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SPEAKER_05: Football season is back, and Whole Foods Market has everything you need to host a successful watch party or tailgate on game day. In the meat department, there's animal welfare certified marinated chicken wings, organic chicken sausages, hot dogs, and more. And you can grab football-ready sides in a flash. Everything from mac and cheese and potato salad to sushi. I love picking up Whole Foods guacamole, which if you haven't eaten it, you're about to get your mind blown because it's actually amazing. By the way, catering from Whole Foods makes tailgates a breeze. Explore the menu at shop.wfm.com. Save 20% from September 20th through October 17th with promo code FALLCATERING, all one word. Don't sleep on the build-your-own-taco bar. It's always a winner. Terms apply. Elevate game day at Whole Foods Market. This episode is brought to you by State Farm. If you're a small business owner, it isn't just your business. It's your life. Whatever your business might be, you want someone who understands. And that's where State Farm Small Business Insurance comes in. State Farm agents are small business owners too, and know what it takes to help you personalize your policies for your small business needs. Like a good neighbor? State Farm is there. Talk to your local agent today. Hey, before we start the show, you know, we talk a lot about hustle here on how I built this, and recently I spoke to the music producer Diplo, who told me about starting out as a DJ in Philadelphia. He was obsessed with turntable culture, and to afford the equipment, he worked at a lot of different jobs, like at Subway and even at the zoo. Now he's DJing massive music festivals around the world and producing with artists like Justin Bieber. Check out my conversation with Diplo on my other podcast, The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators.com. And now, on to today's show.
SPEAKER_02: Because I was a one-man show, I was the customer service guy. So anyone that would call me, they would ask me a question, I would answer very thoroughly, give them a wonderful answer, and they would ask me, you know, what's your name? And I would say, Andrew. And they would say, okay, well, thank you so much, Andrew, but you're not the Andrew on the back of the package, are you? And I would say, yes, I am actually. And you know, many people thought that was great. But others didn't think it was that great, because you're not a big company anymore. Right? Are you, you know, are you running this from your, you know, garage? Yes, you were. And the truth is, I was.
SPEAKER_05: Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how a life-threatening illness inspired Andrew Abraham to launch Orgain, a top-selling brand of nutritional drinks and powders. OK, this is going to start a little grim, but if you've ever been around someone dying or trying to recover from a physical trauma, you've probably been around Ensure. It's a brand that makes high-calorie shakes designed to help people get fast nutrition into their bodies. And almost every hospital, hospice center, and assisted living facility stocks palates of these drinks. Ensure's been around since 1973, and it dominates the category. But in 2009, Andrew Abraham decided to enter that same category. And he did it because of a bad experience he had as a teenager, when he was fighting for his life, and had a hard time keeping down solid food. So Andrew started Orgain thinking it could be an alternative for people recovering from surgery or cancer. But it took off in an entirely different direction, and became a lifestyle drink for people on the go. And Andrew didn't plan for any of this. His intention was to become a doctor. He actually completed his medical residency. But as Orgain grew, it became clear that he needed to ditch medicine and focus on business. Today, Orgain is on track to hit around $700 million in sales this year, and it makes one of the best selling protein powders in the United States. Andrew was born and raised in Long Beach, California to Egyptian Coptic Christian parents. In the 70s, his parents emigrated to the United States from Egypt. And when Andrew's family moved to California, his dad opened a medical practice as a pediatrician.
SPEAKER_02: He came here with nothing and opened a very small practice with what little funds he had. And so he treated everybody. So even though he was a pediatrician, there was adults that would go to him. And he was just the community doctor. And he was the hardest working, most humble guy, and would treat people for free all of the time. And he treated people for free when he didn't have really a penny to his name. And it stuck with me in such a big way.
SPEAKER_01: Hm.
SPEAKER_05: It's quite remarkable to hear you talk about looking up to your dad as a kid, because a lot of kids, you know, of course, they look up to their dads and hope my kids do. You know, but you know, right? I mean, the way you and I wonder when you were a kid, did you think about him that way? If you could sort of go back to your mindset back then, would you have thought, oh, like, I worship my dad. He's amazing.
SPEAKER_05: Yes, for sure.
