Vision in Venture Capital with Brett Thomas

December 7, 2021
James Whittaker

Check out this episode on the Win the Day Podcast

Skate to where the puck is going to be, not where it has been.”

Wayne Gretzky

What does it take to build a brand that matters?

The right plan.

Joining us today to reveal that plan is venture capital legend, Brett Thomas.

Brett is the visionary behind CAVU Venture Partners, a firm dubbed "the hottest venture firm in the consumer-packaged goods space" by CNBC's Squawk Box.

Brett has assembled an all-star team of industry experts at CAVU Venture Partners, including iconic brand builder and CAVU co-founder Rohan Oza (formerly CMO of Glaceau), to provide unparalleled and hands-on value to their amazing portfolio brands.

In addition to leading wellness brands Bulletproof, Vital Proteins, Thrive Market, and Beyond Meat, CAVU is involved with some of my personal favorites, including Once Upon a Farm, Kettle & Fire, and Good Culture.

When they launched their first fund, Brett and Rohan raised more than $150 million in under six months.

Nicknamed "The Hunter" because he sources the best deals, Brett operates CAVU with his philosophy that he only gets involved in brands where he strongly believes he and CAVU can influence their outcome. 

Prior to co-founding CAVU in 2015, Brett was the founder of Thematic Capital Partners, a private investment vehicle focused on private / public equity investments in the consumer sector.

Before entering into the consumer investing space, Brett worked at Scout Capital Management for five years, a long-short hedge fund focusing on special situations with over $9B in AUM based in NYC. 

Check out the YouTube or podcast version where Brett Thomas does the Win the Day Rocket Round, answering questions about his favorite quote, what advice he’d give his 18-year-old self, the one thing on his bucket list, and a whole lot more?

In 2017, Brett was elected to Boston College's prestigious "40 under 40 list" and was named a “Consumer Catalyst” by Forbes as one of the top dealmakers and influencers in the consumer space.

In this interview, we’re going to talk about:

  • His criteria when deciding what to invest in
  • The power of a good brand (and how to create one)
  • What companies today excite Brett the most, and
  • What founders can do to ensure they grow with the business.

Before we begin, remember that the right bit of inspiration can completely change the trajectory of someone’s life, so if there’s a friend or loved one who needs to hear this episode, or could use some help to win the day, share it with them right now. 

Let’s WIN THE DAY with Brett Thomas!

James Whittaker:
Brett, great to see you my friend! Thanks so much for coming on the show.

Brett Thomas:
Great to see you! And thanks for having me James.

To kick things off, is there a memory or story that you recall that's so vivid for you today that personifies and summarizes what life was like for you growing up?

Yeah, I grew up in the Midwest, in a suburb outside Cleveland, Ohio. A typical middle class family. I think growing up in the Midwest with Midwest values, as they always say, and being grounded and appreciating everything you have was really instrumental for me as I went through life and went through challenges of either success, but more importantly failure. It was really able to help prepare me for those moments going forward.

What career paths were you naturally gravitating towards when you were young?

I was a very good athlete when I was younger. I always thought maybe I could be a professional, whatever. And I played tennis in college, but I found myself in college not knowing what I wanted to be when I grew up. And that's okay, right?

I started CAVU when I was 34 years old. So it took me the first 30-something-odd years of my life to figure that out. So I decided to major in finance because I thought it was the most practical. I'd learn some skill sets that I guess could be applied in a lot of other various career paths, is a good foundation. It took me a moment to figure out what I wanted to be when I grew up.

In that five years you spent in New York working for the hedge fund, how crazy was that lifestyle and what did you feel like was missing from you personally?

Oh wow. It was baptism by fire. I use the analogy: have you ever been into a dojo? And how much pain can you take? That was how I would describe it. It's one of those experiences where you're in the office at the crack of dawn, you're working till late, but then you're young and you're in New York City. And you're out socially and staying out late, so less sleep.

It's ironic today because the studies show you need sleep! So how in the heck people were able to operate like that back in the days. But it was tough.

And I also use the analogy of, you're in high school and you probably had a teacher that was really, really hard on you and you didn't realize it at the time, but they saw potential in you and so they pushed you harder. At the time, you thought they were the meanest person in the world and the bane of your existence, because, "Why are they being so hard on me? And why is this so hard and challenging?"

