Dr. Squatch: Jack Haldrup. From a Closet Full of Soap to a $1.5 Billion Brand

Jack Haldrup didn’t set out to build a billion-dollar company. He just wanted a way out of consulting and a bar of soap he actually liked. After developing psoriasis, Jack started paying closer attention to the products he used on his skin. A chance purchase at a farmers market introduced him to handmade soap and sparked a business idea. With just $1,500, he launched an online soap company, shipping orders from his closet. Eventually, his mom took over fulfillment from his childhood bedroom. But growing the company meant navigating a trademark dispute, a painful split with a lifelong friend and business partner, and rising expenses that forced Jack to cut staff and rethink the business. Then, in 2018, a video ad made on a small budget went viral and transformed Dr. Squatch into a rocket ship. By 2020, annual sales had reached $113 million, and Unilever acquired the company in 2025 in a deal reportedly worth $1.5 billion. In this episode, Jack explains why spending most of his remaining savings on a marketing class became a turning point, how Dr. Squatch found its voice through funny ads, and why he eventually stepped down as CEO of the company he’d built. What You’ll Learn Why Jack saw an untapped opportunity in a product that had been around for centuries How subscription boxes helped Dr. Squatch find its first customers Why Jack made a $3,500 bet on a marketing class when money was running low How Facebook ads helped Dr. Squatch grow before its viral video breakthrough What Jack learned about hiring, managing costs, and scaling a fast-growing business How Jack navigated the transition from founder to CEO—and eventually stepped away Production Credits How I Built This is produced by Podcast Pointman and part of the Vox Media Podcast Network. Follow How I Built This: YouTube → @HowIBuiltThis Instagram → @howibuiltthis X → @HowIBuiltThis Facebook → How I Built This Follow Guy Raz: Instagram → @guy.raz X → @guyraz Substack → guyraz.substack.com Website → guyraz.com Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:02Speaker 00

  I bought maybe 400 or 500 bars of soap to start with. Literally had it on a shelf in my closet. My mom took over the shipping department. She did it out of my old childhood bedroom, which is pretty cool. There was a point where my dad called me and was like, hey, you need to find a fulfillment center so I can have my wife back.

• 0:27Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 0:40Guy Raz?

  I'm Guy Raz, and on the show today, how a burned-out consultant, a trip to the farmer's market, and a viral ad combine to turn a natural soap side hustle into a $1.5 billion brand. Dr. Squatch.

• 0:56Guy Raz?

  Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one hard question. How do we make sure AI goes well for people? So they asked over 100,000 people their hopes and their fears, and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them

• 1:40Guy Raz?

  write the business plan, build the prototype, analyze the market, maybe even come up with the idea. What separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. Support for the show comes from Stripe. When you're ready to incorporate your startup, Stripe Atlas is ready for what's next. With Stripe Atlas, nearly all companies are formed in just one day, all the legal documents handled. And with Stripe Treasury, you can manage banking, cards, payouts, and more on day one.

• 2:24Guy Raz?

  A global by default business account helps you manage multiple currencies. From incorporation to running your global finances, Stripe is ready for what's next. Start at stripe.com/atlas. Stripe Treasury includes various distinct Stripe products. See applicable product terms. Stripe is not a bank. Checking accounts are provided exclusively by Fifth Third Bank, National Association, Member FDIC. Support for the show comes from Framer. When launching a new website turns into a pile of tickets and handoffs, Framer helps you move faster. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever

• 3:08Guy Raz?

  while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply.

• 3:36Guy Raz?

  If you were super online back in 2018, you might have come across this really crazy ad.

• 3:43Speaker 02

  Listen up. The soap you shower with, it's [BLEEP]. You probably haven't even questioned what bar of soap you lather up with. Let's face it, most guys don't. They're still using whatever bar their mommy bought for her little man.

• 3:57Guy Raz?

  This video features a big bearded dude standing in an outdoor shower being told he needs better soap.

• 4:04Speaker 02

  You won't just smell good either. Your skin will be healthier and more nourished. Dare I say, soft.

• 4:14Guy Raz?

  This ad helped turn a tiny business into a major brand, selling millions of bars of soap every month. And as you're about to hear, Dr. Squatch launched with just $1,500. And in 2025, Unilever acquired it in a deal reportedly worth $1.5 billion. So do the math on that one. That is a 1 million X return on the original investment. The guy behind the company is Jack Haldrup, who got the idea after buying a bar of soap at a farmer's market to help with his psoriasis. Building that business would mean putting most of his savings on the line and straining a lifelong friendship. And eventually, Jack would have to ask himself

• 4:57Guy Raz?

  whether he still wanted to run the company he created. Jack grew up in a middle-class family in Carmel, Indiana. His mom worked nights as a respiratory therapist so she could be home for breakfast and dinner. His dad worked in restaurants before starting a company that connected local businesses to the internet. Jack studied business at Indiana University, and when he graduated, he took a job as a consultant at a big firm in Chicago.

• 5:24Speaker 00

  I didn't like being a consultant. And a lot of consulting is kind of positioning yourself as an expert and telling other people what to do, even though you're not necessarily in their business. And so I maybe had like a little bit of imposter syndrome from that. And I also just had a desire to, you know, I'd say get into the arena or like be involved in actually building something versus kind of critiquing from a consultant lens. And I say the second epiphany was really this realization that I didn't want to necessarily be anybody that was a partner at my firm. So the highest level that you can get at this type of company is to become partner. And there's a lot of great stuff about it. You make pretty good money.

• 6:07Speaker 00

  But you're still kind of in that travel lifestyle. And they actually traveled more because they would go almost like day to day from job to job to just check in because they're kind of the main person. So you're traveling actually four or five days a week to different places, not just one place. And I just felt that the lifestyle and kind of the health and the quality of life that these people had, it wasn't great and it wasn't what I wanted. And the decent money was not like near enough to kind of make up for that. And so I had this realization that if I don't want to be that person, then why am I, you know, the longer I stay in this career, the more kind of trapped I'm going to be.

• 6:44Guy Raz?

  Okay, so you are, this is going through your head, but it's still a job and you're, you come from a family that I think is, you know, expects you to be responsible and make rational decisions. So like, I imagine you're not just going to like walk in the door one day and be like, I quit, I'm out of here. Like, what's it gonna happen that way?

• 7:04Speaker 00

  Yeah, I would never allow that, I guess, for myself. I started to, so I guess I started to have this idea that I wanted to become an entrepreneur or that I wanted to move into the tech industry and work for a small startup. And I wasn't really sure where to start or what to do. But I knew that if I did something, I wasn't going to leave my job. And so I started to just basically become obsessed with learning everything I could about entrepreneurship in terms of just like absorbing content. And one of the benefits of the travel-based job is you have so much downtime by yourself and a lot, and very few distractions when you're on the road or even if you're at a local client because you're driving.

• 7:48Speaker 00

  And so I had ample time to kind of just think and to listen to podcasts and read books. And so my first step was just to put myself into that world of consuming as much as I could around those topics.

• 8:00Guy Raz?

  And what did you, what kind of things were you reading? Do you remember?

• 8:04Speaker 00

  Four Hour Work Week was a classic that stands out. Lean Startup.

• 8:08Guy Raz?

  Eric Ries's book, yeah. Lean Startup, Eric Ries's book, yeah. Okay, so you are, and tell me about your own lifestyle at the time. I mean, you're in your mid-20s. Did you have time to like take care of yourself, exercise, or you just on the road all the time and eating, you know, fast food?

• 8:26Speaker 00

  Yeah, it wasn't great. It's very hard to be healthy on the road because, you know, it's such a grind that one of the, one of the main benefits that you get is the ability to just go to all the restaurants kind of in town that you're at and on the client's dime. And so you're typically going out to all these places. And as much as you want to stay disciplined, it's just very hard to like pass up, you know, certain meals. And even if you try to stay healthy in a restaurant environment, like, it's just tough. And so, yeah, I mean, I had a great kind of social life. I had a lot of friends in Chicago. I lived with friends that mostly were from IU and just people I knew from the area. But I'd say from a work standpoint, I wasn't too happy with my lifestyle.

• 9:07Speaker 00

  And then I did have a health condition kind of pop up basically around this same timeframe, around 2012 as well, which probably contributed to a shift in some of my views.

