Advice Line with Nick Green of Thrive Market

Today’s callers: Mercedes in Utah tries to find harmony between quality and speed as she scales her concert attire brand for musicians. Then Danny in Colorado grapples with the tradeoffs of growing his sustainable and functional coffee brand. And Riya in Illinois wonders how to build awareness for her app that aids people affected by speech loss. Plus, Nick’s insights on how AI is changing the way we fill our grocery carts — and how grocers respond to food and nutrition trends. Thank you to the founders of Blackstrad Concert Attire, Peak State Coffee, and Voice Back for being a part of our show. And be sure to listen to Thrive Market’s founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/305cbf92-4758-45c1-9e74-6bd31e83a7c9/embed as told by Nick in 2024. This episode was produced by Sam Paulson with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Annlie Huang. You can follow HIBT on X https://x.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis/ and sign up for Guy’s free newsletter at guyraz.com http://guyraz.com/ or on Substack https://guyraz.substack.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:00Guy Raz?

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• 3:22Guy Raz?

  Hello and welcome to the Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. Joining me today is Nick Green. He's the co-founder and CEO of Thrive Market. Nick, welcome back to the show.

• 3:41Speaker 01

  Thanks for having me back.

• 3:42Guy Raz?

  It's great to have you back. You were first on the show in 2024, and of course, you told the story of Thrive Market. You and your co-founders originally wanted to kind of combine Costco and Whole Foods, but as an e-commerce platform, and you had all kinds of challenges building the platform and trying to raise money. And you actually ended up taking small investments from hundreds of like health bloggers. But eventually, you launched Thrive in 2014. And I think by last year, I think you did over $700 million in sales with more than a million and a half members, which is amazing. Congrats on that.

• 4:16Speaker 01

  Thanks so much. Yeah, I mean, we talked about the early challenges back in the day, but the challenges, of course, never stop in business. And I think one of the jokes we used to have early on was that we almost had a new business every year or two. And you would think that would slow down, but it really hasn't. I feel like our business has transformed even since we met in 2024. We've, in some ways, doubled down on things that we were already doing. For example, serving parents and families. We've built a whole feature and really expanded our recurring offering where members can put their Thrive Market orders on autopilot, edit and have full control of the products that they purchase each month, but make it even simpler to reorder. And we're now seeing over 60% of order volume coming from that.

• 5:00Speaker 01

  We've, of course, doubled down in AI, which was already starting to be a thing in 24, but has like exponentially changed. Our first orders now, members can get help building a cart with an AI cart builder that's just transformed the way the onboarding happens for new members. 90% of our member service inquiries now are self-service through AI. And then people misunderstand the fact that even at scale, if you want to continue succeeding, and especially if you're a mission-driven business, you want to continue to deliver on that mission, you have to constantly be evolving. Consumer expectations are always going up. The competitive landscape is always shifting. And the technology backdrop like AI is transforming.

• 5:45Speaker 01

  And for us, that's been, we're now 12 years in. I think when we talked, we were just coming up on a decade. But even 12 years in, even approaching a billion in sales, even approaching 2 million members, we're still at a place where it is constant evolution, constant transformation.

• 6:01Guy Raz?

  You've watched like thousands of products come through Thrive Market. Can you tell within a few minutes whether a new consumer brand is going to work? And if so, what are the signs?

• 6:16Speaker 01

  The short answer is no. The best sign, honestly, is data. So I have a very good sense, talking to brands because of my knowledge of the data on Thrive Market. We have our finger on the pulse of which brands are selling, which search terms are spiking, what are the search terms people are looking for that we don't have an option for? We call it empty search results. It's one of our best sources of new product innovation and places we should go develop new products for our own brand. So we really do rely on the data to tell us at scale, what are people looking for, how are preferences shifting? What are we delivering really well on?

• 7:00Speaker 01

  And what are the things we're not delivering well on? But I actually think the biggest trend, the biggest secular trend that's going to transform all of grocery is really the mega trend that's transforming everything, and that's AI. And we are seeing that, the AI cart builder that we've developed, which is still early, there's still so much more we can do. And what's possible is transforming every few months. But I think a lot of people are not going to be doing their own grocery shopping in a few years because they're going to have a purpose-built experience like we have on Thrive Market that takes their data, that takes their biomarkers even, that takes their health goals and helps to build them a basket that is optimal for them. And of course, does it instantly.

• 7:42Guy Raz?

  Yeah. Before we get to our first caller, I'm curious. Is there a daily health habit that you do that is, has proven to be beneficial for you over time?

• 7:58Speaker 01

  I am a constant experimenter. You and I have talked about this. So I'll try, I'll try just about anything. And I'm constantly iterating and changing things. I'll say the one constant for me, well, I'll give you two that I've combined. So one is walking. It's like so basic, but

• 8:20Guy Raz?

  Especially after you eat.

