Founder Fundraising Journey: Craig Dubitsky, Happy Products

14:10Craig Dubitsky:So here's this toxic stuff. Oral care, similar thing. You have to kill, eliminate odors, germs, and bacteria, except now it's in your mouth instead of your house with relation to cleaning products. Whiter whites and brighter brights, that was laundry detergent. Then that became your teeth. You know, there's all this stuff around fear and shame and fighting, and that's supposed to be a driver for people to get them to want to buy certain things.

14:35Hannah Dittman:Yeah, the push versus the pull.

14:37Craig Dubitsky:Yeah, and I think playing in a space where emotion can be the driver and positive emotion is really important. So anyway, I started happy with my co-founder, which we can talk about as well. It's Robert Downey Jr., for those of you playing at home. He and I are often confused for one another. No, only in my twisted mind, maybe. And we started this, and I remember I was talking with Robert, and he's like, you know, not everybody's happy. What can we do about that? It's a really interesting name, an interesting mark, which by the way, we trademark. It's a R with a circle, which is pretty cool.

15:10Hannah Dittman:Not an easy one to get, I'm sure.

15:13Craig Dubitsky:No, no, no. It took some doing.

15:15Hannah Dittman:I'm sure.

15:16Craig Dubitsky:Yeah, but Robert and I were talking and we're on a FaceTime chat and he said, you know, not everybody's happy. Like, what are we going to do about that? And my bride was sitting behind me and full disclosure, she's a PhD in clinical psychology. And my joke has been, I brought it in house. She is full time on me. I keep her extremely busy. And I just turned around. I'm like, hey, honey, who's doing anything at scale that's really meaningful in terms of mental health? And she went, oh, NAMI. And I said, what's NAMI? Oh, National Alliance on Mental Illness, which I hadn't heard anything about. So quickly went online, found out where they were, connected with some folks on LinkedIn.

15:56Craig Dubitsky:Luckily, some of those folks liked to clean their house or their hands with Method. They used EOS. They brushed their teeth with Hello. So I was very fortunate. and convinced them to generously give me a few minutes of time and went down to outside of Washington, D.C. to meet with them. And I learned all these incredible things about the work they do. For one thing, they helped start up 988, which is the 911 for mental health. NAMI, by the way, National Alliance on Mental Illness, largest grassroots mental health organization in America. So I learned these very challenging metrics. Let's start with adults.

16:31Craig Dubitsky:So one in four adults in this country have some form of mental illness. I'm talking not like, oh, my team lost the game. I'm sad. Not to minimize how someone might feel if their team lost. I mean that. Like any emotions are important to recognize. So, but that's not like a clinical diagnosis of a serious mental health problem that could lead to other issues. So one in four have some form of, again, mental health related, like DSM-IV clinical grade mental health issue. The suicide rate has got 30 % in the past two decades. That's staggering. And 80 % are men, which can be attributed to all sorts of things.

17:08Craig Dubitsky:We can say that for another topic, another time. And when I was a kid, the number one killer of teenagers were car accidents followed by leukemia. And it's great. We've made amazing strides in terms of cancer and cancer research, and especially with regards to leukemia. And cars have gotten safer and all that important stuff around safety. Sure. But now fast forward, the number one killer of teens is handguns followed by suicide. And often handguns are used if someone dies by suicide. So this is a staggering set of statistics. And we wanted to do something a little different. So the more we spoke with NAMI about these things and the fact that they were getting over 2 million calls a year through 988, like what's keeping you all up at night?

17:50Craig Dubitsky:Because the work they do is really incredible. And they said the number one thing to hear from people is if only I'd known about you sooner. So we said, well, that sounds like an awareness issue. What if we could help you with that? And they said, well, how would you do that? And by the way, this is before we didn't launch. We had no product yet. We were like formulated, we were working on some things and we've had some very good fortune in terms of distribution with products in the past. And we started chatting with some retailers and I said, I think we're going to be able to get product into a lot of doors.

18:19Craig Dubitsky:What if we put information about NAMI on every product we make, like a QR code, a toll-free number, the whole thing. And they said, you would do that? And I remember saying, let me think about it. Yes, of course. So we figured that wasn't going to be difficult for us to do because we hadn't manufactured anything yet, but we also wouldn't do anything that was performative. This is very serious stuff. If you care about the earth, if you care about the environment, you don't wait for earth month to do something. You don't say, oh, it's Earth Month. I care. If you're LGBTQ +, you're not waiting for Pride Week or Pride Month.

18:59Craig Dubitsky:Your LGBTQ plus life, who you are as a human, that's every day. You're not standing up to cancer one day. God forbid you have cancer or someone you love or care about has cancer. You're not waiting for that day to wear a t-shirt. Again, that's not to minimize or diminish any of the work that these different organizations that support these types of challenges are all the good work they're doing it's really truly not to do that it's just to say like well how do we do something that's different because mental health affects everybody and there's no like mental health day like it's an every minute thing so we wanted to make sure we weren't doing something that just seemed a little self-serving or obvious or it wasn't going to be good enough just to say we're going to put information about nami on here we wanted to say that was different and we also wanted to try to reimagine the relationship between entrepreneurship and philanthropy.

