You might think that turning a simple personal experiment into a successful business is far-fetched. But when our guest decided to mix up protein powders in his college dorm basement, he signaled the start of something revolutionary in the world of nutrition.
In this episode, Eric Wu shares the incredible journey of Gainful, a CPG brand offering personalized nutrition products and services. He discusses the strategies they used in marketing and scaling the business from zero to $100,000. He also talks about skills that you’ll need to have and develop as a leader. A learning mindset can help you to achieve these skills, overcome impostor syndrome, and expand your business!
Tune in to the full episode to learn how you can build a CPG brand that people love and bring something valuable into the world!
Click here to read transcript
[2:29] For the folks who are listening, who aren’t familiar with who you are, let’s start there. Tell me a little bit about your company and who you are.
- Of course, I am Eric Wu. I am the co-founder of Gainful. Gainful makes personalized sports nutrition for everybody. And what that means is you go to our website, gainful.com. You take a quick, easy five minute quiz, we’ll ask you things like your height, your weight, your fitness goals, your dietary restrictions, and then we’ll create a suite of nutrition products specifically for you.
That means personalized protein powder, personalized hydration, personalized pre-workout, and most recently, we launched a line of performance boosts which are creating collagen and fiber. And on top of all that we give every single one of our customers free one on one access to their very own registered dietitian who is there to answer any questions you might have about nutrition or fitness at any time.
[3:26] You guys are graduates of Y Combinator, right?
- That’s correct. We were in the winter 18 batch of Y Combinator which was about five months after I graduated from undergrad. So it was a great, great experience. It’s really like the Hollywood of Silicon Valley.
[3:41] So you guys are in for a treat. We’re gonna break this interview down into three parts. The first part is the journey from zero to 25,000 in revenue. Then from part two, we’re going to cover how they went from 25 to 100. And then part three, we’re just gonna call it the evolution which is some of the things that Eric learned and some of the mind shifts that he made as the company continued to scale.
I want to start though, let’s jump into you. You were I remember from doing the pre interview with you. You were cooking stuff up in your kitchen and you had no idea what you were doing.
- For those of us who weren’t so lucky to have gotten to undergrad with me, I was not a nutrition scientist. I was not a registered dietician. I was not a food scientist. I was just a guy who had always played sports. I grew up playing sports with my co-founder actually, Jahaan. We were co-captains of our high school soccer team. And so we were familiar with supplements with protein powders, protein shakes, even things like creatine and pre workout but I’ve never tried it myself because it was so scary and intimidating.
So it definitely is counterintuitive that my senior year as an undergrad, I ended up actually mixing up protein powders in my basement in my college dorm. That was really because it was born of personal need. I just could not find something on the market that I liked. Especially the brands being so macho. The ingredient list being so confusing. And even just the names of the ingredients sounding like nuclear waste, not something that you want to put in your body made me feel like okay, there’s got to be a way for me to create something that I understand, I know is right for me. And it’s based on the things that I actually want in the product.
That’s what led me to buy a bunch of raw ingredients on Amazon and mix them up in Tupperware containers. And obviously, my roommates thought I was totally nuts gone off the deep end because I looked like I was doing some Breaking Bad experiments down there. But it ultimately worked out for me, I found something that really, really worked. And it was something that I was able to get excited enough about to tell my friend Jahaan, who, as I mentioned, was my buddy from high school. And he was, and still is the smartest guy I know. So when he got really, really excited about this little protein powder side project I had going on in college, I knew it could be something big.
[05:48] So I want to explore just for a second if we could the mindset because this is not what happens for most people. Most people don’t know, like, I’ve been taking supplements and protein powders and stuff my entire life. And I don’t know that I even looked at the ingredients. I was like, “Oh, that looks good. It’s got a nice label, I’ll take that one.” And maybe on Amazon I might look at reviews, and make a purchase decision as a result of that.
But you went out of it a completely different way. And I think for entrepreneurs, it’s important to understand because so much of what we do build and what we accomplish is the result of how our brains work. What the hell happened in your head to make you think that because you had no formal training, and this and be like “I’ll buy some stuff off Amazon, and I’ll mix it all up and it’ll work.” Like, come on.
- I think a lot of people would assume that I was just another one of those tech-obsessed biohacker type folks, there’s a lot of those nowadays. But that really was not who I was, I was pretty, I would say, poorly versed in the world of nutrition science. in the world of food science, in the world of performance nutrition. It was interesting to me, sure, because I had always been an athlete, and as an athlete, you want to perform your best.
But I think what was really interesting to me about making something for myself was also this concept of progress, right, and being able to make something X percent better than what I was seeing, not only on the market, but also what I was eating for myself, right. And kind of like this athlete mentality where every single day you can be better than yesterday. But really, when you apply it to business building, it means you’re constantly seeing things out in the world where you say, “This would be just a little bit better if you could do it this way.”
Protein powder was not my obsession again, it was just something that I found very, very jarring on the market of products that I was seeing out there in the world. Enough so the point where I thought, “What if I tried to do this myself?” and that sort of tinkering is something that’s always been a part of my psyche, part of my mentality. And it honestly has, I think, proven pretty valuable in building the business as well, because I was a liberal arts undergrad, I didn’t know the first thing about raising venture capital.
I didn’t know the first thing about setting up a business model, I didn’t know the first thing about pitching VCs. I didn’t know the first thing about nutrition science or building an operations team or building a growth marketing function. And yet, this obsession with progress and making both myself and the organizations and groups and products and people around me better every day, is something that I think is really carried through from those early days of mixing protein powder in tubs to building an organization of people who are all unified in the same mission of bringing personalized nutrition to everyone.
[8:27] So at some point after your Breaking Bad experiment yielded some results, something that you could put in your body and not get sick from. What did you do then, you thought “Okay, so I’m going to make this for myself.” Did you know you were going to make a company and I assume you did, but if you knew you’re gonna make a company like how do you go from “Alright, I got batch number one, I didn’t puke, and now I got to see if anybody wants to put this in their bodies or buy this stuff.” Walk us through what happened?