• 8:21Speaker 01

  After you eat. But for me, it's like after I eat, if I'm stressed, if I'm having a tough conversation, like everything is made better by being in motion somehow. And I feel more energized afterwards. I sleep better on days that I walk a lot. I'm in a better mood. I mean, it's like such an easy thing to forget because it seems so basic, but when you do it, you just feel good. So that's one.

• 8:44Guy Raz?

  That's good.

• 8:45Speaker 01

  And I don't track my steps, by the way. I used to do that maniacally, and it was like, became a goal-oriented thing. Now it's just like walk, walk as much as I can. The second thing is reading. And this is, I would say, more of a mental health thing. But my mind goes too fast to meditate. It's hard for me to slow down. Reading transports me. Reading also is creative for me. I read a lot of nonfiction, but I also read a ton of fiction. And that for me, when I'm go-go-go and working really hard and got four kids at home, like things could be stressful. Reading is my escape, and I think it's the number one underappreciated mental health hack.

• 9:23Guy Raz?

  I love that. Those are two great suggestions. Walking, I do every day. I love it. And reading too is like critical.

• 9:29Speaker 01

  Especially, especially fiction, especially long-form fiction, like reading novels.

• 9:34Guy Raz?

  And it keeps you away from algorithmic social platforms as well. All right. You ready to take our first call?

• 9:40Speaker 01

  Let's do it.

• 9:41Guy Raz?

  Let's do it. Okay. Welcome to the Advice Line. You're on with Nick Green, co-founder of Thrive Market. Please tell us your name, where you're calling from, and just one line about your business, please.

• 9:50Speaker 02

  Sure. I'm Mercedes Smith from Salt Lake City, and I'm the founder of Blackstrad Concert Attire, a clothing brand designed specifically for performing musicians.

• 10:00Guy Raz?

  Wow, Mercedes, thanks for calling in. Okay, Blackstrad Concert. This is clothing for like people who are in a symphony orchestra?

• 10:08Speaker 02

  Sure, that's what I am. I play in a symphony orchestra. But it's clothing for anyone who's performing on stage and who needs to wear what we would call Concert Black, which is a very strict dress code for choirs, orchestras, bands, and a lot of other musical ensembles.

• 10:24Guy Raz?

  Where do you, where do you perform?

• 10:27Speaker 02

  I am the principal flutist of the Utah Symphony. It's a full-time job.

• 10:31Guy Raz?

  Wow. Okay, so I think I know where this is. Tell me about the genesis of this company of Black Strad concert attire.

• 10:38Speaker 02

  Sure. Well, after 20 years of doing this and struggling to find formal wear that was stylish, functional, and met my orchestra's dress code, I decided to start designing my own.

• 10:51Guy Raz?

  That's so cool. It's like figs, you know, like making scrubs for hospitals. Yeah, I mean, because I guess you want it to be nice. It has to be black and you also have to move your arms, right, around.

• 11:02Speaker 02

  Exactly.

• 11:03Guy Raz?

  It needs to be practical, too.

• 11:06Speaker 02

  It needs to be practical and it needs to be formal. I design mostly women's clothing and I think that is actually a big struggle because the men can sort of just, they're uncomfortable too, but they're wearing a tuxedo or tails or a suit. But for women, we're kind of told to just wear a long sleeve, all black. You know, it needs to be to your ankles. But again, to find something that's comfortable enough to perform in, you know, it could be very hot on stage. So a lot of women are sort of resorting to wearing kind of like athletic wear on stage and trying to get away with it, even though they might be sitting next to a gentleman who's wearing white tie and tails. And this seemed like a problem that needed fixing.

• 11:47Guy Raz?

  Yeah. When did you start?

• 11:49Speaker 02

  We launched with actual products just under two years ago.

• 11:54Guy Raz?

  Wow. Okay. And tell me a little bit about how the business is doing.

• 11:58Speaker 02

  Well, it's been growing, especially in the last year. And we're up to around 40,000 in revenue for per month. So it's, it's moving along.

• 12:07Guy Raz?

  That's great. Before we dive in, what is your, what's your question or your challenge you're trying to deal with?

• 12:13Speaker 02

  Sure. I'm constantly trying to improve our products to reduce returns and build customer loyalty. But every round of changes slows down launches and restocks. So how do you balance moving quickly with making sure the product is good enough to earn customers' trust and keep them coming back?

• 12:31Guy Raz?

  All right. I want to bring you in, Nick. Thoughts, ideas, questions for Mercedes?

• 12:35Speaker 01

  First, I just want to say I love this business in that it connects so deeply to a problem you actually faced yourself.

• 12:42Speaker 02

  Thank you.

• 12:43Speaker 01

  And I think what you're, what the problem that you're dealing with and the question that you just laid out also stems from that personal passion and commitment where, you know, you are in the business, you know, working on the product and wanting to make it perfect for every customer at that early stage when you still kind of can, you know, holding it together with duct tape and chewing gum, so to speak. And I think what you're facing is a classic entrepreneurial dilemma between quality versus, you know, speed or scale. And I think, you know, the paradigm shift here, which I think is, you know, every entrepreneur has to make at some point if they're going to scale, is that quality really has to imply scalability, like they have to become two sides of the same coin. And, you know, we've had to make a lot of those trade-offs at Thrive Market.

