Building One of the Fastest Growing CPG Companies in History | Peter Rahal of David Protein, Medici Brands & RXBAR

Peter Rahal is the co-founder of RXBAR, David Protein, and Medici Brands. After selling RXBAR for $600 million, he tried investing and quickly discovered he was miserable watching other people run companies. He explains why he returned to protein bars, why founders must deeply understand their products and how he plans to build the most important food company of the 21st century. Peter describes the intelligence, beauty and discipline behind David's brand, how growing up with dyslexia shaped his competitive drive and why he channels anger and resentment into company building. He also details his approach to hiring former founders, building a culture of truth seeking and humility and treating the organization itself as a product. Peter walks through the acquisition of his critical ingredient supplier, Epogee, the supply agreements that protected his business and what he would change about communicating the decision to other entrepreneurs. He shares why he chose Greenoaks as an investor, why speed matters more than maximizing a fundraising valuation and how he is building a decentralized organization where leaders master their products, confront problems and earn their autonomy. Made possible by Ramp: https://ramp.com AppLovin: https://applovin.com/senra Deel: https://deel.com/senra Chapters (00:00:00) Life after selling RXBAR for $600 million (00:07:29) Going all in and burning the boats (00:11:48) Building the most important food company of the 21st century (00:13:49) How a brand is like a human being (00:21:07) Why Peter always chooses the hard path (00:28:17) From zero to $300 million in two years (00:29:59) Why Peter started selling frozen cod (00:32:51) The organization is the product (00:36:56) Why he recruits former founders (00:41:15) Buying his supplier and victimizing his competitors (00:51:56) How Neil Mehta and Greenoaks earned a spot on the cap table (00:55:47) How Peter fundraises (01:00:31) Running a business is like a river (01:04:16) Why the company is named Medici (01:06:28) Bureaucracy is not inevitable (01:11:48) Why Peter has 25 direct reports (01:16:06) Peter's principle of reactionary leadership support (01:17:45) On divine discontent and loving the fight Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02David Senra?

  Okay, I want to start with the fact that you sold your previous company for 600 million. You and your co-founder own 90% of it. You find yourself as a very young man with about a quarter billion dollars in cash. What happens next?

• 0:14Speaker 01

  The natural thing is to get into investing. Outside looking in, investing is very appealing. It's like, one, you think it's an intellectual exercise. The second real thing is like, it gives you a great lifestyle because you're not operating. So you can kind of, you have no organizational responsibility. I started studying investing and getting into it.

• 0:33David Senra?

  How did you study investing?

• 0:35Speaker 01

  Figuring out asset classes, how to build a portfolio, grow capital, underwriting deals.

• 0:41David Senra?

  Are you having conversations, you're reading?

• 0:43Speaker 01

  Reading, conversations, best books on it. And then where my time was spent was on where I had the best advantage, which was in consumer packaged goods investing or just privates. So early startups. In stage agnostic, seed to growth, didn't matter. And started doing that and quickly realized that the most important skill sets is charisma or like with whale hunting. It's like finding the deal that is quite obvious and then trying to get an allocation. That's really like the game. And that's quite, quite gay.

• 1:22Speaker 01

  Chasing men for allocations is something I didn't want to do. My previous experience was like, I'm going to sit back. I'm going to spend my time building a product and my product's going to do the talking. Like my product's going to do the work. Where in investing, you're taking capital and then you're trying to allocate it into the, into the thing that's going to grow behind a leader that's going to, you're going to bet behind. And that's just two hands off for me. Like I'm, I'm used to like fighting, being in knife fights and it's just too passive. So investing is very tempting because you can like make a decision and not have to do anything. And it works, like it grows. The big problem I had with it is the feedback loops super long.

• 2:05Speaker 01

  Like in building and operating a business, you make a decision, whether it's a hire, whether it's a product decision, marketing, and you get the feedback right away. Like the feedback loops, it's like immediate. Where in investing, it's like, are you can develop a thesis, develop this, underwrite this founder as really great. And then you like make the decision and like, all right, five years go by, did it work or not?

• 2:30David Senra?

  So you're living where when you sell RX Bar?

• 2:32Speaker 01

  Chicago.

• 2:33David Senra?

  Okay. You have this huge acquisition, you have a bunch of cash. This is when you moved to Miami?

• 2:37Speaker 01

  Yes.

• 2:37David Senra?

  You moved to Miami before?

• 2:38Speaker 01

  No, after.

• 2:39David Senra?

  Okay, after. So now you have the money and now you're like, okay, I'm going to, I have a bunch of money. You start, you had this ridiculous idea, this is your own words. Cause when we were hanging out a few weeks ago, you said, I had a ridiculous idea of starting a family office.

• 2:50Speaker 01

  Yes.

• 2:51David Senra?

  So you moved to Miami and you're like, I'm going to start a family office.

• 2:53Speaker 01

  Yes.

• 2:53David Senra?

  Okay, explain that part.

• 2:55Speaker 01

  So I was in Chicago and I just needed change. I needed to like change environment. RX was my identity. I just got divorced. So I looked at the United States and I was like, where's the best place to go?

• 3:05David Senra?

  Wait, the divorce part? The divorce happened after the acquisition?

• 3:08Speaker 01

  Yeah.

• 3:08David Senra?

  Was it anything related there where like you're under a lot of stress?

• 3:11Speaker 01

  Like, no, just hubris.

• 3:13David Senra?

  Say more about that.

• 3:14Speaker 01

  I had success bias where everything I'd done has been successful. And so there's blurred lines between your personal and professional. And I just moved too fast. Thought it was going to be easy. Yeah, because my goal is to have a family. So like career success, accomplished, next thing's family.

• 3:29David Senra?

  And you tried to speed run?

• 3:30Speaker 01

  Yeah, it went too, way too fast. And thinking I'm really good.

• 3:36David Senra?

  So this is, if I remember correctly, me, married, divorced, all in like nine months?

• 3:42Speaker 01

  Yeah.

• 3:42David Senra?

  Okay.

• 3:43Speaker 01

  I beat Kim Kardashian.

• 3:47David Senra?

  Okay, so you moved to Miami, I'm going to invest. And then what I really want to get into is the fact that you are uniquely unsuited to invest. Like all the other founders I know that I asked about you is like, this guy's just like a relentless animal operator. Like the idea that he could think that he could sit and be like the guy behind the guy. Why do you think you made that mistake? This is very interesting to me because you did what you did to start, scale, sell, right? Which is very like celebrated, but I talked to a bunch of founders that did that and then they're fucking miserable. You're one of them.

• 4:17Speaker 01

  Yeah.

• 4:17David Senra?

  So like, I really want to hone in on like what you were feeling and why you were so miserable in this situation.

• 4:21Speaker 01

  My plan was to get out of Chicago, change environments. And then I just looked at a map like, all right, where's the best place to go to reset a bit? And invest, build my family office, get, get, get that right. And then ultimately, my ultimate goal was to relocate where is the best interest to start my next thing. So chose Miami as a place to like reset and invest. And this is before COVID. Got there, started like formalizing a family office. And then I think like what I underestimated with investing in different entrepreneurs, particularly in food and beverage, is that like, I just assumed they all had the same tenacity as me. Like I just thought like, that's what you did. And I didn't really know anyone else who were founders at this time.

• 5:05Speaker 01

  And then I quickly realized like, I'm probably actually a miserable investor because I'm like, I'm handcuffed, sitting in the backseat while someone else is driving and they don't know where they're going. And that's like a torturous position to someone who knows where to go.

• 5:19David Senra?

  So you didn't know how rare you were?

• 5:21Speaker 01

  Yes.

• 5:22David Senra?

  Okay.

• 5:22Speaker 01

  As, as not humble as that is, but yeah.

• 5:25David Senra?

  I was just sitting upstairs right before this and I was with my friend Patrick, who does the best podcast. It's one of my closest friends and we just happened to run into Adam Faruji from Apple. Which again, there's a lot of like overlap between you and, you and Adam. And we were talking about essentially, you know, Adam's running this very, this cash printing machine with like very few employees. Like he actually, he hates entrepreneurs optimized for vanity metrics. Where he's like, you should just focus on cash generation. It's like very straightforward to him, it's like obvious to him. And we were talking about the different, like different hires he had and different other founders he knows. And then through a story that he was telling, Patrick had a great line. He goes, man, it's crazy, like in any domain, there's only like two or three guys that are actually good.

• 6:07Speaker 01

  Yeah.

• 6:07David Senra?

  Just pick any category, there's like a sea of shit and like two or three, maybe four people that are actually excellent.

• 6:14Speaker 01

  Yeah. And like what I, I just like assumed that anyone who's getting into entrepreneurship, they're like willing to die before their company fails. They are willing to sacrifice comfort to win. They want to win. And I realized like, no, some people like, that's not, that's actually not what people, a lot of people do or prioritize.

• 6:32David Senra?

  When you run into other entrepreneurs like this, that you made the mistake of investing in because they weren't like you? When you have conversations with them, like what is their response to your extreme approach?

• 6:41Speaker 01

  If I'm the one giving criticisms to the company, like that's a problem. Like the CEO should be the most critical. I shouldn't be like, hey man, the car's on fire. That relationship, if I'm the one spotting out problems or saying go faster or saying like, that's usually not a good sign. And I kept falling into that pattern and I don't want to be in a position to be like, it's like your company at the end of the day. I don't want to be, I'm not an advisor. I'm just here to try to facilitate stuff, but.

• 7:08David Senra?

  What I'm really trying to get is like, what is going on inside of you? Like what is your inner monologue? You're like, oh, I fucked up? Like what is actually happening?

• 7:15Speaker 01

  This is frustrating. I need to get back in the game. Like this sucks.

• 7:21David Senra?

  How long did it take for you to figure this out?

• 7:24Speaker 01

  Probably a year. Yeah, 21 to 21.

• 7:29David Senra?

  Okay, so then what's the next step after that? You're like, okay, this sucks. I don't want to be an investor. I need to be an operator. I want to run my own company. I'm way too young to be retired, by the way.