- Better than not just avoiding puking. It actually made me feel good. I understood why the ingredients were in there. I understood where they came from. I understood that they were made for me. Granted, they weren’t made for me by an expert performance nutritionist. But they were made for me by me. And that was enough. That made me feel good. So when I landed on that blend for myself, that really works. Like I mentioned, I told Jahaan, who ended up becoming my co-founder, at the time, he was just my very smart buddy from high school.
He was at the time going to Berkeley, full-ride chemical engineering and computer science. He was the whiz kid, the nerd that I’d always known. And also helpfully he was my co-captain in college soccer, meaning he too saw my friends go to 7-11 to buy their muscle milk after practice or the gym. So I knew that we share this kind of, if not passion for, outsider interests in the world of supplementation. And when I told him about the idea, he got way more excited than I thought I would ever see Jahaan get excited about my wacky ideas.
He said, “Personalized nutrition is the Future, this is where the world is going.” He dug up this FDA paper, 75 page FDA paper about how they’re going to make the regulatory environment more accepting of personalized products because that is what is most efficacious for people. That level of excitement from Jahaan, my smartest friend, my Wizkid, Berkeley grad friend, was enough for me to say, “Whoa, wait, there might be something here.” And Jahaan said, “Yes, absolutely. This is going to be a fully-fledged business. That can’t just be your basement side project in college.”
That’s what led us to apply to accelerators and startup incubators, like Y combinator, which is where we eventually ended up just a couple of months graduate.
[10:36] How many did you apply to?
- We ran the gamut. So first, something that actually gets overlooked, I think, in our founding story, pretty frequently is we went to Cincinnati, Ohio for a few months. And we worked out of a startup accelerator called The Brandery because they were, yes, the only people who accepted us out of many, many 1000s of applications, but also specifically for consumer packaged goods, CPG brands, which was something that we really wanted, and they helped us do the version one of our brand to find out what the ethos of what we’re trying to build was. That amount of progress, that amount of traction was able to get us into Y Combinator.
[11:16] Did they give you any money and then take any equity?
- So The Brandery was an accelerator that was for equity. So we did two accelerators, which is typically more dilution than I would counsel early-stage founders to take on from accelerator programs. But in our case, we were fresh out of college, didn’t really know what we’re doing, didn’t have a tech company, we had a CPG company. For that reason, I don’t think we’d be around if it weren’t for both The Brandery and for Y Combinator, and really, really appreciative of everything that we did for us in both accelerators.
[11:45] Alright, so you get out of The Brandery. Now at what point are you like running around to gyms, handing out flyers? Where does that fit into the story?
- That’s all throughout. I don’t think we’ve stopped doing that. It’s, I think, important for us to always make sure that we’re building something for real people that we can shake their hands and understand what they’re all about. So early on, we definitely ran around the gyms handing out flyers, we were definitely going to small conferences, we were talking to everybody we could who had ever tried protein powder. And that continued on through Y Combinator. I remember during YC, Jahaan had gone to Berkeley as an undergrad. And so we went up to the gym at Berkeley with a bunch of flyers and a table and probably got kicked out by the director.
[12:24] Did you have the gym’s permission when you were handing out flyers? Or you were in there just like “Hey, man, check this out.”
- Y Combinator’s motto is to move fast and break things. That also applies to the city rules sometimes. So we definitely had our fair share of times, when we were doing guerilla marketing in ways that probably wouldn’t be considered traditional. But it was really helpful for us to understand, really, who wants us and at the end of the day, I think that’s what any good business grabs themselves in is talking to their customers and actually solving the problem that the customers have, and then building an emotional appeal from there.
[13:02] That’s a rabbit hole I want to go down because it’s something that I’m experiencing in my business. I’ve coached many, many people who don’t get nearly specific enough in understanding who their customer is. So in your case, you’re making protein powder.
So could be muscle monkeys, could be runners, could be this could be like there’s all these people who eat protein powder, but they’re not all your customer. Did you kind of have an idea who your customer was going to be? Or did you go into this going “Not really sure, we need to figure it out.”
- It’s super interesting. The way that we did it was pretty iterative. Which was really again, like the YC school of thought is launch fasts, things will break, you’ll figure it out and then launch again and try to do that 10 times a day because eventually you’ll get closer and closer to the bullseye. There’s definitely multiple schools of thought there. There’s a book I’m reading which is written by the founder of Red Antler, really famous branding agency here in New York, worked on everything from Allbirds to Casper to Warby Parker.
She says, it’s really important to figure out your brand identity, your core values, who you’re solving the problem for, how you can sort of push their buttons in a way that’s really emotionally appealing before you even jump. Before you even create the product. We didn’t really have the luxury of that we didn’t have much time because we were in accelerator programs. We certainly had no money because we had just finished college. And for us, it was a matter of launching quickly, talking to the people for whom this resonated with and then figuring out whether or not they were truly the most valuable customer that we should be targeting.
So early days, we actually had a brand if you go way way back in the annals of history for Gainful’s early packaging and early brand identity. It was way more female-focused. Way more leaning toward a lifestyle brand that was not so focused on performance and more focused on being different from the other guys, the other guys being the big macho brands on the shelf that happened bodybuilders that are sweaty and shirtless on the front of this industrial size tub. And we thought that just by drawing a contrast with the rest of the market, the other guys, we’d be able to differentiate ourselves enough.
But what we ended up finding is that that’s not actually necessarily our best customer. We were pigeonholing ourselves into a female demographic that we thought we could attract simply by being different from the rest. But we didn’t really stand for something on our own. Really, what we found out that we stood for was doubling down on personalization. We were personalized from day one, we would create protein powder formulations from day one that were tailored to the things that people told us about themselves and their lives.
That’s not a gendered thing. That is an everything thing. It could be everyone, the thing that really again, united the people that we felt really resonated with the brand was twofold. One was progress, this idea that there is something better and there is something better that you can shoot for every day. Every day, you can be making an improvement in your life, that can lead to a healthier, demonstrably better, longer life. And for that, it’s a pretty cross-cutting boundary.
It can be a new father, whose primary exercise is running around the yard chasing after their kid. But it can also be a professional athlete, who every day is trying to set a PR. And again, it isn’t something that should be just for men, or just for women. There are probably plenty of brands out there that cater to the meatheads of the world. But ours was something that catered to the people who cared about problems.