• 13:27Speaker 01

  I'll give you just one example where, you know, we're ultra curated. And we could serve more customers if we went out of reach for that other SKU, more SKUs, more SKUs. And a lot of retailers do that. We just said, we're going to keep it simple. And that's allowed us to be efficient. It's allowed us to pass on better savings to our members and have higher quality standards. And a version of that for you might be, you're going to do fewer SKUs. You're not going to have a solution for every single person. You're going to really like invest in that hero SKU and tell the story about why that's great versus having, I don't know, every variation of lace or like sleeve lengths or whatever is, is people are asking for. And that's hard because you're not going to be perfect for everyone. But, you know, you get yourself to be scalable and you can impact a lot more people.

• 14:08Guy Raz?

  Yeah, I, I completely agree, Nick, with what you said, Nick. I mean, you've got to figure out what, what you're going to be the best at. And then, and then make that or those few products. I mean, you have a lot of SKUs available, right, for women and a few for men, but a lot. And I think you want to really focus on what, the two or three that you really nail. And, and part of it is you've got this, you've got an inbuilt, you know, network of people who give you the feedback you need, who can tell you what works, what doesn't work, what you might want to tweak. I'm sure you're getting that information and using that data and I would really lean on it.

• 14:48Speaker 01

  You know, we mentioned figs at the beginning, but one of the things I always like to like tell every entrepreneur, and we've done shamelessly at Thrive, is like, figure out what you do uniquely and don't compromise on that. For everything else, don't reinvent the wheel. And if there's a business like figs, that's probably solved a lot of the same problems in a very analogous kind of space. Study them. You know, they've been a public company and so a lot of that information is out there publicly. I think one interesting thing they did was they, and you probably have your analog, but they made, they actually had their like own look. You could tell it was figs. And they like created a kind of fashion statement in a article of clothing that previously was not fashionable at all.

• 15:29Speaker 01

  So I don't know if that can be incorporated into your playbook, but I think figuring out what were the five or six things or X things that they did really well? What would be my version and how do I go after that? And then I do think the channels thing is really interesting for you where going after individuals is one thing, but you want to think about scalability, much better to, you know, create the uniforms for a whole choir. And some of those choirs are big.

• 15:50Guy Raz?

  Yeah. One quick thought I had also, Mercedes, is that it's, I suspect that you are doing a lot of things here. You've got a lot of SKUs here. You've got a full-time job as a, you know, in, in the symphony. And, um, you know, you're designing stuff. I probably, you're not even scratching the surface. I mean, you're running a business here, right? 40,000 in sales a month. You're fulfilling orders. There's a lot. Do you have any, any full-time employees right now?

• 16:18Speaker 02

  I don't have any full-time employees. Just this summer I did, since we kind of were going well, I did move to a warehouse. So I have someone doing fulfillment now, which is great. And because we have room, I guess, room next door. And we're, I also hired someone to run my paid ads on social media and hired a bookkeeper. But otherwise I'm doing everything myself, including the creative for the ads and all the social media.

• 16:44Guy Raz?

  And I'm sure you probably feel a little bit, sometimes like you're, you're just treading water, right?

• 16:50Speaker 02

  A little bit, yeah. Maybe more than a little bit, yes.

• 16:53Guy Raz?

  Yeah. Which is why I think trying to really focus on a few SKUs for now. And also, um, you know, as this business grows, and it's growing,

• 17:05Guy Raz?

  I don't think you should leave, necessarily leave your job because that gives, yeah, because you're a lot of credibility, right? What you do professionally, but you probably will have to think about bringing on at least another person to, to really help you run this thing.

• 17:19Speaker 02

  Absolutely. Yes.

• 17:21Speaker 01

  I'm sure you've heard of the 80/20 principle, but especially when you're not able to be totally full-time and you're in this space where you're kind of doing it all and potentially drowning. Being maniacal about identifying what is those 20% of inputs in every single part of the business is driving 80% of the output? And then simplify, simplify, simplify, focus, focus, focus. And, you know, you have all that passion and all that knowledge. Channel it in the most like narrow, specific way first.

• 17:50Speaker 02

  That's really smart. Yeah. Thank you.

• 17:53Guy Raz?

  Mercedes Smith, the brand is called Black Strad Concert Attire. Thanks for calling in. Good luck.

• 17:58Speaker 01

  Good luck.

• 17:59Speaker 02

  Thank you so much.

• 18:01Guy Raz?

  We're going to take a quick break, but when we come back, another caller, another question and another round of advice. I'm Guy Raz and we're answering your questions right here on the advice line on how I built this lab.

