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The first two years, I was focused on cracking the code around the fermentation.
So we want to try these three chemicals and we want to try this food source and we want to try these microorganisms.
So let's put that in a bag, let's do 10 different versions of it, and let's literally staple them to the wall of the shed.
Okay. It looked like a scene out of, you know, the hive in aliens.
I was thinking breaking bad.
A little, little, well, yeah, until you see like 400 bioreactor bags filled with God knows what hanging from the walls.
I mean, it was absolute madness.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Roz, and on the show today, how Ben Goodwin set out to make a healthier soda and build ollie pop into one of the fastest growing sodas on the market.
There is an inherent risk in committing your life to a single pursuit.
The most obvious, of course, is that it fails.
No one likes the idea of looking back on years and years of effort, only to conclude that it was time wasted.
Except I'm starting to think that rarely happens.
In other words, I've met and even interviewed lots and lots of people who toiled away on projects and ideas only to see them fail.
And in every case, that person was supposed to fail.
It's like there's a cosmic force that derails you in order to put you on the right path.
Case in point, James Dyson.
He was on the show many years ago talking about his famous vacuum cleaner.
But for years before that, he devoted his life to creating a revolutionary wheelbarrow.
It was called the ballbarrow, and instead of a wheel in the front, it had a large plastic sphere, like a hardened yoga ball that made it easier to balance.
Unfortunately, Dyson's investors kicked him out of the company, and the product eventually died.
Adding insult to injury, the investors owned Dyson's patent, so he was out of luck.
And they forced him to sign a non-compete so he couldn't try a similar design.
But all of that set him off on a new course, a course that would lead to the Dyson vacuum cleaner.
It's an amazing story, and that failed wheelbarrow led directly to the idea of building the vacuum.
And if you haven't heard it, I'll post a link to it in my newsletter this week.
Anyway, we've had dozens and dozens of stories just like this on the show, including today's.
Because Ben Goodwin, the co-founder of OliPop, spent more than a decade developing another drink called Obi.
And Obi, as you will hear, was a probiotic soda that was going to be Ben's legacy.
Except it didn't work out that way.
Ben had to sell the company, and he was restricted from working on a new probiotic beverage.
So instead, he was forced to think long and hard about what to do next.
And he came up with a different idea.
Not a probiotic soda, but a prebiotic soda.
Now, we'll get into what the differences are a little later.
What you need to know for now is that OliPop, which officially launched in 2018, is on track to sell more than half a billion dollars worth of drinks this year alone.
As for Ben, he grew up in the late 80s and early 90s in Monterey, California.
He had a pretty rough childhood.
His dad passed away when he was a toddler.
And his mom got into a new relationship with a man who, Ben says, was pretty abusive.
I would say third grade, fourth grade, fifth grade in my life is when the abuse really started to ratchet up.
And I was hit quite a bit.
I was locked in my room. I was, I mean, I called every name you could ever imagine.
It was very, it was very bad.
So, as that ratcheted up, then I started to become more isolated.
I started to become, you know, it's like the other kids can kind of tell that something's wrong.
And I think the other aspect of that as well is, you know, my mom did work really hard.
But we were constantly out of cash.
So, I moved something like 13 times, I think I counted once, which is almost unfathomable.
We were moving houses almost every year.
Living mainly around in the Monterey area.
Well, that's what's funny, because it's technically kind of a high end area.
But we didn't really have the money to live there.
And so we kept getting evicted from houses and moving to new houses.
So, yeah, there was a real financial, we grew up very poor as well.
I guess that around age 15 or so, you were around that time, decided to change your diet and get into exercise.
You decided to become a vegetarian.
Tell me about what was going on.
Were you conscious of your weight?
What prompted you to make that decision?
Yeah, I mean, look, I think that, you know, there were obviously a lot of really intense negative emotions that I was experiencing.
And simultaneously, obviously, I was also overweight.
But, you know, the drugs of choice shifted for, you know, the stepfather figure.
So, he went from being very angry and explosive to very subdued.
And it was really during that time where there's that shift in tone in the house, where a lot of kind of fighting for my survival shifted to more like self-destructive tendencies, right?
And a lot of anxiety, you know, at 12, I had severe insomnia and wouldn't sleep well for like five days in a row, right?
So, and then I was eating my feelings.
I think my mom didn't have the tools to help at all.
And so, she would just buy me bags of cookies.
So, that was like 12-year-old me was just like going to Safeway, eating a bag of cookies in a day.
And the whole thing was just terrible.
Now, in terms of the pivot point, it was really interesting because it's like a life-long memory.
You know, I was home, I'm on the couch, I'm eating peanut butter with sugar in it.
My sister walks in the front door and she's like, are you just eating a bowl of peanut butter?
And I'm like, yeah, with sugar in it.
She's like, that is, what are you, like, it was just, she was just like, it was just one of those like, okay, Ben, moments.
But that moment will always stick in my mind where I was just like, why the hell am I sitting here eating a bowl of peanut butter?
This is just stupid. It was almost like this awareness entered my mind in this like kind of split second epiphany of, I actually have a choice about what I'm doing.
And I was also having all sorts of existential crises about what happens after you die and what's the meaning of life.
And that was all floating around in my head.
And so, I just kind of got down to the point where it was like, look, I don't know what we're here for.
I don't know what happens when we die.
But I want to have a good life.
And what I'm doing right now is not going to create a good life.
And I just woke up the next morning.
It was like, that's it. I'm changing everything.
I'm going, so I started with the diet.
It started with going on long walks.
Then I learned about factory farms and vegetarian and kind of from there.
But that was this, you know, interesting event that really started to shift things for me.
So you have this, this kind of lifestyle change.
At a pretty early age. And then I guess, sort of sometime after high school, you start exploring all sorts of opportunities.
