SPEAKER_00
So authentic is the most important for life in general because you don't have to show up ever thinking about being a different person Like being authentic allows you to free headspace to not have to worry about anything But how that relates to making more money is really simple is that in your authentic state You have an intuition that nobody else has like period and when you are in that creative intuitive state that is so 100% you It's like I can almost guarantee That you will find success now. Here's the kicker very few people reached that level of intuitive self truth

SPEAKER_02
Nick Greg's hair right now is Some you have to watch this episode on YouTube simply to just observe and admire Greg's hair for the entirety of this thing

SPEAKER_00
It's it's basically like a gorgeous prancing gazelle Flying through the safari Just so graceful. That's all I have to say. I mean that was basically the description.

I was going with actually it's very like

SPEAKER_01
Boy meets world 90s show. Yeah, it's Joey Lawrence Joey Lawrence vibes. Yeah

SPEAKER_02
It's got good Lawrence vibe good Lawrence brothers vibes. I dig that what's going on today guys. What's ever what's on everyone's mind before we dive in here?

SPEAKER_01
Well, I'm just excited to to bring Nick on the show. I've known Nick for for many years he's he always brings an energy and He's for those of you don't know. He's the founder of midday squares, which is Probably one of the more interesting D2C companies in the space right now and then And they're they're they're loud.

That's the best way to describe them their marketing is loud So I'm just excited to bring Nick on and just sort of talk about How to be loud in the D2C space and I didn't know Nick until you brought up

SPEAKER_02
Until you brought up having him on the show and I'm embarrassed now because then once I like went down the rabbit hole on all the Stuff you've been doing Nick. I'm like blown away and super excited to dive into it But I have to say when Nick sent his headshot for this which will be on the cover art when we drop the episode Hands down like 5x as good as any other headshot that we have seen someone said you know You get the like professional headshots the kind of like blue steel magnum vibe that people try to throw at you or the little like You know that kind of cheeky smile, etc Nick brought a totally different level of heat with his headshot So I am personally excited to see what kind of heat he brings to this episode here. I'm fired up yo

SPEAKER_00
I always you gotta bring the heat you get one shot at life to make magic happen when no matter what You're doing so if you don't bring the heat that's on you

SPEAKER_02
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Oh Well, I think it's a good jumping off point. I like that. It's a it's our first framework for the day Greg Is gotta bring the heat it's the guy to bring the heat framework no matter what you're doing you got to go hard at it I actually look I mean broadly speaking I completely agree with that too right like you you know You have a finite amount of energy and so pick and choose the things that you really care about that you want to be working on And when you're going to work on them work really freaking hard at those things and go dive in on them with a lot of that energy so I love it man

SPEAKER_00
It's a good jumping off point I think honestly man I've been great like Greg alluded to like we've been we've known each other I like to think of it if it was in a music scene right like let's say we're talking about a city's music scene but we were talking about entrepreneurship but think about it through that framework right where a lot of musicians in a scene will get together and be amongst each other and see each other as they're trying to do their thing Greg and I since like 16 years old have been hustling entrepreneurship I'm 33 so just I don't even know how old you I think you're 33 to probably run same age so we've come up together in the same city we were under one of the same grandmasters Rory Olson I always love shouting him out come from Montreal And just pause on that under the same grandmaster Rory Olson is that the name. Yeah, what does that mean. What is a grandmaster.

I mean I'll give you my take on it I think you know Greg could take you another can give you another take on it. Rory's just a really predominant entrepreneur out of Montreal has done over three nine figure exits over three took a cut and was the founder of paysafe which I think is today still the largest third largest wallet in the world if I'm not mistaken. I mean this guy negotiated we were just funny Greg he says was up Ralph for dinner two weeks ago I know you guys speak a bunch too but he was talking about he negotiated with.

Why am I blanking out on this gentleman's name he is musk's partner at PayPal Peter to Peter to yeah he had a pretty heavy negotiation or restaurant we're at in Montreal with Peter to in the basement so. I mean long story short Rory's a G after my dad died when I was my dad died when I was 10 he kind of took me under his wing from like 11 to 19 and just really gave me the ins and outs of the game. I learned all my M&A finance deal making stuff through him and so I call him a grandmaster because that that's what he was for my life and I know Greg had a really intimate time with him too so it's just we we both came from the same grandmaster that's what I like to call it.

SPEAKER_01
Yeah I think. So some you know similar experience that I had as a teenager I met him and he also took me under his wing and sort of showed me the ropes. Like there wasn't podcasts like this that the ropes were being shown you know so having someone like that I mean is still today such an advantage but was back then like 10 times or 100 times even more because you know startups back then was completely demystified so having like someone like that who's the top of his game just sort of show you the ABCs was was super valuable.

SPEAKER_02
Yeah, it's kind of one of the it's kind of one of the benefits I was going to say to like you guys are both from Montreal or Montreal as you guys as you guys said I need to get I need to get the accent down. Being from like a non, you know, it's not San Francisco right like it wasn't the tech hub of the world. And yet there was this thriving entrepreneurial community right like we've had Harley on the show amazing entrepreneur from the area there's tons of you guys it's like you know the little Montreal mafia.

One of the benefits of being from one of these sort of off the beaten path entrepreneurial communities is it becomes tight knit as a result of it being off the beaten path and so these people that otherwise might be inaccessible to you and a large, you know, thriving tech hub become these mentors and want to see that community, you know, growing and thriving and I'm sure you guys are now doing that for young up and comers from the area the same way I know Harley is.