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• 22:54Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz, and my guest today is Nick Green. He's the co-founder of Thrive Market, and we are taking your calls. And Nick, what do you say? You ready for our next call?

• 23:05Speaker 03

  Let's do it.

• 23:07Speaker 03

  Hey, Guy. Hey, Nick. I'm Danny Walsh, founder of Peak State Coffee, calling in from Boulder, Colorado. And Peak State is coffee with benefits. We introduced a line of organic whole bean coffee with health benefits that doesn't compromise on the taste of really good coffee.

• 23:24Guy Raz?

  All right, great. Thanks for calling in, Danny. So Peak State Coffee, and you said you're in Boulder, is that right?

• 23:29Speaker 03

  That's right.

• 23:30Guy Raz?

  Okay. And so, health benefits, what's in the coffee that makes it healthy?

• 23:34Speaker 03

  Yeah, so I was looking for the health benefits of mushroom coffee without the classic taste or texture compromise that comes with mushroom coffees.

• 23:43Guy Raz?

  Like reishi and lion's mane and all those things?

• 23:46Speaker 03

  Exactly.

• 23:47Guy Raz?

  Yeah, because if you take those in powder form, which I do, not all the time, but I have, it can be bitter, right? Like, if you take mushroom powders, you really have to just hide it in a smoothie or something.

• 24:00Speaker 03

  When I was getting started, I wanted to incorporate adaptogenic mushrooms in my diet every day, and everything that I could find on the market was, in fact, an instant coffee powder that was either mixed together, or it was like an alternative to coffee that was also a powder. And again, wanting to keep the integrity of a really good cup of coffee, I figured out, while working with a food scientist, that we could actually take an extract, so like a botanical, like a liquid,

• 24:32Guy Raz?

  Yeah.

• 24:32Speaker 03

  and infuse that with coffee beans after the coffee was roasted.

• 24:36Guy Raz?

  Got it.

• 24:37Speaker 03

  So that you can keep the ritual the same without the texture or the powders.

• 24:42Guy Raz?

  Okay. So when did you, and when did you start the brand?

• 24:45Speaker 03

  We launched in April of 2020, so COVID business.

• 24:48Guy Raz?

  Nice. And tell me how the business is doing. Like, for example, what did you guys do in sales last year?

• 24:54Speaker 03

  We're at about a half a million right now, trailing 12 months.

• 24:57Guy Raz?

  Amazing. And most of your sales, break it down for me. Are they in stores? Are they online? Are they elsewhere?

• 25:04Speaker 03

  We're 95% online, 5% retail.

• 25:08Guy Raz?

  So 95% of your sales are happening online?

• 25:11Speaker 03

  Well, 95% direct to consumer. So some of that is farmers markets, most of that is online on our website. And then the other 5% is we're regionally within Whole Foods in Colorado.

• 25:24Guy Raz?

  Got it. Okay. So most of it is through your website, and then what, how much farmer's market, for example?

• 25:30Speaker 03

  How about 20%?

• 25:31Guy Raz?

  Okay, that's great. Interesting. Okay. And before we dive in further, what is your question for us?

• 25:38Speaker 03

  Yeah, so I've always been passionate about using business as a force for good in the world. And I think that the question I have for both of you is, if you were building a mission-driven consumer brand today, how would you fund that growth without compromising on the values that make your company worth building?

• 26:01Guy Raz?

  All right. Before we dive into the question, just specifically, tell me, when you say "mission-driven," what does that mean in terms of your business, in terms of what you're spending on?

• 26:10Speaker 03

  Sure. So the health component, being the highest quality sourcing, organic ingredients, not wanting to compromise on where you're sourcing from, and then also wanting to keep your mission front and center. We have a big sustainability component to our brand, where we're giving 1% of our sales back to environmental conservation, and we're keeping our company a B Corp, so that whatever happens as we grow, we don't lose our way.

• 26:40Guy Raz?

  Okay, all right. That's helpful. Okay. Nick Green, I want to bring you in here. First of all, thoughts, ideas, questions for Danny?

• 26:48Speaker 01

  I mean, first, just congratulations, you know, from one mission-driven entrepreneur to another. I think one of the things that we struggled with back at the beginning of Thrive was fundraising and the assumption that, you know, it was basically zero sum between the mission or building a big business. And I think the first thing to try to break down is that assumption. And before you can do it with investors, you got to do it in your own business. So how do you make the mission, like, actually driving positive sum value in the business? And, you know, for us, we found things in like our GIVES program, where, you know, we're giving away a free membership, but those members still buy products on Thrive. You know, when we launched, we became the first pure-play e-commerce retailer to accept food stamps online. You know, that was a great thing for our mission.