[16:34] I get that. But how did you do that? You’re in the gym parking lot, or you’re in the gym, got flyers, like literally, how did you figure this stuff out?
- The way that we figured it out was definitely do the quiz. So from the start, every single person that wanted a Gainful product had to tell us a little bit about themselves in order for us to create a product that was better for them. And when you do that, you get a lot of people’s email addresses, you learn a lot about what people are doing in their day to day lives, what makes them tick, when they wake up, how much they exercise, what types of exercises they’re doing, why they’re exercising.
Then literally pick up the phone, email these people offer them an Amazon gift card, pick up the phone, try to meet them for coffee, talk to them. Hear about really, what is it in their lives that gets them to use a supplement? What is it in their lives that gets them to use a supplement that they love and want to use every single day. Another thing that we heard also is that it’s not just protein powder, right? It’s a whole holistic lifestyle.
There’s a whole bunch of different products that fit different use cases and needs and people’s days, which is why we went on to launch things like personalized hydration, personalized pre-workout, creating collagen fiber, because it’s not enough to just assume that somebody can have one scoop of protein powder per day, and reach all their goals. There’s a whole ecosystem that needs to happen. And it needs to be paired with actual professional guidance, which is why we give everybody access to their very own registered dietitian as well.
[18:01] Okay, so to sum that up, you just had one on one conversations, you collected a lot of data and you looked for trends.
[18:10] Okay. Makes sense. So the byproduct of everything we’ve been talking about so far is you went from cooking in your basement, mixing in your basement, I guess is more of the appropriate term to use, to you’re now selling some stuff and you’ve hit your first $25,000 in sales during this phase that we discussed. Have we got that about right?
- Yes, correct.
[18:36] Okay. So now we’re going to transition to part two, and that is going from the first 25,000 to now we want to get to the first milestone of $100,000 in revenue. What are some of the things that happened during that phase? Talk to me about how the product was made. Talk to me about marketing and customer acquisition and some of these things.
- Yeah. In the early days getting $25,000 in revenue, it was enough for me and Jahaan as founders to work at night shift mixing protein powders and then selling them online. That becomes a little bit less sustainable when you’re trying to reach your $100,000 mark. So what we did is we actually found a production facility that was flexible enough for our needs. We found a small staff of folks who we could then train up and helping us create the Personalized Protein blends. We also found a three PL warehouse, a third-party logistics provider that would help us ship it out so that we weren’t there taping boxes in our park every single day.
That I think is a pretty crucial inflection point for a lot of CPG brands to go from kitchen top, benchtop, friends, and family small sales. Most people know each other. We’re buying the product to having a distribution network. Albeit very small warehouse production facility, a small staff to help create these products and ship them out so that me and Jahaan can focus more on the tech, the brand product innovation, the packaging, customer research, and less time on strictly mixing up protein packing up boxes.
[20:07] That’s a mistake that I see a lot of founders make is in the beginning, they’re deep, they’re elbow-deep, knee-deep, whatever phrase you’d like to use, and what I call doing the do delivery, yeah, delivering the service. Then they struggle to make that transition to be like, “Well, I really shouldn’t be doing that stuff anymore, because it’s not the highest and best use of my time.”
So with respect to the contract manufacturer, I don’t want to spend too long on this. But I know in our pre-interview, we talked a little bit about this, I was stumped by, hey, you’re this personalized supplement brand? How does that scale? Like? I mean, yeah, you know, if you’re making a custom concoction for every single individual customer at some point, that’s just not going to work.
So explain a little bit about how you manage to make that scalable. And the reason I’m going down this rabbit hole is there might be some folks listening who are trying to think of personalizing whatever it is, yeah, I’m hoping there’s gonna be some takeaways for them here.
- Totally, totally. That’s actually the unique I guess we call it secret sauce of how we built Gainful as well. As you said, doing the do is doing things that don’t scale is not building a business that can be $20 million, $15 million, a billion dollars on day one. But instead, figuring out really what’s important to the business and what people want by doing it at a small scale, talking to people mixing up batches by hand.
We did that for the better part of two years, honestly, where we were mixing up hundreds and hundreds and hundreds of protein powder blends by hand made to order for customers so that we could see one, how they would convert if we showed them certain ingredients. Two, how they would retain if we gave them certain ingredients in their order. Three, how they like the tastes just basic stuff, like whether or not it actually tasted good to people, whether they wanted the sweetness higher, the flavoring, lower, etc, etc.
We did that all that manually. So we had our own production facility, where we had a staff that we were trained to create these blends by hand to order. I’ve been doing that for a couple of years, you start to see trends. You notice what pops up most often that’s something that people convert highest on, retain highest on, love the taste of, and of course, most importantly, report that actually works. And so we use that data to figure out a set number of blends that we could then scale up with a contract manufacturer.
It wasn’t like flipping a light switch ever, we had to, over the course of many years, transition certain of our skews certain of our units, our products, our formulations, our blends over to a contract manufacturer, which was a labor of love, because if you’re making just one product, it’s pretty easy to go out and buy 100,000 units on it with a contract manufacturer and say, we’ll figure out how to market this later.
But we were truly waiting until we had a tipping point. A critical mass of a certain amount of demand for a product before we could then go to a contract manufacturer, which meant that we had to build very deep very trusting relationships with our contract manufacturers, as well as do a ton of research and legwork upfront and this kind of iterative approach to product development was definitely the key to our success in launching protein powder in those days.
[23:17] So pulling out the hockey stick metaphor would it be safe to say that you’re now climbing up the handle of a hockey stick?
- It certainly feels like that. It feels like we’re drinking from a firehose most days.
[23:26] Okay, and how long did you spend on the blade? So in case anyone doesn’t understand what I mean, obviously, the blade doesn’t go up as steep as the handle does. The handle’s when you start to ramp your revenue and scale like crazy. You mentioned a couple minutes ago, a couple of years of doing this stuff laboriously to learn that, you know, hey, there was basically seven or whatever the number is formulas that are most often.
So now that we’re going to talk to a contract manufacturer, we know we need to make these seven things at scale. So that’s like hockey stick handle stuff, but the blade. It sounds like you were on the blade for maybe a couple of years with growth in revenue, but not like crazy growth in revenue. Is that a reasonable assessment?