SPEAKER_02: And I think it goes back to that just kind of unconditional love that he gave me. He was very busy. He worked extremely hard. He always made time for me, though. In particular, you know, my parents wanted me to be a doctor. My uncles were doctors, cousins were doctors, my dad was a doctor. He was building a practice. So at a very young age, basically, I was told, look, you could be anything you want, choose any career you want, as long as you become a doctor and follow in your father's footsteps. But you know, I don't even know if it was really being the doctor part that really attracted me. It was I just wanted to be him. I wanted to emulate him. I loved everything about what this guy did on a daily basis. So for sure, like, I saw him as a superhero, if I'm being honest. AO
SPEAKER_05: life took place. You and it was a health, it was it was more than a health scare. It was a it was a diagnosis. Tell me what what happened.
SPEAKER_02: Yeah, it was right January 1999, right in the middle of my senior year of high school. So I'm the captain of the tennis team. I'm playing varsity tennis, applying to colleges, my grades are good. I'm, you know, I'm feeling the best I've ever felt in my life really. Some January 1999, I was taking a shower and I feel this little lump in my abdomen. And I didn't think anything of it. But I thought maybe I should just mention it to my father. Told my dad about it. He took a look and said, you know, if it doesn't go away by tomorrow, let's get it checked out. It doesn't seem like anything, but let's just be sure. Sure enough, it didn't go away. And next day, we went to a doctor to get an opinion. And he said, Well, we should take a biopsy, just to be sure. And that biopsy, you know, they took the biopsy, we waited a few days, I got called back into the doctor's office. And the doctor tells me, you know, that we took this biopsy a few days ago. Unfortunately, you have a rapidly aggressive cancer called rhabdomyosarcoma. And at the age of 17, I felt like kind of the world stopped when he said that because I didn't believe him. But again, I didn't know what that meant. And I thought, Okay, let's just remove this and can I can I move on? And the answer ended up being much more complicated, unfortunately.
SPEAKER_05: What was the prognosis? I mean, is that a mean you were 17. So it's different because you're younger and, and healthier, but still, I mean, what do they tell you about survival rates?
SPEAKER_02: I will tell you that this is an interesting thing. My father, I'd always ask him like, Dad, you know, what are what are my chances, you know, and he would say it's 99%. He'd always say it's 99%. You're going to be just fine. And then when I turned 18, I turned 18 midway through my treatment, they had to by law, come in and tell me, you know, answer any questions that I had. And I asked the nurse, you know, can you give me an idea of my prognosis? And it was in the high 20s. So I liked my dad's answer a lot better and what he would tell me. So I stuck with that in my mind, but the prognosis was very poor. I had to undergo chemotherapy, radiation, additional surgery. And it was a year long of just the most intensive chemotherapy one can imagine.
SPEAKER_05: So you, I mean, you were, this is the second half of your senior year of high school. Did you have to stop school?
SPEAKER_02: I stopped school. Yes, I was in the hospital getting IV infusions for 72 hours, I would stay in the hospital. I was nauseous. I was vomiting. I had no energy. I was in bed. So and that went on for 12 months. As you can imagine, it was a very trying time on my family and I. And my father was with me and my mom was with me, you know, every step of the way. And my dad would tell me, you know, I'm praying not that God takes away this cancer. I'm just praying that he gives it to me. And you know, on the first day of my chemotherapy treatment, you know, I woke up and I heard my dad like in pain. And it turns out that my dad on the first day of chemotherapy that I had, he was rushed to the hospital with severe flank pain, back pain, and was diagnosed with kidney cancer.
SPEAKER_05: Which is a very, very difficult cancer to...
SPEAKER_02: Extremely difficult. Absolutely. Absolutely. So while I was getting hooked up to an IV infusion on one floor, my dad was being wheeled in to the OR above me to have his kidney removed. And my poor mom, of course, was between upstairs and downstairs between the two of us. So you know, I would say to say that year was extremely difficult would be an understatement.
SPEAKER_05: Yeah. So you're in a year of chemo treatment. Your dad is being diagnosed with kidney cancer. He begins treatment. Tell me how you got through, I mean, you know, it was a cycle of like, treatment, feeling violently ill for a week, feeling really lethargic for another week, starting to recover, and then starting the cycle again for a year. Presumably you lost weight, you lost your hair.