19:48Craig Dubitsky:And long story short, we came up with this idea that we could give NAMI a piece of our company. So literally NAMI's on our cap table from day zero and they own a piece of the company because I'm also an investor, sometimes a little more active, sometimes fairly passive and quiet, but I'm OLDE, right? So I'd been around the sun a couple of times and I've watched a lot of folks attempts at doing very good things. Again, not to ever sound like I'm diminishing or minimizing anyone's good deeds or efforts. I want to be really clear about that. But quite often I see startups that talk about doing good in the world.

20:24Craig Dubitsky:And then it turns out they're not doing as much as we might all like. And again, that's not to cast dispersions on anybody's intentions. It's just, I've seen too many companies go like, well, you know, we wanted to give to this particular thing, but we're building our company culture and it's Omikase Tuesday. And we take everybody out and we don't have any money to give to that thing, But boy, it was really great to put their logo on our social feed or on a thing. So again, I don't think anyone's ill-intentioned. I just wanted to be really clear. We thought maybe there's a different sort of way to do it.

20:55Craig Dubitsky:So we put NAMI on our cap table and it's ownership and it's evergreen and it's very different than like have a new cause next week or a different thing we're interested in. It's like, nope, mental health. And we care a lot. I can tell you hand on heart since starting happy every single day I hear from someone I got to take a deep breath who I either thought I have known pretty well or who I just met that tells me a mental health story. That's the most sobering and uplifting thing as an entrepreneur, because I feel like we can remove a little bit of stigma and help. And I will tell you, we've had people come.

21:34Craig Dubitsky:We were at the Natural Products Expo. I'm sure many folks who are listening have been or know about it or were there this past year. I've been going there for quite a long time. I've never had a situation like I've had recently where I've had buyers come to our booth and cry. I've had folks come and say, Nami saved my life. Nami saved my cousin's life. I was at an event a few months ago, and this really was incredible to me. Four separate people came to me and told me Nami was in their will. who's ever gone around, mentioned their will to somebody, right? I mean, it was unbelievable. And it made me think we're really doing something that is very important.

22:15Craig Dubitsky:And a lot of brands, and again, I'm not here to point fingers or try to do anything other than be helpful to people. A lot of brands talk about their mission and their purpose. And it's very like us, our mission, our purpose. What we talked about as a team was because mental health is so important and so pervasive, the need for help, the need for understanding, the need to remove stigma is so important and impacts so many people. This isn't about our mission. This is about our collective, not just us as a company, as a startup, as human beings, our responsibility. It's a bigger thing than like our purpose, our mission.

22:52Craig Dubitsky:This is collective responsibility. So what can we do to be a conduit to try to create opportunities for more people to feel better, to have access to help, to be empathic in a way that's got some gravitas to it and some real warmth. As you're creating a brand called Happy and knowing that the weight of what we're up against is real, that kind of tension is pretty magical. It takes some tension to create things. Pressure makes diamonds. You need a little bit of that. And by the way, this is like going back to like music, right? There's like contrapuntal stuff. You need some give and take to create.

23:32Craig Dubitsky:So we're really excited to be in this space and it goes well beyond coffee. That's why we're not happy coffee. We're happy products. And I use this word carefully because we are very much focused and sensitive when it comes to all things, mental health. So I'll use this word with maybe some air quotes around it. We're obsessed with making sure that the products are amazing because we're living in tough times. I know I've tried a lot of things where I try it once and I'm like, it doesn't taste good. Or I feel like I'm getting some benefit because I'm told I'm getting the benefit, but man, I got to really work hard to get through that product.

24:09Craig Dubitsky:Like taste is still a huge thing. And how people feel is everything. Like how do we create something that when people see it, touch it, hold it, interact with it, learn about it, they actually feel something positive. because when everyone's talking about their benefit, it does this. I'm like, I'm left feeling kind of numb, frankly. And to create a product that isn't about an arms race or around a set of benefits that sound like other things I'm hearing about or reading about in every other product, that's really important. So we're focused again on making things that are beautiful and thoughtful and obviously that taste great and that try to put a little positivity out in the world and into people's days on the regular.

24:51Craig Dubitsky:Anyway, that's me ranting.

24:54Hannah Dittman:It was a worthwhile rant and so many amazing nuggets and huge points of resonance as well. I think two things that really stuck out to me there that I echo your sentiments on in my own perspective of the industry is the idea of kind of eat, sleeping and breathing what your company is about. You're alluding to some of the things I feel too, which is a lot of people lead with functional attributes or I hate to say check the box, but because they're well-intentioned also. But I feel like it can be very like ancillary or tangential to the main focus of a company. And I think if you're going to be about it, be about it.

25:29Hannah Dittman:And that doesn't mean be about it because a customer made a purchase. so part of that purchase does something or you're putting the onus on the customer to do something or you're kind of allowing a little thread into your company. Make it a main thread if that's what you are in the world to believe in and to be about. So a lot of respect for what you guys are doing.