• 9:20Guy Raz?

  What was it? Do you mind talking about the condition?

• 9:22Speaker 00

  Yeah, no, it's, so it's psoriasis. And it's basically kind of, kind of like a rash on your skin. And it started very small. But I started to notice it and then kind of research it. And I think it shifted my perspective in a couple of ways. I mean, one, just being, being in my 20s, that was maybe my first sense of like not being invincible. And it was like, oh, my gosh, like, you know, what's wrong with me? And I was very, just very resistant to like, I don't know, mainstream medical treatment for whatever way, for whatever reason. And I became very interested. Like, I think that one of the first books I read was Primal Blueprint. And so I changed my diet to the extent that I could and started to kind of get into understanding

• 10:07Speaker 00

  like a little bit more about health and like natural foods and personal care products. And so, you know, that was a big shift.

• 10:14Guy Raz?

  So walk me through how you started to think about.

• 10:20Guy Raz?

  You know, what you would eventually start to work on.

• 10:22Speaker 00

  Yeah. So like I said, I knew I didn't want to quit my job. I probably had, you know, maybe 10,000 in savings. So I knew that I kind of, that was my startup capital. And so I would say that kind of like along this psoriasis journey, I started shopping at farmers markets here and there. And eventually I discovered or I bought some soap at a farmer's market and took it home, took a shower and just like loved the product. And it was kind of this like, one of those experiences in your life that stands out for maybe like more impactful than, than you would think.

• 11:01Speaker 00

  And so normally I always use body wash when I showered, you know, especially like in the Chicago winter, like my skin would just feel really dry, really tight, kind of cracky after doing that. And using the soap, like I didn't have that feeling like my soap, my skin felt soft, felt kind of moisturized and.

• 11:19Guy Raz?

  It was just some, some random farmer's market stand. Somebody was selling handmade soap?

• 11:25Speaker 00

  Yeah. Well, you know, I was buying like produce and meat. And then, you know, there was a seller of the soap. And so I just figured I'd try it out. You know, it's totally, totally random. And so, um, but yeah, it kind of like actually made me look forward to showering where I think before that it was always something that felt like I had to do out of necessity because obviously I had to stay clean, but like I would always get these like negative effects after showering that I didn't like. And so, you know, that just stood out to me and caused me to research a little bit more about the product. And as I started to research it, like there was this story around it that became very interesting to me.

• 12:04Guy Raz?

  What was the story?

• 12:06Speaker 00

  So basically, you know, what I had purchased was called cold processed soap. And it's a way of making soap that's been around forever. And it became, let's say, depopularized in the early 1900s because it's hard to do at scale. And also it's kind of like more expensive than the bar soap that's normally in the store now. And so because of these kind of production reasons that became, I guess, less popular, it's just like, kind of not in the mainstream, even though it's been around forever. And so I just thought that was really interesting. And the fact that it was, it wasn't just like, oh, there's one or two ingredients that are different.

• 12:49Speaker 00

  But the fact that it's like, it's actually fundamentally a different process and fundamentally a different product than what's on the shelf in the store. That just kind of really stood out to me.

• 12:59Guy Raz?

  All right. So soap that you buy in the stores made, I guess, I don't know what it's called, but it's cold process. I'm assuming is that it's cold. It's not heated up. Is that right?

• 13:11Speaker 00

  Yeah. So when you make soap, you do actually kind of like, when you mix lye and water, it gets pretty hot. And then you actually will heat up the oils a little bit. So you're, you are adding some heat. But the main soap that you would find at a store is called extrusion type soap. And it's through kind of a much higher heat process through kind of like a manufacturing at scale that you would see with other products like molds and things of that nature. And so I think in the bar soap space, the category had been kind of commoditized and with like very cheap products that weren't great. And that's kind of was that, what was that on the shelf at the time?

• 13:49Guy Raz?

  So I guess you could say like, um, like commercial soap is like ultra high pasteurized, ultra high temperature pasteurized milk versus like maybe flash pasteurization or even, even unpasteurized milk, right? Which a lot, you know, that's, I know I'm going to get letters from people like, don't drink that. But a lot of people do. I've had it. It's fantastic. There's a different taste, right? You, it's a, and there, there's more bacteria, good bacteria in things that are less pasteurized. So, I mean, it's kind of, let's kind of, is that a fair analogy a little bit?

• 14:25Speaker 00

  I think, yeah, I think there's definitely some similarities in that analogy. I think it's kind of just less processed overall and ends up with a higher quality kind of ingredient product.

• 14:36Guy Raz?

  Right. And so probably the guy you were buying it from made it, right?

• 14:39Speaker 00

  Yeah.

• 14:40Guy Raz?

  And you're, okay, so you're, you like the soap, but you're, how do you start to think, I mean, when you start to research this, right? And you realize that this is very hard to make at scale. I mean, for a lot of people that, that would be, you sort of move on and say, okay, this is, maybe this isn't the right product to focus on because I can't hand make soap and turn this into a business, or maybe you can, but a small business. What, what got you thinking, oh, this, this is something I want to maybe pursue?

• 15:11Speaker 00

  I think it was like that, that story of the soap being different and the idea that I could build a brand to tell that story. And I, what I really thought was possible was, you know, I would say the average guy, most of my friends, 20 year olds living in Chicago were not shopping at farmer's markets and they were not buying cold processed artisan soap. And what I thought was that, you know, I could basically use the internet and this thing called e-commerce to reach those, those people and sell them this product that they wouldn't normally discover. And so that's what excited me. And whether it's through kind of naivety, or maybe it's just the lean startup mindset, I wasn't thinking about,

• 15:55Speaker 00

  you know, can this be a multimillion dollar business or anything like that? I was mainly thinking, hey, I love this product. There's probably other people like me that wouldn't normally find the product, this product, and maybe I can introduce them to it.

• 16:09Guy Raz?

  But there's a, um, there's a slight issue, which is you gotta kind of make the soap. Um, you gotta learn how to make soap, right? I'm assuming that you, you started to find resources, maybe online or in books to teach you how to do that cold process yourself?

• 16:26Speaker 00

  Yeah. Soap making is very easy, especially like in a small batch scale or setting. And so it's something you can do in your kitchen, um, even.

• 16:36Guy Raz?

  Yeah. What is it? It's like lye and, and yeah.

• 16:39Speaker 00

  Yeah. Lye, lye and water. And then, you know, a handful of oils that you can choose, whether it's olive oil, coconut, palm type of oils is the base of a soap. And then any kind of scents or other additives that you may add to it. So essentially you can mix that together with kitchen equipment and you have to handle lye carefully. But other than that, it's, you know, it's a fairly easy process. And so I think, so I did make some batches. And that was fun. But I think pretty quickly, you know, again, like my perspective was like, hey, I want to take this product to another market, not that I want to fundamentally change this product.

• 17:20Speaker 00

  And so I didn't set out with the goal of like, I have to recreate and make the best cold processed soap of all time. You know, my mindset was more, I have to introduce this into a customer that's going to love it, that doesn't know it yet.

• 17:37Guy Raz?

  Okay. But you're still working at, I mean, you're still working at this firm, right? But you're at nights and on, and sort of on weekends, just kind of coming up with a concept, but really not, not, not worrying too much about the actual soap. Like you, you figured that was actually going to be relatively easy, like making a quality bar of soap was going to be easy. The challenge was going to be figuring out how to build a brand.

• 18:07Speaker 00

  Correct. Yeah. Especially at a small scale. And so obviously my approach was to tailor kind of soaps that already exist into like what guys would like. So like a pine tar was our, was a huge seller for us. It was like a black soap. It had a square, you know, we chose like a square shape to kind of differentiate from that perspective. So there was a few little decisions like that. Um, but again, wasn't trying to recreate that from the ground up. Eventually it just kind of all clicked and I gave myself, you know, a 90 day goal to, to launch the business. And so found a manufacturer.

• 18:45Guy Raz?

  Yeah. Okay. That means a manufacturer. Tell me what else you had to do in 90 days?

• 18:49Speaker 00

  Yeah. Found a manufacturer. Um, this was pre Shopify days. So I actually like bought a website template and then had to modify, you know, the HTML code and put in pictures and things like that of the soap and basically maybe did a couple like legal things. So that was probably about $1,500 all in, in like a 90 day sprint. Once I had made the decision to bring it to life.