SPEAKER_02: Yes, that's exactly right. I mean, it really takes a toll in every way. You know, my weight kept dropping, cycle after cycle, my weight would drop, you know, five pounds, three pounds, you know, so I was 140 pounds or so, and then I got down to 130, then 110, then about 100 pounds. Wow. And it was that point where my doctor said, we need to get calories in you. They were hooking me up to IVs that had nutrition in them, but he said, I need you to consume your calories through liquid. And he handed me a bottle of the conventional shake, Insure, with a stack of coupons, and said, I need you to drink as many of these as you can per day. Yeah, just to gain weight. And of course, my mom heard this, and she went out and bought every flavor imaginable, flavors I didn't even know existed, and came home. And I can't tell you how happy she'd be when I would consume one of these, because it would give her a little bit of joy, knowing that her son was at least getting some nutrition.
SPEAKER_05: So that's good, and it probably was working, right? It probably started to put some weight on. You know, I put very little weight on with them, but I was maintaining my weight with
SPEAKER_02: them, but I felt horrible. I didn't feel well. And that's what set me on this journey. So one day, I picked up a book, and this book was about nutrition. This book was called, it was something along the lines of prescription for nutritional healing, or prescriptions for nutritional healing. I didn't know what it was about, but I picked up this book, and I started reading, you know, the first 10 pages, and I was hooked. You know, integrative medicine, nutrition, but not just fats, carbs, and protein, more like metabolic health. And it probably felt empowering, because when you are dealing with a health crisis, you
SPEAKER_05: are feeling very disempowered, because you don't always have control over what's happening. But I guess reading these books kind of gave you a sense of, okay, maybe I can take control over some part of this.
SPEAKER_02: Exactly right. It gave me some control, and it gave me a lot of hope. And between those two things, that's why I ended up reading 150 books that year, because I needed as much hope, and I wanted as much control as possible.
SPEAKER_05: And I'm assuming, like, you know, I read a bunch of books on nutrition too, and I don't know if all of them are accurate or true, but I mean, basically, like, the message is eat whole foods, you know, try to avoid, you know, too much meat and sugar, you know. And was that sort of the main message you were getting from it? Like a lot of, you know, whole foods, fresh vegetables, leafy greens? Yeah, that's exactly right.
SPEAKER_02: As I was reading these books and reading these ingredients that I should put in my body, these foods that I should be consuming, I was also reading about ingredients that I shouldn't be consuming. And the more I read, the more it opened up my eyes. And the more I realized that these conventional shakes that I were drinking were actually full of all of the ingredients they're telling me not to put in your body when you're healthy, let alone when you're sick. It was referring to high fructose corn syrup, sugar, you know, genetically modified maltodextrin from corn, genetically modified soy protein, artificial flavors, preservatives. And I saw these shakes, everyone had them, you know, all the kids around me on the pediatric floor had them. I saw them all throughout the hospital. So I was under the impression that it was good for you. But the more I read, the more I realized that even though it said nutrition shake on the front, it was anything but nutritious.
SPEAKER_05: What's so interesting about this is that you came from a family of healthcare providers, people who know how the body functions, and even you, even your family wasn't fully kind of, you know, clued into this stuff. And you guys were on the front lines of medical care as a family.
SPEAKER_02: Yeah, and that's the irony of all of this actually is not only my family, but I would say medicine in general puts very little emphasis on nutrition versus medication. And I think for me, like, we have this full medicine cabinet in our kitchen. And even during my residency, before I took out a prescription and wrote a script, we would talk about diet and exercise, but in a different way where it was really tangible. All right, so going back to you and kind of this discovery as a 17, 18-year-old kid, you
SPEAKER_05: realized that maybe if you start to put different things into your body, you could have an impact on how you felt at the very least. Obviously, you were still going to have to go through the chemotherapy. But what did you, I mean, you were having a hard time eating food, right? So I have to assume you were still focused on a liquid diet. Yes, it would have to be liquid.
SPEAKER_02: I had a very tough time with food. Even the foods that I loved before, I couldn't even tolerate the smell of them. So my mom and I went out, we purchased a blender, and every day, you know, we'd go to the market, buy organic fruits, organic veggies, you know, organic protein sources, mix them all together and blend them together five to six a day, and I would drink these. I can't tell you that they tasted delicious, but the one thing that I noticed is that I started to feel a little bit better. And then I started to gain a little bit of weight, and I gained some more energy. All right, so you get through it, and you go on to pursue your bachelor's degree with
SPEAKER_05: the intention of becoming an MD. So you go to UC Irvine, and I'm assuming you did pre-med, you were a pre-med student there.