SPEAKER_00
I'm die hard much I mean I speak with Greg about this all time die hard Montreal I mean one of the main reasons why we chose to build midday squares here we were looking at Toronto and LA is just, I always, I have this, you know, vision of bringing the energy that Nike brought to Oregon to Montreal. And that's something that's one of the main reasons why we chose it to even do it here but going back to what you're saying I think a lot of people don't understand how much wealth is in Montreal I mean we have. We have this ridiculous amount of concentrated wealth from very, very long histories of very powerful families in a very small city like I'm telling you it's really small you can drive the entire perimeter of the island in one hour.

And so, like a lot of people don't know this but the Demeray family which is from Montreal owns one third of Adidas right I mean they own one third of the easiest deal they own, you know they own some serious stuff and that's a Montreal family. Montreal is like low key like really powerful and, and I think to your point, you're better off sometimes being a huge fish in a small pond. And that's that's kind of like what I've always loved doing.

I know Greg went out there to San Francisco and really chopped his teeth out there and did a hell of a job. But I never made that jump.

SPEAKER_02
I think there's a benefit of both right like the big fish small pond, and then you know small fish in a big pond that people always presented as like an either or and you kind of got to pick but like Greg's an example I think of someone who's done it both ways and you kind of benefit from it in different ways like you know for me personally my own experience like I was kind of a big fish in a small pond growing up, you know playing baseball in a small town I thought I was like, legit, it probably led to me getting some really cool development opportunities as a result of being a bigger fish in a smaller pond. And then I went out to school and all of a sudden I was like a tiny fish and a massive pond and I was horseshit at the things I thought I was really good at on a grander scale, and you get the like humility, you know, and the grind that you have to develop in order to actually come up the curve when you're in that environment. So I think actually I mean having a combination of both it's like the Greg I've talked to you about this.

I think it's Jim Collins has this idea of the genius of and, and it's like the counterpoint to his tyranny of the or which is these false dichotomies that we create where you're like you have to pick one or the other. And the reality is you can do both and so it's like the genius of and in these situations which I've always loved.

SPEAKER_00
I feel the same way about so much stuff I just I think people over analyze a lot of things like all the way down to should you fundraise should you not fundraise should you just doesn't fucking matter. All that matters is that you have a goal in mind, and you have to get there. And to get there is going to have, you know, whether you need to raise money or not there's going to require some type of capital requirement to get to where you need to do and if you don't have enough money, well then you need to fundraise and if you don't then, you know, continue doing what you got to do like it doesn't need to be so complicated all the time I think that, you know, 33 year old Nick versus 20 year old Nick just oversimplifies everything.

SPEAKER_02
It's the Occam's razor man you got to find like the simplest answer is often the best one simple is beautiful. I completely agree with you it's actually a great place to start to I want because I do want to get into this amazing business you've built and some of the principles and like get a little bit tactical on some of the learning that we can share with people. We've never really gone Greg into D to see and like true consumer on the show and so I'm really excited to kind of get

SPEAKER_00
I want to preface something we are not a D to C company and so I think I think I could give you a great, a great take on what it means to be a D to C company today because we operate in the D to C space but we do not operate as a D to C company. Can you clarify what you mean by that. Yeah, so I think I think there was this movement in 2000 to 2020 that was like you had to build a business around direct to consumer.

And I think in that time. A lot of people, especially depending on what channel you're in but when it comes to consumer package goods I think people miss calculated the value proposition of the supply chain partners, ie distributors and retailers. And so people went out and took those margins because it's like a really nice story right.

Hey, you make a product. A distributor takes anywhere from 18 to 25%. Then you give it to a retailer and they take another 30 to 40%.

Right. That's a nice story to say, we're going to take that away and we're going to pass the savings on to the consumer. What I think people forgot was how trained humans are in that buying cycle and how much more money it actually costed to scale than to actually just play within the distribution channels that exist.

SPEAKER_02
Yeah, I mean that's like the, I think Toby another, another Canadian Toby from from Shopify. He's Canadian right.

SPEAKER_00
Is he a German born in Germany and moved to Canada.

SPEAKER_02
Okay. He was commenting on this earlier, especially to like when you think about the early days of that movement and the idea people had, which is actually a fair insight as you point out. That was during a time when you could literally like, you know, put in any keyword and have pretty little competition.

If you were like buying ads on Facebook or social or Google ad words, whatever it was. And he was joking that like now you can rub your face into your keyboard and probably run into like 100 people bidding against you on whatever that is like jumble of letters. And so that I mean the rules of the game have just fundamentally changed as a result of that.

SPEAKER_00
Yeah, which is always like, I think I feel like I want my whole life to come back to square one. I mean, when I was 16 years old, I was just like brand brand brand brand brand. And then I went away from that and now I've come back to that like the worst place I think you could be to build a massive business is in commodities business.

And so, you know, brand is everything. And then you look at retail partnerships and how meaningful I'm guys. I've been software retail wholesale revenue is as good as software it is like clockwork.

Every 28 days. If you have a product that repurchases, meaning that that's the good sign right if people are coming back into their grocery habits, or any of those like it's it's like clockwork. I've never seen that so that's what I mean by I really did see is just a component of what we are but we are absolutely not a DTC business.

So, so manufacturing business that that runs a brand.

SPEAKER_01
So in the like CPG space like who do you like what other brands are you seeing that are doing a really good job and what are you know, how are you incorporating some of their stuff into midday squares, if any, because, you know, sometimes I look at what you are all are doing and I'm kind of like, you're just doing your own thing. It feels like you're doing like a unique thing.

