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Today’s guest is in constant pursuit of helping other entrepreneurs reach their goals and for consumers to live healthier, happier lives. He is Gautam Gupta, Co-Founder of snack subscription service, NatureBox.

Gautam set out to disrupt how people consumed snack food, by creating healthy options and delivering them in a simple way.

Given trends towards healthier eating, he felt the business model was going to be an instant success but quickly discovered he first had to build a thorough understanding of how consumers purchase snacks, as well as the retailer buying journey in order to get placement on store shelves.  

Since successfully growing NatureBox, Gautuam continues to advise other entrepreneurs on how to create a unique differentiated product and a compelling customer experience – both of which, he believes, are the biggest drivers to success today, over and above location and marketing.

He shares his personal tactics on how to approach entrepreneurial problems and his love of teaching really shows.

Please welcome, Gautam Gupta

[00:00:31]

Daniel: My name is Daniel Rodic, and I’m your host at “The Connections Leadership Series Podcast”. This season, we’re excited to bring you interviews with the leaders and legends behind some of the fastest growing brands in the world today. My goal on this podcast is to help you understand their stories and leave you with the tactics and lessons that will help you better understand how they got to where they are today in hopes that you can use that as inspiration for your own lives and careers.

If you’re joining us for the first time, I am the CEO of Exact Media. Our platform, Connections, helps advertisers acquire customers by placing samples, coupons, and gift cards inside the parcels of other online retailers. For example, if you’re a shaving brand looking to turn college students into your customers, you could place a sample or coupon inside the outgoing parcels of men buying textbooks at an online retailer like check.com. It’s powerful because Check ships textbooks to students across the United States, which means your offer is guaranteed to land in the hands of the consumer in a specific target demo based on their actual shopping behavior.

The consumer views this as a bonus gift, which also means that trial and conversion rates are typically a lot higher, making this a cost-effective and powerful customer acquisition tool. Outside of check.com, we have over 100 different partners to choose from, from advertising in a walmart.com package to sampling your newly-launched food product through a HelloFresh meal kit. If you happen to be an e-commerce retailer, you can use the revenue generated from distributing these offers to subsidize your own customer acquisition costs, while giving a thoughtful gift to your own shoppers. To launch a campaign, visit exactconnections.com and click try connections. Once approved, you can get a campaign started in less than five minutes. Now, on to our interview.

Today’s guest is in constant pursuit of helping other entrepreneurs reach their goals and for consumers to live healthier, happier lives. He is Gautam Gupta, co-founder of snack subscription service, NatureBox. Gautam set out to disrupt how people consume snack food by creating healthy options and delivering them in a simple way. Since successfully growing NatureBox, Gautam continues to advise and invest in other entrepreneurs on how to create unique differentiated products and a compelling customer experience. He shares his personal tactics on how to approach entrepreneurial problems, where his love of teaching really shows. And that’s why I’m so excited to share with you my conversation with my friend, Gautam.

A good place that we could at least start our conversation is some of the work you’re doing, you know, outside of where you spend time on NatureBox and other things is working with other entrepreneurs and founders. A mutual friend of ours, William Yin, who’s running Bon Temps, it was funny enough that I had met his co-founder, and she was asking me about advice as to, you know, “We’re trying to raise a round. What should we do?” And I saw on her deck that’s like, “Oh, like, you know, Gautam’s been, you know, helping us out.” It was like, “Oh, you definitely need to talk to Gautam. He’s like so much a better person to ask than me all the questions you’re asking.” And so how did you, you know, originally connect with William? What compelled you to help entrepreneurs like him and his co-founder, Ali, with, you know, your busy schedule, otherwise?

[00:03:48]

Gautam: Yeah. Well, you know, I think one of the things that I’ve kind of learned about myself is I just really enjoy interacting with entrepreneurs and trying to help them, you know, sort of I’ll say teach. But I don’t want that to sound like I know what I’m doing or that sort of thing. Like, I mean, you know, but just like sort of teach things that maybe mistakes that I’ve made, the things that I wish I would have done differently. And I’ve just, like, over the last couple years really learned that that’s something that I really enjoy. You know, I met William because actually, a couple years ago, he was running a startup that was a subscription e-commerce company and someone had put us in touch. And, you know, he had had all these questions about subscription and, you know, and it just like sort of became one of these phone, you know, kind of pen pal type of relationships.

So and, you know, every couple of weeks we’d jump on a phone call and talk about some questions that he had or some challenge that he was facing in the business and, you know, and I would talk about challenges that we were facing as well, and we just kind of got to know each other. And when he was thinking about starting a tea company, he asked if I might wanna kind of help out. And it was kind of obvious answer for me. And, you know, and that’s one of the things that I’ve been doing for a long time, is actually back in 2017, I made this goal of wanting to talk to and help 100 entrepreneurs.

