706: Daniel Lubetzky - KIND Snacks Founder & Shark Tank Investor on Kindness, Grit, Values-Driven Leadership. and Building a Billion-Dollar Brand

27:30And listening has helped me with my children. I'm not perfect still. I have way more work to be done. But I have become better at the dinner table with my team. My team might complain that I'm still not there.

27:44Ryan Hawk:What do you mean by getting better at the dinner table? Asking better questions, asking follow-up questions, listening, all of the above? What do you mean? my personality is that of someone that always wants to be a protagonist i want to be part of the what's going on i got spoiled by founding kind from a one-person operation where i was alone in the windowless basement of my building to an entity that had hundreds and hundreds of team members full of joy like hanging by my words for the most part not all of them but and so i get spoiled by wanting that. And my kids, guess what? They want to talk about their football practice and they're talking to each other and I'm just observing and I would like to be part of the conversation.

28:30And so all of a sudden I'm learning the skill to listen and to gain more knowledge and to be a little bit more patient and to then know how to ask questions and be part of that without having to be that, without me being at the center of attention, asking questions. My dad, Going back to my dad was the best interviewer because he was a coach. He always was there to listen. And when I was talking to him and I would ask him a question, he would come back with another question. And he would just let me figure out the answers. And that's the deepest way for you to really, really evolve is for you to ask yourself questions.

29:06So a great interviewer or a great coach or a great parent doesn't tell you what to do, which is the easier skill that comes easy for me. helps you ask the questions you need to ask yourself for you to figure out what to do.

29:19Ryan Hawk:As you know, Daniel, I think parents can relate to this. Kids are the greatest in the world at making sure you always stay humble. No matter what you've accomplished, you create these incredible businesses and make billions of dollars. They don't care. And it's as it should be. It's not just that they don't care. It is one of the most valuable aspects because it keeps you grounded and it keeps you human. And if you, you need someone to run yourself, whether your kids or your spouse or your partner or your team members that can call you out when you're starting to think that, is it too crude to say that your doesn't smell?

29:59I don't normally use that expression, but that.

30:02Ryan Hawk:Yeah, no, you're right. You're right. We all need truth tellers in our lives. Kids are, I found to be some of the best because they'll love you and be there with you. But I think if they stopped making fun of you or they put you on a pedestal, that would be a really weird day. I would not feel good. Your kids are there to keep you humble. Okay, I want to go back to actually 2002. You're training for the New York City Marathon, and you're looking around for healthy and great-tasting snacks, and you're struggling to find them. What did you decide to do about that? Well, I tell that story and I tell a couple other stories as anchor moments in my recognition that there needed to be a healthy snack that was portable, wholesome, and convenient.

30:49Like that was the genesis of my idea that what eventually led me to kind, because like when you're running a marathon and you're being served up all this artificial gobbledygook stuff or stuff that doesn't look like food or in any occasion where you're in the airport or whatever, what a lot of people don't know is that in the nineties, late nineties, early two thousands, there was no healthy snack set that didn't exist in the stores and the airports and whatever that did not exist. Your options were either stuff that looked like astronaut food and tasted like astronaut food, or stuff that was completely indulgent and devoid of healthy calories or nutritionally dense calories.

31:30And so I was on the lookout for creating a product that could fit my needs when I was skipping lunch or dinner, a healthy snack that was wholesome and convenient that when you ate it, you could feel good about it. And that was what led us to Lunchkind.

31:44Ryan Hawk:So there's so many different parts of the kind story. One, I'm curious, you mentioned it about your dad, but naming things is very important. We've already talked about this. How do you like, you know what? It's going to be called kind. What's the story behind that? Well, the funny part is that when Sasha Hare and I, where she was my head of marketing at the time and we were riffing on what to call it, I need to find this page. I haven't found it, but we had like 80 ideas. And every one of the other ideas were stupid. And by the way, it's not a foregone conclusion that we would have focused on the word kind.

