Episode 96: A Different Approach to Saving the Planet and Why Plastic Water Bottles are the New Cigarettes with Rich ‘Raz’ Razgaitis - CEO of FloWater

Speaker A: If I were to really synthesize, then I'll kind of go back to your other question about what, what, what captivated or compelled me to lean forward into it or get excited about this. Ultimately, for me, our opportunity, the way I would define it is we have a radical opportunity, and to some degree, I feel a responsibility, really, to change the way the world thinks about transports, consumes, drinks, and enjoys water.

Speaker B: Hey, guys, welcome to Startup Hand Me Downs, the podcast that passes insights from founders and thought down to the next generation. I'm your host, Philip Kusumu, and thank you so much for giving me the next 30 minutes of your time. I promise it'll be worth it. So today I had the pleasure of speaking with Rich Raz Getes, who goes by Raz. And Raz is the co founder and CEO of uh, Flow Water, which is the world's most advanced water refill station and a member of the Inc. 500 list. Raz, whose vision is fueled by wanting to leave a better environment for his children and the next generation, is tackling a problem most of us don't even know know exists, and that's drinking toxic water. Raz is combining his vision with his 20 plus years of leadership and tech experience to deliver a product that keeps 5.5 plastic bottles from reaching our, uh, landfills and oceans every second, which is about 230 million to date. Now, this episode, I learned so much about bottled water, about how toxic bottled water can be, and also learned so much from Raz as he had a really illustrious career up until this point, working as, what I'd like to say, a hired gun for many companies. So, guys, sit back, listen to this episode, and be ready to be wowed by how much bottled water is actually very damaging to society. All right, let's jump into the action. So, Raz, thank you so much for coming on the show today.

Speaker A: Philip, thanks for having me.

Speaker B: So, Rhett, um, you know, California right now, I don't know if there's, if it's still locked down or if you guys are allowed out, but I guess historically when you were allowed out to kind of like dinner parties and startup events, how do you usually introduce yourself to people?

Speaker A: Uh, I typically introduce myself as, hey, my name is Raz. I'm the co founder and CEO of a company that's focused on changing the way the world drinks water and putting it into single use plastic water bottles. And that's part of my day job. Another part of my day job and night job is raising two pretty amazing teenage daughters who are now 17 and a half and 19.

Speaker B: Well, that's a. That's a nice intro. Um, people don't ever tend to talk about their kids on the show, actually, which is quite fascinating. And after the. At the end, they'll be like, oh, yeah, I've got like nine children. I'll be like, oh, wow, you didn't. You didn't mention, uh, cool.

Speaker A: From a kind of a founder or startup perspective. I think my whole kid perspective, especially now that I'm on the flip side of it, has, you know, when I say the flip side of it, I've got kids that are, that are. That are kind of graduating and moving out into the world. So I have a bit of a different perspective on it now. But it is tough, uh, to decouple kids from work life, uh, for all of us. So.

Speaker B: Yeah, no, it's how you totally makes sense. Um, so great. So, look, we want to talk about, you know, flow water and the great work that you guys are doing there. Um, but, you know, before we get into that, you know, I always like to start off at the beginning of, you know, uh, our guests journey, so how they got to where they are today. Um, so, like, walk me through, like, early life and early childhood. Like, where did you grow up? Um, were there entrepreneurs in your family? Were your parents entrepreneurs? Um, what was it like growing up in the early days?

Speaker A: Uh, I grew up in Columbus, Ohio, so I'm the oldest of five kids. I've got four younger daughters and, ah, some. I was. I was born in Texas but grew up in Columbus, Ohio. My dad was a teacher, um, for many years at Ohio State University and then ended up running commercial, um, licensing and development for a technology company in Columbus, Ohio. And so most of my years, uh, were spent one of five in the Midwest. And I think I had a little bit of a. Or perhaps maybe a moderate to a lot of entrepreneurial wiring, though there wasn't really a lot of that in my household. If you, you know, just. In fact, I was. I had a family zoom this weekend. It's probably one of the cool things that has been the output of this pandemic is that I, uh, think for much of us that didn't see our families that often, in some ways see them more often now because everybody's just gotten accustomed to doing zooms. Uh, yeah, I don't. I have family all over. I mean, one in Sister, Indonesia, and then Portland, Louisiana, D.C. my parents from Florida kind of all over the place. And yet, you know, it's been that way for years. We never Use zoom even when there was no pandemic. So for whatever reason, now that there's a pandemic, we all zoom all the time. Even though we've, we didn't before, we just didn't see each other. So that's been kind of cool. We were. Everyone's got time now I guess. I guess that is it. And um, we were just talking this weekend a little bit about family history and genealogy. And my, my dad, uh, is the uh, descendant, uh, he's really first gen, but his parents were born in Lithuania and they didn't come over to the US until they were in their early twenties. So uh, my grandfather never went past first grade. He was a, I, I learned this weekend I thought he was a potato farmer and I guess that's just because I assume everyone in Lithuania that's in the farm. Farming. Agriculture is a potato farmer.

Speaker B: Yeah.

Speaker A: And I just thought he did that. Or uh, I think not maker because I think ultimately the name Ras Gatis means son of a knot maker. But I found out he was a goose farmer. So he was a goose. He grew up in a household of like 12, 13 kids. Goose farming, which I didn't really realize was kind of a thing there. So very unentrepreneurial. Apart from the fact that, you know, at least both on my dad's side, uh, both his parents were willing to forego everything, including seeing their family ever again, the late teens or early 20s to move to the US move to Chicago and try to forge a life. So uh, you know, my, my dad grew up in a circumstance, you know, my mom was a product of, of two university teachers and administrators and presidents of universities. And my dad was a product of, you know, two immigrants, one of whom spent 50 years cleaning houses. She was a house cleaner. She never went past first grade. And my grandfather pressed suits at heart shaft remarks in Chicago until he was like 91, uh, could barely read. Um, and then my dad ended up uh, kind of doing the opposite, which is I think and ends up being kind of a cool story for all of us to have privilege, uh, to varying degrees, but one of circumstance enabling that ah, my dad ended up actually working at ah, NASA as a rocket scientist. He ended up getting a PhD in thermal fluid dynamics.

Speaker B: Wow.

Speaker A: And was a rocket scientist at NASA and helped launch Apollo 1 through Apollo 13 and was part of the Apollo program for, for many years. Um, and literally like one generation before, you know, his dad was a goose farmer that never got past first grade. And so you know, I look at my life And I look at, like, my entrepreneurial journey really got born in many ways. I mean, some of it's genetic. And I think entrepreneurs end up having. Probably we end up having a bigger ego than most. Um, the reality is that, you know, a lot of what we have, uh, and I think this year has really showcased out of this last 12 months, but a lot of what we have ends up being, you know, yes, it's hard work. Yes, it's tenacity. Yes, it's grit. Yes, it's luck and fortune and destiny in some cases. Yes, it's team, yes, it's investors. But then to some degree, it's also privilege and being able to be in a really cool time and place where, you know, opportunities afforded us. Because if this is 150 years ago and 3,000 miles ago, I'd be, I guess, plucking geese right now rather than doing a podcast with you.

Speaker B: Yeah, exactly. Uh, no, that's. That's incredible. And I. And it's always interesting to kind of understand, like, you know, who were the people that came for us, right, and how we got to this point, you know, why did we not go down their path? And, you know, the learning, then we take something from all of them, whether we know it or not. Um, and it really does, you know, craft who we end up becoming. Right. To some extent. Um, no, that's awesome. And so, so, so your dad was a rocket scientist. Um, so, you know, the most intelligent people on the. On the planet.

Speaker A: And unfortunately, that. That genetics skips a generation, so my kids have it. I, I most definitely. And anyone that works with me or my sisters, certainly my sisters can attest to it, and so can my kids. So it does skip it.

Speaker B: You haven't done that bad. I mean, look, you. You done a. You, you went to, you went to college, you got an mba. Uh, and so far it looks like it's going. Going good. It's going okay. Um, so, yeah, so you've done your mba, and then I guess after that you went into, I guess, the world of work. Um, so, like, what was the first thing that you. You did? I guess. Did you know that you wanted to go down, like, the entrepreneurial really early on, trying to, like, figure that out and just trying to.

Speaker A: I, I didn't. I mean, so I graduated in 19. Uh, I graduated college in 1996. So I went to a small school in Indiana, and, you know, I kind of just went there by default. Small, uh, school called Anderson University. No one, no one has ever heard of it. So I always Just rebrand it for everyone and tell them it's kind of like the Harvard of the Midwest. It's not. I've actually said that so many times and usually I. People know that I'm kind of joking about it. I actually have said that so many times. I was in the Bay a year ago and I said that to somebody and they actually said to me, you know what? I've heard that before. And they probably have heard it from me five years ago. But now I'm like kind of repackaging my undergrad, my alma mater. And so I went to this very small school in Indiana. Most, um, of the people that went to that school, I mean, not everybody, a lot of those people ended up just staying in the Midwest thereafter. Uh, I kind of had this itch to go to the east and the West Coast. They were not. I think I was entrepreneurial by the fact that, you know, I started businesses in colleges when I was in college. And when I was 20, I had a, uh, I was, uh, I. When I was 18, I was a Cutco knife salesman. I sold knives door to door. And then When I was 19, I was a manager of a division that did that. And then when I was 20, I went and opened my own office. I moved away from home and during summer I moved, open my own office. You know, trained 200 people, I recruited them, trained them how to go sell knives door to door. I made a commissioner, everything made. So I, you know, that was kind of like back in the world before there were things like kind of more traditional startups. Like that was a startup. Uh, and so I was a little bit entrepreneurially wired. But when you graduated college, there weren't. You could go start an agency or a T shirt shop or. But there just weren't. It just wasn't like it was today. And so, uh, when I graduated, I had kind of three primary jobs that I was looking at. I was looking at working at, uh, I was interviewing with, uh, jj, HP and IBM and both in the east and the west coast. And so I ended up taking a job at J and J. And I thought, you know, I'm going to go take this job, be, you know, hospital and field sales rep, a pharmaceutical division. Then I'm going to work my way up. And my goal was to someday. I mean, at the time, and this sounds maybe a little silly now, but I was 22 and my goal was to move out to the east coast and be the president of JJ someday. And that was just kind of the path that I thought Sounded really cool. I thought I would enjoy doing it. I thought maybe someday I could be good at doing that. And I never thought I would kind of dip my, my hands into the entrepreneurial and startup for I really ever, ever again. Because I was on that. Some of it is a little bit programmatic, which is you m. Go to undergrad. I didn't feel a pressure from my parents, but you get an undergrad, everyone's getting these jobs. They sound like good jobs. You should be doing this. Uh, like big corporate jobs are a good thing to do. They're safe. It's a little bit like when you go to a small school in the Midwest. The program is you go, you get married, you have kids, you buy a house, you procreate, you coach soccer. It just kind of ends up, it's not like that anymore. But I was growing up in the 80s and 90s. It was like that. I, uh, five of my six, I went five consecutive weeks in a row after I graduated. I went to weddings, uh, all five of my six best friends all had marriages and got married five out of six weeks after graduation. I was the rebel. I didn't, you know, I wasn't dating anybody and I moved out to the east coast. But um, it just programming kind of materializes implicitly or explicitly. And that was kind of my path on the, on what I thought was the corporate side. And I did that for a few years and I found out, man, I am not, I'm not a long term corporate dude. I think I could be once again. But uh, my ability to go through all the paces in your career like it used to be at a point in time where if you wanted to actually get to a pretty interesting management level job, you know, you'd be in the trenches for like 5, 10 years sales and then you'd be an associate and associate, associate this and you maybe get to be a manager. But like your manager, you know, I just didn't get as much action like to get to the action took so long. I felt like. So yeah, I suppose I, I suppose I'm more entrepreneurially wired but you know, I didn't grow up in a family of entrepreneurs and you know, I kind of kept getting pulled into that. And so over the course of the last 20 years I've done, I've worked for a few Fortune 500 companies, I've worked for a few privately held companies that, that ah, you know, I was there from 30 million in revenue to 100 million a year in revenue within a period of a couple of years. And then I've, uh, co founded or I've been brought in very early stage startup companies from like $0 or $1 to, you know, growing it or selling it.