• 27:32Speaker 01

  It was also a great thing for our business. You know, when we do packaging reduction, we do that because it's the right thing for the environment. It's also cost reduction in the business. And, you know, you can't do everything all at once, so you'll always have to sequence. I think thinking about what are those things that won't be zero sum? You know, 1%, like 1% is 1%. That's going to cost money. But there's a lot of other things where you can be accretive to the business, and that'll be attractive to investors and good for your bottom line, but also will be really good for the mission. The other big thing, which, you know, I looked at your website a little bit. I think you're doing a great job with this already, but make sure you're getting credit for those higher standards. I think there are so many awesome entrepreneurs out there who are doing things better, who aren't cutting corners in the supply chain, who are elevating standards,

• 28:17Speaker 01

  but then don't get credit for it with the consumer. So I'd say those are the first two things. In terms of fundraising, you know, it's a big question. And I think the question for you to ask yourself is, when is the right time to do that? I think, you know, debt can be really valuable because you're not diluting, you know, yourself as a shareholder. But debt is also higher risk, and eventually you have to pay it back. And so, you know, sharing some of that risk with other equity holders can be really valuable. It can allow you to get more capital into the business. It can ultimately allow you to get more debt. If you get the right shareholders who share your values and are mission-aligned, they can also be incredible thought partners. And one of the toughest things as an entrepreneur

• 29:02Speaker 01

  is just the loneliness at the top, so to speak, and having, especially as a mission-driven entrepreneur, and how do you, how do you push that forward? And do you have co-founders?

• 29:12Speaker 03

  Just, just me.

• 29:14Speaker 01

  Yeah, so even, even tougher, right? And I had, I had three co-founders at Thrive, but was a solo entrepreneur in my first business. And so if you get the right partner, it's a source of capital, but it's also a real partner in the business. And I do think that, you know, first you gotta be able to convey how the, the things you're doing from a mission standpoint actually are accretive to the business. But second, you gotta find a partner who values the, the mission for what it does for the business, but also believes in what you're doing and is excited to be, be a partner in that.

• 29:44Guy Raz?

  Yeah, I, I, I agree. I mean, I, I think that, first of all, I would say being a, a values-driven business doesn't mean that every value has to be equally sacred, right? Like, and it doesn't mean that all of the things you do make you a values-driven business. I think you all, you wanna first start with what's non-negotiable, but I, I put that aside for a sec because I, I think, again, I, I, like Nick, I think I'm reading into your question, like, should I look for, for funding or is this something I should consider? And, and I would not assume that, that VC-funded direct-to-consumer is, is the answer just yet or, or ever. It could be. I mean, if you have the right, again, the right partner who wants to work with you to scale this up in, in the way that both of you are aligned on, that's different.

• 30:27Guy Raz?

  I, but where I, I, I'm looking at, at some of the things you said, I mean, 20% of sales are farmers markets. That, that's pretty great. I mean, that seems like a, a pretty interesting opportunity. And then the other thing is, I'm curious, how, what is the, um, uh, like, repeat order rate? You know, what, what percentage of, of what, like, website customers are coming back?

• 30:49Speaker 03

  Yeah, so the overwhelming majority of our online sales are subscription customers. And our, so, and then for those non-subscription customers, our repeat purchase rate is about 60%. So we have pretty good metrics there.

• 31:02Guy Raz?

  That, to me, is the opportunity, that the subscription, being a, a subscription company and going after those repeat visitors, you know, who are not yet subscribers. And I wonder whether there are things that you can do and offer for subscribers. You know, maybe if you become a subscriber, you get a discounted first bag or something like that. Because that, to me, is where the opportunity is right now, you know, for you to really scale up. I mean, I, Nick, you'd know this better than I do, but I, from, from our experience on the show, coffee is actually, it's very competitive, but it is an unusually good subscription product because people consume it every day. They run out of it, they need more of it.

• 31:47Speaker 01

  And it's addictive, right? Like, this is the, uh, and I'm a, I'm a, I'm a coffee drinker who's now very interested in trying your product. And if you have that kind of stick rate when people try it, you know, you also can think about potentially investing a little more upfront. And, you know, there's a, obviously the math of your, your LTV, CAC dynamics, but, um, you know, being maniacal about that equation and how do you, uh, you know, get the churn even to a stronger place? But also, uh, you know, figure out how can you bring more, more people in the door if that, if the, if the ratio is working? Uh, it absolutely makes sense. And I think that, you know, I, I don't want you to think that I'm saying you have to go raise money.

• 32:29Speaker 01

  I think if you look at really successful businesses, there's as many that have been ruined by raising outside money as, you know, made stronger. And, uh, and there is also a lot of value to going a little bit slower because, and being more thoughtful about the capital that you deploy because it's your own, uh, and being constrained on capital as just a forcing function to do things right, be intellectually honest, you know, not, not get out over your skis, so to speak. So it's, it's a big decision, uh, and your, you know, a potential inflection in the business either way.

• 33:05Guy Raz?

