#219 - Managing People at Work with Seth Goldman of JUST Ice Tea

0:10Three things. The first one is this empowerment. So meaning you have to be empowered. You have to be able to take action to affect those goals. And no one wants to be an automaton or just a cog in a machine. So you have to be empowered to make decisions and take actions that shape those goals. You have to have the information, the transparency to understand whether you're hitting them or not. So if you're doing things every day, but you don't see how your work manifests, then you're not really empowered. Welcome to the Startup CPG podcast. You're going to love today's episode. You know how when you read some of those billionaire biographies like Elon Musk and Steve Jobs, it's very inspiring.

0:50They've done incredible things. But also, although they come off as brilliant, they also come off as kind of ruthless when it comes to managing their teams. Just cutthroat, getting so much out of people. It's kind of crazy. So you as an aspiring titan of industry with your dream could think that's the only path. I should be that way. But actually, there's another way. And I wanted to explore that because Seth Goldman, he co-founded Honest Tea. He's now on this crazy rise with Just Ice-T, having surpassed$30 million in sales. He's chair of the board for Beyond Meat. He is known as a hugely successful company builder, but he's also a genuinely nice guy.

1:25And everybody who knows him holds him in such high esteem. So I wanted to explore this topic with him and talk about that balance about being liked, but also very effective and really showing up and being transparent with people. So on today's podcast, we get into just that. his approach to managing people at work, starting with hiring and goal setting, handling performance issues, and also a lot of tips for people earlier on in their career. Thank you so much to Seth for joining us for this episode. I know you're going to love it. All right, here we go.

1:59All right, Seth, my friend, welcome back to the podcast. We had an amazing series with you a few years back where you were sharing your reflections on entrepreneurship while your current company, Just Iced Tea, was really starting to take off. So it was super cool to hear that kind of in-the-moment lessons as you guys were just exploding. So for anyone who missed those episodes, though, can you give us real quick the Seth Goldman 101, your background, how you got to be where you are today and what you're up to now? Well, first, it's great to be with you as always, Daniel, and it's been fun to share this journey.

2:30This is kind of a second stage journey. The first 10 years, 15 years were pre our collaboration. But yeah, I had launched Honest Tea out of my house in Bethesda, Maryland back in 1998 and grew it the hard way, not the slow way, but the old fashioned way to sort of bottle by bottle. We became the best selling tea in the natural foods industry. We ended up selling the Coca-Cola in 2011. And I continued with the business through 2019. But along the way, I also got involved with Beyond Meat, where I became executive chairman and then now chairman, and helped scale that business internationally and the IPO.

3:06And then I also got involved PLNT Burger, Plant Burger, a 13-store chain in the mid-Atlantic and up into the Northeast. And then I also have a role with Tony's Chocolate Lonely, the chocolate company based in Amsterdam, where I'm chair of the Mission Guardians. So I guess I think of myself as an activist entrepreneur in the food space where we have the chance to improve people's diets, improve our environmental impact, and improve the way the communities we source from are treated. Amazing. And can you just also give everybody a little bit of what's going on with Just Iced Tea? Because I know you guys started with Eat the Change and you started with the mushroom jerky product and then just decided to do the Just Iced Tea and it just caught fire.

3:49I saw it everywhere all at once immediately and just flying off shelves. Thank you. So yeah, in 2020, I started Eat the Change with my co-founder, Chef Spike Mendelsohn, And we were initially focused on plant-friendly snacking. We had mushroom jerky. We had a carrot snack that was amazing. But I got this unsolicited call from Coca-Cola in 2022 where they informed me that they were going to be discontinuing Honest Tea. And there was a moment of just sadness. And then there was a moment of inspiration, like, we got to go do this. And so we pivoted the whole business and got behind just iced tea.