The thing about hedge funds, you either made money or you lost money every day. You went home and you became numb to it.

But then 10, 15, 20 years later, you sit back and you go, "Oh, wow. That person really was instrumental in helping me and saw something in me, maybe that I didn't even see it myself." That's kind of how I equate the hedge fund world. Although it was a very hard experience, it shaped me in many ways and I probably didn't enjoy it as much when I was going through it.

As I sit back now — and managing people, the team, investments, and being a fiduciary of capital — I really appreciate those learnings and how hard it actually was.

So even though it took a few years off your life at the time, it just also taught you a lot about how far out of your comfort zone and what boundaries existed for you?

100% and I think I was unhealthy when I was working in a hedge fund. I was overweight. I was 'skinny fat' as they call it. It was very unhealthy, not a lot of sleep. Eating habits weren't great. And it was really hard, both physically, but more so mentally. A lot of people put themselves through the grind in any work, but especially at that time in early 2000s through 2009, when I left, it was definitely a stressful time in my life.

Yeah, I can imagine the sub-prime mortgage crisis probably didn't help.

That didn't help. That made it even more of an experience. But again, going through something like that shaped who I am today as a brand builder and investor because I've seen what happens and what can happen. And I think I was in college when the dot com bubble burst.

The thing about hedge funds, you either made money or you lost money every day. You went home and you became numb to it. But going through an experience like that, where you see the world melting and going through a financial crisis and all the jobs lost and the people's lives that were affected by it, it really sticks with you.

It taught me two things. One, to understand what risk is and how to look ahead and not just be content with where things are today. And two, it's always darkest before dawn. It will take a moment, but this shall pass and the world will come back and things will come back.

And it's hard. We saw that last year when the height of COVID, in the spring, when specifically in the stock market there was a huge correction. It was a 50% retracement and people were fearful, people were losing their lives, people were quarantining. We never experienced something like this in a 100 years.

Soo you see the world starting to get back out there. Although this morning, as I was driving here, I saw all the shipping containers out on the Pacific [outside Los Angeles] waiting to get to port.

From a mindset perspective, when was the first time that you felt like you could do anything that you set your mind to? That you're much more capable than you had ever given yourself credit for previously?

I always had confidence about me and it wasn't an arrogant confidence. I always thought that, "Oh, I can just figure this out." And maybe I didn't push myself in areas where I thought I had no chance whatsoever. I mean, I wasn't doing biochemistry by any means. But in areas that I thought that were challenging, I never doubted myself.

I don't know if it was from when I was a kid playing sports or if something happened in school or I had a test but I would say, "Okay, I'll figure it out." Like, "We'll get through it."

I always had a belief in myself since as long as I can remember that I can make this work.

I always had a belief in myself since as long as I can remember that I can make this work. And maybe that's just a mindset of fooling myself and the confidence, but I think half the way in any challenge is just believing. I think getting halfway through a challenge is just believing that you can actually do it, and developing that mindset.

That's been one thing that's always stuck with me that, since I can remember, I always just believed in myself and no matter how rocky it got or how many times I've failed, I'll figure it out. And most of the time, I did in some ways.

In 2015 you launched CAVU. Amazing company. You've done so many cool things ever since, as we mentioned in the intro. What were the origins of that business and what problem were you trying to solve?

So I left the hedge fund space in 2009. My grandfather was a very instrumental part of my life growing up in Ohio, and he taught me lots of lessons. One of them was, if your job's not your passion by the time you're 30, you should quit it immediately. And as I think back now, it was kind of ironic. He was a bathtub chemist. He invented car wash products, and he retired very early in life.

And so I was like, "Oh, it's easy for him to say that, because he kind of made it as an entrepreneur." But that resonated with me as I found myself sitting in a hedge fund... I think the financial crisis probably helped as well. I think COVID, speaking in modern day now, I think COVID actually gave people a chance to step back and reflect on... They see what's happened in the world, in life, and how quickly things can change for the better or for the worse.

People have now taken a step back and saying, "You know what? I don't want to be doing what I'm doing anymore. I want to go do something where I can actually spend time or I can live anywhere I want to now."

You don't necessarily need to live where your job is and, "I want more flexibility." Or, "I want to go on adventures I'd never done before." Because that got taken away for a while. The ability to be able to travel and do the basic things we took for granted every day.

