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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. It looked like a scene out of the hive in aliens. I was thinking breaking bad.
Well, yeah, until you see like 400 bio reactor 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 Razz and on the show today, how Ben Goodwin set out to make a healthier soda and build Olipop 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 ball barrel 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 mean, I called every name you could ever imagine. It was very bad. So as that ratcheted up, then I started to become more isolated. I started to become, you know, I select 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 at a 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 there were 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 it exercise. You decide to become a vegetarian. Tell me about what was going on where 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. You know, the drugs of choice shifted for, you know, the stepfather figure. So we 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 and 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, that was like 12 year old me was just like going to safe way, 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, it's like a lifelong memory. You know, I was home. I'm on the couch. I mean, peanut butter was 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, we're sugar in it. She's like, that is what are you like it was just you 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 there's also having else 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's 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.
And so I started with a diet. It started with going on long walks. Then I learned about factory farms anyway 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 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.
And DJing at raves and Monterey and you also attend college for a while. But you wind up dropping out pretty soon after, right? Yeah. So I dropped that 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 tell you to the end 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. Alright, 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 Cliffbar, who's been on the show several times and as a friend of mine.
And I think that I think came out in in O5 or O6 called raising the bar, which is the story of Cliffbar. 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 this I pick this book up for whatever reason and I'm reading it and you know 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 in your footprint.
And obviously in the end Cliffbar 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 I can just go be an entrepreneur and I get a great of product. It's perfect. I mean, it's it's the I think that that was the whole goal of the book to inspire people to do that. And of course, you know, 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, you know, because I wasn't making a lot of cash, but I wanted to eat really, really well.
So I were going to produce department and then that problem solved. And then I had started, you know, 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 was 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 great name, by the way.
And tell me what, 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 scoby starter from somebody that 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, you can figure out how to naturally carbonate it, but in a way you bottle it in a second fermentation.
But I'm assuming you were learning all this stuff. 100%, 100%. So my main area 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 for people?
Most people think probiotics. 100%, but why are the probiotics important? Right? And so that what was the most important, I'd say, kind of conceptual, a ha 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 access. 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 start at least in the sort of the consumer consciousness is beginning around this time.
And so that's the kind of kombucha people are drinking it and 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?
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 coops. 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 I 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 it probiotic soda, we're not necessarily talking about like, you know, Joe six pack, 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. 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 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. 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 keeper style beverage that doesn't have that funk to it? And kefir is just to, it's a fermented milk. It's a little bit like buttermilk, but it's more, more common Europe.
That's right. That's the dairy version. Right. And then there's a non-dairy version that actually was originally harvested from 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 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 got to refrigerate it or you've got it doesn't last long or what it's shelf life is limited. Like what are there 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 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, they'll inoculate their culture banks against viruses, for example, that could come in and just wipe out the culture bank.
Scaling complex fermentation is is is a very labor intensive in complex endeavor. So you're working with this microbiologist. Yeah, so his name was Jim LaDier and he would get hired to go down to Central and South America and test different plants for interesting bio reactive 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 two or three hundred thousand dollars 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 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 when you're a garage. So the first iteration of lab insanely was a spacious shed in a friends 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 plastic fold up tables. I mean, here's how insane it was. So you need bio reactors if you're going to drive fermentation. Right. Bio reactors are quite expensive. And you know, they're quite technical. We would go to like ACE hardware and the aquarium store. You buy a bunch of Ziploc bags because they're they're they're pre sterilized. Yeah. And you get an electrostatic gun. And you run the electrostatic gun over the Ziploc bags create micro punctures.
Okay. So all of a sudden you create this sterilized breathable membrane. And then you run it as a miniature as like a next to free miniature bio reactor. You pour like a fear juice and I like. Yeah, so you take whatever you take whatever you're using as your culture base. And then you pour whatever you're experimenting with into the vessel. 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 that have minor differences. And let's literally staple them to the wall of the shed. So you would have them hanging to the wall of the shed. And did you have to control the temperature of the room? Yeah, I mean, it wasn't perfect. But we have a little place here. Yeah, cool. Yeah. It looked like a scene out of, you know, the hive in aliens. I was thinking breaking bad, but okay.
A little, a little, well, yeah, until you see like 400 bio reactor bags filled with God knows what hanging from the walls. I mean, it was absolute madness. It was also very fun. Wow. So how much did this all cost you? I mean, it was a four year R&D time period front to back. The first two years, I was focused on the, on cracking the code around the fermentation. The second two years, I was focused on, I have this thing. Now I wanted to make a taste like a soda.
And I would say I probably spent about three to $350,000 out of my almost entirely out of my own pocket over that those four years. So if you were making a hundred, 150 grand a year, basically after taxes, everything was going into this thing. 100%. But how did you want to make this? I mean, Kefir is still a little bit, it's out there, right? I mean, it's not like a, a mate, it's like Coca-Cola, right? The idea you had was to make something that was going to be, to have mass appeal.