And, you know, and most of that stuff was nights and weekends, you know, to obviously make time for my day job. But it basically consisted of doing phone calls and, you know, meeting with entrepreneurs and helping them think about fundraising, helping them think about, go to market strategy, hiring, firing, all the kinds of things that I think most entrepreneurs have to face at some point in their journey. And it was a really energizing activity for me. So I’ve continued to do it. You know, I’d say I probably don’t talk to 100 entrepreneurs a year right now, you know. I did hit that goal for 2017 but, you know, it was sort of like two or three a weekend, which definitely became kind of hard to keep up with. But yeah, no, I do it pretty regularly though.

[00:06:08]

Daniel: And what I find very interesting is in your kind of specific space with NatureBox, you’re in a unique position in that you have experience for, you know, what it is like to build a direct to consumer business. But then also, I mean, there’s like if you think about everyone who’s at Expo West, like we were just chatting about, there’s a number of, you know, brands that are maybe family business or a mom-and-pop type of business that is just selling into retail and, you know, is not as a growth stage business. Since you are this growth stage type of company with that kind of backing, going from a direct to consumer model, not trying to launch into retail, what led to that decision to move towards selling into stores? And it’s almost like a whole new muscle you have to flex because it’s no longer I can just have performance marketing and brand marketing and just, you know, sit in our office and do it. So you have to build a sales team and, you know, hire people that otherwise I wouldn’t need if I had just stuck to selling stuff online.

[00:06:58]

Gautam: Yeah, and it’s interesting, you know, I think even when we started the company, we had this vision of at some point, you’d wanna sell the product in physical retail. And for me, the reason for that was pretty clear. It was that, you know, even though we’re big believers in e-commerce and online, we still realize that the majority of food being purchased was being purchased at a physical store. I think as we got further into the business, what we have learned is that the majority of brands and products that consumers become aware of, they actually become aware at the shelf. Which makes sense.

I mean, if you think about your own shopping habits, like how often have you gone to the store and said, “Oh, wow, you know, there’s this new flavor of kombucha or something that I didn’t know existed,” and the only way you knew that was you’re literally staring at the, you know, different kombuchas and you see a brand that you’ve not seen or product that you’ve not seen.

And so we always felt like our offline was going to be part of the story. But it actually just kind of took us longer to get there. And we all thought about it as, you know, could it be the way that you build awareness with the consumer, get them to try the product in a retail store, and then ideally, if they like the product, they can come and buy it online? And that was always kind of the strategy and vision for us. It just kind of took us longer to get there quite frankly.

[00:08:28]

Daniel: And, I mean, given you had so many different SKUs with NatureBox, I’m sure there’s different ways you can answer this. But I find the challenge when talking to a lot of other brands that may just play in the chips and crackers space, or the coffee space, or the granola bar space broadly speaking, it’s like differentiation with the retailer. And so for you, like what…you know, I guess maybe reframe this differently. If you were giving advice to a, you know, a generic company without you know, obviously being able to talk to the specifics of their brand, you know, what were your learnings when trying to sell into the Targets and Walmarts and, you know, retail players of the world that you felt helped NatureBox stand out to that buyer that, you know, they were willing to place a bet and put an order in for your product versus the, you know, thousands of others snack brands that they could list and give shelf space for, which is finite?

[00:09:16]

Gautam: Yeah, I mean, it’s fascinating. I learned a lot going through that process, and I would say that probably the biggest thing is that, you know, you have to think about a compelling reason for the buyer. And it may not be what you think it is. And so, in our case, you know, we honestly thought, “Okay, well, we’ve got this, you know, huge customer base online, we’ve got all this awareness. You know, why wouldn’t they want a product like ours where we have 40% awareness across the United States?” How many snack brands, how many startup snack brands can say that they have 40% awareness. And we sort of thought like, “Oh, no, this is going to be easy. Like, we’ll go have a meeting with the buyer, the buyer will be begging us to come into the store.” I think what we realized is there’s kind of a couple of things that we didn’t really value or we didn’t think of.

One was how we fit into the current assortment. And so where do we have products that are differentiated from what there is existing in the assortment and that are, you know, additive? Right? So like, it can’t be that, you know, we’re taking someone away from an organic, you know, dried mango and selling them a natural dried mango, which is cheaper and sort of like a lower price point. That’s not good because the buyer isn’t going to like that. I mean, they’re sort of, like, there’s a reason the organic one is in the assortment. So one learning was just like, you know, how do you create a pitch around being super differentiated and really understanding the other products that the buyer has placed in the assortment and sort of being able to communicate why yours are different.

And then the second thing is, and this is where we had a lot of traction, is how you send traffic to the store. And so this is actually where we did get a lot of traction is that one of the things that we would do is actually use our online customer base, incentivize them, like give them a coupon to go to the store and buy the product. And so that was pretty exciting because not many brands can do that. So the fact that we could send a coupon for customers to go and redeem the product at Target and then have thousands of customers go and redeem this coupon, like, that was a big deal. And so, you know, I think it definitely evolved. We learned over time but certainly like the first couple of meetings that we had with buyers were not super productive frankly.