  You know, you, you could get, and we've seen this with, with brands on the show, you get a million dollars and you raise a million dollars and you're gonna spend that million dollars trying to reach new customers who may come in and try it once and may not come back. And, uh, and, and the cost of acquiring those customers is very high, right? But we know, we know this, I think the cost of getting people to subscribe or to be regular repeat purchasers, some, it's just a, you know, the value of that is, is, is, is just gold. Uh, and that's, that, to me, is where I see a real opportunity to grow before you even think about, um, you know, bringing in money or trying to scale it.

• 33:45Guy Raz?

  I, I think you could build this into a five, maybe even 10 million dollar business, possibly, without raising a dime.

• 33:53Speaker 01

  One last thing I'll throw in there, yeah, just to go back to the Thrive Market playbook where we, you know, we raised money from influencers and we also gave them equity and in fact, paid them to promote in equity instead of cash, which allowed us to raise less money. You know, you, if you imagine, you know, selling 10% of your business by raising money, you could take that, that equity and allocate it to influencers who can get the word out and have an audience and are authentic and, you know, uh, and connected and, and fans of your, of your product already. One of the things we obviously do is look through our customer files and see if there were influencers that were just coming in organically. And then we'd reach out to them, uh, you know, to start to, to start to partner and promote.

• 34:34Speaker 01

  And, you know, that can be a channel that's very defensible and, and sticky and doesn't have the issue of, of low-quality customers who are just coming in off an ad, but rather coming in from someone they trust.

• 34:45Guy Raz?

  Yep, a Thrive playbook. Uh, Danny, I think you've got your marching orders here.

• 34:49Speaker 03

  All right. Well, thank you, Guy, thank you, Nick. And yeah, I've been a big fan of the show for a while, so it's awesome to be here.

• 34:56Guy Raz?

  Thank you for calling in. Peak Steak Coffee, good luck.

• 34:58Speaker 01

  Good luck.

• 35:00Guy Raz?

  All right, we're gonna take another quick break, but we'll be right back with one more caller. Stay with us. I'm Guy Raz and you're listening to the Advice Line, right here on How I Built This Lab.

• 35:24Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz and today I'm taking your calls with Nick Green. He's a co-founder of Thrive Market and let's bring in our next caller. Hello.

• 35:34Speaker 04

  Hi Guy, Nick. I'm Ria Jane, calling from Chicago. I'm a Duke student and the founder of VoiceBack. So VoiceBack is a mobile app for people with conditions that cause speech loss, like ALS, to clone their voice from just 10 seconds of audio so they can communicate in their own voice instead of a robotic one.

• 35:53Guy Raz?

  Cool, thanks for calling in, Ria. So you have created a, an app that uses a previous recording of their voice to actually speak to people? Like, you can, you can respond, you can type responses in and it'll use their voice?

• 36:09Speaker 04

  Yeah, exactly. So people who have ALS, Parkinson's, stroke, throat cancer, even autism, aphasia, they upload an old recording of their voice and this can just be 10 seconds to 60 seconds, old video, voicemail. The app will clone their voice and then put that into a text-to-speech board so they can conversate with people in their own voice instead of the alternative, which is like a robotic one.

• 36:34Guy Raz?

  Like a Speak and Spell type of voice, like the Stephen Hawking voice?

• 36:37Speaker 04

  Exactly.

• 36:38Guy Raz?

  Yeah, oh, that's a cool idea. So how, how did you come up with this idea? What's the story?

• 36:42Speaker 04

  Yeah, so about three years ago, my grandma was diagnosed with ALS. And even after losing all ability to move, the hardest part for her was losing her ability to speak. Like, she was an absolute social butterfly, loved making friends. And so when the doctors gave her voice options in her iPad phone and they all sounded robotic, you can imagine it was just so devastating and embarrassing for her. And she hated these options so much that she refused to use them and would only write to communicate, which made it so challenging and even dangerous when we couldn't understand her. And so I invented VoiceBack for her so she could sound like herself, feel more confident, and she loved it. She, she used it all the way up until her passing.

• 37:21Speaker 04

  And, and so now it's my mission that everyone with speech loss and ALS be able to sound like themselves again and get that emotional identity back.

• 37:29Guy Raz?

  Yeah, that's an awesome story. Um, and, and so this is available in the App Store and, and, and the Android App Store as, right now? That's, that's where, that's where you get it, right? Yeah, okay. And, and how, how's it doing? You launched it and, and what's, what's the status?

• 37:43Speaker 04

  Yeah, so I launched it a year ago. Today's actually one year anniversary, so exactly a year ago. And, uh, to, to date, we've done over 50,000 downloads on the app. Uh, and most of those downloads were free users doing beta testing because I really wanted to make the product perfect and have all the features that people would want on it. And then I installed a paywall about two months ago. And so we've done around $20,000 in, in revenue so far from that paywall.

• 38:10Guy Raz?

  And, and how much does the app cost?

• 38:12Speaker 04

  So right now, it's, it's a bit unusual business model, but it's about $23.99 lifetime or a $2.99 a month with a seven-day free trial.

• 38:22Guy Raz?

  Okay, um, before we dive in, what is your question for us?