Was it, I mean, was it going to be like soda or was it going to be like Kefir? Yeah, so I didn't, I didn't totally have that part nailed down at the beginning. So at a minimum, it's like I could make this kind of a delicious, sparkling, fruity, fruity beverage. That's fermented. Like I, I mean, I'm even just poor fruit juices into it or you mix it, 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 I was like, all right, Jim, we got to, we got to pack it up. We've done so many iterations. I'm, I'm, I'm so over my skis on, on money. And I was breaking down the lab and there was this, literally this, this experiment in the corner of the lab
that I hadn't tried. And I said, hey, what, 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 drank it. 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 Ross. And you're listening to how I built this. This time of year, there's a lot to plan for. Getting back to school, big work projects,
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Carefully consider the investment objectives, risks, charges and expenses of the fund rise flagship fund before investing. This and other information can be found in the funds perspective at fundrise.com slash flagship. This is a paid advertisement. 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. 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 say together like two, three months or? No, she and I worked together for probably about nine, ten months. Wow. So that's a long time to kind of come to the conclusion that's not going to work out.
That's right. And it was it was challenging. And I was back out of I was back at a cash. I mean, they were a high net worth individual, but it wasn't it wasn't the right fit. Ben, I'm curious because I think this is particularly interesting and 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 on what's important about what you're doing, right? They can't have a problem rolling their sleeves up your 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 realize 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 we blow ourselves up to try to 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. But I'm not going to shrink myself, but I'm also not going to expand myself and go into this, this like spiral that consumes me. And so I was actually a super valuable lesson that I learned out of that.
But 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 Leicester. 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 Diagio at the beverage company, right?
Yeah, you know, we talked on the phone. He's he's from North 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, it'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 picture as 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 or 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, you're going to go do this thing with this guy, aren't you? And I think it he looked at her and he's 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, yeah, he's the the kind of brilliant mad scientisty guy.
And here's the kind of corporate guy and they allowed them to categorize us in a way that made the 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 haven't assumed 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 diageo for so many years. I've tried more stevia sweetened products than I can count and challenging because stevia has like a bitter after taste. 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. OBE probiotics soda. And you guys indeed you raise about two million dollars. Have 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 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 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 groundswell.
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 as 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 peer for David in terms of how much longer he could go without some 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.
Alright, 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 with these were going to mean cans. So OBS 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 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 pounding the pavement. You know, it had the kombucha market not existed. I don't think they would have been a space for OBS.
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 OBS was lower sugar than most of the kombuches that were on the shelf as well. And you in in OBS you were doing like cherry vanilla flavor. You made a root beer flavor. That's right. So this looked like I mean it was like soda.
That was the whole goal. So what's the biggest non water beverage that exists. It's soda right. It's a $42 billion industry with 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 this 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 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 was going on. I mean at its height. I mean imagine in two years you never never 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 we weren't having a drop off of product traction. The product was continued to grow. I think we were 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 we're yeah we're trying to dollars. Yeah. It's not bad. It's very 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 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 this seven years of your life. Right. Yeah.
Was 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% there were moments when exasperatedly I would say I just set seven years in my life on fire. That's how that's how in certain moments it felt. Yeah. And 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. Coming out of a high trauma childhood that's trust in general is not a strong suit of mine 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 relieving.
Yeah so I yeah I basically signed a document saying I wouldn't go back into probiotics so you were so but that had been your life. So you've got to figure out the next thing so first of all what did you do in the in the weeks and months after that and did you start to think right away okay what am I going to do next or did you kind of wallow or did you. So I mean look 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. So that's how you live off of that and use it to start to start all the pop but yeah 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 or at least as the way that David described it to me like if you fail as an entrepreneur in the UK it's very shameful. Yeah well you failed draw so it's not like the Bay Area where like how many times you failed yeah cool exactly so that it's a little less plucky to that to that fact.
And it's just been 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 okay 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 don't 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.
So I spent about two weeks I walked like I went to five or six cities I walked 170 miles and 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 it's 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 or 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.
I mean 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 hundred percent new research around prebiotics which is basically 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 encouraged it encourages bacteria to grow good bacteria.
And tell me when you start to think okay maybe that's the thing maybe if I go back in the 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 referred to as the prebiotic soda category right because that's kind of this 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 allysmart 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 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
that the complex kind of functional formula you know it's designed to be beneficial to digestive health and it's been pretty meticulously arranged so that it's a bit more comprehensive and it's in its nature.