32:19And we have words like healthy and tasty, deliciously nutty, nutty-licious, nut-alauco, nut-alauca, fruta-nutty, nut-alauca, fruta-la-nata, bla-palata-cata. All variations of the words fruta-nutty, joey and fruity, fruity-lutty, chuk-i-lutty. And it was too descriptive. It was too just on the nose. Oh, fruits and nuts. Well, you're going to look at the product, these fruits and nuts. we didn't need to waste our very valuable thing just recommuting people that it's fruits and nuts plus kind didn't need to stay just in the fruit and nuts space as a healthy snack thing at that point that's what we had stumbled upon a fruit not bar but kind deserved to be more and we were very blessed thanks also to sasha to a lot of my self-reflection about losing my dad and around that time like we were looking for a word that could describe the three pillars of our brand which turned out to be kind to your body, helpful, kind to your taste buds, delicious, and kind to the world, socially responsible, trying to make a small contribution to make this world a little bit kinder, one snack and one act at a time.

33:27That language came much later, but that's what it became. But when my dad passed away, like it just became obvious that the adjective that best described him, anytime you met anybody still today that was implicated in my dad, He was the kindest man and he saw his mission in his life of bringing smiles to others. And all of a sudden, and this is the year 2003 where my dad died and what we're thinking of packing up our bags. Again, in terms of like not giving up, Ryan, or it wasn't like it was all a straight line to success, the opposite. We had just lost a huge account with our prior business because the predecessor product we're selling, we didn't control the manufacturing at the time and they had added sorbitol and sulfur dioxide.

34:15And so we had lost all of our business for that product line. And we were barely making ends meet. We had like six or 17 members, myself included. We sat around the table and we said, do we give this one last shot or we just pack our bags and I'll give you guys two, three months to go look for a job. I'll go do the same. I'll look for a job. and then we'll call it a day. And we voted and part of me wanted to just be throwing the towel and just give up because it had been 10 years of a very, very tough journey. And maybe part of me wanted to go on. Maybe I lied to myself that I seriously considered giving up.

34:55But we seriously took that vote. We literally took that vote. And all of us said, all right, let's give this one last shot. and then all of a sudden from the greatest darkness of losing my best friend my mentor my dad and just being so sad to lose him and a business that barely can make some meat all of a sudden can

35:17Ryan Hawk:gets launched and it just takes over i love the idea of the store behind sampling so your budget for sampling was like 800 bucks and you viewed it as a cost and you got some advice to say, wait a second, this stuff is so good. You just got to get people to taste it. Let's dramatically increase the sampling budget so that people can taste it. And once they do, all of a sudden that feels like an inflection point. So the power of sampling, I'm curious about your thoughts on that. Yeah. But with a caveat, it needs to be the right mousetrap because Because if you start sampling the wrong thing, it won't work.

35:56And I talk about a lot of these tools on Build or Break, both advice that I have for my journey, but also that some of these extraordinary people have. And we go practical. We talk a little bit of the strategic and spiritual and everything, but we provide very practical tools. And I talk a lot about sampling because it's misunderstood art form. And just to simplify, you first want to make sure that if somebody samples your product, they're going to enjoy it and recommend it to friends. Because if you're sampling something that only one out of 10 people like, you're going to lose your shirt giving all these free samples.

36:31Only 10 % they're going to want to consider buying it again. You need to make sure that that number goes up to five out of 10, six out of 10, seven out of 10. In Kind's case, nine out of 10 people that tried a Kind bar, it was like, oh, my God, I want to buy more. and they were our ambassadors. They were the ones saying, so it was a no brainer, but I had been mistrained by myself because during the Peace Rocks years, where as you know, Ryan, I have no money, everything was a cost center. And so I had developed a scarcity mentality. And I talk about this a lot on Build or Break, about the different tools and how to build a business and think about this stuff.

37:07But a scarcity mentality is definitely better than a gluttonous mentality, right? Like an overspending mentality where you're just wasting money. A wasteful mentality, a wasteful money culture is just going to run you to the ground. You're going to run out of business. A scarcity mentality is going to help you preserve every dollar, but it's not going to fulfill your potential because everything is a cost center to you. You're missing opportunities. The right thing is in the middle, a resourceful culture and mindset where you're thinking like an owner and you're not wasting money. If you can do it for less, do it for less.

37:41But sometimes you want to invest in that growth. And so sampling was a good example of, I saw it as a cost center and I hadn't realized that it was an investment opportunity. And once we started sampling, we went from$800 in 2008 to$800 ,000 in 2009 to$20 million in free product within a few years. And that made all the difference in scaling to a multibillion dollar company.