[00:11:51]

Daniel: What’s interesting is that that reminds me actually, I don’t know if you’ve ever heard them, like Ryan Holiday or some, you know, successful authors. They’ve used their own, you know, email lists and CRMs as leverage to get better publishing deals. And, you know, a somewhat parallel example where many times they get those authorships because, like, I have a pre-vetted group that will buy everything I write. And so that’s why you should give me this deal. And in your case, you have kind of unlocked an advantage with your direct to consumer business in that like I have an audience I can point to you or I can point to someone else. So, you know, that’s like extra value that others don’t bring.

[00:12:26]

Gautam: Absolutely. And I think that once we figured out that, you know, that had to be part of the conversation, I think things then started to, you know, kind of move for us. But it certainly took us a little bit of time to kind of figure that out.

[00:12:42]

Daniel: With the direct to consumer business itself, there is kind of a whole other thing to still be sorted out, is how do you continue to grow that part of your online business and, you know, I’m not sure how close you are to the tactic side of it, you know, most recently. But a lot of the other folks I talked to in the industry have been really wary about having all their eggs in one basket with Facebook, with Instagram, with, you know, your, like, kind of big three players.

And over the past few months especially, I’ve seen this movement away from like, “Hey, let’s test new things. Let’s test new channels,” but I’m curious for you, with NatureBox, how you’ve seen that evolved, you know, most recently in how you’re managing your acquisition side of the D2C business and what are the things that the team is experimenting with, what seems promising for those who are facing similar challenges to this concern of, you know, acquisition concentration?

[00:13:33]

Gautam: Yeah, you know, it’s interesting. I would say that we have a bit of a different perspective on it, which is that if you can successfully scale in one channel, that ability to focus on one channel can be pretty powerful, and that could allow you to find ways to optimize that channel sort of faster or better than a lot of brands who kind of spread their efforts.

And so I think we have a bit of a different perspective, which is that you don’t necessarily need to be marketing in 10 different channels. I think the sort of perspective that we have is that, you know, especially some of these channels like Facebook change really frequently. And so to the extent that you can focus, and optimize, and continuously evolve your Facebook strategy, you can actually make a channel like that work and be productive for a long period of time.

I would say though, that, you know, one of the biggest learnings is just how to try to compel and incentivize consumers to buy on an organic basis or drive repeat purchase. So basically the things that don’t require paid advertising. I would say that, you know, probably the biggest learning for me has been, you know, that the more time and effort you spend on that, the better it is for the business because, you know, at the end of the day, like none of us I think wanna be in a company where, you know, 20%, 30%, 40% of every revenue dollar is just going to Facebook. Or any marketer for that matter.

And so I think that the real call-to-action in my mind is like how do you get the business to a place where you can grow organically without paid advertising? And that is either through word-of-mouth or through repeat purchase and making sure that like you just have a product that is so fundamentally good that, you know, you capture a lot more repeat and retention.

[00:15:33]

Daniel: The one thing I actually want to dig in with you as well is, you know, as I’m reading about the transition you went, even before retail, was just from, you know, subscription to non-subscription and, you know, a la carte purchase or one-off purchases. What were some of the, you know, tactical learnings from that? Like what ended up being, if you could distill it to, you know, one or two things, whether it’s from the way you design a product or communication or email marketing, like, what was the thing, the aha moments? Like, this is how we’re gonna bring people back that if, you know, someone else is facing a similar challenge, they could think about how would they, you know, incorporate that into their business?

[00:16:06]

Gautam: Yeah, I mean, I think the advice that I would have, even separate from NatureBox and just like kind of the journey that we’ve been on, the advice I would have is just really think from a first principle standpoint of what drives the consumer to purchase the product. And not even just your product but what drives people to purchase in this category. And so, you know, I think that when you start to think at a pretty high level like that, I think you can come to conclusions or hypotheses that when tested can lead you down some pretty interesting paths in your company or in your business.

You know, for us, like, we definitely went through that process, and it led us down a lot of interesting paths. But, you know, primarily, like, one of the things that we figured out was there’s many types of snacks purchases and use cases. The use case around the office is a use case that, you know, correlates like really well with high AOV. So high order value and high lifetime value. And so if you can get people who are thinking about purchasing snacks for their office, that can be a very profitable line of business.

And so we’ve kind of doubled down on our B2B side of business and really, you know, changed the way some of that works and, you know, kind of made the offering even more compelling for office customers. But it came from kind of first principle thinking around saying, “Okay, what are the needs of customers in this category,” and then finding this use case around office snacking and then looking even deeper at that and saying, “Well, what are the problems with purchasing snacks in the office today and how can we solve some of that?”

[00:17:57]

Daniel: I’m curious. What were the things that you saw that that made you feel like, “Hey, let’s double down on this?” What were the data points or things that…and what were the tweaks you made to the product to actually take advantage of that opportunity?