• 7:38Speaker 01

  Yeah, for sure. So I started, one of the good things about investing is you're talking, you're getting through the deal process. You're ideating, you're talking to other movers and shakers. And that's a helpful process of like, all right, is that something interesting? Is that a problem I want to solve? But basically I had several false starts. I looked at recycling garbage. I looked at synthetic biology. I looked at other consumer packaged stuff. And I like started and then I basically pulled out committing to stuff. And the reason is like, if I go in, I'm like fucking all in. And that's like a really scary thing actually. Cause then I like, my friends go away, my health goes, all this stuff happens to me. So.

• 8:22David Senra?

  Hold on, we can't, we can't go on from that. Okay. Then you need to describe what all in means, see what you just said, it's scary. My friends go away, my health goes away. So this is just the only way you can operate? Explain this to me.

• 8:33Speaker 01

  Yeah, my, like my leadership style is like, it's just like all in. Burn the bridges, burn the, so I can't go into something like half ass, ever. So what I commit to is like very serious. And so all my false starts were like, ah, I'm not like moving in the direction of starting it and then pull back. Moving in this direction, starting, pull back. The other thing that there was like, I needed to start a family. So my order of like, during my hiatus of investing, I was like, I need to find a wife to go start a family.

• 9:03David Senra?

  I don't know if Miami is the place, Miami Beach in particular is the place you should be searching for a wife.

• 9:08Speaker 01

  I agree. And then I bought a place in New York and moved to New York. But in general, it's goes like, all right, so if I find something and fall for it, there's a really high chance that I'm going to go all in. I won't see my friends, lose my health and I'll be 50 and single. And that's a version of my, the future I didn't, I didn't really want. So ultimately I found my wife and then all roads led back to like protein bars. It required some humility of being like, you know, that's like my stick. Like if I die, I'm my gravestone and I might say like, protein bar guy. Like I'm, I'm comfortable with that. Uh, cause first I had some like influence of Elon, like, oh, I need to go into like, I'm not the food guy, I'm going over there. I'm not this, I need to like prove something.

• 9:51Speaker 01

  But then I really, I was like, I've been, I've been in the food business since I was like 12. I like have a deep intrinsic knowledge of it. And, and basically, once, once my non-compete was like a year away, it just like naturally happened of like, oh, started connecting the dots, like this is what I should do.

• 10:10David Senra?

  So wait, you're in the food business since you were 12. How old are you at this point where you're like, I'm going to be, I'm going to start another protein bar?

• 10:16Speaker 01

  34.

• 10:17David Senra?

  Okay.

• 10:17Speaker 01

  Yeah, so 34. Yes, my non-compete was 22, October 6th, 22.

• 10:22David Senra?

  How long that getting over that dialogue, that inner monologue where it's like, oh, like, you know, I need to do something more impactful or I have to do biology or create hardware or something. And it's like, no, I'm going to actually stick to what I actually know and maybe the best in the world at.

• 10:35Speaker 01

  It was three years.

• 10:36David Senra?

  You had to convince yourself this?

• 10:37Speaker 01

  Yeah.

• 10:38David Senra?

  Wow, okay.

• 10:40Speaker 01

  And a little bit of like, you know, I always think with a, this is both as, with as an investor, when I looked at companies and then a philosophy for myself is like, the leader of the company, if they have to pick up the phone to fix the product, they're fucked. Meaning like the leader has to be able to really deeply understand the product and be able to fix it. And then all those false starts were like, I kind of depended on something else. Or I didn't have the time to learn the, the, get the deep enough understanding of the product to make that change. And so with food, I like deeply, I like know exactly what to do. So it just became really obvious and. Got my wife and then started. What is today, David?

• 11:22David Senra?

  When we talked the other.

• 11:25Speaker 01

  Just like that was my, it was a very clear process like, all right, check your personal life before you, so you don't like ruin your personal life again. And because you're gonna like go all in on something and then like, once that's done and then.

• 11:37David Senra?

  It just happens. You got the family, the non-compete expires and now you're back at this.

• 11:41Speaker 01

  Yeah.

• 11:41David Senra?

  But you're, maybe your ambition when you were younger, because you started RX Bar when you were how old, early twenties, something like that?

• 11:47Speaker 01

  Twenty-four.

• 11:48David Senra?

  Twenty-four, but now the scope of your ambition is like, David is not a bar company. That's like the first of the products, but how do you describe what you're working on now?

• 11:56Speaker 01

  We don't want to tell people what not to eat. I think that's like a lot of the food business, like, don't eat this. It's like demonization and it's pseudoscience. We want to make your favorite foods smarter. And so it's a really quiet approach, like they're there and they're more intelligent, they're more effective, they're objectively better. So we're going to do that across multiple categories. Protein bar is the wedge. I know it. That's what we use to get to scale. And once you get to scale, you can build the platform for there. You have the organization, you have the rock to market, you have the R and D capabilities. So the protein bar got us our platform and now we're proliferating into categories that just make sense for us and our technology.

• 12:36David Senra?

  When you started, David, you knew that you were not going to stay, that you wanted to build a food company and a protein bar company. So I'm going to just answer the, my question that asked you, the way you said it to me before, which I think was excellent, where you're like, I have to be the best in the world at what I do in my category. And I was like, what's your category? And you're like, CPG. I go, what does that mean? And you go, anything that you can buy in a store. That's the size and scope of your ambition.

• 13:00Speaker 01

  Yeah, like we're competing with Nestle. Like, I want to build the most important food company in the 21st century.

• 13:07David Senra?

  And how big, what's the scale of some of these food companies?

• 13:10Speaker 01

  Nestle's 100 plus billion in revenue. They're real global as well. Pepsi's probably around there, real scale.

• 13:19David Senra?

  So a couple hundred billion dollar companies, how many different products?

• 13:23Speaker 01

  Well, they have these enormous portfolio of brands.

• 13:25David Senra?

  Yeah.

• 13:26Speaker 01

  And then, you know, hundreds of brands and then those brands are different by cultures or geographies.

• 13:32David Senra?

  They grow by acquisition or no?

• 13:33Speaker 01

  Yeah, mostly.

• 13:34David Senra?

  Okay. Are you going to do that too?

• 13:36Speaker 01

  Probably it's on the table, but our core competency is the ability to build brands. So like, I know how to create an identity and build a brand. So for the next four years, five years, we'll probably just create brands. But I wouldn't rule it out later on.

• 13:49David Senra?

  Okay. So tell me what you know about building brands and identities. This could be interesting.

• 13:53Speaker 01

  The analogy I think of as a brand, it's simply just a human being. So a brand has a name, it has mommy and daddy, it's the founders, it's parents. Those parents have DNA. This brand, this individual has values. It has a vision where it's going. It has other traits, tone of voice, has friends. Who do you associate with?

• 14:19David Senra?

  Hold on, explain that part to me. Who do you associate with?

• 14:21Speaker 01

  So who are you going to do partnerships with? Like, so David, for example, David Protein is a partnership with Huberman. Like, that's in alignment. Like, we wouldn't do a partnership with,

• 14:33Speaker 01

  I don't know, Miss Rachel doesn't make sense. I know she's great, but like, just like a human, the social circle matters. And so in creating a brand, that identity, both from tone of voice, visual, what clothes it wears, who is its friends, its values, vision, you define that clearly and that there's like a north star to it. The most important factor in building brands is it just takes time. So if you keep this identity, it can be dynamic in nature as it grows. But you are consistently doing that over time and with really great quality product and service. The time piece is critical. Like, you just have to be doing that over time. David's values are around intelligence, beauty and discipline.

• 15:18Speaker 01

  And that's rooted in the story of Michelangelo's masterpiece, the sculpture of David. Those values are rooted in the symbolism of that masterpiece. And then the tool, the chisel, which is like this crude nail. But the meaning of a chisel is intelligence, discipline. And if you apply those things, you get a masterpiece, something beautiful. So that's the logic for David's brand and brand identity. So if you have a crystal clear identity for a brand and it's product offering and it's position, the marketing action becomes really easy. You just constantly hammer those points over and over and over again.

• 15:56David Senra?

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• 16:35David Senra?

  So when you're running your business on Ramp and your competitors are not, you have a massive competitive advantage that compounds over time. Ramp is the only platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp and you should too. Go to ramp.com to learn how they can help your business save time, save money and grow revenue. That is ramp.com. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority.

• 17:13David Senra?

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• 17:55David Senra?

  we can accelerate our innovation and bring more voices, stories and ideas to every corner of the world." Deal is trusted by over 40,000 companies and growing fast. Learn how they can help your business by going to deal.com/cenra. That is deal.com/cenra. How much time did you put into planning this brand identity for David?

• 18:17Speaker 01

  Six months maybe.

• 18:18David Senra?

  Okay. So then, once you have this clearly defined set of qualities for the brand, and then you're saying, okay, then we just extend this over, you know, decades, this is the plan?

• 18:26Speaker 01

  Yes. You just hammer it. Like, keep going.

• 18:29David Senra?

  How did you learn the importance of maintaining the same brand identity over a long period of time?

• 18:35Speaker 01

  Just studying, like just studying brands. Like, if you look at the best brands, they're all old. And so time's a factor that's really, really important and the consistency of that. And the thing is, there's an asymmetry where like, those brands are super fragile. So if you like fuck around on quality or something else, like it's over really quickly.

• 18:56David Senra?

  The reason I asked that is because I was obsessed with this guy named David Ogilvy and I've read every single one of his books. He built one of the greatest advertising agencies of all time. And he would hammer exactly what you did. You sounded exactly like him if you read his autobiography or if you read Ogilvy on advertising. And his whole thing was just like, people jump around too much. Like, you pick one brand identity and you do it over and over and over again for decades.

• 19:16Speaker 01

  Yeah.

• 19:16David Senra?

  And you came to the exact same conclusion. It's like the best brands are the best brands because they did this for decades after decades.

• 19:22Speaker 01

  And it's fundamentally about the values of the brand. Like for David, it's about intelligence, beauty and discipline.

• 19:29David Senra?

  Why did you pick those three traits though?

• 19:31Speaker 01

  They're close to me. I love beauty. I love intelligence and I love suffering and discipline. To a negative point of view, almost. Protein bars are our start. So what do people come to protein bars for? They come to it for body composition. Like, no one really eats protein bars as like, oh, I'm just going to enjoy this treat. It's like very, very functional. Like, I'm gonna, I need to transform my body, either increase muscle or decrease fat. So the category and protein in general is very oriented around those values as well. And so with David, one of the things I wanted was like a weight loss company or a body composition company without being one.