• 19:17Guy Raz?

  And you called it, what'd you call it?

• 19:20Speaker 00

  Sasquatch soap.

• 19:21Guy Raz?

  Okay. And, and tell me about that name. Why'd you call it that?

• 19:24Speaker 00

  So my sister is very creative. She's a little more of a musician, but she still was good with drawing. And I told her about this concept of a soap company that I wanted to create for guys. And I wanted this brand that was, you know, kind of manly, but funny, whimsical, outdoorsy. And so I get, and I was like, can you help me come up with a character for it? And so she drew the Sasquatch character. And I was like, oh my God, this is perfect. And so, you know, that was prior to a name, but the, the character, I fell in love with it. Kind of like took it from there, was able to color it and, and add some stuff. And then, yeah, just kind of ran with the name Sasquatch.

• 20:09Speaker 00

  I think there's a funny thing with the brand where like, we wanted to almost stay away from like Bigfoot references because it felt too over the top, like too aggressive. And Sasquatch was just kind of like a different way of positioning it, but with the same kind of character. And so that's kind of how that all ended up.

• 20:28Guy Raz?

  Okay. So you gave yourself a 90 days to get a website run going, file an LLC as an LLC and have product made and sell. And the idea would be to sell exclusively through a website. You were not going to go to farmer's markets and set up tables?

• 20:44Speaker 00

  Correct.

• 20:45Guy Raz?

  Okay. So let's just break this down. How did you find somebody to make it for you?

• 20:51Speaker 00

  That's pretty easy. I mean, soap making, again, it's not complicated. So I found somebody in the Chicago area, met with them. And kind of, again, we kind of agreed on some small changes and some things to do in terms of scents that would appeal to guys. And probably had, you know, four to five SKUs to launch with. And I bought maybe four or 500 bars of soap, maybe to start with. And, you know, literally had it on a shelf in my closet, um, in my room in Chicago that I was using as my fulfillment.

• 21:23Guy Raz?

  And how much like, how much did a bar of soap cost, cost you?

• 21:26Speaker 00

  Dollar 50.

• 21:27Guy Raz?

  And you were going to sell them for like five, six bucks?

• 21:30Speaker 00

  Yeah, six bucks.

• 21:31Guy Raz?

  Okay. So now, before we get to the actual launch, tell me about this sort of six month period of lots going on, because you're going to. Launch this thing online. It's gonna be a tiny little, you know, it's gonna be one of millions of websites, but you're gonna launch it and you also are gonna pursue a different job opportunity.

• 21:53Speaker 00

  Yeah, I launched it first and you know, the first six months, it went well enough to want to continue. And gave me enough confidence that the e-commerce space was the space that I wanted to pursue. And so I chose to pursue a job in New York through somebody I knew that did software development for an e-commerce platform that was kind of a pre Shopify platform.

• 22:21Guy Raz?

  And how long were you in New York?

• 22:23Speaker 00

  About six months.

• 22:25Guy Raz?

  Okay, and did you leave the company at the end of that six month period?

• 22:29Speaker 00

  I started working remote for probably another six months after that, but New York was just not for me. It was kind of not a great place to be. When you're trying to launch your own business and work for another startup, I was probably making $25 an hour. You know, it just was like, if my goal was to kind of build up my savings and use that as a way to fund my business, it was just probably one of the worst places I could be.

• 22:54Guy Raz?

  And so you decide to move to, I believe, San Francisco.

• 22:59Speaker 00

  Yeah, I had a little stopover in Colorado, kind of for the ski season, just to enjoy the lifestyle of that. But eventually, yeah, landed in San Francisco mainly because my sister was living there and had a very cheap room open up in the house that she was living in.

• 23:17Guy Raz?

  Got right, because it's not also not a cheap place to live.

• 23:19Speaker 00

  Correct.

• 23:20Guy Raz?

  Right. Okay, so you you moved to San Francisco because your sister's there. You may maybe can save some money. I live in the in the Bay Area. I love San Francisco. It's a great city.

• 23:33Guy Raz?

  A lot happening there in 2013. But let's go back to the e-commerce site that you launched, you know, six months before that. When you say it was doing well, like how well, like how much money could it have been generating? I mean, this is you, a website and bars of soap, very limited budget to set to buy ads. Like, how much do you remember making in your first six months or maybe the first year?

• 24:00Speaker 00

  The first year, which was like, let's call it like September to the end of the year, I made about $12,000 in sales.

• 24:09Guy Raz?

  Okay.

• 24:10Speaker 00

  And so I thought that was awesome, to be honest.

• 24:15Guy Raz?

  And how did you reach people? Where did the sales come from?

• 24:18Speaker 00

  A lot of it was general word of mouth and kind of posting on Facebook and convincing friends and family to buy. And then I had a small kind of budget for Google AdWords set up and was starting to learn that and explore that.

• 24:34Guy Raz?

  But now, help me understand the business and you know, you were, were you doing all the fulfillment? Like, were you, like, when you moved to San Francisco, did you move to San Francisco with suitcases full of soap and keep it in your apartment and send send it out yourself?

• 24:52Speaker 00

  So when I lived in Chicago, I was doing all the fulfillment. And I would, you know, I would come home from working, you know, on the road, come home Thursday, Friday, ship out a batch of orders, maybe we maybe we had 10 orders that week. And so it's kind of like at that volume. And so that was easy enough to handle. Once I was like, leaving, I did have a call with my my mom and my parents. And you know, I was expressing like concern on like how to continue it from that perspective. And my mom offered to take over and be the shipping department. And so that was amazing. She did it out of out of my old childhood bedroom, which is pretty cool.

• 25:34Speaker 00

  And so we had the soap and then she was actually curating, like, we used to do these gift boxes that were, she would go get old cigar boxes from cigar stores locally and, you know, try to haggle them down to like a dollar a box. And then we would kind of put soaps in there and wrap them up. And that was like our gift box product, which was a pretty big product at the time. So, so yeah, at that time, my mom took over the shipping and kind of the gift box portion of the business in exchange for some equity. So it was a pretty cool deal.

• 26:04Guy Raz?

  How long did you continue to work with that Chicago manufacturer? Like, did you, in well into 2013? Were they still making your soap?

• 26:14Speaker 00

  For a few years, yeah.

• 26:16Guy Raz?

  Okay, and let's talk about 2013, you know, again, so you're running this remotely, which which you can. You read the four hour work week, you knew you could do that. And all of the inventory is being shipped to your mom, to your childhood home and your bedroom is your it's your warehouse, your mom's doing the fulfillment, which is probably manageable because again, you're probably what I mean, by the end of 2013, do you remember roughly how much you guys did in sales?

• 26:44Speaker 00

  2013, we did 80K roughly in sales.

• 26:48Guy Raz?

  Wow, that's pretty great. So what, like five plus orders a day or something like that roughly?

• 26:56Speaker 00

  Yeah, probably. It definitely spiked in the holidays and you know, because of the gift box thing, there was a point where my dad called me and was like, hey, you need to find a fulfillment center so I can have my wife back. And luckily, at that point, we had built enough scale where when I went to go talk to fulfillment centers, you know, they were actually interested in working with us, so.

• 27:20Guy Raz?

  Okay, so you are, it's the middle of 2013, or I guess sometime in 2013, you brought on a friend of yours, a childhood friend to help you run the business. I guess he also went to IU, you went there together. This is AJ Fountain. And and AJ moved to San Francisco?

• 27:43Speaker 00

  He kind of was very nomadic. He kind of lived part time between San Francisco and Colorado. But he initially started working with me probably in 2013. And basically, as a door to door soap salesman, he was doing kayak guiding in the Pacific Northwest. And basically I said, hey, you know, every bar you sell, I'll give you a dollar. And so, you know, it was like basically a dollar for the business, a dollar for him. And so I would ship him out, you know, batches of soap and he would kind of go door to door and sell it.

• 28:16Guy Raz?

  And so, all right, so he eventually, so eventually, I mean, he's doing some sales for you, but eventually it's more formalized, right? Like he actually, I guess he's named president, which was just the two of you. So that means that you both did everything, but was he, did he also, both of you, I think, were business students, right? At IU?