[00:18:09]

Gautam: Yeah, sure. So I’ll give you a little bit of the context. So when we kind of started this thinking, our office product was basically where you could buy bulk snacks on an a-la-carte basis. And what we realized is that, and one of the learnings in going through this process, is you know, at a company that’s 50 to call it 250 employees, typically, the office manager is doing a lot of the snack ordering or all of the snack ordering. And the office manager is pretty busy. Like, I mean, you know, this is typically companies that’s growing, adding employees, the office manager is asked to do a lot of work and ordering snacks is, like, one of the, you know, 20 things that they have to do.

And so what we realized is our product, our offering was too time-intensive for most office managers because it’s sort of like we were asking them, “Hey, what snacks do you want? Okay. And, every month, you know, could you please come back and re-order those, and let us know if you want anything different?” you know, all this stuff. And like, it was just a really complicated use case. And what we also weren’t seeing was that that office manager needed to manage to a budget. And so, they were also looking at, “Okay, well, how much budget do I have? The budget usually doesn’t change every month, so it’s sort of like how much budget do I have? How much can I spend on snacks, and, you know, like, where should I be buying these snacks?”

And so the change that we made basically was to go from a true sort of like a-la-carte you buy whatever you want but you have to place an order, you know, you have to, you know, kind of proactively click an order to a model where you could set it and forget it, and that model is basically unlimited snacks for $20 per employee per month. And so if you pay $20 per employee per month, you can get any number of snacks that you want, we will send them to you when you run out, so you don’t have to worry about reordering or things like that.

And then in addition to that, you never have to worry about the budget because, you know, it’s unlimited. So if you ever run through a snack faster or you get something that people don’t like and you want to replace it, you know, all that stuff is covered in this kind of like, you know, one price to fit all policy. And so that was a big unlock for us and that was something that I think made the offering a lot more consumable for the office customer and also, you know, made us very differentiated because there’s nowhere that you can get that same type of offering.

[00:20:57]

Daniel: So you’ve kind of hit on, whether it’s intentional or unintentional, this broader concept I’ve been observing of the streaming of X where, in fashion, for example, Rent the Runway, she’s trying to build a business where you stream your closet and their stats are pretty compelling. Their customers are spending…I think the number they reported is something like 120 and 130 days, basically like one-third of your year, average the runway customers is streaming their closet using their fashion opposed to something else that they buy, which is you know, pretty…it’s more often than people buy coffee, it’s more often than people do a number of different things. So you’ve kind of done it now in office snacks is, you know, taking a step back as more of an entrepreneur looking at opportunities, have you seen other places, you know, whether it’s within your office customers or with general consumers where the streaming concept you think could be applied in a different way?

[00:21:49]

Gautam: You know, it’s fascinating. I’ve thought about some of these categories, probably not as deeply as, you know, entrepreneurs out there kind of thinking about ideas. But I think of it actually maybe a little bit differently. So I think snacking for us works really well because we are the manufacturer. We’re the brand, so we’re vertically integrated. And so it works well for us because if we were selling you brands of other snacks, I don’t know if the economics would be high enough, the gross margin would be high enough that we could actually afford to give you unlimited snacks. So the reason that it works is, you know, we’re vertically integrated. I do think that there are many categories that kind of lend itself well to vertical integration where you could charge on a pricing model that makes more sense to the consumer. And so I’ll give you sort of like one example.

Like, you know, it’s kind of weird that, you know, today when you buy, like dish soap. And this is kind of a weird example but like, when you buy a dish soap, you have to think about the number of loads or like the number of, you know, cycles. Like, how many people even know how many cycles you run your dishwasher, you know, every month? Like, I have no idea. And so, you know, when you buy, like, that, you know, thing, you’re sort of, like, “Yeah, I think this will last me, like, six months or something. Like I don’t know, something like that.” And so I do think that there’s probably opportunities for a lot of these consumer goods to be created, packaged, priced in a way that matches the usage. And maybe that then, you know, lends itself well to one of these kind of more service, like a streaming type of, you know, service.

[00:23:45]

Daniel: Taking kind of a different angle on this idea of business models and things like that, you’ve obviously done a lot of work yourself with NatureBox to grow their business, to raise money, to build it and pivot it many times. And you talked to many entrepreneurs who are doing different things, doing the same things rather that you’ve lived through. Probably a big group of people that will listen to this are a lot of the, you know, up and coming brands that are having this question of like, “How do I raise money for my product or my business?” like Bon Temps is a great example of that. What are some of the most common mistakes you’ve seen founders make in, you know, either their pitch deck or as they approach investors that is kind of a common occurrence that you feel like if more people think through this, or solve for this, or anticipate this, they’ll see more success in that fundraising process for their company?