SPEAKER_00
It's not even that unique Greg it's fully stolen from the music industry that's what I love I love talking about this all the time is like, it is. Okay, so let me let me really bring it down what was the initial strategy midday squares. Okay, if you really so yes we're a manufacturer.

Yes, we're a CPG product but to really understand what we're doing from a marketing perspective is we're a media company and our patreon is our chocolate that is like the best way to describe what is happening and so my partner Jake really brought this idea to us is let he distilled the last 10 years of brand and like hardcore brand like stuff that really is moving the needle and I'll give you. I'll give you some examples of like, like I think figs is doing a great job at just like being a D to C company. You know, I think everybody can find their own playbook and just to clarify figs for those you don't know that's uniforms basically for healthcare workers.

What? Yeah, they made they were public to me and they got huge. Lululemon vibe like brilliant brilliant player right boring unattended to industry of brand it was all commodity style players but there were some big players and they just brought some some style to it and really exploded. I think for us was like, if you really look at what was happening in fashion in the music industry and like the convergence of those two it feels like every brand today that's successful has to be celebrity driven.

I don't know if you guys feel the same way but it's almost like, hey, if you're a celebrity, you got to have a CPG product. And that's, that's true to a certain extent. But I think that the reverse is true to you can actually use the product if great to celebrity ties yourself, and then bring out an audience that's really committed to seeing your growth you can, you can do it in reverse.

And so I think the Kardashians shark tank and like Elon Musk style of communication really resonated with Jake and that's what he came like me and my wife are super introverted. She's the third partner. And for everybody that's listening we make we make functional chocolate bars because we even touch on that but we manufacture them as well too.

SPEAKER_02
You own a factory. Did you like create a factory.

SPEAKER_00
Oh, you really own it's fully vertically integrated got it. Yeah, you can visit anytime you're a Montreal like it's crazy that experience. I love to even speak a little bit on on why I think manufacturing so critical for the for the next steps of having success in brand.

And there was a reason why we had to pursue it but that's a story in and of itself so the last piece to the playbook was, hey, why is it that, you know, skims was able to come and really come after Sarah Blakely's Spanx in a very, very fast period of time. And I think that's really because it's driven from a narrative people like to buy into stories and then the stories lead to the product but if you have that brand narrative sorry if you have a personal narrative you can convey it into a product line. And so Jake's idea was, how do we create a product line that is about being in your face and bold kind of giving people permission to be themselves unapologetically.

And that led to this brainstorm which was like what if we conduct ourselves like a band. Hence, so he'll the picture you got before right you can you can really orchestrate how you show up in the world it's very it's very possible and musicians and and artists have been doing that forever. And so we started conducting ourselves like a band, everything the way we brand it talk about the product the way we do photo shoots like, why do we do photo shoots every month.

Just because right just because that's content to put on the gram to bring to life to show you the light that seems larger than life that's what musicians do all the time. And, and at the same time tell the story of entrepreneurship on the rise. And that was like shark tanks numbers they were the num they were so high in the rating shark tank it didn't even make sense when I was seeing the data on that they were like number one show by miles.

And so it was like so obvious that people want to watch this and we kind of just put together a mini reality television show on Instagram started really small started manufacturing in our condo and built that narrative and story and

SPEAKER_02
like we're trying to build super fans. So get into the manufacturing piece of this because my perspective, or my assumption rather, generally is like when people think about creating a CPG brand they're like holy shit I don't want to touch manufacturing because that's really wrong. Yeah, and I want to get into why you think that because I think that's an interesting contrarian insight because like my instinct with when most people start one is like, Okay, let me do this in the latest touch way possible, pay a contract and I'll hire an agency to handle all the ads, I'll do like everything and it just your margin just keeps coming down and down in the quality, because you're outsourcing to a contract manufacturer is just harder to control I imagine to and you can't iterate as quickly on things test learn etc.

So I'm curious for you just like, what was the insight there? How did you actually do it and act on creating that manufacturing side?

SPEAKER_00
So that I, you know, they tell you the more swings you have an entrepreneurship the better you're going to get like that is so true. I've failed at so many different things and trying to bring them forward and I kind of have developed this like list of things, not to do. And one of the main things was to avoid China at all costs when creating products.

So that was the reason why is like, I think early on, you need to be able to have a competitive edge when it comes to uniqueness of a product and manufacturing if you play in that area of where things could be copied really quickly you're going to be, you're going to be commoditized pretty quickly is is an insight I have on that end. And then two is, I love massive markets, massive, massive markets that are saturated, because those are such proof points that a pond full of ridiculous fish exists right so you have a fucking pond full of ridiculous fish. And so here's where the contrarian play comes in is the problem with saturation is that by definition saturation is an uninnovated market.

And to bring true innovation to market you, you almost are never going to be able to show up to a co manufacturer and have that happen regardless of what you're building. So for us we went to go see 26 different co manufacturers. And again, I want you to know it wasn't like there was some grand plan to go become a manufacturer.

It was in the event we could find a contract manufacturer we wanted to use it we absolutely wanted to use it. The problem is is that nobody wanted to make what we wanted to make. And this is where I think, especially in food, food entrepreneurs go wrong, because you show up to the contract manufacturer, and they will take your product and turn it into the thing that already exists on the shelf.

And here's why. And I know that because we're a manufacturer now. It's, if I'm running a manufacturing line and I want to have as little turnover as possible and you want to use an ingredient and I'm not storing in my warehouse.

