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eOlipop’s surging popularity has taken the $60 billion soda industry by storm. As Gen Z and millennials ditch sugary sodas, Olipop is leading the pre-biotic beverage trend, sparking the likes of Coca Cola and PepsiCo to enter the fray. Olipop co-founder, CEO and formulator, Ben Goodwin, shares how the brand is navigating the turbulence of rapid growth amid rising competition, and whether healthy soda is actually healthy or just a TikTok-fueled fad.This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. So for folks who are less familiar, Olipop’s known as a functional soda. What does that mean? What is a prebiotic soda versus a probiotic soda? Give us the landscape. Soda itself has a really, really interesting, very deep history. It goes back a couple hundred years. There’s Middle East roots, there’s European roots. So in the U.S., obviously full-sugar soda in a myriad of forms existed for many, many decades, especially starting in the late 1800s. It actually wasn’t until 1943 that the federal government stepped in and told Coke and Pepsi and Dr. Pepper that they could no longer call soda “healthy.” That’s how long it was they were saying that it was healthy, even though, by that time, it was loaded with caffeine and sugar. And then in the ’60s and ’70s, and then really peaking in the ’80s, you had diet soda come in, and that was this awareness that, “Hey, all the sugar’s not great for you. Let’s go with these kind of artificial sweeteners.” And it’s been that two-horse race for a really long time. Ben Goodwin [Photo: Olipop] Functional soda, which I am fortunate enough to effectively have been the one that created the category and I’ve been working on it since about 2010, is basically this idea that soda can actually be health-contributing. I was looking at the evolution of the science around digestive and microbiome health and decided that this kind of nutritional intervention was, I thought, actually a superior strategy. The base of our nutritional pillars are fiber, prebiotics, and nutritional diversity. So sometimes when I hear people say, “The prebiotic soda category,” I’m like, “Well, that’s true, but that’s just part of the story,” because a lot of the other competitors that have come into the space are just looking to capitalize for the most part on a trend, but it only is actually technically a part of what we offer. The health benefits, not everyone’s on board about them. There have been some class-action lawsuits, not about your claims, but about claims from others. Is Olipop actually healthy for me, or is it just better for me than traditional soda? I’m actually so grateful that you asked that question. I don’t want to wade into trash-talking territory here, but I do think a lot of the other entrants, they’ve either got a really small amount of total fiber or they’re putting some of that fiber in and it’s not even stable in their product. You really want a blend of different high-quality prebiotics. It’s how you get to the best outcome. That’s at least my formulation philosophy. Olipop is actually healthy. We have done multiple in vitro clinical trials now at Purdue. We’ve a partnership with their stability lab, we’ve a partnership with their complex carbohydrates laboratory, and we’ve looked at microbiome and digestive health outputs. We saw incredible bifidogenesis. We saw the fermentation of multiple forms of short-chain fatty acids. And then we just finished our first pilot human clinical trial, and we were looking at blood sugar stability and blood sugar response. And basically, of the folks that we studied, it kept their blood sugar stable for a full three hours. [Photo: Rob Kim/Getty Images for NYCWFF] So if you start stabilizing people’s blood sugar response, you start benefiting their digestive health microbiome outputs. I don’t know exactly what level of data most people need to classify something as healthy, but I’d say that certainly meets my criteria. My goal is to say, “Health and wellness should be actually contributing to your health and wellness,” and you should have some empirical data to validate that. If you’re going to ask consumers to spend a premium, you want to know that you’re actually giving them real outcomes for what they’re spending. You mentioned how fast your business has been growing, and it’s one of the fastest-growing U.S. beverage brands ever. You recently raised funds that, I don’t know, around a $2 billion valuation, but you do have this intense competition, right? Poppi, which is known for these Super Bowl ads, that was recently acquired by PepsiCo for just under $2 billion. Coca-Cola’s launched Simply Pop. How much does that change the game when the big players step in? I really want to see this category live up to its full potential. You’ve got soda, which is a $60 billion, 98% household penetration market in the United States. If we can do good in that category and use that as a kind of a Trojan horse to drive healthy outcomes for people, it’s really powerful. In terms of big players entering the space, to be honest with you, I think it’s fantastic. Some of the largest brands and the largest players in the soda and beverage space in the world getting into your category goes a long way to massively validate what you’re doing. And so hats off to Poppi. I know that getting out, selling their business was really important to them. Coke as well getting involved. It’s like, to be honest with you, it’s a bit of an honor. One of your investors is Indra Nooyi, the former PepsiCo CEO. I imagine that PepsiCo may have approached you at the same time as they did Poppi. I don’t know. Do you consider tying up with a bigger place? Look, I mean, I can’t really speak to that with a lot of detail. I don’t want to be overly coy in terms of Olipop does need to create a liquidity event, right? The reality is we’ve taken on investor capital, you just pointed to that, that was our final round into the business. We’re very, very fully profitable and really liquid, pun intended, but we have raised investor capital, which means you need to generate a liquidity event. There’s multiple ways that you can go through M&A, there’s obviously IPO going public, and