I literally was in a hedge fund and it wasn't about money. I thought when you grow up, oh, you have money. And what I quickly realized was the price that you pay, or the sacrifices you made, while yes you have a little bit more money in your bank account than I did when I got out of school, but that wasn't happiness.

And for me, I wasn't happy. I was lucky that I was able to leave my job. I went in, gave my two week notice, and so I ended up leaving a week after my 30th birthday, but close enough! My wife was pregnant at the time. We were moving into our first apartment together and it was a scary, scary time. But again, even then I was like, "It'll work out somehow." And I didn't know how or where or what.

If your job's not your passion by the time you're 30, you should quit it immediately.

But the problem I wanted to solve was, I want to build something tangible. I want to be a part of a brand. And I think walking through those Kmarts and Targets in the Midwest with my grandfather and literally we would spend three hours going up and down the aisles, admiring different brands and packaging, and how packaging draws you in as a consumer in that if you have beautiful packaging, but the inside is not great, the engine of the car, you're not going to have repeat trial. But if your packaging is great, it'll drive trial and then you'll have consumption if the engine is just as good as the packaging.

And how every invention comes from someone's problem. That was formative in me, so I wanted be involved in consumer. Then as my wife was pregnant at the time, just shortly thereafter, watching how she changed looking at packaging when we were feeding our newborn son, and what she was feeding him. Making homemade food and looking at the ingredients and the labels and scrutinizing them.

Not only what was put in his body but on his body in terms of shampoos and conditioners. That was my aha moment of, "There is going to be a massive secular change in how consumers live."

And it's not going to be a revolution. It's not happening tomorrow. It's going to be more of an evolution because you don't change consumer behavior that quickly, especially amongst the different generations. So it was really trying to be healthier. I changed my lifestyle. I was drinking a Coke a day and it's 40 grams of sugar and 140 calories, and I switched to Bai. 

One of the reasons I made one of my first investments in consumer in Bai personally was I started using the product. I was like, "Wow, five calories, one gram of sugar, naturally sweet and taste great." I can drink one of these. And it was permissible indulgence. I didn't feel as guilty having some flavor or having a Bai with lunch versus when I drank a Coke and I felt bad about it.

Yeah, that evolution is much more sustainable too, rather than revolution. We see a lot of those trends come and go in fitness and nutrition, but the evolution of consumer demand and what they actively seek out is interesting.

You are involved in so many amazing businesses and things today. Which ones are you involved in that excite you the most?

Oh geez.

Like a forced ranking of your children!?

Yeah, exactly!

We'll do that for the next question!

The Wayne Gretzky quote that you started this episode with, it's so true. I always want to see what's next and where the world's going; not where we are today, but where I think the world is going. So I love taking a thematic approach of, "Okay, what's going on and where's the world going?"

Then doing the homework and the research, and talking to people and getting educated, then making a gut call with some data. Because there's not going to be a ton of data, right? If it's a new category that's forming, there's going to be very little data information about it. But making a call and saying, "Okay, this is a brand or a category that I think is going to grow."

Every invention comes from someone's problem.

Collagen was a perfect example. Collagen's been around for ages. And if you looked on Amazon four or five years ago, it was mostly geared towards geriatrics. Older people who had joint health issues. Because there's actually medical science that collagen helps with joint repair and health. And if you looked at all the brands, the packaging and everything was geared towards older people. It was gross packaging.

You look at Google search trends and other data and you start to see more and more people talking about collagen a little bit. And this is 2016. So we made a bet that, "Hey, we think collagen is going to be a lot bigger tomorrow than it is today." We thought it could be as big or bigger than something like whey protein. So it could be a really massive category.

And it's data points. It's going around and saying, "Okay, what are those data points out there?" And I'd go to dinner with my wife and other couples. In two of those dinners, the wife of the other couple pulled out a stick pack of Vital Proteins' collagen and said, "My trainer..." or, "My Pilates instructor told me I should be using this because it's good for my hair, skin and nails as well."

Now the science on whether it's good for your hair, skin and nails, it's two-sided, right? There's some that say yes, there's some that say no. But even if you believe it's helping, how do you afford not to take it? So we went out and looked for the best asset in the category and we thought Vital Proteins was the category creator.

