Matt Kelly · 2026-07-01 · 16 min
Key moments - from our scoring
Substance score
40 / 100
Five dimensions, 20 points each
Matt Kelly demonstrates his founder-led approach to product development by tastings six variations of his Rainbow Dust supplement - three different formulations, each tested with and without natural flavor extracts. The episode centers on the practical tension between optimizing taste and managing cost of goods sold (COGS), with Kelly using LTV-to-CAC (lifetime value to customer acquisition cost) as the core metric driving product decisions. He explains how gross margin per customer relative to CAC - not total revenue - should drive product economics, and how product improvements affect retention differently across industries (citing pet food at 60% month-12 retention versus supplement brands). Kelly works with two suppliers who maintain tasting kitchens, and conducts in-person review sessions roughly every six months; his MPD manager handles more technical sampling and variant testing. Using natural flavor extracts (sourced from specialty flavor companies similar to perfumery), Kelly targets products that taste non-functional while remaining functional. He uses Granola for voice-based feedback capture instead of manual notes. Throughout the tasting, Kelly evaluates versions based on coffee depth, ingredient prominence, and overall flavor profile, ultimately finding his preferred version - but noting it's also the most expensive, highlighting the core product development dilemma.
He uses LTV-to-CAC as the North Star metric, weighing whether a better-tasting (more expensive) product will improve retention enough to justify higher gross costs, or whether a cheaper formulation with lower retention might still achieve the same LTV-to-CAC through better margins.
Home sampling is informal and subjective (unmeasured doses, no palate resets); professional tasting rooms use crackers and water to reset palate, coordinated sessions with 15-50 SKU variants, and multiple team members (founder, MPD manager) contributing technical and sensory feedback to combine notes.
Smaller serving sizes mean fewer total ingredients and less actual coffee, which makes remaining actives and added flavorings taste more prominent and overpowering, sometimes creating an artificial or unpleasant flavor compared to the original larger-dose formulation.
They're pure, potent extracts (similar to perfume) sourced from specialty flavor companies, added in precise doses to enhance taste without making the powder taste functional or artificial - the goal is to make a caffeinated functional drink taste like regular coffee.
He typically orders 100,000-120,000 units at a time for main SKUs, which significantly reduces production costs compared to smaller batch sizes, though further cost reduction often trades off taste quality.
Our reviewer’s read on each dimension, with quotes from the episode.
There are genuine operational nuggets here - particularly the LTV:CAC framing around gross margin per customer and how product cost changes affect each lever - but they're buried under extensive real-time tasting commentary and throat-clearing. The insight-to-noise ratio is low for a 16-minute episode.
if you can reduce cost in a product without changing it, that can have a positive impact on the add to cac. For obvious reasons, gross margin improves. If you make the product way better, it can improve retention, but it might make the product more expensive. So it's always a balance.
I just woke up, so I probably look and sound like shit
The reframe of LTV as gross margin per customer versus lifetime revenue is a useful distinction that many DTC operators conflate, and the pet-food vs. supplement retention comparison is a decent non-obvious analogy. Nothing is truly contrarian, but it avoids the most recycled takes.
a lot of people say LTV and they talk in general revenue terms. I think of that as LTR lifetime revenue life lifetime value, which is the one that, the only one that matters really is the margin per customer
pet food brands typically might have 60% month 12 retention which is unheard of in supplements. But it's not like for like because they might have 20, 30% gross margin whereas a supplement brand might have 80%
The host is a genuine operating founder running a functional supplement brand at meaningful scale - not a career podcast guest - but this is an unstructured solo episode, which limits the depth of practitioner insight that can be demonstrated.
we order now like 100, 120,000 units, typically for like main skus at a time
I go every six months to look a lot of stuff and just get up to date on stuff. Um, but yeah, they have their own tasting kitchen. They obviously have our specs, etc.
A handful of concrete numbers appear - retention benchmarks, margin ranges, unit order volumes - but no brand names, no specific ingredient costs, no actual revenue or pricing figures, and the tasting methodology is explicitly described as unscientific guesswork.
pet food brands typically might have 60% month 12 retention which is unheard of in supplements. But it's not like for like because they might have 20, 30% gross margin whereas a supplement brand might have 80%
this isn't particularly scientific, but I'm granola in this
This is an entirely solo, unedited stream-of-consciousness monologue with no interviewer, no questions, and no structure beyond product order. There is no conversational craft to evaluate; the format precludes follow-up, pushback, or any of the dynamics that make podcast dialogue valuable.
Hopefully this was somewhat useful and just interesting. If you're into this sort of stuff. And I'll catch you the next one. Peace.
Anyway, this is a brief example of how I sample stuff at home.
Computed from the transcript - who did the talking, and the words that came up most.
