Things Have Changed

The Biggest Crowdfunded Food Product Ever – with John Coogan

June 30, 2020 Things Have Changed
Things Have Changed
The Biggest Crowdfunded Food Product Ever – with John Coogan
Show Notes Transcript

John Coogan, Rob Rhinehart, Matt Cauble, and David Renteln sought the perfect balance between nutrition and convenience.

Soylent was created from a need to find a simple, nutritious food source & created a formula consisting of 100% of the daily value of necessary vitamins, minerals, and macronutrients obtained from normal meals.

In 2013 Soylent raised $3M, the most ever seen for a food product on a crowdfunding campaign & quickly grew into a cult following in schools and colleges all across America.

In the Part 1 of @johncoogan conversation with THC, we cover Soylent’s early days, the incredible community & virility it garnered, and the D2C model with demand so high it took Shopify servers down!

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Things Have Changed

John Coogan [00:00:02] If you're in a scenario where you're trying to cut back expenses but remain healthy, you can do that with something that is like a Soylent, but maybe not even affiliated with the brand. Maybe it's your own thing, but you're just thinking about the nutrients that you're putting in your body and then optimizing those for cost and time. That's really the vision and the ethos of the company. And I hope that that's something that people can benefit from at this moment more than ever. 

Jed Tabernero [00:00:30] That's John Coogan, co-founder of Soylent, the Silicon Valley Meal Replacement Company. John served as a chief technology officer and helped raise the largest crowd funded food product in history. Three million dollars. Join us as we learn about how Soylent was founded and how John and his team of Silicon Valley engineers hacked food. Oh, and for all of you who watched the movie Soylent Green, it's not made out of people. 

Shikher Bhandary [00:01:33] Welcome to things have changed. In 2015, when I moved to the United States was in New York doing my grad school in Manhattan, I did not know Chad or Adrian. Rijad and Adrian are at Berkeley roommates. But I guess we had one thing in common. We were both in school and we both were on silent. Yeah. So that's kind of what I'm trying to point out to how culturally significant the drink that you John created with founders that you worked with. But it was it was just incredible to think that, oh, yeah, this was something I was consuming. To get through school, to get through, I couldn't afford a ten dollar meal at Chipotle back then, so I needed to optimize my workload because Labbe was so busy and I found that white bottle. So, no, it's it's just so exciting to have you on, John, so that we can just kind of go through that whole process because, I mean, you were in your mid 20s back then, too. So you guys were figuring out this whole thing, ingredients, branding, vitality of a consumer product. Good. Yeah, no, 

John Coogan [00:02:53] I'm super excited to talk to you guys. It's super funny you mention Chipotle, because that was about maybe six, nine months before Soylent even was conceived. That was one of the biggest co-founder fights I've ever had with one of the co-founders of Soylent and my current business partner, Dave. We were we had seventeen thousand dollars for our first venture. We had just graduated and had gotten into what, like an incubator program. And and so the money was the only thing that was keeping us going. We had no savings, no income, just the seventeen thousand dollars to last us indefinitely until we could raise money or be something which was not a lot of money for a modern venture. And we would go to Chipotle as a treat every once in a while. And when we were there, I was always like, we need to save money. Let's just get the normal thing. 

Adrian Grobelny [00:03:53] And did you get the Guac? 

[00:03:55] The fight was over. The fight was over the Guac. So David, my business partner, he's a big guy. I'm a big guy, like and he just when he's enjoying Chipotle, he wants to double meat once the guacamole, as most people do. It's the best thing when you when you're when you're there. But it quickly the eight dollar excursion turns into twelve dollars and you extrapolate that that's an extra week of runway right there. So we were so so eventually after a couple of these, like, you know, me trying to nickel and dime him into not not upgrading a Chipotle order. Finally, the the resolution that we came to was just that I would just get whatever he got and then I would be equally responsible and and like to this day when we go out to eat, I'll often just be like, yeah, I'll just have whatever he's having because I know it's going to be a lot. And then when the bill comes, I don't feel like I got screwed or anything. So it's become kind of a running a running joke between us that that's the only way to keep it fair is just for me, because I'll never talk him down from a larger order. 

Jed Tabernero [00:05:05] Yeah. Yeah. David and you have been friends for a while. 

John Coogan [00:05:10] It's so I mean, yeah, that's kind of the beginning, at least to my side of the story. We actually went to preschool together, but I don't have a real memory of that. But we went to preschool in Altadena, kind of out here in L.A., wound up going to middle school together, did our math homework together. We were in actually rival Counterstrike Clans where and then in high school. 

Shikher Bhandary [00:05:37] That's where friendships were broken. Yeah. 