Speaker B: Yeah. And I guess the first thing that I noticed was, I guess, your, your time with healthology, um, and I guess throughout your career as well. I see this. There is some synergy in terms of like working with like health care or pharmaceuticals or in that type of realm and consumer realm, which we can like delve into, like how that came, I guess with healthology. You were quite early on at healthology, Right.

Speaker A: Number six, I think, employee number six. So I left. I was in Indianapolis. So I was. So I worked. I started out my career in J.J. and then, and then, um, I was at J.J. and I found out, I found out when I got into J and J. I was like, this is amazing. Like, got a job at jj. It was a very coveted job. I mean, it was kind of at the time like the Google of, you know, companies. And so I got this job. Then I found out I get in this job and they're like, all right, well, here's the career path. Like after I kind of got into it, after a year, they're like, you know, you get to go do sales for three to five years and then you do sales management for like five to seven years. And then you can get into corporate, you know. And I was like, well, I'm going to be 34. Like, that's before I get to like, where all the action is and all the corporate execs are. And as a sort of, around the time that I was discovering this, I got a call from someone, Eli Lilly, and they're like, hey, we're starting a new specialty pharmaceutical division. It's an obgyn. It's for women's health. We're launching a new product called Evista. Uh, and it was at the time intended to prevent osteoporosis. It later became indicated for the prevention and treatment of osteoporosis, as well as, uh, the prevention of breast cancer. They said, we got one position left, it's in Southern Connecticut, and we want you to interview for it. So I remember meeting with the, uh, person that was interviewing for it. Her name was Camilla Brown. She's amazing. Probably still to this day the best manager director I've ever had in my life. She was such a great boss. Such a great boss. And I interviewed and she's. I said, hey, well, tell me about the career path here. Because at JJ, this is like three to five years of this and another three to five years and I'll get into action in 10 years. She's like, well, basically it's three to five years in the field, then you can get into the action. I said, well, I said, I have a deal for you. I said, why don't you. I was like, if you really want me, I was like, make a commitment that if I go crush it in the next year, then you either promote me or like, you know, kick me out the door and like, let me go. Like, like fire me or promote me, but, like, I'm willing to kind of go all in to get to where the action is. And so things worked out. I actually got promoted within nine months, uh, to work in corporate. And I was part of the launch team for Evista. Uh, and it was cool, there was a lot of action there, but it was like slow action. And I remember doing a lot of market research and I was traveling a lot to the east and the west coast and I'd fly into sfo. I'm like, literally four miles from sfo right where I sit. I fly into sfo and I used to, you know, fly in. I'd get in the rental car and I'd be driving up and down 101 San Jose to San Francisco, seeing all the signs for pets.com and you know, all of like drcoop.com and all these new, like this 98, 99, like all this emerging energy around startups and I was just like salivating with like, man, this is where I'm supposed to be. Like, this is my home, these are my people. And I really wanted to get to the east and west coast. And that's what ended up. You know, sometimes if you just. I mean, I don't. I'm not necessarily a believer of like. Well, you just start thinking things and then things start manifesting. But I do believe that, well, if you start thinking about certain things in a certain direction, then you start to see certain opportunities that you might not have seen before. And right, uh, I got an opportunity to go be the number 6, 7 person at a company called Healthology, where I went and worked for a guy named Steven Heimowitz, who also would be tied with my best boss ever. Fantastic. Such a. I got so gifted earlier in my career to be able to work for amazing people. And, uh, did that for a couple years. And so that was, you know, pretty pre revenue, just closed around Series A funding. Um, you know, I was the number six person there. I was hired in one role. I Ended up being. I ended up being really number two in the company where I was responsible for uh, all of sales, marketing, client services and was uh, there from kind of first dollar into getting at the profitability and then it was later sold. I left to go run a company, uh, after a couple of years, but that company ended up getting bought by iVillage years later. It was a great experience. I mean it was like, what did they do?

Speaker B: What did they do there?

Speaker A: Basically did so, you know, so hard to. For people that didn't weren't in the ecosystem at that time. It's kind of hard to remember, but once upon a time creating health content for your website, like if you were CBS News, it was really hard. Like there was no health content out there. There was things like PR Newswire where you could pull in press releases on, but that's not health content, you know. And there were places like the New York Times that were writing health content, but like they didn't. They were writing articles like they weren't doing entire pages and pages of pages of health content. So what we would do is we go to these media properties, you know, this is still early, so early, late, late 90s, early Internet 2000, 2001. And we go and basically say, hey, look, we've got a team of medical writers, medical doctors. We do written and video and audio content. We basically can white label your entire health channel. So if you go to cbs.news.com for example, at one point in time health, we would basically power everybody's health channel. And then we would do the same thing. We go to all these verticals. Like, for example, there are 500 different verticals and websites around multiple sclerosis. And we go to them and say, hey, look, we got a ton of content around Ms. We'll be able to power a portion of this so that you have content to create stickiness in m your website. And so basically what we were were PR Newswire for original content around health. And rather than being a destination site, we actually syndicated. We kind of flipped the model on its head. And this is at a time when like Medscape and Dr. Coop and everyone was trying to build WebMD, they were all trying to get all the consumers to everyone's website. We said, well, why don't we be the intel inside that powers health and syndicates it across the web. So they're seeing our content just by wherever they're already going organically, you know, and they're surfing because we're going to power all these channels. So that's what we did. Um, and it was kind of a unconventional model. Uh, we went through the decline. I mean March of uh, 2000, there was a massive precipitous decline and ad revenue like went to the floor. I mean CPMs went from like 100 bucks to like 5 bucks. And this is when there was a huge fallout of companies during that period of time. And we actually staved that we had the, we picked the right business model and we did not pick an ad based, we picked a sponsorship based, uh, revenue model which saved the company. You know, in one sense. I remember many, many, many debates at the executive table about whether we should do that versus the ad revenue model. You know, and in retrospect, of course, if you end on the right side, tend to think you were a genius

Speaker B: and,

Speaker A: and, and, and, and the reality is, you know, like, we were more right than wrong on those decisions. But then to some degree we also got, you know, we, we, we got fortunate. I mean we didn't know that the CPMs were going to fall off the uh, off the cliff. And we got really fortunate by building a business around a revenue model that was sustainable that enabled us to get the profitability. So that was, it's crazy because media,

Speaker B: uh, media went, went through something very similar like, like over the last few years again, like the media space has been struggling like content.

Speaker A: It's almost like the, well, what we did at the time, which was kind of sponsorships, I think is a lot more of how successful media companies sort of survive now is through subscription. Right? I mean the subscription has replaced the sponsorship. And the earlier you were into subscription, the easier it's been, um, to do that. And also consumers are a lot more predisposed now that if they are generating and extracting value out of content, they're a lot more willing to pay for it. But yeah, that is amazing that that is, um, I mean there's some parallels to that in water by the way, which is, you know, people that, you know, just as an aside not to like skip too much here, um, but people value water historically when it's packaged into a bottle. Like you're, you're willing to pay $3 for something that goes that, that, that's flown, you know, halfway across the world from Fiji, that's in a plastic bottle. We are polluting the environment and like literally just smoking environmental cigarettes every time you use one of those. You're willing to pay $3 for that. We, you know, consumers. Yet we won't pay three bucks a day. Not yet. We are Starting to. But most people are getting kind of around this idea of well would I pay $3 a day for better water coming out of my home so I didn't actually have to buy that one bottle. And people are very, very rapidly moving there. But 10 years ago they weren't nearly as nearly as prevalently. So. Excuse me. So anyway, that was healthology and then actually learned a really important lesson about grit there. So you know we went through 9 11. I mean my house, my, my, my condo uh, was three blocks south of the World Trade Center. Um, and I was married at the time. We had just found out that was pregnant with my youngest daughter, excuse me now my oldest daughter but uh, whose birthday just turned 19 on Saturday. Um, and she was, you know, she was, I mean we had our old whole wild experiences. 9 11, you know, uh, going through that and the implications of that. Actually my 19 year old was born perhaps somewhat related to 911 and all the events that happened with my wife at that time. But she was born super premium, 26 weeks, £2, got down to a pound and a half. Wasn't expected to live hospital for two and a half months. So during that time uh, when I was at Healthology, these are probably the most important years to me as an entrepreneur. A I had an amazing boss like this guy Stephen Heimowitz. Just, he was so good. It's so many things and so not textbook. I mean he was a, he was an md. He didn't really go through classical business training. It's definitely not a Fortune 500 company guy. But he had great business intuition and he was just, just, he was just so supportive. But he was also incredibly aggressive. I mean I think he, you know that's probably where I developed my affinity for um, using F bombs more than pronouns. I don't do that as much anymore. But I mean I do remember I learned a lot from him including um, emphatic language. But the second was, you know we went through some really grindy stuff. I mean went through like a complete, complete decimation of an industry. Went through 911 and all the implications. 90% of our customers were Fortune 500 pharmaceutical and biotech companies that were all in the tri state area that had all been devastated to some degree BY Kind of 9 11. We were in cash flow negative business. We had to get the profitability very very quickly, which we did. We survived. In fact we were the only investment uh, from our series A investors that uh, were individuals as well as institutional investors. We were the only investment that returned positive return, invested Capital from that era, uh, in, you know, to again, some degree luck, some degree great. And then I had a pretty serious set of personal circumstances where I'd go work all day and then I'd go and spend the night in the NICU with my daughter. It was a preemie from 9 till 4am M. Then I get up and make my way to the office and start the day again. And so you end up finding out that, um, entrepreneurialism is a lot about grit and some of the things that I said earlier. But then, you know, sometimes it's just, it's just luck and it's sticking in it. And who can. I heard someone that was a great endurance athlete describe the other day. You know, the key to winning an ultra endurance competition is basically because they're all starting great shape, they're all eating well, they've all trained a lot, they all have great coaches. Kind of his summary was, hey, who can, can withstand the greatest amount of discomfort the longest? It's kind of what it comes down to. And to some degree, you know, that's also entrepreneurialism.