4:22And it is now the fastest growing tea in the country where we sort of captured the natural channel. and now we're expanding beyond that in a very fast and aggressive way. And we're just three years in, but we'll do about$30 million this year in sales. And it's really, I think, a great lesson in karma. You know, the folks who we treated right all along the way building on IST were right there for us when we wanted to go out and launch Just IST. And we've all had so much, I guess it's more fun, but we've had a lot of fun together building it because we knew who we were working with. We were ready to go.

4:56We knew the wire. we knew what to do. So it's happened very quickly. And as all I'm sure many of your listeners can appreciate, that is, you can skip some of those painful stages. That's a blessing. It's pretty amazing. I remember seeing you at like, I don't know, Expo East or something, even like a year and a half, two years ago. And I was like, it was just starting to take off. I was like, whoa, it's basically like you already laid all these tracks down years ago, and now you're just going to run over all of them. Yeah. So we say it wasn't really a startup. It was more of a jumpstart, right?

5:24We had all the wiring in it. And in this case, we kind of had this opportunity where the shelf space was opening up, you know? So we still had to earn it. We still had to prove that we deserved it. But what's really striking, we just got data this week, our velocities this time around is so much faster than Honest Tea. And I think part of that is that Honest Tea was always a little bit ahead of its spine. And my feeling is that just iced tea has met its moment. So it's really, this is the drink, you know, the less sweet, organic, fair trade. And then even just the glass bottle. It's clear people are moving away from plastic.

5:56And so what we're offering is just a really refreshing, different product. Yeah. And I remember seeing it on the Sprouts Innovation set in the early days. And I'm going, and I think I was checking my product, other people's product, and yours was just gone. Like people that just ripped it off the set. And I was just looking at it. And I think I use this example a bunch on the podcast where it just for me is such a great example of really clear branding because you just you look at it and it's like oh this is iced tea and it looks good and it's simple there's no education really required even if you're not looking for the like right level of sweetness or analyzing you're just like that looks healthy it looks good i'm gonna get that that's really nice to hear that's certainly what we hope for so that i appreciate you saying that it's funny because i used to hear that about honesty as well.

6:43They said, I created the expectation that was the drink inside. So it's sort of delivered on the expectation created by the packaging. It's great. And so that doesn't surprise me at all about the velocity. And I'm sure that'll really continue into conventional where it's even more important that a product can just speak for itself that way. So I love it. All right. Now let's get to the reason that I asked you to come on today, which is I really admire people in our industry who are just so well-regarded, respected, liked, and have been super successful, but are just, you know, like really nice people, like nice guys who you never will hear a bad word about them from anybody.

7:20And they are still managing to be really successful because you read these legendary entrepreneur biographies, Elon Musk and Steve Jobs, and a lot of ambitious people want to emulate a lot of things about them. But then you also read in a lot of those biographies, just stories of how ruthless they are and how much pressure they put on people, how they drive people and like probably ruin a lot of people's lives, you know, just people who want to be part of that dream and work hard as well. And so I'm really interested just to talk to you a little bit about like, how do you really manage to, you know, be a nice guy and treat people well and also be this successful and be able to grow brands in this way and have a high performing team that is aligned to your mission and, you know, really loves doing this stuff for you.

8:02So let's just jump right into this. Very kind of you. Thank you. So like, I guess my first question is, do you think that being liked and being effective are ever in conflict? Like, how do you reconcile those two as a leader? I used to think that, but I had gotten much better. I would say being effective and being transparent. I don't know if it's liked or transparent. Other people have made that judgment. But in the beginning, I really struggled giving people bad news or even pushing people on performance. I would dance around it. And so now it's one of the things I always say, no one should ever be surprised when they are fired and they should never be surprised when they get a bonus.

8:44Like if you're being transparent all along the way, they have to understand, you're sending signals throughout, like this is exactly what I'm looking for and this isn't. So being as transparent as you can be about what's happening really helps. You know, light is a, like I said, that's a judgment call, but being effective, I think, is directly connected to being able to be transparent. Okay. So overall, it sounds like you also have been on a bit of a journey, like learning how you show up as a leader and how you get the most out of people. Do you feel like in those early days then when you were having trouble being really transparent with people, you just like, okay, yeah, well, let's just keep trying, you know, and just like not actually telling them when they're underperforming or being able to point specific behavior?