SPEAKER_02: I was a pre-med student there. I arrived late, so I was a couple semesters behind, but I started there, yes. And then I ended up finishing college early because I didn't want cancer to be the reason why I would be set back in life. But I was certainly watching my diet very, very closely and applying all of the learnings that I had.
SPEAKER_05: But your intention was to go to medical school and to become an MD, and you did. You continued right after you graduated, went right into medical school.
SPEAKER_02: Went right into medical school with the intent still, of course, to take over my dad's practice and really make sure that I was going to live up to his dream and my dream that I would be taking over his big practice that he had built in Long Beach.
SPEAKER_05: The intention of taking over the practice, I imagine you were thinking, I'll become a pediatrician like my dad, but I really want to understand nutrition and wellness as well.
SPEAKER_02: That's right. And during medical school, I remember we had about two weeks of nutrition, and it was very high level, and we went through it, and then it was done. And I remember going up to one of my professors afterwards and said, you know, do we get nutrition again? Do we go through that again in a little bit more depth? And he looked at me and he said, nope, that's it. And I was completely floored. I thought that nutrition was going to be one of the cornerstones of medical school, one of the things that we talk about the most for prevention. But it ended up being something that they just had to check the box and move on to the next thing.
SPEAKER_05: You end up doing your residency with Kaiser. Was it in California? Yes, Kaiser in Riverside, California. Tell me how you started to, I mean, I have to imagine you've been thinking about these shakes that you'd been drinking, that you'd been making in your Vitamix like six years earlier for a while. But there must have been a point where you thought, maybe I could try to turn this into a business. I mean, did you start to think about that during medical school?
SPEAKER_02: I didn't. Not in medical school. It was really during that first year of residency. And I never thought of it as a business. I thought of it as a need. So I had patients asking me for more protein. Hey, I'm on the go all the time. I'm looking for more nutrition. Is there something I could just grab? And ensure was the option, basically.
SPEAKER_02: Yeah, conventional nutritional shakes, ensure. And I said, I would tell them, no, please, this shake changed my life. And I would give them this long list of ingredients. Go buy a blender, blend all of these together. It's going to change your life the same way it changed mine. The issue was compliance. Out of 20 people, maybe one would do it. So I knew that giving them this list of ingredients and having them blend them was not the answer.
SPEAKER_02: It wasn't going to be a sustainable solution for my patients.
SPEAKER_05: You were in your late 20s at the time, maybe 29. And when you thought to yourself, OK, let me start a company that makes a drink, you were thinking this could be like a sort of a Whole Foods or natural version of what was available, like a better version of ensure.
SPEAKER_02: That's correct. So my wife has her master's in holistic nutrition, and we basically took out a plate and we asked ourselves, what would we want in a perfect meal? Let's work backwards. And I wanted to take that concept and put it in a ready to drink shake for patients. So we wanted to have organic protein, organic complex carbs, vitamins, minerals, antioxidants. And we laid it all out and developed an organ.
SPEAKER_05: You developed an idea of what you wanted there. But that's one thing to make it in a Vitamix, right? It's another thing to manufacture it and put it in a box and then try and sell it. So there's going to be a long road ahead for you. But let me sort of take me back to this is around 2009. And you decide I'm going to start a company making these. By the way, still thinking that you would also be a doctor? Yes, this was going to be a little side business.
SPEAKER_02: I would sell it online. I thought, how hard could it possibly be? I would do this on the side and then I would practice medicine during the day. Yeah, I got you.
SPEAKER_05: So the idea was you were going to make a ready to make drink in a bottle or a Tetra Pak or something like that.
SPEAKER_02: That's right. I actually had no idea what would it go in. I wasn't sure. Is it a Tetra Pak? Is it a bottle? I didn't even know the difference. But I contacted food scientists all over the United States. Got a lot of rejections, of course. And I got a lot of crazy quotes on how much it would cost and what was involved. And there was one food scientist that clicked with me and we became very good friends. And he said, you know, why don't you meet me in Texas? Let's run a trial together with these different options and see what happens. How did you find him? I just searched and searched online and was calling random food scientists and I didn't know who was good or who was bad. But this was the one guy that was willing to talk to me. So in my mind, he was great. And he ended up being excellent. So you go out there, he's based in Texas.