Alright so this is around 2017 and I think somewhere during that year you reach out to David your partner 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 it's a 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 kind of strategy of formulation
and I think ultimately you know the thing that I landed on which I communicated to him and 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 to the world
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 have been in David punch through the board stay with us I'm Guy Roz and you're listening to how I built this how I built this is sponsored by ADT ADT spends all of their seconds helping protect all of yours because a lot can happen in a second like one second your baby can't walk then suddenly they can one second
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hey welcome back to how I built this I'm guy Ross 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 Obey 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
Chickery root or like I know you looked at marshmallow root and Jerusalem artichoke and basically you have to you have to powderize 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
it has to say a solution right and it has to it has to survive manufacturing so our all smart is a cassava root, Chickery root, Jerusalem artichoke that's 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 a soda stream I saw the stream okay yeah I gotcha 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 samples 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 and I I still use that exact same setup we have a more complex lab in the Bay Area that we use
sure but when I'm formulating that's still just a stark test yeah 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 taste good
so when you were coming up with this who are you thinking the consumer might people you 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 I certainly haven't historically thought in demographics
that is one of the nice things about going after something's largest soda market you just thought I'm going to make something that people want because they want to get healthier well yeah and 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 an
nostalgic way like oh cream soda or yes soda or yeah a great example it you're 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 onable 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 know I landed on stevia at the end of the day because the technology is farther along for stevia yeah but obviously understand that for some folks especially less kind of skillfully put together for me this can be can be challenging okay tell me about the name how did you come up with a name all the pop it's great name but where did come from
yeah thank you so the allie is short for a liguio saccharides which is a family of prebiotics that it's used 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 lemons starberry vanilla and cinnamon cola yes I'm
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 going to need to
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 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 going to say oh and this also as a bunch of fiber and it's good for your
not like what were you prepared to say that was 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 that contradiction creates mental stickiness because you look at it go like healthy soda I don't is yes no I don't 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 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 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 how did they do how did you get me 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 wow how why would explain to them mean it was another beverage in the cooler yeah but I think you know it starts with you the out there 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 but 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 all right let me ask you a health related question here which is as you know as some we've talked about this I'm super into you
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 Ollipop and you're going to get enough fiber where you don't actually to worry about eating almonds and you know roughage and kale and cheesese 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-y style is experts agree that Ollipop 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
to low compared to what has actually historically been consumed by humans and it's lower than the WHO recommendations around fiber consumption so Ollipop has never been designed to replace a healthy diet it's meant to help to complement 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 die 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 Ollipops doing it's the doing the same thing it's it's a 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 a $850,000 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 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 Erwan it's a very fancy natural food store mainly in LA and it's a frequented by celebrities
they love Erwan and so when you're in Erwan 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 store you went into in Southern California
yeah you're right I think it was one of the first but do you know who else frequents the Erwan Isles 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 in 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 yeah so it was a what we knew from the beginning is we are looking to create a mainstream product that can 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 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 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 in mainstream channels when the pandemic hit in 2020
you've been out for a while right for about a year less the 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 you know people were just popping in and out of grocery stores quickly that year well and you're never your DOS you're doing no demoing right so that was a really fascinating experience because obviously 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 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 you've 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
out 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 maybe you know I don't know basically saying look we want to kind of take those companies on yeah I mean look I
think the trick you territory guy very tricky territory the way I would describe it is we have had triple digit growth every year sent 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 a hundred percent 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 third wave of soda right you a traditional soda and then there's diet soda in the 1980s I think three or four years diet soda became 25% of all soda sales yeah and now we're looking at similar a similar trajectory 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 for the last ten years there's been a 60% reduction in let's call it Gen Z Gen Alpha traditional soda
consumption that's exactly I mean we're a big tent we we still work really great with with Gen X and and millennials and we open 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 it 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 for 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 if the right partner comes along it 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 honesty I'm talking about Coca-Cola you know other big brands have taken on smaller brands and really continue to to make them and and distribute
them and they're still good products yeah I mean look again I'm gonna artfully dodge this specifics of full dodger yeah I'm and it's so artful that I'm just gonna say it out loud but like I would say like obviously I hear what you're getting at if I just exit all the pop and I'm like oh yeah I've
got my small amount of cash oh it'll be a it'll be a large amount of cash if you exit let's be on it will be I mean let's be honest there's nothing wrong with that I'm just I'm sitting on my cash I'm sitting on my cash and then 10 years goes by all the 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 snow walk in the park either right there's a whole bunch of minefields associated with 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 Dave Lester or or you know working at 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
the work you put in the hard work and your skill yeah I mean it would be absolutely assinine 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 one 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 and the kombucha coming up paving the way for OB and then paving the way for digestive health
um 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
um and also how you facilitate self-awareness and self-development through all those different experiences that's Ben Goodwin co-founder of Ollipop 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 coconut 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
and as always it's free and if you're interested in insights ideas and lessons from some of the world's greatest entrepreneurs sign up for my newsletter at gyros.com this episode was produced by Sam Paulson with music composed by Routine Erivlui and Sam Paulson it was edited by Niva Grant
with research help from Catherine Cipher our engineers were Robert Rodriguez and Quacy Lee our production staff also includes JC Howard Devon Schwartz Kerry Thompson Alex Chung John Isabella Chris Messini Carla Estevez and Elaine Coates I'm Guy Ross and you've been listening to how I built this
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