9:25Yeah. Like so many entrepreneurs, I'm an optimist. And so, and my wife tells me this all the time, I'll often see that the good in people may be more than they deserve. And so I may have a blind spot for where someone isn't effective. And so that's all the more reason to try to be just transparent about what the expectations are. And so when someone understands if they're addressing it. And so part of that is, you know, frequent check-ins and communication, but it's also sharing the vision for the company. You know, no one, if we understand as a company, I'll just pick a number, you know, we have to hit 25 % gross margin.

10:00And we're not, you know, there's a few determinants of that. One is your trade spend. Obviously, what is your cost of goods? But if we have a trade spend number, we know we need to hit. And we're not hitting it. I need to communicate that. If people don't know that, I can't blame them. But if I'm saying this is our goal and this is what we're doing, how do we get to a better number? I mean, just, you know, being that transparent is just really critical. And I think in the past, I may have danced around and said, guys, we're not hitting our gross margin number, but I didn't necessarily break out why we weren't.

10:30So the salesperson would say, oh, well, that's going to be somewhat an operations fault. So in operations, there's too much of a trade spend. But instead, being really specific as much as they can be, it helps empower people too. It helps them understand, here's my role in achieving this goal. So we have the company. We always have five objectives and key results, five OKRs. and each OKR, I want someone to look at and understand their role in achieving, right? I don't want everyone to say, okay, well, here's the OKRs, but those four are for someone else to do. You know, everybody can play a role in us achieving those goals and then they'll have an understanding of what's expected of them.

11:08Can you give me an example of what your current OKR, you don't have to give us the specific numbers, but like give me some examples of what these OKRs are right now or what they would have been in the early days? Sure. Well, what is always related to just growth, right? So the first one, you know, this year was expanding into mainstream channels, right? So, you know, we started the natural channel. How can we get beyond, I love natural channels and certainly one of the OKRs has continued to lead in the natural channel, but, you know, our top one this year was expand beyond natural into mainstream.

11:37So for us, going into Target was a big deal. Going into CVS was a big deal. And so how do we execute that? And so part of that is, Obviously, we got the account approval. That was the first step. But then the distributors getting into those accounts. But it's not just getting in. It's showing up in those accounts. Do we have the point of sale right in those stores where possible? Are we doing the right marketing and promotion and programs? Are we doing the right social media? So everybody has run, obviously, from our team, are we anticipating the orders? What's our on-time delivery percentage to the target warehouses?

12:08And so operations understands we have to get a rating of 95 % or higher on delivery. So everybody really has an accountability for that goal. Like I say, I don't want anybody to just think, oh, that's for someone else to worry about. They need to understand how their work plays a role in us achieving that goal. We'll be right back. Okay, you know that moment when someone hands you a business card and then it disappears into the void 10 minutes later? Yeah, same. If you're out pitching your CPG brand, grinding at trade shows, networking like it's your job, Unicode's digital business cards are the smarter, scalable upgrade that you need.

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13:47Any others that you would suggest for early stage brands to think about? Well, certainly gross margin has to be in there, right? So for us, that's always a top, usually top two. So for us, that was one. When we started in our first year, the top one was succeed in the natural channel. And so what does that mean? Top selling tea in Whole Foods, top selling tea in Sprouts, becoming the fastest growing major team spins channel in every region, gaining leadership in different spins regions. So we just saw the most recent spins data, and we now have top tea brand across the entire East Coast as well as the Midwest.

14:21So like that was a goal we had for this year. And it's great to see, you know, we've achieved that. Okay. Let me ask you kind of a dumb question, which I'm like, yeah, that sounds right. Like, but wait a minute, that, that would feel so impossible for so many people, but you said it and then you did it. So, well, and I admit that we have a maybe unfair advantage because we've talked, as we talked about, but going back to the honest tea days, it was become the fastest growing tea, you know? So that's the first goal. And that if you're the fastest growing tea year after year, soon you start to get up into the rankings, you know?