[00:24:31]

Gautam: Yeah, you know, my biggest advice to entrepreneurs on fundraising is usually it’s pretty sort of clear what is the most exciting thing about your business, you know, whether it’s growth, the team that you’ve assembled, the market, the economic model, whatever, you really want to I think lean into what is exciting about your business and make sure that that’s well articulated. But on the same token, it’s usually pretty clear what is less exciting, right? And so, like, what’s the reason that someone isn’t going to invest in this company. And I think often entrepreneurs kind of, they don’t hit that topic head-on, they sort of wait until an investor might ask the question.

So like, let’s say that the margins are really low, for example. And they sort of know that the margins are low and that’s a less attractive part of the business. Instead of talking about, “Hey, here’s why the margin is low today and why we think it can scale, or why we don’t think it matters,” you know, they sort of wait for the question of the product. And so, you know, my biggest advice is that you hit that straight on. And in fact, you try to hit that like early into the discussion of your company because I think often people, you know, investors within the first like 5 or 10 minutes of a presentation are starting to form an opinion. And, you know, sometimes they have formed an opinion.

And so if you’re not hitting that that sort of more sensitive issue head-on and waiting until the end of the presentation or worse, like waiting for like some follow up email or question, then I think you’re actually already selling to an audience that you’ve lost. So I typically advise people, like, “Hey, it’s usually pretty clear what’s exciting and what’s not exciting. Let’s hit those within the first, you know, few slides, within the first handful of slides.”

[00:26:33]

Daniel: And for you, I imagine this has evolved through the different rounds of fundraising you’ve done on NatureBox. But as much as you feel comfortable talking through the last round you’ve done with Wheelhouse, you know, when you’re preparing your own investor materials and pitch deck materials, like how did you kind of do that for NatureBox? What was the exciting thing about the business today, and what were the things that, you know, you had to kind of address head on that helped you navigate that transaction?

[00:26:59]

Gautam: Yeah, definitely. I mean, probably the biggest thing that we had to address head-on was just that the ownership of the business needed to change. And, you know, the prior investors, basically the two folks that had led investments into the company previously had both left their venture capital firms. And we just kind of were orphaned with a couple of the investors where they weren’t going to be involved going forward. And so the biggest challenge was, like, we had to talk about sort of the ownership needing to change and that being a big part of why we were raising capital.

And I think, you know, what helped was we were able to, you know, give people references to talk to as well and, you know, say, like, “Hey, you can actually, you know, kind of, like, validate this story with our investors. Like, it’s not we’re not doing anything, we’re not hiding the ball or, you know, trying to trick anyone here. Like, there’s a desire to recapitalize the company and change the ownership structure of the company. And here’s why.”

And so I think that one was a little bit more complicated because it required someone to maybe take an extra step to kind of validate the story. But we were definitely were, like, pretty open about what needed to change and how we kind of solved the transaction, getting done and like, what we thought the transaction looked like.

[00:28:26]

Daniel: And then, for you personally, I imagine it’s been a…I mean, I went through, I guess, the reverse. Not really reverse but a different version of that where I, about a year ago, had taken over for my co-founder who moved into a board role, and then I took over all day-to-day responsibilities overseeing the business, is that you’ve kind of made the reverse switch of with John taking over running the business. You know, what’s that experience been like for you? Or, you know, what were some surprising, you know, things that you felt like you didn’t expect to happen that happened as part of that transition?

[00:28:54]

Gautam: Yeah. Well, if I’m being completely honest, it’s been just really relaxing and relieving because, you know, after six and a half years of running the company and just that level of stress for such a long period of time, it’s just been great to not have the stress and to actually take like a real vacation and, you know, kind of do all of those things that I feel like I, you know, missed out. And, you know, even in addition to that, like, it’s also just been great to reconnect with people, friends, family, who, you know, I’ve just been kind of MIA on.

And so, I will say, like it’s been actually, personal standpoint, super rewarding. It’s been really relaxing and, like, just great to be able to get into a mind space of, you know, less of the day-to-day pressure and less of the, you know, kind of like day-to-day kind of grinding on the business and more, like, just thinking more, you know, higher level and kind of, like, you know, with less of the sort of pressure. So it’s been great. It’s been really fun and, like, I think it’s been a great opportunity to just kind of recharge a little bit.

[00:30:08]

Daniel: Then for you now that you have some, you know, more, whether it’s mental space or time as well, what has kind of attracted your attention outside of your responsibilities to the company, whether it’s personal or other, you know, business opportunities, what’s…?

[00:30:22]

Gautam: Yeah, probably the biggest one is I was a pretty active angel investor, and I’m really ramping that up. So I’m actually doing a lot more private investing and, you know, like, trying to get sort of back to thinking about new ideas and working with founders at the inception of the company. So that’s probably the biggest thing is, like, I feel like I’m spending a lot more time around ideas and spending time investing capital and things like that. And so, you know, that’s probably been the biggest.