38:03Ryan Hawk:You eventually decide to sell on different, I know, not all at once. so you become this guy who was making 24 000 bucks a year knocking on doors to a billionaire i mean that's a dramatic change how did that change you so first of all there's a difference between the liquidity event and the paper money right like so i prior to selling kind i already have achieved a lot of success and I already have a lot of those resources. In my case, it was true that I was much more conservative because in my nature, I also, I don't waste. Still today, to be clear, Ryan, I do not throw away food, perhaps because of what my father went through, perhaps because how they taught me, but I will not waste.

38:56So I find it very important to teach my kids not to waste. If you want to be a good entrepreneur, I wrote an op-ed on the Washington Post. I encourage everybody to read it about frugality and resourcefulness because it's so dumb in this culture to think that, oh, you should be just spending and that if you're saving money, you're a loser. I just don't understand why people think that. You're not going to be able to build a healthy home or a healthy business. But yes, I do think that once you have a liquidity the event and when you have the money in the bank, you start taking care of yourself a little bit more.

39:32And, you know, I didn't own an apartment or any housing till past 45 or something. Like, I didn't own any real estate till I was in my mid forties or something. We didn't have a car. We had one and then we sold it and we for a while didn't have a car. Then we had one modest car. And still today, we don't, in our style, by the way, we live very well. We have an incredible home and vacation home, and we're ridiculously blessed, and we cannot complain. We take very good care of ourselves. I'd like to say that I live within my means and that I always try to remember that you never know and never be wasteful.

40:17We certainly, in our decisions, I spend far more time and money on Camino Partners, which is our investment platform, our business, and on the Builders Movement and the Lubetzky Family Foundation, which is what tries to give back, than I do on just pampering myself. I haven't yet bought a plane. I talk about it. I think about it. But I've resisted it. I like flying commercial. Sometimes if the schedule's bad and the plane gets delayed, I'm like, oh, damn you, Daniel. Why are you trying to be such a dummy just by the plane? But as a general thing, I like to do things to stay connected. And I actually think airports are the places where you see so much kindness.

41:06Of course, sometimes you see jerks. If you're on social media, sometimes you get down these rabbit holes of everybody hating each other and all this political stuff where they're hating each other. And you go to the airport, people are kind to each other and nice. And I like, I like connecting with people.

41:22Ryan Hawk:Well, one of the ways that you connect with people and that you help other people, and I've loved getting a chance to watch this is Shark Tank. It's one of my family's favorite shows. And to see like your style versus Mr. Wonderful, who you just talked about, which you could tell like some of those people who are the most passionate and sometimes come off as like a character also can be very emotional, which I love seeing that range. When you're on Shark Tank and you're thinking about investing in somebody, I use that phrase on purpose, investing in somebody. It feels to me like your style is more about the people and maybe less about the numbers and or the idea because you're like a people, and I'm not trying to put words in your mouth, but you feel like a people-centered guy who cares for others, is kind, and wants to support someone who looks like they have the attributes of like, let's go build this cool thing.

42:15Ryan Hawk:Is that how you approach Shark Tank? Or what is your overall philosophy? Well, it's evolving. It's evolving. But yes, directionally, yes. But I want to give an ode of joy to Mr. Wonderful for a second. I think he's an underappreciated genius, and I'll tell you why. First of all, he's like the glue that makes this thing work because he's comfortable being the jerk and the tough guy and saying what needs to be said sometimes when others are uncomfortable. It's the hardest job and he does it in a very witty way. And yes, by the way, I do think it's the essence of his personality to say what needs to be said, but obviously he over dramatizes it for TV and plays it up a little bit.

42:52But I believe he's one of the most loyal people and very bright and a man of the world. And there is a role for the Kevin O 'Leary's of the world who are just going to tell it like it is. Because if all you do is just be nice, then you're not being kind. You understand the difference between being nice and being kind? If you're nice, you're polite and you're not saying uncomfortable things. But if you're kind, you're honest. If you're nice, it doesn't cost you. It's easy. You can be weak and nice. But to be kind, you need to be strong. There's a huge difference between being nice and not causing problems and being kind and solving problems.

43:33Between being nice and not bothering people, not saying things, and being kind and giving honest feedback that's going to help people grow. Between being nice and just standing on the side and being kind and stepping up against the bully and standing up to solve problems together. So kindness requires you being a protagonist. Now, I would not go so far as to say that Kevin is kind to all entrepreneurs, but he does an incredible service to say things that some of us, the rest of the sharks might be thinking. I'm like, oh, my God, this person has a really, really tough story. They went through all this adversity, but their business makes no sense.

