He considers this extra spark to be the secret sauce for up and coming founders. Health food distributors didn’t exactly roll out the red carpet for Quest’s founders in the early days. “I had to plan for my growth every time I placed an order. Before turning his focus to creating nutritious snacking options, the University of Southern California graduate had a successful career in the technology sector, serving as the CMO of Awareness Technologies for almost eight years. Tom: The irony is so if you listen to xxxx he talks about, “If you wanna get an advantage just do more work than other people.” And I think at the end of the day other people aren’t willing to write those letters, they’re not willing to go and research and figure out who these people are and show a real depth of understanding and that’s something that our podcast Inside Quest has become famous for is just the level of research that we do. And the truth is we haven’t. Maybe. Manufacturing challenges, in particular, caused more than a few headaches, with Bilyeu needing to estimate eight to 10 months down the road when pulling the trigger on new equipment. Tom: So just like xxx talks about is we really wanted to identify those styles and true fans that would really understand our product and it would be meaningful and useful in their lives. The Simply Good Food Co. SMPL, +1.65%, a company known for its Atkins-branded low-carb foods, has agreed to purchased protein-bar company Quest Nutrition LLC for $1 billion in cash. We’re gonna go after it all out.” And if you’ve got something in you that you believe in that much you’ll stay hungry man, but if you’re just in it for the money and you’re asking yourself, “What’s the least I can do today to get what I want?” you’ll fade away. And I cannot stress this enough if you have a product that people value they’ll pay for that. Actionable Strategies for Starting & Growing Any Business. And, when the company sold in 2010, Tom asked himself what he’d love to do, even if he were failing. Like how did that work? We’re not going to wait for anybody else. We researched the life out of those people and we wrote to each on of them explaining why we thought the product might be useful to them, why it might be useful to their audience and just showed real appreciation and understanding for who they were and what they were trying to do because a lot of you know when people are building a community it’s like this real sense of service that community. Well look a couple last questions Tom before we wrap up. Now, with their growing range of products sold in 80 countries, the president and his co-founders are taking on one of society’s biggest obstacles, metabolic disease, and trying to reverse its impact on our collective health and wellbeing. Why Bars? And quite frankly if you not eating a terrible diet you don’t have to live like that. And how did you make your bars to have a unique selling proposition that stood out from the rest? We got of with a billion dollars for the company, we could have retired, bought island and just been done with the whole thing but the truth is money isn’t a primary motivator so we’re so focused on really going after one of the largest problem that we face as a society and say, “That’s our problem to solve. Nathan: So you did things that don’t scale? Mike Osborn - Founder - Quest Nutrition | LinkedIn. Finding clever ways to stretch the dollar was also an important strategy for the close-knit team. and we were able to do that because literally we’re negotiating contract and terms that allow us to pay things at advantageous times so that we’re able to manage our cashflow. Bilyeu goes even further to suggest Osborn’s knack for negotiating favorable contracts and terms was the reason Quest did not require outside capital during their high-growth phase. We’re going after it, and give ourselves over to it completely. I’d rather make 10% profit and put a billion dollars in my bank account than making 90% profit and put $100,000 in my bank account. Quest Nutrition grew by an eye-watering 57,000% over their first three years in business, in what Bilyeu now describes as an intense “rocketship ride.” As he recalls, it was both thrilling and terrifying, on a number of different fronts, trying to manage that kind of explosive growth. In addition to drawing meager salaries during the first two years, Quest’s founders were extremely canny in the way they operated the business day to day. And I just knew that food is a drug and it’s a powerful drug and it gets people into this negative spiral where they are feeling bad so they turn to something that does cheer them up, food, but they choose the wrong kinds of food and then they feel worse, they look worse so they need more food and get into just a devastating cycle. It is the most free time to be an entrepreneur you just need to get out and do it. So we had to invest on new equipment for instance to have long lead times which it may be eight months before I get that and then another two-four months after that before I start collecting revenue. Great interview. Amazing growth for a bootstrapped start up hey!! He currently leads the team at Foundr as their Chief Executive Officer. No joke, Tom once received a complaint that a customer chipped a tooth on a Quest bar… so he covered their dental bill (PSA: Don’t try this at home). By taking foods people wanted to eat, like cookies and cakes, and making them healthy, Quest’s founders believed they could bridge the gap between what the industry was dictating and what the average person was prepared to do to lead a healthier life. Quest Nutrition has a somewhat ambitious mission statement (“Our goal is to end metabolic disease,” says president Tom Bilyeu). And I was even lucky enough to actually catch up with Tom for dinner and I can’t just say how much he’s just an amazingly humble entrepreneur and it’s just so incredible to see someone that’s had this much success how down to earth he is and how