John Coogan [00:05:40] Back in the early days, there's always been a little bit of rivalry between us, which I think is what makes us good business partners. And and then in high school, I was playing football, he was playing soccer, but then we both played rugby together. So that was another good opportunity to kind of get to know each other more. And then we both went to college in Boston. He went to Harvard, I went to Northeastern, and we were both kind of interested in finance economics. He studied bio but was doing internships at startups. I had an internship at a startup in Cambridge so we would get lunch and hang out and kind of share what our experience was like at the various companies. And then Northeast turns a five year program. He was doing a fifth year at USC doing a post back to prepare for med school. And we both had this summer. That was the kind of the fifth year and we already had all of our other high school friends who had graduated in four years. They had already been in the workforce for a year and could basically tell us how terrible, you know, entry level finance and consulting jobs were. So it took a little bit of the you know, the the illustrious nature, the allure of those roles kind of out and and kind of gave us some perspective. So we started talking. We started reading Paul Graham's blog, learning about what was going on in Silicon Valley. There was a lot of entrepreneurship going on in in Boston, but I feel like it was still at that time a little bit less receptive to the year. Twenty one, you know, nothing. Here's your punch of. I had to go do something crazy. And where is Silicon Valley that's like, you know, like every day you see rounds like that. So. So we were like, OK, well, if we don't have the experience to go and talk to some super professional D.C. and Boston and and just build build something that way, let's go out to Silicon Valley, do one of these crazy incubators and and see what happens. So we applied, got in, move out to Silicon Valley. We're looking for housing. Of course, we only have this seventeen thousand dollars. So we're trying to keep it as cheap as possible. We we go on. I think it was like pad mapper, this thing that was like it took Craigslist postings and put them on a map so you could see where they were and they had just broken their API integration with Craigslist or something. So all they had was Airbnb listings. And there was a another Y Combinator team that that had posted like, hey, where this house where the startup house. It's amazing. It has a pool. We have an extra room and it's only like a thousand dollars a month or something like that. So we go we go in and tour and we're like, this will be perfect. They're working really hard. They have a demo day coming up. We have a demo day coming up as well. We were we were actually part of immagine K-12, which later was absorbed into Visi. So we show up to this to this house. And of course, it's in complete disrepair. The pool is filled with algae, just completely green, and there's holes in the floor. The toilets don't work. It's just a mess. So naturally, we're like, this is perfect. When can we move in? And they're like, whatever. And so we're like, OK, we'll go get everything that we have in the car and move in right now because we're not moving from anywhere. We're moving from our car. Yeah. So so we immediately bring in his mattress, I think a box of books like some O'Reilley technical manuals. And and I found it on Craig's List and we set up shop. So at that point, both teams are working on different ideas. We're working on something in education technology since that's immagine K-12 focus. They're working on wireless networking, trying to build kind of a new mesh network over the TV, the TV spectrum. So they're doing hardware. They're a bunch of Georgia Tech engineers and we're doing education, technology, just trying to learn how to code and build kind of consumer facing apps. Both companies don't do very well. No money raised after I see Demo Day or imagine K-12 Demo Day. And so then the kind of reality sets in of like there's just less and less money available. Do we want to go get jobs? Is this a failure? Where do we stand? And so a couple of team members from Georgia, from the Georgia Tech team go back to the they actually needed to finish school. So they went back to Georgia Tech to finish their degrees. Smart idea, because we had nothing going on. It was not a runaway success. So why would you drop out? And then David went to go do a PhD at Caltech in bio, thought he was going to pursue that route. And so for a while, it was just me and Rob and Matt, two of the other founders. And we were just kind of working on all sorts of stuff. We had a sticky note wall of ideas. We would try and build things in like a week or two, release them. Nothing really ever got traction. But we got pretty good at prototyping very quickly. And then just coming up with an idea architecting it, Matt picked up front end. I was doing all the backend stuff. Rob was doing a bunch of crazy experiments. He built like a virtual desktop platform where you could go in and use a really powerful computer through your Web browser. And a lot of these ideas have actually become good start ups with the right resources and the right teams. But we just were never able to get any of those working so well. These ideas are failing and failing. We start looking at the numbers and they that team, they had about one hundred and seventy K from Wiki at the beginning. This was when I think why she gave twenty and then there was a safe that came along with it. There was one hundred and fifty so they had one hundred and seventy was lasting a lot longer and they were much, they were very good about managing it very judiciously. So. So we start looking. Yeah. So we start looking at our, at our costs and we paid our rent a year in advance. We had our laptops, we had an Internet bill that was maybe 30, 50 bucks a month. And the real only the only cost that we had that was really dragging us down was food. And in San Francisco, it's really hard to get affordable food easily. That's convenient. You can go out to a great restaurant. It's super expensive, but it'll be healthy and convenient. You can grow your own food, but that takes a long time and it's really hard to do that. In a studio apartment in San Francisco in the. And then, of course, you can go and eat fast food, but that's a fast track to killing your health and then eventually you'll you'll be less productive and you won't be able to actually work long hours coding on the dream of building the, you know, the ultimate app, which was still the goal. So Rob starts kind of thinking about the his nutrition and his diet, but very much from a computer science perspective, since that was his background at Georgia Tech. So he starts thinking about, OK, these are inputs and outputs. You put protein, carbs and fat in, calories in, calories out. You burn calories throughout the day. And really, this this is a problem that can be kind of optimized. So let's so he set up some spreadsheets and started crunching some numbers and looked for kind of the cheapest and purest inputs that, when multiplied together, added together, could result in a balanced diet as defined by the FDA and the Institute of Medicine. So so he starts prototyping it. And at that point, I still think, you know, this is just like a fun little side project. There's no business here. At first when he told me, I was like, why are you going on a diet? Like, no one cares what we look like they care about are about the output of our code and the quality of our business ideas. They don't they don't care what we look like. We could weigh four hundred pounds. And, you know, if we have traction on a thing, we'll get funded. But it was obviously very interesting to him. So he runs this experiment, creates a prototype, lives on it exclusively for 30 days straight, and then starts blogging about his experience. And that just kind of catches Hacker News off guard at the right time. And in twenty, twelve, twenty thirteen, Hacker News was still I mean, it always has been very technology focused and still is. But there were really there was really nothing about nutrition on there that could break through. And he had developed a little bit of a following on his blog about technical issues. And he of course, was speaking the language of hacker news, talking about things in terms of algorithms and quantification and and data. So he was able to speak to that community in a very authentic way because we very much were part of that community. And normally we were posting about software just we were young software engineers and weren't able to build anything great yet. So that gets overwhelming traction. We put up different landing pages and different beta apps and share them with our friends and gotten tens of people to use them. I think the best one we ever had was like five hundred users. But overnight we have ten thousand sign ups on this landing page just to learn more. And then he sends out a questionnaire to the customers or to the people that gave us their email and says a whole bunch of questions about what's your height, what's your weight, what are your dietary goals, what do you with your physical activity. These are things you you'll see on a lot of health apps now. But the level of amount of information that people were willing to share and be a part of kind of this hacker open source movement was insane. People would say, yes, I've done twenty three in me and I will send you my DNA. Like I will go and get a blood test and send you the results. Like that's how much I want to be a part of this. So that was amazing to see and that was just incredible traction. From there, the press started getting interested. That helped you gain a lot more sign ups and pre launch traction. We were able to launch a crowdfunding campaign, which at the time was, I think, the biggest food crowdfunding campaign of all time. We raised over three million dollars and from there we were able to leverage that into raising some seed capital and then eventually a series and grow the company into a much larger organization. So that's kind of the Soylent founding story. 