44:11How the hell do we help them? By the way, I'd like to think of myself. Lori is just the most nurturing person, right? which is always trying to help heal that person. And Kevin is just going to tell it like it is. What I'd like to think is I am trying to be nurturing while being kind with the feedback. Meaning I try to, in the way I provide the feedback, be nurturing, but I want to do it. I want to say what needs to be said. And I don't always have the strength that Kevin has. He has no compunction, but it sometimes takes strength to tell people something they might not want to hear. I've evolved a lot in season.

44:51I've been now eight seasons. This one that's coming is the eighth one. And it's starting, I think, September 29th, I think, where our first episode. An incredible roster of guests. Whoa, whoa. I mean, I think this season is going to be one of the best. The producers did an insanely good job with the guest choice. In season 19, it was one note, kindness. And as I've evolved, I've tried to be a little bit more leaning into also being comfortable saying jokes and being witty and understanding that people are here also to entertain. I wanted to just always be providing advice, but I realized that you need to also engage people.

45:31And that's what the rest of the sharks do so well, right? They're so funny. They're so witty. By the way, people don't realize you don't know who's going to come in front of you. like the only thing that's different is that they record for 30 to 45 minutes and then they edit it into an 8 to 11 minute segment but you get the essence like you leaning here who's the editor and an executive producer does a very good job at extracting the essence of the thing and it really it's very hard to do all of that detective patterns be funny and my fellow sharks are pretty good at it.

46:05Ryan Hawk:What are some of the must have attributes and a founder that they got to have this or these three things in order for you to say, yeah, I want to back them. I want to invest in them. I want to be partners with them. Integrity. If I don't trust the person, I'm not going to waste my life, no matter how much. Can you sense that in that, in that 45 minute pitch? Yeah. The best one at it is Barbara. Barbara is like Dr. Freud and like she, she has this, an essence of understanding human beings like nobody. She's got an incredible emotional intelligence. But yes, you can. You don't always get it right.

46:40You're not always get it perfect. But yeah, I think you can in between, by the way, and when you interview person, Ryan, and when you meet people, it's not by saying, do you have integrity? Or like, show me an example of integrity. It's by asking other questions and then seeing how they're performing that you get to the essence. But you have to dribble and look for the nuance. That's what you really need to be intently observing. Integrity is really important to me. And I want people that I would enjoy because in 99.9 % of the cases, it's not going to be like this, that everything's growth. It's going to be up and down, up and down, like a roller coaster.

47:17And so I want to work with people that when I need to be in the trenches helping them, I enjoy that there are people worth helping. So I do want to find people that are worth helping, that are good human beings, kind, respectful. And I want them to have a ton of passion. I want them to really, really believe in their business and to sense that they're going to add work everybody else. Because that's what it's going to take.

47:43Ryan Hawk:Do you have a favorite that you've invested in? A favorite product or company? Or person. It's like asking me to choose among my children. I know. People ask me this all the time about my podcast. It's really hard, but I try to Well, not after today. You're going to have a favorite for sure, Ryan. Come on. We're here. Let's go. But the couple of Home Viewer, they're the salt of the earth. I love them. I don't know if you know this story. They invented this thing where this hummingbird dances next to you and drinks nectar from flower that is by your helmet or whatever. and the whole community in colorado got together to help them is like a town of i don't know 40 50 people they're all assembling them doing them it's changed their lives they retired as a teacher and an electrician and started these things what's beautiful about shark tank it helps people pursue their lifelong dreams and be entrepreneurs and build their own futures i love it daniel i got one more question before we run man oh this has been so cool let's fast forward a year from today and you are surrounded by the people you love and you are celebrating like crazy you're popping bottles spraying all over each other what are you celebrating well if you see this logo it's the builders movement and i worry that i don't want to over dramatize things but we are entering an era where a lot of the values that we take for granted are under threat respecting one another, being kind to one another, democracy, rule of law.

49:23And everybody that's listening agrees, but they think it's happening on the other side. They don't see it happening to their side or to themselves. And we need to recognizing that both political parties and a big number of politicians, they use this to divide us. And they're no longer, the true north is not to solve problems, is to get reelected. Most of them are not bad people. They're just responding to the incentives. Because on social media, if there's scandal, it travels farther. If you send that fundraising email with some screams, you're going to get more dollars. So we as people need to build a movement of builders that are committed to hold all special interests, all politicians, all political parties accountable to follow the will of the people.