• 20:13Speaker 01

  So if you look at the great, they're not really great, but the nineties brands in weight loss, like Atkins.

• 20:22Speaker 01

  Weight watchers, Jenny Craig, like they're super tagging. But there are people went to them for body composition stuff. So the question was like, all right, well, how do I make that more refined? Really more European, like higher, better taste. And so did that.

• 20:39Speaker 01

  And then the other insight, like, I don't know, but when I turned 35 and just looked around my friends, I just realized like everyone I knew had some issue with weight, weight. Like everyone had struggled with weight loss. As you get older, everyone wanted more muscle. Like everyone I've ever talked to, whether it's a issue they're honest about or they're in the closet about it. Like, so it's like a ubiquitous problem. So ideas like how to create a brand that really embodies that in a refined way.

• 21:07David Senra?

  All right, I'm going to get back to the masterpiece in a minute. So don't let me forget that part. But you said that you're almost like attracted to suffering in like, almost like an extreme ridiculous way. What the hell does that mean?

• 21:16Speaker 01

  I always choose the hard path. Like, even when I exercise, I choose the most painful exercises. When I take my son out, I refuse to take a stroller. I just always carry him. I just like being strong and doing hard things. And I think there's something spiritual about like suffering that I find very gratifying. Once you get through it. And I think physical suffering is easy because like you just get really hot, get really cold. It's like, but what's nice about building a company is it's like emotional suffering. It's, it's like a lot of tough conversations. And so I just, I, I think what I've learned early on is like, if you face those things, there's growth on the end of it.

• 21:59Speaker 01

  And so I found this relationship, the more you suffer, the stronger and the more growth you experience. And so when I see it and I feel it, I like lean into it.

• 22:11David Senra?

  Travis Kalanick, the founder of Uber was on this podcast and he said something that resonated with a lot of people. And he's like, the lifestyle of an entrepreneur is I can take more pain than this guy and I'll prove it to you.

• 22:19Speaker 01

  Yeah.

• 22:19David Senra?

  Do you agree with this?

• 22:20Speaker 01

  Yeah. It's fun. Yeah, I love it. Pain tolerance, yeah.

• 22:26David Senra?

  I want everything that's in your head about pain tolerance and suffering. Let's just put it out here because I think this is very interesting. Look, look in your eyes. I don't know if we can get this on camera or not.

• 22:35Speaker 01

  I don't know. I, I, it just feels good and I like, I don't know where, I don't know where it's from necessarily. I think it's rooted in competitive nature, but I think it makes you a better man. I think there's a little, there's nuance, like suffering for like no benefit is not good. But I think this is actually it. I have a lot of resentment and anger in my life. And if I do not harness that in a certain way, it is because it starts to, I become a bad person or I start to not be happy. And so physical exertion, exercise, company building stuff is a way for me to channel

• 23:18Speaker 01

  all this spite and anger in a way that's really productive.

• 23:22David Senra?

  What's the source of the resentment and anger in your life that you feel like you have to channel?

• 23:27Speaker 01

  So like trauma is relative, but for me, when I grew up very beautiful parents, like I, so I don't want to sound like I suffered that much. But when I was a child, I was just labeled disabled because of my dyslexia and that. I remember hearing conversations of teachers saying, oh, is Peter stupid? Like, I couldn't read well. And I remember that, like, I've overheard those conversations with my parents. And that just, I think, broke me in a way that it's like my deep intrinsic motivation to prove that wrong. And it's actually why I am so disagreeable with any sort of authority or disagree, like, or contrarian by nature.

• 24:09Speaker 01

  Cause like my survival strategy as a child was to say, to have self-esteem really is like, all you teachers are wrong. This whole system is broken. Fuck off. So I think deep in my personality is that, like proving that all wrong. And then even to survive in school, I had, it was like, it took me, it was like 10x the effort to get like a C, D. So I think a lot of my pain tolerance came from some of that. But my resentment and anger is certainly rooted in that.

• 24:46David Senra?

  You still feel this when you wake up today?

• 24:47Speaker 01

  Yeah, yeah. No, I think it's like tattooed, psychedelics, therapy, it's like tattooed in me at this point. I,

• 24:55David Senra?

  You've tried to get rid of it and you can't.

• 24:56Speaker 01

  Yeah.

• 24:57David Senra?

  And so you feel the outlet is crushing your competitors?

• 24:59Speaker 01

  Yeah. Yeah, it's like, it's, yeah, it's winning. It's like, it's, and it's like, I'm not really proud. It's like, it's, I'm just like, it is what it is. I didn't really choose it, but it's like to prove that I'm not that fundamentally. But I thought when I was in, when I was a, working as an investor, I, I was deeply unhappy because I wasn't able to channel, I was like, I'm a sideline. I'm not, I'm not a fucking cheerleader. Like I'm on the sideline and I need to like channel all this anger and like thing towards a result. And I like, you know, reporting on a portfolio is not doing that.

• 25:41David Senra?

  I have a younger friend that feel like I can kind of share like the, some of the experience I get to have with this person. And I was just like, as a general rule, the further you get away from the person that actually has talent, the more cautious you have to be. So it's like the founder obviously has talent. You obviously have talent. You created something from nothing and you've done it over and over again. And now building, but like, you have to be careful of these agents. You have to be careful of these bankers. You have to be careful of these investors. The further you get away from the person with talent, the, it's, they, they just are incentivized to kind of like persuade, cajole, you know, act in many cases, like against your interests. And I was like, just stay close to the people that actually have talent.

• 26:26David Senra?

  And if you're, you don't need many friends in life, you can have five. And like, those are the kind of friend group that you should have where like you have all these other fakers out here that are playing politics. You can get ahead that way, which is like completely different than like how the entrepreneur thinks.

• 26:39Speaker 01

  Yeah, I agree with that. Yeah.

• 26:42David Senra?

  There's another thing that you were saying, because I, I'm not going to leave this alone. Like I want to hear more about like your resentment and this, this like attraction that you have to pain. So the founder of the Four Seasons, this guy named Izzy Sharp, he has this great line where, you know, he started, he's like, kind of like embarrassingly ambitious. And I mean that in a great way where he's like, I'm going to build the world's greatest high-end luxury hotel chain. He didn't know anything about, he never built a single hotel before he had that goal. And so his autobiography is excellent. And in there, he says, one of my favorite maxims in his entrepreneurship, he says that excellence is the capacity to take pain. And this same thing, he had this very complex relationship with his father. He had a lot of people doubting him. This idea like what you just said to me makes perfect sense because it's just in these biographies over and over again.

• 27:23David Senra?

  A lot of people that have come on the show, I just mentioned Adam Ferrugi, like one thing that he drove, drove himself. This is like, I tried to give, raise money. I was giving, willing to sell 25% of my company for a million dollars. Right? This is the company that's going to wind up being worth a hundred, $200 billion. They turned me down, these VCs turned me down. And then, and then they funded some of my competitors. So we made it a company principle to put those competitors out of business. So when I hear you, I hear this guy, Josh Wolfe, has this great line where he says, chips on shoulders puts chips in pockets.

• 27:53Speaker 01

  Yeah.

• 27:54David Senra?

  It's like using that pain that you had when you were younger as, and channeling it to drive an achievement.

• 28:00Speaker 01

  Yeah. And I think that's the key is like you, if you have that, if you don't channel it and focus it, I think it's destructive. So like for me, it all gets channeled through the art, through the company building process. And that is productive because it can be destructive if you don't channel it.

• 28:17David Senra?

  Okay. So how are you channeling it into what you're building now then?

• 28:20Speaker 01

  The company's output is really impressive. Just a lot of hours, butts in chairs in the office, just dedication.

• 28:29David Senra?

  What do you think is impressive about the output they're doing right now? What does that mean?

• 28:32Speaker 01

  We're only two years old and it feels like five years. So our relationship with time is really bizarre, but in two years, I mean, we're running over 400 million this year. We'll do 300 million this year. We're in the frozen category. We're obviously in protein bars. We have an RTD. We've launched a confection with three different formats. We're launching another brand in November. You just don't, in my field, you don't see that sort of output and it keeps getting better. Like all our products keep getting better. But I mean, we're the fastest growing food company, I think, no, I know in history. So it's really hard to scale it and the pace in which we're doing it. Like I think this would have taken normally 10 years and we've done it in two.

• 29:17David Senra?

  Explain to me why it's so hard to scale.

• 29:20Speaker 01

  Well, it's hard to scale is because it's inventory. So like you, you need to go buy the raw materials, convert it into finished product. And some of the raw materials take a long time. And like, for example, the dairy market was super tight. So if you don't, like growing 300%, 400% a year is really, really, or even closer every six months is really demanding on the supply chain. To take Travis, like this is all Adams. Like it's no, we're not a digital business at all. So yeah, the inventory part is really, really challenging. So matching supply and demand has just been very difficult and.

• 29:54David Senra?

  So you've had times in the company where you ran out of supply, correct?

• 29:57Speaker 01

  Oh, constantly. Yeah.

• 29:59David Senra?

  Is this when you started, I saw like, you know, Rob and everybody's been telling me about David Barr. And then I saw like an ad and you were like selling like cod or something.

• 30:07Speaker 01

  Yeah.

• 30:07David Senra?

  Is that as a result of the fact that you ran out of supply? What happened there?

• 30:11Speaker 01

  The story of cod was,

• 30:15Speaker 01

  We're creating our website and we're doing a comparison table. And the one metric we think is really important is how many of your calories are coming from protein? And on this chart, we were number one and we were number one on everything. And like for me, my investor influence, anything where I see a chart where it's all number one, I'm like, it's bullshit. So we were like, all right, well, we need to find something that's number one. What is a better protein to calorie ratio than our gold product? And the only thing we found was boiled cod. And so in our comparison chart, we put boiled cod number one and David number two. And just left it there as like a dorky sort of comparison. Why it worked is like the juxtaposition between our bar and cod is like signals convenience.