SPEAKER_02: He's based in New Jersey. But the place where you trial these is in Texas. And he met me out there and we developed some concepts and prototypes before. We tried a bunch of them. You know, they all tasted absolutely horrible in the beginning. And then one formula that came off the machine, I take a sip and I said, this is delicious. And I was so happy that we were able to finally get all of these ingredients in and have it be enjoyable.
SPEAKER_05: So let me understand how this worked. This is around 2009, right? Like it's sort of, if you want to start a cosmetics brand, right, you would find a white label co-packer and you would go there and you would have thousands and thousands of different ingredient options to choose from. And that would be the basis for your brand. And many cosmetics brands do this. Was this facility like that? They had like 25,000 powdered versions of powdered banana, powdered kale, powdered vitamin E. And you just kind of say, let's put some of that in there and some of that in there and some of that in there?
SPEAKER_02: Not at all. I wish it was like that. So we had to ship all of our ingredients in. We had like dehydrated, freeze-dried fruits and vegetables. We had organic proteins. We had everything just shipped and we would experiment. And the other thing is no one had made inorganic ready-to-drink shake it. It had never been done before. So it was unchartered territory.
SPEAKER_05: So when you came up, when you finally landed on the flavor that you wanted, was it, and it was, because I know you start out with vanilla and chocolate, was it a vanilla flavor drink?
SPEAKER_02: It was chocolate to start and then we made a vanilla. That's correct.
SPEAKER_05: And the idea was this is going to be a great option for patients who are recovering from or who need it for health reasons, like who need to gain weight, who need more protein. That was the market you were looking at. It was like people in hospitals, because I think anybody who's been to a hospital, you will see palates of ensure. You will see them all over hospitals.
SPEAKER_02: Yeah. And I thought that was going to be our demographic. It was going to be people in the hospital, people that had GI issues, maybe someone that had their wisdom teeth removed and couldn't eat for a few days. That's what I initially thought would be the demographic and where this product would go. But then what?
SPEAKER_05: I mean, then it was what? I mean, this was a food scientist and I mean, for one thing, you had to make something that was not going to spoil or go bad. You had to package it and you had to market it. So I mean, that's a lot to do from there. So I mean, at this point, once you landed on a flavor you liked, great. But then what do you do? I didn't know.
SPEAKER_02: And to be honest, I flew home. You know, I asked my food scientist and he's like you said, he's a food scientist. He makes the product and you're on your own after that. So I thought first thing I need to do is come up with a name. And the name came to me while I was driving one day. I wanted it to have the word organic in it. And I thought about what people would benefit from this. People would gain health, they would gain energy, they would gain life. And I combined organic and gain into this word organ that would stick. So I had a name and I had a formula and that's all I had. So when I came back to California, I was talking to people researching online and someone told me, you know, there's this trade show that just so happens to be in three weeks in Anaheim, California called Expo West.
SPEAKER_05: Huge trade show, one of the biggest natural food shows in the US, if not the world.
SPEAKER_02: That's right. It's one of the biggest natural food shows in the world. And it just so happened to be a few weeks after we came back from Texas. And it just so happened to be 15 minutes from my home. So I called them and you know, I don't even know what this, I thought it was like a farmer's market. I don't know anything about it. And I sign up to register and it's $5,000 for a booth. For me, that was a lot of money at the time. But I thought, look, I got to get this out there. I'll just sign up and go. Really not knowing what to expect. So I sign up for Expo West. Three weeks later, they have a load-in day where you're loading in. And I didn't know what that meant because I'm walking in with two chairs and a folding table.
SPEAKER_05: Did you even have a logo or anything at that point? I had nothing other than a formula in blank packaging and a name.
SPEAKER_02: And I see these massive booths being put together. Some of them look like small homes. And you know, I'm with my wife and she looks at me and she goes, we got to go. This is not what we expected. And I said, I know, but we paid $5,000. It's non-refundable. And we're going to set up right there and we're going to talk to people about this.
SPEAKER_05: So you've got this little booth. And so sometimes people would stop, but probably 95% of people just walked by because there was no, like, what is it? It said, Orgain Protein Drink or Orgain Nutrition Drink. Like what was the description on the sign?
SPEAKER_02: Yeah, Orgain Organic Nutrition Drink. Right. Okay. And that was it. Yeah. It's funny because as you say that, I remember a moment where there was a guy that I spoke with on the side. He didn't know I was presenting at the show.
