YouSaid · the spoken record

Nick Green

lines on the record: 75
first: 2024-08-12
most recent: 2024-08-12
sittings or episodes: 1
sources: podcast

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“I think it's a combination of all of the above. I do believe that staying at it and being flexible in your tactics and willing to adjust and respond to the facts on the ground is everything with entrepreneurship because best life plans will be will just be wrong every single time. That approach, I think, which is probably a combination of luck and work has really worked for us. I think for us, the mission, again, being clear on where we're going has made us very flexible in how we get there.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“I think we see a really clear path as a standalone business. The membership renewal rates are over 70%. We're still bringing in new members that are really rapid clip. And we're still very early in that journey. So we don't see any need to become part of a larger business. To date, we see the clear path as continuing to do what we're doing and continue to grow both the profitability and the revenue.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So we're running the business profitably operating cash flow positive. And back at those early days, we were losing money on every order. Today, we're making significant contribution margin overall.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Well, over half a billion in sales last year. And our members every year are getting more active on site and where we invest today is how do we just deliver overwhelming value to those members so that the value is growing every single year.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“In the short term, some of these programs cost money. So it might have a positive impact. I think in the medium to long term, it would have a massively negative impact on the member perception and member loyalty, on our ability to attract great employees who come to thrive first and foremost because they believe in the mission. And on our ability to think long term, like that mission is what galvanizes our entire company. And I think it is the reason why members not only purchase on site but also evangelize. And I think we've also been really, we tried to be really smart about looking for opportunities.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Yep. And that was one that we was also very popular at the time. Tom Shoes was another LA company doing that. For us, we looked at it and said, look, the membership is all margin, so we can give away memberships all day to folks that wouldn't otherwise be able to afford them. And, you know, in the initial model was low-income families, but we eventually expanded it to teachers, to students, to first responders, and to military veterans.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“That point, we were. Yeah, we were starting to spend money on paid media, you know, and we were also at a scale where to keep growing at the rate we were growing. It was going to require more than just the influencers. And the biggest thing, though, by far was focusing on the quality of the product in a way that made our members the evangelists. So our number one acquisition channel today is unpaid. It's referral. It's members telling members. And I think that was another place where we saw the mission made people want to evangelize more when they felt good about things that we were doing with packaging and shipping policies, or when they knew their membership was sponsoring one for a low-income family.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Was a lot of money, so it gave us the runway to step back and think more long term. And then because the partner that we brought in, so we brought in a group called the Invas Group, they're a Evergreen Fund. So they don't have a timeframe where they're trying to sell a business. And they were the one group that we talked to at the series B that was sort of brutally honest with us about what was not working. And that resonated. So it was strange. At the Series A, you had a lot of VCs that are telling you everything you're doing right. At the Series B, we had this one investor that came in and said, here are the things that you guys aren't doing right. And as we looked in the mirror, it was like, yeah, you're right.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“A certain point, we had to sort of tell them to stop promoting. Because we couldn't handle the volume. So we were at that point just operationally really compromised. And as the business sort of continued to grow, we were approaching a hundred million dollar run rate. We were dealing with, one, how do we make sure we have enough capital to grow operationally into the demand that we now have? And then just how do we keep the organization functioning effectively when we've brought on 100 new people and people are kind of running around trying to do their job, but we haven't really been clear about what their job is. And, you know, we've got so much changing so quickly as co-founders, we didn't really know what to do and when.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“One, we hired way too fast. And when you hired that quickly, you can't integrate people effectively. You make mistakes in hiring in terms of fit. And that really caused us to suffer because it's a lot easier to hire people than to fire them. We were way too aggressive with marketing. We spent too much for individual members and did things like the coconut oil funnel. And then we just, I think underestimated how difficult it was to scale operations. You know, you think about a technology business grows exponentially, but a physical goods online retail business is technology enabled, but fundamentally, it's still an operating business. And we had to open warehouses. We had to grow our inventory. And all of that was expensive. And it was complex in a way that we just didn't appreciate until it was upon us.