Jed Tabernero [00:16:19] So if you get on Amazon and check out Soylent, the first comment is still is it made out of humans? That is so bizarre. 

John Coogan [00:16:28] Yeah, it's remarkable. I mean, we thought we were kind of like this nerdy sci fi fan in crowd that was aware of Soylent Green and the and the Charlton Heston film. But apparently every single person that has an Internet connection has seen that film because they all comment. But so it was obviously a joke. It was just a funny look like what is the opposite of the thing that you should call people took away from what they wanted to? We were definitely the picture of like the Silicon Valley hustling startup. Let's not go out and let's work along to work long hours and code and stuff. And a lot of a lot of people For good reason have have qualms with that lifestyle. But at the end of the day, we work we internally, we were thinking Soylent will will give us time back and allow us to go and do other. Things can go on hikes and and relax and spend other time, but it quickly became know in popular culture like, oh, this is this is something that, you know, they're trying to force down people's throats and they they're going to take away Thanksgiving. That was a big thing. Like Silicon Valley is going to cancel your Thanksgiving. And we were like, no, like our goal is to save you money so you can afford to have a more lavish Thanksgiving. 

Jed Tabernero [00:17:46] Perhaps it's funny. The reaction of the media was bizarre because they started posting titles like The End of Food, because basically the narrative of Soylent Green, the movie is that in New York there's an overpopulation and people are getting fed like fucking lentils and soy. But then they found out that it was made out of people. 