25:48Craig Dubitsky:Yeah, yeah, thank you so much. I think that people don't want to buy things. That's transactional. They want to join things. They want to feel part of something. They want to feel when they see it, touch it, engage with it, it makes them feel like, well, where has this been my whole life? Yeah, why didn't someone do it like that before? Yeah, that's subtle stuff, but it's really important. You know, a lot of people focus on the math and I use math as a proxy for either the financial aspects of their business or the math meaning functional stuff and benefits. But the magic is the hard part. The magic meaning how do you get your brand product company offering way of being to a place where it makes somebody feel something really good.

26:31Craig Dubitsky:And that's tricky. And if you get the math right, that's great. But if you get the magic right, the math usually takes care of itself.

26:37Hannah Dittman:I love that. And I think also coffee is the beginning of the day. And to your point, well, for most people. I'm having some right now. Some of us have use and abuse it throughout the day. But when you think about the traditional, the first thing in the morning, my mind kind of goes back to Folgers where it's like the best part of waking up is Folgers in your cup. That was one of the only ones that kind of had this like upbeat instead of like you're saying fuel or like take on the day. Let's like attack this. And you want to feel happy and at ease in your mornings. You want to feel like you're happy and excited for the day.

27:11Hannah Dittman:And that's what's going to really make a difference in your experience throughout that day versus jacking yourself up with jet fuel.

27:18Craig Dubitsky:Yeah. And you know what? For people that want that experience, that's great. Like there are all sorts of offerings that I hope make them happy. that's terrific and for people that want something not instead of but something else maybe in addition to that we're here for it and here for them well thank you so much for sharing a little

27:38Hannah Dittman:bit more about happy i think that's going to be really helpful as we dive into the rest of the conversation i'd love to pivot a little bit more and get some learnings advice and takeaways on fundraising and kind of the process and the journey obviously you've not your first rodeo You've been in the industry for a long time and you've had a lot of different experiences, I'm sure, and are well-versed with capital constraints and some of the challenges that founders face as they go through building their beliefs. For context, and obviously we can pull from a lot of different experiences that you've had, but what's your experience with fundraising?

28:12Hannah Dittman:How many times have you fundraised in what context and for what companies that you've worked through?

28:18Craig Dubitsky:Sure. I think I've been fundraising my whole life, frankly. I'm joking, but I'm not really joking. It doesn't really end. And it's interesting because I've been fortunate and have had some companies that have experienced some exciting things in terms of their growth and in some cases, changes of control, which is a code word for or expression for having a quote unquote exit. it. That's another word I don't really like. I remember folks would come over to me and they'd be like, oh, you had an exit with hello. And I said, no, we had an entrance. Like what? I just made it up one day. I guess I'd kind of make up all the stuff, but I was in front of a group of people and someone, there was a Q and a session and someone said something about an exit.

28:59Craig Dubitsky:And I was just kind of like time and place. It didn't feel like in a public forum, someone should be asking me about this notion of an exit. And I said, no, we have an exit. We had an entrance and people were like, what? And I said, the biggest oral care company in the world, Colgate, acquired this thing I started around my dining room table with four people and a dog. That's not an exit, it's an entrance. Like now we're playing on a world stage with the biggest company in the space in the world. It's great. Now, was there a transaction? Yes, money's changed hands, that's terrific, but that wasn't really the point.

29:30Craig Dubitsky:The point is I've been fundraising for 20 plus years, right? I went to school, I changed majors. I was fundraising. My funding source then, apart from some parental help, was Fannie Mae at Student Loans. I've been fundraising my whole life. When I was a trader, you were always, in some cases, robbing Peter to pay Paul without the robbing part. You were always balancing things and mitigating risk. That's just life. Just a funny story, and I promise I'll get to a real tight answer to your question about fundraising. But I remember years ago talking with someone, I'll be respectful in old names, and his company had been acquired by a very, very large strategic and it was in the news.

30:11Craig Dubitsky:And he was in the New York area and he called me and I said, congratulations, you must be here to celebrate and to like, there was news about the company closing and closing meaning on a transaction. And he's like, no. And I'm like, what do you mean? That's not why you're here. Like thought you're going to go have like dinner and go see your show and go celebrate. He's like, no, I'm meeting with investors. I was like, what do you mean you're meeting with investors. Your company just got acquired. And he's like, dude, until the money wires, I'm meeting with investors. It really stuck with me. This is a long time ago.

30:41Craig Dubitsky:I was like, you're kidding. He's like, wire hasn't hit yet, man. I'm like talking to investors. And he was not kidding. It kind of never stops. And that's okay. It's not a bad thing. If you build your expectations properly, the expectations of your investors properly, of your company properly, It's not that you'll never have a series whatever round and stop. It's that you're never really done with the cycle of managing risk, mitigating risk. Sometimes the bigger capital is human capital and figuring out how to optimize, maximize, retain, attract that form of capital as well. So again, I use capital as a placeholder.