Speaker B: Yeah. 100. I, I totally agree. I think, you know, if you, if you, if you hang around long enough, the courts, you know, you're gonna, you're gonna be able to play a high level. Um, no, that's, that's amazing. And we're going to talk a bit about, you know, later on about why, you know, those two bosses you mentioned were great bosses and again, why, what, how that's actually translating to how you have become a boss and a founder and a CEO. Okay, so you've done that. You were at healthology. Um, you did some more time with Univera. Yeah, Univera, again, that was another kind of like a health tech company. Consumer tech company.

Speaker A: Yeah. What was the consumer products.

Speaker B: And again there did you come in. How big was that organization when you joined because you eventually became the CEO

Speaker A: For a while I ended, I ended my career there as CEO International. I started as VP Sales and Marketing, and then, uh, within a couple years was president of North America. So most of my time there was spent as running north, uh, America. And then the last, the last year that I was there, I was, uh, running International. Um, that was a roughly $36 million a year business when I joined. Um, when I left, we were, when I, when I, within a couple years we got that to about $100 million run rate. We went through numerous iterations of kind of like growth and then retrenching and growth again, uh, depending on how interesting it is. You know, I could, I could share some war stories from that.

Speaker B: Yeah, of course. Please do. Please do.

Speaker A: Well, I'll tell you what happened. I mean, very specifically, I had a. I will not use names on that. I actually also worked for a terrific. Another terrific CEO.

Speaker B: Oh, man, you're lucky, man.

Speaker A: I got some great advice, by the way. When I was really young. Um, I got some really great advice. And the advice was the guy said to me, don't pick your next job. Don't pick your next job based on your next company. Pick your next job based on your next boss. And I thought that was really great advice. And there's a variety of pros and cons to it. I mean, the market has changed now. Experience is now a little bit different, which is. I think that that kind of gets offset versus today vers versus what it once was for me 20 years ago. Um, and then also, you know, bosses come and go, but I like really leveraged every kind of ounce that I could out of the great bosses that I worked for. I also worked for a few doozies, by the way as well. I just don't. I just don't share those. But I, I portion of great, of great bosses. And so, um, I came into this company and we. This was before I was president of North America. I, uh, was promoted to president of North America. I was head, uh, of. I was VP of sales and marketing EVP in North America. And um, we were growing really, really rapidly. You know, we were. I was in charge of pretty much all commercial. And this is when we went from like 36 million a year to 100 million a year in revenue in a period of two years. We were crushing it. Explosive.

Speaker B: What happened? Why, why, what, what was that?

Speaker A: You know, I think it's having the right products, the right commercial energy, get, um, focusing, focus around, um, your market makers. You know, we developed a plan that worked incredibly well with some sales levers that were proven performers and we just triple down on them and those on those. You know, rather than trying to get underperformers to perform, we really focused all of our efforts on top performing, uh, sales channels, sales verticals, as well as salespeople. Uh, and that's where I spent almost all of my time and you know, had a great team. I mean I had a great, great team of people that, you know, I probably ended up doubling or tripling the size of the staff and I just ended up surrounding. I got the good fortune of surrounding myself with some really talented people. Not only had some Great bosses, but I had some great colleagues and teammates that were working for me. So you know, I could kind of like distill it down to like very specifics. But I mean, generally I think that's what it was. But then we had this huge launch event. Um, we were, we had decided. And this, I will go on his record as saying I was really, really, really opposed to one of these decisions. In fact, I think it's what ended up getting me promoted. But one of the things that helped get me promoted shortly after this, but we decided to change technology platform RPS and launch a brand new product that um, did not get fully tested. Uh, there's this thing you do when you're launching nutritional products called accelerated stability testing. And basically what it means is you take this product that you're manufacturing and then you throw it into a chamber and that chamber is like heat and pressure or humidity. And you're trying to accelerate what two years of life would be like in a period of 30, 60, 90 days to see is it stable, you know, does it get contaminated, et cetera, et cetera. Well, basically, a very long story short on this, we go to this major launch event. I've got 5,000 sales reps that are at this national meeting. Uh, we literally had just almost. No, we basically had tripled the company's revenues in under two years. And there was a separate group that was launching the technology. I did not have have the CTO reporting into me. I did not have the CPO or like the R D team reporting into me. But basically the gist of it is, um, the technology platform did not migrate and we had um, a fatal failure to the point at which like 100,000 orders all got lost and screwed up and they could never reconcile which customers got which orders. And we literally couldn't ship product for like 90 days, 100 days, something like that.

Speaker B: Oh my goodness.

Speaker A: Which, you know, is pretty devastating. And also it was kind of an Avon style model where we sold direct, but we also had sales reps selling the product and this was like income for them. Like this was paying for school or books or car payments or mortgages or.

Speaker B: So that's the multi level marketing model, right?

Speaker A: It was, yeah, it was, it was, yeah. I typically kind of classify it more as direct sales, but it would, some people will call it multi level marketing, but it was more like kind of Avon style, uh, or. Uh. Yeah, a bit of that as well. Yeah. And so that was a, that was a nightmare. So that business. And then also when we launched this product Literally, uh, it started fermenting. Now we, the product, we opened it up at convention, um, and someone, the head of operations, missed some steps, and it was literally like fermented grape juice. And so we had to trash all that product. And it was kind of like old Coke, new Coke. So there was a decision that was made to, like, forego the old product in favor of the new product because it was so much better. Except it's not better when it's fermenting, when it's not supposed to. And you have a huge problem in your hands when you launch a, uh, product that you now have to scrap all of it, but you've stopped production on your old product. So we had this double whammy, which is we couldn't ship. We lost all these orders for all the other SKUs, and then the two SKUs that kind of, or, uh, the one skew that represented probably 50% of our revenue, we'd stop producing and replace it with another SKU that was basically blowing up. And that was a disaster. I mean, we literally, that business, we got lucky to save that business. You know, it went back down to like, probably 30 million, 35 million in revenue or something like that over a period of time. And there were a lot of people that worked really, really hard to reboot that business. So kind of in, um, you know, a variety of. Variety of people got moved around in different seats. And, you know, we had some major problems that emanated as a result of that. But then it caused us to really reboot the business and we started growing it again. And so we went from like 35 million that year. Like, that was the new low, back up to like 60, 65 million in revenue a year later. So we grew it by 3x. Then it, it got crushed by 3x. And then we grew it really rapidly thereafter, again by 2. Uh, getting it back to 2, 2 1/2x was way harder the second time than it was to get it to 3x the first time, because we'd just gone through a decimation. You know, of course the people that were responsible for that all got either replaced or promoted. Kind of as a Korean thing to do is to promote people when things don't go. Sometimes you do it when they go well. And sometimes when things don't go well, you get promoted. So you never really know. But, um, in that, actually, at that point, I did get promoted, but I didn't get kind of promoted to some, like, sanctuary division. I ended up getting promoted to president of North America at that Point and that and then had another new CEO come on board. Amazing. Um, and that was a wild, wild ride. But I learned a lot. You know, one of the lessons that I learned from that is, quite frankly, this was not my first time learning that lesson. And there was, um, quite a bit of conflict, uh, I mean, to the point where, um, I pretty much went to the mat, uh, for my career, on and on what I thought was right for the company on these decisions, because I was very violently opposed to switching a tech platform that we hadn't tested and weren't running in parallel. We weren't running a parallel system, we hadn't tested it, we hadn't been doing test transactions. So I thought that was incredibly stupid and reckless. And then also I'd done enough nutritional products to know that you need 90 days AST and you don't want to ever shortcut that because there's all these unknowns. And the reality is, you know, whenever you're facing, there's so much risk that we all face as entrepreneurs, there's so much risk that my perspective is wherever I can, I try to de. Risk myself, you know, and so kind of like a, a metaphor that I might use is, I love riding a motorcycle. I've got a couple motorcycles. I love riding them. I would never ride without out all the gear all the time. There's that expression for anyone that rides a motorcycle. It's called atgat, which stands for all the gear all the time. Which means, like, I am not like, riding a motorcycle is a calculated risk. But I think it's kind of a smart risk if you're willing. Wearing a helmet and you got all the gear and you got armor in, you got boots and you got the gloves. But riding a motorcycle with sunglasses, a tank top and flip flops is just sheer stupidity. It is just absolute stupidity. And, and that's kind of my perspective when I draw a metaphor around kind of like learning about risk and risk reduction. We're all taking risk all day long, whatever we decide to do. I mean, whether we're riding a bike or doing a startup or you're taking your kids on an adventure or whatever it is. And I'm all for risk. Uh, but also I think it's kind of temple jumping or Russian roulette. If you're given the opportunity to reduce risk, risk and you choose not to do it because of hubris, you're. You're arrogant or you think, yeah, you think you're so smart and that you got everything figured out and it's always going to go your way. And it doesn't, it doesn't even. You know, I know a lot of very successful. Excuse me, I know a lot of really smart entrepreneurs that just happen to have everything or the nothings go their way. And, you know, I don't know. You don't, you don't, you don't hear it from them. And then I know a lot of entrepreneurs that kind of got lucky along the way, and you happen to hear from them all the time. And, you know, better to be lucky than good, as the expression goes. But it'd be nice to be both. And the reality is, I look at, you know, a series of life events where really comfortable taking risk and in some cases, really big risk. But, you know, I think it's also smart to de risk along the way. And that's one of the lessons that I just continue to, to see occur in not only my career, but as I'm observing it as a board member and advisor or just reading articles, which is like, hey, wherever you can de risk, you should try to do that because you're all, you're, you're absorbing a lot of risk in other areas as well. Um, and you need some offset.

Speaker B: Yeah, no, absolutely. And, you know, that's something that's come up quite a lot with a lot of the entrepreneurs I've spoken to. Man, they talk about de Risking, and, um, de risking looks different to everyone. Right. Like, it really depends on where you are in your life and what you can afford to risk and what you can't.

Speaker A: Right.

Speaker B: Um, so I want to switch gears now and talk a bit about, you know, flow water. Um, you know, how, you know, because obviously coming from your career, you know, you went on to do a number of other roles as a CEO, uh, um, as a hired gun, as I like to. I like. I like to say, and starting early. But, um, really keen to understand where the, like, what was the genesis for flow water? Like, how did that come about? You know, why water, uh, does water need to be innovated in. I don't know. Um, you know, we've seen some great things with, you know, like, water aid, like, on the more philanthropic side of things, or like charity water, who have done some great things. But I think in terms of, as a, as a business, this, you know, you know, is. Is quite refreshing. No pun intended.

Speaker A: Well, you know what's so funny? It's, it's. It's going to be hard to go through this without, like, 10 other water puns. You don't realize how many Puns that we use as a part of modern language until you get in the water industry. But yeah, damn, um, I didn't even

Speaker B: notice until I said it.

Speaker A: Uh, we'll be prepared to be amazed.

Speaker B: So yeah, like, how did that come about and, and, and like what made you go down this, this, this road? Fruit?