so that is where right nowwe’re just preserving optionality. I mentioned Poppi’s Super Bowl ad earlier. They spent, I don’t know, $16 million on a one-minute spot. Oh, more than that, yeah. You didn’t make that investment, and, instead, you teased them for their spending on social media, which they then called online bullying. Is that kind of back-and-forth with them, is that strategic? Is that what customers want from brands? You’re laughing. Yeah, I have no idea. The online bullying thing is really good. It’s really good. First of all, there’s a difference between the stuff that I personally authorize, and sometimes the stuff that the social media team decides that they want to get up to. And that was a moment where, to be honest with you, there was a little bit of a gap. I was actually at a friend’s wedding in Puerto Rico. I was not the one hitting send on the whatever platform it is that we were commenting on. But at the same time, I understand where the consumers were coming from, which is we do live in a time with an enormous amount of income inequality. Whatever it was about how Poppi showed up, that hit a nerve for a lot of people. They made their own voices heard. I don’t need to add to that conversation. Our team did say a couple things, but then they stopped, and that’s good because they probably would’ve been fired if they hadn’t, and we just went on with their lives. But yeah, I think that we don’t spend the same amount of money on marketing that Poppi does. I’m okay with that because a lot of what has driven our business has been organic demand and organic word-of-mouth. That is real, sustainable growth that we’re experiencing, and I’m really proud of that. And as long as you can continue to grow the business like that, you should. I think that we will probably have increase in spend in marketing as we go, but it’s okay for us as brands to have different strategies in terms of how we approach growth.
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E-Commerce
Warren Buffett is likely the best-known, most successful investor in the world today. The philanthropist and CEO of Berkshire Hathaway has an estimated net worth of $158 billion and is known as the Oracle of Omaha for his ability to pick long-term investments. Hes also dedicated to sharing his wisdom with everyday investors, including beginners. Here are Buffetts top three tips: Principle No. 1: Invest Only in What You Understand Buffett has famously advised, Never invest in a business you cannot understand. In a letter to Berkshire Hathaways shareholders in 1996, Buffett explained the concept of a circle of competence: Basically, these are the fields that you truly understand and are knowledgeable enough to evaluate. You don’t have to be an expert on every company, or even many, Buffett said. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital. For example, Buffett famously stayed out of tech stocks early on because he felt he couldnt truly evaluate the investment opportunities himself. At a 2019 stockholders meeting, Buffett advised investors to try and learn as much as they can about as many businesses as possible and then figure out which ones they truly understand and have knowledge on. That, he said, would put them ahead of most other investors. If youre an investor whod like to build your own portfolio, sticking to what you know is vital. Youll be able to evaluate each business for yourself and understand the true relevance of new developments over time. Meanwhile, if youre investing in something just because someone else says its a good idea, youre entirely dependent on their judgment, which may not be as sound as they claim or believe it is. If you dont have the time or inclination to study individual businesses thoroughly enough to make these judgments for yourself, Buffett recommends investing in an S&P 500 index fund as the best option for most investors. Principle No. 2: Avoid Unnecessary Activity You dont get paid for activity, you only get paid for being right, Buffett said in 1998. Especially as a beginning investor, youll likely get the urge to react to news about the market or your individual investments immediately. Its easy to panic when an earnings announcement sends the value of your equity down 5% or more in a day. But Buffett preaches patience: If youve done your due diligence and youre investing only in stocks you have strong reason to believe will pay off in the long run, a little market noise along the way shouldnt scare you off. Inactivity strikes us as intelligent behavior,” he said in his 1996 letter. If youre sure youre investing only in strong, well-managed businesses, then you need to trade only when those qualities arent true anymore. Stocks and the market tend to grow in value over time. By trading too frequently, you may find yourself reinvesting in stocks at higher prices than you originally bought them atlosing out on gains, dividend payments, and any trading fees in the processor losing out on higher long-term profits. Principle No. 3: Make Every Investment Decision Count In a speech at the USC Marshall School of Business in 1994, Charlie Munger, cofounder of Berkshire Hathaway, said that Buffett believes most investors would be better off in the long run if he could give each one a ticket with only 20 slots . . . representing all the investments that you got to make in a lifetime. The root of this advice is the same as Buffetts other investing principles: A limit of 20 investments forces you to carefully consider every move, to be patient, and to not invest in businesses you dont understand. Youd also ensure youre confident enough about each investment that its worth missing out on another investment in the future. Think about it: If you were buying a house or a car, would you buy it sight unseen, without an inspection, or on the word of some random person online? Probably not. Your investments deserve nearly as much deliberation. Buffett said in 1996 that every investors goal should simply be to purchase stocks in businesses that they are virtually certain will be earning more money in 5, 10, or 20 years. This diligence and patience has made Buffett one of the richest men in the world and could help your portfolio as well.