• 31:00Speaker 01

  It signals value and like cod's pretty unappetizing. And then we're halfway through our first year and I was like, you know, it's like deja vu for me. I'm like, this is super boring, like another flavor, another, I'm like, we need to do something bold. And so we're like, let's actually sell cod and not like a stunt, like actually seriously sell fish. And so we did this boiled cod campaign and everyone's like, and it was funny because it was like,

• 31:27David Senra?

  You like pain, let me sell.

• 31:28Speaker 01

  Yeah, it's like got in the frozen business and it's like back to our brand values. Like it was actually a very intelligent thing because it had centered the conversation around protein to calorie ratio. So we did it in a way that wasn't sort of like, hey, protein, like right on the nose. It was like a little bit of a riddle and it's like $55 frozen cod online. Like no one really wants that. So we didn't have product market fit, but it functioned as a really great communication tool.

• 31:55David Senra?

  They're creating a product for marketing benefits.

• 31:57Speaker 01

  Yeah, we call it product as market. I'm not giving up on it. Like we're going to keep, we're going to keep going. We're going to keep going on cod until we get product market fit.

• 32:07David Senra?

  I don't think you will. I don't think you will, man.

• 32:10Speaker 01

  I know. It's funny because if you look at our website, it's like protein bars, bronzing gold, pints, frozen ice cream. And then there's like RTDs and there's like fucking fish. And it's like, it's weird, it's weird, but like the whole food space is so fucking boring, to be honest. It's like, they all say the same shit. They all do the same things. And so being a second time, I was like, we gotta have some fun with it.

• 32:37David Senra?

  Okay. So that was not in response to, to supply issues because there was no demand for this frozen cod so far.

• 32:44Speaker 01

  Yeah, yeah, no, it was, it happened to work at the same time and we were out of stock on some things, but no, it was independent.

• 32:51David Senra?

  Okay. So let's go back to when I interrupted you because you started talking about pain. You said, talk about building a masterpiece. What were you going to say there?

• 33:00Speaker 01

  Oh, it requires tons of discipline and intelligence and it's done over time. And that's really what the brand David's about is like finish your masterpiece. And it happened to everyone's inner excellence.

• 33:11David Senra?

  But how do you apply it to building your company though?

• 33:14Speaker 01

  Well, I think I start with like the fuck, what is a company? So our strategy is like two fundamental things in a company. People, it's all about people, as cliches it is. And I think about the organization as a product. So my focus is all about that. And then the second piece is product and mastery of the product. And when I think of product, I think of brand and product is the same thing. Like the product is just the raw thing and then the brand is like what it wears, like the exterior piece. But if you try to look at the organization as a product, a company is just a group of people aligned towards a mission. So if that's the most important thing, like what actions does a company do to like make sure that it's done?

• 33:55Speaker 01

  So for, for us, I think mastery is like, we have four processes in the company that ensure our organization is, is, is done right. And culture is lived. So if people are everything, who you select is the most important thing. Who you select into the organization, how do you train and onboard them? Three, how do you select the ones to get promoted and rewarded? And then how do you get the, terminate the ones that shouldn't be there? So those four processes are really critical to building the organization and scaling it. And so we spend a lot of our time refining our hiring process, training and onboarding is mission critical.

• 34:40Speaker 01

  And then promotion as well, rewarding the right behaviors and then firing. And then those are all organized around our value system, which is the best way to align a group of people, to make sure the right behaviors are matching what we want.

• 34:52David Senra?

  What are the behaviors that you want?

• 34:54Speaker 01

  You want truth seekers, people who have courage to seek truth. That's mission critical. You don't want biases in place. Foundational would be humility, which is I define as the freedom of pride and arrogance. So humility is really foundational and it shows up like intellectually, be like, I don't know what I'm doing. I need help. Like I don't want to cover your ass culture where people are like, I have this data. Therefore my decision's good. Like it's not really productive.

• 35:24David Senra?

  Say more about that.

• 35:25Speaker 01

  You'll get people from big corporate America come in and then they will generate a bunch of data, surveys or whatever, to prove their experiment or cover their ass if the experiment goes wrong.

• 35:40David Senra?

  Just like fake work.

• 35:41Speaker 01

  It's performative in a way of like, I'm just doing this to cover my ass versus focusing on the experiment and not worrying about covering your ass. Entrepreneurship is a very important value of the company as well. And that's like so anti, like to any activity, like any performative activity and fearing of failure is like the opposite of entrepreneurship. You just can't have that as a company scales. And so you get a lot of people coming from different corporate environments that have that, like just to protect their job.

• 36:12David Senra?

  Are you able to recruit from other food companies? Cause like you're so different. Most of these, these companies haven't been founder led in, I don't know, a half century, if not longer.

• 36:22Speaker 01

  Yeah, we can and we do. There's a lot of good experience they have. You just sort of have to baptize them when they come in. So that's where the onboarding process is really critical.

• 36:30David Senra?

  You baptize them?

• 36:31Speaker 01

  Yeah.

• 36:31David Senra?

  What does that mean?

• 36:33Speaker 01

  You just have to teach them new beliefs, new values. If you just sort of throw them in, they're just going to take what they know and apply it. And so you really want to have them assimilate to the culture in a way. And so a very thoughtful onboarding process where you learn the values of the company. You learn entrepreneurship, you know, we pack boxes, you learn humility, you learn all these things. It's really critical.

• 36:56David Senra?

  Are the most talented people in your company, the ones with no experience though?

• 37:00Speaker 01

  The most talented people in our company are former founders.

• 37:04David Senra?

  Say more about this.

• 37:06Speaker 01

  Convincing a founder to like not do their thing to join a greater company is a really strong signal of the opportunity we have ahead. Basically, I would position it as like, this is a platform for you to go do your thing. You could do your thing with amazing technology. You can do your thing with resources and you don't have to deal with the bullshit of raising money, all the bureaucracy that comes with the different stakeholders. And I think you see this in AI where all the, a lot of founder talent goes to those platforms. Convincing them to join a founder led company is how, without bureaucracy and for them to be able to fill their, their vision is.

• 37:48David Senra?

  Did you specifically target founders?

• 37:50Speaker 01

  Yeah, for sure. Cause they have agency, they have courage, they have humility. Yeah. And they're not ruined by corporate America or school. School ruins you too. You have to follow procedures. You're not thinking it's out of the box. You're following a playbook. Like there's no playbook in entrepreneurship. You just have to like think from first principles, understand the fundamentals and fucking just go.

• 38:16David Senra?

  Yeah, we just had Luca Ferrari on this and you know, he started this crazy company called Bending Spoons. He's doing it from Milan, not exactly like a startup hub. And he's talking about being isolated was super valuable to him because he just did the, not, he can't even copy this startup mantra because he doesn't know them. He's like immune to them. And his point was just like, he doesn't, he prefers young graduates or even people that didn't graduate to over experience. He's just like, I don't want your bad experience. Like I know what we're doing. Let's, let's just take high agency, young, smart people that want it really badly. And I think he said he got something like 800,000 applications last year for like 350 positions. Cause he's in markets where there's, there's a lot of, there's smart people everywhere. There's no great jobs for them. Their economy's terrible.

• 38:58Speaker 01

  Yeah.

• 38:58David Senra?

  And he's just like, I'm just optimizing for this and then I'll come in and indoctrinate them into how we're running the business. Which is completely different than school or a bad, or a company that's like a mediocre company.

• 39:06Speaker 01

  Yeah. Yeah. Cause the thing with experience is like really valuable, but there's a consequence to it where you'll naturally reason through your, through analogy or reason through your experience, which can be the right call. But you're not going to ask the dumb question or naturally think through first principles because you've already done it. So you're just going to move faster through, through, through leaning on your experience. And like for me personally, I started a company with no experience really. You know, I fundamentally don't think it's that important if you're, you have good reasoning skills and have the right ability to learn.

• 39:44Speaker 01

  So the best is like some inexperience, I find, and then like some damage, like some chip on shoulder. Like there are individuals at our company that you can't compete with them. They're not giving up. They have something to prove and like those are the most powerful people to get, to you want to organize around.

• 40:06David Senra?

  Tell me more about them.

• 40:07Speaker 01

  No, they're just kind of like, it's all child, they're getting something fucked up in their childhood. You can't, you know what I mean? Like I, there's some of them, you know, there's one kid in our team, like I can't compete. I get, I, he's just, he's going to die before he fails. And I didn't have a comfortable life and it's like a really, really, like this is, this is different for him. So you want many of those people, but like too many probably break things. So you're like, in general, you want like a balance of like those crazy chip on shoulder. You know, some, some people to balance out the team that are very rational and pragmatic and more conservative. Like you want a good team design, but the people driving the company are usually those maniacs that have a chip on the shoulder,

• 40:50Speaker 01

  high agency and more entrepreneurial.

• 40:53David Senra?

  Was this person having to be a former founder?

• 40:55Speaker 01

  Yeah.

• 40:57David Senra?

  How long did it take you to recruit them?

• 40:59Speaker 01

  Well, when we bought EBG, he was a victim of us acquiring that.

• 41:05David Senra?

  A victim?

• 41:06Speaker 01

  Yeah, because we bought up all the supply. So he was a customer of the Apogee business. So recruited him to join us and do it here.

• 41:15David Senra?

  Victim. I love that you just said that. Okay. So let's get into this because this is one of the, again, I've been hearing stories about you for a long time. And then this is the story that other founders repeat so much that's very Rockefeller-esque. Explain what that is. What is it?

• 41:31Speaker 01

  Apogee.

• 41:31David Senra?

  Okay.

• 41:32Speaker 01

  So in March of 20...

• 41:36David Senra?

  Don't go to the acquisition yet. Talk about the fact, what this thing does, why it was important to your business. And then we're going to go to the fact that you victimized everybody else.

• 41:45Speaker 01

  Apogee makes EBG, a steroid for box side, a cholesterol.

• 41:53Speaker 01

  Basically, it's a modified triglyceride. So olive oil is a triglyceride. So triglyceride has three fatty acids attached to a cholesterol backbone. Your body can't digest this unless lipase comes and clips these fatty acids off. What the company did is they figured if they can lock these fatty acids in, lipase can't break it down. And so what that means is you can have the taste and mouth feel of fat without the caloric metabolic impact. Why that's a huge innovation is because most of the calories in food are coming from fat. They're twice as much as protein and carbohydrate. This technology was naturally misunderstood, like most food technology.