On the personal side, I co-teach a class at Santa Clara University right now, that’s been fun on kind of new models in retail. You know, I think one of the things like I’d love to, 20 or 30 years from now, would love to teach on, you know, kind of full-time. And so, you know, that sort of getting my training wheels on that right now. And that’s fun, and interesting, and, like, personally rewarding. But I’d say yeah, that’s pretty much it, you know, those kind of two areas.

[00:31:30]

Daniel: I didn’t realize and it didn’t come up that you were teaching a course. And this is actually a very interesting question of, you know, what, what does that curriculum look like? Like, if I were to be taking that class, you know, what are the things that you think are important for the next generation of, as you call them retail professionals, or entrepreneurs, or, you know, people in between, like, what should we be paying attention to that you’re highlighting?

[00:31:50]

Gautam: Well, so that course basically has kind of three components. So one is kind of a more traditional lecture which my co-teacher, who’s a professor at Santa Clara, really leads. And that’s kind of like a lot of his research on retail and e-commerce. And I think that’s fascinating because, you know, he sort of has both a lot of academic, you know, experience and research experience, but also sits on the board of several e-commerce companies. And so, like, he actually has a lot of, you know, industry experience as well.

The second component of the class is actually hearing from CEOs and founders. And so over the course of the quarter, we’ve had I think about a dozen, you know, 10 to 12 founders, CEOs come in and actually talk about their journey in starting their company and what they think the future of retail looks like. And so that’s been exciting and really fascinating to hear about those ideas and hear from those people.

And then the third component is they actually create a business plan and present to a panel of investors. So they actually come up with an idea, they do market validation survey. So they actually, like go and talk to, you know, consumers, get their interest, you know, whether they’re interested in buying or not. They actually build a prototype of the app, or the website, or, you know, whatever it might be. And then, you know, part of what they’re doing is they’re creating presentations to raise capital.

So I think there’s a lot of learning involved in this third component. And it’s really, like, sort of the beginning, the sort of, like, entrepreneurship 101. So like how do you take something from an idea to, you know, a real company? And, you know, obviously, it’s hard to do that in a quarter. But I think, hopefully, there’ll still be a lot of good learning and, like, good value out there.

[00:33:47]

Daniel: From the speakers that have come in, I’m curious if you’ve noticed any particular common themes across their talks as to either, you know, what are the most common learnings or what are kind of their most common views about where they see retail going?

[00:34:01]

Gautam: Yeah, you know what’s interesting, I’d say it’s really fascinating. We’ve had a very wide set of speakers and entrepreneurs come in and talk. Probably the most consistent theme is on product or customer experience being the driver of retail success. And so, you know, what you don’t hear about, like, I think if we were doing this class 20 years ago, I suspect that you’d hear people talk about, like, location. Like, location is the big driver or, you know, marketing is the big driver of success or something like that.

Like, today, you know, the message was really from many folks, you have to have a unique differentiated product and/or a really compelling customer experience to get someone to buy online or offline. And I think that’s pretty interesting, you know. Like, it’s becoming…I think retail is certainly becoming much more of the value that you provide to the customer versus, like, “Hey, you’re in a really great location so you’re just gonna get a bunch of foot traffic.”

[00:35:09]

Daniel: It ties into, whether it’s a trend or it’s probably more of a fundamental truth of business is that, you know, the better your product is, the easier it is going to be to drive acquisition for that product. And so there are many different ways and people who have attacked this concept, but it’s, you know, if you kind of nail your product, the marketing will take care of itself. But that’s inherently like fundamental to the marketing and distribution of your product is that is it inherently viral? Is it inherently something people will talk about because it’s just such a good experience opposed to kind of just branding it and doing it from that perspective?

[00:35:45]

Gautam: Yeah. I mean, I think that’s absolutely right. You know, and I think if you think about one of the implications of Amazon or just online shopping, just, you know, think about the fact that today when a consumer goes online, the number of things that they can filter for and the amount of data that they can get about a specific product is insane. And so, you know, the thing that I like to tell people is I actually think brands and products are going to be much more niche in the future than they have been in the past because you’re not playing to the masses anymore. You’re needing to play to an individual customer’s needs, and technology and the internet has made it very transparent what the product features are. So I do think that, you know, you’re going to have a lot of competition on some of these features that maybe we didn’t before.

[00:36:42]

Daniel: And this kind of ties into your investment side of things. But within the world of retail, whether you’re attacking it from a retail side, or a consumer product side, or whatever it may be, what are kind of industries or verticals that have attracted you the most from an investment perspective that you feel like there’s an opportunity to close that gap and build a niche product that otherwise doesn’t exist? Like, where are you putting your money? [inaudible 00:37:10] simple question.