Speaker A: Well, there's, there's a couple pieces to the story. I mean I think like anything that's an evolution as well. Right, which is how you start. Well, how you end is not really how you start in most cases and in many cases it's, it's quite a bit different than how you start. But um, this, the start of the story is that I actually met a guy that was the founder of the company. He was looking for a co founder and you know, the primary, the primary revenue model according to the projections at that time and you know, early stage, your projections are all over the place. Like you don't know. You have a bunch of hypotheses. You don't really have a lot validated. So you just don't know. And then as time goes on it becomes more predictive and more predictable. Uh, but even still, you know, you just, you don't start to know until you really get critical mass, you know, and then it's more possible to forecast and project. But originally a big portion of the P and L was really oriented around selling water, um, in a refill station, ah, to consumers where they would, instead of paying for a bottle of water that they would refill their bottle for 75 cents, for example. And so the idea behind that is, well, hey, this is silly. We're shipping water all over the planet. It. And you have water kind of in your backyard or in your kitchen or in your grocery store or in your company or your gym or what have you. You should just use that. And so that, you know, kind of. And so I met the uh, founder and joined him as co founder. Right as um, like before the first seed money, the seed money was kind of getting into play at that point and met him. This is January of 2013. So it was eight years ago. And then I really was kind of all in starting March, April 2013. And then we got our first seed of funding closed in June of 2013 or so. It was roughly $950,000 of seed funding that came in the summer of 2013. Um, so kind of emanated out of that idea. It's grown over time. Uh, if I were to really synthesize then I'll go back to your other question. About what captivated or compelled me to lean forward into it or get excited about this. Ultimately for me, our opportunity and the way I would define it is we have a radical opportunity and to some degree I feel responsibility really to change the way the world thinks about transports, consumes, drinks and enjoys water. And by that I mean we have a massive problem. CO2 byproduct, you know, plastic pollution, microplastics that are in the environment that are caused by single use plastics, pet water bottles. It is a huge issue now. In fact, you drink on average, you drink or eat on average one credit card worth of plastic every couple weeks. And in fact, if you were to fill up in the us, I don't know what it is in the uk, but if you were to fill up in the US and I think the data is not that different worldwide, if you were to fill up your hydro flask for example, or anything that's about 1 liter in size with uh, tap water, or you were to buy a one liter plastic bottle, both of those in the US would over 90% of those samples would contain over 300 microplastics of uh, particulate in the water. So we are now, you know, this didn't exist 50 years ago.

Speaker B: What is that? Sorry, what is that?

Speaker A: It's literally little pieces of plastic. It's like little, it's like, like, it's like nanoparticles and micro, it's not even down to nano, it's micro particles and plastic, plastic that uh, are, you know, like, it's, it's like the equivalent of tobacco smoke, but in your stomach with plastic in many ways. And that's why I draw so many metaphors to big tobacco and big bottled water and what happened in the 60s with big tobacco and what's happening now in the 2000s with big bottled water and changing consumer sentiment and whatnot. But I think ultimately the big idea for our company is we can radically change the way that water is consumed. And the way that we do that is by. It's not, you know, this whole story about recycling, this is greenwashing by big bottled water. I mean, people tend. First of all, first of all, let me be clear. If you got a product that is plastic and you can't get it any other way, you know, I'm a bit of a pragmatist. Which is, should you recycle that? Uh, absolutely. Is that a good message? Absolutely. If you're a big bottle water company that, and you're telling everyone, hey, we recycle, this is not a problem. Well, that is, that is total bunk. I mean, for, for decades, people have been working on improving recycling rates, and it's still about 20%. 20, 20, 22, 23%. Even in places in San Francisco, it's well under 30%. And this is a market where everybody recycles. It's still less than 30%, but everybody recycles. I mean, this is, everyone says they do one thing and then what they actually do and what ends up actually making its way into to a recycling, uh, plant is very different in terms of the actual data. And so the real story is not, well, you know, keep recycling. And this is made out of 98% post consumer recyclable material. That's just greenwashing. The real story is, hey, stop, stop using plastic. Stop uncycling is what we would describe it as. And I would describe it as a good one. How do we, you know, it's a little bit like, I mean, the metaphor, like, let me just get back to the tobacco metaphor. Like what big bottled water basically is saying. It'd be the equivalent of big tobacco saying, you know what, like Marlboro red's too much for you. Just move to Marlboro Lights. Like that's the solution. Just step it down. Just step it down. Like if you're not, if you're not, if you're not man enough, you know, to be a cowboy smoking reds, then just move to lights, you know. And that's kind of the story of recycled pet. And our perspective is like, hey, you want to get rid of the destructive effects of smoking? Well, the only way to do that is to stop smoking. And that is the parallel for single use pet. Now here's the irony is we do not have a problem in most of the world. In most of first world. If we're looking at developing nations, different issues, different problems though, by the way, they actually can get fixed quite similarly. But I'll set that aside for a second. You look at uk, look at United States, um, numerous, numerous, numerous other markets that I can refer to as well. But we don't have a problem called, gosh, if I could only find a faucet. That's not the problem that we have. I'm. No one's sitting around saying, gosh, I wish I could find a faucet, my gym or my company or my hotel and a sink. Or people are basically saying, hey, I don't like what comes out of that faucet in the U.S. i'll just again go back to data. 70 to 80%, 70 to 80% of consumers in the United States either do not like or they do not trust what is coming out of the tap water. And that's because it has microplastics in it. It's because it has chlorine in it. It's because it has products like glyphosate, which is, uh, the chemical compound that's commonly known under brand name as Roundup in it. Uh, lead, you know, lead contamination. 25% of random sample test sites over the last couple years done, uh, by Popular Science I think it was in 2017, showed that 25% of random test sites had higher than EPA acceptable levels of, ah, lead limits in the United States. That's a huge issue. I mean that's just lead. You know, you throw chlorine in there and you add, you know, all these other things in there. What you're left with is consumers either saying, hey, either this doesn't taste good, this doesn't smell good, or this does not sound good to me and I don't want to have that stuff kind of, of contaminating my body potentially. And by the way, let me be really clear, this is no fault of municipal water. I mean municipal, uh, treatment facilities have done an amazing job. And what we've done is we've given them an impossible task. We've, we've, we've polluted the environment with Roundup and you know, the municipal water was never designed to treat Roundup. Uh, we have contaminated our oceans, lakes, rivers and landfills with, with, with, with trillions of tons of plastic waste which doesn't biodegrade, it photo degrades. One piece turns into 2, 4, 8, 16, 32, 64. And to the point at which it's plastic or nanoplastic, to the point at which plastics, uh, will outnumber aquatic life and fish by the year 2050. And now we're literally eating and drinking our plastic. Um, and it's no fault of municipal water. They've done an amazing job, all things considered. So our solution is, hey, how do we take something that's pretty freely available, really inexpensive and get consumers to fall in love with it and prefer it to their favorite bottled water? And that's what we're doing with flow water. Flow water solution ends up being how do we take, take kind of the last mile, and in this case it's literally the last few feet of a water line. Put a flow water device onto it. That basically is like having a little mini bottling plant. You know, it's like having your own little bottling Plant at wherever a water line is that removes all the impurities, the pharmaceuticals, the herbicides, the pesticides, that removes viruses and bacteria, that reintroduces alkalinity, uh, remineralization that makes it taste great using a coconut carbon filter. Like how do we do all these things that would be far better than a bottom plant with fresh water that turns it into something that you prefer to bottled water. And that's how we believe the problem gets solved is let's use existing infrastructure, let's make it fantastic so people prefer it and then let's let people naturally decide, hey, let's un cycle like let's not even buy this crap to begin with. Let's just use what we got at our disposal. All.

Speaker B: Yeah, no that, that makes a ton of, a ton of sense. And like I guess from a practical perspective, how does it work? How does one go about implementing this in I guess into their homes or into their businesses? You know, how does it work?

Speaker A: Well so we started um, we. And, and I'm going to kind of take a cue from some of the pre interview dialogue that we had if I may just in terms of like how started is it? May I?

Speaker B: Yeah.

Speaker A: Um, so you know you start with a hypothesis and sometimes that hypothesis tested and you've done some kind of beta tests and pilots and you know you've looked at things like the tam, the total addressable market. You know and so we knew the data around how many hotels are there and how many schools and how many corporations and gyms and you know, universities versus K through 12 and all that stuff. So you, you develop, you know, you look at the competitive products. You know our competitors are water fountains or they're five gallon jugs or they are water coolers like these black box water coolers primarily. Like that's kind of like the first gen old school competitors that we're replacing, uh, so that we can ultimately replace bottled water. But um, you know, the way that we figured out our verticals and who to sell to and how much will they pay is by getting out in the market market. And so you know my, my perspective on this is um, you know I've sat on a good number of boards, uh, as an advisor, board of directors and you know, lived in Silicon Valley on and off for, for 12 years. Um, some people are really, really good at doing this. I think some of the better companies and the, the better CEOs are really good at kind of owning the customer experience early on to understand what the customer thinks, what do they buy, what do they not buy. What do they like? What do they not like? What are the product attributes? Attributes? You know, what is. What does kind of price elasticity look like? Because you can't run a price elasticity study. I mean, you can do market research, but you got to have some customers that are willing to buy to actually be able to run elasticity studies. And early on, you're just trying to find out kind of this expression, will the dogs eat the dog food? You need to be there for that conversation. You really can't farm it out. And so one of the things that we did, and this is everyone in the organization ultimately, is, uh, when I say it was everyone, it's like two of us for the first time.

Speaker B: Yeah, I was gonna say, how many of you?

Speaker A: We were able to rally the troops and get both of us to do what we said we were gonna do. But, you know, then after that there was like a couple more people and three, four, five. You know, so about a year later, there are about five people in the company. Um, but, you know, we're all customer centric, focusing on what do they like, what do they not like? And so what you do is you just go and you start sitting in front of customers and pitching and pitching and talking and asking questions. It's not just pitching. It's starting by asking questions like, well, what do you do? How do you view the segment? What do you pay? How do you buy? What are the ways that you buy? What, like, about what you buy? What do you not like about you buy? Is this a problem that you actually have in the market? You know, and you're trying to figure out, well, like, are we, are what we solving for the right things? Are they real things? Or do we need to pick and choose what we're resonating with the end user? And so, you know, we started with universities. We looked at, you know, middle schools, elementary schools, uh, gyms, hotels, you know, grocery stores, seven elevens. Um, and it's really through a period of trial and error and, you know, you're overlaying, like, what you intellectually believe to be true, looking at the TAM and, you know, buying behaviors and, you know, competitive products and gaps. But then you also got to get out in the market and just talk to a bunch of people. And so we started seeing a lot of success in CrossFit. Like, that was a hot. That was our hottest kind of vertical from the get go is, well, here are healthy, fit people. They care about performance. Like, they are geeked out on supplements, branch chain amino acids, pre Post workout, the type of protein that they drink when they eat all, you know like these are.

Speaker B: And so yes, it's a religion. It's a religion, uh, similar to kind of like Peter from RX Sparse. Right. Like that's, that was his community initially.