SPEAKER_02: And he had been there for 10 years and he was telling me about it. And I was listening in earnest and he said, you know, you have this guy over here that's selling this iced tea that wants to take on these big iced tea companies. He goes, over here, there's this other guy that has some organic nutrition drink that wants to take on these big pharmaceutical companies. He goes, these guys aren't going to be here next year, is what he said.
SPEAKER_02: And he was talking about me. And I remember that moment sticking in my head that now my new goal was that I was going to come back next year. To be honest, we looked a bit foolish and we weren't buttoned up. I mean, people are wearing matching uniforms. Some of these booths have like two or three floors, right? So I'm sitting here like with my blank packaging, looking up and wondering, okay, what am I doing? But just continued, anyone that would give me just a couple minutes, I would tell them about the product, try to tell them a little bit about the story and the genesis of it. And the show went on and one guy came up to me and spent five minutes with me. And I told him the story, what we're doing, the plan. And he said, can you come share it with me?
SPEAKER_02: And I said, absolutely, I'd love to. And I thought he was maybe a physical therapist in the Anaheim area. And he turned his badge and he ended up being the global buyer for Whole Foods.
SPEAKER_05: Wow. His badge was turned around because I think a lot of times they do that. They don't want you to know who they are when they're coming to your booth. That's right. I mean, given and he tried to try the drink.
SPEAKER_02: He tried the drink. He liked the flavor profile and said, can you come out to Austin? And six weeks later, I was on a flight to Austin, Texas. And by the way, in a show in 2009, at the Expo West with thousands of booths, there
SPEAKER_05: were no other I mean, protein powders were out there, you know, extras like post workout powder companies were out there. There was nobody out there doing sort of the keeps by shorthand saying a better for you version of ensure I shouldn't really say that but but just shorthand version. No, nobody's doing sort of an organic version of what was already on the market at the time.
SPEAKER_02: Not at all. No, not only was it not there in Expo West, but I remember when I was sick and beyond there I would call all of these random companies in the United States and beyond in the world to see if anyone was doing it. It's hard to imagine now.
SPEAKER_05: I mean, of course, today, there's hundreds of protein powders and things on the market. But 2009, you were the only one there. So it makes sense. I mean, I can understand why this Whole Foods buyer stopped because they're always looking for things that just aren't nobody else is doing.
SPEAKER_02: Yeah, you know, he probably thought that obviously, the packaging and the design, you know, it was completely underwhelming, which I which I agree with. But I think he was intrigued by the story, the fact that I had, you know, developed this formula that tasted good that all of these ingredients were in there, and he gave me a chance.
SPEAKER_05: But you had to prepare for a presentation for that. I mean, that's kind of a big I mean, when he said come come present. Did you know what that meant? Because he because you had up until that point, I guess been thinking, this is going to be really primarily purchased by hospitals, not not grocery stores.
SPEAKER_02: That's what I thought, you know, and I thought maybe some grocery stores could entertain it, but I really thought it would be in hospitals and we'd be selling online. And I prepared in every way that I possibly could. I remember very specifically getting there. I had a like a suit. I was extremely prepared in every way except when I woke up that morning. The one thing that I didn't have were my shoes, my dress shoes. So I got there, I'm waiting in the in the lobby, and out comes Heather Mills, who's had just divorced. Paul McCartney. Paul McCartney. Yeah. She had a full team with her and they presented a vegan line of frozen foods there. You know, they had all kinds of paperwork, it looked like they had given the laser light show presentation.
SPEAKER_02: And I was up next and I have my sneakers on and I have 10 pages that I had printed in kinkos in color and I was just completely honest. I said, you know, the truth is I don't have anyone here with me. I don't have a fancy PowerPoint presentation prepared, but what I do have is a product that I firmly believe is going to transform a category and change people's lives for the better. And they tried the product. They didn't give me that much feedback. I think someone said I like the taste. I didn't hear anything else from anybody else in that room and I went home and, you know, four or five weeks later, I got a phone call and an email that said, you know, can you handle a national launch? I didn't know what that meant, of course. And I said, absolutely.