31:20Craig Dubitsky:If it's financial capital, there's human capital. And quite frankly, you need some financial capital to get some human capital too. So it never really stops. And I think that's okay. If you got an e-ticket and you're on this ride, this roller coaster, like buckle up because if there's anything I've learned, it's that everything takes longer and costs more than you think. Again, I'm an investor, right? And I'm an LP and a couple different funds and part of a GP of different funds. I love it. And I love the journey as trite as that sounds, the journey. People want more of a vacation sometimes. They want less of a journey, more of a vacation but the truth is this stuff is hard you know that if you're listening to this you know you're putting in the hours it's hard you're probably commuting right now far away dealing with lots of headaches as you're listening to this because you don't even have downtime just to listen to music right you're listening to someone like me wax poetic nonsense about it so what i would say is take a beat take a breath know it's going to cost more don't worry as much as you probably are about valuation and dilution because at the end of the day, it's about succeeding.

32:23Craig Dubitsky:And if success for you only means a high valuation, how much you took home, that's not good. And I can tell you as an investor, when I meet with startups and entrepreneurs and they tell me about their exit strategy or they try to defend wild valuation, I'm like, that's not the stuff that's important. Tell me about your team. Tell me about your product. Tell me about your brand. Tell me why it's going to matter. Tell me why you and your brand alone are the only ones who can really do what you're talking about. Like that's the stuff I think is the most important. And know that you need investors who are going to be along that path with you that have some dry powder that can keep going, that believe in you and are going to keep believing you when things get tough.

33:04Craig Dubitsky:Because it's really easy to just get excited and have a great deck and talk about success along the way. Like that's all important stuff, but you got to know it's important that you have the right partners, internal, external funding, financial capital and human capital. So just know whatever you think you need. I've never met anyone who's like, oh my God, you know, we gave back half the money we raised because we didn't even need it. We did so much better. We took our series B, we turned it into an A1 and we gave half of it back. Like that doesn't really seem to happen. So I think what I would share is it's okay to know that it's not all about like optimizing your valuation.

33:44Craig Dubitsky:You want to take care of investors that have come in and make sure your valuation is fair and appropriate for them. If it's all about your take on valuation and your equity, like that's the wrong way to play it. And I meet a lot of founders and that's like what they worry about. I don't want to give up too much. I'm like, it's about building a company. And if at the end of the day, you end up owning a small piece of it, but you have the right partners and you can really grow, that's worth everything. I will tell you at Hello, we get everybody equity. And the greatest thing ever was when I got to tell people that the company was being acquired.

34:20Craig Dubitsky:And one person asked me, tell me about the cap table. Is there a waterfall? Like, tell me, was there a preferred? Is there like, the only question I got was, oh my God, will we still get to work together? It was the most amazing thing ever. So people ask me like, why do you do this again? I'm like, because we got a chance to create something special that people again got to use every day and many cases fall in love with, which was a gift in and of itself. We got to create the start of generational wealth for a whole bunch of people. I was the founder. I used to say everyone's a founder because when you're there together, everyone's making it better.

34:53Craig Dubitsky:Like I'm the founder. It's like, yeah, I'm the person who had the first idea. Big whoop. It's the whole team. So if you can create something that lets your investors feel the same way, that they're not just investors, but they're co-founders with you and their way of paying their bills and feeding their children is to own a piece of things. You have to respect that and you have to appreciate that and you have to make sure they feel really part of the process and they own it with you and your team. You might be the founder. Again, I'm like, they're all founders. Everybody's helping make it better.

35:25Craig Dubitsky:and I think it's having a mindset about that. It is a process. It's going to take a long time. You might end up with less. Your role might change. Your title might change. None of that really matters. If the thing that kept you up at night that made you start this in the first place comes to fruition and other people start to use it, engage with it and love it, that's the win. And at the end of the day, the money part is going to take care of itself. Again, that's the math. It's going to take care of itself. You might own less. You might need to raise more. There might be a down round. It's about getting to the next level and making sure your vision survives and gets improved upon and that the people that help you make it real and make it better are rewarded emotionally and financially.

36:07Craig Dubitsky:That's the job of a founder, I think.

36:09Hannah Dittman:So well said and some great words of wisdom and higher level advice and a little bit more of a bigger picture. I think capital needs can be so stressful. You're worried. You're so stressed. Your eye is like so on the prize of how do I keep the company alive? How do I make sure we have inventory? How do I make sure people get paid? How do I make sure that everyone's taken care of? How do I make sure that we're going to live up to the promises that we said we're going to do or we're going to grow and able to unlock whatever? How do I keep my retailers happy? You know, there's a lot of pressure to get capital in the door.

36:43Hannah Dittman:And because of that, I think you can kind of lose sight of the bigger picture narrative of what you're doing because you're in survival mode in a lot of ways when you're thinking about money.

36:52Craig Dubitsky:Always. And by the way, I'm no different. I'm thinking about that, too. I am all the time.

36:56Hannah Dittman:And I think it's easy to lose sight of that big picture of remembering all the other stuff that got you to that point and that are circling around the same path that you're walking that are equally important. And kind of that shift in perspective, I think, can help temper some of those emotions.