John Coogan [00:18:11] But I mean, we were definitely leaning into that and having fun with that. Just a lot of that a lot of that sarcasm and irony was lost on the over 40 crowd. But interestingly, especially at that time, it was incredible from a growth marketing perspective. And we I would love to say, oh, yeah, we thought this through and this was our plan all along. But realistically, any time we posted anything anywhere on the Internet, I mean, food is already a hot button topic because everyone has their own diet. Everyone has their own opinions. They have. Oh, no, I like this doctor. I like what this person has to say. But a product name, Soylent, immediately you post anything. Top comment. Soylent Green is people. No, it's not like is this people? Why did they give you this name? I want to fire their marketing person. So you just get so much you get so many comments. And especially at that time, Facebook would just boost that stuff that had a lot of comments. So all of a sudden we just had tons and tons of traction on any post. We put love in any and then also press articles. So, you know, these blogs and small digital outlets, they want traction and they know that if they write about something that's as controversial as silent, they're going to get a lot of traffic. So it really helped build this organic movement that drove. We didn't spend any money on advertising for years because just everything was completely organic. And that was definitely luck. But I mean, it also did come from the fact that there was this authentic voice at the helm, which was very like witty, ironic tone, combined with the actual computer science knowledge to write about things in a certain way that were either intriguing to people or absolutely infuriating, 

Jed Tabernero [00:19:58] not made out of people, 

John Coogan [00:19:59] No people. In fact, no animals. It's a vegan product and product. 

Jed Tabernero [00:20:04] That's the thing. I guess also we can look at this as sort of an optimization problem right there, optimizing for faster eating times, faster preparation times for food and all that stuff. So so, Rob, your co-founder, I watched a lot of shows that he went on and he was mentioning how he now has a or at the time had a diet of 90 percent Soylent and the rest would be for food. And he was mentioning how well you don't want to enjoy food every single time. Right. And in Neil deGrasse Tyson, he had a an appearance there where he said something pretty interesting. He was talking about how he was driving in a car technology. He was living in a house, another human technology, but he was still eating grass. You know, he was eating like vegetables and not actually address, but, you know, things that were organic or something like that. 

John Coogan [00:21:08] Yeah. And that is something that is tailor made to infuriate people who who are in the Michael Pollan realm or. Oh, you know, the the eat local or eat organic. And that stuff is true. There's a lot of evidence that eating organic and eating locally is optimal and is good from a diet perspective. I wouldn't say that it's not, but it's just is it cheaper? Is it more efficient? And for people who want to make a certain type of tradeoff so it can be a really good product for that. So I don't think, you know, it's not supposed to be all things to all people. But when when people hear Silicon Valley and something, they're immediately thinking, OK, this is going to take over the world like Facebook and I'm going to be you know, there's nothing I can do. So I must resist. 

Adrian Grobelny [00:21:56] Now, you guys got so much hype through just going through college. I would hear about it all the time. People would argue like, oh, Soylent, it's it's going to take over and like, take out Chappellet and like like I need my avocado toast. And there's so many debates over Soylent and what it's doing to consumer behavior. I wanted to jump. Into your different iterations of the product, so can you walk us through how you guys kind of started off as experimenting with different nutrition's that the body needs and kind of packaging it into this powder at first? Initially, you guys had the powder packages and you would add it with the oil and you'd add it to those blender bottles, kind of like a protein shake in a way. And then eventually we started bottling it. Now you guys have a coffee version of the Soylent. So walk us through the iterations of how you guys came up with the formulas and the amounts of nutrition that you think is ideal for someone that wants to streamline their food intake. 

John Coogan [00:23:01] I mean, the reason we started with powder was entirely practical. It was something that we could make in our kitchen. So and then from there, it was easy to find a manufacturer who had the ability to blend powders together because that particular machine is just basically just a huge blender and it just mixes everything up. So that machine might be between one hundred thousand dollars and a million dollars, whereas a line to do a ready to drink product, a bottle product might be 20 million, 50 million. So the barrier to entry is a lot higher there. We pretty quickly knew that we wanted to go to a drink format and a bottle format just because it certainly satisfies the the idea of being more convenient. But Poutre was great because it allowed us these really quick iteration times. We could we could just be in our kitchen and mix up different things and see, does this taste good? Is this acceptable? And then in terms of the actual nutrients that are going in, that was always managed pretty much just in a spreadsheet looking at the ingredients or the nutrients in the ingredients that we were using. So if we were using a certain protein isolette, we would look at the amount of protein in that, as well as the amount of fat, because it's not it's rare that you get an ingredient that is one hundred percent isolated. So you need to kind of take into account all the different nutrients in each ingredient. So we were iterating very, very quickly. And even even once we went to market and we're manufacturing, we were still doing runs of improved products know basically once a month. We launched a 1.0 product in May of 2014. And and throughout that summer, we were shipping one point one one point to one point three. And we've pretty quickly got to one point six. And then that was stable for a while. And and I think now we're on one point eight or something like that. So the the pace of play and the ability to bring that kind of startup mindset around around iteration and quick revision and feed customer feedback was really critical. And and the the the powder platform definitely allowed us to do that. Once we got to drink, it was much harder because even just to test it, the machine that actually can replicate what the results might be like on that 20 million dollar line, just that benchtop machine is millions of dollars. So it becomes very difficult. So a lot of times we'd have to go to labs that had the equipment work with technicians of those of that equipment and then and then see the results. And then once we got something, there was still a little bit of a gap between what we would make on the benchtop in the lab and then what would actually be produced. So navigating that, the staging to production translation is it was pretty key. 