Okay, what is my incentive for you to use that ingredient so I'm going to come to you I'm going to say, Hey, we can do this at the minimum order quantities you want but you can't use cocoa butter you need to use palm kernel oil. By the way, you know how you want your chocolate to be one and a half inches can't be so we're going to have to do an enrobe chocolate. You know you want to be square it's got to be circular edges.

I mean we could go here forever and it's like so you leave that thing. And now you have a product that looks like everything else in the market and guess what, a manufacturer that knows how to make your secret sauce. Who the fuck wants to give away their secret sauce like I you know in software you show up.

I want to take you guys through this. Okay, just because I want you to laugh with me this is how wack it is. I don't think it doesn't hit a lot of people until I say it this way.

So imagine you show up into an investor's office and you're like, All right guys, I got the greatest fucking idea. Everybody at the table is like, Okay, we're ready for you. We're going to build the next Google.

Okay, you have my ears. What are you going to do that's different than Google. You give your pitch yada yada yada.

All right, who's your CTO who's the team that's going to be building this. Guess what here it is asset like we're exporting everything to an agency. The agency is going to build Google from scratch we're just going to say here, tell them what to do they're going to ship us the code when it's I mean you get laughed out of the room.

Your competency is being outsourced to another company. Like what the fuck has happened. And I know how it's happened having been here now.

It's because Pepsi and Coca Cola fucked everything up back in the 80s. And we're like, Hey, we've created these big conglomerates we want to divest all of our asset heavy, you know, manufacturing plants we're going to go and franchise models, blah, blah, blah, blah, we're going to create cash for shareholders. And they created this false ideology of this co manufacturing being the holy grail to asset asset like CPG businesses and I just don't think that's the way to build the next Nike you might be able to build a company in five years and flip it to Kellogg's or, you know, Nestle but you ain't building the next Nike with comments.

SPEAKER_02
Yeah, I mean, I think so you hit on like 100 fascinating ideas here so I want to run back through through some of these to double down on them.

SPEAKER_00
Shut the fuck up.

SPEAKER_02
No, no, no, there's too much gold in there man. It's like too many cool ideas. So first off one of the things you said at the very outset there that I thought was great was like, when you see a pond, and there's a whole shitload of, you know, fishing boats in one area.

There's probably a good indication that there's a lot of fish in that area and actually that you might want to go there and so like, that's really again contrarian advice because usually people are like go fish where there isn't anybody, but But I'm sure there isn't anybody there might not be any fish there and that's why there isn't anyone sitting there. So I mean I just I love that idea and it all kind of goes to like a common thread and what you're saying which is like this, this whole concept of playing different games, which is something that I think about a lot it's like what what game do you want to be playing. And how do you figure out a different way to play it that just doesn't doesn't look the same as the way everyone else is assuming you should and so you know you talk about like manufacturing as an example and as a use case of that I have this friend who you might have come across actually in the consumer world his name is Chaz Flexman.

And this business called All Day Flavors and it's like alldayflavors.com it's actually my go to like spices for I'm not an investor I have no affiliation for what it's worth but it's amazing like low sodium spices basically but they've done something similar which is like rather than just taking the same approach of going to like random contract manufacturers and making the product that that company knows how to make that are optimizing that contract manufacturers margins or whatever their like line utilization which is all they care about. So they're like doing small small test runs focus groups, getting initial data where they have a high degree of certainty when they launch a new product that it is going to pop, because they have the data and the insights from the get go and they're able to iterate quickly change etc and the spices are amazing and like they haven't had a flop of a product because they're taking this very different approach to doing it.

So I just like that was just really hitting in my mind as you were talking through all of that around the manufacturer and just like doing something differently taking a different approach to something that is very commonly done.

SPEAKER_00
And then also under. I think the biggest part that people forget is to look at the world through the lens of playing a game you said that perfectly actually sell it's like the faster you figure out the game you're playing the more you can find areas of exploitation, and it exists because unlike a board game real life is full of full of conundrums full of false positives full of double sided swords like nobody's thought about everything perfectly in our societal structure and business so these pockets present themselves. So for instance there's this pocket that in CPG if you own a manufacturing plant, the probability of you finding another competitor willing to put chips on the table under.

I know because I have some two really big buyers of companies at big CPG I won't name their names that that are in M&A. They won't even look at reproducing a manufacturing line internally, unless they have proof points of $300 million of year of revenue. So like, like right there.

I weren't, you know, we're just trying to get to 20 this year. We know that these guys are they won't even entertain the idea of making a midday squares manufacturing plant. Then you go into the internal smaller co manufacturers.

I know when we were going through people were willing to listen to how we would want to make it and they would say to us hey are you in billing. Are you willing to invest $3 million in our plan, and your minimum order quantity has to be a million dollars. So there's these pockets and that's why it's like four years now that midday squares has yet to see a competitor on the shelves.

I think it's coming eventually but it creates a ridiculous moat because yeah it's a real moat and internal politics of where people just don't want to fuck with investing that type of money.

SPEAKER_02
Yeah, it's the narrative to right like the narrative around manufacturing is like oh shit sounds like a lot of headaches and I got to deal with this and that and I don't understand many fact I got to hire people to deal with it and it's like it's this whole narrative that you build in your mind.

SPEAKER_00
But so hill that's when I get I get excited when that gets presented to me that's actually my driving force in life that's part of my algorithm for decision making is is this something that most people say is a bad idea.