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38:14Hannah Dittman:has anything surprised you or not matched your initial expectations in terms of managing capital or fundraising has there been a learnings along this long path of your career where you really wish that you had kind of known something earlier on or that you felt was very different than your original expectations?

38:36Craig Dubitsky:Yet another really good question. I may not have complimented your other questions, but they've all been great. Well, I think I mentioned this a little bit earlier that everything takes longer and costs more than you think. And you'd think that as I've been involved with this stuff for a long time, I would know that. And I'm still always surprised at how long it takes. So sometimes the surprises are positive surprises. And for me, like in the case of happy, not to get too much into maybe like private number stuff, but we hit some revenue numbers really early that I didn't expect to hit in a good way.

39:10Craig Dubitsky:And I promise this isn't like yay us braggy stuff. It was more like, holy shit, like there's something here. And when you get a lot of distribution, if you're lucky enough to do that, it requires also a lot of discipline. And getting in is one thing, but getting off the shelf is another and building awareness is another. So we've learned that sometimes you've got to slow your roll a little bit. Be prepared with backup plans because in every single instance, and I'm laughing because I'm looking around my desk because I have like product everywhere because I just love product and shape and form and things.

39:41Craig Dubitsky:The first, I have an early Holo Toothpaster. This is what it looked like. People thought this was a hand lotion. It was an epic fail. and had we not have quickly shifted to kind of meet people where they were for this category and put stuff oh that's right it's toothpaste it comes in a tube and it goes in a box we didn't have a tube but we didn't have a box so we pivoted the first method dish soap was an inverted bowling pin for mars it had a valve in the bottom it leaked i mean but had we not have launched with that the brand never would have come to life at all had we never launched with this hello wouldn't exist at all the first happy has been this really funky cube people had no idea like what this is because didn't like anything in a category now i mean we still have some cubes but we also now have bags like it's a little more in keeping with the cues of the category and i bring all this up because somewhere you also have to like realize okay what if i have to pivot like plan like if you can be as mindful as you can that the thing that's been keeping up at night that you've all been working so hard to do.

40:45Craig Dubitsky:What if it isn't really right? What if like you think it's right, but maybe it isn't. Maybe you have to come up, not because of failure, but because of a plan for success. Come up for like, what's going to be next. When you launch, you already know what the next thing is, or if something isn't right, what the next thing is. So it's kind of like you got a parallel path things. And that's always been surprising to me that each time, whether it's a toothpaste toddle that is in a tube that needed to be in a box that wasn't, or a funky shape that was different than anything. This first year, it's like nobody knew what this thing was at first either.

41:18Craig Dubitsky:It was like, wait, what the hell is that? And I remember there was a retailer that said, unless you put a picture of how this works, I'm like, how it works? It's a lip balm. They're like, well, no one had ever seen a lip balm shaped like this. The one buyer at a drugstore who was like, no, you got to put a picture of somebody using it so people know what it is. You have to be ready to listen to other people. They generally want to be helpful. They're not trying to take you off course because they're bored. They're trying to be helpful for the most part. And see if as you're getting going, you can figure out as quickly as you can or in parallel, what would either the next thing be or a fast fix.

41:56Craig Dubitsky:The word pivot gets used a lot. All that stuff is really important. And I'm always surprised that even after many fits and starts and starts and fixes, I'm still always sort of planning for a contingency. like there's always got to be another thing you know we started out happy the first thing was dry coffee and we thought dry coffee and we had ideas about doing ready to drink coffee but they were going to be a little bit further in the future and a big retailer said you know we really love your brand do you think you can do an rtd and i said let me think about it yes and we went from nothing to on the shelf in under four months fully commercialized products finished amazing but it was because we had built in a lot of flexibility into the way we could operate internally and save some dry powder in terms of our capital base to be able to do that kind of thing.

42:46Craig Dubitsky:So I'd say you want to not be surprised because your question was like, is there anything that surprised you? What surprised me is I'm still constantly surprised and that's probably never going to stop. So do your best to plan as best you can to save some capital, figure out if there's another idea that could work in concert with what you're doing, not to totally flip the script and throw babies out with bathwater. You should never throw out babies. But yeah, try to future-proof yourself, knowing that the future could actually not be years away. It could be like two months away.

43:17Hannah Dittman:I think that's such sage advice. And I feel like many founders listening have probably faced a lot of these challenges in their own way or opportunities to learn from the customer or learn from the market and be able to adjust accordingly. And to your point on making sure you have capital reserves for that, that is the resource you need to be able to get things done. I mean, you can't really function without money and all these beautiful, amazing ideas and feedback you're taking in can't really be actioned without having the resources need to go get after it. So I think that's great advice. And especially for earlier brands that are kind of still figuring out their product market fit.