Speaker A: Yeah 100 and it's very viral. I mean it's like well once like one CrossFit gym has this and it's like well wait, why do these guys have a flow water station and my gym have a flow water station? So we, we uh, worked early on. Jason Calipa, who um, is a, is, has been a friend of the company. Um, he's five time CrossFit world champion. Amazing, amazing CrossFit athlete. Like this guy is just, and he's a great business guy. He's, he owns half a dozen different CrossFit gyms and he develops content. He was one of our earliest customers here in Silicon Valley. Big, um, advocate. But we just really started uh, exploding within CrossFit and so we kind of just doubled down there, right? And then that CrossFit kind of served as a precurs to get into other fitness. So then you know, CrossFit, yoga, Pilates, you know, spin, normal kind of quote unquote normal gyms as well, kind of non specialized gyms, um, just retail gyms. And then that kind of served as a, you know, basis into hotels and so on and so forth. And so to go back to your question, really our primary focus pre pandemic were hotels, schools, corporations, gyms, retailers and then we did a ton of event business. Uh, those have obviously been affected but our businesses continue to do really well in spite of those being affected. Um, I actually think this last year, I mean no one would wish for this to happen again, uh, for all the obvious reasons. Uh, but you know, there's silver linings and everything. And I think just from a pure business perspective, this last year has forced us to think about things differently. And I think coming out of this we'll be in a much stronger position as our core verticals rebound. But we've also found other great verticals like schools, you know, schools, you know water fountains in schools are no longer seen as an acceptable solution. I mean no one wants to be drinking or filling their bottle, uh, off the back of a water fountain that someone's been kind of like slobbering over and drifting over. Like I was just the wonder why

Speaker B: they allowed that in schools.

Speaker A: I mean I, I, I, I do too. I mean that was pre pandemic right now like kind of post Post Covid like, well, no one would ever, ever think about doing that. I don't think I've seen anybody drink out of a water fountain in, uh, in a year. And so, you know, we now are doing really, really, really well within schools. And we just signed a major, and we've signed probably 10 major deals. We're putting flow water refill stations throughout entire school districts to replace or supplement their water fountains with, you know, fully touchless systems. So that's been how we've gone to market kind of over the years. And you know, there's a pre pandemic version and there's, there's a post pandemic and then there's a say, hey, when things get back to normal, it actually probably ends up being even more accretive than it was before. And then part of our strategy also is to go and get into the consumer M household. Right. Which is, um, our strategy is ultimately our belief is that every consumer deserves access to clean drinking water that they can trust. And our mission is to deliver that water to wherever consumers work, rest and play. And in the process of that, that put an end to single use plastic water bottles. So what that means is as we look at developing products and we've got, you know, half a dozen different products that are in various stages of product development which will roll out over the next five years, is flow water for your countertop, flow water for your faucet. We actually just launched a flow water faucet filter. So for $99 US you can have kind of a flow water light version. It's not the exact same version as is in a major system, big system that, you know, six feet tall that's sitting in a gym of course, because this goes on your faucet, but it's a five layer filter that takes your tap water and turns it into something really, really good for $99. And our idea around this is a very simple one, which is if you can have better water wherever you are, that is worth paying for. And it's a heck of a lot cheaper, uh, and more affordable than buying anything prepackaged. And it's infinitely better for the environment.

Speaker B: Yeah, no, that, that makes a ton of sense. Um, and I just want to talk a bit about, you know, obviously, you know, today you guys have raised just like you said about just, I think it's just over $22 million, um, Series B rounds, which is incredible. But you know, obviously your background, you know, has predominantly been in like around sales and growth around that. Can you just talk a bit about the growth strategy and, like, how you're thinking about sales. So, you know, you identified, like, the CrossFit community. How do those conversations go? Like, what does that, what does that process look like? What's the sales cycle like? Um, obviously you were probably, you know, the first salesperson, as you said. How, how are you thinking about sales? Because I think a lot of our listeners would love to learn more around kind of like B2B sales as a new company. Right. Like, I'm the new kid on the block. How do we get this?

Speaker A: Uh, I'll, I mean, I'll. I'll kind of go. I'll just dig into, like, what we did and then how we scaled it and what worked and what didn't work along the way. Um, and, and I mean, just to be really clear, I mean, I'm hopefully doing an adequate job of sharing some things that did work and didn't work. Uh, because there's plenty that didn't work along the way. I mean, I, I, you know, I always, like, roll my eyes when I listen to these podcasts, and it sounds like everything that every entrepreneur is probably, like, just brilliantly and according to plan, because that is total bunk, at least for me. Like, you know, I'm got. I mean, I've got a lot of things that didn't work, and it's in. It's trial and error, and to some degree, it's grace that it hasn't ended up being worse than what it has. So we've had some things that have worked better than others, and I think we've done more things right than wrong. But I just want to be clear that we've not done everything right. And I'll share some stories along both along the way, but I think the first thing is getting out in the market and getting in front of customers and like, literally picking up the phone. It's not like, Let me explain what it's not. What is not is having someone go set up 10 appointments for you, you know, or it's not farming it out to a call center that can, like, go and do some, you know, market research is fine. I mean, do it, of course, but it's not like saying, well, go, let's put these two call center people to go and pitch and see what they say and then have them bring it back to us. Or it's not, let me ask five friends that are in the industry, you know, to kind of like, let me pitch them them and hear my mock presentation. It is literally getting in front. It's Literally picking up the phone, calling. So like, let's use CrossFit as an example. It's like you as an executive or a founder or co founder or CEO or whoever. I actually like when everybody in the company does this. And in fact, sometimes I get these whirlwind moments where I'm going to be adamant and ask everybody to call five customers that week. And I don't quite end up making that happen with like all my C level, my CFO and COO staff. But someday I'm gonna, someday I'm gonna do more of a rotation where I get people back into the world of hearing from customers directly. Though they still do that. They, uh, still talk to customers. But for me this is, hey, if you're in the CC, you're picking up and you're calling 10 Crossfits or 30 Crossfits or 50 and you're cold calling them M. You're emailing them and you're getting a pitch and you're pitching them, you're like, hey, like, I want to, I want to. I've got a great concept. We've done some testing on this. CrossFit users love it. They have better workouts, they recover faster. They think they recover faster. It causes them to drink more water and it increases your visibility or your brand affinity and your gym experience. And it's less than four bucks a day. And I'd be willing to let you try the product for free. Can I have 20 minutes of your time or 10 minutes of your time to talk to you about this and get your feedback right? It might be that or it might be, hey, I'm, I'm, I'm starting a company. I got this new concept. I really would love 10 minutes to get your advisement on how you think about like, water and what you do for your gym. Like, it, it's, it's whatever it takes to get the, ah, appointment, like in the world, in the world of like maintaining your character. I mean, not, it's not a, it's not a scam, like, but, you know, it's like, hey, it might be market research and then you're doing that, or it might be, hey, I got a product or hey, I got members, members that love this product at another gym. Can I come by and talk to you about it? And so then it, you know, like drawing it down. It's going and having 10, 20 pitches with those CrossFit owners to tell, you know, talk to them, hear from the market, see how they respond, pitch them, see will they, will, they will they try it. Will they sign up and will they actually sign an order form? It's not like sitting in a room of like, hey, what would you think about this idea? I mean, yeah, of course at some point we're all there where we haven't launched a product and we're like, hey, what do you think about this idea? Idea. But the second you have a commercial product that someone can actually write a check for, like, the question becomes, can you get them to write a check and sign a contract and sign up for it? And you're only going to find out by going out and if in sitting in front of the customers and then that same parallel is okay, like, well, if there's a there there, then you find out, like, okay, what are the. Like, let's. Then, then we said, well, let's hire a sales rep for CrossFit. All right, great. And then we're going to hire a sales rep for fitness and a couple, three sales reps. And then we're going to spend a lot of time working with them on what do they, what are the metrics? Like how many deals a month can they close, how many units? How, uh, what's, what does that represent? Total contract value? And then we kind of find out. You know, you only really find out by being involved in the process. And you find out, okay, well, what's the index? Like, what's the index? What I, I knew and I know to this day, like what, you know, what are the comps in the waterfool industry, the company units? What's the total contract value that they can do on a monthly basis? Basis? And now I have what our index is, uh, in a flow water perspective. Like, what can we do? What does good look like and what does great look like? And so you develop a set of patterns and indices of like, well, is there a market there? What will they pay? What's the close ratio? You log it all, you put it into a CRM by, you know, you don't have to sign up for Salesforce. And we use Pipedrive for the first eight years of this company. Pipedrive, I actually think it might be a British company. I'm not sure about that.

Speaker B: But yeah, I'm not sure either.

Speaker A: Even it's like, I don't, I don't even know what it is because like when I signed up for it was like seven years ago. And now like, I'm not in the nitty gritty of that anymore. But you know, I don't know, 10 bucks a month per user or something like you don't have to be on sale, but you do need to log the data. You need to be able to look at what the funnel looks like and the calls to close ratio and everything along the way. And so being involved in that is really essential. And then you can develop a set of indices and a sales funnel of uh, like, hey, you make this many calls, you get this many closed deals. Uh, and then we kept moving from vertical to vertical. Then we said, okay, well let, let's check this out on hotels and let's check this out in schools and let's check this out on retailers and let's go to events. And instead of paying to go to events, what if we actually sold events and said, hey, you should, ah, rather than us paying you to sponsor your event, you should pay us. And here's why. And we did that. Um, but you're not going to get somebody that's like super junior to the company that's not kind of at the founder level to be able to go and sell that story in. Yeah, uh, you have to be sitting at that seat to change the commercial landscape because you're trying to do something really hard, trying to, you know, decommoditize water. You're trying to like, get someone to pay for events when they've always been paid before, whatever it is. Now fast forward to where we are today. Um, you know, the way I look at our business is really direct and indirect. And so we are, uh, working on, you know, building out our own W2 Salesforce market to market couple three sales reps where they call on, you know, a variety of B2B customers. Um, in Dallas, in San Francisco, in Los Angeles. Future markets will be Chicago and Seattle and New York. So I don't want to be in 50 cities across the U.S. because, you know, you start to lose some of the economies of scale. And what I really want to do is kind of own, so to speak, the top 15, 20 cities in the US where we're going and getting flow water into the world's best brands, which is got, you know, we're on our way to 10,000 customers right now. Um, um, and you know, some of the world's best companies and you know, not just California, but across the United States are using flow water as their preferred water of choice. So the focus is on continue to accelerate that by going into owned and operated markets. That's what I call kind of our direct business. Then there's an indirect part of our business which is, you know, a lot of people in the tech World will call it the long tail. Tail. Right. So the long tail is the other 90. I mean it's kind of the 8020 rule. But even 1090 which is you know, 10 of the customers make up 90 um of the volume. It doesn't quite work like that. Ah though in the BDB verticals. And so I'll give you an example of what the M. Long tail might be. There are in the US 10 million SMBs, small and medium sized businesses that are out there. Well that's a massive, that's a massive number of customers. I mean if we just penetrated 5% of those uh, in the next five years, just those SMBs, that would be most of my entire five year projection. For a flow water business that takes us well over you know, $150 million a year business uh, per year. So how do we get there? Well you know we can use partners. I mean part of this is the indirect basis which is we're now rapidly accelerating relationships. We work with dealers, distributors, brokers, resellers, food services companies, companies where they already have an installed base. You know. So these 10 million SMBs are already being serviced for a variety of, by a variety of companies for a variety of different products which you know, maybe it's a dishwasher, maybe it's coffee, maybe it's micro market, micro kitchen stuff. But in any case um, our, what we want to do is add value to the partners where they can add accretive sales to their portfolio by bringing flow water in. And we get incrementalism as a result of being able to grow that channel. So our, our business really is direct and indirect, direct local as well as national. Um, and that's how I think about it domestically. And then us or excuse me, OUS is a different story. But we are just now we just signed our first four international partnerships and we're just starting to forge forward on that as well. Uh but 95% of our primary focus still remains domestic US at present.