• 38:25Speaker 04

  Yeah, so my question is, since VoiceBack has no inventory and almost no marginal cost, awareness is the only thing standing between us and everyone who needs it. But our customers find us at a devastating diagnosis, which means we can't reach them through normal ad targeting. So how do I scale awareness in a market that the standard marketing playbook can't touch?

• 38:47Speaker 01

  Yeah, you know, where my mind goes is, I think the work you've done over this last year, where you kept it a free product and you just iterated and learned about basically product-market fit, right? To understand what do people need, what makes it, what makes it sticky, what's gonna keep them coming back? Like, all of that is amazing work. I would say before awareness, you actually need to do that work with the paid app, right? There's, it's very different to have product-market fit with a free download versus something people have to pay for. And I think the work that you wanna do before you, like, awareness is about scaling. It's about, hey, everything's doing great, now I just need to put, pour fuel on the fire. But I actually think the first thing you wanna do is iterate on your funnel. Like, you gotta develop a marketing funnel.

• 39:32Speaker 01

  You should think about your pricing model and maybe you've already done some iteration there to come up with the, the two options you have. You should be looking at the churn curves. Because the most important thing isn't getting people in, it's how many of those people stay in. And you should be really iterating the product now to be a paid product. You know, before you're, you're, you got 50,000 people, which is awesome that you're having that impact, but the bar is kind of low. They're not having to pay for it. Now you've raised the bar, you got to figure out what's, you know, what's the business model? And then only once you've really put that together, then you start thinking about awareness. I think in your case, that the hard thing with awareness is that you can't just go on Meta

• 40:11Speaker 01

  and spend it on ALS. The good thing is, uh, there are, there are really good micro channels, which I'm sure you've already, uh, started to look at where it's support groups, it's forums, it's specific influencers who are facing this issue themselves, or talking about family members that are, that, that have it. And so it's how do you find the, the, the communities and market in a more grassroots way, uh, to those communities. And you have a business that I think can actually really scale with word of mouth. And it was kind of depend on that because people that are going through this, they look for other people that are going through it and they share it. And, and so I do think that's, uh, you know, for us with Thrive Market, you know, people starting their health journey, they want to find us a good solution and then they want to help other people. It's probably even

• 40:56Speaker 01

  more acute with a journey like you're talking about.

• 40:59Guy Raz?

  Yeah, I, I agree. I think that the number you want to focus on is not the 50,000 downloads, but on, on 500 people who, who, who are going to be far more valuable. You want to target, uh, neurologists and, and speech pathologists and ALS clinics. And as Nick said, you know, patient advocacy organizations. I, I would start by making a list of every ALS organization or treatment center that you can find. And then go on their sites and look for clinicians who work with patients at those centers. And I would, I would email them. I'd find their emails and say, hey, my grandmother lost her ability to speak when she was, after she

• 41:40Guy Raz?

  was diagnosed ALS. Um, she hated this robotic voice that she, you know, had, or whatever the story is, obviously. And so I built this thing so she could reclaim her, her voice. So she could, as you have said on your website, you know, she could have, get her identity back. Um, can I, can I get 10 minutes of your time to show you how this works? And those are the people you want. You want 500, 5,000 better, but 500 of those people. That's really how you get this into the lives of people who are affected by this devastating condition, disease.

• 42:14Speaker 01

  I mean, one of the things we found at Thrive Market, and I actually still do to this day, those customer conversations where, you know, especially when they're dealing with something that's really intense in their own life, if they'll share what they're experiencing, what worked, what didn't, and give you feedback, you know, that's, it's really, really impactful, especially as you try to go to a, go to a paid product. The other thing I was just thinking is, is you talk about 50,000, like, that's a big impact. You don't want to give up impacting those people that maybe can't pay or won't pay. One model to think about that may be really helpful for you would be freemium. And maybe you're already, you know, maybe you already have a version that's free right now, but that could be, you know, the way that you actually build awareness by having a free product, but then layering enough value above and beyond that to monetize.

• 42:58Speaker 04

  Yeah, yeah. No, that's, that's great advice.

• 43:01Speaker 01

  And I, I always say, like, study other apps that are in similar spaces too, to see like, how are they set up? How, and I'm sure you've done some of this, but how are they priced? What's the model they use? And, you know, is there, uh, is there a, an analog?

• 43:17Guy Raz?

  Yeah. I mean, the upfront pricing to me seems low, but I, and, and look, let's, let's be honest. I mean, this is not, it's not like, you know, AllTrails or the New York Times Cooking app, I mean, which, you know, somebody might have for 20 years. Like the reality is, what's the prognosis on ALS, right? It's, it's, it's a few years. So it's possible that, you know, you're going to have people using this for a year, maybe less. Um, I would, so I would definitely think about the pricing model. I think the freemium idea is really interesting. Um, but ultimately it's who you reach. And, and I don't think you have to focus on patients. You want to focus on caregivers, neurologists, speech pathologists, families eventually. But I would, I would just start to email,

• 44:02Guy Raz?

  cold email, uh, some of these speech pathologists.