Like you sell coconut water at a farmer's market and you're doing some DJing at raves and Monterey and you also attended college for a while.
But you wind up dropping out pretty soon after, right?
Yeah. So I dropped out almost immediately.
You know, I know enough about myself to know that I'm never going to do something and stick with it because it's quote what I'm supposed to do.
My personality is such that if I'm really engaged in what I'm doing and why I'm doing it and I'm fascinated by it, I'll take it to the ends of the earth.
But if I'm just doing something because that's what's next up on your dance card, I'm really going to struggle to see it through.
All right. So this is around 2005, 2006.
And I also read that you read a book that had a big impact on you.
Which is a book by Gary Erickson, the founder of Cliff Bar, who's been on the show several times and is a friend of mine.
He wrote a book that I think came out in 2005 or 2006 called Raising the Bar, which is the story of Cliff Bar.
And tell me about what that book did for you when you read it.
Yeah. The timing was really good because I'm sitting here struggling with this.
I feel like there's a bunch of stuff I could be doing, but I'm not 100% sure what it is.
And then I picked this book up for whatever reason and I'm reading it.
And the essence of the philosophy is you can do the thing that everybody else does, or you can carve your own path.
And by the way, that's where a lot of the most interesting things can happen.
And it's unique to you and your footprint.
And obviously in the end, Cliff Bar did that through creating a health and wellness product company.
And it really opened this pathway to me like, oh, I guess I'm going to go, I can just go be an entrepreneur and I can create a product.
It's perfect. I mean, I think that was the whole goal of the book to inspire people to do that.
And of course, Gary and Kit would go on to build an empire really with that brand.
And at the time, what else were you doing?
I was working at a local health food stores produce department, which is my hack at that time for getting all the fruits and vegetables.
I wanted to put out, because I wasn't making a lot of cash, but I wanted to eat really, really well.
And so I work in a produce department and then that problem solved.
And then I had started, basically developed an interest.
And look, this I think is part of the siren song of the beverage industry, because obviously so many people go into the beverage industry and so few are successful.
But I felt drawn towards beverage, but I realized that I had no idea where to start.
And I had a friend who had at that time a boyfriend.
His name is Adam Goodman.
And she was like, Hey, my boyfriend's starting a kombucha company.
And I was familiar with kombucha.
I didn't know much about how it was made.
And she's like, he's, you know, he just started.
He really needs some help if you want to chat to him.
And so of course I did. And then I started working with Adam in kombucha.
So you start working for this startup, this kombucha brand.
And I think it's called kombucha botanica, which is a great name, by the way.
And tell me what, I mean, kombucha, anyone who's made it, I've made it.
I used to make it all the time.
It's not that hard. You know, you get the sort of the Scobee starter from somebody, the mushroom thing.
And you do the sugar tea and then you watch the mushroom eat all the sugar.
And then eventually you get this nice fermented drink.
And if you're really skilled, you can feed it to the customer.
You can figure out how to naturally carbonate it, the way you bottle it in a second fermentation.
I'm assuming you were learning all this stuff.
A hundred percent. So my main area of focus was managing the production side, especially the fermentation side.
And to your point, you know, kombucha is really interesting because there is the entry level.
There's an entry level ease to getting into it.
But really the most salient thing that came out of that experience was when I started looking into what is kombucha supposed to be doing anyway?
You know, why is it in theory good for people?
Right. Most people think probiotics.
A hundred percent. But why are the probiotics important?
Right? Like, and so that what was the most important, I'd say, kind of conceptual aha that came out of the experience of kombucha botanica was learning about the microbiome.
It's in the gut, obviously, yes.
Yeah. The digestive microbiome is in the gut.
And that's the most important microbiome, arguably, for human beings.
And then the other thing about the microbiome is there's something called the brain gut axis.
Yeah. So we produce the majority of our hormones and our neurotransmitters in our microbiome.
Those have a market impact on how we feel, on how we think, and that's powerful.
And, you know, the whole probiotics revolution really, at least in the sort of the consumer consciousness is beginning around this time.
Kombucha, people are drinking it, making it.
And around this time is around 2008, you leave kombucha botanica, which would eventually, that brand would sunset anyway.
And you decide to try your hand at creating your own probiotic beverage.
So tell me what you started to think about.
Were you going to make a kombucha?
Yeah. So, you know, I left, I left kombucha botanica and there's, you know, a couple, kind of interesting years in the middle where I started up a series of co-ops.
I did a bunch of freelance product development for people because I wanted to sharpen my skills.
So I would practice supplements, I practice skin creams, I practice all sorts of different things and was getting paid for it.
I also developed rudimentary web design skills, SEO skills.
So I had this kind of rotating set of skills that I was using to fund my existence.
And I started to really reflect more on what is my mission.
And I felt like I had evolved out of a difficult childhood to be more than good enough at taking care of myself and being healthy.
And a lot of this, for me, comes down to, you know, how do you create a higher quality world?
I think it's really difficult to feel truly free and alive as a human being if you are struggling with your health.
So I wanted to create products that at scale could start to offer that higher quality of health to more people in the country.
Okay. But you, but I mean, making a probiotic soda, we're not necessarily talking about like, you know, Joe Sixpack, you know, product.
So how are you going to take that concept of probiotics and make it appealing to, you know, to a larger group of people?
So it started with this concept of I really enjoy fermentation.
Yeah. I still think there's something really, really important about fermentation for human health.
And I had started to observe some of the weaknesses in kombucha as well.
I was like, okay, here's this, here's this culture.
It's got five to eight different organisms in it.
It's got the strong vinegar taste.
It's actually pretty high in sugar.
So my first question was, can I make a more interesting and just delicious fermented beverage?