Now we didn't know if we were going to be right or not. Then you meet the founder, Kurt. An amazing entrepreneur and you see his vision and you're like, "Oh, wow." That's what I enjoy the most is going out there, finding something that's not yet discovered, but has a few data points that you can kind of base your thesis on, and see what happens.

Obviously timing is a big one, but how do you build an economic moat to stop well-funded competition from coming in and basically replicating the ingredients of your core products?

It's hard. You really can't. You see, in the old days it used to be big advertising budgets. So if you want to create a brand, you have a multi, multi multimillion dollar marketing advertising budget. And you would go to Madison Avenue marketing firms that would put you on TV or radio or print.

New and upcoming brands really couldn't afford to do that. And I think with the emergence of social media and reviews, and direct to consumer and Amazon, a mom in Chicago can talk about her experience with the Once Upon a Farm platform, about giving it to her babies and their children, where someone may be living in the middle of the country, hadn't heard of it, but because she or he follows that person on Facebook or whatever media outlet there is, that's like grassroots marketing.

That was my aha moment of, "There is going to be a massive secular change in how consumers live."

You don't have to pay for that. Now, yes you can. There's digital advertising and all these things and acquiring customers. So the hard part about consumer is, in a lot of ways there's not a moat. But your moat is basically being a category creator — either a fast mover or a fast follower.

And my belief is, you don't want to be investing in the 19th kombucha coming to market. It's too hard. There's too much competition for shelf space. Usually what happens is, categories get popular — just like with collagen — so the price keeps going down and down.

And I give Kurt [founder, Vital Proteins] a lot of credit because he went and built his own manufacturing early on. He saw that, "Hey, listen. This category is going to get big." There was going to be price promotion. Lowering and lowering and lowering of prices. But because he has his own manufacturing, he ultimately has higher gross margins than all the other competitors that are independent startups.

Other people are using co-manufacturers. And so he has the ability to actually lower prices and have still a pretty healthy margin and have a sustainable business. So category creator, fast follower would be the first part.

Then it's just brand and team. And I put team as execution. And then anyone can come in. The first mover advantage is real, because if you're in a category and you're the first mover, it's just such an advantage. You've made some mistakes earlier on. You're able to get that shelf space. People when they think of collagen, most people say, "Oh, Vital Proteins."

Now, I saw on TV the other day, there was a DASANI water that has collagen in it now. So you think about how far this is coming in four or five years.

And DASANI is owned by Coke, isn't it?

Right. And so it's just like, "Wow. Okay." So there's something there when you're seeing those commercials on TV. But consumer is very hard. It's adult swim. It's all the kids out of the pool and time for the grownups to swim their laps at rest period. It's a very hard industry.

But if you've got something differentiated, I think it's easier now than ever to start a brand because the barriers of entry are a lot less. Which makes it more accessible for anyone in anywhere in the world to launch a brand if they have a passion for it, or they think they have a good idea.

You touched on being one of the first entrants in a category there. What else is part of your investment criteria when you're looking at being involved in some amazing emerging brands?

I think finding a category creator is something different. So it's something that's unique and, listen, we may not always get it right. We think a brand's a category creator and it really isn't. Or we pick the wrong one.

Like the jockey, not the horse.

Yeah. And the horse has to be pretty strong. And a fit horse, but you choose the founder, even with a horse that's a little bit less. And it's funny.... pattern recognition becomes real.

Before I started CAVU, before I took other people's money, I wanted to make sure that I did a lot of my learning and mistakes on my own money. And I didn't feel comfortable yet or confident enough in terms of, "Okay, I'm ready." And I had help, where I have brought an industry vet Rohan Oza into the mix early on. Which was crucial because he had been in the industry, he worked at Mars and Coca-Cola.

You don't want to be investing in the 19th kombucha coming to market.

So he did big CPG. But then he worked at entrepreneurial brand like Vitamin Water. And helped build that and then helped on Vita Coco and Pop Chips and Bai. So that was invaluable in terms of helping kind of get up that learning curve quicker. But pattern recognition is real.

I can't tell you how many founders I've met since I started doing this. It's probably the best part of my job, is sitting across from a founder and hearing their passion, seeing it, painting the vision, and then being a part of that journey. And it's not the pot of gold at the end of the rainbow, as all of them kind of seek out saying, "Yes, I'm going to make a lot of money here." It is that journey.