Shikher Bhandary [00:25:51] This is on, I guess, the product side. So how is the the demand side? I mean, we just spoke about how, you know, it just went viral. Everyone colleges were drinking it. Was there a certain moment that really took you, like in. I guess just zero to one hundred or was it just stages of just good press throughout good and bad press? 

John Coogan [00:26:13] I Mean, there were definitely major step changes. The first was probably an article in Vice magazine that went pretty viral. The blog post that we were posting were on Hacker News and doing very well, but not insanely well. I mean, a few hundred upvotes. The but the the vice article would obviously go much wider because that would expose people to outside the hacker news community to the product. And then as that grew, we did something with Discovery. We did something The New Yorker wrote a really long piece about the company that was a huge, huge, you know, just step change in the business. And then Rob was invited to appear on The Colbert Report. And that was, you know, like late night TV. Is this insane? Intended the audience. So we did so much business. Like, I think Shopify was down for like a second because there was so much traffic. 

Shikher Bhandary [00:27:12] Wow. 

John Coogan [00:27:13] But, yeah, it was it was pretty it was pretty crazy how much how much demand we were having with with the 

Shikher Bhandary [00:27:20] that might actually go down in history because like I guess this was Shopify when. 2013. 2014. 

John Coogan [00:27:26] Yeah, it was early. 

Shikher Bhandary [00:27:27] This was I guess when did the IPO'd like twenty fifteen. 

John Coogan [00:27:30] So I mean now have Kylie Jenner on the platform and stuff. So yeah I'm pretty sure they can handle any amount of demand. But at that time I think we were probably close to setting records on, on daily traffic when we do one of these huge, huge precipices. 

Shikher Bhandary [00:27:49] Yeah. Wow. Like taking Shopify servers down, I mean Shopify now is like oh what a hundred billion dollar company. And I don't know, it's just historic to take something like that down. That must have been the amount of new visitors that might. 

John Coogan [00:28:12] Yeah. I mean we were also just having trouble keeping our blog alive like we were just self hosting I think maybe a WordPress blog on native us and and just the amount of comments was just crushing the database. And so they're just keeping it, just keeping it up and was so difficult because we were getting millions of hits on just various blog post because Rob was such a like such a persuasive writer and he'd write these articles that were so infuriating for people, but also like there was a lot there. And he was writing a lot to like at least once a month he would write something and he would do crazy experiments on himself, like it wasn't just limited to Soylent. And he really knew how to strike that nerve online and just do something like just weird enough to really get a rise out of people. And that stuff is just tailor made to get traffic. 

Jed Tabernero [00:29:04] Yeah, pretty much during that span of time, you guys were like blowing up everywhere. I think The New Yorker is the piece that said the end of food or something like that. It was ridiculous. Yeah. 

John Coogan [00:29:13] Yeah. And it was it was there was like a cover, like The New Yorker doesn't do like cover stories, but they do like a like a half pamphlet overlay on the cover. And our story was the cover. Basically it was the biggest piece of the week. 

Jed Tabernero [00:29:27] How did it feel to be I mean, you were young at the time. And, you know, there is Silicon Valley stories that are like that where young people just get famous so fast. But what is it like to be part of that circle? You coming in and none of you are food scientists. All of you are from back. 

John Coogan [00:29:43] Yeah, I mean, huge imposter. 

Jed Tabernero [00:29:45] Yeah. That imposter syndrome must get hard. And then you got famous three months. That must have been a crazy feeling. How did that feel for you guys. 