Speaker B: Awesome. Awesome. Makes sense. And I love the way you kind of think about sales and you're breaking it down. I think that obviously that comes from your, your, your, your sales background and I guess you know, not a lot of founders will have that experience and I guess that confidence in, in like saying okay look they from day one with you know, just our products, this is how we're going to go about sales. Like you have a very clear strategy and I guess some people just, just wouldn't think about it as clearly as you've put it, which I hope they will now. Um, but I guess in terms of like, as a company right now.

Speaker A: Can I just add one thing to that though, please?

Speaker B: Yeah, please.

Speaker A: Because I, I think, I mean, it's very nice that you articulated and summarized it that way. I would just say, you know, it sounds really clear now. It was, it was a really messy process to get to clarity now. Right. So a lot of spinning and not because, you know, like, we weren't competent at, uh, it. It just. There's so much uncertainty. And so I, you know, I would say if you're a founder and you're going through this or you're a C level exact, and you're going through it and it's really uncomfortable and it's messy and it's really unclear. Clear. Uh, you're probably. Exactly, you're probably going through a good process. I mean, just by the fact that it's unclear and messy doesn't mean it's necessarily good. But I'm saying if you're actually going through the rigor of trying to understand from a customer perspective, you might just need more data points. You know, if you're unclear after 10 customer interactions, you might need to go get 100. But it will become pretty clear at the output, uh, and at the end. But, you know, as you're going through it, it's kind of a messy process as.

Speaker B: Yeah, no, totally, absolutely. Yeah. And just to go back on that as well. And you know, just before the call, just before we actually started, you were talking about, you know, you had to change strategies. Sometimes a lot of things didn't work out. So can you delve into a few things that didn't work where you had to like, be like, oh my God, like, we just wasted X amount of years doing this and this didn't work. Can you think of times where that's happened with flow Water?

Speaker A: Um, yeah, for sure. Um, I mean, I can think of a lot. I'll give you a couple quick examples.

Speaker B: Um, and also it'll be good to kind of delve into the product development of things because obviously this is like a hardware solution. Um, so I don't know if your co founder is into hardware or anything like that, but how did the product development come about as well?

Speaker A: Yeah, okay, great. Uh, so, well, let me answer your first question in terms of like, things that did not go so well, that spent a lot of time on that, you know, could be. Could get surfaces. Learning one is on people, right? Which is, um, I learned a lot. I heard someone tell me the other years ago, but I started reflecting on the other day. I remember a founder telling me many, many years ago, so things that, that don't start well generally don't end well, well. And um, I don't think that's always the case, but I think that's a pretty good truism, which is like, if things are pretty messy going into it, um, you know, from the very beginning, it's unlikely that things are just going to become magical later. I, my experience, you know, definitely corresponds to that, which is just, I'll use an example with employees, which is, look, employees, teammates, investors, advisors, board members, spouses, kids, like, whatever, you know, people, humans, um, the reality is, you know, you're going to go through all sorts of ebbs and flows and ups and downs and um, like that's number one. However, number two is, you know, my experience has been that like, when I've been disappointed with someone's performance and behavior over a period of three or six months, like, if I'm looking at that and I'm like, man, like kind of on the verge of getting it, they should get it. The resume says they should get it. All these companies they've worked for, but they're just not getting it. Like, they're not clicking and you know, they're just not turning the crank. They don't have the thirst or the hunger or the tenacity, or they're not coachable or they don't want to learn or they don't want to figure it out, or they just are out of energy. Uh, those are the cases where I'm like, man, I wish, I wish I'd cut sooner on that, you know, which I, I, I would probably tend to give people longer Runway to make it work. Not, not years, but sometimes, you know, you'd be better off to cut at 180 days or 120 days than, you know, day 270 or year one. And if people aren't like clicking within like six, nine months, three months, then there's probably a problem there. That's one example of just from, from, from like lessons learned and things that didn't go well that I look back and I'm like, man, that was a waste of a year or six months or nine months or money. Uh, now that being said, I've also termed people within 45 days. Uh, so, you know, I'm, I, you know, that, that to some people might sound pretty harsh, but you know, sometimes when you know, you know, but even still, um, I wish I, I, I, I wish I could force, um, myself to Be even more aggressive about looking at indicators earlier on. Uh, and it's just hard to know. Uh, but they don't always, you know, I look back at the people piece of it and some of my best bets of course have been on people. But then some of my, you know, mistakes have been on people as well and holding on to them too long. Uh, number two, from a business kind of selling and commercialization perspective, I mean we originally thought that universities were going to be really, really good. Uh, what were what you know, a big part of part. If we look at the original P and L, a huge portion of that projected 5 year P and L was selling to universities or selling to kind of vending machine companies where we would have flow water dispense for 75 cents and they would swipe a credit card and we would make money and we would rev share with the university and we would replace soda fountains or bottled water vending machines or you know, the uh, bottled water sales at the bookstore for example. That was a very, very, very, very difficult market to crack. And a lot of reasons why one is, one is you're going against, you're going head to head against Coke and Pepsi. So in universities, Coke, Pepsi have major contracts that have massive blocking rights from anything that gets monetized that's water or soda. So you know, for starters, you are now literally getting into a, a um, um, a fist fight, like a street fight with you know, you know, I don't mean this from like a legit litigious or litigious or a kind of a contractual perspective as much as it, I guess to some degree contractual. But you know, you're literally going and fighting it out with you know, Coke and Pepsi and other big bottled water companies where they're really protecting universities and they're going to say, well maybe we don't want flow water on a retail basis. Like maybe university xyz. We're going to tell you you're not allowed to sell any of that stuff because you're selling Coke and Pepsi products or Coke or Pepsi products. So that was one really, really difficult thing. Right. Uh, number two is very, very bureaucratic decision making in a university. Very complicated. I mean there are a lot of, you know, you got facilities, you got sustainability, you get student health, you've got maintenance, you've got uh, food and Bev, you know, food and Bev in many ways is making money from packaged water sales, sustainability as opposed to anything generally. And that's wasteful and plastic. So you have kind of all these conflict not Only do you have big bottled water contracts that come into play and a ton of power. But then you also have fairly complicated decision making cycle. Um, and then the third thing is you have a major consumer behavior change, which is okay, now I got to change a consumer's behavior from buying a bottle of water or if they were really comfortable with, with it, they were already filling it up at a water fountain. They had a hydro flask or a swell or a Mizu bottle or whatever it was, clean canteen, you know, they're carrying those around. And college students, you know, probably a little bit more, in some cases more apt to be comfortable filling it up at a water fountain or a hydration station. So then, so then either you got to switch the bottled water behavior away from bottled water to single use purchase and you got Coke and administration, all these things that you're like negotiating. Again, not directly, necessarily indirectly. And then you have the consumer behavior change which is, hey, if you were paying, if you're getting free water before through a water fountain, now we, now we want to, now, now you should be spending 70 cents per fill. And here are the reasons why. That's a pretty, that's a pretty difficult behavior change. I think that that will happen eventually. Do I, do I believe that people will end up monetizing water and it might be enhanced water through carbonation or flavoring or more mineral, you know, so like maybe you get the good uh, water for free and then you get kind of the improved water or the improved beverage through a device that kind of charges you just like a soda fountain does in many ways. Right? You get a Chipotle, you buy a cup, pay a buck for a cup, you get to fill it with whatever you want out of the soda fountain. Um, I think that kind of same evolution will happen with enhanced or boutique or remineralized or flavored and carbonated water over time. But that was a really, really tough vertical. I mean we spent about a year trying to get that to work. We had this telemetry system, we built this B2B telemetry system as PCI compliant and was, you know, modems connected to the cloud and the device. It's like you uh, know like level three PCI compliance. So everything was like you know, running secure transactions. We built it all to run. And the problem was we couldn't get consumers to take like the few, the few schools that we got into, which are very hard to get into. The few that we got into, we just couldn't get consumers to switch behavior. And after a year we basically just said, well, we're gonna, we're gonna, we're gonna shelve this. We were really early on it. I still think that that's going to be a market, uh, but not quite yet. While we were doing that though, we were running kind of parallel paths, which was, we didn't bet entirely on that model. We also said, well, let's go try these other verticals and let's try leasing the equipment or renting it to somebody, you know. So like, let's try instead. Not enough people in a CrossFit gym that could even conceivably swipe the credit card enough per day to have it make sense. Like you have to have, it's like a vending business, which is like you have to have enough foot traffic for the vending business to be interesting. Like you can't put the vending machine outside, you know, someone's house. There's not enough foot traffic there. You know, you have to put it in a campus or a dorm or a gym or something like that. And same with kind of vended water. So we basically said, well, well, you know, let's, let's go to CrossFit and see for four bucks a day, you know, for $125 a month, will they lease us from us and provide it as an amenity to their members and will hotels do that? And you know, on and on, uh, will campuses do that? And so that business went really, really well. And uh, that's 95% of our core business today are companies that are directly leasing the equipment from us that are, you know, super motivated to provide their employees better water, plastic free, do something great for the environment. And by the way, like one of the things that we started doing as we, you know, I think like this whole fab selling, you know, have you heard the term fab selling? Feature advantage benefit, you know.

Speaker B: No. No. What is it?

Speaker A: Okay, it's like maybe an American thing, uh, and I'm sure it's been parodied in the office as well. So that's like probably something that we can both share an appreciation for across the pond. But fab selling is feature advantage benefit selling, which is like, you know, you like first cover the features and you talk about advantages and really what you should do on them is predicate your product around benefits to the customer. Uh, my perspective is that that's, you know, kind of like very, I don't know, still kind of very 90s to me. I think ultimately where we've tried to wire around is outcomes Outcome selling. And so what that means to me is when we drop a flow water unit of the customer, what ends up changing for them in the way of positive outcomes, Whether it' you know, economics for them or the employee health or reduction in single use plastics. So we started doing all this pre post data. So we put a floater refill station in. We'd let customers try it for two weeks. And that was one of our sales tactics, I guess, so to speak kind of experience tactic is hey, like rather than someone have to sign up for a three to five year lease agreement where they're spending $125 a month for a five year lease, like you know, we'll drop this in, let them try it for two weeks and if they love it, they'll keep, keep it 90 plus percent of the time they love it, they turn it into a contract. So kind of the game now for us is well, how many, how many people, how do we get more people to try the product? Because if we got a 90 free trial conversion ratio after eight years, well part of the gate factor, gating factor ends up being well let's just get more people to try the product. Because almost everyone signs up for a five year agreement because they love it so much. But what we also tried to do is look at outcomes data. And so we're you know, the first company I know that's done this in years, uh, at least around water. But you know, we started doing pre post data where we'd say okay, let's do surveys of like what were you, what was the consumer, the employee, the guest, the student behavior, pre flow water and post flow water. Sounds kind of silly, but when you look at it it's like well what were they drinking before, how much were they drinking, how much were they drinking of water? Now that flow water is here. And so for example, when we deploy a flow water refill station, it's not intended to sound a commercial, you know, because like I'm not, I'm not here trying to pitch flow water devices. I'm really just trying to share what worked and what didn't work for us along the way. This is one of the things that worked really well though is we looked uh, at well if we started to be able to show customers, hey, when we deploy a flow water refill station, not only do your employees or your students or your guests or your gym goers love it, but there's a 50% reduction in soda and coffee consumption at least in places that were offering soda and coffee before. Like not the Gym, but the company for example, and there was AN A, ah, two to five fold, excuse me, three to five fold increase in hydration, um, and 80% reduction in single use plastics. So like this is not only something that people prefer or they like or it's an amenity but you're literally changing like what they're drinking and doing during the course of the day, which is if we can fill students or employees stomachs with more water and less sugary carbonated energy drinks or caffeinated, blah blah, blah, like that's a good thing for that them because they're going to be more productive and they're going to feel better and they're going to like reduce their you know, micro kitchen spend on sugary, carbonated, canned and bottled beverages. Um, so those things worked really, really well for us. But those things only came as a result of us finding things that we didn't succeed at. Or to be more blunt about it, we failed at.