- I think it’s probably a reasonable assessment. And I would say it took us the better part of three, four years, really, three years, in order for us to see what I would consider breakout growth and it didn’t come right after Y Combinator. It didn’t come right after venture capital money either. It came when people actually began, well, really, at a simplest level, it was product market fit. It was giving people the amount of product, type of product, the flavor product that they wanted, at the right times in the right ways.
That was something that we honestly had to iterate a lot in order to get to and it didn’t come to us until I would say you’re after Y Combinator, so late 2019.
[24:52] How long after YC, because you would get from YC like 100 grand maybe or 50, something like that.
- The standard YC deal, I believe at the time, was 120 grand. It has since gone up to 150.
[25:01] Okay, so that’s not a lot. You can smoke through 120 grand pretty fast. How long after YC did you raise the next round?
- On YC demo day, we were able to cobble together an annual round, which was about half a million dollars. And that’s the power of YC. Right? People come out of the woodwork to invest in companies. And so that was an angel round of small seed funds, pre-seed funds, and individual angels half a million dollars. Then BrandProject, who coincidentally ended up co-leading our series A, they actually led our seed round, I think about three or four months later. So it was definitely a process of relationship building. And we found a bunch of investors that we liked, and that liked us after Demo Day.
We really spent some time thinking to choose the right one and it ultimately ended up being BrandProject. They led our seed round, put in another thing it was seven or $50,000. And quickly followed up with another $800,000. So the seed round in total was technically I think 1.5. But then they had it on quite a bit more than doubled down on their investment once they started to see things pick up a few months after they invested. And yeah, they’ve been a great partner. They’re the first investors in companies like Daily Harvest, Freshly, Persona, all big exits in the direct consumer subscription, consumables space, and that’s been invaluable for us.
[26:23] How much has been raised total so far?
- Raised a little over 12 million today.
[26:30] Okay. Let’s talk about the marketing in this phase two aspect. So you’re kind of still on the blade, so to speak. But just handing out flyers at gyms probably isn’t cutting it anymore. Yeah. Yeah. What are some of the other activities that you later layered on?
- We started investing in paid marketing pretty early, but we always wanted to be very careful about it. Because paid marketing can be a drug, especially for e-commerce direct to consumer companies, Is not super difficult to whip up a Facebook ad campaign and begin selling products online. But it’s a whole other thing to find a scalable process for generating creatives and targeting for these ads, that then can sustain a business in the long term.
You always want to make sure that you have a healthy portion of your customers that are coming from things like referral, that are coming from things like organic and SEO, so that you have a good base of customers that you can rely on in case it’s not always smooth sailing on paid channels like Facebook, Instagram. This landscape, I think it’s going to continue to evolve. And I definitely am a firm believer that the days of building a big business off the back of simply crushing paid marketing are long gone, and they’re never coming back.
But there are also interesting ad platforms that are popping up now in the form of TikTok, for example, that are definitely worth exploring, because it’s an entirely new customer, potentially an entirely new customer, and an entirely new way that you have to engage with them. So paid marketing, of course, is going to be important for almost any direct-to-consumer company. But our real unlocks, were always on the product side, was finding ways to get people to see the value of Gainful long term as part of their every single day.
One of those ways was we heard from customers over and over, we were just simply sending too much protein powder, we were sending them too much product, and we had to adjust our packaging and our serving sizes to more easily fit into the lives of our customers. That was one big unlock. The other was our flavor system, which is definitely innovative for protein powders in particular, and will continue to be innovative for supplements in general, which is divorcing the flavoring from the product itself.
So all of our protein powder blends and future products as well will arrive unflavored. We then give you a free supply of flavor boosts, which are single-serving stick packs that you add to each serving of protein powder so that you can mix up the flavor every single day, and not fatigued from having 45 scoops of chocolate in a row, for example. That was also a huge unlock for us. It just gave us so much more lifetime value from our customers which in layman’s terms just means that people wanted to have Gainful as part of their lives for a longer time, which is just as effective if not more effective than spending less on marketing.
[29:16] Plus what your if I understood what you just explained, you’re kind of handing off some of the personalization to your customers. You’re letting them personalize their own stuff, which means you don’t have to figure out all the logistics, you just need to supply them with the flavor sticks
- There is customization and there’s personalization, and we want our customers to have both. We want to be able to personalize the nutritional profiles of our products based on the work from our science advisory board because they are creating the supplements for the best athletes in the world. And we want everyone to have access to that sort of elite-level nutrition. But then there’s customization which is fun things like flavor and packaging size and packaging format. We want customers to be able to choose that for themselves.
[29:58] I like that. So, after you’re in the early phase of raising money, graduating Demo Day, all this stuff, you’re, I’m assuming not a digital marketing media buying specialists at this point in time. You’ve got money coming your way. So you can afford to go and hire these people, how do you make sure that you go and hire the right people and avoid the wrong ones.
- There’s a couple of ways and truly in the early days, and even now, as a first-time entrepreneur, you do feel a lot of imposter syndrome, where you’re hiring people who are sometimes many years or senior with way more experience, who technically have seen a whole lot more business than you have. And you are there trying to convince them of your dream, of your vision. And this is a place that’s worth investing the next stage of their career. So that’s, that’s tough. And that took a lot of honestly reps for me to get right.
But I think approaching every single one of those conversations with sincerity, and being very genuine in them, helped me communicate better with people who may have just known more of the tactical stuff than I ever do. It helps to have really strong advisors as well, people that you can lean on for a reference call or an interview, or a template for how they would interview this type of person. But really, it’s trial by fire. You learn by doing and when you interview enough people, you kind of figure out what bubbles to the top.
Even if you don’t know the lingo, or the jargon of the particular role that they’re interviewing for you, you learn to learn. And that I think, is probably the most valuable thing that you get from being a founder, because you’re just drinking from the firehose constantly, you’re ingesting so much information, you’re doing so many things. Today, you’re talking to so many interesting people, and you’re learning so much that it’s either sink or swim. Eventually, if your back’s up against the wall, and you’re doing something that you really, really do believe deserves to be in the world, you figure out a way to doggy paddle your way out.