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Transcribed and scored by The B2B Podcast Index.
Speaker A: This episode is sponsored by HeyGen. HeyGen turns a script, photo or presentation into a polished video of you in minutes. No camera or crew required. It's how real estate agents, financial advisors, attorneys and creators show up consistently on every feed and build a brand that brings in clients without spending their whole week making content. Rated the 1 AI video platform for small businesses on G2, with the most realistic AI avatars in the industry, trusted by a community of over 30 million people and 85% of the Fortune 100. And built to work in over 175 languages so you can reach your audience in theirs. Here's the wild part. Record yourself for just 15 seconds and Heygen builds an AI avatar that makes professional videos for you on demand, so you can post everywhere your audience is as yourself, without filming every time. Your first three videos are free at heygen.com pod that's H E Y-G-E-N.com pod
Speaker B: Right, so I am testing or tasting a bunch of different rainbow dust upgrade versions today. I'm being very stealth. We have six versions, three different formulations, then both with different flavoring and one without flavouring. Sorry. So six different versions, three different formulations, full stop, and then each of those three with and without flavoring. So, yeah, basically the way, I guess, sampling for any of this type of product works is for fundamentally, at least the way we do it, like most brands do it, you could do it yourself in a tasting kitchen. We've never done it that way. We have two suppliers we work with, one we used to work with exclusively and now another one we work with. So they make up. We like go in person probably every. I'm gonna say I go every six months to look a lot of stuff and just get up to date on stuff. Um, but yeah, they have their own tasting kitchen. They obviously have our specs, etc. We've been working on back and forth, like, what do you want to change, customer feedback, etc. Etc. Different ingredients, price, always a big one that comes into it as well because at the end of the day, product tastes great, it's got amazing ingredients, but economically doesn't work because it's, I don't know, you know, twice the price you need it to be. This all comes into LTV cac, and that's kind of the North Star here. Right. And, um, by the way, it's like I just woke up, so I probably look and sound like shit, but, um, yeah, ultimately, like making a great product. Is that going to be clipping? Comes down to pursuing LTV to cac which can be improved by either better margins, better retention or lower CAC or a combination of all three. I think the reality is these days a lower CAC has to be assumed. That's not going to be the case, certainly at scale and not forever. So you should be optimizing for say primarily better retention. But retention in isolation isn't always the solution. And what I mean by that is you hear like, I don't know, pet food brands typically might have 60% month 12 retention which is unheard of in supplements. But it's not like for like because they might have 20, 30% gross margin whereas a supplement brand might have 80%. Right. When I say LTV to CAC, I'm talking gross margin per customer to CAC. Typically we'll look at it in a 12 month period, payback, 12 month period and then lifetime, I think at the most useful benchmarks. So yeah, like my point being if you can reduce cost in a product without changing it, that can have a positive impact on the add to cac. For obvious reasons, gross margin improves. If you make the product way better, it can improve retention, but it might make the product more expensive. So it's always a balance. Then the other thing is cac, which is probably less relevant specifically to the product itself. People haven't tried it when they're buying it. But if you put say a really unique ingredient in it and you can advertise that, is that going to reduce your cac? Potentially. So getting a better product is all the balancing act of those three things or those two things primarily specifically about product. Is it a better product and therefore do you think the retention is going to move? But if it's a better product, often it costs more. So it's finding that balance between price, taste, ingredients, efficacy, etc. To get the ultimate blend of retention, CAC impact as a result of marketing impact and gross margin, which ultimately results in hopefully a better ltv cac. When I say that uh, a lot of people say LTV and they talk in general revenue terms. I think of that as LTR lifetime revenue life lifetime value, which is the one that, the only one that matters really is the margin per customer, gross margin per customer relative to CAC, which is just your revenue over 12 months, you know, times your gross margin, say 60% whatever, et cetera. So anyway, this is, let's be careful not to show you. This is the larger uh, one I think the 8 gram serving with flavoring. I'm just going to give my gut instinct on taste um, because yeah, I know what the ingredients are. I'm not gonna go into that here. Okay, so smell is in my opinion, quite good. Similar to. So this is the one that ends in 5, 2, 6, which I believe is the largest serving with flavoring. So smells similar, Right? Just checking which one I'm on. Smells similar to existing. It's hard to say on that, to be honest. I think that's pretty good. I think it's lacking a bit of coffee depth. I don't know if we've reduced the amount of actual coffee in that. To me, compared to existing, that's less coffee. Like, which might sound ridiculous, but that's what I'm getting. So that's a larger one with flavoring, funnily enough. Okay, now I'm going to try the same one but without flavoring, which is concerning me because the one that had flavoring didn't have much flavor in my opinion. Honestly, that tastes very similar to me. I'm