50:07Think about it. Over history, as the United States was built, every industry group has a trade group, a lobby, a group representing them. There's the Napkin Association and the Food Association and this association. Everybody has an association lobbying the politicians. And the only people that don't is the 80 to 90 % of citizens that agree on almost those issues. The most divisive issues that are used as wedges to try to get people to raise money and to get elected and to divide us. Immigration, voting rights, 90 % of Americans support voter ID. Why are the Democrats opposing it? But on the other side, Democrats support access.

50:49Why are the Republicans opposing it? There's things that are so basic, even on the most controversial issues like choice and life, 70 to 80 % of Americans can agree on 78 % to 80 % of the issues. And yet, on gun rights and gun safety and all of these issues, we're paralyzed from making progress because it's us versus them, it's dehumanization, it's polarization. And you've seen how that can end. You've seen what can happen to people where there's so much dehumanization. And so Builder Break is not just about personal growth and professional growth for you to build the best business. Builder Break is also about building a community of builders that are going to build their businesses, build their families, and build a better world by being curious, compassionate, creative, and courageous.

51:39The four C's of a builder's mindset are the essence that helped me build Kini to a multibillion dollar company with almost no investment and the essence of what's helped me build the One Voice movement, the builders and all that. And it's the essence of what it's going to take for us as Americans and human beings overall across the world to build a better chapter. So what it would look like is that builders movement made progress and helped start turning the ship to hold politicians accountable. And politicians are now paying attention, understanding who's the sheriff in town, and doing what's right for the 87 % of Americans that want to solve problems together rather than tear each other apart.

52:19Actually, that number is probably even higher.

52:21Ryan Hawk:Man, I want to be celebrating with you. I love that mission. I love that you think big. It's inspiring. It makes me want to follow. You know, that's what great leaders do. You can do it. Go to Builders Movement. Go to Daniel Lubetzky to Build or Break. Please follow our social media channels. Please join on the web and give us your email or address. We don't ask for money. We ask for you to become a better, the best person you can be. And it's going to give you tools to grow your business better and to help build this world. I will, man. For$19.99, we'll also send you a jinzo knife. See, you learn to sell when you're in your early days and it never leaves you, but you do it in a way that I love.

53:02Ryan Hawk:I love the juice you bring to it and the enthusiasm. It makes, again, it makes people truly, you can't get behind a leader and follow a leader who isn't jacked up about the thing they're doing. And you can sense it and feel, and I love that. So, hey, man, this was great. I love it. And I would love to continue our dialogue as we both progress. Next time I'm in Austin, I would love to see you. It'd be really, really cool. Thank you. It's a pleasure and I hope to stay in touch.

53:28Ryan Hawk:It is the end of the podcast club. Thank you for being a member of the end of the podcast club. If you are, send me a note, ryan at learningleader.com. Let me know what you learned from this great conversation with Daniel Lubecki. A few takeaways from my notes, a scarcity mindset versus an abundance mindset. Viewing something as a cost instead of viewing it as an investment. This was Daniel's early mistake with Kind Bars. He only budgeted$800 a year in samples because he viewed it as a cost. Then he changed his mind and realized it was an investment. He upped it to$800 ,000 per year in samples and eventually$20 million a year.

54:12Ryan Hawk:Scarcity versus abundance. View it as an investment instead of a cost. Where are you doing this in your life and in your business? And then Daniel's four C's of a builder's mindset, curiosity, compassion, creativity, and courage. That's how you both build a company and a movement. And then the difference between being nice or being kind. Being nice avoids conflict to protect feelings in the moment, the short term. Being kind is about being willing to risk the moment, telling the hard truth because you actually care about the person. We want to be kind more so than be nice. Once again, I want to say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of The Learning Leader Show with Daniel Lubezki.

55:04Ryan Hawk:I think he'll help you become a more effective leader because you continue to do that. And you also go to Spotify, Apple Podcasts. You subscribe to the show. You rate it, hopefully, five stars. And you write a thoughtful review by doing all of that. that you are giving me the opportunity to do what I love on a daily basis. And for that, I will forever be grateful. Thank you so, so much. Talk to you soon. Can't wait.