It sounds cheesy and cliché, but when you think back, and I was just with Kurt from Vital Proteins the other day, and we were talking about how fun that journey was and how there are good days and bad days and stresses. And, "Oh, my gosh. How are we going to figure this out?"

So as you look back, that's it. But it's founder. And now you're not always going to get it right. But the founding team has to be passionate. You just, you can tell. Like, how do they solve a problem? Can they build a team? Can they be leaders? And you know, where I've sat in enough rooms now with people where I'm like, "Okay, this person is someone that I think will figure it out."

You mentioned Vitamin Water, and 50 Cent was involved in that one. Jennifer Aniston was involved in Smart Water. Why do some celebrity-endorsed products explode while others completely fail?

Couple of things. One, the consumer is a lot smarter. It used to be that you could take Michael Jordan and show him holding a Big Mac and people are like, "I want to go have a McDonald's Big Mac because Michael Jordan eats it."

I think this generation, I think millennials, Gen Z, I think they're a lot smarter. They read a lot more. I think they don't see that as authentic as maybe in the days when we were growing up. And I think from that perspective, it's got to be more authentic.

It has to really work with the story. And I think 50 Cent works with Vitamin Water because that changed the whole equity play, right? Celebrities were always with products, but they were getting paid cash.

And it's funny, Rohan always jokes, they say, "Wow, that was game changing, revolutionary partnership. 50 Cent having his own flavor at the time." He's like, "It wasn't because it was anything revolutionary. We just didn't have the money to pay him cash!" He wanted cash. We had to give him [50 Cent] equity because we didn't have money." And so it was almost a necessity they had to do that.

He wanted cash. We had to give him [50 Cent] equity because we didn't have money.

But I think it has to do with the celebrity too, whoever that might be. If you bring them in too early... You don't want to be known as that celebrity's brand only. I think a brand has to exist on its own without a celebrity early on. Now obviously, there's examples where it works day one with a celebrity. But most part, I feel like it feels forced. It feels inauthentic.

Also is that celebrity authentic in the sense, like if you bring a celebrity into a pet brand, do they even own a pet? Are they passionate about pets? Have they been known about being a pet lover for years? That adds to it. Where it just feels like, "Oh, you're putting a well known face on this brand to try to accelerate it." The consumer is way too smart these days.

And I think the influencer is the new celebrity. Nano, micro influencers, the moms or the dads who were cooking a recipe with a product like a Kettle & Fire, whatever it might be. Those are the new influencers because they have a following. And then it's these mini infernos that get started across the country.

You do a lot of work in-house. You try to add a lot of value to these brands and things that you work with. Is there a particular success story or transformation that you've had with the brand that really stands out or that you're most proud of?

There's a brand called ONE Bar. ONE Brands. And it's funny, I never had heard of the brand and the preexisting brand was called, Oh Yeah! Nutrition. And it had been around for literally 20 years and had decent success, but kind of stalled a little bit. But a little bit of profit, making okay money.

Then the founder, he saw Quest, which became extremely popular and had incredible growth. And he didn't like the taste. He thought that there could be a better way to deliver the protein with less sugar than what was available, so he created ONE.

Rohan and I, I remember sitting next to him, we tried it for the first time. And we both looked at each other and he said, "This is the buy of candy bars, of protein bars." Because it tasted like a candy bar and it was 20 grams of protein, one gram of sugar.

Yeah. So cleaner ingredients, better taste.


Match made in heaven.

Exactly. But the problem — I used the car analogy earlier in packaging — the packaging was horrible. It was horrendous. But the engine was a Ferrari engine. And so we love that opportunity because ONE Bar got pretty successful very quickly with the packaging working against it, not helping it. So in our mind we're like, "Oh, my gosh. This is easy. We can fix this packaging. Start activating it."

But you always have to have a conversation with the founder and make sure you're aligned before you go into a deal. It's a partnership. It's a marriage. And you want to have those conversations and be honest and open and transparent. We told him, "Ron, your packaging sucks." 

And listen, he'd been doing something for 20 years the same way. To come in and say, "Hey, we love your baby, but it could be a little prettier." How an entrepreneur responds to that tells us a lot about them. 