SPEAKER_05: When we come back in just a moment, Andrew runs into a problem that could upend the business when his nutritional shakes start to solidify. Stay with us. business. Go to business.landsend.com slash built and use promo code built for 20 percent off your order. That's business.landsend.com slash built promo code built for 20 percent off your order. You know, as I get older, I'm much more vigilant about taking care of my skin. And lately I've been trying skin care from Caldera Lab, and it's been so easy and also really kind of fun to incorporate it into my daily routine. Caldera Lab creates high performance men's skin care products and the regimen leads off their product lineup. It's a twice a day routine to transform your skin. The regimen includes three products, the clean slate, the base layer and the good. The clean slate starts and ends your day. This face wash leaves all skin types refreshed. The base layer is your daily moisturizer to hydrate your skin and jumpstart your day full of confidence. The good is your go to serum at night and it helps your skin look tighter and smoother. Just for our audience, we have an exclusive offer. This is their best offer available anywhere. Use code built at calderalab.com to get 20 percent off right now. Get 20 percent off with code built at calderalab.com and make unforgettable first impressions that lead to the charming words, you look younger. Get 20 percent off at calderalab.com with code built. One more thing before we get back to the show. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and it's totally free. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2009 and Andrew has just hung up the phone with Whole Foods and he's kind of in shock because not only do they want to order his nutritional shakes, they want to do a national launch. And suddenly he has a lot to do.
SPEAKER_02: I knew it had to be shelf stable, but I didn't know what that meant at the time. And so as soon as I got that phone call prior to this, I had been working with a small agency to design the package to make sure that it looked nice. And I just was gathering as much information as I could. I was taking all of these notes every day. And then when I got the go ahead from Whole Foods, I contacted a manufacturer, you know, and I got rejected and it was very hard to get capacity, especially as a small brand. Yeah. Somehow, some way I was able to convince a manufacturer to take us on. Where was the manufacturer? What part of the country? Savannah, Georgia.
SPEAKER_05: And they were, they made all kinds of beverages there?
SPEAKER_02: Yes, they made everything from chicken broths to other protein shakes and so forth.
SPEAKER_05: And so they would be able to not just make the product according to your specifications, but also to package it?
SPEAKER_02: That's right. So I would send in every single ingredient to them, give them a formula, how to mix it, how to process it, what to do. And their job was to essentially blend the ingredients and put it in the package that I sent and charge me a tolling fee. I gotcha.
SPEAKER_05: Okay. Now the question is, when Whole Foods said, we want to roll this out nationally, how many cases of this stuff were they ordering?
SPEAKER_02: You know, it was tens of thousands. And I didn't know what I was doing at all, but I just started placing orders and really trying to make sure that I could deliver for them. And I placed the orders on ingredients. Some of them had longer lead times, the organic cocoa was going to take six weeks, you know, the organic protein was going to take three. And I was trying to merge them all together. And then you always have one lagging ingredient that's going to take 10 weeks. I'll tell you, I didn't even know how to arrange trucks, right? So I'm on like freightquote.com, trying to manage trucks and get trucks to different places. It felt like every step there was an obstacle.
SPEAKER_05: Before we get to how it was sort of received at Whole Foods, let's go back for a moment to the time between the order and then getting it made. How did you finance that? I mean, Whole Foods is not going to pay you upfront. They're going to pay you 30, 60, 90 days later. You had to finance this. So where did you go? I mean, did you get a loan from your dad or from other people? Because you needed a hundred, I'm assuming a few hundred thousand dollars.
SPEAKER_02: It was over a hundred thousand for the initial run. But interestingly enough, I had started a business in college where I was really into cars. I loved cars and I built and designed custom cars for trade shows. Wait, wait, sorry. What?
SPEAKER_05: This is the new story. You built cars?
SPEAKER_02: So I had a car. I had a small car that I would take to trade shows that I really enjoyed and I would fix it up, you know, and you would put rims on it. What kind of car was it? It was a Mitsubishi Eclipse Spider. And what happened was at these trade shows, I would get these companies that would come up to me and say, we really like what you're doing. Can you feature our TVs in it? For example, Panasonic or Accelavision or one of these companies. And what I would do is I would feature their TVs, they'd give it to me for free, and then they would pay me to go to these trade shows to display it.
SPEAKER_05: And in the car, you would have like a television monitor integrated into the exterior of the car?
SPEAKER_02: Into the interior, it would come out. So before like the shows on TV, I was very early on in integrating TVs and custom interiors into cars. And I would build and exhibit these cars and they would pay me for it. You would go to like junkyards and buy parts or what?
SPEAKER_05: Like how would you, a million questions. First of all, how did you even learn how to work on cars and do this?