SPEAKER_02
I saw this on your. So first off that's like a Keith reboy thing that I've seen him say a lot is like his barometer for his investing as a BC is like do half of my BC friends laugh at the investment that I'm making. I've always loved that like I thought it was just a good idea in terms of as an entrepreneur as an investor etc but I read this when I was doing my research for this episode and one of your like, it was a blog post you were interviewed in.

Where you said something like going after hard concepts is actually an easier way to succeed. I thought that was really really well said.

SPEAKER_00
I've had inherently the easiest time fundraising with this business. My enjoyment level every day has been so much happier because it's attracting talents easier when you're going after really hard things raising money is easier when you're going after really hard things. It just makes everything so much easier.

It's like this epiphany I had it's like from now on going for whether midday squares is successful or not everything I will touch must be in this realm of hardness complexity and magnitude because it has made my life 10x easier than the the the nickel and diming of that I used to do. And when I talk about nickel and diming going after businesses that could hit you know only 20 30 million a year of revenue.

SPEAKER_01
I will say the one one piece you are missing is I think authenticity because when I look at midday squares I see like it's not it's not just that you're doing hard things you're doing hard and authentic things to you Jake and Leslie the co-founders. So for example like you know I saw a video of Jake who's this like highly energetic guy basically pumping up like I think it was like an Air Canada or some like company doing like dancing to the YMCA and you just see him like going completely like bonkers and and if you know Jake that's Jake and if you know Leslie that's Leslie and if you know Nick that's that's Nick so I think it's a good framework to start thinking about is like do hard and do authentic.

SPEAKER_00
Yeah and do so authentic is the most important for life in general because you don't have to show up ever thinking about being a different person like being authentic allows you to free headspace to not have to worry about anything but how that relates to making more money is really simple is that in your authentic state you have an intuition that nobody else has like period and when you are in that creative intuitive state that is so 100% you it's like I can almost guarantee that you will find success now here's the kicker very few people reached that level of intuitive self truth and that's what I'm out there pitching which is you know go deep figure out what that thing is that makes you you and then triple quadruple down on that and that's it.

SPEAKER_02
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You also hit on this idea of like kind of complexity and like I always think of the. I think it's Charlie songhurst the famous investor has this matrix that he draws of like complex on one vector and boringness like or sexiness on the other one. And he talks about the fact that you want to be building businesses that are in this in the quadrant that is like complex and boring because complex and sexy.

You know that's like SpaceX or something and there's so much competition when you're building complex sexy things that everyone wants to build and so talking about manufacturing. I'm like holy shit that's boring. You know that's like the boring stuff and it's super complicated to do and so you're building in this rarefied air where people don't want to be building there because it's not sexy and it is complicated and so now all of a sudden what's your competition look like I'm you're building in a big space with less competition to your point five years people haven't been replicating it or doing it because it sits in that in that sector.

SPEAKER_00
Oh man. Oh man that is like it's it's number one in finding pockets of exploit what I will say is Greg asked me to come up with some ideas for the show today and I thought about it and I have ideas but I I want to leave for sure an anecdote on this podcast which is I've gone after things just for money and have made money doing them and I know in for sure with 100% truth that the success lies in the thing that you want to do no matter what and usually if you do something for instance there's a huge keyword spread right now on hrefs right for plumbers local plumbers there's a huge opportunity to build a monster aggregator for plumbing the plumbing industry. It's so clear how to make money in that industry.

What I do it tomorrow no, even if I see it because I when the going gets tough in a business which it ultimately always will. This is the first time ever because I'm excited about what we're doing. I love chocolate I think literally my graduation when I was in grade six I said Charlie Willy Wonka and the Charlie factory was my dream to be one day.

I never want to quit I'm addicted to it. And so you don't ever discount that part and sometimes when you're doing unsexy things like for midday squares as unsexy it is in manufacturing is very sexy from a brand standpoint, like people love wanting to build brands people love what comes with that aspect and I have and I'm and I'm I could tell you I've been chasing this since I'm 17. I've wanted to build Nike since I'm 17 and I veered away from that for many years and now that I'm back I realize why I'm addicted to it.

SPEAKER_01
And why did you veer away is it because you were chasing the chasing the money.

SPEAKER_00
I was chasing the money there was there's a million easier ways to make money than to build a brand. It's it's there really is. I don't care what anybody says like you know if you if you're trying to become a millionaire building a brand is not the fastest way to do it.

If if if anything it's actually the least probabilistic way to do it.

SPEAKER_01
The truth is yeah the truth is it's it's enormously difficult to build a brand and it's enormously difficult to build a startup like if you want to make a lot of money. You know honestly just go work at Facebook and Google and get some stock and you'll probably make a lot of money like people who go into startups especially like CPG or even hard things like consumer social like don't it's just not your odds are so low like you need to go in because like you want to make you know 16 year old Nick proud basically.

SPEAKER_00
Yeah it's like Iron Man know I'm actually really I'm really open to sharing the why the why is I like doing things that and I know Sahil even Greg you both feel this way one I'm an ex athlete Greg we've been doing this is where you are. I like knowing that I'm doing something that a very small percentage of the world is capable of doing. That's that's what that's what that's what drives me.

It's it's my competitive force against myself I always have when I was playing hockey. It wasn't about what was going on around and it was like hey how far up the stats could I get myself how good of a goalie could I become. And it's the same thing here is I love the idea that I don't know five two people in 100 years three people in 100 years get to make Nike I don't know if we'll do it but that's the dream and that's why you know I if you hear me talk about this all the time is I'm always like we're doing this for 2535 years again everybody I meet trying to build businesses for five years and flipping it do you think that we would have ever built a manufacturing plant.