43:57Hannah Dittman:They may be on their first fundraiser. So as they think through their capital needs, everyone kind of always says, take more than you need. You want extra runway. But I think putting in practical terms of like, hey, realistically, these are some of the things you might be thinking about. What if you need a whole nother production run? What if you need a whole nother packaging situation figured out quickly? Would you be able to finance that? And if you weren't, what would happen to your business? What would happen to your retail relationship or different things you have going on and understanding the revenue needs you need to get to to be able to make that happen and what you would do with the existing inventory and all these other operational questions that come up.

44:35Hannah Dittman:It's the domino effect of all of these things. But I know that you don't necessarily love the word exit, but I think I'd be remiss to not be able to pick your brain from one of the few founders who have gotten to a stage of their business like that, I think a lot of founders would love to understand and maybe have a part of that experience demystified as they work through the path of building their business. What do you think the things that went quote unquote right were or kind of the dynamics that existed in your business that allowed it to get to the point where a strategic partner wanted to get involved with you?

45:11Hannah Dittman:What was the journey of that like?

45:13Craig Dubitsky:Oh, well, the most recent thing I can speak to is definitely hello in oral care. I think a few important things really aligned. First, the products are really great, right? They're vegan, cruelty-free, made in America. We had fourth-generation women-owned farms in the Lamas Valley growing the mint in the products. The tubes were BPA-free before people really thought about that. You could recycle them more readily in almost every recycling jurisdiction before people really were thinking about that. around toothpaste tubes. The vibe of the brand was certainly different than things in the category for sure that were clinical and just a little cold.

45:53Craig Dubitsky:I mean, this brand that was all about friendliness and it was literally called hello, which is the friendliest word I could think of. There was a lot working. And I don't mean working as in like adoption working. I mean, like, we had a lot of pieces to this puzzle. Or maybe a better way to put it is like, instead of just having like bass and treble we had like an array of like graphic equalizers we had a lot of like levers we could play around with and the song was good but man we could stick in different instruments and change the tempo and do all these things because the lyrics were smoking so we had a lot to work with and i think one of the things that really kicked things into like the neck or kick things up to the next level we launched the product in the dollar channel and the natural channel eight days apart with the two biggest players with the same product.

46:41Craig Dubitsky:And I think that really like made a lot of people go like, whoa, wait a minute. Cause I had this idea that everyone deserved more effective, natural, beautiful product. It wasn't for a select number of people. It could be for everybody. And if you're a concerned parent, not just to focus on children's toothpaste, cause that was just a piece of the business, But that's like, if you're a concerned parent and you go to a natural channel player for your stuff, for your family, you care about your family, you go, you have that experience. If you're not able to go to that store because geography or economics, you don't think that parent doesn't want better things for their job?

47:21Craig Dubitsky:Of course they do. So what if we made better stuff for everybody? The big idea was to make better stuff and make it available to more people. And I think that became a really interesting turning point because the brand as a brand was having some moments, but then all of a sudden to show that we could play across different channels, that this was a broader kind of a platform than just an item. all these things helped and to showcase that our team had the ability to execute like that at scale and at pace was also really vital and we started to grow and started to outsell incumbents and started to some cases grow the whole category for retailers where they hadn't seen growth those were really big things so the team had really gelled we could perform the products were working we had great repeat.

48:08Craig Dubitsky:I'm really obsessed with repeat because a lot of things can sell. You might buy it once, but the thing is like, get it to a place where people love it and want to have it and use it and be around it over and over and over. Really, I'm more obsessed with repeat than anything in terms of metrics. So I think that became for us a moment where we had repeat, We had meaning for people. The brand was clearly differentiated. It's one thing to build a moat. It's another thing to have a good castle too. So you kind of need both. Since I'm in this weird metaphor mode here, you have to be able to have a drawbridge and you have to be willing to put it down and you have to know when to put it down and you have to know who to welcome it.

48:50Craig Dubitsky:And we were very lucky. We had multiple overtures and people really interested in the brand and the business and the team, frankly, like what we were able to do. So ultimately Colgate acquires, hello, by the way, I'm not contractually obligated or financially motivated to do anything other than speak the truth. It was an absolute honor and privilege to work with inside of Colgate. People always ask me like, oh, like you went to work for a big company. I've worked inside of a few big companies. Colgate was amazing. There's a reason why people stay there for as long as they do. It's a lovely place with the loveliest people.

49:27Craig Dubitsky:They take such good care of people. and they literally were like, we so appreciate what you built and your team and we're going to be the perfect place for you and your people. That was amazing. Now, of course, it didn't hurt that Colgate's the single most penetrated brand in the world and that's the biggest oral care company in the world. That's why it was also so incredible that this small group of people was able to create something that was considered valuable by someone with infinite assets and credibility. And that just made it that much more special because they treated us really so in such a lovely way.

49:59Craig Dubitsky:So it's really nice. And people do ask you like, what's it like? And you know, inside a big company and there's money stuff. And I'm like, you know, I didn't think about that stuff because we were so in love with what we were doing and the idea that we could just keep doing it and do it together and now do it in a bigger way with more people. It was an amazing thing. And the brand still thrives and continues to grow it. That's really what you hope for. It's like, if you ever have children, you hope that they outgrow you, outlive you, out succeed you, like do everything. You want your kids to fly off and thrive.