• 28:38Speaker 00

  Yeah, I'm not sure exactly what his degree was, but yeah, he he got some money, raised up from his family and bought into the business and and got like an ownership stake. And we became, you know, business partners.

• 28:52Guy Raz?

  All right, so you are, I mean, a lot of what you were doing, from what I understand, those first that first or full two years was a lot of trying to get this into small retailers, like local boutiques. I read that that you guys like would go all up and down the the West Coast, right? Would you do that together? Did you go into stores as well?

• 29:16Speaker 00

  We did do that a few times.

• 29:18Guy Raz?

  And you would, what was the pitch you would make?

• 29:22Speaker 00

  I mean, we would kind of come in and talk to them about, we have this handmade, you know, natural soap for guys. And I think half the people bought from us because they would say something like, oh, you remind me of my son or you remind me of somebody I know. And it's, isn't it so cute what you're doing? I think there was more of that than there was, you know, this is an amazing idea.

• 29:42Guy Raz?

  So, all right, and meantime, you get a chance to be in one of these boxes, right? I think you were actually in Birchbox, but you you were also in this one called bespoke posts and how and they did they discover you just like serendipitously? Or did you did you kind of pitch them?

• 30:03Speaker 00

  Bespoke posts found us very randomly, and I think through Google search. And Birchbox, I had a personal connection through like friend of a friend to just so happen to know the men's buyer at Birchbox. So that was an amazing connection. But those those were in 2013, kind of into 2024, 2014. That was probably our biggest like marketing channel that was like somewhat scalable were those boxes.

• 30:32Guy Raz?

  And were those boxes helpful? I mean, I imagine in some ways, you know, it's a, it's risky because you probably aren't making that much money off it. You are getting exposure with the hope that people will order your product. But it's a little bit like like Groupon, like a lot of businesses were like, sure, you know, we'll do two for one massages. But then people just took the Groupon but never came back.

• 30:58Speaker 00

  So they were amazing at the start and then I think those businesses got a lot smarter. So the V1 of working with those boxes was they would pay us essentially at cost or maybe slightly above cost of our product. So for our standpoint, it's like we're getting free marketing and then if we can get, and they were very oriented around trying to get people to then buy the products that they sampled. So they helped facilitate that. So if we would get, you know, if we would send 4,000 out on bespoke posts, we might get 10% to buy from us. So that was, you know, that was huge.

• 31:30Guy Raz?

  Wow.

• 31:31Speaker 00

  And it was free, you know, it was free essentially. And then it quickly moved to like, you know, from we're getting paid for the product to now we're giving the product to them for free, which still, okay, that makes sense. It's free marketing, still valuable. To then it turned into, you know, pay a fee to be included because the marketing is so valuable. And then they kind of closed off some of their sales channels so that like, instead of us getting the sale, then they would like buy some from us wholesale and then they would sell it on their own store. So over time, and I obviously understand why they did those things, but over time, from the brand standpoint, the business, the channel kind of degraded into something that, you know, wasn't as valuable.

• 32:15Guy Raz?

  Yeah. I mean, I mean, I'm sure initially it was great. They're buying your product and they were facilitating the sales, but they realized that wasn't a good business model for them because they needed subscribers. Plus, if they could get the products for free and say, hey, we're just, we're just another platform to market your products, that's even better. And then if it came to like, oh, you gotta pay us, that's like slotting fees at a supermarket. So that's like great. That's, that's three, that's three different channels of revenue.

• 32:41Speaker 00

  Yeah. And it was still good. It just kind of went from a way to really get profitable customer acquisition to a way to kind of still get some good brand marketing. But it wasn't, it stopped being like a very high level, you know, conversion channel for us.

• 32:59Guy Raz?

  What was the point at which you felt comfortable stop like no longer doing other work, like consulting work or IT work or, you know?

• 33:11Speaker 00

  Yeah. So my hand was actually a little bit forced in that. And the company I was working for went under towards kind of the second half of 2014. And, you know, one of the like benefits that came from that was just a cutting of the ties. That was, that forced me to go 100% all in on the company. And during that same time, one of the benefit, biggest benefits I got from living in San Francisco was that I chose to attend this thing called General Assembly and do a digital marketing class through them.

• 33:50Speaker 00

  And I want to say I put like, maybe had 5,000 left in my savings and I put $3,500 of that towards this class. So it was a big gamble and I kind of, at the same time, I was actually like preparing my resume and kind of putting together like a website of like, you know, consulting for Google Analytics and stuff like that. But the class ended up being one of those just incredible experiences that turned into an inflection point for us. And it was taught by somebody who was directly in the industry doing media buying and ads for this clothing brand called Beta Brand. And the biggest thing that, you know, I discovered there was basically that we were, we should be doing Facebook ads and not Google ads.

• 34:35Speaker 00

  And so again, 2014, it's very early days for Facebook ads, especially for small brands. A lot of their tools had just been kind of launched that year. And I got to see firsthand, you know, from this instructor, like what he was doing in his companies. And, and that was, you know, an immediate, almost an immediate like 3X in revenue in the month after kind of learning and bringing that to the company.

• 35:01Guy Raz?

  All right. Let's, let's, first of all, General Assembly, I think is still around. It's, it's a, it's like a training program, like you could pay to take classes there, right? Like a training program and it wasn't, probably it wasn't very expensive. And this was a, a marketing class that you took. You had been doing Google AdWords and through this class, you realized that Facebook actually is where you need to be. First of all, why did you come to that realization? What was, what was the problem with Google Ads versus Facebook?

• 35:30Speaker 00

  Yeah. Ultimately, nobody was searching Google for men's soap or natural soap or any of the keywords that we could potentially rank for. You know, it was a couple hundred people per month. So there was one point in the business where I thought, okay, if we can just own natural soap for men as the search term, like we have made it at that point. And then, you know, we got there and I was like, okay, we're getting, you know, five sales a month from that. But what we discovered through Facebook ads was basically that we were an impulse buy product. And so nobody was actively looking on the internet to buy natural soap or very few people were. But if it came across their feed in a way that was kind of interesting and entertaining, then they would be like, oh, okay, I'll try this out.

• 36:14Speaker 00

  And so Facebook basically opened up that type of marketing to us.

• 36:18Guy Raz?

  Okay. I wanted to, I want to get back to Facebook in a sec, right? Because that, that would, that's where you would start to do, run experiments. But meantime, you've got this other challenge or this, this, I should say, a challenge, which is the name of your brand, Sasquatch Soap. You get, I guess, a cease and desist letter. Am I right about that from somebody saying, hey, that's our, that's our brand?

• 36:44Speaker 00

  Yes, correct.

• 36:45Guy Raz?

  Tell me what happened.

• 36:46Speaker 00

  Basically, what had happened was that there was another company selling, let's say a variety of soaps, maybe 30, 50 soaps. And one of the ones that they sold was called Sasquatch Soap. And so even though they had a different company name, obviously based on being in that space, they had rights to, to use that trademark. And we actually only found out because like of a third party that tried to like trademark it, because nobody had, had it trademarked. So they had like a common law thing on it. And so this other party saw our brand, thought it was cool, tried to trademark it before us. And then they found out that this other person had it. And so there was like, these people ended up getting into a battle behind the scenes

• 37:29Speaker 00

  and we could kind of see that that was happening. And so we knew that we had to pivot. And yeah, it was, it felt like an existential crisis at the time.

• 37:55Speaker 03

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• 38:31Speaker 04

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• 39:01Speaker 05

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• 39:13Speaker 06

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• 39:18Speaker 05

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• 39:37Guy Raz?

  So you have this name, you've got a website, you've got customers. And, and I mean, that is stressful. You kind of like, you can't use that name anymore. And you've established, you've spent two years, two plus years, building up this name and this business, even though it's still small. I think you were already in boxes under the name Sasquatch Soap, right? So tell me a little bit about just that, that, you know, what was going through your head trying to untangle this? I mean, were you thinking that's it? We're toast, we're done?

• 40:15Speaker 00

  Yeah, it felt potentially existential and in large part because for the longest time, we could not think of like, an alternative brand name. And we had these terrible names like Kingsley's, Sudsworth's. And we were, you know, surveying customers and surveying friends. And basically every name that we had thrown out there, everybody thought was terrible. And so, yeah, there was a lot of fear, there was a lot of stress. But at the same time, I mean, we didn't have, we didn't have a whole lot of time to react and to think about it.