[31:56] How much of a role does YC play in helping you to recruit or not at all?
- I went to a Y Combinator conference that was very helpful in structuring the recruitment process. Although granted, it was more appropriate for technical hiring software engineers, but learning how to run an efficient process, the communication that candidates want from you, how to give an offer letter, how to communicate the benefits of the offer letter. That was all very, very important. But really, it comes down to the founder and the founder being able to be adaptable, and figure out these things on their own as well.
[32:30] Remember when, before we started to record this interview, I was talking about how I’d been at Sastre in Santa Fe last week. Another YC graduate was there. She was saying that she spends 50% of her time recruiting. 50%. Half of the CEOs time just on that one activity recruiting. Initially when I heard that I went “Man, that’s crazy.” But then when you think about it, well, when you have some money to be able to hire the right people, what would be more important than hiring the right people?
- Exactly, exactly. I could see that being a conservative estimate for some of the high-growth companies. If you’re, as a CEO, not fundraising, not setting the vision for the company, of which hiring is part of, then really, you ought to be bringing on incredible people to help take over the jobs that need to get done. Because your company is growing so fast, you can’t afford to have not fantastic people in those roles. That honestly I think, brings up a good point as well, because, for me, something that was super valuable for the way that we built Gainful which was very scrappy. The founders do everything first and then they figure out how to get something better to do it for themselves.
That really helped me. I understood a thing or two about running the warehouse because I was shipping the boxes myself. I was looking at carriers to figure out what the best shipping rates were. I was mixing up the blends myself so I had learned just by osmosis and trial and error, things about food science, nutrition, science, operations, product innovation, growth, marketing. I ran all the Facebook ads and email marketing in the early days myself. Learning by doing helped me also hire and figure out really isolate what the qualities were in people that I was interviewing, that would best suit our needs.
[34:20] Okay, so let’s transition to part three of our chat today. We call this the evolution. Now, as we alluded to before, you’re transitioning or have transitioned from the blade up to the handle. Growth is starting to accelerate because you really have a strong understanding of who your customer is. You’ve got offers and funnels that are performing, you’ve got logistics, you’ve got something of a team in place.
And of course, now your investors have expectations that you’re going to scale like crazy. For you as the leader, what does that look like in terms of how you spend your time, the things that you think about, the areas of focus. Because you can’t be running around on the warehouse packing boxes anymore, you can’t be making the Facebook ads anymore. There’s a lot that you have to seriously evolve in order to still be the right leader for the organization. Yeah, so talk to me a little bit about that.
- Yeah, absolutely. Before I talk at all about these grand things that I’m doing as co-founder now that the company has grown and matured a little bit, I will say I still do things like jump in on customer support, and clear a couple tickets in Zendesk here and again. Because I think it’s important for me to do things, again, that don’t necessarily scale things that keep me close to the customer and make me understand, “Okay, how are our internal processes working? If I am somebody on our customer experience team, how are our responses working, if we are interfacing with customers who have XYZ problem,” that’s still important to me.
I still relish the opportunity to visit our warehouse or manufacturing facility and see how things get made. In terms of how I’m spending my day now, I spent a lot of time this year thinking about what the future of Gainful could be. What really, the ceiling for our company could be, because together with our investors, we’re looking to take the world. Something that excites me, more than I can put into words about the opportunity in front of us for Gainful, is that our differentiator, our key innovation, is not a single functional ingredient. It’s not a dietary trend.
We’re not the low sugar company, we’re not the keto company, we’re not the collagen company. There are other companies that have built on those ideas, those platforms, in order to raise many millions of dollars and become billion-dollar exits. And yet, that was only a subset of what we’re trying to do here at Gainful because our key differentiator is personalization. That means for any category, not just within sports nutrition, but nutrition generally, as well, as long as the category’s better by personalization, we want to tackle it.
That’s why we went from personalized protein powder so gracefully into personalized hydration, personalized pre-workout, creating collagen fiber. These are all on their own billion-dollar categories that we deserve to make better because our core competency, our key differentiator is personalization, and not say, collagen, right? That’s what’s super exciting to me. And that’s something that I’ve been spending a lot of my time communicating the vision of, to everybody at the company to potential investors to potential partners, and thinking deeply about how we fit more broadly into this high-performance ecosystem.
These are all the companies like Tonal, WHOOP, Peloton, Eight Sleep that are all working on maximizing human performance. But none of them have quite yet that personalized nutrition component. And so we can plug into so many different platforms and become a more and more integrated part of everyone’s lives as we move toward a world where everybody actually really does have the data at their fingertips to make better decisions for their health, through nutrition. So I’m really excited to say that I really, truly do believe Gainful is at the vanguard of that personalized nutrition movement. We’re also going to be the keystone of this personalized performance ecosystem.
That’s super exciting to me. I know that was a roundabout way of answering your question, but it is what I think about a lot of my day now. And I structure my day around getting people on board with Gainful that see that vision and understand what needs to be done on the upside, the growth marketing side, the brand side in order to achieve that vision, but also thinking constantly about what sort of partners we can partner with and what sort of customers we need to go after in order for us to fulfill this vision. Because right now, with how Gainful’s performing, it feels like it’s ours to lose if we don’t take over personalized nutrition.
[39:08] When we did the pre-interview, you said you had 28 people. Is that the current headcount, or has it grown?
- We’re still at 28 people, though, we’ve added a couple. We’ve added a couple engineers offshore.
[39:17] What are some of the challenges? I want you to get tactical here for a minute. What are some of the challenges now that you have 28 people, maybe you’re one of the 28, so it’s 27 people whatever the number is, that are looking up to you as the leader of the organization. You’re no longer the kid in your basement, and you’ve got all this investor money. These people are placed their bet on you and your organization and you’re the leader.
What are some of the things that you are doing to make sure that you evolve to still deserve to be the guy who’s leading those 28 people?
- What I just said about pegging this vision for how big Gainful could be, and how we get there is certainly a big part of that. Also setting the brand values for the company, what the company stands for, the people that we have here, what they ought to care about, whether it’s sustainability, whether it’s performance, whether it’s innovation, figuring out those things that are the through-line, between every single person that works for Gainful and what motivates them. That’s one way that I think that I can establish my, I guess, credibility and legitimacy as somebody who can lead this company forward into the next 10, 20 years.