John Coogan [00:29:52] Yeah, I mean it was it was pretty wild. I think, you know, we pretty quickly knew that we needed to bring on domain specific advisors. So we brought on the former CEO of Muscle Milk who had, you know, manufactured this exact type of product both in powder and drink form. So that was super helpful. And then we brought on the head of nutrition at Columbia to advise on the nutrition side and validate all of our assumptions. And then we were also working with professionals on the manufacturing side and the R&D side. So we were able mostly because we were really good at generating demand, which generated preorder revenue, which which generated venture capital dollars. We were able to actually afford to bring on experts and then defer to them. So that was that was the short of getting through things. And then the rest of this stuff was mostly just testing and learning. And we tried to keep that as much as possible to things where the the downside risk was was limited. Like if we put up a Shopify site and it and there's an air there, like it's not a huge critical issue. It might hurt our business, but it's not going to hurt the customer. So that was one place where we kind of. Moderated a little bit more and we're a little bit more doing things in-house, same thing with the press and the PR and the blogging, all of that was was fully handled in-house, whereas a lot of the manufacturing we really wanted to make sure we're working with the best in the world. 

Jed Tabernero [00:31:21] That's so crazy. I remember the backlog. I remember you couldn't order it at some point because 

John Coogan [00:31:26] it was crazy. I wrote so many scripts for, like managing that backlog and deciding who gets what and if you ordered twice when one order and stuff because it was a secondary market on free and for sale. Yes, dude, I can't even. 

Shikher Bhandary [00:31:42] What was it like you mentioned Shopify and writing the Python scripts and stuff. Was it a conscious decision to get it, like to see what you were just hellbent on? OK, let's just get the consumer first and there's a closer connection with them. So now you can build on the data that you can. 

John Coogan [00:32:02] Yeah, yeah. I mean, we were super bullish on DC, mostly because we ordered everything online ourselves. We were very used to that. It felt very natural. All of our customers were online and willing to preorder and subscribe. And and when we looked at the trends of ecommerce growth, it was clear that, you know, this was going to be growing for a very long time. I think eventually what we realized was that there was know there is an addressable market for these types of optimized nutrition products, and that addressable market is somewhat smaller when you look at only online, because there's just only so many customers that shop online for this category. So eventually we realized that if we wanted to really expand and reach everyone possible, we had to go into retail. And and that was a big reason why we raised the Series B from Google and brought on an executive team to manage the company and take the company from what we'd built and created, kind of a very solid platform to build off of with the products and the DC business, but then take it into Amazon, take it into retail stores. And we started seeing it ourselves, like if we were traveling, we couldn't get it for ourselves. So, you know, in terms of kind of dog food, we were unsatisfied with the customer experience that we were providing, because if we were in if we were in New York, you couldn't just pop into a store and get one. Or if you were traveling through an airport, you couldn't get one. So we knew that we wanted to at least get into this grab and go contacts. But then also, you know, we had before silent, we were shopping at Costco a lot. So it made sense to get into Costco and and these larger channels as well. 

Jed Tabernero [00:33:48] So I wanted to dove into your role as chief technology officer. I feel like every company in Silicon Valley needs chief technology officer, but it was hard for me to imagine what the role of a CTO would be in a company like Stotler. So I'm curious to understand what your first primary responsibilities were. And I know that you already mentioned that you were handling volume and handling the amount of orders that were coming in and figuring out ways to to get it to the right people. But that couldn't have been your only responsibility. Could you talk a little bit about your other responsibilities as CTO? 

John Coogan [00:34:26] Yeah, yeah. I mean, it's it's interesting because, I mean, we weren't we weren't our product was not software. So having a CTO is certainly less it's a different role than what you'd see in a normal Silicon Valley company. And yeah, I mean, at a larger CPG company, the CTO is much more like a head of it, looking at network management and permissions and and device policies and and some of those some of those ERP installations to to manage inventory across Pepsi. It's a massive undertaking and incredibly talented individuals. But on the small DC startup side, the CTO is usually just kind of an extension of digital marketing responsible for building the website, very much product focused and not in the consumer packaged goods sense of of developing, you know, formulas and products. More on the on the digital products side. So I had a team of user experience, user interface designers, front end software engineers, database engineers who would build and scale the the e-commerce website so that we could handle all that traffic and then provide a good experience for customers basically just trying to think so. 

Shikher Bhandary [00:35:38] D2C is like I guess it is mainstream now, but in 2013 it wasn't right. If in like Instagram, like you guys were putting out products there so early that it just added fuel to the fire and just kept running that engine. 