• 40:50Guy Raz?

  And you had to come up with a brand new website, I mean, a brand new URL, right? I mean, you had.

• 40:55Speaker 00

  Correct.

• 40:55Guy Raz?

  You would have to, so you're thinking of completely different names. So how did you come upon the name Dr. Squatch? I mean, it's Sasquatch Soap that you couldn't use.

• 41:07Speaker 00

  Yep.

• 41:08Guy Raz?

  So you changed it, which is an interesting change. How did you come up with that? And then also, wasn't that going to be risky?

• 41:15Speaker 00

  Yes, I think a couple of things. One is that we wanted to, I think, make it more of a character. So Sasquatch Soap versus Dr. Squatch, Dr. Squatch became like more of a figure. And we wanted to do that. And we thought that the doctor kind of gave it a little bit of an elevated positioning. And we ultimately weren't sure if it was going to work. So we had kind of a dual track of like, hey, maybe this name is too close, maybe it's not. And if it wasn't, if it ended up failing, like, we would have had a backup plan, which was, again, like, none of the names we were felt great about, but we would have had to do something.

• 41:53Speaker 00

  But we, we went forward with the Dr. Squatch name, went through, you know, the trademark process, put it out there, didn't have any, you know, I think there's like a period for people to comment or to flag against it, and we passed that period. And so it worked out.

• 42:10Guy Raz?

  And the character now, I mean, it's a Sasquatch with like a pipe. That's basically what your sister had drawn year in initially?

• 42:18Speaker 00

  Correct.

• 42:19Guy Raz?

  And so had you called that character, were you, did you have a name for that character? I mean, he's probably known as Dr. Squatch now, but did you think about that character with a name? Or as a, with a particular kind of personality?

• 42:34Speaker 00

  Well, I think it just evolved over time. And I think that after the rebranding, I mean, I think we quickly realized that it was actually a better name. And so it turned from an existential crisis into like, one of those things that was a huge benefit that maybe we would have never done if this didn't happen. And it would have been a worse name and turned out differently. So I think we recognized that early on. And I think it did allow us to lean more into the persona of the character than we had done previously.

• 43:02Guy Raz?

  Okay, so let's, let's kind of dive into Facebook. So you, you know that Facebook is probably a better place for you to start spending money. But did you have, I mean, did you have money? I guess, I guess it wasn't that, I mean, it's different today, right? Facebook in 2014, I've heard people say it's like, it was like shooting fish in a barrel. Like, you know, it was just, it was a different, the platform's totally different. So like, how much would a Facebook ad cost you to, you know, roughly?

• 43:37Speaker 00

  Yeah, it was, I mean, it was so different. One of our first ads that I remember, you used to use these like free library images. And then I found one that had like a little funny, like little Sasquatch character in the woods. It was like a toy figurine. And I literally just put like a bar of soap Photoshop next to it. And then I put like an ad that said like, you know, soap for men. And I think I ran that for six months and it was like our best ad. And we were getting, you know, customers for like 15 bucks on it.

• 44:05Guy Raz?

  Wow, and, and that was it? That was the ad?

• 44:08Speaker 00

  Yeah.

• 44:08Guy Raz?

  It was like just a little wonky, just a static ad on Facebook, soap for men. And that, and that would drive traffic?

• 44:17Speaker 00

  Yep, and so I would say, I wasn't the most sophisticated at that time. I think I quickly realized that the way to grow the business was going to be Facebook ads. And so I dedicated kind of myself to becoming an expert at that. But yeah, the early days, didn't necessarily know all the numbers. But ultimately, we were able to get customers for, I would say, like, probably like a break even after the first order, which is pretty good.

• 44:45Guy Raz?

  So, all right, so you get through the name change, you start to focus on Facebook ads. And I think around this time, it's 2015, let's say, I think you moved to San Diego, is that right?

• 44:57Speaker 00

  A year later, but yes.

• 44:59Guy Raz?

  Do you remember what you did in sales that year?

• 45:01Speaker 00

  Yeah, about 750K.

• 45:03Guy Raz?

  Wow, that's a huge leap.

• 45:05Speaker 00

  Yeah.

• 45:06Guy Raz?

  So you were probably making close to what you were making as a consultant, I guess, by that point.

• 45:12Speaker 00

  This, 2015 was probably the first year I crossed that threshold, yes. And by the end of 2016, the business had done 1.8 million in sales. So we had another strong jump.

• 45:24Guy Raz?

  Amazing, and this is all through Face, mainly through Facebook ads?

• 45:28Speaker 00

  Yes.

• 45:29Guy Raz?

  I mean, that's, that's amazing, right? $1.8 million in that year. And that class you took really paid off. I mean, it really taught you a lot of things. It wasn't just Facebook ads, there were other things you were probably doing. You were looking at data analytics, you were making decisions based on, on that data. Can you, can you kind of walk me through a little bit about what you were doing? And how you were shifting and making decisions based on what information you were getting?

• 46:01Speaker 00

  Yeah, I would say in 2016, my main role in the company was really focused on understanding e-commerce. And that was the first time that I think it started to really come together. So Facebook ads was just one part of it. It's obviously how you get the attention and kind of get the initial customers. But I think we started to really understand more about, you know, things like subscription and merchandising, broadening our merchandising. We started to understand more about how to do email marketing and retention based marketing so that like our customers were valuable on the backend. And I think it shows that the market we were going after was big.

• 46:44Speaker 00

  And it didn't feel hard to hit these numbers. It almost felt like it was just kind of happening. Again, with Facebook ads as the main driver, not the only driver, but I think adding these other pieces within e-commerce and starting to understand the data and modeling that a little bit better.

• 47:00Guy Raz?

  I want to dive into 2016 because this is a pivotal year. $1.8 million in sales, amazing. And also, I think this is the year when AJ and you split, you go separate ways, he leaves. You know, and again, like, these things are challenging because there's humans and personalities and history involved, but it's very real, it's common, and it's, it happens, you know? I mean, what did you start to think the business could be? And where was there a difference in, in, in sort of vision or view between you and your partner?

• 47:40Speaker 00

  Yeah, so I think with all the growth that we had and some of the metrics I was seeing, I really had a big vision for where the brand could go. And I just kind of felt like we were in the early innings, even if I didn't know exactly where that was going to end up. And AJ is, he's an extremely kind of outdoor focused person. And I think the business was at the level of achieving his dream, which was kind of to make a certain amount to live off of so that he could spend as much time as possible, kind of in nature.

• 48:17Guy Raz?

  Like a lifestyle brand, basically, it could be passive income for a great life.

• 48:22Speaker 00

  Exactly, exactly.

• 48:23Guy Raz?

  Which is, by the way, just to put a point on that, that's actually not a bad ambition. Like, lots of people have that ambition and it's, you can have an incredibly meaningful, fulfilling life, especially if it's not, if scale or, you know, or even money isn't that important. It's, if it's, I want to be able to do the things I want, that I enjoy doing, and I just need this amount of money to make it happen.

• 48:49Speaker 00

  Totally agree, and I, I enjoyed like a lot of that lifestyle with AJ as well. And so this process, I mean, this process was extremely hard. And he was one of my best friends from childhood. And it, you know, it was like a relationship that was just no longer working out from my perspective and no longer serving the business and where we each wanted to go.

• 49:10Guy Raz?

  So you had to have hard conversations?

• 49:12Speaker 00

  Yeah, a lot of hard conversations.

• 49:16Speaker 00

  You know, but I think both kind of recognizing and agreeing that, you know, we just weren't on the same path in terms of where we wanted to go. And that we had done a lot of good stuff together to get to that point. But that, you know, having a separation would be the best for both.

• 49:33Guy Raz?

  Did that cause you stress? Just knowing that you had to have those conversations?

• 49:39Speaker 00

  Yeah, massive, massive stress on a personal level, just to deal with that. And also just stress on a financial level in terms of negotiating and kind of going through that buyout process and.

• 49:52Guy Raz?

  Because he bought into the company.

• 49:55Speaker 00

  Yep, yeah.

• 49:56Guy Raz?

  And you'd done $1.8 million in sales at that point. So, you know, I guess, you know, you could start to think about what it might be worth.