[00:37:11]

Gautam: Yeah, you know, I think that I’m really excited about just the intersection of kind of health and wellness with direct to consumer. And so whether that looks like RX, prescription drugs, or it looks like supplements, or, you know, ayurvedic products, I’m really fascinated by a lot of those sort of developments happening in that space or at that intersection. You know, I think like sleep is an area that I’m personally really interested in, and I think we’re gonna see a huge investment in sleep. I’m very interested in anxiety, like, I think you’re going to see a huge investment in, you know, just like, you know, if you think about a lot of the challenges or issues that millennials or even younger consumers have today, you know. It’s like ADHD, anxiety, sleep, weight loss, stress management. Like, I think all of those things are sort of opportunities to, you know, help consumers manage some of that. And hopefully in ways that, you know, are not like, you know, don’t create addiction or things like that.

And so, that’s kind of one area that I’m spending time and thinking about. And then, you know, I think generally I’m a big believer that you have to be somewhat opportunistic, or, like, just open to looking at the world, you know, with a fresh set of eyes. So what I mean by that is, like, you know, when entrepreneurs reach out or, you know, I talked to someone about their idea, you know, I try to go into it with very little, you know, sort of bias because I think, you know, often like these things that at first blush may sound crazy or may sound like it’s not going to work end up being, you know, hugely successful. So, anyway.

[00:38:59]

Daniel: You actually hit an interesting…this is more from the psychology side, an interview I did last week with the CEO of SimpliSafe. We had this discussion around biases. It was more from like a leadership and management perspective of, you know, in his case the sum cost bias of making sure you don’t attribute, don’t make decisions based on the fact that you’ve kind of committed funds to something if it’s not working out, and so you have different biases. This is a very tactical question but have you found any particular techniques or things that you do to view an idea with a fresh set of eyes? Because I think this helps in so many different way whether you’re an investor, you’re an executive trying to determine, like, “Hey, is this idea that my team is pitching me a good idea or a bad idea?” You know, what do you do to prepare yourself to make sure that you’re viewing things that way?

[00:39:49]

Gautam: Sure. So I think a lot of people think about why can’t something work. So the first sort of thing that they think about is, like, “Okay, let me tell you all the reasons that this can’t work.” I try to stop…and I think that’s human nature. So it’s, like, really hard I think to program your brain to kind of not do that. But I try to stop myself when I notice that I’m doing that and change the question to why could this work or, like, what happens if this works? And so I try to sort of, like, imagine all the ways in which, you know, this idea could work and, like, could gain significant amount of traction.

And then, you know, if I’m struggling at that, then I feel like there’s something at a first principle bubble that, like, I can kind of rationalize or, like, I can then start to articulate. I think if I sort of can see that, “Oh, no, actually, there’s actually a way that, you know, this could be, you know, really ubiquitous sort of consumer brand,” that usually leads me down a path of asking I think just better questions that are more suited to the demographic or the consumer need that are actually being targeted. But I think you have to force yourself out of this kind of very natural human behavior of let me tell you the 10 reasons that this can’t work.

[00:41:19]

Daniel: Are there any other good questions you’ve found that have helped you evaluate ideas, getting those to our kind of good reframings that I hadn’t really thought about?

[00:41:27]

Gautam: Yeah, I mean, you know, I like to try to understand also, like, why someone came up with this idea and why are they passionate about it. I think typically in that story, there’s a lot of value. And so I don’t know that it’s like a great question but I just find that if you get someone talking about sort of, like, what the passion or the interest was that led to this idea, it usually uncovers something that’s really interesting, either about the entrepreneur or about the idea. So it might be something, like, “Oh, you know, I needed to get this product and, like, I couldn’t. You know, I went to my doctor, you know, the doctor wouldn’t prescribe,” like, you know, whatever. It’s sort of I think can take you down an interesting path.

[00:42:15]

Daniel: You know, I think on the health and wellness side, the Roman founding story has been very interesting for me. We did an event with them and just hearing the story of how it’s really been a problem that Zach, their CEO, had faced since he was a teen. And to see how that’s manifested itself into a company, you know, however many years later and now looking at their success and growth, it’s a good point in support of your approach.

[00:42:39]

Gautam: Yeah. And I think, I mean, it’s a great example of, like, you know, you can read all the statistics about the market and all this and what you won’t hear from that is that, you know, actually men, you know, are embarrassed to go, you know, sort of talk to their doctor about this or lazy to set up an appointment and, you know, do all that stuff. And I think you sort of get a different view of the consumer needs that helps you understand why the business can be a success.

[00:43:12]

Daniel: This is kind of taking a more personal route but for you, now that you have this ability to kind of talk to really anyone you want and have the time to actually take action on those ideas, what’s kind of next on your bucket list that you’re hoping to check off? Whether that be, you know, more professional stuff around investing, or the NatureBox business, or for you personally, you know, now that you have time to explore that you’re excited to go after?