not getting much difference with the. Without flavouring they're in. I'm really struggling to tell those apart. So with flavouring again, Uh, okay, no, I'm getting it. The one with flavoring is definitely better. That's the funny thing with sampling. Often you have to go back to the comparison to actually notice it. When you just go first one, second one, often you, you lose the distinction. All right, uh, I'm gonna say, uh, the with flavoring was better. Okay, moving on to version two. And to be honest, when I'm doing it at home like this, it's not. It's not science, more an art because. Or I should say it's B tech rather than professional because I haven't weighed them out. I haven't got scales here for some reason or like a scale that's accurate enough and I've just put, uh. Well, to be fair, I've got a water machine that does 100 mil shot. So I've done that, which is probably like about right. But I don't know the exact, you know, it's a bit like back a fag packet estimation on serving size. So this is minus two with flavoring. So this is the medium sized one is my understanding to clarify without flavoring, which is this one is just the ingredients and the coffee whatever without anything external. Flavoring it with flavoring as it sounds, is with flavor. But let me be specific about that. These are all natural extracts of flavors. So you have companies. I'm not gonna name any, but we work the few and these are flavor expensive. It's almost Like a perfumery in terms of like drinks, their whole business is they have extracts, really pure and specific extracts. And they have like hundreds of flavors of different things. So you might have like dark roast coffee version 1, 2, 3. And by themselves, this would be almost like a perfume, like super potent, whatever. When you put it into a powder, um, and effectively a drink, it obviously blends in and it has a subtle but important flavor. Improvement is obviously the goal. So you can kind of design a flavor. I mean, I'm probably not the best person to describe this, but I feel like it's a good description. It's almost like designing a perfume, right? You're adding a certain amount of something and oh, that tastes good or whatever. So you get to like the perfect flavor. Because often with functional stuff as well, it's obviously what we do. It's way harder to make it taste amazing because it's got functional ingredients in it, especially powder, which you can taste rather than say a capsule that if you consumed by itself or drank this in water would make you fucking vomit. Um, but what we're always targeting as the North Star is make it taste not functional, I. E. As good as a standard coffee or a standard RTD coffee. Now with the RTD without, sorry. While being functional. Tastes non functional while being functional. Or rather be effective and functional and great for you while tasting like it's not. So yeah, it's version two with flavoring, to me so far, I'd say all of them are lacking flavor depth. I want it to be stronger. I know some people like more of like a, I don't know, just a medium or a light coffee.
Speaker A: This episode is sponsored by HeyGen. HeyGen turns a script, photo or presentation into a polished video of you in minutes. No camera or crew required. It's how real estate agents, financial advisors, attorneys and creators show up consistently on every feed and build a brand that brings in clients without spending their whole week making content. Rated the 1 AI video platform for small businesses on G2 with the most realistic AI avatars in the industry, trusted by a community of over 30 million people and 85% of the Fortune 100 and built to work in over 175 languages so you can reach your audience in theirs. Here's the wild Record yourself for just 15 seconds and Heygen builds an AI avatar that makes professional videos for you on demand so you can post everywhere your audience is as yourself without filming every time. Your first three videos are free at heygen.com pod that's H E-Y-G-E-N.com P-O D.
Speaker B: To me, that's just lacking. Just lacking flavor, lacking coffee. And these are smaller servings, uh, so we've reduced the size of them, which is partly a cost thing. It's also partly a, um, size of pouch thing, which is also kind of a cost thing, but also impacts the ability to ship in large letter. So, yeah, it's kind of a cost thing, but it's also a lot of feedback that a lot of customers aren't even aware. They just assume our product is coffee and lion's mane or coffee and mushrooms, when it's actually coffee plus mushrooms plus multiple other ingredients. And if people don't care about those ingredients, or at least they say they don't, you have to test that by, you know, split testing different versions and seeing which one they actually prefer, regardless of ingredients. But if they say they don't care, they should be paying to put those ingredients in. Right. This is V2 without flavoring. Oh, I really don't like that. That's the first one out of the four I've had so far I don't like. That's not very nice for me. Okay. Right, moving on to the final two. And yeah, this isn't particularly scientific, but I'm granola in this, so I'll send my feedback to our MPD guy in Slack, George, who runs all this stuff. This is version three with flavoring. So I haven't got scales, but I have got hands. And this is definitely the lightest one with flavoring without flavoring. So same again. This is a even lighter blend because we removed more stuff. I've actually forgotten specifically what was removed, but I'm also not going to reveal that here because I don't want you to know exactly what's coming. Even our competitors copy all our shit. V3 with flaving. Okay, Now it's interesting. That one, to me is almost an overpowering flavor and it tastes a little bit artificial, and that's not surprising. I think that's because there's less Actives in here because we've removed one or two things and there's less