John Coogan [00:35:54] There were a couple big DC companies. I mean, Warby Parker was kind of the early one that a lot of people were looking to. And then Dollar Shave Club kind of happened while we were doing Soylent. And that was a. A huge mark for the industry and then there were a lot of companies that kind of got popular like Birchbox and Loutre and people were there was definitely like a subscription boom. And then now I think we're in kind of a new phase of a little bit more influencer driven with the Kylie Jenner brands and with a lot of other like what Lady Gaga is doing. And then there's still I mean, I see a ton of activity in D.C., whether it's in clothing or makeup or food or pretty much everything is D.C. And there was interestingly, like a lot of a lot of kind of anticipation about a reset in D.C. because valuations had gotten high. There was a question about would larger companies actually acquire these DC brands or would they just spin up their own? Unilever was looking at a few different options and there was a question about like, will there be liquidity for these startups? But now the covid hit, there's kind of a really a new wave of energy around to see and e-commerce because the whole category is growing faster than ever before. So I'd say, like last year, the big theme was, was traditional to startups repositioning themselves as as omni channel brands, really focused on brand development, focused on partnerships and and developing the communities going retail very early, often like the Wikler, truly, totally and often often having their own bespoke retail spaces. There were a lot of startups experimenting with that. And now I think a lot of them startups are like, well, DDC like still great enough that our core. So let's focus on that. 

Adrian Grobelny [00:37:52] Yeah, that's that's funny that you mentioned influencers and how big it's right now. Just what came to mind was bank energy drinks like it's wild, how aggressive they are with their advertising, with influencers. And they and I'm pretty sure none of them drink that stuff. 

John Coogan [00:38:09] It's you've got to watch YouTube videos. They are the craziest. It makes Rhinehart blog posts look like FDA guidance or legally. Yeah, I like this guy is so just over the top, like a lot of a lot of health claims. It's I don't know if I was his lawyer, I would be a little worried that 

Shikher Bhandary [00:38:36] they saw somewhat Dollar Shave Club did and literally a hundred thousand X'ed. The outrageous level totally was. 

Adrian Grobelny [00:38:46] So, so yeah that's I see that all over, especially now with covid going on. There's so much more Instagram ads going running right now because people are saying people are on their phone. More Instagram average time that you use it every day is way up. So that's huge right now. Touching on covid-19 and what's going on right now and how it's affecting all of these startups and established businesses even. How do you think the current scenario is affecting consumer behaviors with eating out and people's habits and behaviors with how they're consuming food? Do you think it's going to maybe potentially help Soylent be an alternative for people to turn to because restaurants are closed? Your options are kind of limited and people are also tight on money as well. 

John Coogan [00:39:38] Yeah, totally. I mean, so I think that there are kind of two waves. In February and March, we saw the whole stock up phase and that was, you know, a lot of people going online and stocking up on their favorite products. And now we're seeing a little more of realization that we're moving into a recession, probably a depression. You know, pretty much everyone will be feeling a squeeze of some sort. So you are seeing a little bit of consumer movement from the more premium food goods to more discount food goods, things that were on trend like, you know, premium kito products or health foods that are maybe a little bit more premium ingredients, all organic, very you know, sometimes they taste amazing, but they're a little bit more expensive. You know, you see this with there's been a little bit of a move towards refrigerated products. I don't want to name any specific brands, but, you know, you can see that there are some that, you know, we designed our product to be shelf stable and meaning you could throw it's the perfect prepping product. You could throw it in the garage for a year and be fine. And then there was a counter trend to that. Or maybe we were the counter trend, but there was a counter trend where there were shelf stable products that were either delivered to the customer cold in an ice pack or they were only sold through retail. And I think those products are. To start struggling a little bit as customers pull back from those more luxurious spending, and then you're also seeing this trend a little bit more DIY. There's a big baking boom. A lot of people are doing the salad of starter thing or making bread, buying the more general ingredients. And, you know, the interesting thing with Soylent is like we always wanted to encourage kind of this open source movement. So even before we started shipping the powder, we we encouraged 

John Coogan [00:41:36] a really talented software developer who is a fan of the product to build this website that would basically allow you to customize a DIY soylent so you could go on there. And there were different recipes and they were and they were able to you know, people were able to put up different recipes. So if you wanted you to do Quito or you wanted to do maybe gluten free or a different thing that we weren't able to cater to, you could go on there, find a recipe or create your own with this kind of handy, you know, web app tool. And then you could just click checkout and you would go to Amazon and he would get the affiliate revenue. And for a while there, he was making a lot of money on our affiliate revenue. It was pretty it was pretty awesome. And and, you know, that's something that I that I think like, regardless of the of the impact that the drinks in the powder have as a product, you know, of them is very much like a corporation now. But I do think that the I hope that there's a little bit of a lasting change in the idea that you can do this yourself. Like this can be a resource and kind of a portal to a world where you're thinking about your health and nutrition in kind of an optimal way, so that if you're in a scenario where you're trying to cut back expenses but remain healthy, you know, you can you can do that with a, you know, something that is like a Soylent, but maybe not even affiliated with the brand. Maybe it's your own thing, but you're just thinking about the nutrients that you're putting in your body and then optimizing those for cost and time. That's really the the vision and the ethos of the company. And I hope that that's something that people can can benefit from in this moment more than ever. 