For me, as well, it’s a matter of also being a really good listener, and having a really, really high EQ. Because, as a first-time entrepreneur, as somebody who is doing this technically on my first go around, yes, I’ve learned a lot, but I certainly do not know it all. I’m learning to manage by doing. I’m learning to become a good manager and a good leader by actively managing and leading every day. Whereas, for people who may be way more experienced than me, they know already by experience. I’m learning through intuition. And that’s something that you can learn you can teach is how to be a good manager and a good leader.
Something that’s more difficult to learn and teach. And it’s not necessarily always table stakes is having a really high EQ and caring, caring deeply about the people that you work with and the people that we serve, which are our customers. I think if I can come to work every day, and have tough conversations, and influence people to do their jobs better every day, by one, actively showing them that I’m learning to be a better manager and a better leader every day. But more importantly, just showing up and being available and showing that I care and having a high EQ and all these conversations with people who, likely have more experienced than me, I think that’s a good, that’s at least a very good starting point for getting people to believe in what we’re building here.
[41:52] Any books that you have read or are reading that have helped you to significantly evolve as a leader?
- Like I mentioned, I’m currently reading a book that I’m actually forgetting the name of, but it’s written by the former founder of Red Antler. That’s been really interesting in helping me crystallize how I think about what the true value of Gainful is on the world, and how we can communicate that to our customers, and just how important it is to figure out what motivates the people that we sell our products to emotionally. So that’s been a pretty interesting and eye-opening book that I’m currently reading.
But on top of that, to be honest, I don’t really consume a whole lot of business-focused books. I find that the practice of actually doing it day to day keeps with the volumes, and then being able to at night or on the train or commuting, whatever, listen to something that’s totally disparate, listen to a podcast on food, or sports or politics, that actually helps me take a step back from what I’m doing every single day and leaves me rejuvenated and refreshed to be able to do it again, the next day.
Although I will say the Fitt Insider podcast, which I was lucky enough to be featured on, is a fantastic newsletter. And that newsletter actually has a bunch of really interesting stuff around the future of fitness, nutrition, health, and wellness that I think any entrepreneur in our space, specifically not supplements, but health and wellness in general should take a look at.
[43:18] So before we wrap up, I want to talk about one last topic that’s near and dear to my heart and every founder of every company ever. And that is dealing with adversity. There is no such thing as a journey that goes in a straight line from idea to successful business. I’ll use myself as an example first, to talk about this question that I’m going to ask you.
So we are a bootstrap company, which means I don’t have a big team. And I don’t have lots of money, but I’m purposely bootstrapping because I do have personal funds to be able to do it. If I didn’t have that option, obviously I wouldn’t be bootstrapping. That means that there have been times and we’re very much on the blade, still. we haven’t transitioned up the handle.
There are times I remember them a couple of weeks ago where I would “come to work” which means to walk into the office shed in my backyard because I have this beautiful, beautiful office shed. It’s the best thing ever. I’ve got 200 square feet here of just beautiful place to work. But I digress.
What I’m talking about is some days the imposter syndrome. I feel like “Am I really smart enough to pull this off. I’m making these mistakes. I’m not hitting the milestones that I thought I was going to hit. I’m letting myself down. I’m letting my team down” and not very often, but once in a while like it really gets me down. As the leader, you can’t allow yourself to wallow there for very long.
You have to figure out, you have to dig into your resilience and figure out how to how to get your head out of your ass so that you can stop feeling sorry for yourself and go on and overcome whatever this thing was that put you in this disempowered emotional state. How do you deal with? Do you ever get imposter syndrome? I’m guessing you must. When you do, what’s your strategy for coping with it?
- I will try not to talk your ear off about it. Because it’s something that I’ve thought a lot about, as I mentioned earlier, in our chat here, I definitely get imposter syndrome. I think you have to be a special sort of sociopath to not get imposter syndrome as a founder of a company, especially if you’ve founded the company at the age of 21. And you’ve never had a “real job” before that. Yeah, sure. My internships were in venture capital, were in startups, software and hardware, and consumer products. But that gave me maybe a half a leg up on anybody else who’d be starting a company at the age of 21.
On top of that, we were blessed to be able to raise money relatively early. And we’re blessed to be able to scale the company with relatively good product market fit. That also places a lot of expectation on my shoulders. And so again, it’d be crazy to say that I didn’t have this imposter syndrome when you’re talking to a VC and you have no idea what they’re asking questions about, because you were a liberal arts student three months ago, right. The way I cope with that, I think it’s, I’m not sure if it’s unique to me, but I certainly feel like it could be.
I love the process of learning. Apart from the money, which is fantastic that there could be a big financial upside in starting your own company that’s venture-backed, I would still do it all over again, if only to have the learnings that I’m having right now by working with incredibly brilliant people, by being able to learn what makes customers tick, by being able to work on product development, by being able to bring something into the world that you can feel with your hands and taste with your mouth and understand, “Hey, I willed this into existence.”
That is such a special feeling. And I am so so blessed to be able to do what I do every day, that if there’s ever a moment where I doubt myself, I say “This is still the best gig in world.” Like, I think maybe my brain was hardwired to be a founder because I love this process. I’ve never once felt like I was even close to burning out. It’s what I love doing every single day. I know I’m also in a special position of privilege to be able to do this because I went to a college that I guess was well respected in many regards. And I was able to study the liberal arts, which is not necessarily the most practical thing to be studying.
I was able to leave with no student loans because my parents made a ton of sacrifice through their lives in order to put me, their only son, their only child, in a position to be able to go and start a wacky zany startup that you thought was definitely going to fail in a couple of months directly after college when a lot of other people have to go and find “real jobs” because they have student loans to pay, their bills to pay, they have potentially even mouths to feed. And for me, that position of privilege that I’m in makes me so so grateful that I get to do what I do every single day with that safety net.