50:32Craig Dubitsky:So knowing our brand landed in such great hands and that it was treated so well and respectfully and with appreciation for where it could go, what we had done, but where it could go. It's incredible. I'm the luckiest person ever. I don't forget how lucky I am. It's all because of the people I got to be around.

50:50Hannah Dittman:We love to see people winning who want it for the right reasons and who have the belief, not just themselves and their own financial benefit, but the belief in their brand and the people they're selling their brand to, the people they're working with, like the rest of the ecosystem and that it's not just about the money, it's about so much more.

51:08Craig Dubitsky:I'll tell you, I was a derivatives trader. I helped manage a multi-billion dollar portfolio over us on a daily basis. I traded out of London City and Singapore for over five years. It was not particularly enjoyable. And my incredible bride says to me one day, she's like, you're so focused on money. I'm like, well, my whole world was all about transactions and trading and staying Delta neutral and all this tweaking a Black Shoals model to work on the London Metals Exchange, all these things. And she said, you know, as soon as you stop thinking about money all the time, you're going to see more financial positive stuff will come your way, which I never thought would ever be a possibility.

51:47Craig Dubitsky:And as soon as I stopped thinking about money and focusing more on like, how do I make the best stuff, the best thing, the best environment, the best place for people where they don't feel like they're coming to work, where they don't have a job. They feel like this is the place I'm supposed to be at. And the more you focus on all those things, the more smart capital wants to come find you because thinking that way is also differentiated. If you can take that mode of thinking and apply that to a great set of principles and products you can create, you're going to have an asymmetrical level of success, I find.

52:23Craig Dubitsky:And again, I say this as an older person, and I hear myself saying it, and I want to cringe a little bit because it sounds trite. But sometimes these things sound trite because they're true. And we've heard them so many times. It's like, oh, bullshit, that hasn't happened to me yet. So it's not really true. They're trite. And you hear people say that because it can happen. And when you're little, you're unencumbered, right? I was told you can grow up and be the president one day or anything's possible when you're little, right? And then you get older and you're told it can't. You can only do this.

52:53Craig Dubitsky:You know, that's a pipe dream. You're going to listen to someone else talk about it. And you hope one day that's going to be you, whatever it might be. The truth of it is, we're lucky to be here. There's nothing you can't do. You're educated. You're kind. You have access to people now that were not able to be ever contacted before in the past. Like you got to show up the right way. Mean it. People have a bullshit meter and they can tell. just keep putting good stuff out there you're going to work hard i think everybody works hard i don't think there are people that don't work hard life is tough most people work really hard if we're lucky enough to be in position to even take time to listen to a podcast that alone is a gift so i'd say like stay the course be positive keep putting positive stuff out there and i'm married for a long time we have two kids and all i ever kept saying was you put positive stuff out you get positive stuff back you put negative stuff out the negative stuff out back.

53:47Craig Dubitsky:So just keep trying to help people and then magical things happen. I can't even tell you how many people have been so helpful to me. It's ridiculous numbers. So if I can ever be helpful to people, whether it's sharing a story or trying to connect somebody to someone or helping with a product or an introduction, hit me up because that's how it works.

54:07Hannah Dittman:Craig, this is so great. I have about 50 million questions I could ask you and we would be here for so many hours. I will pivot into someone else's question for a second though. As you know, Startup CPG has the largest Slack community in the industry with now over 35 ,000 members. Thank you. I'd love to pull a question directly from our channel and have you answer it as a case study for any founder with a similar question. Today's question is, what does my company profile need to be like in terms of metric, scale, team, or otherwise prior to a fundraise? Essentially, how can I be attractive to investors?

54:43Hannah Dittman:And I think this is coming from the perspective of maybe someone thinking about fundraising for the first time and what would need to be in place for them.

54:49Craig Dubitsky:Sure. Something that's worked well for me consistently, especially if it's a first-time fundraise for you as a founder or because it's not even your first company, it might be your third, fourth, second company, whatever. Something that's worked for me is stacking the deck by magnetizing your idea and your business, even if it's in its earliest state, so that some really incredible people can be, call it your advisory board, right? Take a, like in my experience, the really good folks. And by good, I don't just mean like they've got a great resume. I mean like they're good people, like they care, they give a shit, they want to really be helpful, not like what you could give me.

55:31Craig Dubitsky:Like people that are like, what are you going to give me? That's transactional. And those aren't the folks I think you want to necessarily surround yourself with. If you can find the true believers that have had some great experience that are maybe a little further in their career and that have some glimmer to them and their resume and their background and their networks are incredible, find those people and they're out there. You have to avail yourself. You have to get yourself in the room so you can be around those people and or use LinkedIn, use other tools to find them. Introduce yourself.

56:04Craig Dubitsky:Introduce why your thing is better, what you're looking for, and ask them if they'll be an advisor on an advisory board. And if you surround yourself with those folks, I think investors go, whoa, like there must be something there. They got the from so-and-so to be on their advisory board. Like that person's no dummy. She did this and this and this and this, and she's a believer? Huh. And all of a sudden it starts to open the door. And if you get a few of those people, and hopefully a few of those people are either tangential to exactly what you're doing, or they've had a success that parallels where you want to go.