• 42:38Speaker 01

  And so it was sitting there and it's like, it's really amazing. You can like have your cake and not have the caloric consequences. So think of it as like high intensity sweeteners, like stevia monk fruit. That's sort of level of innovation. So anyway, we were using it for David and then we were buying, we were like 90% of the company's sales and then like all paths led to like litigation.

• 43:05David Senra?

  So you were, this is a patented technology, correct? So you had one source where you could buy it from.

• 43:11Speaker 01

  Yes.

• 43:11David Senra?

  You just said you're 90% of this company's overall sales.

• 43:14Speaker 01

  Yep.

• 43:15David Senra?

  But there's a handful of other companies that saw that same opportunity when you use this into their product. Okay.

• 43:19Speaker 01

  Yeah. So we started, like, and the company was struggling, like, a bunch of...

• 43:24David Senra?

  Their company?

• 43:25Speaker 01

  Yeah, Apogee. Yeah. Like a bunch of cats and dogs trying to like make it work. And it's hard to work with. It's not like, it requires a good product development skills. But we were 90% of their available supply and...

• 43:38David Senra?

  And you'd be in a bad position if, for whatever reason, that company went under or they said, cut you off.

• 43:43Speaker 01

  We'd be dead.

• 43:44David Senra?

  Okay.

• 43:45Speaker 01

  And then eventually we became like 150% of their supply, meaning like they couldn't supply our needs. So anyway, as soon as I started the company and we were using the ingredient, my whole, like, just like, this is a nasty dependency. And on top of it, it was run by like older gentlemen, mostly lawyers. So you know how that is, like lawyers running companies is not good. I'm sitting there like, all right, either they're going to kill us, this is going to end in litigation, extortion, or we're going to buy them. But I was like, all my attention was like making sure either we buy them or something. And then in February, basically six months into the company, they came to us like, hey, you guys are killing it. How about you take it over?

• 44:30Speaker 01

  And of course, I'm like, let me think about it for a second.

• 44:35Speaker 01

  But so negotiated and it was an obvious deal, like these food companies need to be vertically integrated. Like if you're out there making a food ingredient and you're trying to sell to a big food company, it's this hell, like, because the food company were like, well, you don't have enough supply to meet our demand. And then you're like, well, I don't have enough demand to generate supply. And then it's too expensive. And then on top of it, you're going to like, well, I need redundancy. I need two suppliers. Well, I have DIP. I can't do that. So vertical integration is like, makes the most sense. So...

• 45:08David Senra?

  And they could not vertically integrate?

• 45:10Speaker 01

  They didn't have a route to market. Yeah.

• 45:11David Senra?

  So they essentially just bought this patent as a way to make money?

• 45:13Speaker 01

  Yes.

• 45:14David Senra?

  This is not a real...

• 45:14Speaker 01

  Well, they developed it. Yeah. They developed the process and invested in it. And the entrepreneur, the founder is amazing. It just, it required so much cash that it just eventually got diluted for the lawyer's sake over. And it just made sense for both parties to like merge and acquire. And so we did a half, a deal where we bought half the company and then, or we bought the whole company, but half equity, half cash. And then we got in a situation where it was like, all right, David's going well above our forecast. And then, so we are 150% of their supply. And at the end of the day, there's all these like customers that had no supply agreement. Honestly, their businesses weren't like going anywhere. And so if you didn't have a supply agreement, you're just not going to get supply.

• 45:59Speaker 01

  And by the way, me with David, the first thing I did when we started was negotiating a supply agreement with them. Prior to acquisition, we had a supply agreement that was good around change of control, that most favorite nations on price, most favorite nation on inventory. So any inventory that was available was ours.

• 46:16David Senra?

  How did you know to do that?

• 46:17Speaker 01

  When you have a dependency like that, you just got to make sure you're covered. Even if the deal didn't go through, we'd have all the supply anyway. Like we're the elephant in the room with the customer. If you didn't have a supply agreement, you're out of luck.

• 46:30David Senra?

  So the way it was reported or talked about was there's this very important patentable ingredient he needed. He was using most of it. There was these other companies that also used it that he was technically competing with. He buys the company and shuts off their supply.

• 46:48Speaker 01

  Yeah.

• 46:49David Senra?

  But I didn't hear the second half of the story that I then I also recruited from the people that I just...

• 46:53Speaker 01

  Yeah.

• 46:54David Senra?

  You had a lawsuit or something over this, right?

• 46:56Speaker 01

  We got an antitrust claim and lawsuit. Yeah.

• 46:59David Senra?

  Is that still ongoing?

• 47:00Speaker 01

  It was dismissed three times. Because like for that lawsuit, that lawsuit to function or like for them to actually have any merit would mean like, it would be like a landmark case in intellectual property. The big lesson in which I think you've had Lulu on, which if I had Lulu in my pocket, we would have managed the comms differently. Like we didn't, we just like, one, we let Apogee manage the comms a little bit. And we just did a terrible job communicating.

• 47:26David Senra?

  Did you communicate at all?

• 47:27Speaker 01

  There was a notice standing out of the acquisition in that if you don't have a supply agreement, there will be no supply. But like that comms, I could have done better. Like I could have, I could have done it with more compassion and like called the entrepreneurs or could have done it differently.

• 47:44David Senra?

  In what way though? Compassion doesn't seem to be one of your personal traits.

• 47:47Speaker 01

  I think it is. I think compassion is important.

• 47:50David Senra?

  Do you have it?

• 47:51Speaker 01

  Yeah, yeah, yeah. Yeah. To be a good leader.

• 47:54David Senra?

  Show it to me.

• 47:56David Senra?

  I didn't, where are you hiding it?

• 47:57Speaker 01

  I just like, I just don't have sympathy for like, I don't have sympathy for stupidity. I don't have sympathy for incompetence, really, like.

• 48:07Speaker 01

  It was so obvious that if you're going to get into it, if you're going to use an ingredient that has a single source, you better make sure you have a supply agreement. It's fundamental.

• 48:18David Senra?

  This goes back to something that was like second nature to you, that you don't even feel special. Like remember at the beginning of conversation, you're like, okay, well, yeah, I'm going to, I've got all this money. I'm going to chill. I'm going to find a wife, have some babies, and then I'll invest in the side. Obviously, you're an entrepreneur, so it's like life and death for you. You'll take it very seriously. You start cutting checks and this company's like, what is this guy doing?

• 48:36Speaker 01

  Yeah.

• 48:37David Senra?

  You didn't know how rare you were.

• 48:39Speaker 01

  Yeah, no, totally.

• 48:39David Senra?

  So it's the same situation here.

• 48:41Speaker 01

  Yeah, a little bit.

• 48:41David Senra?

  How many other companies are involved where you're buying the same ingredient?

• 48:44Speaker 01

  Three.

• 48:45David Senra?

  Okay. So it's like...

• 48:46Speaker 01

  Yeah. And their response was like, well, I didn't know I couldn't, I didn't know I, that was an option. It's like, what the fuck? What are you doing all day? Like honestly.

• 48:56David Senra?

  I found one of my all time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places. And they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform. AppLovin connects you with over a billion potential new customers in mobile games. AppLovin allows you to capture undivided attention. AppLovin ads are full screen videos that are watched for an average of 35 seconds. That is retention that blows other ad platforms out of the water. And you can launch on AppLovin in minutes. You set the goal and AppLovin achieves it. No complex setup, no expertise needed, and AppLovin scales quickly.

• 49:40David Senra?

  They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. So you want to get started quickly before all of your competitors are on AppLovin. And you can do that by going to applovin.com. That's applovin.com. Calm.

• 50:02David Senra?

  Is this why you had to raise money? Because?

• 50:04Speaker 01

  Yeah.

• 50:04David Senra?

  So your first company, you did like a, RXR was like a friends and family loan? What was the?

• 50:09Speaker 01

  My dad and my partner's mom guaranteed a line of credit.

• 50:14David Senra?

  A line of credit?

• 50:15Speaker 01

  Yeah.

• 50:15David Senra?

  But no typical venture capital?

• 50:17Speaker 01

  No.

• 50:17David Senra?

  Okay. What did you start David with? Did you raise money right away? Did you put your own money in? What'd you do?

• 50:21Speaker 01

  Yeah, I put 2 million of my own in as like whatever pre seed. And then that was enough to get us to launch. And then launch, we raised, uh, eight. For working capital, just to survive.

• 50:34David Senra?

  Why not just put up the eight yourself? Since you already got it in your pocket?

• 50:37Speaker 01

  Yeah, because I wanted to bring in, um, some people have been very good to me. So Valor Equity Partners, uh, Antonio and John have just been really supportive. And I like how they operate. Like their name is Valor. It's like they're pretty intense.

• 50:53David Senra?

  Outside of Valor, it wasn't like typical investors?

• 50:54Speaker 01

  No, no.

• 50:55David Senra?

  Okay, so friends and things like that?

• 50:57Speaker 01

  Some small friends.

• 50:57David Senra?

  Yeah.

• 50:58Speaker 01

  And then, and then I was like, we're done. All right, like we don't?

• 51:03David Senra?

  Why was that your initial reaction?

• 51:05Speaker 01

  Because I don't want to spend time talking to investors or fundraising. I think in consumer packaged goods, the P and L should work pretty quickly. Human economics should make sense. So you should be really capital efficient. You should not be raising a lot of money. Until unless you're going to acquire a company or like do what we're doing. So that wasn't like on the table in the beginning. So I'm just focused on the business, not thinking about raising more money. So I thought that was like, that's it. That's the only capital in. And then we had product market fit like crazy and it got bigger and then?

• 51:36David Senra?

  Hey, I need to raise money to find out how to sell fish online.

• 51:39Speaker 01

  Yeah, exactly. Well, that was funny like, so, so we've eventually raised around to finance the acquisition. And we turned out we didn't need more money on the balance sheet.

• 51:47David Senra?

  Okay, hold on, before we get there. You raised how much money to do the acquisition?

• 51:53Speaker 01

  We raised 85.

• 51:54David Senra?

  And who'd you raise it from?

• 51:55Speaker 01

  Green Oaks and Valor.

• 51:56David Senra?