And I ended up focusing on something called water kefir.
So a lot of people are familiar with dairy kefir.
Yeah. Yeah. But there's these kefir beverages that you can get.
Like it sort of tastes like sparkling yogurt drink, even though it's clear.
Well, yeah. Well, okay.
So great, great point. That yogurt taste is lactic acid.
And so my goal was, how can I create a scalable kind of water kefir style beverage that doesn't have that funk to it?
And kefir is just to, it's a like a fermented milk.
It's a little bit like buttermilk, but it's more common in Europe.
That's right. That's the dairy version.
Right. And then there's a non-dairy version that actually was originally harvested from cacti.
So that's where it started.
I'm like, I'm fascinated by the idea of a water kefir style beverage.
And I really need to figure out how to actually make it sustainable because I had had enough experience with fermentation at that point that I knew some of the pitfalls of trying to scale up fermentation.
Because it doesn't like what, you've got to refrigerate it or you've got a, it doesn't last long or what it's shelf life is limited.
Like what are the, some of the limitations?
Well, one of the, so I ended up working with a genius microbiologist and organic chemist in this process.
And one of the ways that he described fermentation, especially fermentation that's this complex is it's more like animal husbandry than anything else.
You know, you basically have these different microorganisms and they've got to eat correctly and they've got to rest correctly and they've got to stay in the right balance.
And if they get sick, it could be devastating.
So, you know, for a lot of brands that have scaled fermentation, even in yogurt and stuff like that, like they'll, inoculate their culture banks against viruses, for example, that could come in and just wipe out the culture bank.
It's scaling complex fermentation is, is, is a very labor intensive and complex endeavor.
So you're working with this microbiologist?
Yeah. So his name was Jim LaDeer and he would get hired to go down to central and South America and test different plants for interesting bioreactive compounds that could end up having like pharmaceutical or other utility.
You know, if you're out in the literal jungle trying to create these extractions and do these projects, you don't exactly have access to the best equipment.
That's perfect for me because I didn't have $200, $300,000 to build out like an appropriate microbiology lab.
So this is where, you know, stuff started to get serious.
I was working three different income streams.
You know, I would have the SEO going, the web design going, the product development going.
And I spent every extra dime I had to pay for this gentleman to fly out, put him up in a hotel for a couple of months, and, and then to create this like this low budget microbiology lab.
In your house, in your backyard, or in your garage?
So the first iteration of lab, insanely, was a spacious shed in a friend's backyard.
So that's where we started.
And how did you make the lab?
You start building it with what?
Yeah. I mean, it's, it's plastic fold up tables.
I mean, here's how insane it was.
So you need bioreactors if you're going to drive fermentation, right?
Bioreactors are quite expensive and, you know, they're quite technical.
So you have to be careful.
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You have to be careful. I mean, kefir is still a little bit, it's out there, right?
It's not like Coca-Cola, right?
The idea you had was to make something that was going to be, to have mass appeal.
Was it going to be like soda or is it going to be like kefir?
Yeah, so I didn't totally have that part nailed down at the beginning.
And you would just pour fruit juices into it or you'd mix fruit juices into it.
Yeah, that's right. That's right.
And then, you know, we got to the end of this two-year period and it was just hundreds and hundreds of experiments.
We actually thought that we had failed.
We thought that, you know, we had tried so many different things.
And it got to the point where we were actually breaking down the lab because we were like, all right, Jim, we got to pack it up.
We've done so many iterations.
I'm so over my skis on money.
And I was breaking down the lab and there was this literally this experiment in the corner of the lab that I hadn't tried.
And I said, hey, what's this?
I haven't tried this one.
He's like, oh yeah, it's this new one that blah, blah.
And I drank it and I was like, are you kidding me?
Is this stable? Is it delicious?
When we come back in just a moment, Ben launches his first beverage with mixed results.
Stay with us. I'm Guy Razz and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Kai Razz. So it's 2012 and after five years of trial and error, Ben has finally developed a probiotic beverage that tastes good enough to sell.
But now he needs to raise some money to get it out there.
And for that, he needs something else.
I knew I needed a business partner.
You know, I think most folks, most institutional investors would probably say, hey, this guy is brilliant, but I'm not sure that I trust him to manage my money.
You knew that alone you would not be taken seriously enough.
You thought you needed a partner.
Yeah, and I also just, you know, I also feel like in my early 20s, I had been probably, probably was just naturally a bit more arrogant.
You know, it's the insecurity of being smart enough to be smart, but being young enough to just, you know, not know enough about the world.
And I felt it was important that I find somebody to counterbalance any weak spots that I had.
I mean, three of the four years I was in the R&D process, I was looking for a business partner.
I actually went through three or four rounds of looking for a business partner.
I had one for a while. We didn't work out that we divorced.
That was messy. How long would you sit together, like two, three months or?
No, she and I worked together for probably about nine, 10 months.
Wow. So that's a long time to kind of come to the conclusion that it's not going to work out.
Yeah, that's right. And it was challenging.
And I was back out of cash.
I mean, they were a high net worth individual, but it wasn't the right fit.
Ben, I'm curious, because I think this is particularly interesting and useful for people listening, which is, how did you know that person was not the right partner?
I think that the cleanest way to analyze it was you really do need someone just mercilessly obsessed as you are on what's important about what you're doing, right?
They can't have a problem rolling their sleeves up.
Your co-pilots together in a plane that barely flies that's going a thousand miles an hour.
So you have got to be tight and focused.
Yeah. And look, good entrepreneurs don't let anything go to waste.
And so even when something absolutely implodes in their face and it's really, really painful, you've got to take a really useful lesson out of that.
And I realized that a lot of my stress was actually coming from my own ego and that the best way to navigate this situation was staying your size.