If I could just talk your ear for a little bit more on this topic, the way that my parents sacrificed ties into all this is also a really, really key motivator for me, because they were both immigrants from China. They came over here after they had graduated from college and they were looking for jobs, they couldn’t find jobs in the US. Their Visas expired, they had to go and move to Canada, which is actually where I was born. Although they are both very, very entrepreneurial people, I feel like every time I go home, my dad and my mom have some zany idea for a new restaurant or coffee shop or something that they want to start.
They’re super entrepreneurial people as I think a lot of immigrants are, they went ahead and found the most stable jobs they could possibly find at the biggest companies they could possibly find. Then they didn’t take their butts out of those seats for 30, 35 years, which again, that’s a privilege that they were able to find those jobs in the first place. But that’s not what they wanted to do. They did that because they knew they were going to have a child. And they knew they wanted that child to be able to go to school and come out and not have student loans and they wanted that stability.
They traded honestly a part of their American dream, their entrepreneurial American dream, to give me the freedom and the safety net, to be able to pursue my American dream with a full range of motion, the full freedom that they never wanted to afford themselves because they wanted to have it for me. That is such a special feeling such a special, I guess, debt of gratitude that I feel in a way I want to repay. Obviously, I didn’t expect to repay in the form of a personalized nutrition company. But it’s what I’m doing and the fact that I love doing it and I was put in a position to be able to do it and feels that it’s repaying this debt is something that I will never ever take for granted.
[50:17] So on the days when you’re feeling down in the dumps and disempowered, what I’m hearing you telling me is, “I owe it to my parents to make sure that I dig myself out of this.” Did I get that right?
- In a weird convoluted way, yes. But I think I am also uniquely blessed to be a uniquely happy with my job, happy-go-lucky type guy. Typically, if I’m ever feeling down in the dumps, I’ll go and play some soccer or go to the gym and exercise, clear my head, cook a good meal, and I’m back at it. I’m pretty elastic guy, can spring back pretty easily.
[50:55] All right. Well, Eric, it has been a pleasure to have you on the show. I found this to be a fascinating interview. I’ve been writing notes for myself and some things to be talking to my team about. Hopefully, the audience has been doing the same thing.
And folks, if you did find this interview very helpful, I would encourage that you don’t be shy about reaching out to Eric. If there’s something that you want to ask him as well. I would love it if you would take a moment. And you know, if you’re listening on whatever app you’re listening on, just like rate and review the show if you found this interview really helpful.
If this was your very first interview and you want to be notified of future interviews so that you don’t miss out, just go become a subscriber at brightideas.co. We send one email a week because we do typically one episode a week. So we are definitely not going to overpopulate your inbox with a bunch of stuff that you don’t need or want.
So Eric, any parting comments before we go?
- I’m more than happy to help out any entrepreneurs who are getting started. College entrepreneurs, any age and sector, happy to help out. But of course, the things I’ll be probably the most helpful in is people applying to Y Combinator, student founders, anybody working in health, wellness, nutrition, subscription, startups direct to consumer growth marketing, those are all the things that I’m happy to wax poetic about. If anybody wants to reach out to me, my email is email@example.com. Always happy to talk to you founders.
[52:24] Alright, Eric, thank you so much for being on the show. It’s been a pleasure to have you here.
- Thanks so much, Trent. I appreciate it. This is a lot of fun.
[52:30] To get to the show notes for today’s episode, go to brightideas.co/379. Thanks very much for listening to the Bright Ideas podcast. Check us out on the web at brightideas.co Alright, Show’s over. I’m tired.
Eric Wu’s Bright Ideas
- Find the Opportunity for Progress
- Talk to Your Customers
- Build a Distribution Network
- Discover Your Unlocks
- Know Your Core Competencies
- Evolve as a Leader
Find the Opportunity for Progress
Eric was a liberal arts student and athlete. He was by no means a nutritionist or food scientist. But not finding the right products for him sparked the desire to create something tailored to his needs.
When he started mixing protein powder in his basement, his primary goal was to progress. Paired with his athlete mentality of always doing better, he sought to make better things than the products we see in the market and use in our daily lives.
Eric says, “But really, when you apply it to business building, it means you’re constantly seeing things out in the world where you say, ‘This would be just a little bit better if you could do it this way.’”
His obsession with progress and making himself, the people, and the products around him better led to Gainful. This CPG brand prides itself on its mission of bringing personalized nutrition closer to everyone.
Talk to Your Customers
Not knowing your customers can be detrimental to your business, especially if you’re a CPG brand.
Eric spoke to every Gainful customer and had them share about themselves. By getting them to answer a quiz, he was able to gather emails and find out their needs and preferences. But more importantly, the key lies in meeting them personally and finding out what gets them to use a certain product and love it.
Here’s how the process works at Gainful:
- Ask clients to answer a five-minute quiz (thereby gaining information and their emails).
- Pick up the phone and call these clients.
- Offer them an Amazon gift card.
- Try to meet them for coffee.
- Most importantly, talk to them.
Your customers lead different lives, so it’s safe to assume that they will have different needs and preferences. So have one-on-one conversations, collect data, and look for trends.
Build a Distribution Network
Doing everything on your own manually isn’t sustainable if you want to hit a higher revenue. For Eric, that was their $100,000 mark.
To get them closer to their goals, Gainful:
- partnered with a production facility,
- hired a small staff, and
- employed a third-party logistics provider.
Doing so helped them manufacture and ship their products at a larger scale. More importantly, this allowed them to focus more on research and innovation, things that propelled their CPG brand’s growth.
Next, scaling a personalized business requires knowing:
- How do you convert your customers?
- How do you retain your customers?
- What do your customers like?
Before sealing the deal with a contract manufacturer, Eric made sure to wait until they hit a critical mass and a certain amount of demand for their products.
Discover Your Unlocks
It’s not healthy to be dependent on paid marketing. While it’s certainly important, especially for direct-to-consumer CPG brands, it’s best to find a scalable marketing strategy.
In case paid ads don’t sail smoothly, it’s helpful to make sure to have a good base of customers and rely on referrals, organic searches, and SEO.
More importantly, Eric says, “Our real unlocks were always on the product side. Finding ways to get people to see the value of Gainful long term as part of their every single day.”
So, they adjusted their packaging and serving sizes to fit easily into their customers’ lives. Their flavor system was divorced from the product itself. Their customers can customize their products on top of receiving personalized goods.