  Okay, we need to talk about, so Neil Meta, I'm friends with Neil. I talked to him on the phone all the time. I talked to him about you like, I don't know, like two weeks ago. And he's got hilarious stories about you that I'm going to bring up on the podcast too. But you need to explain, like, why'd you choose him? Because you said, I'm not going to put any more money in. You're a second time founder. You made a boatload of money before. You have all these other investors chasing you. You don't even like talking to them. You were kind of like, in this is my own character position, kind of like, not even rude. You're just like, leave me the fuck alone. I'm building my company. Go away.

• 52:28Speaker 01

  Yeah.

• 52:28David Senra?

  But Neil's been, and Green Oaks was chasing you, right? So explain how you wind up selecting Neil and Green Oaks?

• 52:33Speaker 01

  The investor class believes they're very, very high status. And they always reach out with an entitlement to like, take my time. And so I, I've always viewed it as like, I'm not giving you my time. We're not, I will be respectful, but like, I don't just take investor calls. I just don't do it. I think it's a bad use of time. And plus I have my own capital. So I was like, I'll finance it. Fuck it. That's a great position to be in, by the way. I love it, right? Like, I don't need anything. So anyway, my friend Chad Byers was like, hey, my buddy Neil wants to reach out to you. And I'm like, for what? And he's like, it's like, oh, he's an investor. And I'm like, and I'm like, cool.

• 53:15Speaker 01

  I, I'm not, I'm not taking investor calls right now with all due respect. So I passed. And then two weeks later, Chad says, hey,

• 53:26Speaker 01

  I think you should take their time. I'm like, all right, for you, Chad, I'll do that. And then I got on the phone and I was like,

• 53:32Speaker 01

  I'm just like really focused. So I'm like, hey, listen, like, this is not a tech company. Like the math should work really quickly. Like, we should be like profitable sales. Like, that's how we're going to grow. It's profitable sales and then like line of credit. And they're like, great, well, if there's any opportunity that comes along, let us know. I'm like, great, we'll do. So then time goes on, we're just heads down. And then I start getting messages from former RXR employees, where a firm was soliciting them for, like, offering to pay them for reviewing or reviewing me. And it's not just one. It's like 20 people I haven't talked to in like five years. Be like, hey, Peter, should I take the call? And I'm like, yeah, take the call.

• 54:16David Senra?

  Basically what they're saying is, we'll pay you $1,000 if you get on the phone and tell us about your experience?

• 54:20Speaker 01

  Yes, with Peter. Like, what kind of leader was he?

• 54:22David Senra?

  Okay.

• 54:23Speaker 01

  And I'm like, yeah, take their money. I had no idea.

• 54:26Speaker 01

  And I thought, I was going through like the litigation. So I was like, oh, they're just like trying to fucking find dirt. So I had no idea he was an investor. And then I'm like, all right. Um, and then the Apogee deal happens, meaning I, the chairman of Apogee comes to me and we say, hey, let's figure out a deal. So then I reached back out to Neil. I'm like, hey, this is happening. You guys want to take a look? And of course, reach out to Valor, but hey, this is happening. We're going to need probably some money for this. Well, this is why I respect Green Oaks so much is like, even me kind of being rude to them, they had like put resources to do diligence on me. And in the best way possible, which was like Dylan's just doing my leadership, which is actually the, I think the most fundamental thing for this investment to work. It's like, you gotta make sure is Peter the right, right type of leader?

• 55:10Speaker 01

  They already done that when there was no deal on the table.

• 55:13David Senra?

  Not only there's no deal on the table, you already told them there won't be a deal.

• 55:15Speaker 01

  When I found out it was them, I was like, oh, wow. These guys are like, they're good. And I didn't do an auction. I, I, I want the right people on the cap table. Um, so it was, and Green Oaks won just out of my respect for their approach. Kept it like with just friends I know. Um, and then Valor had a conflict of interest because they're in the deal. So they couldn't do M and A because the deal is to finance the other company. So, uh, Green Oaks let it and, um, yeah, they're, they're amazing. I'm very lucky that Chad connected us.

• 55:47David Senra?

  So before I tell you the story that he told me about you, you just said, I didn't do an auction. Why is it that important to not do an auction when you're fundraising?

• 55:55Speaker 01

  The reason why I didn't want to do an auction is one, we didn't need a lot of money. So it's very important. If we needed a lot, a lot of money, I think it's different.

• 56:06Speaker 01

  But we only needed like one or two players. We were growing like crazy and I did not want to consume the company's resources in a way that would harm our, our operating our business. So I'm very sensitive to the resources an auction would take.

• 56:20David Senra?

  What are the resources an auction would take?

• 56:21Speaker 01

  Well, you gotta like run tons of management meetings. You have to constantly answer diligence questions. Like, it's a lot of time.

• 56:28David Senra?

  So your, your whole thing keeps going back to like, you're, you're intolerant of wasting any time.

• 56:32Speaker 01

  Yeah.

• 56:33David Senra?

  You've said this thing in like half a dozen ways, like in subtle ways, since we've had this conversation.

• 56:39Speaker 01

  Yeah.

• 56:39David Senra?

  You're obsessed with time.

• 56:40Speaker 01

  Yeah. So if you think of it as like, the analogy is like aerodynamic. I want to be super aerodynamic through things. Um, and then like my goals and like also is like being on the other side as an investor. Like I want to maximize value, but not really. Like if you want to, if I want to maximize value, I would run an auction and I wouldn't care. But I, I don't really want, I want to make sure my, the investors make money and they're, they're good with the underwriting. So like, you want to walk to the line where it's like rich, but not too rich, right? Like you could, you could actually, if I'm on the other side, I can underwrite it pretty, pretty easily. I want to make sure all my stakeholders make money and that's my approach. So the con of that is like, maybe we could have gotten an extra 100 million valuation. I don't know, but I don't really care. Like, I want to make sure that everyone feels good.

• 57:25David Senra?

  Why are you not really caring? And I agree with this. I'm just, I want to get your thinking out. What's like any open?

• 57:30Speaker 01

  2%? It just doesn't matter. It just doesn't matter.

• 57:36Speaker 01

  And like, I care about money, but I don't really care about that type of money. I really, I care about how the people on the team feel and are excited and aligned. And I've seen, I, I've seen on the other side of the table and founders just prioritize enterprise value that early. And just fucking gross.

• 57:54David Senra?

  Why is it gross?

• 57:55Speaker 01

  Cause it's not about that. Like it's about, in this stage, it's, it's about the right people and it's focusing on a mission.

• 58:05Speaker 01

  It's not about maximizing enterprise value at this stage.

• 58:07David Senra?

  And if you're good, you're going to wind up with the money anyways. It's just going to take over.

• 58:10Speaker 01

  Yeah. And like, we got a good valuation. We got fair and, but I'm, I, I don't want an investor feeling like, fine, we'll do it, but I disagree.

• 58:17David Senra?

  So you said, if you're on the other side, you could underwrite it. So essentially you want to do a deal where like, if you were Neil, you would take the, like, it's a good deal. You should make that investment.

• 58:24Speaker 01

  Yeah. And that's like, exactly. And that's how I underwrite it. Cause I'm, I'm, I'm operating as the CEO and then I'm operating as an investor too. Cause I'm participating in all this stuff as well. Which is a conflict, but I'm generally trying to like bifurcate like, all right, Peter's the CEO, but he's also an investor.

• 58:39David Senra?

  You mean, you're putting more of your own personal money into the company? Why would that be a conflict?

• 58:43Speaker 01

  Well, because if I could like lower the valuation for me, like?

• 58:47David Senra?

  Okay.

• 58:47Speaker 01

  Yeah.

• 58:48David Senra?

  You would self-serve. You're trying to do what's best for the company, not just business.

• 58:51Speaker 01

  Yeah.

• 58:51David Senra?

  I read Michael Bloomberg's autobiography for the first time like five years ago. And then I knew he has one of the most profitable private companies in the world.

• 58:58Speaker 01

  Yeah.

• 58:58David Senra?

  And I've heard crazy rumors, uh, that we don't even have to get into, which is like way richer than even, everybody knows he's really rich. But I heard he's like orders of magnitude richer than you've, has been reported. And he raised, I think it was Merrill Lynch, if I remember correctly, 30 million for 30% of the company. Then he winds up buying that first like 10% slug back to them from, from them like 10 years later. And whatever, it was like 200 million he paid for that, right? And then he bought the other 20%, I think in 2008, like 4.5 billion. So if you look at it, he's like, one of the best investments he ever made was buying back his shares, right? And essentially now being owning all this company. I think it was all of it or like 90%, something like that. And Merrill, and Merrill Lynch's point was like, well, we paid, you know, 30 million in like 1979.

• 59:42David Senra?

  And by 2008, we made 4.7 billion on it or whatever the case is. Could you see an example, a, a future? Cause I do think you are kind of like, uh, obsessed with control. Anybody's obsessed with like quality and control and everything else is like, tends to, I could see you wanting to like buy back the shares at one point.

• 1:00:02Speaker 01

  The opportunity presented itself for sure.

• 1:00:06Speaker 01

  The governance is set up in a way where I have that. So as long as that's there, but yeah, like I don't.

• 1:00:10David Senra?

  The governance is set up that you have control.

• 1:00:12Speaker 01

  Yeah, yeah. And, and I'm good with power, so don't abuse it.

• 1:00:17David Senra?

  Are you going to continue to raise money?

• 1:00:18Speaker 01

  I mean, if we have a need, but right now we don't.

• 1:00:20David Senra?

  But in every round, you put in more money of your own?

• 1:00:22Speaker 01

  I should, yeah.

• 1:00:23David Senra?

  Okay.

• 1:00:24Speaker 01

  Oh, yeah. Oh, yeah. Yeah, you gotta, the fuck else am I going to do?

• 1:00:31David Senra?

  All right, so I get on the, I'm on the phone with Neil and he was like, Peter's like one of my favorite kind of founders, like the founders he likes to back, which is you, you, you kind of like hinted at that earlier, which is like, nothing's that you wake up and it's like, you don't focus on what's good, it's like, everything is just not good enough. And all you see are the kind of flaws in your business, you kind of attack those flaws, trying to make your business stronger over time. Again, very common in his entrepreneurship. So I guess he like came to visit you and it was him and somebody else. And it was you and a bunch of people that worked with you and you were doing like taste tests or whatever, maybe new products or existing products. And like, what do you guys think? Like, this is awesome. And you go, wrong. This is shit. And then he goes, he said, not only he said it was wrong, that everything was shit. And then he listed all the deficiencies and the things that he wanted to, to fix.