• 50:05Speaker 00

  Yeah, it was a significant amount of money for where the company was at. Not necessarily from a revenue standpoint, but again, just from a cash flow and a profit standpoint, you know, in that year, we made 1.8 million, like, we might have done, I don't know, let's say 100K, give or take in, in profit. But then, again, from a cash flow standpoint, you're always building inventory, you have marketing expenses, so you don't necessarily have a ton of cash lying in, lying around. And at the same time, you know, you still know that the business is worth, you know, something fairly meaningful. And so we had to come up with a creative structure to basically buy him out through the continued performance of the business.

• 50:48Guy Raz?

  From a personal standpoint, did you also know that that was going to be maybe the end of your personal friendship?

• 50:57Speaker 00

  Yeah, I wasn't sure, I mean, where it was gonna end up exactly. I mean, I think,

• 51:04Speaker 00

  you know, we tried to approach it amicably, but it's like, it's an extremely hard thing to do. And there's a lot of emotion and a lot of tension and each person is trying to kind of get the best deal that they can for themselves. And so it's tough.

• 51:18Guy Raz?

  When you made the, when you came to terms and you agreed that you were gonna buy him out, was any part of you like, God, am I just mortgaging my future here? Like, what if our sales were just lucky and, and then, you know, we're like, it just dies. And then I'm on the hook to pay all this money over the next several years?

• 51:38Speaker 00

  It was a real risk. It was, you know, there was, it was cash upfront, it was cash monthly, and then it was kind of like cash every year in, based on how performance went for a couple of years. And I would say, you know, it was delayed gratification for me, just in a sense that like, I didn't get to take out anything at all at that point, relatively to the size that he did. And I wasn't sure where things were gonna go. And we probably had one of our toughest stretches in, you know, I would say in the six to nine months after this process for a couple of reasons. And so that was, you know, it just added to kind of the stress of, of dealing with this process.

• 52:17Guy Raz?

  What happened?

• 52:19Speaker 00

  Just, just some things started to go wrong. You know, I would say, we were continuing to try to scale and I think added some employees and tried to kind of build the team up for the first time, post that transition happening. And the business was doing well, but it got to a point where we were spending more and kind of had invested in too much. And people were, we just kind of couldn't afford what we had signed up for.

• 52:50Guy Raz?

  What did you sign up for? You're talking, you're talking about the people? That was the cost?

• 52:54Speaker 00

  Yes, yes. Increasing kind of that overhead cost on people, office, things like that, to an extent that drained the profitability of the business. And then, me moving away from overseeing some things like the marketing and led, leading to like a decline in, in performance on that. And some agency partners that just weren't working out. So, just honestly, just very kind of normal ups and downs of having a small business, but just happening very kind of close proximity to this buyout, which was also financially stressing the business, put us into a pretty challenging point in, in 2018.

• 53:34Guy Raz?

  And so, most of your money was going to pay them. And meantime, you've got to figure something out. So, I mean, I would think the, one of the first decisions you have to make is, maybe let some people go? Or am I wrong?

• 53:49Speaker 00

  Yeah, we had, I had to let some people go. I did kind of a process that a lot of people I know have done, where I literally printed out, you know, three months worth of bank statements and was circling every line item or crossing things out, just to cut expenses as much as possible. Had to let two people go. Basically, just kept their kind of customer support and social media person. But if, you know, that felt like a step back, because we had been, you know, on this trajectory, growing every year. We had obviously challenges, but this felt like the first time that we were maybe in a position to kind of step back as a business.

• 54:29Guy Raz?

  In 2018, you would have this pivotal experience. And before we get to what that was, I guess you were sort of working with a, a marketing agency, or you had contracted a marketing agency. And from what I understand, they, they had worked with like the San Diego Symphony. So, first of all, tell me about this agency that you identified to work with? Because it's always a risk. You don't know whether they're gonna be able to bring value to what you're doing.

• 54:57Speaker 00

  Yeah, I think I knew some people that worked with them. And then, they just so happened to have an office basically next door to the office we had in San Diego. And so, it was kind of natural to meet with them. And they're very smart at marketing. And I think we kind of just, we tiptoed into creating small videos and small ads, mainly around like, you know, Facebook advertising, as well as like some branding stuff. And so, we just kind of started doing some work with them. And so, the first things we worked on were just more basic things. But I think, eventually in 2018, I had gotten through some of the challenges that I had spoken about earlier, and kind of reorganized and right-sized some of the expenses and the

• 55:38Speaker 00

  trajectory of the company. And I think I was just feeling maybe more positive and more like, hey, we should, it's, it's a good time to like, try to take a swing. And I had recently gone to like, a marketing event or convention and heard a talk by somebody that was in the company called the Harmon Brothers. And they were basically producing these Dollar Shave Club style, Dollar Shave Club style videos. And so, going to that event, kind of learning about that, I did talk to the Harmon Brothers, you know, they wanted 250K to do the video, and

• 56:18Speaker 00

  then 250K of ad spend that they would manage to help kind of like promote the video.

• 56:24Guy Raz?

  Wow.

• 56:25Speaker 00

  And so, that, you know, that was a massive number for us at the time. That would probably be a couple of years of profit. And so, even though we had decent revenue, like, there's just no way, you know, that wasn't on the table, right? And so, I think I just kind of like, started to noodle with it. And as I had conversations with Raindrop, the agency in San Diego, you know, we basically just kind of said like, hey, like, what if we just tried to recreate one of these videos? Like, how hard could it be, basically?

• 56:53Guy Raz?

  And I guess we should describe it for anyone who doesn't know. You can, can find it. I mean, the, the video you guys did, now it's 120 million views. And for people that haven't seen this, this guy has got like a blonde beard and like, he's a big guy, and he looks friendly, but also like a guy who would be, you know, like, likes the outdoors. And, and you shot this video. First of all, how much did it cost you to do, to, to shoot this whole thing?

• 57:17Speaker 00

  It was about 15K.

• 57:20Guy Raz?

  Wow. Amazing. It's, I think it's three minutes long. And just describe this video. What, what, what was it?

• 57:29Speaker 00

  He's in the shower, but it's outdoors. And he kind of grabs your attention and says that, you know, the soap that you're using sucks.

• 57:34Speaker 02

  Listen up. The soap you shower with, it's [BLEEP]. You probably haven't even questioned what bar of soap you lather up with.

• 57:41Speaker 00

  And then we kind of go through why our soap is better. And obviously, like, a lot of funny shots in the, in nature and with the shower and, you know, lathering up.

• 57:49Speaker 02

  I'm talking about natural, nourishing, cold-pressed, hand-cut soap for men. Men who use their hands. Men who build things. Men who open the pickle jar on the first try.

• 58:00Guy Raz?

  It's really entertaining and engaging. And the idea, I guess, was to just, what, put this up on YouTube or, and buy some Facebook ads with this video?

• 58:09Speaker 00

  Yeah, I think it's easy to call it a viral video, but we knew that it would be an ad. And so, I would say it's viral because the ad was so efficient at acquiring customers, like, cheaply and profitably, that that's what drove the virality, is along with like, some of the sharing behind it.

• 58:27Guy Raz?

  Well, tell me about launching it. Like, like, you had originally talked to somebody and said, well, we'll make it for a quarter million, and then we'll put a quarter million dollars of, of marketing behind it. You spent $15,000 on producing the video. And then, what did you have to spend to actually market it, to get it out there into the world?

• 58:45Speaker 00

  Yeah, that's a good question, because when I think about marketing, I think more incrementally. So, when we put it out there, you know, let's say we're getting people to watch two minutes of content for like, half a set on average, which is crazy cheap for that level of engagement. We're getting people to become a customer for three to $4. So, at that level, in, you know, in, of profitability, because I make, let's say, I make $25 on that order, then after my margins, you know, I'm getting, let's say, $10 per customer. At that margin level, I would spend as much as I possibly could, as long as I have the supply chain, to fulfill it. So, I wouldn't even think about like that as like a marketing

• 59:28Speaker 00

  budget, right? I would think of that as like a sales machine. And so, I would say the video was kind of like this sales machine for probably like a three to four month period of time, where it was just like, going crazy on both Facebook and YouTube in terms of like, how good the advertising was against it, before it started to slow down. So, cumulatively to date, I don't know exactly how much we've spent on that. But I would say that we basically would spend on it to the extent that it was profitable in terms of acquiring customers.