If we had a five year business plan absolutely not you could not make the returns work. And so again like a competitive advantage people think competitive advantage comes down to intelligence all the time how much experience you have in something sometimes it's as simple as saying hey I'm not going to play the game that the world wants to play I don't want to do this for just five years 30 years you're going to you're going to interact with your decision making like on a whole different level.

SPEAKER_02
I saw a great tweet about that exact point that you just made on like people think that experience and intelligence is is like the most important thing around this. I think it was Jack Altman you know Jack Greg he's a founder of lattice. I think his brother is Sam Altman one of the YC guys.

Jack tweeted one of the most surprising things in business is the degree to which an inexperienced person with the right mindset will outperform a highly experienced person without it. I thought that was so well said I was like the whole thing of experience is just like I just think it's overrated.

SPEAKER_00
So overrated what it what it what it's not overrated on is giving you the lay of the land that's it after that get get the fuck out of the way like when it comes to experienced people they actually do more damage in their squareness even like myself I will be that person when I'm 70 going back to a 20 year old I will be more destructive than I am positive to that person because I will have created all of these false stop and goes when wire Z roads present itself simply because of timing luck my own skill sets right but what they are really good at is if we give the analogy of a formula one track they can tell you on turn two there's going to be a pothole avoid that at all like they're really good at that and then after you've just you've distilled that like get them the fuck out of the way.

SPEAKER_02
They've gone through the the idea maze like they've kind of been through it at least in some form in some way shape or form I do think that like sometimes you know those people have this like flawed map of the reality because it doesn't apply anymore and so they're like hey you're going to screw this up you know Nick your manufacturing is going to be broken because of this this or this and like that was 10 years ago and things have fundamentally changed and there's some reason or new insight that you know they don't understand or fully fully appreciate but I agree with you.

SPEAKER_00
Far from it like I have I have an incredible board okay and I've spoken about this so I'm not throwing them under the bus at all this is really just a good example of it. We were going through we just transition the whole business from a two square business to a one square business. We needed to make these decision clicks cost were rising we want to do a price increase we had data from the customer that they want to buy one square time not two squares so we said you know what let's do a $1 price increase but to offset the feeling to the customer.

We're going to drop it to one square so now instead of selling two squares or 399 we're selling one square to 49. That's the premise of it we presented to the board saying we're rolling this thing out and everybody like whoa whoa whoa like we could we do a test market first and this I'm just looking at everybody I'm like what do you think this is fucking. L'Oreal test market we were barely surviving the water is filling up every day we have two people in QA we could barely scan the boxes in we could barely manage three flavors now you want me to manage three flavors and two skews which create which creates six different skew possibilities is like no we have a gut feeling we're rolling with it this is where it's at and I get in 10 years when we're a different company that we can be.

More calculated in our approach but sometimes you're just too far from it and you forget what it's like to be on the the army lines.

SPEAKER_01
First of all I love that you're just like absolutely not like I feel like a lot of I know a lot of founders who have conversations like this with their board and it's easy to you know it's your board and ultimately you're the CEO and you kind of work for the board. It's easy to be like. I'm sorry we're going to the direction we're going.

SPEAKER_00
No and this is a piece that I think a lot of investors are going to hate me for saying on on this podcast is just. I I my board trusts us. I'm about to say what I'm about to say is that you have to earn trust in life and how you earn trust is by delivering that being said founders need to start taking back.

And then you have to be like you know you're doing the stuff we are the scarce ones monies of abundance and that's our of abundance boards are of abundance. That is not to be saying that you should show up like an arrogant prick because I think if you called my, my, my board they would say you know what he's he's reasonable. You know what they say you get paid to make the convicted shots and you have to you have to show up with that confidence to lead.

You're leading them through war not them leading you through war and that's the piece we got a flip because there's a huge. There's this huge idea of like founders are just glorified employees and that is the furthest thing from the truth.

SPEAKER_01
And then there's this big decision that you made or you and and you know your co-founders made at midday square is where it was a gut decision and you went with it. But deep down you're like oh my God I don't know if this is actually going to work because I'm sure there's you know I'm sure you have some of those.

SPEAKER_00
Can I tell you honestly it's happening right now it is the one squared decision and here's why I'm going to explain to you why it's and I don't even have the answer yet. So it's actually right now in this part of the movie where the plane goes off the radar and nobody knows if it blew up or not. And that's kind of where we are right now so here's why this was such a big deal.

If every customer right we were we were on fire in the US we beat perfect bar in the last 24 weeks is the number one bar in the US. Okay, so that's like do not fuck with anything right like don't fuck with anything. The board was like guys.

If we're selling two squares for every customer and we now bring it down to one square package. What's to say that every customer is going to continue to buy two squares we might actually go cut our revenue in half. That is a factual statement.

And this is where gut overrode it. It was. I hear you loud and clear but if you just read the request from the customers.

They want one square so badly at a fair price. And there was no data in the world that could have made this presentation. Look like this was the right decision to make other than anecdotal evidence.

And so our bet is that no matter how much carnage it reeks on the PNL. That in the long term, we will actually end up selling more squares per customer. And we think that because now we're giving the customers what we want.

And that's what we have 100% conviction on is that they want the one square. So even though it might hurt the company financially in the short term. We bet the farm on it in the long term.