• 1:01:17Speaker 01

  Running a business is like, it's like a river. As long as it's flowing, great. But if there's something blocking that flow, you need to fucking fix it. Like, if something's in the way, I ruminate on it to the point where I can't sleep, that I have to fix it so I can sleep. I ruminate on the problems.

• 1:01:40Speaker 01

  So they just like nag at me. This is actually a problem I have. A flaw of my leadership tiles, I don't acknowledge the wins or success. I'm only preoccupied about what's wrong. So I'm working on that. But I actually outsource that to people internally to like, hey, make sure we're like saying, you know, like our birthday is tomorrow. I fucking hate birthdays, but our birthday is tomorrow. So I'm like, please do something so we can acknowledge our birthday. But like, I don't do that. So I outsource it a bit internally, but yeah, it's, because if you just fix that, I don't know, the approach makes sense.

• 1:02:15David Senra?

  Yeah, it's almost like what Elon does. So we just had Zach Dell on the podcast and Antonio is on his board. And he says the first, I think it's still to this day, like the first two years, every conversation that Zach Dell had with Antonio, is it Gracias?

• 1:02:29Speaker 01

  Yeah.

• 1:02:30David Senra?

  Antonio Gracias is, hey, Zach, how's it going? Good. What's your bottleneck?

• 1:02:35Speaker 01

  Yeah.

• 1:02:35David Senra?

  He wouldn't, he refused to talk about anything. And he's like, what is the bottleneck? What is the in way or critical path? And then we're just going to talk about this. The entire conversation is this. And then the next thing that is resolved, okay, what's the next bottleneck? And it's just over and over and over again. Just relentless focus on the bottleneck.

• 1:02:51Speaker 01

  Yeah. Yeah. I think it's like, all right, my job is to scan the holistic picture of the business and react to the problems and then go fix them. And it gets fucking away. It's like constant confronting the problems.

• 1:03:07David Senra?

  I think this is like, almost all the elite entrepreneurs have this exact same mentality where it's like, you can even go to like, Buffett and Munger were talking about this when they were talking about people operating all the subsidiaries of Berkshire. It's just like, just tell us the bad news, because the good news takes care of it.

• 1:03:20Speaker 01

  It's like the river running. I don't, it's running.

• 1:03:22David Senra?

  It's some of the bad news.

• 1:03:23Speaker 01

  Exactly.

• 1:03:24David Senra?

  Tony Hsu from DoorDash, who I feel like I want to get him back on the show as soon as possible because I can't explain why, but like you talked to him, I think it's like 41, 42. And you just sit there and, you know, if you actually look, it's not, he's like, it's not just a delivery business. That's not what this guy's doing. He's like, gives you like young Jeff Bezos vibes and like, he's chasing after something much larger that you can't, he sees what you can't really see at the moment. And he has, he said he has this problem too, where it's like, you know, they hit a milestone, they do some kind of revenue or whatever the case is. And he's like, I might go out to dinner, but in many cases I don't even do that. And it's like, okay, what's, I'm on to the next day, the very next day.

• 1:04:00Speaker 01

  Yeah, to say that. Like our expert, I didn't do anything. That deal happened, I just, the next day.

• 1:04:06David Senra?

  You bought a house in Miami, looked for a wife, though.

• 1:04:07Speaker 01

  That was a year and a half later. Yeah, I did do that at some point.

• 1:04:13David Senra?

  So what is the thing that you're trying to unlock right now that you see blocking you?

• 1:04:16Speaker 01

  So we've reorganized the group to be a hybrid organization where we have David as a business unit, which has its sales, marketing, supply, finance, and we have Hall Pass, another BU. So we have two, we're two BU's and we're about to have a third business unit, all operating semi-autonomously. And then we have, at the Medici level, sort of shared services.

• 1:04:43David Senra?

  Why name the company Medici?

• 1:04:45Speaker 01

  I love history and it reflects how we operate organizationally. So the Medici's,

• 1:04:52Speaker 01

  they created the conditions for the Renaissance to happen. They weren't necessarily the doers. So they created the conditions, they identified Michelangelo, Donatello, Galileo. And it's a little bit of the analogy of what are the people that work at Medici at the company? They create the conditions for the business units to thrive and flourish. And they're the artists and scientists. So at Medici, it's like, it's like the money, the law, like the things that are agnostic live it there. And then the artists and scientists, the people actually doing the work are at the business unit level. So the name suited how we operate. Medici in our company creates the conditions for the business unit leaders and all the operators to go execute what they need to.

• 1:05:33David Senra?

  Say more about the structure. So you have all these businesses, you just said they operate semi-autonomically?

• 1:05:37Speaker 01

  Yeah. Semi-autonomically, meaning there are some centralized services, but they more or less are their own business unit that have agency and autonomy, run their own P and L and go do versus like a large CPG are typically centralized. So it's a decentralized approach because speed and agility is the main objective. Because you look at it and you're like, all right, your payroll is too high. Like, it's quite inefficient on a P and L basis because you have more, you're like double, you have double sales.

• 1:06:04David Senra?

  Duplication of efforts.

• 1:06:05Speaker 01

  But to me, it's the main design objective is speed. And so if it's speed, you're designing for speed, you're going to pay extra people to do that.

• 1:06:14David Senra?

  Me and Rob had this exact same conversation yesterday.

• 1:06:17Speaker 01

  Yeah, speed's important. Like, it's always been important and it's really important, especially in our market we're in. We're dealing with people with mega, mega scale. Our ability to bring product to market fast is, I don't want to lose that. And honestly, if we lose that, I'm like, I'm done.

• 1:06:33David Senra?

  What do you mean you're done?

• 1:06:34Speaker 01

  Like, if we lose our entrepreneurial, and I say this to the company, like if we lose our values and the way we operate, our culture, I'm fucking leaving.

• 1:06:41David Senra?

  Why don't you just grit your teeth?

• 1:06:43Speaker 01

  Grit my teeth? Because it makes me angry. Because like, because it makes me angry. I hate big fat stupid.

• 1:06:50David Senra?

  Fucking leave it.

• 1:06:50Speaker 01

  I hate big fat stupid things and I don't want to be a big fat stupid company. The problem is, it's actually inevitable as you get bigger. Like, my, my job is to fight bureaucracy and fight the bullshit.

• 1:07:01David Senra?

  It doesn't have to be. I mean, you even kind of stumbled upon, or maybe maybe stumbled upon, you were probably very intentional about the way you operated this. I just did this episode of my other podcast, Founders, about Henry Singleton. And he read, he led one of the most successful conglomerates of all time. In many cases, a lot of the ideas that we ascribe to Buffett and Munger were actually things they learned from him. And his whole thing is, I think at the time, the seventies, he owned like 130 businesses, 129 of them were profitable. And essentially like they, same thing, they just ran, they ran their own operations. The only thing he centralized was compensation and capital allocation. So you're on your own, you're making cash, I'm going to leave you alone.

• 1:07:36Speaker 01

  Performance equals freedom.

• 1:07:37David Senra?

  Yeah, exactly. And then you just send your cash and then I make the capital allocation decisions for us.

• 1:07:41Speaker 01

  Yeah.

• 1:07:41David Senra?

  So I don't think, and he didn't have a big fat stupid ugly company. So it doesn't have to be that.

• 1:07:47Speaker 01

  No, no, I know. But it's like the nature of these organizations, the more people they want, like nature pulls it in together. Like, the more people, the more, like, it almost wants to be that, a group of people.

• 1:07:59David Senra?

  I mean, Luca Ferrari just said the exact same thing. Because, and, you know, he buys these, he acquires these companies. In some cases, they have like hundreds of, these are software companies. So he's like, how do they not make money? It's like, how are you unprofitable?

• 1:08:10Speaker 01

  That's where our margin business is.

• 1:08:12David Senra?

  And it's like, what are these 400 people doing? And in one case, he bought a company that had 400 people, he got it down to 20. And now went from losing money to it's a cash printing machine. He's almost making every year in profit what the acquisition cost was originally. But that was his whole thing. He's like, it's in human nature to add layers and complexity. And I think he said the company value of his is like, anybody in the company can raise their hands, like, I don't want to add this complexity. And he goes, it's on the person wanting to add the complexity. He's like, you can just raise your hand, you don't have to say anything else. But the person who wants to add this has to be the one in the company to justify it.

• 1:08:43Speaker 01

  Yep. So you've got to fight it.

• 1:08:45David Senra?

  Okay, so you have the Medici level, you have all these semi-autonomous business units. How much power does the person running the individual business unit have?

• 1:08:54Speaker 01

  Quite a bit.

• 1:08:55David Senra?

  These are typically former founders?

• 1:08:57Speaker 01

  Yeah.

• 1:08:57David Senra?

  Okay.

• 1:08:58Speaker 01

  They're former founders or they have to be product leaders. That's like a credential, meaning they have to, back to my like, they have to pick up the phone to fix the product, they're the wrong guy. So they have to be product first. Ideally a founder or someone who has that, those, that experience, but not necessarily. But product leaders.

• 1:09:19David Senra?

  Okay, tell me more about the organization now.

• 1:09:21Speaker 01

  So at Medici's product, cash, people, law, regulatory, so like that sits there. I sit there and we serve the BU's, right? And then there's a lot of collaboration in general, we're all in the same office. There's a cross-functional team at each BU. So it's just supply and demand. So, so demand is sales and marketing. Demand is finance and supply. And CPG, it's very cross-functional. So the, the typical business units are organized around sales, which is working with retailers, marketing.

• 1:10:01Speaker 01

  And that's really demand, right? They generate demand. Marketing can be mostly e-commerce, but it's also all social digital. And then there's a supply side, which is supply chain, which is end to end. So raw materials to fulfillment and warehousing. And then finance, which is forecasting pricing. And so finance is the referee. So that, that, that makes that cross-functional team runs the business.

• 1:10:23David Senra?

  Wait, what do you mean finance is the referee?