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E-Commerce
As the founder of a high-growth SaaS business, Evan was the quintessential entrepreneur. Ideas and innovation were his strength, and they led to his success in attracting investors and inspiring his early hires. With the infusion of investment capital, the company entered a new stage of growth. To scale successfully, the business needed to standardize operations and develop repeatable processes to reliably deliver services to its customers. But these were not Evans strengths. With a near-constant flow of ideas and a desire to resource them, he soon earned a new nickname among his team: chief distraction officer. Eventually, investors grew tired of Evans lack of focus and replaced him with a seasoned operator who had the operational capabilities necessary to grow. The skills that make founders successful often become liabilities as a business builds. As executive coach Marshall Goldsmith says, What got you here wont get you there. Here are five leadership behaviors that break at scaleand where the fixes lie. 1. Creativity over Discipline Evan was a perfect example of someone whose creativity and passion were a perfect fit for a founder. As his business progressed to the next stage of growth, the primary skill required was the ability to build out processes, to systematize the product so that it would be delivered to clients consistently every time. But highly entrepreneurial leaders often find it draining to limit their focus to only the one or two proven products. Whats the solution for the mismatch of a founders talents to this later stage of growth? The most successful ones recognize new skills are needed, have the humility to accept their own limitations, find a great COO, and get out of that persons way. 2. High Appetite for Risk When starting out, its important to take risks, try new things, learn from your mistakes, and try again. As companies scale, though, the focus should turn to building stability and predictability. Sudden shifts in strategy and focus cause uncertainty and inconsistency, which erode the trust and confidence of customers, employees, and investors. How do leaders balance the need for continuous innovation with stability and predictability? Former Google executives Eric Schmidt and Jonathan Rosenberg offer a great framework for continuing to innovate as you scale: the 70/20/10 rule. The idea calls for allocating 70% of capital to the core business, 20% to emerging products and services, and 10% to the cutting-edge, higher-risk ideas. This framework ensures that innovation is always happeningbut not at the expense of the core business. 3. Command-and-Control Leadership Founders are notorious for having their hands in every decision, from product development and pricing to the paint color of the office. As the company scales, this level of involvement is no longer possible. Founders have to bring on new leaders to mobilize, motivate, and manage a larger number of employees. But bringing in leaders is the easy part: Moving to distributed leadership, where the company is truly led by a team instead of an individual, is harder. Distributed leadership calls for founder CEOs to step out of the day-to-day operational decisions, delegate, trust, and empower those on their team to drive results. Allowing others to share the management responsibilities pays enormous dividends. Beside the obvioushaving others to lean on for their knowledge and expertiseit also helps to ensure the stability and continuity of the business. Only by distributing leadership will CEOs be able to elevate their role to focus more on leading strategy. 4. Open-Door Communication Early-stage leaders enjoy the close proximity of their team and the ability to communicate in real time. It can be really challenging for CEOs to break the habit of communicating informally and directly with everyone at the company. To scale successfully, a CEO needs to shift to more measured and intentional communication. As Google was growing rapidly in the early 2000s, founders Larry Page and Sergey Brin faced the challenge of shifting from being player-coaches who shared an office with fellow software engineers to becoming key executives of a publicly traded company. To help themand their employeesenforce new and necessary boundaries, the two hired a key executive assistant. That new hire served as a filter for their email and a bouncer for their office, with their role empowered to moderate the flow of people in and out so the executives could be more disciplined with their time and focus. 5. Valuing Relationships over Accountability A key ingredient to building a successful company is a high-performing teamand most startups dont begin with one. Founder CEOs often describe their initial team as a family who have bonded with each other through the intense challenges of the startup experience. Sometimes, early employees are actual familysiblings, spouses, and children are often part of the act, bringing all of their relationship dynamics with them. High-performing teams, by contrast, run on accountability. Those who are not able to deliver the required results wont make it, regardless of their relationship to the founder. Adding accountability structures like job descriptions, goal-setting, and performance management helps to ensure the team is on track to execute. These processes also help to shine a light on anyone who is unable to adapt to the new demands of the larger and more complex organization. Inevitably, founders will be forced to make some difficult decisions regarding some of the early team members to make way for new talent who can drive results and take the business to the next level. Building a sustainable, stable growth engine with double-digit year-over-year growth is hard. Each new stage of growth brings new challenges that require a different set of skills. The most successful leaders are those who understand the need to adapt their behaviors to meet the next stageand what it demands.
Category:
E-Commerce
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