And, and, and that's where, you know, in September, if we were wrong on this, we put ourselves into a position of where we can potentially smash into a wall and have to raise, you know. Way earlier than expected with revenues not hitting where they need to hit potentially creating a down round scenario if that all does come to fruition. And that's where like, that's where I love thinking about entrepreneurship like being a Formula One driver sometimes you can't think you just have to act and and what will be will be you know you live and die by the decisions you make and so we made a really we made a really hard gut decision on this one.

There was no data to suggest that we should have done this.

SPEAKER_02
I love that because it's just an example of a bold decision that you just you had to make. And it's also the benefit of being a private company right like a public company. The reason I think most public companies end up stalling out at some point, you know, in the long run and getting, you know, chipped away at by by innovators and by, you know, new entrance to a market is for this reason right like a public company can't make that decision.

Because it's just like, oh my god, we can't shoot the golden goose like we can't give up revenue in order to go after the thing that might be correct in the long term because we've quarterly earnings reports and we have to read them out to investors and we told analysts what we were going to hit and we have to hit that or we have to be in the band whatever. And so I mean it's also, it applies to like when you think about the public companies that have really thrived like in the tech world especially the ones that have the founders still leading them, still make those bold decisions. Because they aren't just some like executor that's come in to like operate for their 10 year stewardship and then move on and retire with their $30 million pay package.

They still care about it like it's their baby. And so like, you know, an Evan Spiegel at Snapchat or Mark Zuckerberg at Facebook, you know, criticized them as much as you want, but they're still making decisions as though it is their baby and it is they care about it so much over the long term because it's so much of their legacy is tied to it.

SPEAKER_00
Why am so bullish on so two other contrary things actually just one on that end but is we fundraise at lower valuations every single round to control the board and have complete voting control. So we've taken 10 $50 million cuts from the valuation in order to have those provisions in the term sheets. This is stuff that people need to continue to do now why am I so bullish on control and board people always ask this question is like why are you an ego maniac or no it goes back to your answer in software, all of the top companies I think people just got excited by software business models but in CPG, there's not one founder led top 10 company and the publicly traded ranks.

It's all like, you know, the guy who founded Hershey's was a G back in the day that guy is dead now and it's you know like what happens when a founding team in CPG goes the distance doesn't sell the company retains ridiculous voting control at like the super voting rights of the Starbucks and is able to continue to make crazy bold decisions well bringing in a billion dollars of revenue. What does that world look like. That's what I think we're excited about and why we fight so hard for control I mean fight fucking tooth and nail in the negotiations for that.

SPEAKER_01
It's the classic name your price and I'll give you the terms. Right that the saying it's not about the price that you get. It's about the terms that are often way more important.

SPEAKER_00
And that's actually how we start the fund raises so what a trick that I've learned that I really like is we create the term sheet and I think other founders could use this too so you you go out you pay you pay a law firm to create an outline term sheet so you get you get rid of all the people that are going to waste your time. You show up and you're like here is the framework of the term sheet. You know price just the framework of the voting control and all that if you are willing to do this deal.

You name your price knowing these provisions if not walk now and you could still bring your own term sheet I'm not saying you have to use our term sheet this is the outline so this way in 24 hours you scare away all the players that don't want to play.

SPEAKER_01
Nick you are on this podcast right now because literally no one talks like you at all in Silicon Valley or whatever like. Not only are you saying things that no one I know is doing. You're telling other people about it in a public saying you're not afraid to tell and that's why you're here like I that's why I love you.

And I love that about you is because you're not afraid to do your own thing and just kind of. Hey this is how other people are doing it. This is how I think is is reasonable.

Let's go.

SPEAKER_00
But it comes down to my dad died and my dad died at 10. My family really all mourned it separately so we all became alone for a very long period of time you know we were in a house together. And I think that period of time of my life has really it really shaped me to to to having first principles thinking and unique thoughts and because I was just so alone for so long even though I was amongst people that you start to really lean in and trust yourself when you are trying to figure out death.

It creates this really amazing energy in you to have to figure out life fast quick who you are how you're going to react to it. And that's why like I always say like the best thing that ever happened to me is my dad, my dad passed away and I don't mean that. My dad passed away is that it really just shaped everything for me because it taught me to be a unique thinker because there was nobody to mourn with.

And the more I leaned into myself, the more happy I was getting and that kind of translate into life outside of the morning part. And then I just started to realize wow, you know, you, you, this is going to sound bleak but I don't mean it in this way you're born alone and you die alone and conduct yourself accordingly. And you're going to have a great journey on the planet.

But but really think for yourself.

SPEAKER_02
So in our last couple minutes, I just have like a prompt for you kind of, I guess like pretty, pretty open ended prompts like say you were dropped into a, you know, new place, you have nothing on you you got you know, no money, no connections you don't have your network, any of that stuff. What would you do? How would you because you strike me as the type of person that would figure out a way like I would go check on you in 10 years and you'd somehow be successful and have figured something out and you would have made friends and done stuff. Like what would be your moves like what would you go do if you were dropped into a new place and needed to, you know, needed to find your way.

SPEAKER_00
I would, I would really do I get do I get to bring the skill sets that I have or am I.

SPEAKER_02
No, no, no, you get all your skill sets all your knowledge in your brain whatever you guys and you know you have your baseline level of like you don't need to be stealing food. I'm at the outset to survive.

SPEAKER_00
Yeah, I would find baseline family businesses. And go become the right hand person to the right person because that is a launchpad that like. I mean, putting yourself secondary to someone is always the best way how did I make my network in Montreal it was.