• 1:00:00Guy Raz?

  So, you, you put it out into the world with some, a little bit of ad spend. And what did it do to sales, for sales?

• 1:00:08Speaker 00

  Yeah, I mean, sales were crazy. And then, like I said, is also, they were profitable. So, we probably spent, you know, relatively like as much as we could on the video. Like, we probably were supply chain constrained more than anything else. And we probably did a five million, a little over five million in sales through the end of 2018.

• 1:00:31Guy Raz?

  Wow. So, you went, I mean, so that, and, and how much of that five million in sales would you attribute to that video?

• 1:00:39Speaker 00

  Probably 30 to 50%.

• 1:00:41Guy Raz?

  Because I think it got 12 million views in that first year. Again, today, it's got 120 million views. Very funny video. But it was a, I mean, would you call, like, how much of a sort of a game changer would you call that for the business?

• 1:00:54Speaker 00

  Yeah, it was massive. Obviously, from creating that, and I'd say, bigger picture, bringing the brand to life in the real way, for the first time ever, and creating a roadmap for us to produce future content, and us kind of really finding our voice that worked for the brand, were second level effects that it also created.

• 1:01:37Guy Raz?

  All right. So you $5 million. That's great. And you go into 2019, and I think this is the first year that you go out to raise cash, to raise some money from outside investors.

• 1:01:54Speaker 00

  Correct.

• 1:01:55Guy Raz?

  So tell me about that. I mean, you bootstrapped up until that point. Tell me about, I think you raised $1.3 million. I might be wrong. Maybe the number's different. But yeah, tell me about that decision.

• 1:02:06Speaker 00

  Yeah, no, that's the correct number. So in 2018, I think I started to see the potential for the business come to life with some of the video marketing efforts that we were doing. And I was, I'd been through a lot of ups and downs in the past two to three years. And I think I was, I came to this conclusion that I didn't want to run the business by myself as a lifestyle business forever and deal with all the ups and downs. And that I wanted to take a real swing at going for something big. And so those factors kind of came together. And so I was open to outside investment for the first time and was in the mindset

• 1:02:51Speaker 00

  of being receptive to it. And so I started to do some outbound outreach, as well as getting some inbound requests for that, which I had kind of always gotten throughout the years, but never really responded to.

• 1:03:02Guy Raz?

  And who did you, who were you raising money from? Was it, was it friends and family or was it professional investors? Or maybe not professional, but angel investors?

• 1:03:11Speaker 00

  No, professional investors, Guild Capital, and that they were the ones that hosted that roundtable. And it was a network of companies that either they had invested in or wanted to invest in. And so that was a big driver of me wanting to work with them was because I could see how the collaboration in the portfolio would work and the value add that would be kind of brought to the table. And so it took a few months to kind of hash out an agreement with them.

• 1:03:40Guy Raz?

  So they were your sole investor?

• 1:03:42Speaker 00

  Correct.

• 1:03:43Guy Raz?

  And I think the valuation was like 4.3 million. Is that right?

• 1:03:47Speaker 00

  5.7 post-money. So I guess it depends.

• 1:03:50Guy Raz?

  5.7. Okay. So, man, they made a good investment.

• 1:03:56Speaker 00

  Yeah, it was, I mean, great deal for everybody.

• 1:03:59Guy Raz?

  Okay, so they, they buy a little over 20% of the company. And what did the, and that money presumably enabled you to, first of all, you relocate to LA. I think you're, you moved your headquarters to LA. And what else did that money enable you to do?

• 1:04:18Speaker 00

  The main focus of the capital raise was to increase marketing spend and increase the employee, the talent, you know, of the company. So money for hiring and money for advertising in a way that would allow us to scale, you know, much quicker than we had done previously.

• 1:04:36Guy Raz?

  So 2018, you do 5 million. Do you remember what, what you did in 2019?

• 1:04:42Speaker 00

  2023, 20 to 23.

• 1:04:46Guy Raz?

  Wow. All, and all of this, like, what percentage of this is, 100% of this is direct to consumer is through your website?

• 1:04:55Speaker 00

  Correct.

• 1:04:55Guy Raz?

  You're selling at no stores at this point.

• 1:04:57Speaker 00

  We had a small, independent retail business that, from the origins of the AJ days, and that still existed. But it was pretty marginal, you know, no, like, formal retail.

• 1:05:12Guy Raz?

  All right. So you're, you're $25 million in 2019. I read at the, is this right? I read at the end of 2020, you did close to 100 million in sales. Is that, is that right? Or was my research right?

• 1:05:26Speaker 00

  113.

• 1:05:27Guy Raz?

  That's crazy. I mean, I'm just thinking going from five to 113 million in a little over two years, two years, basically. I mean, everything is going to change. Like, you're talking about like the hiring, the scale of this. It's like, it's like, I can't imagine that hamster wheel that you were on.

• 1:05:50Speaker 00

  Yeah, it was the hardest two years I ever worked and the most fun two years I ever had in business at the same time. So I think, you know, every, I think a lot of businesses, right? When you pitch an investor, you kind of pitch like, hey, we have our business model figured out and we just need capital to add fuel to the fire. And I think sometimes that's true, sometimes it's not. I think in our case, it truly was a reality. And so, you know, we basically just started spending as much as we possibly could on Facebook advertising and bringing in as much talented people as we could over that two-year period. There were a lot of other things we did. We did a lot of product line expansion, which

• 1:06:31Speaker 00

  enabled, you know, us to get a higher, you know, order size, which again, allowed us to kind of be able to spend more and, you know, made customers more valuable. So there was a lot of things we were doing along the way. But it, you know, it was absolutely drinking from a fire hose. You know, there's probably nothing harder as a CEO than kind of like hiring constantly for your full team, plus running your business at the same time. It's almost like having two jobs. So that's kind of how I felt. I'd never felt a stronger pull to work, you know, when I would, I would almost go to sleep dreaming about the first thing I needed to do in the next morning and would wake up like, ready to jump into it. And so, you know, it was just such a cool experience to be a part of.

• 1:07:16Guy Raz?

  Okay. So now, and I think in, and you've got the pandemic in 2020, which is great for direct-to-consumer businesses because you've got captive audiences on social media all day. And, and that was the $110 million year. And of course, everybody was focused on staying clean because everybody was freaked out about germs. Did you see any direct correlation between that and, and your sales?

• 1:07:42Speaker 00

  Yes, for sure. I mean, COVID was like, at first, we were very scared of it and very uncertain of what was going to happen in the world, obviously, and if we were going to be able to continue. And so we initially kind of like tried to slow things down because we just weren't sure, like, what was going to happen. We didn't want to like build up too much inventory. And I think, you know, a month or two into it, we clearly saw like that was not going to be the case and that the demand was, was going crazy. And yeah, we, we were in hygiene space, which was another just kind of, you know, blessing that really kind of added some tailwinds. But, you know, the company was growing at a pretty crazy trajectory even pre-COVID.

• 1:08:23Speaker 00

  So I would say it's a little hard to kind of fully isolate that, but definitely was a big tailwind for us in an unexpected way.

• 1:08:31Guy Raz?

  So, okay. So you, I mean, the growth is just incredible. I think in 2021, a private equity group came in and purchased a minority share of the business, right?

• 1:08:46Speaker 00

  Majority share.

• 1:08:46Guy Raz?

  Majority share. And that, I mean, I'm sure was a great for the investor, probably great for you. You stayed on. Did you feel, I mean, how did you feel about, I mean, you were the CEO and the founder? I mean, when you had, you know, investors now owning a majority of the share of the, of the brand, did you, did it change how you could operate? I mean, was there oversight? Was there more feedback? Was there more like, hey, you know, I think, Jack, you know, you got to do more of this or less of that?

• 1:09:23Speaker 00

  Well, I would say a couple of things about that. I knew I had a timeline as CEO. Just, I think every founder, you know, kind of has that journey where they figure out how far they can take their own business themselves. And most of us are not, you know, like a Mark Zuckerberg. And so I, there was definitely even a point of this growth phase where I was like, I'm, you know, I'm just not well-equipped to be the CEO of a large company. You know, I'm, I'm love and I'm great at, I think, a lot of the things for a slightly earlier-stage company. And then once it gets to that point, it's just kind of not, not what I'm great at and not what I want to do. So prior to going into this sale, that was, that was actually like a big motivator.

