's the most underrated thing? Most underrated tactic or strategy?

1:39:31Bold, bold creative bets, bold, bold storytelling bets. Like, I think like, okay, here is the most underrated thing in advertising or in marketing is a great script. Like there are not enough great scripts. People don't write great scripts. Like it's like, I see so many insane examples of like, if we chop together these 40 clips into one mega UGC compilation, or like if we get this creator and we pay them this much money and it's like, just write a great script. Great scripts can carry quite a lot of things.

1:40:01Matt Bertulli:So good. Tim, that is it, man. You crushed that dude. That was so fun to have you on. Great conversation. I learned a lot. Tim, it is no surprise you've been successful, brother. No, not at all. Thanks, Mikey.

1:40:19Your Heart