Adrian Grobelny [00:43:24] I was just thinking it's Soylent in a really good structure, like a business strategy. It's in a good position because it's in a way it's countercyclical, because your whole goal is to cut costs and to be an alternative to food. So in difficult times, Soylent able to really deal with any any kind of cycles that go on or recessions, because it's it's not a premium product. It's it's good nutrients. It's quality ingredients, but at a good price. So I think that's that's really that positions you guys really well for any kind of scenario that's going on in the global economy. 

John Coogan [00:44:05] Yeah, totally. 

Jed Tabernero [00:44:06] What does Peter's Thiel have in all of his bunkers just silent. 

John Coogan [00:44:11] No, it's people. It's people. It's what. It's people he has. Yeah. 

Jed Tabernero [00:44:16] But the thing the thing is like for any situation that we were freaking out about early fucking feb. 

John Coogan [00:44:22] Yeah. 

Jed Tabernero [00:44:22] Soylent would have been a perfect product to just go with bags of it, put it in your damn like, like peppers love this product. But it just at this point of time whether it would happen or not, the first or second wave. 

John Coogan [00:44:35] So it has been. Yeah. 

John Coogan [00:44:37] And one thing to add about this whole trend, I mean, 

John Coogan [00:44:41] it's it's crazy. 

John Coogan [00:44:42] Like a year ago I had not heard about milk. Now I drink that every single day. Right. So how has it been for you? I mean, Soylent was like what was part of that was literally one of those early movers within this whole space where consumer tastes just 

John Coogan [00:45:03] literally changed in the span 

John Coogan [00:45:05] of like 

John Coogan [00:45:07] three, four years where we went 

John Coogan [00:45:09] from drinking whole milk to now just drinking almond milk are automatic and now milk is considered. I don't think you get milk from cows anymore. You just get it from 

John Coogan [00:45:19] cashews and crazy shit 

John Coogan [00:45:21] like that. 

John Coogan [00:45:21] So like 

John Coogan [00:45:23] peas. Yeah. So how has that been? I mean, just looking back, you do see yourselves as oh, maybe just early movers or reinventing the space or 

John Coogan [00:45:36] I mean, so there's two things. First, I mean the idea of a you know, a protein shake is not new. We really reintroduce that concept to people. 

John Coogan [00:45:46] We didn't really 

John Coogan [00:45:47] invent the whole category. And but in terms of the vegan trend, I think what was important was that we didn't come to that conclusion to make our products vegan on the basis. What the primary motivation for the trend was at the time, the primary motivation, as I remember it, of course, there were vegans that were vegans for different reasons, but the primary motivation was empathy towards animals, which we definitely had. But the real driving force was a like an efficiency gain. And really just thinking about if you if you break the, you know, the pipeline down, you're trying to get energy from the sun into plants. They photosynthesize, they create nutrients. You could eat those or you could or you could eat the cow that ate the plants. So it seemed more efficient. And that was a different way of looking at it. And I think that's what allowed us to kind of stand out. And then when you look at the branding and the name being ironic and it being it, there was nothing about it that said, you know, this is the pastoral vegan brand that there are five others of. So it was a way for people to you know, a lot of a lot of the customers weren't vegan, but they were happy to participate in veganism because we made it so easy for them. And I have a big I have a big kind of theory or or just idea that the best way to facilitate social change is not to tug on the heartstrings or try and change someone's motivation. It's actually just to make it easier for them to do that specific thing. I think teslik a great job of this where, you know, there was a movement early on for the electric vehicle, but it wasn't practical and it wasn't easy to do it. So even if you were worried about climate change in 2010, you got the EV one, I think it was called. It wasn't an upgrade, whereas now the people that are buying Tesla's, they're buying the fastest car, the coolest car. It looks great biology work ever good looking. So so all of a sudden the people that are buying them, they're having the impact that they want to have, but they're doing it kind of on selfish grounds. But I'm sure, you know, from studying economics, you know, getting someone to do something that's self-interest is going to be a lot easier than trying to convince them, especially when you have a global free rider problem like that with something like climate change and veganism plays into the climate change equation as well. So our goal was to be vegan because it made sense long term from an environmental perspective, but also just from an efficiency perspective. Our society should be more efficient about extracting nutrients that we need. And veganism is a path to that we want to make we want to make products that enable that as easily as possible. 

John Coogan [00:48:57] Thanks for listening to Things Have Changed.