• 1:10:25Speaker 01

  Meaning they define the framework for pricing, they define the budget, they're, they're sort of the ones. Because there's inherently tension between supply and demand, right? Like, there's always a healthy tension there. The, the finance is the referee in terms of they define the rules of the game and they ultimately run the P and L, in my view.

• 1:10:44David Senra?

  Explain the tension between supply and demand.

• 1:10:46Speaker 01

  Supply, people are really driven by accuracy and efficiency. Sales and marketing people are really more charismatic and want to generate demand and maybe that requires less accuracy. So they have a conflict of interest sometimes because one just wants to grow as fast as possible. The other one wants to make sure the supply is there appropriately and accurately.

• 1:11:12David Senra?

  I'm still not understanding though. Say more about the accuracy. You're using the term accuracy.

• 1:11:16Speaker 01

  Why would someone be interested in supply chain? Generally like to know what you need, where is

• 1:11:20David Senra?

  You're talking about the personality types?

• 1:11:21Speaker 01

  Personality types, yes.

• 1:11:22David Senra?

  Okay.

• 1:11:23Speaker 01

  And their function is like to make sure what do we have, where is it, when do we need it? How much do we have? Like, and then sales is like, I want to go win. And often, they will outkick their coverage, or there will be issues, and ultimately, supply has to go fix those problems.

• 1:11:40David Senra?

  Okay, so how many business units do you currently have at BDG?

• 1:11:44Speaker 01

  Uh, one, two, three, four.

• 1:11:47David Senra?

  You said something earlier that I, like, I wanted you to expand on too. You said, it's very important for me to be aerodynamic as I go through things.

• 1:11:55Speaker 01

  Yeah, it's like efficiency and simplicity. Like, um, I think the best design is the simplest design and just my, I think my nature.

• 1:12:05David Senra?

  So how does that manifest, your nature manifest in the way you're building this business? Because it looks super complicated.

• 1:12:10Speaker 01

  Um, it is complicated, but

• 1:12:16Speaker 01

  well, one, it's a very flat organization, so there's not a lot of depth. Like, I have like 25 direct reports.

• 1:12:23David Senra?

  What's interesting is I read this book on Jensen, and Jensen has famously like 60 direct reports. And a lot of people, when that came out in the book, and I think he's talked about this in some interviews too. They're like, that's way too many. Like, how could he do it? And it's like, well, this guy's running the most valuable company in the world. Seems to be working for him. How many direct reports is too many?

• 1:12:38Speaker 01

  Well, I used to think that like seven or eight was the most you could have to really like develop and like give the right attention to like develop the best leaders possible. Now, I think the value of having so many reports is it allows you to see a lot. And it keeps the organization, um, it keeps me closer to the problems. And what I tell people when like, if they're, if they're reporting to me is like, I'm not going to manage or tell you what to do. We're going to work together to set priorities, but like, I'm going to expect you to like, bring things to me. I'm going to, you need to bring the problems to me, and we're going to figure it out together. But like, I'm not going to be like managing your to-do list. Like, it's, so it takes a certain type of leader, like,

• 1:13:22Speaker 01

  report to me, like, I'm not going to manage them, but I'm going to lead them. Yeah, so it requires like these leaders to have just better agency and autonomy if they're working with me. Versus a conventional organization, which is like, oh, I only have eight direct reports. Then you usually get this very, very stacked thing that like,

• 1:13:40Speaker 01

  the hierarchy gets too stacked and information doesn't flow as well.

• 1:13:44David Senra?

  Do you have a co-founder?

• 1:13:46Speaker 01

  Yeah.

• 1:13:47David Senra?

  Are you still working together?

• 1:13:48Speaker 01

  No.

• 1:13:50Speaker 01

  He's no longer at the company.

• 1:13:52David Senra?

  What happened?

• 1:13:53Speaker 01

  He was really helpful in the beginning, but most founding teams never really scale to the, to the promised land. Like, it's always pretty,

• 1:14:05Speaker 01

  like, the hardest thing in leadership is that the team that gets you started in the different life cycles, usually is not the same group of people.

• 1:14:13Speaker 01

  Um, so that's, that's a true observation that I've had.

• 1:14:16David Senra?

  The observation you had is the founding team, that says there's two, three, four co-founders, usually is actually one. It just takes time to reveal who the one is.

• 1:14:25Speaker 01

  Yeah.

• 1:14:26David Senra?

  I've noticed the same exact thing.

• 1:14:27Speaker 01

  Yeah, yeah.

• 1:14:28David Senra?

  We, I talked about Adam Ferrughi earlier in Apple of it, and like, I think he even said this on the podcast. You know, he wants to run a very strict and ruthless meritocracy.

• 1:14:37Speaker 01

  Yeah, same way.

• 1:14:38David Senra?

  Yeah, and his whole thing was like, well, the co-founder that maybe had the skills to be the CTO at the beginning, couldn't hang, so we had to literally like, and in many cases, they had a conversation. Adam was the one driving it, but he was like, you see what's going on. So like, do you want what's best for the company? Or do you want to have like this fight? And in many cases, if you just frame it's like, this is obviously best for the company, you see what's going on, and like, it's somewhat amicable.

• 1:14:59Speaker 01

  Hmm, yeah, and I don't like, I don't like the, I don't like the founder, co-founder's titles, because it implies some privilege. Um, it's inherently anti-meritocratic.

• 1:15:11David Senra?

  What do you mean, you don't like the founder, the co-founder?

• 1:15:14Speaker 01

  I just don't like, what, like, a founder is in a role. It's not a job. You never hire it. So it doesn't have a role in the company. So I think it's actually people abuse its power, and I don't think it should get special treatment. So, like, I don't use it. I think it's an abuse of power. Everyone has a role, everyone has duties, and either you do them well, or you don't.

• 1:15:39David Senra?

  This is what's getting more and more interesting about me having more of these conversations, is to start seeing the same similarities between the people, because I mentioned Luca Ferrari earlier. Uh, Adam Ferrughi, I mentioned a few times. They both said the same thing, like Luca Ferrari, she's like, we don't even like the term founder in the company. And it was like four founders of Benny Smith, it's like, we all have the same job. And that job is to do whatever's best for the company. They don't use the title at all.

• 1:16:02Speaker 01

  Yeah, I don't, it's not on my, it's not on my signature.

• 1:16:05David Senra?

  So you define your role as what?

• 1:16:08Speaker 01

  Chief executive.

• 1:16:10David Senra?

  And how do you think about that in like terms? You wake up every day?

• 1:16:13Speaker 01

  Yeah, my kind of forever job description is the management team, making sure they're performing. Make sure we get product market fit, and continually get product market fit. Organizational health, so just like, how is the culture? Is there, are people scared? Are people like free and creative? Are we living the values? Can people recite the values? So, culture. And then four would be alignment of like strategy, like, are we organizationally aligned? Not in decisions, but like, does everyone understand where we're going, why we're going, and is everyone incentivized to go there? Is the group of people moving in the right direction? And then fifth would be cash or fundraising. So those are like my forever. And then

• 1:16:59Speaker 01

  I have one of the, what I like to call, this is like founder mode, but then what I've always done is like, I call it, my main job is like reactionary leadership support. So reactionary in the sense, I literally react to it. So fires or problems, I get information, it's a very reactionary, which generally viewed is negative, but like, my job is to react to the problems. So reactionary leadership support. So the leadership support, I either have to drop what I'm doing, or prioritize or reshuffle, and then go in and assess, figure out, fix it, whether that's directly or indirectly, or whatever, provide resources, just shine a flashlight on it, and then get the fuck out of the way. And I expect that on all leaders in the company.

• 1:17:42Speaker 01

  Like, call it reactionary leadership support.

• 1:17:45David Senra?

  I want to go back to this, I think one of the most fascinating things about you is this, uh, like divine discontent, this, you wake up with this fierce competitive drive, but also, I'm not going to call it unhappiness, because I don't think that's the right word, but like this discontent of where you are and this constant desire to improve things every day. When Travis from Uber came on, uh, he had like a warning, because, how old are you?

• 1:18:09Speaker 01

  Forty.

• 1:18:09David Senra?

  Okay, so he's about 10 years older, right? And he's like, what you have to worry, worry about is that you get so, he's like, the act of entrepreneuring is just dealing with problems.

• 1:18:20Speaker 01

  Yeah.

• 1:18:20David Senra?

  Concept. And he's like, he said something like, when a warrior fights too long, he might be too zen. So he's like, kind of like zen on the outside, but he's like so used to adversity, and it's like, it doesn't bother him anymore. Right? And he's like worried that

• 1:18:34Speaker 01

  Yeah, he's numb.

• 1:18:35David Senra?

  Exactly. Numb is a great way to put it. And the, the point that he's making is like, you want to wake up being bothered and not being used to adversity, not being, not, doesn't prevent you from acting, but you want to essentially react to it. This is what your reactionary leadership, what you just said there, made me think of this. So how do you think about like what's actually going on inside of you?

• 1:18:57Speaker 01

  Emotionally?

• 1:18:58David Senra?

  Yeah.

• 1:19:00Speaker 01

  I do have a sensitivity, um, and get angry, but I harness it in the work, which is good. I love the, it's like, it's not a fair analogy, but I love like, I love the fight, so I seek it.

• 1:19:17Speaker 01

  But I don't think I'm good at tapping into my emotions on the spot. I think that building the pain tolerance is very good, though, to be able to handle it over long periods of time. Because if, if you are too sensitive and you react to it, it, and you're in an affection in your sleep, then you will break. So I do think it's important to be able to like have that zen, be able to build it, like get punched in the stomach and you're just chill with it. But you, yeah, you definitely can't lose the emotional response. Like, things don't bother me like they used to. I'm getting better at it, but I still have that response if things aren't right. But I imagine with Uber, he's just got really, really thick-skinned about it, to the point where

• 1:20:04Speaker 01

  everything was, I don't know, I don't know his experience, but I could see how that happened.

• 1:20:08David Senra?

  So what keeps you in is you like to fight?

• 1:20:10Speaker 01

  Yeah, I love conflict.

• 1:20:14Speaker 01

  Healthy conflict, but.

• 1:20:16David Senra?

  Thanks for taking the time. This was awesome, man. Appreciate it. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.