14:50So. All right. Right. I love it. Yeah. You've got to pick your, I mean, going back to the Honest Tea 1998 launch, we were only in 17 Whole Foods stores. And so the only goal we had that first summer was succeed in those 17 Whole Foods stores. And we did, we did six demos per store. And by the end of that summer, we were the top selling tea in those 17 stores. And that was our launchpad. So you've got to sort of pick your pond and start with a small pond and make yourself a big fish in it. I love it. And when you're setting those kind of early stage ones, like we're going going to hit these 17 stores, be top selling there.

15:23It is with that long-term vision though in mind, like that's what we're going to do this year. And then later, that's going to knock down the region for us. And then we're going to hit the region and then we're going to dominate the whole world. But to be honest, back in 1998, that goal was, that was a survival goal. Like if we can succeed in these 17 stores, we renew our license to operate. We'll be able to raise money to expand and we should be able to get authorization to go into other Whole Foods region. So I don't want to make it sound like in 1998, I had that roadmap all laid out. With this, with Joe.

15:53This time you might. Yeah. This time I knew. Yeah. Okay. First thing we got to do, we got to succeed in natural. If we don't succeed in natural, then we don't get that license to go beyond natural. I love it. I just keep thinking about like, oh, getting to play a video game that you've already played and beat before and just everything that you can do faster and better this time. We're the same, a lot of the same team. I mean, that's the beauty of it. And actually in the context, we're talking about managing people, right? No one is, there's no indentured servitude. So, you know, the fact that most of the major leadership from Honest Tea is with me at my side with Just Ice Tea is something I'm really just gratified by.

16:28They're great people, but they also felt this was, you know, attracted to this opportunity and to work with me again. That's beautiful. It doesn't surprise me at all. And so getting back to the topic a little bit. So now we've talked about setting these goals and you mentioned, like, I want to talk a little bit about your overall perspective on managing people at work, but it sounds like it really starts with this, like we need to have goals set and for everybody to understand what those goals are, how they play a role in them. And then like, what else? How do you think about it holistically? So it's, there's really three things, right?

16:59It's the first one is this empowerment. So meaning you have to be empowered. You have to be able to take action to affect those goals, right? If you're, and no one wants to be an automaton or just a cog in a machine. So you have to have the, you have to be empowered to make decisions and take actions that shape those goals. You have to have the information, the transparency to understand whether you're hitting them or not. So if you're doing things every day, but you don't see how your work manifests, and then you're not really empowered. And then accountability is the third one. So you have to have the information, you have to have the power, and then you have to be held accountable for the results.

17:36Meaning if you over-deliver, then you should be rewarded for that. And if you under-deliver, you have to own the results. And it may not mean firing, but it may mean more supervision. I would say who get the least supervision in our company are the people who are just out there killing it on their own. And they'll check in with me and I'm like, yes, yes, more and more. Yes, the greatest gift is that we don't actually have to spend a lot of time together. Right, right. And then the other pieces that come with that, part of empowerment for me means equity ownership, right? So if you're the people who are most empowered or people who feel like they own the business, and in my case, I want them to literally own the business.

18:14So anyone who's been with this company for more than 12 months has stock options. And for the honest tea people, it turned into real meaningful wealth creation. I certainly hope that will be the case here as well. That's wonderful. And then with some of those people, whether it's giving them more supervision, how do you help, step in and help when things aren't going great or when it's going slow? How much do you really want to get in and do that versus the point where you're like, all right, maybe this isn't going to work. One thing that's important to recognize, especially today where we're not all in the office, just as people learn differently, different people work differently.