Speaker B: Wow. I mean, yeah, it's you know, there's so many things to unpack there and I guess, guess you know, you know, a year, you know, and it's so hard I guess as a startup to know when to continue being perseverant or when to stop. Like a year to figure out like the university thing obviously. But then you've got things like you know, long sales cycles that probably play into that as well and figuring things out and like, you know, because there's so many people, it might take a uh, longer period to get like approval. Like you said, you got the different approvals approval. But like for most startups, you know, we're told to like, you know, fail fast and fail forward and like do things quickly. Um, and then if it's not work like quickly iterate and pivot and what have you. So you know, was that a discussion at any point or like, you know, after the year were you guys like

Speaker A: okay, look, this just not all the time. I mean I, you know, in fact, I mean I'd be curious to hear your take on what from talking to a bunch of entrepreneurs, what you think the answer is. I think one of the hardest things to discern is strategy number one, strategy number two, team. And then number three, you know, what do you keep pressing on because you're right and it's simply hard or what do you keep pressing on that you're wrong on? And it also happens to be hard. And that last bucket is in many ways I think the most nondescript and hard to decipher because we all hear These stories. I mean, this is like the. I mean, this is like one of these insane, like, euphemisms that entrepreneurs say also makes me cringe is like, you know, and you read these me like, these memes is like, you know, the. The summary of it ends up being we'll never, ever, ever, ever, ever, ever quit. Well, that's like the dumbest advice ever, ever. I mean, that's like just the dumbest statement. Like, that's just total bunk. That's just something that someone says, you know, after, like, either, you know, to get a meme with a bunch of likes and try to inspire people, or, you know, this is kind of diluted thinking, or someone that finally made it and they attribute all of their success to just sticking with that one thing. And in some cases, of course, the answer is, of course that's true. But in other cases, you know, you would look at it and say, well, if we didn't quit that other thing, we would never have gotten to the yet other thing that got us to be successful. Or it's like, at what point. At what point do you say we'll never, ever quit, but I'm going to lose my family, and amidst that, or my relationship with my kids, or never, ever quit, I'm going to lose. I mean, there's so many things that we could go through. So I think that is one of the most difficult things to wrestle with as an entrepreneur and as a business exec is. Is, hey, at what point do you call it, you know, when do you call it an employee? When do you call it on strategy? When do you call it on, like, market and verticals and progression? And, um, we have an idea. An idea completely, you know, and, you know, for every. For every entrepreneur that's on a podcast saying, well, I never quit and I never gave it up and on and on. Like, there's a hundred others that never quit and they didn't make it. You know, maybe if they'd quit that kind of one thing, like, they would have made it in another thing. And. And so I think, you know, it's not. This is not to, like, uh, you know, be a naysayer about anyone's kind of personal perspectives on it, other than to say, I do think it's a lot more complicated than, like, quippy little quotes that, you know, entrepreneurs or, you know, people post on Facebook and Instagram. Uh, because it's not that simple. It's very, very complicated. And really, to answer your questions, yeah, we had a lot of debates. We still have a lot of debates around strategy and do we do this and do we keep betting on this and is this the right chance panel? And like, you know, sometimes the data is clear and sometimes the data isn't clear. I mean, the reality is when you're starting a new business in a new vertical, the data isn't clear. Like, you don't know. It becomes obvious only after you've done it, you know. But when you're going into it, you don't know definitively. I mean, you know, you think you know, and you might have indicators and precursors. And of course you have to have conviction and belief. Like at a certain point when you say, hey, we're going to do this, A, you better believe it, you better believe it. But be B, then you better go like hell till you make it happen. And see, you know, that's the only way that anything's ever going to get done is if those first two things fall into place. But the reality is, I think you also have to have enough humility to know, like, at a certain point, you maybe are wrong on certain things or the way to get there. Maybe it's the right strategy and it's just the wrong process. And we've had those same debates and discussions before. I have the dis. I had this discussion a week ago, which is. I brought it up and, uh, I can't. I don't really want to see what the subject was. But I brought it up and said, hey, look, A, we tried this three years ago and it failed. B, that does not mean it's the wrong strategy, you know, because like, one of the things I hated being a big company is like, uh, like, we can't do that here. Or we tried that once and it didn't work. You know, my, my follow up to, hey, historically, here's historical data on this, just so you're aware. But B, we might have, we might have been really crappy on execution. We might have been wrong in our approach, and we might have been wrong on timing. Like, maybe it was the right idea, bad timing, and maybe we just did a really crappy job executing that or we just failed at it, you know. So, um, we do have that debate about either things that we're currently doing or things that we should maybe revisit doing. And we say, well, is this the right idea and the right thing for strategy? And we just didn't kill it last time and we need to, we need to revisit it, saying, I don't know.

Speaker B: Yeah, I mean, I think, you know, back to your Question, uh, most of the people I've had on the show and spoken to, whether it be like a uh, really seasoned investor or you know, seasoned entrepreneur, when I ask them that question, they all say the same thing, which is like, yes, startups need to know when to like quit or when to call it a day or you know, using discernment to decide when they need to pivot, but no one knows what that, when that is like. It's one of the hardest things to like to know. And they can know a founder and no VC has ever been able to say, yeah, it should be after this date or this amount of days or this amount of months or this amount of years. It's hard because, you know, around the corner could be success. Like you say, you, uh, know if you read like zero to one Peter Till's book, you know, it's like, you know, if you keep, if you're creating new markets and you're trying something that's never been done before and it's completely new and it might take a while to get off the ground. But you know, on the flip side of things, like you say you could keep going and never quitting and it still may never not just work. You just don't know. It's such a difficult thing to say. And I think that's probably where a lot of startup founders really start to struggle and that's when like the mental health side of things start to kick in because it's like, you know, all these successful entrepreneurs are telling me to keep going, but I really don't think this is it.

Speaker A: Mhm.

Speaker B: So it's just, it's just hard. It's a very difficult, difficult. It's something that we could probably talk about all day long. But um, I just want to, I want to work towards wrapping up now and I just think, you know, with flow water. What, what's the, what's the goal now this year? I mean obviously like you said, you've done a, you know, it's been going like, you know, just under eight years now. You've done the series B. Is the goal to do another round? Um, you know, how are you thinking about, you know, scalability moving forward? Like the plans for 2021?

Speaker A: Yeah, um, well, so we, we, you know, going into like if I were to kind of take eight years to current and really we started to truly uh, get out in the market and have kind of our first full commercial year was 20, uh, 2014 could almost be argued 2015. Uh, 2014 was kind of like beta commercial like just getting our first 150 units out in the market and getting a lot of market feedback. So we didn't really start really, really moving until 2015. So we've doubled every year since then, except for this last year. So, so we were growing pretty much 100% year over year growth for the last five years. Um, 2020 we were pretty close to flat, uh, which ended up in some ways it's hard to get excited about having a flat year. Uh, on the other hand, we did that with 25% less uh, operating headcount during a pandemic. So we had 25% less team than we did the year 2019. And we were selling into incredibly difficult verticals. You know, I mean, you know, it's like pretty much any, any vertical that was getting shut down was our business. And so we, I think in many ways had a very successful year by maintaining for the Most part revenues TCV units deployed. We actually had a fantastic Q4 compared uh, to a year prior. So the plan now really is, well we've weathered the storm. We need to focus on growing. Our plan is to go back to uh, over the next 24 months to get back to the point where we can have 100% year over year growth. And that was the trajectory we were on. So uh, that is a, uh, building out the product portfolio and in accelerating the product portfolio both in B2B as well as migrating more to B2C. B, uh, it is to take our existing product and to sell it to more verticals and also to take our existing product and open up more channels. And the channels means looking at partners that already have an installed base, they already have demand generation, they already have critical uh, mass and scale, whether it be regionally or nationally. And to work with them to kind of accelerate our progress, but also to help substantiate and support theirs through accretive revenues and profits. Um, C is to build out the marketing engine. And really, I mean one of the things that you know, I've set out with this company is to develop much more of a war be like product engine, a product and commercialization engine where you're looking at, you know, and same with Casper, you kind of pulling some plays out of that, that, that playbook or cards out of that playbook, which is how do we get, you know, legion and run this like a real growth marketing company in a pretty more, you know, more archaic industry like water hardware is, you know, not kind of the most progressive industry. And I'm not knocking any of the companies that are in it. There's some very fine companies in it. But I mean really we're looking at and have been then working on how do we take more of a Casper and Warby like approach to Legion growth marketing, paid and unpaid organic, social, um, adwords, you know, social media and running them through a demand funnel. So those are, those are three commercial things and then kind of d or the fourth thing really ends up being catalyzing the business with uh, additional funding that enables us to cross the profitability threshold next year. Year. I mean this is a business where we just, we're in an industry that has high uh, capex and opex costs and it's, you know, I mean it's not like building a car company exactly, but there is a parallel which is, you know, like you got to start selling a lot of cars till you can amortize and start to free cash flow the cost of building a factory. And you know, this is on a much smaller scale. But the premise is really still the same, which is we have OPEX infrastructure, warehouses is trucks, people, you know, high capex. I mean when I say high capex is pretty efficient but um, you know where it becomes a lot more efficient when I'm buying 100,000 flow water units than when I'm buying 10,000 for example. And so capital enables us to really accelerate the growth trajectory that we have been on and continue to play to win during a very difficult uh, time still, but one that we've been successful in and then set the stage for um, growth domestically and beyond. So that's how I would summarize the four areas of focus. Uh, and then of course the fifth one, just embedded within all of that is trying to align and cohese, but also push and inspire the team. Another hard thing for founders and entrepreneurs is how hard do you go personally, how hard do you push the team? And that's kind of always in balance. It's probably a separate discussion for a separate day. It's very, very kind of challenging to navigate that. But making sure that the team comes along and leads with this is kind of an overlay into those four strategies.

Speaker B: Yeah, that makes ah, a ton of sense. Um, so I want to work towards wrapping up now. And as I mentioned earlier, there's a ton of questions that I can have our squest guests sorry at the end of each show. Um, so yeah, they just require like a quick recipe answer just to see where your thoughts are. So the first one is what has or who has been your biggest inspiration? Well, m.