So I think a lot of times when we feel insecure, we either shrink ourselves or we blow ourselves up to try to deal with the perceived threat or the trigger.
And there's a real strength in staying your size and saying, you know, I'm not going to be reactive to what ultimately is probably another person's ego.
I'm not going to shrink myself, but I'm also not going to expand myself and go into this spiral that consumes me.
And so that was actually a super valuable lesson that I learned out of that.
All right. So you go through a breakup with this one partner, but I guess you eventually get connected with someone who would become your next partner, this guy, David Lester.
Yeah. And from what I gathered, I mean, he had a lot of experience in beverage, right?
I mean, like he had just left a pretty big job at Diageo at the beverage company, right?
Yeah. You know, we talked on the phone, he's from Northern UK.
And, you know, that tends to be a fairly emotionally monotone group of folks like Liverpool area.
And so the first, I remember the first time I talked to him on the phone, I was like, this guy is not interested working with me.
But then I met with him two weeks later in a cafe in Palo Alto, and we really actually hit it off.
And, you know, what's also very funny is that he had a job lined up.
He had like a safe job lined up that was down the street from where his wife was working.
And they had this, this like picturesque fantasy of we're going to be in San Francisco, we're going to work these great, safe jobs.
We're going to see each other on our lunch breaks.
And then he came home from the lunch meeting with me.
And his wife took one look at his face and she was like, ah, you're going to go do this thing with this guy, aren't you?
And I think, and he looked at her and was just like, yeah, I think I probably am.
I totally, you know, and I actually did ultimately make him the CEO of that venture.
And one of the reasons why we landed there was again going back to now we're starting to reach out to investors and raise capital.
And look, I just, I kind of wanted permissibility to be myself.
And I thought that the kind of more straight man that David tends to be.
And again, we've both changed a lot over the last decade.
But at that point in time, that's kind of how the dynamic, you know, it's, I think that people really love to create categorizations for other folks.
So it allowed people to put me in the, oh yeah, he's the kind of brilliant mad scientist guy.
And here's the kind of corporate guy and they allowed them to categorize us in a way that made them feel comfortable at the time.
I mean, it's, he knew beverage, right?
Because he had been a diagio, but he probably didn't know.
I'm assuming he didn't know much about like gut microbiome or probiotics or stuff like that.
Yeah. He knew next thing I think about it.
So when he tried my products, he was like, we've had teams working on Stevia sweetened products at diagio for so many years.
I've tried more Stevia sweetened products than I can count.
And challenging because Stevia has like a bitter aftertaste.
It's, I developed my own Stevia blend to sweeten the drink with because I didn't like any of the technology that was on the market.
So like this is one of the most skillful formulations I've ever tasted involving Stevia.
And then I just lambasted him with three hours of, you know, my obsession with the microbiome and health and how this all rolled up into the greater good for society.
And he walked away, you know, very impacted by this dude is very serious about this and he wants to change the world.
All right. So you joined forces and, and he becomes you decide that he's going to become the CEO and you start to I'm assuming I think start to pound the pavement to raise some cash so you can you can package and market this product.
OB probiotic soda. And you guys indeed you raise about $2 million.
Had the groundwork already been later, was it hard to earn to raise that money?
Oh, it was very hard. It was very hard.
It's just like you have the meeting and you it's unclear whether they're going to move and then they have you have you just have the you get strung along often.
And eventually the first chunk of funding I think we raised about 900 K in our first on our first go.
And it was just this assorted network that we had built up enough rapport with.
But yeah, we just we built up enough grounds well and actually it was really lucky because I think we've been working for a little over a year with no salary at that point.
And for David that was like a very unusual experience for me was somewhat normal for him is really unusual.
And I think he was about at the level where he's like I only have a couple more months of this and then I'm going to have to go find a real job.
So we were we were pretty much at the end of the pier for David in terms of how much longer he could go without some in some cash capital inflow.
But we kind of Jerry rigged enough partnerships together that gave folks faith and got enough people around the table writing checks at the same time that we pulled it in.
All right, so you have the cash and you've been working on this formulation and you've had some experience in this business you probably had some connections to like a bottling plant or can it was these are going to mean cans.
So Obi was actually in a tall neck glass bottle with a crown cap.
Oh, so like a like one of those Mexican colas Coca Cola similar.
Yeah, yeah, the generic glass shape and tell me where you first started to sell it like I mean did you start to sell it in small like natural food stores in Santa Cruz Santa Cruz.
Yeah, that's the nice thing you've got all these you've got all these health food stores.
It's a great place to go start pounding the pavement.
You know, it had the kombucha market not existed.
I don't think there would have been a space for Obi, but I think there was enough of an argument around.
You know that your shoppers in this natural channel are interested in fermented drinks.
What if they could have something that was more powerful but didn't taste like vinegar and that was enough of a hook that folks started to give us a give us a try.
Got it. Okay. So does it get traction quickly?
I can't imagine it got traction that fast.
It was I would say it was like it definitely didn't perform poorly because in fact there there was a there was a need state for consumers who wanted to drink a fermented probiotic beverage that didn't really like the taste of kombucha right and Obi was lower sugar than most of the kombuchas that were on the shelf as well.
And you in with Obi you were doing like cherry vanilla flavor you made a root beer flavor.
That's right. It just looked like I mean it was like soda.
That was the whole goal.
So what's the biggest non water beverage that exists at soda right it's a $42 billion industry 97% household penetration.
It's it's an absolute legacy product in the United States and I have this theory that a healthy soda is going to gain some traction.
And so you know we have the root beer cherry vanilla.
We had an orange grapefruit and we had a lemon lime.
So those are and it's just kind of broad enough blend that you can test it out but guess what our top seller was root beer.
Yeah. And that's when I was like oh here we go.