18:51And so some people are really good at spreadsheets and filling in things and other people just don't want to be near it. And we have to find ways to work with people on both. I remember with Honesty, we had a guy who's just incredible at building displays and getting loyalty with accounts and getting us in the right place in the cooler. But he was terrible with paperwork. And I remember his supervisor telling me one time, I can't get this guy to do paperwork. I said, but look at what he's doing. And I said, rather than having him send in forms, have him just take pictures and send you pictures.

19:25We know he's doing the work. We shouldn't be dinging him. We shouldn't be penalizing him because he's not delivering the reports on his work the right way. If he's not doing the work, that's a different thing then we have to address it but part of it is just recognizing everybody learns and works differently so he wasn't doing the tps reports yeah for any office fans out there yeah but he was doing the work that was the important work which you know if i have a choice i'm gonna choose that every time all right all right there's this movie office space where they just talk about the tps reports all the time like why didn't you send in the reports like the freaking reports all right so but yeah i totally agree with you just like i don't know It doesn't make sense sometimes when you have someone who just they're so good at a bunch of things, but they don't do the thing that they're supposed to do that everybody else does.

20:09You're like, well, I don't know. Let's figure something out so that they can flourish where they flourish. Exactly. Check the job description and the tasks. And is the paperwork the most important part or is it the sales that this person is making happening? Of course, in our view, it's the sales. OK, great. So let me ask you another question here, which is especially in the startup world. I mean, we all work hard. We spend a lot of time at work. people form real friendships with people that they work with. And I think also as managers and like a company leaders, you will genuinely start to care about the people that you work with, like you're traveling together and stuff.

20:47How do you sort of separate the two when you also just start to get to know people on a personal level? Yeah. Well, one thing that's a real contrast from when we were starting Honest Tea is the workplace is not just the nine to five office. So I think the pandemic really accelerated that transition. So we are dealing with people in their whole lives. There's not an office personality versus a home personality, because for a lot of people, when I speak to them, they're in their home and they're in their bedroom. I'm in their bedroom, by extension. And so recognizing that we have to deal with the whole human, not just the person nine to five who I look at on a screen.

21:26And so part of that means embracing all their diversity or quirks or differences, their lifestyle, and understanding it. And again, it doesn't change my expectations about delivering their work roles. But if somebody needs to be with family for a sick relative or a different event, as long as they're getting the work done, so as a result, we have no PTO restrictions in our company, which can scare some bosses like, wait, what? But if you go back to what I said about empowerment and accountability, I don't generally have worries about people sort of just running off and going out of the street.

22:05We do try to, we have found we need to create some guardrails, but for the most part, we've got to embrace the whole person and support them, not just in their work, but in their lives. So, you know, when someone is either personally sick or someone in their family is sick, we don't ask questions. We just, how can we help? That's how you, I think you really have to embrace the whole person. So can you take me a little bit more back to kind of the earlier Seth Goldman, like building honesty. I think you hadn't done a lot of CPG before that, right? I know you had some pretty interesting jobs before then.

22:35How did you really start learning about how to most effectively manage people? Are there any resources or people you looked up to? Or, you know, it's also situations where I said, oh boy, this doesn't feel right. So my first real office job, I was working in a Senate office. I was working for a senator from Texas, and he had an old, I was a press secretary, the deputy press secretary. The press secretary was an old school, you know, belt and suspender, cigar chomping guy named Jack DeVore, who was an amazing person to learn from. Talented, smart, funny, but he was also a very tough boss and demanding in the right way.

23:13And I learned to write well and certainly present ideas well. So I feel invented, but he was, he did not have that lens of sort of embracing the whole employee. I remember one time I wanted to take off Wednesday before Thanksgiving. I wanted to take off in the afternoon to travel up to Boston to do with my family. And he gave me a really hard time about taking that off. This is the Wednesday before Thanksgiving, you know, and it just made an impression on me that the time away from the office was, you know, de minimis. It was really not a lot, but that it should be so hard for me or I should feel guilty or nervous about asking for is just silly.