Speaker A: I'M going to give you an unconventional one here. I'm actually, you know, as we talk. I'm sorry, I'm trying to pull up something real quickly to reference it, but, uh, I just. I just learned. This is gonna. This is gonna sound really unconventional, but I'll tell you, it was, like, super inspiring to me over the last five years. I met this guy maybe eight years ago at a farmer's market in Burlingame, California. And, uh, his name was.

Speaker B: Was.

Speaker A: I don't know exactly how to pronounce his first name, but I believe It's Harwin, uh, Har 1. Wesley. And he was this guy that was a surfer, lived in Pacifica. And he was Maybe, I'm guessing 50 then, like eight, 10 years ago when I met him. And he had his mom's pie recipes for many, many years. His mom was an amazing baker, and he loved making pies. And he always wanted. He always had this dream of starting his own own pie shop. And so he would go to farmer's markets, and I would see him every year and every week, you know, pretty regularly at these farmers markets. And he just. Super affable, gregarious, friendly, positive. Just like this guy that you just felt like you'd meet him and you were best friends with him, but I'm sure he felt like this with a thousand other people or a thousand other people felt like this. So he actually started his pie business, which I think was named after his grandmother Champa's piece in Pacifica. So I went to the opening, you know, and I just fell in love with this guy and his story. Like, this is like, the quintessential entrepreneurial story. This guy's early 50s pie maker. He's been schlepping to all these. All these, uh, farmers markets up and down Silicon Valley, making kids days by, like, giving them pies to stuff in their coats to carry along with them. These little, like, personal pies. And they were amazing. And he had this great story. Story. And I'll tell you what, you know, as far as heroes go or people that were inspiring to me along the way, when I look at guys like this, uh, this is like this guy Herwin Wesley was one of them. And unfortunately. And, like, the sad part of this, it's like the mystery of life. And, like, how does any of this make sense? Uh, I just saw him a few months ago, you know, for Thanksgiving, kind of my annual order there, and chatted with him for a bit. And several weeks later, he. He unfortunately passed away at the age of 64. Or I, uh, just pulled up online, uh, in a surfing accident, just a tragic accident near the Golden Gate Bridge. Uh, but I'll tell you, if someone asked me who inspired me over the last 10 years, like this pie maker guy did, I mean, it's not, you know, like. Yes. Do I follow, like, what Elon does, and is it amazing? Yes, absolutely. It's insane. But then I look at what are, like, kind of the common everyday entrepreneurs doing to, like, further their family, their mission, their purpose in life. Like, I get very inspired by kind of the everyday man and woman. And this guy was an example of that, where I was just so inspired by his story. And, you know, it was in my backyard, so I got to watch it evolve over many years and see his restaurant or see his. His. His retail shop and go to the opening day. And when I was there for Thanksgiving, there was literally an hour and a half line, uh, out the door. Uh, and it's really amazing to see, but also kind of a tragic ending, but it makes you realize how short life is.

Speaker B: Is.

Speaker A: And also the complexity. And why does this stuff happen in life is like, another mystery. Um, but that. That would be one pretty. Pretty unconventional answer. Perhaps, but it's seeing other entrepreneurs and perhaps the unconventional entrepreneurs as well.

Speaker B: Yeah, no, that's, uh. Yeah. I mean, I. I even saw something earlier today that was kind of alluding to the whole, you know, you just don't really know what.

Speaker A: What's.

Speaker B: When your time will be right and, you know, make the most out of

Speaker A: today, which is for all of us as entrepreneurs, like, really the balance. Right. Which is. Well, you can spend. You know, I mean, it's like, I know we're closings. We're not. This is, like, not the beginning of a new topic. But I mean, I, you know, I went through. I was married 17 years. I got divorced five years ago. Um, you know, I have two daughters is, as I believe I'd mentioned earlier, kind of actually mentioned a couple times this morning, so I can't quite remember whether it was this morning with you earlier, But I've got two daughters, 19 and 17 and a half, you know, and you have to, like, that's another thing to throttle is, well, you don't know when your time is, and you really. Like, one of the things I'm spending a lot of time on and I have spent a lot of time on in the last six weeks is like, well, what is really my purpose? My purpose is not just to put an end to sink and use plastic water bottles that might be Part of my purpose, and that certainly has been part of my purpose, but that cannot be my only purpose. I'm life because my kids need something out of me or my family needs something out of me that's different than that. And like whatever other areas of your life are important to you, I think that's another thing that we all struggle with as entrepreneurs is like, well, how do we make sure that, you know, as we're wrapping our entire lives around kind of this mission, how do we not lose sight of, uh, what our purpose is beyond a pretty big endeavor that is pretty damn time consuming and life consuming. Mean, um, in some cases over many, many years.

Speaker B: I did the awkward thing of talking and not realizing I was on mute. So. Next, uh, question. Your favorite podcast.

Speaker A: Uh, you know, my favorite. My. I'm, uh, not going to do something like pandering and like say yours, but I'm, I'm going to start listening to yours by the way. But, um, I, you know, I'll just tell you what my favorite podcast is. My number one is Daily, uh, by the New York Times. Yeah, I think is. I love, I love deep dives into current events, you know, rather than just like a cursory overview of news. So that would be my number one podcast. Podcast.

Speaker B: Nice. Favorite blog. If you still read blogs,

Speaker A: Uh, Both sides of the Table, which is a, um, VC blog. I mean it's kind of my favorite kind of entrepreneur blog. Uh, but I don't know if you're familiar with it, but.

Speaker B: Yeah, yeah, yeah.

Speaker A: What's the name again? I forget.

Speaker B: From uh, Red Point Ventures, isn't it?

Speaker A: Yeah, it's um, uh, gosh, I think it's Mark Suster.

Speaker B: Yes. Mark Suster. Yes, exactly. Yeah, that's a great, that's a great blog. I love that one.

Speaker A: Yeah, he's great.

Speaker B: Yeah, he's awesome. Uh, and like he's like one of those VCs. He's like, I do two deals a year. It's like two deals a year and I put all my energy into them. Sounds like a great job, dude. M. Favorite book?

Speaker A: Uh, you know, my favorite book would probably is an old one. My favorite book that I've ever read is probably the Right Stuff by Tom Clancy. It was about kind um, of pre, pre space era Air Force pilots, Chuck Yeager. They kind of went from Chuck Yeager to, to like NASA and whatnot. So that, that would be one of them, um, kind of for a business book. Obstacle is the Way and then, uh, personal reading. I'm, I'm reading now. And I'm really enjoying Zen and the art of motorcycle maintenance. Awesome.

Speaker B: Favorite, ah, Twitter account.

Speaker A: You know, um, I don't, I don't spend really any time I read Twitter as it relates to like kind of what might maybe get synthesized in news stories. But I have to say I spend next to no time any longer, uh, reading or keeping up with Twitter.

Speaker B: Makes sense. Uh, what do you wish you could do that you currently can't do?

Speaker A: I mean there's so many things, um, well, I mean, I'll just rattle off a few. Like one would be date, I suppose, like find a, find a, find a companion. So one of those things where it sounds really silly, but I pretty much have relegated that, uh, I can't do that and be responsible to my other priorities, which is, you know, number one, being a great dad to my daughters and being there for them, uh, because, you know, there's diminishing return the more that you take on. Two is, you know, running a company and being successful at, ah, you know, serving the company and the shareholders. And then number three is a fair amount of personal development stuff work as well as kind of personal fitness. So like, that'd be one, um, love to, you know, grow faster amidst the pandemic and, and, and put more resources to work and double down in certain areas of the business and move more quickly and, and some of those are just kind of internal dynamics that I'm navigating. Love to go be able to take a, uh, month off and ride a motorcycle across the Transamerica Trail by myself and camp along the way. Way. You know, I'd like to, like to be able to go comfortably run a marathon. I used to be able to do that and I've kind of lost my, my running legs. So, uh, there's a variety of business and personal things, but I've pretty much relegated myself to those things that I think matter most. And I'm putting all my effort behind two or three categorical things and uh, letting the other stuff kind of fall by the wayside until I get more time and space to pick it back. Back up.

Speaker B: Yeah, no, that makes, that makes sense. Um, what's the one thing startups should ignore in the early days?

Speaker A: Uh, you know, it's hard to say this without putting a qualifier behind it. So like, let me say it, but let me also just give my qualifier. I think it's advice from people that have no skin in the game game and no material stake in the outcome.

Speaker B: M.

Speaker A: Yeah, I mean, you know, because it's like, I mean, I'LL just give a, let me give a couple quick examples on that. Uh, you know, I can't tell you how many people that I, we all meet with that don't invest, that have a ton of advice. It's like, okay, well you're not investing, but you're giving me a bunch of advice and you have no stake in the outcome and you're not going to be the one holding the bag, you know, when it comes time, you know, time to look at the end of the Runway or look at the exit or whatever it is. So I think it's, you know, I would say not over weighing it. Uh, that being said, you know, if you don't, if you're not willing to listen to advice along the way from people that maybe don't have a stake in the outcome, you're going to miss some good things. So I think it's really think about it judiciously. So I've picked up a lot of great advice from naysayers like why do people not invest and why do you not like this business? Why are you skeptical? And do you not believe in me or do you not believe in the team or do you not like the unit economics or do you not like the price point or do you not like hardware or whatever it is? So I always try to find out, but then at the same time, you know, taking advice from them, I try to take with a grain of salt and really evaluate it. Um, particularly when they're super strategic decisions and they have no skin in the game. That would be, that would be a big one.

Speaker B: Yes. That's, that's huge, I think. Um, and finally, I guess, what's your vision for the company? What's the big goal here?

Speaker A: Well, ultimately I want to see a world where the insanity of shipping and transporting and packaging and trashing our environment as well as now, ultimately our bodies with single use packaging goes away like that. That's the big idea, is to radically change the way that people drink and consume water. And that is, you know, ultimately seeing an evaporation and dismantling of the logistics industry that uh, transports water, you know, from Fiji to here or from LA to Denver, you know, and long haul trucking and pallets and sitting in retail shelves and so, so I see, uh, our opportunity is to create the world's best tasting, most trusted drinking water and to basically democratize water. I mean the fundamental belief of our company is everybody deserves equal access to clean drinking water that they can trust. That's free of plastic and free of packaging and that is the big idea and that's what I've got. A team of 45 people in Denver, uh, some investors, advisors, a lot of great customers, and also a lot of great advocates around doing a new thing better that's sustainable for the world, uh, that are advocating for and cheering us on as well as helping us get there. So that's the big idea.

Speaker B: Awesome. Raz, this was great. Thank, uh, you so much for coming on the show. Uh, if people want to get in contact with you or learn more, uh, ah, what's the best way to get

Speaker A: in contact on social? Uh, personally I'm at Rich Rasgatis R I C H R a Z G a I T I S uh, for the company, uh, web as well as social, we are at Drink Flow water and that's drink F uh L o W a T E r one w awesome.

Speaker B: This was great. Just want to say another massive thank you to Raz for coming on the show and the team for helping to arrange this interview. It was great. And like I said, I learned so much. Please let me know what you guys learned as well. As always, guys, thank you so much for tuning in. And if you haven't already, please like and subscribe on the Apple podcasting app or anywhere you listen to your favorite podcasts. It honestly does go a long way. Until next time, guys. Keep grinding.