So that was an insight because it wasn't the fruit drinks fruit flavored ones it was a root beer flavored one that people wanted.
I think at one point it was 30 40% of our sales for the line.
Wow. Okay. You guys launched this product I think in late 2013 or maybe early 2014 in stores right.
No it sounds about right.
Yeah. Okay. And it lasted for about two and a half years.
And then you guys were acquired.
I help me understand what happened.
What was going on. I mean at its height I mean imagine in two years you never ever ever got close to profitability.
Right. Yeah. So the the version that I can legally communicate is that we got acquired.
You know the reality is we actually were we weren't having a drop off of product traction.
The product was continuing to grow.
I mean slower in comparison but after that kind of you know two-ish years we were up at about a million bucks in revenue and really.
Yeah. Million dollars.
Yeah. It's not bad. It's pretty great.
So it wasn't like I was looking at our performance and was dissatisfied.
It was going along but it just got to the point where hey it's on it's untenable with the kind of current corporate structure that we have and the partnerships that we have.
We simply just can't continue this.
And in late 2016 we finally kind of washed our hands of the business.
So safe to say that you and David did not walk away from that experience flush with cash yourselves.
I had just about recouped my R&D budget but yeah.
Well I mean you'd put four years into developing it and then another three years trying to.
So this is seven years of your life right.
Yeah. And then you did it.
I mean you're talking about it like you know and then we did this and this but I have to imagine this was emotionally painful.
I mean 100 percent there were moments when exasperatedly I would say I just set seven years of my life on fire.
That's how that's how in certain moments it felt.
Yeah. And on the flip side of the coin I had gotten a lot of really useful market data.
I had proved out the hypothesis that I was exploring which was our consumers actually ready for a health contributing soda.
And I developed a lot of good relationships and because of how we had exited I had retained those relationships.
Yeah. And part of it was you know learning to trust myself has really been a lifelong journey for me.
You know coming out of a high trauma childhood that's a trust in general is not a strong suit of mind learning how to filter out the noise and figure out how to act on my instincts and my intuitions and my survival instinct has been key.
But I think the other thing is you know to have a certain amount of self respect for the fact that I had been in the trenches for years and years and years learning how to survive.
So when this thing unwound right and you were basically back to square one I'm assuming there were some restrictions on what you were allowed to do probably not allowed to directly compete for a while with the company.
The company relieving.
Yeah. So I yeah I basically signed a document saying I wouldn't go back into probiotics.
So you were but that had been your life.
So you're now. I know. So probiotics done.
So you've got to figure out the next thing.
So first of all what did you do in the weeks and months after that ended?
Did you start to think right away OK what am I going to do next or did you kind of wallow or did you did you and David go your separate ways for a while.
So I mean like David I think you know my impression is that was the most challenging life experience that David had had full stop.
Yeah he gave up a great steady job to go do this thing with you and he walked away after a few years probably with very little or no cash out of it.
Yeah I mean again we made enough that we were able to live off of that and use it to start to start Oli pop but yeah I certainly wasn't the outcome that we were looking for.
But it's also you know I don't know you may know this about Europe and maybe it's changing but the entrepreneur culture is quite different in Europe as well.
Right. So if you if you fail as an entrepreneur at least is the way that David described it to me is like if you fail as an entrepreneur in the UK.
It's very shameful. Yeah it's not like yeah you failed draw so it was like the Bay Area would like how many times you failed yeah cool.
Exactly so it's a little less plucky to that to that fact.
And it's just been very very very very stressful I mean it was it we got we got properly slapped in the face.
Now again as somebody who had been getting slapped in the face for years.
I was like it was a particularly brutal experience and I also had a certain amount of that experience I think David so David and I did.
It's not like we we lost contact but we did take a little breathing space I was like OK I'm like in my late ish 20s and you know I suddenly just got a small pile of cash and so I'm thinking awesome.
I have to immediately go find another job or something and I my whole life I wanted to go to Japan and so I'm like I'm going to Japan spent so I spent about two weeks.
I walked like I went to five or six cities I walked 170 miles and one of the things I was wanted to do while I was over there was study their beverage market because I have always been very fond of Japanese formulation.
It's really it's like nuanced it's balanced subtle it's intriguing the flavor profiles are intriguing.
And I started seeing some drinks that were over there that had fiber in them and I was like that's really that's really interesting that they've got all these drinks with fiber.
So you basically start to kind of for me you're essentially banned from working in probiotics from this contract but in a sense and maybe you maybe you've only recently come to this realization that was a gift that they gave you because it forced you to look at a different part of this.
You were an expert in drinks and beverages at this point but you couldn't do probiotics but you could do prebiotics and there's a new research around prebiotics which is basically that the food that that bacteria essentially in our gut eats right.
I mean to sort of oversimplify it and a lot of it comes from these like certain fibers non digestible fibers that encourage encourages bacteria to grow good bacteria.
And tell me when you start to think OK maybe that's the thing maybe if I go back into beverage I should focus on this thing called this this prebiotic function.
Yeah it's absolutely and just be clear I totally understand why the categories often refer to as the prebiotic so to category right because that's kind of the salient ingredient that it's easy to understand.
But the bigger nutritional platform that the product offers is is also important which is fiber.
It's fiber prebiotics plus nutritional diversity right so we've got an ingredient mix called Oli smart which has eight different ingredients in it.
And again the reason why that's important is because like so we've got three different sources of fiber right now.
And so you're you're getting a large bowl of fiber but you're not getting it from just the same prebiotic ingredient.
And the reason why that's important is because if you are trying to benefit the microbiome you want to bring up multiple strains of beneficial bacteria simultaneously.
If you overfeed one strain you actually can just create a new imbalance.