56:37Craig Dubitsky:And it seems kind of obvious in a good way, obvious that is going to instill confidence in somebody. And the other thing is be realistic about expectation, how much you need, because there are people who sometimes, especially for a first range, right? This is all we're going to need. You're going to miss it. If you don't get in now, like the door's going to close. You're going to miss the opportunity. you can't be heavy handed and i think again like going in not with your hat in hand like poor me can i have some money but we have something special and it says it's special without you having to say it because you've already brought some of these other people on board they already signed up for the ride because they believe in you and believe in the idea and people generally have a little bit of this notion of like well i'm gonna miss out on this thing and that if someone else is in it that's good like it's not because misery loves company it's because we have fear we're going to miss things, right?

57:26Craig Dubitsky:It's more like FOMO than fear. I think for some people, it's like, oh, there's fear of missing out. Okay. But it's not like a, I'm running from my life fear. It's like, oh, I'm going to miss something good. So stack the deck in your favor by getting other true believers that will allow you to use their name and hopefully some of their Rolodex to attract other investors. And usually in my experience, if you have that first investor, they love to share as well the good ones i think do and if you can get one they'll introduce you to another and another and another and that's how i've been able to do a lot of things i've been able to do it's just going humbly and passionate about what you're doing be able to explain why it's different slash better needed something lovely fabulous tastes better works better better in a way that you could actually showcase like where it's definitive declarative very obvious, like the before and after picture kind of thing.

58:22Craig Dubitsky:Like, oh, wow, I want the after. The before is crap. Look at that after. Like to be able to show somebody how much cooler your thing is. And then you say, oh, and by the way, here are the people that are going to help me do it. Here's a team I've already identified. And that's another trick. Like you may not have people signed up. You may not have had the ability to raise any money yet, but you've identified the team and they're going to all quit and come join you. That's really helpful too, because that again, instills confidence. An investor doesn't want to put money in and then hope you can get a team and hope you can get retailer interested or hope you can, like you want to dot all the I's as best you can.

58:57Craig Dubitsky:You want to say, oh, I've already identified my manufacturer. I've already sourced everything. I know what my cost of goods look like because I've already done all the work. I've got a prototype that works. I have this meeting with this retailer. Here's a note from retail that says, I love this idea. When can you come see me? Like you want to make your pitch so crystal clear that you are on the right track and that you understand what your cost of goods look like, what your margins really look like, and what your use of proceeds look like. By the way, use of proceeds is I'm hiring this crack team that knows how to do this better than anybody.

59:29Craig Dubitsky:And I have this amazing board put together, advisory or otherwise, that will make your fundraise that much easier because people really believe that you know what you're doing. You've cross the T's, dot the I's. And you're looking at this as an operator, not just as a quote-unquote passionate founder.

59:47Hannah Dittman:So many great pieces of advice and tactical words of wisdom packed into that answer. I think that was such a helpful playbook of the way founders need to be thinking about approaching the fundraising journey and also kind of like the strategic planning of the business of how you get from zero to one, essentially, which I think is the hardest mountain to climb sometimes. and drinking from a fire hose in a lot of ways. And I think you really clearly laid out a lot of the pillars of what is going to need to be in place in order for you to be off into the races. So thank you so much for sharing that.

1:00:21Hannah Dittman:Thank you so much for being generous with your insights, your stories, your time, and being willing to chat with me today. It's always such a pleasure to speak with you. I feel like I go to a little bit of consumer church. I love to hear the way you think about things.

1:00:36Craig Dubitsky:Amen, sister.

1:00:37Hannah Dittman:Yeah, it's a big motivation. and hopefully likewise for everyone else listening today. So thank you so much again, Craig. A real honor to be speaking with you today.

1:00:45Craig Dubitsky:Well, you're very kind. Thank you for having me. If anybody wants to chat, I'm very findable. Link in for sure. My cell phone, I'm happy to share with you. People are fantastic and amazing and respectful and I love people. So 917-392-1000 is my phone number. You can call me or text me. If I don't pick up, it probably means I might be on a plane or just in the middle of something where I can't, But I promise to do my best to get back to people because people are awesome. And I'm just lucky people have gotten back to me. So, yeah, there you go. Be kind to everybody and drink more coffee, hopefully happy and stay out of trouble.

1:01:21Hannah Dittman:Yeah, I'm looking forward to my happy tomorrow morning. And thank you so much for being accessible. You really eat, sleep and breathe a lot of your principles and that you approach business and your brand with. So thanks again. Huge, huge pleasure. And I hope that a lot of questions get answered for people today. Well, friends, we've now arrived together at the end of another episode of the Startup CPG podcast, the top globally ranked podcast in CPG. And if you love this podcast, you'll love our Slack community even more. Here at Startup CPG, we're a community of brands and experts, and you should join.

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