• 1:10:06Speaker 00

  It was actually a big motivating factor for me to want to sell in the first place was, was kind of knowing that that was how I felt about it. And then also just the pace that I was operating at was just not really sustainable in terms of the work and even just all the emotional burden of the previous, you know, 10 years that had gone into the business. Like, it was kind of felt like at certain point, I was going to need a break from things. And so I went into the decision to sell part of the company with those as, as some of the motivating factors, not the only ones.

• 1:10:44Guy Raz?

  Right. That makes a lot of sense. I mean, some founders are like, I'll never, this is my thing for life. I want to do this forever. I'm going to stay on as long as, you know, the board's going to keep me on. And some founders are like, I scaled it to this point and I wanted to get out and do other things. And I think both of those are great, you know, options. But it sounds like, because you, you did step down as CEO in 2023. And you felt like, and I think that's a really mature decision. You felt like I'm just, I'm not the right guy to run a, you know, a big CPG brand at this point. I just don't have the, maybe you have what it took, but you just didn't have the, the passion to do that.

• 1:11:29Speaker 00

  Yeah, I think it was a 300-person roughly company at that point. And it almost had come full circle into like having a job again versus where I initially started, you know, leaving my job and having some of those desires. But I would say ultimately, my, when you're an entrepreneur and you have a will to succeed versus like maybe a stress or drudgery tax against things that you don't want to do. And when your will to succeed is really high, you can overcome those things. But then at the end of this kind of 10 years and just given the scale that the company had got to and some of the success that I had had, I think just being honest about it, my ability and my willpower to do some of those things was just lower than was needed

• 1:12:14Speaker 00

  for me to successfully do the role at the time.

• 1:12:17Guy Raz?

  So when you left, what did you want to do? You just wanted to kind of unplug entirely?

• 1:12:22Speaker 00

  Mostly that. Well, I didn't leave with, you know, like you said, some people leave and maybe they have their second business or their, their next business in mind already. I didn't leave with that in mind. I left with, I left with the need to take the weight of the business off my shoulders. And so it was nice to gradually step into a board role and still have, you know, a level of connection and direction in terms of what the company was doing, but to no longer be the person where I felt like I was the primary driver. So I would say that that, you know, was kind of just a nice release period initially.

• 1:13:04Guy Raz?

  It sounds like it. And did you, did you have those inevitable conversations where people were like, well, what's next?

• 1:13:13Speaker 00

  Still do.

• 1:13:13Guy Raz?

  Does that annoy you, that question? Or do you, are you just, have you gotten used to it now?

• 1:13:19Speaker 00

  I mean, I'm still, I want to know the answer as much as everybody else does. And I think that I'm still kind of figuring that out. And I'm still in a little bit of that transition phase. And so, you know, I have three kids and able, I'm very blessed to be able to have success and to also be able to spend time with my kids when they're young and to be fully present and fully focused on that. So I try to make that a huge priority.

• 1:13:44Guy Raz?

  I think last, in June 2025, Unilever acquired Dr. Squatch from all the investors. And you are still, I think, an equity stakeholder for $1.5 billion. So really, I imagine now you're really out of it. I mean, you have no involvement in Dr. Squatch.

• 1:14:02Speaker 00

  Correct, yeah. I was on the board up until that sale. And after that, you know, they don't really have that board process for a company that they acquire. So pretty much a clean break.

• 1:14:13Guy Raz?

  Yeah. You know, when we started, you mentioned how when you learned about soap, you know, the big companies were making things at scale. And this kind of process, this cold process was really hard to do at scale. Now it's owned by a company, well, and even when you were running it, was at scale. I mean, it was mass producing bars of soap. So, I mean, does it mean that Dr. Squatch is now doing what it set out not to do? Or are you, is it still, is it able to do what it was doing at a small scale, but at a larger scale?

• 1:14:51Speaker 00

  We built our own manufacturing facility to be able to achieve the scale that we needed. So, you know, I would say we are producing cold processed soap at scale. And we had to kind of figure that out from scratch. Obviously, making a batch of soap is pretty easy, but figuring out how to produce, you know, 5 million a month is a lot tougher and involves like some additional engineering. And I would say that ultimately, we've kind of come full circle and we've, we've really won in the sense that we are no longer, you know, the underdog on the outside, only selling online. And now we are on shelf, you know, and just as big as like all the other big brands out

• 1:15:34Speaker 00

  there and offering, you know, what we think is a better alternative to people.

• 1:15:38Guy Raz?

  And so when you see it on the shelf, what do you think?

• 1:15:41Speaker 00

  I still think it's cool. I still get pictures. I mean, yeah, I still love seeing the displays. I still, you know, love walking into random grocery stores and I walk in and they've got, you know, Squatch stocked. So I think it's awesome.

• 1:15:54Guy Raz?

  It used to be, you know, 90, 100% direct to consumer. I think now the vast majority of its sales come from Target and Walmart and, you know, grocery stores.

• 1:16:05Speaker 00

  Yeah, it's a majority retail. The e-comm business is still significant, but over the last three years. And that was another reason for me to maybe not be CEO. I mean, when we sold to Summit in 2021, we had essentially zero in retail. You know, and now that, that business alone is well over 300 million. And so that was a little bit unforeseen for us to kind of like how quickly that would happen.

• 1:16:39Guy Raz?

  So when you think about, you know, the journey you took and where it started, you know, like reading the four hour work week and, you know, go to farmer's markets and sort of coming to this realization that you could build a brand around this cold processed soap, which you did. And you became very, you know, wealthy and this brand became very successful. How much of this do you attribute to, to luck and timing? I mean, Facebook ads at the time, it was just amazing and direct marketing and, and sort of that wave. And how much do you think had to do with just the grind and the discipline that you put into it?

• 1:17:17Speaker 00

  Yeah. It's close to 50/50. I think if I like put it out on a scale, you know, I think on the, on the kind of the grind side, I would say the number one thing is just getting started and creating a vehicle, because if you don't have that, you can't benefit from any of these lucky events. Number two is that you have to survive. And that involves, it involves kind of just knowing when your business is in survival mode and doing a lot of things that probably many people aren't going to want to do. And then I think that there's a third pillar around execution where that absolutely makes a difference in terms of like how far you go.

• 1:17:58Speaker 00

  So those I would put on the side of the scale towards, you know, skill. And then I would say on the luck side, you know, there's absolutely timing. I don't think Squatch could have existed 10 years, you know, 10 years earlier, I wouldn't have been able to build it. Brick and mortar retail would not have taken it in without a proof of concept online. And so, you know, it basically would have been impossible to do that. You know, I think that there's category around luck. And I think that, you know, I chose to go into soap because it was very personal. It wasn't a top down decision where I said, hey, this is a great market to go into. And so I think I could have done all the same things and applied that to a different product and maybe not have nearly as big of an outcome.

• 1:18:42Speaker 00

  And it just so happens that I was kind of lucky that this was a recurring product and that this, this, you know, this was a category ready to explode. And so that probably had a big impact on how big it all got. You know, and then there's just the other serendipitous kind of moments and many things that led to one another, meeting different people that all kind of add up. So I think it all kind of adds up close to being 50/50. And that's how I, you know, break it down.

• 1:19:08Guy Raz?

  Jack, thank you.

• 1:19:09Speaker 00

  Thanks, Guy.

• 1:19:16Guy Raz?

  That's Jack Haldrup, founder of Dr. Squatch. These days, Jack's still based in San Diego, raising his young kids, investing in businesses, and advising other entrepreneurs. In fact, he also serves on the board of a company called Brick, which makes a device that helps people spend less time on their phones. And thanks so much for listening to the show this week. Please make sure to tap the follow button on your podcast app so you never miss a new episode of the show. And you can now watch How I Built This on YouTube. This conversation is on our brand new YouTube channel. Just search How I Built This on YouTube and subscribe. We'll also put a link to our new YouTube channel in the episode description. Our show is produced by Podcast Point Man.

• 1:20:00Guy Raz?

  I'm Guy Raz and you've been listening to How I Built This.