Know Your Competencies
As a founder, it’s still essential to get your hands dirty with tasks such as marketing and shipping. Keeping in touch with these functions allows you to find out how your internal processes are working, and connect with customers.
Something that excites Eric about Gainful is their core competency. They can branch into other personalized categories because of this. He says, “Our core competency, our key differentiator is personalization.”
So, he spends a lot of time thinking about the potential opportunities for their CPG brand. He makes sure to communicate it with their investors and team so that they can help pitch ideas towards this vision.
Evolve as a Leader
Being a company founder comes with pressures and expectations. As your company grows, you have to evolve to be fit to lead your also growing team.
To show that he is fit to lead his currently 28-people team, Eric…
- Intently thinks about their company’s vision
- Sets the brand values and throughline
- Shows up every day to actively lead and manage
More importantly, Eric prizes “having a really high EQ and caring, caring deeply about the people that you work with and the people that we serve, which are our customers.”
Being a founder who started at 21 years old, fresh out of college, Eric often experiences impostor syndrome.
While he does occasionally doubt himself, especially when speaking to more experienced and knowledgeable people, Eric focuses on valuing the learning that comes with his job instead.
His incredible passion for learning drives him. He says, “… I would still do it all over again, if only to have the learnings that I’m having right now by working with incredibly brilliant people, by being able to learn what makes customers tick, by being able to work on product development, by being able to bring something into the world…”
So when he doubts himself, he reminds himself that he’s bringing value to the world.
And when he feels down in the dumps, he simply takes his mind off things by going to the gym or eating a good meal.
What Did We Learn from this Episode?
- Having a keen eye for opportunities to progress is a must.
- Connecting with customers is crucial to creating a brand that they will love.
- Scaling your business requires knowing your customers in-depth so you know exactly what to create before mass producing them.
- Communicating your vision and value is more sustainable than paid marketing.
- Know your business’ core competencies so you can leverage them as a differentiator from your competitors.
- Being teachable, proactive, and compassionate are necessary for a leader.
- If you ever experience impostor syndrome kicking in, remind yourself why you’re doing what you’re doing and what value you’re bringing into the world — or maybe take a well-deserved break to recharge.
[2:39] — Gainful’s humble beginnings
- Eric is the co-founder of Gainful, a CPG brand manufacturing personalized nutrition products.
- During his undergrad years, Eric had always played sports but was intimidated by supplements.
- Not finding the products he wanted led him to mix his protein powder in his college dorm basement.
[6:33] — The concept of progress
- As an athlete, he always wanted to do better. This passion translated into his desire to create a better protein powder.
- As a liberal arts graduate, he wasn’t knowledgeable about raising venture capital, setting up a business model, and other entrepreneurial skills.
- Yet his desire to make himself, the people, and the products around him better spurred him on.
[8:53] — Setting their business foundation
- Jahaan, Eric’s buddy, became excited about the idea of personalized nutrition.
- His enthusiasm made Eric consider that there was a potential business in his personal experiment.
- Thus, they applied to accelerators and startup incubators. The progress and traction that they got with The Brandery got them into Y Combinator.
- Throughout their journey, they ran around gyms and conferences to hand out flyers and do some guerrilla marketing.
[13:35] — Knowing your customers
- It’s important to figure out your brand identity, core values, and customer needs.
- Everyone who purchases a Gainful product needs to answer a five-minute quiz to help Eric’s team fulfill their needs.
- This quiz helped them figure out what makes them use the products that they love.
[18:58] — Getting a distribution network
- Eric soon realized that working night shifts and selling products online isn’t sustainable for growing a CPG brand.
- So, they found a production facility, hired a small staff, and employed a third-party logistics provider.
- Going from small circles to a distribution network is a crucial inflection point for CPG brands.
- Through that, Eric and Jahaan were able to focus more on tech, research, and innovation.
[21:03] — Scaling personalized products
- Figure out what’s important and what people want by doing it on a small scale.
- For two years, Eric and Jahaan mixed hundreds of protein powder blends by hand. By doing so, they found trends in customer conversion, retainment, and preferences.
- They waited for a specific amount of demand before going to a contract manufacturer.
[26:47] — Bringing value vs. paid marketing
- The days of building a big business off the back of paid marketing are long gone. However, it will always be important for any direct-to-consumer business.
- Gainful focuses more on its products and finding ways for customers to see their brand value in their daily lives.
[30:28] — Hiring people
- When hiring people, approaching each conversation with sincerity will help you be able to communicate better.
- It’s also crucial to have strong advisors to lean on for reference calls or interviews.
- The most valuable thing for founders is being able to adapt and learn by doing.
[35:34] — Leveraging your core competencies
- It’s necessary to do things that will bring you closer to the customer and understand how your internal processes work.
- Gainful’s key differentiator is personalization and making product categories better through this trait.
- Eric has been communicating that vision to potential partners, investors, and his team.
[39:58] — Evolving as a leader
- Setting brand values establishes Eric’s credibility to lead the company.
- He also considers being present, proactive, teachable, and compassionate as good starting points for getting people to believe in their brand.
- Reading Emily Heyward’s book, listening to podcasts, and the Fitt Insider podcast’s newsletter have helped him evolve as a leader.
[45:33] — Dealing with impostor syndrome
- Eric is passionate about working with brilliant people, learning what makes customers tick, and bringing something valuable into the world.
- So when he doubts himself, he reminds himself that his job is still the best gig in the world.
- He also remembers the sacrifice his parents made to let him pursue his American dream with full freedom.
- He simply loves doing what he does every single day.
- If he feels down in the dumps, he clears his head through exercise and a good meal.
Eric is the co-founder of Gainful, a personalized sports nutrition system transforming the way every body can lead an active lifestyle. Gainful’s flagship products are Personalized Protein Powder, Hydration, and Pre-Workout. Eric started the company as an undergrad at Georgetown University, where he graduated Magna Cum Laude from the School of Foreign Service. Prior to Gainful, Eric worked in digital marketing at Hatch (consumer hardware), completed a fellowship with True Ventures (early-stage VC firm), and served as COO of The Hilltop Microfinance Initiative, a nonprofit focused on empowering low-income and immigrant entrepreneurs.
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