I give him credit. Not only was he willing to change that packaging, but he also was able to be honest with what his skillsets were and weren't. Great founders understand their skillsets: what their strengths and what their weaknesses are. And so it's trying to put yourself in a position to succeed, focusing on your strengths and not letting your weaknesses hurt you.

You always have to have a conversation with the founder and make sure you're aligned before you go into a deal. It's a partnership. It's a marriage.

A lot of founders can say they want to be richer, or they want to be famous. And I give Ron a ton of credit because we said before we went in, "Listen, we'd like to bring in a team and expand the team. We'd like to bring in someone to run the day to day." Because he was amazing at innovation. He could create bars that were so great tasting. And so we brought in a management team. Peter Burns, an amazing operator in the CPG category. Along with some of the team that he'd worked with previously at Justin's. The brand did incredibly well because of those changes.

And so we did that packaging in-house. We have a agency internally called UNCOMMON and it does packaging work, design work, billboard campaigns, social digital influencing, DTC, Amazon work. And I give Stevie Clements and her team a lot of credit for recreating that packaging in-house and doing it.

I guess now that you've got the runs on the board, as far as the shifts in packaging that you've been able to create and the explosive growth those brands have experienced as a result, any founder who doesn't recognize your expertise in that, it's probably a bit of a failed test from their perspective. It's that you are not aligned on vision and they're thus not a good fit for that partnership. Is that right?

Yeah, I think so. Listen, I always love when you're talking about a partnership. Outside of their family, it's the most important thing to them. It's their baby. And you're talking about equity percentages and ownerships and all these terms and how's life going to change.

You learn a lot about a person during a negotiation or a conversation about, how is this going to work? And you don't always get it right. I've made mistakes and you learn from it. But I think one of the strengths is trying to listen and hear from the entrepreneur about what's important to them. And then conversely also understanding what's important to us and seeing if that's a match. And if it's a match, fantastic.

You're not always going to see eye to eye. And our way we work with brands is we want them to say, "This is how we feel we would work together." And make sure we get alignment. Then during the journey, all we want to do is push the thinking. It's still their baby. We are minority investors. So we don't have the final say necessarily. 

So it really comes down to building trust between both sides as the foundation of the partnership, so that you can have direct honest conversations. And all this is to push the thinking of the entrepreneur, to give them another point of view and keep them away from the landmines.

CAVU stands for "ceiling and visibility unlimited." It's a pilot's term, it's the perfect flying conditions. So our whole hope with that metaphor is that we can help make that journey a little smoother. Like clear skies. And we've learned a lot from mistakes. And so if we can impart some of that, avoid a landmine or two to these founders, we want to pass that on. We come with the perspective that we want to help them. 

This is our opinion, but it's your show. This is your baby. You're driving. You have the keys to the car. But that's how we would see it. And they digest that and they end up making a decision because they have better information and they've gotten other opinions from people.

We've mentioned packaging, we've mentioned founders. What other characteristics make a good brand for those who want to turn their concept into eventually a household brand?

I think you have to be solving a problem. I feel like where I've made mistakes in investing in brands is when there was just kind of a me too type of product. And it wasn't a category creator.

It has to solve a problem. And it also has to draw an emotional connection with the consumer. You need to have that consumer become brand evangelists.

There's a shoe company that just went public called On Running. And we're not investors and weren't investors in On but... And I use that example because I use the products. It wasn't a very well-known brand, but the people who know the brand were enthusiasts. They owned six, seven pairs of the shoes. And I found, I was that consumer.

Brands that feel like they're made in a lab don't draw that emotional connection.

I kept every new style that came out. I wanted to buy them. You have to have an emotional connection with the consumer in some way. Whether it's the packaging, whether it's the mission, the problem you're solving, the founder's story. It's got to be authentic. Brands that feel like they're made in a lab don't draw that emotional connection.

But the founders that are actually trying to solve a problem because they had a personal experience themselves, and that's the reason for why they created this. And it goes back to what my grandfather always told me, right? Every good invention comes from someone's problem.

So having a founder that has experienced this problem and wants to go and set up and trying to solve it. I think there's no secret, "Well, you have these two things and it's a go." It really is trying to see kind of that pattern recognition of those four or five things. And if a brand checks a lot of those, then I think that's something that we usually get excited about.

So the emotional connection, when you look at any type of package and it's like, "50 years ago, Mary, our grandma was making this in a kitchen." Is that exactly what they're doing? Trying to make that emotional connection?