So the the complex kind of functional formula you know is designed to be beneficial to digestive health and it's been pretty meticulously arranged so that it's a bit more comprehensive in its in its nature.
All right so this is around 2017.
And I think somewhere during that year you reach out to David your partner at OB and you ask him if he wants to go in with you on this new idea.
Yeah, that's right. That's right.
Eventually I did ring David up and say hey I think I got another one and he was you know I think he'll admit he was a little gun shy at first.
We had both felt pretty challenged by our prior experience and I think it was a real moment of reflection.
Are we willing to sign ourselves up for that again.
And obviously I think he got he ended up getting excited about the the kind of strategy formulation.
And I think ultimately you know the thing that I landed on which I communicated to him I think resonated with him was hey man we didn't finish the mission.
Like we owe it to I don't know the world consumers whatever to ourselves to get back out there and finish it.
But I am only doing this again if I am coming back 10 times better and 10 times stronger with all the learnings from everything I've taken before.
And if we're going back and we're going to do it again.
We are going to punch through the board.
When we come back in just a moment how Ben and David punch through the board.
Stay with us. I'm Guy Roz and you're listening to how I built this.
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I'll let you girl. Hey welcome back to how I built this.
I'm Guy Roz. So it's 2017 and Ben has gotten back together with David to launch yet another beverage.
This one a prebiotic soda with fiber that encourages the growth of good gut bacteria.
So what we felt that we took away from OB was that consumers didn't like the word soda but they wanted to drink soda and especially with like low calorie ingredients you're building a structure where all of the elements have to click together just right to create a really compelling illusion.
Where did you start to experiment with the powders and the ingredients and mixing it into a beverage.
I mean literally my kitchen.
I mean by this by this time this stuff is somewhat second nature to me right.
I know who to call. Yeah when I need to go find a bunch of samples of ingredients.
I'm assuming like you're looking at chicory root or like I know you looked at marshmallow root and Jerusalem artichoke and basically you have to you have to powder rise it mix it into a beverage and hope that it still tastes good like it's still going to be delicious.
Well that and it has to say in solution right and it has to it has to survive manufacturing so our only smart is cassava root chicory root Jerusalem artichoke that's our that's our our fiber blend.
And you're mixing it with maybe fruit juices and soda water right I mean initially probably something like that right.
You know I still you I have always used the soda stream.
I saw the stream OK yeah I got you.
It's hilarious how simple my lab has always been and it's still as simple today as it was back when I started it's it's a it's two scales that are very expensive but one is is goes out three decimal places one goes out to.
It's a Vitamix it's pipettes and it's a soda stream.
Yeah I still use that exact same setup we have a more complex lab in the Bay Area that we use now but when I'm formulating that's still just to start testing out yeah you can do so.
So you're playing around with this stuff and while you're thinking about this right.
You know because there are a lot of products out there that start by focusing on their health claims or the benefits of the product and they soon discover that actually a lot of consumers don't care they just like that tastes good.
So when you were coming up with this who are you thinking the consumer might be.
I mean again and forgive me people listening because I know there's a lot of generalizations here but you do have to think in categories at least initially were you thinking like yoga moms were you thinking women rather than men.
Like who did you think would this product appeal to.
Yeah that is that is funny because call me unsophisticated but I don't.
I certainly haven't historically thought in demographics.
That is one of the nice things about going after something as large as the market.
You just thought I'm going to make something that people want because they want to get healthier.
Well yeah and also all of our data shows that you are 100% correct.
I mean in terms of your the earlier comment you made good good luck trying to get a bunch of people to switch their behavior.
If something doesn't lead with delicious flavor and when we talk to our consumers and and try to figure out hey what's contributed to our our kind of growth and the.
High level of kind of advocacy that our customers have for the product it's it really a lot of it is the emotional and flavor relationship first.
In fact that's core to my approach to formulation is every flavor has to have a hook in it that registers in some part of the brain in a nostalgic way like oh cream soda or orange soda or yeah.
A great example you totally right great example is our tropical punch right so I grew up drinking red Hawaiian fruit punch so good I want one right now.
And there's a really specific flavor note in there yeah you instantly know what flavor I'm talking about when I reference it right so our tropical punch has a toned down version of that same note in it yeah so you're you're hopefully creating.
You know historical referencing but future focused ownable formulas and I should mention you were not using sugar you were using a stevia blend like a not right you wouldn't register a lot of sugar in the final product.
Yeah that's right so I tried a bunch of stuff I tried monk fruit I tried stevia I tried all you lose I landed on stevia at the end of the day because the technology is farther along for stevia.
But obviously understand that for some folks especially less kind of skillfully put together formulas can be can be challenging.
Okay tell me about the name how did you come up with a name Ali pop it's great name but where did it come from yeah thank you so the Olly is short for a Ligio saccharides which is a family of prebiotics that it's used in the in the product got it okay pop is soda.
Right okay great so you get the name and you started out so you were ready to launch and you can launch with I think three flavors ginger lemon strawberry vanilla and cinnamon cola yes how did you so again did you go back to the playbook from your previous.
You know company did you go to investors and start raising a bunch of money to get the funding to start canning this stuff for bottling it and then distributing it.
Yeah that so the so all the kind of branding work formulation work I think even maybe like the initial test run that was all self funded by you guys funded that with the proceeds from the sale of your business which wasn't much but it was enough to get this off the ground.
Okay exactly exactly and then obviously we knew hey we're gonna need to raise some additional capital and actually a lot of the folks that we went back and spoke to were the investors from OB that we felt like we had we particularly enjoyed working with right.