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so it was a combination of really specific situation with his family. His father had late stage cancer, and he wanted to spend more time with him. And then the other side of it, which he and I talked a lot about and to his credit, he was really open about, was just sort of the business was changing so fast and the needs that kind of skill set that was required at that stage was really different. So we had this period after we raised the $30 million that we're going full speed. We grew way too fast. We made a lot of mistakes.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“First product we made was olive oil. The olive oil was single source from a fourth generation of family farm in Crete, different form factor coming in at 10 instead of a bottle. So we innovated on the packaging. We innovated on the sourcing. At the beginning it was mostly staples, right? So it was like the cooking staples, the snacks. Then we started creating new innovative products like one of our best signed products today is called fruit circles, but it's basically healthier fruit-only ingredient, fruit by the foot.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So, one of the first things we did there, and maybe one of the only good decisions we made at that stage of the business was to start working on private label. And so that rapidly grew to 15% of our sales”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Costs a lot, especially when we had to shut down the coconut oil program a few months later and got stuck with a million and a half dollars of coconut oil inventory. So it was very expensive. Nominally, you had the member count growing through the roof, but under the surface, you know, the engagement of those members wasn't what it needed to be.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So at the time, every membership started with a trial. And the funnel that we landed on that drove the most growth was if you gave a free gift when you started your trial. So we would ship a jar of coconut oil. They didn't have to buy anything, and they would get the membership free for the first month.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“I think the challenge was we were growing so fast. And then when we raised that money on really advantageous terms, it just vindicated the strategy of grow, grow, grow. And so our approach was let's blow the doors out. We hired 100 people over the course of the next six months. We moved into a $25,000 square foot office. So this is like a over the top office with mirrors on the ceilings under the floating conference room. Everything you'd expect from an overfunded Series A startup, we leaned into sort of crazy funnels where we would, you know, if you signed up for a trial membership, we'll give you a free jar of coconut oil. But that was actually the moment where the wheels almost came off.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So we created our own terms, the valuation was 20 times higher than it had been six months earlier. We got to pick the VC to lead that we wanted. And then we went back and kept trying to grow.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Alluded to oblivion, and more importantly, we wouldn't have had the influencers to come in and actually drive that growth. So who knows whether we would have been as successful?”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“We prove the demand. We weren't as focused at that point on the model because we were so exhilarated. And I think VCs, especially that early stage, when they see that you've got a tiger by the tail in terms of growth, they want in. And the challenge with that is we were not under any scrutiny on the unit economics. We weren't under scrutiny to really make the business sustainable. And then we threw the hammer and tried to grow even faster.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So, we are bringing in as much money as we could, but that wasn't enough. We wanted to continue hammering the gas because it was working. And that was the time that we really got out over our skis. And what we did to solve the problem is we said, all right, now we got to go back and raise more institutional money. And the conversations couldn't have been more different with the VCs. Everyone that rejected us now wanted to invest. And so we raised $30 million.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“We did not expect that to happen. And the other challenge was just the speed at which we were scaling. You know, we like, I mean, at that point, we were burning more than a million dollars a month. And so that was a challenge.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“It was at the time we were actually losing money on each order that went out the door, which means the more that you grow, the more money you lose.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Remotely profitable. So we didn't know, I think this was the again, the naivete coming in, we didn't realize how difficult it would be to do this profitably. So when you layered in the shipping costs, the packaging costs, the cost of goods for buying from all these brands at relatively low volume, it was really, really challenging.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Didn't have the capital and we didn't have like at first we didn't have the facility, right? So our 6,000 square foot warehouse was bursting at the seams within a month and a half. We moved to a 40,000 square foot building in Los Angeles and that was bursting into seams within another six months. So it was very, very challenging to scale operationally.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So we, you know, we had gotten just ridiculed left and right by investors when we went out with our projections. And I think our projections had us doing 15 million in the first year. So we doubled what we thought we would do. And honestly, we were constrained, right? Operationally, we couldn't scale fast enough.