I think so. It's authentic.

I feel like Siete does that really well.

Yes. Siete is an incredible brand. It was the family and the story. First of all, the product is really good. You always have to have a good product, or you're not going to have trial or repeat business. But if you turn over that bag of chips and you see the picture of the family from 20 years ago, and all seven of them. And then they tell the story about the recipe, that's pretty cool.

Yeah. You're rooting for their success.

You're rooting for it, and they have good products. The packaging is catchy. The name stands for something. That's exactly right. Good call-out. And again, the fact that I've turned that over and you've mentioned that brand and I've actually read the whole back of that envelope. That's exactly right.

Would you ever double dip in the same category if it's something you're super excited about or really bullish about it?

Probably not. When we invested in kombucha, we had an opportunity to invest when the market started to change a little bit where alcoholic kombucha came out. Some people were saying, "Okay, functional soda now is out, there should be functional alcohol." But we were still investors in Health-Ade and so, no. We wouldn't invest in two things like that.

There's been a situation where we had Vital Proteins, which is purely collagen, and then Bulletproof has some collagen. So that was something where we had to call both founders to make sure, "Hey, are you okay with this?" And if they weren't okay with it, then we wouldn't have done it. We want to be doing this for the next 20, 30, 40 years. I want to build an institution.

I want people when, if they're a food and beverage entrepreneur... It's like in tech when you have Sequoia and every tech founder wants Sequoia. In food and beverage, we want to be one of those couple of firms that people seek out.

And as we go into other categories in pet and human performance and personal care and beauty, that's our aspiration, that's our BHAG, is trying to be when an entrepreneur is starting a company that they want to reach out and talk to us. And in six years, that's already started to happen in some categories. But because of that, we don't want to double dip.

If there's ever a little overlap we make sure that we have that conversation. But it's hard because if you believe in a category, I think there can be more than one winner, but then if they're sitting next to each other on the... I mean, you can't do that.

Perfect example would be a brand of ours called Poppi. And Poppi was a brand Rohan actually, my partner found on Shark Tank. And it was called Mother.

And we partnered with them. We changed the packaging from a bottle to a can. We changed the name. Came up with Poppi. And then we did the packaging in-house, the UNCOMMON agency. And this brand launched last year as Poppi. It's honestly the fastest growing beverage brand we've ever been a part of. 

There was other category brands forming there in OLIPOP and culture POP and Health-Ade even has launched one. So we've had opportunities to look and won't do it. It's a good sign, seeing competition. Because if you're the only brand in a category, you're going to start to look around and be like, why am I so lucky? Right? Or what am I missing?

With Poppi, we actually like seeing competition come in, because it's validating category. It's not just the absence of bad, it's the presence of good now as well. And so if you can offer something, a probiotic, a functional soda with 4 grams of sugar instead of 40, then 20 - 25 calories that taste good, there's a category there.

And I think this could be the new pop, the new soda and the millennial, the Gen Z soda. And I get 14 year olds who will write me asking for Poppi swag because they love the brand. And that's pretty cool that a brand is reaching 14 years old, but also I drink it.

For sure, big range, micro influencers. You better get some swag to keep them happy!

Exactly, exactly.

I saw that Nancy's now as well is doing probiotic, which I often see next to Good Culture in the supermarkets. It looks like they're going all in on that probiotic thing. It's amazing to watch these trends that can just take off so fast.

Gut health. We're still living with the old school food pyramid. That food pyramid should be inverted. Look at the milk campaign. When I was growing up, I had milk at my table every single meal.

I mean, my kids don't really have milk. And it's just incredible, what a marketing campaign can do for a brand where it helps your bones. It helps you be taller. I'm 6'5'' and people always ask, "Well, how are you so tall?" My mom's like, "Oh, because he drank milk." And it's like, "Actually, mom. No, it's not true. That's a marketing campaign that convinced you that that was true."

Confirmation bias.


We like to keep it pretty real on this show from a mental health perspective. Is there a particularly dark day on the entrepreneurial side that stands out for you?

Listen, I think there's been a ton. And I think you have to expect that. Being an entrepreneur is not for everybody. It's why, I have a lot of friends that are extremely smart, extremely successful, and they still have their nine to five. And it's, "Wow. If this person were to leave and go on their own, imagine the world of possibilities."