sharing he is with all things he knows and has learnt as being a super successful entrepreneur. Well said. Carol Dweck, Gabrielle Reece, Laird Hamilton just some absolutely phenomenal people. If you find yourself in a position of hyper growth, Bilyeu says, as much as financial clout and cash flow management will help you, you also need to know your business well enough that you become adept at predicting the future. What do you mean by that? Nathan: I see. Having grown up in a morbidly obese family, Bilyeu was determined to help the people he loved lead healthier lives. Nathan: Yeah. And for us the reason we wanna do that is our mission is to end metabolic disease. So, they decided to go in together on their next venture: a nutrition company. And so that’s been super important to us and I think people feel that and they feel that in a way that we view social media to connect authentically to give before we ask what we get and because of that, because we were literally giving away the product you just xxxxx try it man, tell us if you like it and if you hat it tell people that you hate it. And the sky is the limit. “We were literally giving away the product saying, ‘Tell us if you like it and tell us if you hate it. So I just wanted to say thank you so much for taking the time and sharing your xxxxxx with me. GNC and Vitamin Shop were the first retailers to sell Quest. A couple last questions Tom. Inc. named it the second-fastest-growing private company in North America in 2014, due to its 57,000% three-year growth rate. “We thought, any company you can build by giving your product away, that’s a good business model, because it means it’s actually delivering enough value on that first exposure that people will come back and buy. While it’s necessary to have someone who can dream up a grand vision, he says, having someone with an eye for finance can be the difference between achieving modest growth and really turning the game on its head. Awesome. The magnetization of even manufacturing is so unbelievable this is the most exciting time to be alive. And once you strip that out the product did really become impossible to make with off the shelf equipment. Nathan: Yeah. And giving that product away was that sacrificing profit for growth? And she says, ” Clarity comes from engagement not thought.” And I think that is so powerful. The company, which focused on the relatively new field of search engine optimization, rode the dot-com wave so successfull… That’s how you built your unicorn company. After setting themselves a lofty goal—to wipe metabolic disease off the face of the planet—the company has invested millions in cancer research, aiming to prove a hypothesis that cancer is a metabolic disease. And we’d send them free product and say, “Hey man, if you like it tell people you like it and if you hate it tell people you hate it.” And I actually think not trying to steer their comments gave us a pretty great reputation which is really nit. I just don’t know your bio, I get your world view and I wanna bring that knowledge and those insights to our audience.” And when you show people you really see them, there’s a great quote of getting inspired a person’s name is the most beautiful word in any language right? It takes this guy that has a wooden toothbrush and he help him get a sale live on the air it was absolutely incredible and is I think from most beginning entrepreneur who are selling something physical just a breakthrough in a way that he is able to explain how to give your customers the value that they are willing to pay for. Thomas “Tom” Bilyeu is an American entrepreneur and businessman from Tacoma. Report. We just want to know, metabolically speaking, is it true or not?” Thanks Kathy! The trio also went old school, researching several hundred health and fitness influencers, then sending them handwritten letters and free samples. Mentally he was hitting rock bottom. After a period spent working in the back of a popcorn factory, Bilyeu and the team built a relationship with the landlord of a local business park, who gave them a heads up on any unused space as it became available. The bars are hand-rolled and a hit among friends and family. One tactic they adopted was to find businesses who held more real estate than they needed, and would allow Quest to take over part of their space for minimal rent. Now he is president and co-founder of the highly lucrative Quest Nutrition. Bilyeu further identifies this philanthropic effort as one of the key reasons he and his co-founders have found it easy to reject the many suitors lining up to buy their company. But it required a big picture mindset that considered the lifetime value of a customer, he says, and not the short-term idea that giving away excess product was sacrificing profit for growth. Thy believe in their heart that they’ve got that entrepreneurial spirit and they just haven’t yet taken that step and I wanna quote Marie Forleo who hopefully your guest know but if they don’t well immediately go out and look her up. So it’s always been a celebration of the fans which gave them reason to tell their friend and in the beginning we were sort of that cool band that you knew and loved that nobody else did and you wanted to tell somebody about it. So, how did a company founded by three guys with zero food industry experience grow to hundreds of millions in revenue and $1 billion valuation less than 5 years after launching? Apr 2001 – Oct 2010 9 years 7 months. Tom:And that concept of finding something that you would enjoy even if you were failing really became a powerful macho for us. For young entrepreneurs, it’s the stuff of dreams, also known as a billion-dollar-valued startup. Because you guys were going really fast and you must have been like a capital, you are a capital intensive business in terms of manufacturing, did you guys have to raise capital? What are the things it takes to build a unicorn? 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