And you know look I think what some of these folks saw was that we had absorbed a lot of the lessons from from OB and that the new product was at a much higher it was just a better level I remember one of our bay area investors tried an early version of strawberry vanilla and was just like oh this is this is it this is going to become a cult cult classic and it absolutely has become
a cult classic verse. Help me understand before you even got into stores what was the value proposition what were you going to be able to present to consumers for why they should drink this because it was low sugar or no sugar I mean a lot of people don't want sugar they just want a nice soda.
Yeah. But were you gonna say oh and this also has a bunch of fiber and it's good for your gut like what were you prepared to say that was you know that wouldn't put you in trouble.
Yeah look I one of the things that I love about the territory is more of a understood inevitability now but at the time even just the concept and the communication of a healthy soda was at that time an intrinsic contradiction like we felt like we had insider data that showed people want this.
We also knew that it was like a that contradiction creates mental stickiness because you look at it going healthy soda.
Is yes no I don't know like and then okay cute packaging though I'll try it.
Oh my god it tastes great.
Oh I look at the then I look at the nutrition facts panel then I look at the ingredients so I had faith that if it tasted right and the and the pack was right that just the concept of the healthy soda.
Would create enough kind of mental noise for people that they'd want to try it and I was right.
So all right so you launched this product in 2019 and in about 40 grocery stores all in the Bay Area and I remember seeing it because I remember seeing a strawberry vanilla soda and I was like oh that looks interesting I'm going to try that.
But I'm also an ally or because not everyone's like that but how so how did they set how did they do how did you get in those stores but then what I mean there's like hundreds of beverage options in those stores.
One million percent we were really really lucky that the data was incredible basically from the word go.
How why what explains it I mean it was another beverage in the cooler.
Yeah but I think you know it starts with you the outlet right starts with the and that's also why we chose to launch in the natural channel because there are more folks with little more expendable cash and there's folks who are willing to try novel things outside of the norm in order to pursue their health.
It's also a product and a concept whose time has come there is a quite a deep pain point for a lot of American consumers that love soda that have migrated away from the category because of how unhealthy it is.
And by offering something that really scratches that itch but the deeper you dig into the science the more you actually come away feeling.
Wow they're not messing around this is this is actually contributing a benefit.
That is the kind of equation that develops organic traction.
Let me ask you a health related question here which is as you know as some talked about this I'm super into you know fiber and and you know having a good balance of vegetables nuts and seeds and things like that.
What's the argument like could you would you argue that yeah you know if you just drink ollie pop you're going to get enough fiber or you don't actually need to worry about eating almonds and and you know roughage and kale and chia seeds that give you fiber.
So I really appreciate you asking that question.
One of the most common things I see in articles that are discussing the category usually with a hatchet eat style is experts agree that ollie pop and comparable beverages are no replacement for a healthy balanced diet.
I totally agree. All of that said 90% of Americans are not getting adequate levels of fiber 90% and arguably the FDA's recommended daily allowance of fiber at 28 grams is already a bit of a pittance.
Compared to what is actually historically been consumed by humans and it's lower than the WHO recommendations around fiber consumption so ollie pop is never been designed to replace a healthy diet.
It's meant to help to compliment the diet of a population that is chronically deficient in this absolutely essential nutrient.
So essentially what you're saying is look hey you got to eat the broccoli and chia seeds if you can and instead of grabbing a diet coke you might as well have this because it's just going to add to your total fiber consumption a billion percent.
And the other thing that I find really funny about it is I don't hear the same level of outcry around protein supplementation right like I you know and nobody kind of bats an eyelash if somebody throws a scoop of protein in their smoothie.
Well what do you think ollie pops do it's the doing the same thing it's it's it's supplementing but it's critically it's doing it in a way that's incredibly enjoyable and you might just use it to replace something that's not good for you.
I mean I know that in the first year you did an eight hundred and fifty thousand dollars in revenue which is pretty great.
You did this all with a very and I guess we should mention you did raise you raise some seed money from those former investors a little over two million dollars so with that money you could you had some flexibility right you could build up inventory and you know do some marketing and maybe hire a couple people.
Yeah but one of the things that you guys also did in the first I think year so as you went into Erdogan.
They love Erdogan and so when you're in Erdogan there's a good chance that a celebrity is going to pick up on your beverage was that also I mean.
You know I think that was the first story went into in Southern California yeah you're right I think it was one of the first but do you know who else frequency Erdogan.
Is the Walmart buying team the Walmart buying team they go because they're looking for cool things they're looking for the future so it yes it's the celebrity and the influencer crowd but it's also senior buyers at mass grocery.
And so that was also strategic that you because you you wanted to be in Target and Walmart fairly quickly.
Well we wanted to be we wanted to be ready to transition when the time was right so Walmart's one of our biggest customers now but they approached us to go into the stores about 18 months before we felt ready to do it.
So it was what we knew from the beginning is we are looking to create a mainstream product that go toe to toe with soda.
We want to start in the natural channel to build up our early adopters to build up our revenue base and our rudimentary proof of concept and brand awareness.
And we want to build the brand and the flavor profile such that so that it's it's ready to jump the fence and go mainstream right because I think a lot of times.
Brands from a advertising perspective and a and a and a flavor profile perspective will over will will over leverage their product to be successful in the natural channel.
And then it really struggles to gain traction and mainstream channels when the pandemic hit in 2020 you'd been out for a while right for about a year less a year but you've been out.
But still like I imagine you didn't have a huge marketing and advertising budget at that point I don't think you did.
How did that I mean it turned out that year was very good for you.
Yeah but how did people discover the product when they weren't going and spending a lot of people were just popping in and out of grocery stores quickly that year.
Well and you're never you're doing no demoing right.
So right. That was a really fascinating experience because obviously at the beginning of the year when you know shut down the shutdowns occurred everybody was rightfully losing their minds.
The prevailing logic at that point in time would have been this is an impulse purchase that people pick up when they're grabbing their sandwich.