• 44:05Speaker 01

  In my first business, I would use like high school directories to email out to students that we're going to bring in. At Thrive Market, we, we went to farmers markets, you know, we are on the forums. And, you know, our, our most successful strategy was finding influencers specifically focused on healthy living and advertising through them. And, you know, those honestly were much more successful, uh, for us and much more efficient than using, you know, big paid acquisition channels.

• 44:32Speaker 04

  Yeah, yeah. 100%. No, that's great advice. I think we definitely try both routes, like the clinician route and the influencer route. With clinicians, it can be a little slow because many of them have been used to a certain way for so long, you know, partnerships with these apps that generate this robotic voice. And so it's hard to, you know, keep following up and reaching them. But I think you're right. That's what you have to do as an entrepreneur. And Nick, I definitely took a page out of your playbook with the influencers, because I've reached out to so many influencers and eventually got to Dr. Richard Bedlak, who's like one of the top ALS doctors and has a great following, um, and at Duke ALS clinic. And so now he's our medical advisor. We've done posts, collaborative posts, and that's what's really moved the needle. And so, yeah.

• 45:18Guy Raz?

  Have you done, um, social media posts showing how this works, like actual, with actual patients?

• 45:23Speaker 04

  Yes, 100%. So I actually have a voice back advisory team of like 10 people with ALS or different speech loss conditions who give me great feedback on the app. Cause it's interesting in that, I mean, I don't know what I don't know. It's not like I have the condition. So if someone tells me, hey, you need this feature or I need this added, it's like, great idea. Let me program that in right now. And so they, they give me great advice and help create content of themselves using the app and, and how it works.

• 45:50Guy Raz?

  Yeah. Awesome. Well, I, I congratulate on this. The app is called Voice Back. Uh, Ria Jane, thanks for calling in. Good luck.

• 45:56Speaker 04

  Thank you.

• 45:57Speaker 01

  Good luck.

• 45:58Speaker 04

  Thank you.

• 46:00Guy Raz?

  Nick, let me ask you one, one final question to give yourself advice. If you could go back to Thrive in 2014, when you launched and all the challenges you faced back then, knowing what you now know, 12 years in, what would have been, what do you think would have been helpful for you to know? What, what, what could you tell yourself now, if you go back in time?

• 46:18Speaker 01

  Oh, man. I mean, I feel like if I had known how hard it was going to be, it would have been hard to even start, is the truth with, and it's just like, you hear this all the time, like to be an entrepreneur, you have to be irrational, you know, arguably insane to take that risk and go do it. But yet you have to, you have to sort of have that belief in order to make it happen. And so I don't know if I would have told myself about anything that was going to happen that would be really hard. And I don't know if I'd want to know either that we got through to the other side, because, you know, that might take away some of the fire in the belly and some of the fear of failure that actually drove us to succeed. So I don't, I, you know, I think that every journey is so path dependent.

• 47:02Speaker 01

  And ours, we've had, you know, many precarious moments, many challenges, but also that's been part of the victory. I wouldn't, I wouldn't change a thing. I think the, you know, the things I would tell myself are the things that I, that I felt then. I just want to feel them even stronger. It's like, go after the mission. Don't give up. Uh, there's always a way to solve the problem and keep going.

• 47:23Guy Raz?

  That's Nick Green. He is the co-founder and CEO of Thrive Market. Nick, thanks so much for coming back on the show.

• 47:30Speaker 01

  Thanks for having me.

• 47:31Guy Raz?

  Uh, and by the way, if you haven't heard Nick's original episode of How I Built This about Thrive Market, please go back and check it out. We'll put a link to it in the show notes. So just scroll down and click on it. Uh, and here's one of my favorite moments from that episode.

• 47:44Speaker 01

  We weren't product managers, didn't have a background in building an e-commerce platform. So we hired an outside agency. We thought it would take six months to do the tech build. And four months in, started getting the sense that we didn't have anything. And so at that point, I said, we need help. We're out of our depth. We've made these mistakes. We were desperate.

• 48:07Guy Raz?

  Yeah.

• 48:08Speaker 01

  Not only had we spent a lot of money, so we had the sunk cost, but we had nothing to show for it. It was a complete train wreck.

• 48:16Guy Raz?

  Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at guyraz.com or on Substack. This episode was produced by Sam Paulson with music composed by Ramtin Arablouei. It was edited by John Isabella and our audio engineer was An Li Huang. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coats, J C Howard, Catherine Seifer, Carrie Thompson, and Neva Grant. I'm Guy Raz, and you've been listening to the Advice Line on How I Built This Lab.

• 48:57Guy Raz?

  Thanks again to Engine for their support. If your business is growing and your team is traveling, Engine makes it simple and saves you money doing it. 33,000 businesses have joined. Now it's your turn. Engine.com/built.