The thing is, not everyone's wired like that. I left a very good job when I was 30, because I didn't see the downside. And I did have fear, maybe it was peak earnings at 25 and 28. And I was like, "I don't know if I'll ever make this much money." And I didn't care about that because I want to follow my passion and what I love to do.

There's been a ton of dark days. I mean, you always move with a fast pace, with purpose. And I always go back to the Stephen Schwarzman book where he talks about if he hadn't moved with such purpose and intensity, and time kills deals and all those analogies. They talked about how they closed their first fund Blackstone on a Friday. And that following Monday was Black Monday for the stock.

Being an entrepreneur is not for everybody. It's why, I have a lot of friends that are extremely smart, extremely successful, and they still have their nine to five.

He's like, "Who knows if Blackstone... We would probably not have been able to raise our fund." You think about a weekend difference, about moving forward. So it's not for everybody, but for the people who have made that leap, you just have to not let the lows get too low, the highs too high, and you got to stay as balanced as possible.

And it's okay. You have a bad day or bad news. It's okay to wallow in it for a little bit and feel sorry for yourself. But whenever I failed in life, I kind of allowed myself, "Okay, one day of feeling bad for myself" or "Why me?" And "How can this happen?" Then the next day it was, "Okay, let's roll up the sleeves. Let's go chop wood. Let's get back into it and try to figure it out."

And it's growth. It's learning. Failure, I mean it's interesting. I was told, "You can't fail. You can't fail. You got to keep practicing. Practice makes perfect." No, practice makes progress. And my kids tell me that. Because I will say on the basketball court when they're practicing, "Hey, practice makes perfect." And I'm like, "Oh, no." And they correct me.

And I love that. Because people put too much pressure on themselves on every single little move. I get it. The stakes are high. You probably have left your job. It could be paycheck to paycheck. It's painful.

Practice makes progress. I love that. I think that's really cool.

Came from my children. Which tells you how things have changed from when we were growing up and it seemed more like, "Be perfect. Be perfect. Be perfect."

You mentioned a couple of times today, "Every good invention comes from someone's problem." For someone who has what they think is a great business idea, what's the best way for them to stress test that so they can hopefully build a sustainable business?

I think you have to get feedback. And you can't just get feedback from the people who love you. You actually have to put yourself out there.

In beverage, we say, "Liquid to lips." If you believe you have an amazing liquid, you've got to get it in people's hands. Because once they try it, if it's good product, then their consumption will continue. So I think being honest with yourself and everyone's taste preferences, everyone's view, that's what makes humans amazing, because everyone's different.

So not just drinking the Kool-Aid of, "This is amazing." But actually going out and putting yourself out there and taking feedback from a sample set of all different people. I think that's very healthy.

Check out the YouTube or podcast version where Brett Thomas does the Win the Day Rocket Round, answering questions about his favorite quote, what advice he’d give his 18-year-old self, the one thing on his bucket list, and a whole lot more?

And also, you and I live in Los Angeles, it's La La Land. Some things that are very practical and everyday common here may not be applicable to other markets, even on the other coast. So you have to put yourself out in saying, "Okay, is this a product for people who live in a bubble or is this something that is actually mainstreamable?"  

Just having feedback and being willing to go out there. But not only just get the feedback, actually listen to it. And that's the hard part because you may not get back what you think you're going to to get back.

Yeah. Like a $20 cold pressed juice from Los Angeles might not work as well in other parts of the country!

There you go, right? And that's the hard part. And part of the reason I moved to LA was yes, better lifestyle for my family and so my kids didn't have to grow up throwing the baseball on the sidewalk. But also because I found myself on a plane coming out here 15 times a year. And the hard part is finding a brand out here. Because a lot of them will start out here, but I want to know which ones will transform the country.

Final question, what's one thing you do to Win the Day?

I workout every single morning before the day starts. So I usually workout at 5:00 or 5:30 in the morning. It's just getting the endorphins, releasing stress. You start with a workout or a run or a walk. And that kind of sets the tone for your day where you've already knocked that out. Everything else is...You've got momentum behind your back to kind of ease in through the day.

So good. Brett, thanks so much for coming on the show.

Thanks for having me. Really enjoyed it.

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Until next time…

Onwards and upwards always,
James Whittaker

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