It turned out that for those customers that had discovered us and basically were falling in love with the brand.
They were already considering it an essential shop for the week so people weren't just going in and grabbing a can they were going in and grabbing enough cans for the whole week because they were already making it a regular part of their consumption habits.
But that was that was for me this real epiphany moment of like oh my god this is something is happening here that's at a whole different level than I could have expected it would be.
You guys are I think just hit profitability right.
We have been profitable every month this year and will be profitable through the year amazing.
So and of course had other rounds of raising money and I think this year 2024 you're on track to hit possibly half a billion dollars in sales.
Looks like just yeah just south.
So all right tell me what the game plan is here.
I mean Coca Cola 280 billion dollar market cap Pepsi 234 billion I have seen you quoted and maybe you maybe you know I don't know.
I don't know basically saying look we want to kind of take those companies on.
Yeah I mean look I tricky territory guy very tricky territory.
The way I would describe it is we have had triple digit growth every year since inception.
In fact in 2020 we almost had quadruple digit growth.
Yeah and there is a lot of room headroom left to hit anything that even remotely resembles a ceiling.
So exactly what that future looks like is still unclear but for right now we are just 100% focused on continuing to go after the enormous market opportunity that's still in front of us.
Because you know the way that I'm conceptualizing this is this is the this is the third wave of soda right you had traditional soda and then there's diet soda in the 1980s I think in three or four years diet soda became 25% of all soda sales.
Yeah and now we're looking at similar a similar trajectory in terms of the rate at which this category is achieving household penetration.
I think the other piece of this as well is that traditional sodas pipeline of young consumers has collapsed in the over the last 10 years there's been a 60% reduction in let's call it Gen Z Gen Alpha.
So traditional soda consumption that's exactly and we were a big tent we we still work really great with with Gen X and and and millennials and we open and we over index with these younger consumers so I think we've got a really great opportunity.
To be the spearhead of soda which is a great American institution doesn't need to die off it just needs to evolve.
Yeah. So now the question is you talk about you know the mission and things like distributing around the world and the obvious answer to that is Coca Cola or PepsiCo I mean they have the biggest distribution networks on the planet I mean that you.
They can take a brand doing a million dollars a year today and turn it into a hundred million dollar brand tomorrow.
At some point you got a bunch of investors you guys have raised money over the you know over the last couple years.
You know it's it's right it's it's like go public or sell.
So it you know and it's probably too early to talk about it now but it seems like there is a world where if the right partner comes along and says hey you know what you guys have crushed this we're not going to compete with you.
We just want to take it over.
I mean they did it with Topo Chico they've done it with Honest Tea.
I'm talking about Coca Cola.
You know other big brands have taken on smaller brands and really continued to make them and and distribute them and they're still good products.
Yeah I mean look again I'm going to artfully dodge this specifics.
The artful dodger. Yeah and it's so artful that I'm just going to say it out loud.
But look I would say like obviously I hear what you're getting at.
If I just exit Oli Pop and I'm like oh yeah I've got my small mountain of cash.
It'll be a it'll be a large mountain of cash if you exit.
Let's be it will be. I mean let's be honest.
There's nothing wrong with that.
I'm just it's going to be a lot of cash.
I'm sitting on my cash and then 10 years goes by Oli Pop has disappeared or I don't like what it's doing in the world anymore.
I will not have considered that a win.
You know but going public's no walk in the park either right.
There's a whole bunch of minefields associated with that choice.
What's nice is with the way that we're growing I have no plans to sell the company right now.
So I'm fortunate that I don't we don't feel a lot of pressure from our investors because they're all so up on their money already.
Yeah that we're doing fine.
I'm sure they want you to wait actually.
They have a range of opinions.
Yeah okay I got you. Ben when you think about where you've landed you know and the journey you took right.
Everything from you know meeting David Lester or or you know working that kombucha place or I don't know everything that happened along the way.
How much of where you are do you do tribute to luck and how much do you think has to do with the work you put in the hard work and your skill.
Yeah I mean it would be absolutely asinine to not acknowledge that it's a that it's a mix.
I was born with a with a brain that has allowed me to be do things that are hard for a lot of people.
I'm sure my genetics have played into my resiliency.
I grew up in a really bad situation but I also grew up in a nice area.
So one of the things that happened when I was a when as a teenager going through my metamorphosis.
I was able to go for walks and just psychoanalyze myself with my head in the clouds for like three hours at a stint.
If I grew up in like a dangerous neighborhood I wouldn't have been able to do that.
And there's where we are in the health and wellness industry and consumer receptivity and the kombucha coming up paving the way for OB and then paving the way for digestive health.
There's a million of those different instances where a hundred percent I was I was given a good hand.
There's a bunch of other spots as well where I was given a terrible hand and that's obviously life.
And so then there's how you respond to it and how you build a framework of meaning around it.
And also how you facilitate self awareness and self development through all those different experiences.
That's Ben Goodwin co-founder of OliPop.
By the way the company just announced that its soda will be sold at the LA Clippers new sports arena the Intuit Dome.
It's a major coup for the brand because normally Coke and Pepsi have exclusive deals that prevent any competition at sports stadiums.
Hey thanks so much for listening to the show this week please make sure to click the follow button on your podcast app so you never miss a new episode of the show.
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This episode was produced by Sam Paulson with music composed by Ramtine Ereblewe and Sam Paulson.
It was edited by Neva Grant with research help from Catherine Seifer.
Our engineers were Robert Rodriguez and Quacy Lee.
Our production staff also includes J.C.
Howard, Devin Schwartz, Keri Thompson, Alex Chung, John Isabella, Chris Messini, Carla Estevez and Elaine Coates.
I'm Guy Roz and you've been listening to How I Built This.
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