coffee as well, because as a result, less actives, you need less coffee to offset to get to a similar flavor profile. But to me, yeah, it's a smaller overall dose that is powder grammage. Um, but the taste is overpowering, interestingly. Okay, now we're on to the same one, which is the lightest version three without flavoring. So that's way nicer to me. There's a Big distinct difference there. And it's probably easier to notice the difference because the serving size is less. Okay, so I'm going to go back through all of them, try and get my gut feel on what is actually my favorite. Often if you're tasting properly with a supplier and like their tasting rooms, which we do, like I said, probably every six months I would go MPD guy would go more often. They give you crackers and stuff in between and water to try and like reset crackers. In particular, it's like a dry flavor. Try and reset the palate similar to when you go to, uh, I don't know, an aftershave shop or in the airport. Typically you spray loads of aftershave and they'll give you the coffee beans to smell to reset the nose. That's basically the equivalent. Alright, so going back to V1, which I believe is the 8 gram serving, the original with flavoring, which is the first one I tried, to me that's nice. That tastes the most like what I would want it to taste like. I think. Okay, V1 without flavoring again, To me that's a little bit bland, but it does have more coffee flavor overall, I think. I think because it has my actual coffee in it. Okay, this is V2 with flavoring again. To me, I'm not liking that. Uh, I think it's either it's either had an ingredient removed or it's got something else added or it's got less coffee and therefore the stuff in there is more prominent because I don't like that very much. This is V2 without flavoring again. Yeah, to me that one's pretty sour. And again I think it's because of what I said about the first uh, V2 with flavoring. It just now doesn't have flavorings, it's even more prominent. This is V3 with flavoring again. Yeah, I'm really not a fan of that. Like I said earlier and then V3 without flavoring again. Do you know what's annoying? I'm pretty sure the ones I like the most are the most expensive and it's quite a significant difference. Um, obviously we're not optimizing just for cost. Like I said at the start, our products right now are actually quite expensive to make. They're a lot cheaper than they used to be because we order now like 100, 120,000 units, typically for like main skus at a time. Um, But yeah, trying to reduce the price. To me right now it's hurting, hurting the flavor, which is annoying. Obviously ideal if you could, like, take 30% off your cogs and you got a better product. But again, this is just me, which is why we do a lot of consumer testing on this stuff. But, yeah, for me, virgin one's still the best. Anyway, this is a brief example of how I sample stuff at home. Like I said, there's typically two other ways to sample this in the office with our suppliers, which I'll do maybe once every six months for, like, I'm gonna do a shitload of stuff. I'll spend like four hours doing, you know, 15 products or whatever, or like, new stuff, new flavors as well. Not 15 products, but 15 SKUs with different versions. You might sample, you know, 50, 60 things, which I've got six things, but you'd have, like, little shots and stuff on, and it'll be coordinated by someone else. And by the end of those sessions, you're always, like, shaking. Because these are caffeinated drinks, you have a lot of. A small dose of something ends up being a lot of something. And then my MPD manager will do a lot of his own more technical sampling, I guess, where he's weighing stuff out, he's adding different things to it, whatever. Um, he'll do that either at home or in the office. And then stuff would get sent out to me. Generally, it's like a final check and then we'll combine our notes to see what we're thinking. I'll send him a granola summary, which is why I've got granola running here. Probably won't send in this video, but I just find that's the easiest way to do feedback and anything, particularly products, because. And that's why I love granola. I'm not sponsored by granola. We have one of our team leave to granola, and I joked it's because I mentioned it every day for like two years. Um, and they're an AI company that pays their way more. But, um, yeah, great tool because I can just put that on, speak freely, as I would not have to think about taking notes. You know, I see people taking notes in, like, Tampa meetings. It's like, just put granola on. It'll capture everything that I needed to capture and it'll summarize it, obviously, and I can, you know, update those notes put into Claude, whatever. So anyway, that is the sampling done. Hopefully this was somewhat useful and just interesting. If you're into this sort of stuff. And I'll catch you the next one. Peace.
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Speaker A: This episode is sponsored by HeyGen. HeyGen turns a script, photo or presentation into a polished video of you in minutes. No camera or crew required. It's how real estate agents, financial advisors, attorneys and creators show up consistently on every feed and build a brand that brings in clients without spending their whole week making content. Rated the 1 AI video platform for small businesses on G2, with the most realistic AI avatars in the industry, trusted by a community of over 30 million people and 85% of the Fortune 100 and built to work in over 175 languages so you can reach your audience in theirs. Here's the wild Record yourself for just 15 seconds and Heygen builds an AI avatar that makes professional videos for you on demand so you can post everywhere your audience is as yourself without filming every time. Your first three videos are free@heygen.com pod that's H E Y-E N.com pod.
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