I was at like this like thing where I had john bigs who was the editor of tech crunch. And we were just eating dinner and I just was like a servant to him. It was not about me.

And, you know, two months after he hits me up is like you want to host tech crunch in Montreal. And then I made somebody else the face of it LP Maurice not me. I just got to put my name with it and was a steward to him.

And he got to put his name on that and that changed my whole life just that was just that one little thing right is is be a steward to others and and it's it's the hack. So I say it all the time you have no idea how many people come through midday squares and piss away their opportunity to be the right hand person to the next Nike like I they can't see it right. And I'm always like why would that person want me to have a negative opinion of them like if they were smart, and they were to make a bet, even if it's unlikely but if we do succeed at our vision, it's going to be pretty big what do you want me to have a good opinion of you.

And these are the things that I think about it myself so I would, I would be a steward to somebody that needs to make sure that I make them a boatload of cash or a boatload of notoriety or a boatload of fame and whatever the hell it is and my life.

SPEAKER_02
It's like the era of apprenticeship is not dead. And if you can find a way to go be someone's apprentice and hustle your ass off to do it well and to learn and be a sponge when you're around that person and go improve upon it. Like, that's kind of an old fashioned way of making sure that you succeed and win in the long run.

SPEAKER_00
Oh, my it's it's that I think that is the thing that will never change you know Bezos always talks about what are the things that are never going to change. That's one of them like being a steward to somebody will never change.

SPEAKER_02
That's one of my favorite frameworks by the way, the, you know what will stay the same framework. It's like Bezos talked about how, you know, for anyone that doesn't know this one like he talks about how it's really hard to predict the future. I think it's so hard so uncertain.

And so if you're trying to say like what's going to be different 15 years and let me try to plan around that to position us well it's really really hard to do sometimes people do it well but it's very difficult versus the flip side if you invert the problem and think about what's going to be the same in 15 years. What do I know is not going to change and let me make sure I'm building for that. So it's like customers are going to want things fast and they're going to want things seamlessly and check out easily like that is never going to change people always want less friction.

SPEAKER_00
And so how do I build around less friction. It's why we chose chocolate. I mean 142 billion traded globally.

Every country knows what chocolate is. Nobody requires education for it. If I give you a piece of chocolate in a country where we don't speak the same language you will immediately know what I'm doing.

I'm going to be going to you gratitude. I'm giving you a little piece of good vibes. These frameworks are so powerful.

So that doesn't mean that they're going to be easy once you do them but that what is not going to change is a great place to start 100% 100%

SPEAKER_02
Greg any any closing thoughts here as we as we hit the end of our time. I feel like we hit on so much interesting stuff here. How much Nick how much are you sleeping.

Like would you say you sleep a lot a little and I ask because a lot I ask is especially with this bit this change from two squares to one square.

SPEAKER_01
I must be like in your brain right now. And yeah just curious your sleep habits and how you're feeling just you know mentally right now mentally I need to always a week every so okay.

SPEAKER_00
I'm plugging the podcast midday squares uncensored guys come come listen to it because it's Jake Les and I we talk about our journey and what we're going through so it's not it's not an interview show it's really about us like you get to be a fly on the wall as we just distill what we're going through. That's why that that brought it up but right now I'm a bit beat up but I went all in with my life on this. And so I really don't have much of a personal life.

And I mean that Greg like I haven't seen any of my friends in three years. My family knows that I'm going to be very unpresent Les and I who are married this is all we do. And so the reason why I'm sleeping well is because I've eliminated everything from my life except midday squares.

And so when I get home it's just home sleep back at it. And every three months I need one full week off to sleep. And that's how because because it's it's so hard manufacturing.

We just to give you guys a scope of the scale. August 2018. We had max capacity per day of 60,000 bars.

And today we produce 46,000 bars a day fully automated. And we're looking to double that that that that I've had a teammate die on us at a company retreat I've had mold in the walls while investors were visiting. I mean, it's just been one thing after another there's no reason why we should still be alive.

And I attribute sleep to a big part of the success is that I'm sleeping really really well which allows me to be decently emotionally stable to deal with, you know, the onset of depression that come on while you're going through it, which is, you know, something I've struggled with my whole life. I mean, we can get into that another time but yes, it's been crazy hard but I prioritize sleep like crazy. That's like, again, 30 year old Nick versus 20 year old Nick prioritize sleep.

SPEAKER_02
I love it. You, you, I feel like you opened my eyes to a bunch of new stuff here I'm going to need to do like Greg we're going to need to do like a debrief and and takeaways and stuff as like a follow up post script to this when we when we release the episode because there was so much gold in it that that I feel like I'm going to need to go back and re listen to it again to uncover all of it so thank you Nick for for taking the time to join us man this was awesome. Where can people find you and and your and your business.

SPEAKER_00
Yeah, so Instagram midday squares. Nick Salto on Twitter. I love just, you know dropping tidbits as I'm not tidbits and necessarily how we're doing stuff which is what I'm going through.

So Twitter Nick Salto Instagram midday squares ticked off midday squares.

SPEAKER_02
I'm going to go buy some now too. I'm excited to give him a shot. This is going to be awesome.

SPEAKER_00
Please do please do. Thanks Nick.

SPEAKER_02
I will I will let you know thank you so much for joining man this was awesome. Thanks so much for listening to today's episode. If you have any questions that you want featured in a future episode, email us at high at trwh.

com. Leave us a review at Apple or Spotify to help us grow the reach of this podcast. Until next time, we will see you soon.