[00:43:35]

Gautam: Yeah, well, you know, I mentioned the investing thing. I sort of view that as, you know, something that, I don’t know, maybe not a bucket list item. But like something that, you know, I’m actively doing now and I want to do more of. I’d say the bucket list item is 20, 30 years from now, like, I really love to teach. I don’t really have a path to figuring out like how to do that. And so, you know, but that’s sort of like…I’d say that is the bucket list item. Like that’s something that, like, you know, I’m really, like, not doing today or, like, not spending a lot of time, like, thinking about that. But it is something that I’d like to do, you know, sometime in the future. And, you know, I probably need to figure out, kind of, like, how you’re gonna do, like, you know, I don’t even know how that work.

[00:44:25]

Daniel: You know, it’s interesting. There may be…I don’t know if you have any reason to come out to Toronto but there’s someone you should meet. It’s the same program that I went through and William went through. It’s called NEXT Canada. And so the founder of that, he actually has built, like even though he doesn’t call it this, it’s essentially like a little university for entrepreneurs, is what they’ve created. And his whole story is that he had built a couple of businesses and then kind of had the same desire you did to teach. And so this was maybe mid-2000s or something like that, I’m trying to think of the dates.

He had basically just walked down the street to the University of Toronto saying, like, “Hey, I’d love to teach a course and, you know, here’s the deal, I’ll put in some money as like a grant and in exchange you give me full control for how I run my class,” and essentially turned it into this…he brought like a Harvard-style case learning to the University of Toronto, which didn’t really exist at the time, and selected people to come to his class every year. So 36 people every year in the class. And then at the end of the class, he would host like his, you know, top performing students for dinner and then someone would win a few thousand dollar scholarship or a grant for performing well in his class, and so he did that.

[00:45:30]

Gautam: That’s awesome. I like that. That’s great. Yeah, I would love to…actually, you know, it’s funny I was in Toronto maybe a year ago, and I was there for some conference. So it was kind of, like, a quick trip but it was so cool to see the entrepreneurial ecosystem being created over there. And, yeah. No, like, that’s a place I’d love to spend more time. I definitely think that there’s some really interesting stuff going on there. And generally like it’s sort of I think folks our age that are thinking about, you know, how do we go start a company. And that’s pretty exciting. You know, it feels there’s a change happening in the culture.

[00:46:13]

Daniel: It’s interesting you bring that up because I find in this specific, and maybe I’m biased because it’s my vertical, I spend all the time looking at is, is like CPG, consumer goods, e-commerce. For whatever reason, I’ve noticed, like a higher than average that I would have expected, types of companies that are being launched and created here. And even when I was at Expo West or these kind of other natural food product conferences, it’s more often I’ll run into a bunch of Toronto-based or broadly Canadian-based food companies, which I wouldn’t have expected that concentration of people to be there, relative to the size of, you know, the U.S. counterparts.

So there’s something about, you know, some people have pointed to our natural resources where there’s a lot of companies actually being launched out of what I call our version of the Midwest, which would be like Saskatchewan and kind of the middle provinces where that’s actually I think we’re one of the biggest producers of pulses, which are your chickpeas and, kind of this new wave of food.

[00:47:03]

Gautam: Okay, oh, there we go. I didn’t know that.

[00:47:05]

Daniel: Yeah. And so there’s…yeah, the name escapes me at the moment but I’ll have to send it to you afterwards. It’s a company that is run…

[00:47:13]

Gautam: No worries.

[00:47:13]

Daniel: …out of Saskatchewan, which no one has any reason to go out to other than you hearing about the story where, you know, his company, he won EY’s Entrepreneur of the Year Award, I think, definitely for Canada, if not globally. And he’s one of the largest suppliers of pulses around the world.

[00:47:29]

Gautam: Wow.

[00:47:30]

Daniel: And the rest of Saskatchewan knows about him, unless you’re in the industry and you definitely about them.

[00:47:35]

Gautam: That’s awesome. That’s great. That’s cool. Well, I’ll definitely let you know next time I may come out, you know, to Toronto or sort of in that area.

[00:47:47]

Daniel: Yeah. Great. Well, I know we’re running up on time, so I appreciate you taking the time to chat.

[00:47:51]

Gautam: Of course.

[00:47:51]

Daniel: I know our conversation kind of jumped around, but I quite enjoyed…

[00:47:55]

Gautam: No, it’s great.

[00:47:55]

Daniel: …discovering a lot of ground in the limited time we had together.

[00:47:57]

Gautam: Yeah, no, it was great. Thank you for taking the time and, you know, I hope it’s helpful. And if there’s anything that I can, you know, help, let me know.

[00:48:05]

Daniel: Awesome. Well, I appreciate you taking the time, Gautam, and hope to really catching up with you. And I look forward to our next conversation soon. Thank you so much for listening. This podcast is brought to you by Exact Media. Visit our platform at exactconnections.com and click try connections to start acquiring customers by placing your sample coupon or gift card inside the parcels of other online retailers across North America. If you enjoyed this podcast, it would mean a lot. It would mean a lot if you just subscribe to it, shared it, or send us a note telling us what you liked about the episode or what you’d like to hear more about. Until next time, thank you so much for listening.