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Blogger in Kentucky. She's in her mid twenties, and she wrote a post about Thrive. And within 24 hours, we had orders coming in from all 48 states in the continental U.S.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Pre Instagram, pre YouTube. They were bloggers. They had email lists. They were, in some cases, best-selling authors. And the first promo that we ran was with Katie Wells, who's site Wellness Mama was one of those.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“In LA, in Venice, and obviously not going to ship out of there. So we, you know, looked around. This is still before we had been able to successfully raise money. And we found an old garage that had been used for an auto mechanic shop. We moved in and when we did launch, we were working in the office during the day and then packing boxes at night.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“We watch the floors and we just hit everyone up. And I think there as well, we had the benefit of the mission really resonating. Like these brands like the influencers, they understood that there isn't a lot of access. They knew where their distribution was with brick and mortar. They knew who their consumers were and they knew they weren't accessing middle class middle America. So for them, it was like, wow, from a business standpoint, we can access this whole new consumer set. And from a mission standpoint, this is awesome.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, we brought them more than 400 brands in. I can remember in the spring of that year, Gennar and I went to the natural products exposition west, which is the largest in Anaheim.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Would buy credits for our carbon footprint. And then we did from the very beginning a lot of things to try to reduce that carbon footprint. The biggest of which was absolutely prohibiting the use of airshipping.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Carbon neutral shipp Like doing our own fulfillment so we could control the quality experience and use sustainable packaging.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“That's right. But I think the benefit for us, besides the fact that we actually got money, which we needed and couldn't get any other way, was once they had skin in the game, now we were able to work with these influencers as real partners. So they were on the same side of the table with us. They understood the story because they had underwritten it for their own investment. They were already passionate about the mission. And when they did talk about us to their audiences, it was just that much more aligned from an incentive standpoint. The other big benefit was that had we had VCs, they didn't care about the mission. So their focus would be how do you make the business model work? And I think they would have looked at that in a very short-term way. The influencers cared only about the mission. And that allowed us to bake in things early that I think BC probably would have vetoed.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“And so we raised a million and a half in the seed round. And then had more demand. So we opened up a convertible note and ultimately brought in hundreds of these people.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“They were all over the place. Many of the influencers had never written an angel check in their life. So we had, you know, one of our first checks was from Wellness Mama. She was at the time 26-year-old mother of four in rural Kentucky. Huge audience, super authentic content ended up being a huge promo partner for us. I remember we had a call with her accountant who asked us what our ticker symbol was. I'm like, well, we're not quite there yet. So yeah, it was anywhere from 5, 10, 15, sometimes $25,000. I think Mark wrote a $50,000 check and that was probably one of, if not the biggest. Yeah.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“We met with Mark Sisson at a coffee shop in Malibu. We walked in at that time, you know, all the background that I already described around where the development was, the rejections we'd have from VCs, our expectations could not have been lower. And he essentially wrote a check on the spot.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So at that point, we were pretty desperate, and we had been kind of the one bright spot in terms of progress we've been making on the business was conversations we'd had with health and wellness influencers. So a friend of mine, John Durant, who I knew from college, had recently written a book called The Paleo Manifesto and become a thought leader of sorts in the burgeoning paleo movement. He became friends with a bunch of other authors, bloggers, early social media kind of folks at the time. It was on Facebook. So, you know, he had introduced us to a number of these folks. We had talked about doing marketing with them. They were excited. They were engaged. They understood the mission. Their audience was the target that we were going after people that are trying to get to this lifestyle, but it's really hard because of where they live or because of how expensive it is or whatever. So out of desperation, we went to these people and said, how about you invest too? And to our surprise, a lot of them said yes.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Dozens, dozens. So our confidence is waning or getting slapped in the face every day with no's from VCs. It was an existential moment.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“That's right. And I think their assumption was that was based on where the demand was. And our hypothesis was that there's latent demand.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Keeps a pretty simple operational business. But are we going to fund a membership club that has thousands of products from hundreds of brands and is trying to ship those all over the country? That sounds crazy.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“So, I think the problem was they didn't understand the problem. That was the first problem. So we're pitching affluent, mostly male investors who live in, have a whole foods within driving if not walking distance and probably don't do their own shopping themselves. So for them, the question was, how would you compete with Whole Foods? For us, the answer was 50% of people in this country don't live within driving distance of a Whole Foods, and even more of them can't afford the premiums even if they do. And so that was like problem number one for us. The second problem, which is totally on us, is we were very naive about the operational complexity, the capital requirements, the margin challenges of building an online retailer. And I think the VCs, you know, if not having direct experience there had heard the horror stories and said, you know, we'll do a D2C brand that has a single item, controls their supply chain and”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“2014. Things are going slower than we wanted. We're spending more money than we thought we would, and it's all our own. We need to bring in investors. So we thought, well, okay, we maybe haven't been as effective as we thought we would be building the site. But look, we're seasoned entrepreneurs. We have wins under our belt. Surely we can get investors to come support us and get this thing on track. We went to a bunch of VCs in San Francisco. We took a trip out to New York. We visited every VC that we could find in LA and we got intros to most of them through Launchpad. And we were rejected every single time.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so that's the other humbling side of the stage of the business we were kind of starting in March or April. We said, all right,”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“No, no. No money back, no time back, no confidence back. So deeply humbling borderline humiliating experience. And so the next question for us was, how do we, like, where do we go from here and the kind of non-negotiable for Gennar and I was we need to have a CTO? So we made an offer to Sasha. He said no. We made another offer. He said, I'll invest and advise. And, you know, we more or less locked him in a room and said, what's it going to take? We basically refused to take no for an answer. He said, all right, let's go. Let's do it. He came on as a co-founder. He in about 10 weeks. Built for a fraction of the funds, what we had failed to build over the prior four to six months. And at that point, we were basically a month and a half behind schedule, but pretty good given where we'd sat a few months prior.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Sasha Siddhartha. And he came by and said, Look, I'll help you understand what you have here, what you've built. He went, spent two hours at the agency, said you got nothing. Vaporware. Absolutely nothing.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“We were four months in, hundreds of thousands of dollars of development, and started getting the sense that we didn't have anything. And so at that point, I went back to the managing partner at Launchpad. I said, we need help. We're out of our depth. We've made these mistakes. I just sort of like kind of poured it on him because we were desperate. Not only have we spent a lot of money, so we had the sunk cost, but we had nothing to show for it. So, like, neither Genar nor I are technical. We couldn't even assess whether there was any progress being made. So I said, look, I need the best technology person that you know of who has done things at this early stage, who knows e-commerce, like, who is this person? And I need to hire them now. And so he pointed us to Sasha, who was ended up being our fourth co founder.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Hired an outside agency. We thought, look, we know what we're doing. We've built companies before we'll in house it later, basically, was the attitude. They build the whole kind of platform that we would use for back and front end e-commerce. And I think we really underappreciated how creative that process would be. And so the communication with them was challenging. The progress was slow. And, you know, four months in with target launch date rapidly approaching, it became very clear that we were not anywhere near being ready. So we weren't product managers, didn't have a background in building an e-commerce platform. We thought we knew what we needed, but the reality is we didn't. And we probably didn't pick the right partner. So kind of on every level, we set ourselves up for failure. And in retrospect, predictably it was a complete train wreck.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Both of us had started and sold businesses. So the idea initially was we can self fund this for a while. And then we're two seasoned entrepreneurs with wins under our belt. We can go raise outside capital. So this is all still, you know, Year out from launch.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so the complication that we had is we weren't going to build out a network of retail stores, which would take a decade plus. We wanted to do it online. And so that meant that we, to your point, could not do the fresh products that if you're shipping through a third-party carrier become very, very challenging. So we decided let's focus on the dry assortment. That's half of what people buy in the grocery store anyway. If they can save on all the non-perishable products that go in their pantry, their medicine cabinet, their cupboards, then, you know, maybe they can spend more on higher quality produce and fresh items that they buy locally.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT
“Membership model to enable better pricing, and then private label to cut out steps in the supply chain and introduce higher quality products that are also better pricing. That was kind of the trifecta.”
2024-08-12 · How I Built This with Guy Raz · Thrive Market: Nick Green · IDENTIFIED FROM THE TRANSCRIPT