SPEAKER_02: So I wasn't the guy actually working on the cars or sanding down the fiberglass. I was the guy drawing the concepts. So I was really more the creative behind it. And I found guys that this was their specialty. This is what they do. They could take a 27-inch TV and mold it into fiberglass in the middle of the dash.
SPEAKER_05: Wow. This is like a, this is a wild side hustle. I've never heard anything like this. Yeah.
SPEAKER_02: And it was again, not intended to be a side hustle. It was just a personal hobby that turned into this business that ended up funding a good portion of Oregon. And my father also provided a loan for me in the beginning.
SPEAKER_05: All right. So with the, this money from this totally different part of your life, learning all these new things all the time. You were able to finance and then with a loan from your dad, you were able to finance. You know, this production run, which as you say, was over a hundred thousand dollars. That's right. And, and over a hundred thousand dollars. And that was going to make thousands of cases of, of, or gain. That's correct.
SPEAKER_02: And, and I would ship it to whole foods and hope for the best. I, you know, I knew it was a big risk. I didn't know, you know, I, I spent this much money. I really didn't know how much would come back. I just made it and went forward.
SPEAKER_05: Okay. At what point were you still planning to become a doctor to take over your dad's practice? Absolutely. How are you doing the residency and prep planning to provide whole foods with a national, a national rollout of your product? I mean, residency, you don't, you're working like crazy already. That's a, that's a grind. That's like 10, 12 hour days already. Yeah.
SPEAKER_02: And every third day we worked something called a Q3 shift. So every third day you worked a 30 hour shift with little to no sleep. You know, whether there's a code blue and you're running a code blue or managing all of the patients on the floors, you are the doctor at that hospital. And it was extremely exhausting. And the ongoing joke, you know, with my residents and even my superiors was, you know, Dr. Abraham is the guy that will see a patient step out of the room, order 20,000 pounds of organic cocoa and go back and see the patient again.
SPEAKER_05: And how much time did Whole Foods give you? They said, you know, they, after you went there, they, six weeks later, they said, we're, you know, we're ready. If you want to do a national rollout, the clock started ticking. How much time did you have to deliver? I had about 90 days.
SPEAKER_02: And to be honest, I failed in reaching that timeline. It was a couple of weeks late. They were very upset, but the product made it on shelf. I had zero dollars for promotions, zero dollars for marketing, and it just went on shelf. And they didn't even know where to put it on shelf because it was a whole new category. But that's still crazy.
SPEAKER_05: You had to make thousands of these boxes in 90 days and get them distributed. How did you manage that? I mean, you yourself admit you didn't know anything about the food business, let alone how to run a business.
SPEAKER_02: I didn't. It was really just sheer willpower. And I dedicated my whole life and was consumed by making sure that I was going to deliver this. So every waking hour where I wasn't working at the hospital or seeing a patient, I would dedicate every minute, every second to making sure that I was going to make this happen. How did you deal with the bureaucracy and logistics of working with Whole Foods?
SPEAKER_05: Not to say they're bureaucratic, but once you work with a big organization, there's a bunch of forms to fill out. And there are different units that you have to talk to, and you needed people to do that with you, I imagine.
SPEAKER_02: Typically you do. And I filled out those forms, and I would write my mom's name as one unit, my wife's name as another unit, but all the numbers would be pointed back to me. Unit meaning like accounts payable? Accounts payable, accounts receivable, operations, food safety. So you just basically put your relatives' names.
SPEAKER_05:
SPEAKER_02: Relatives names and my number and kind of went with it, yes.
SPEAKER_05: And did Whole Foods ask you any questions? Did they say, like, how big is your operation?
SPEAKER_02: They didn't. They knew that I was starting off. They knew that I was able to produce it, but they didn't initially ask how big was the operation. Because you didn't have an office. I didn't have an office. I didn't have anything. I mean, I ran Orgain by myself for almost four years as a one-man show.
SPEAKER_05: All right. So you had to get this to Whole Foods in 90 days, and you managed to convince this co-packer to make the product for you. What was the reason why? What were the challenges that you had to be? Was it the ingredients coming in? Was it the production process was slow?
SPEAKER_02: What was it? It was a learning process every step of the way that further delayed things by one or two days.
SPEAKER_05: How were you managing the residency and doing and getting this to Whole Foods? That's what I'm trying to figure out. How did you find the time?
SPEAKER_02: It was very little sleep, honestly. You know, I look back and I think about the sacrifices I made, and that year was the biggest sacrifice in terms of just getting it out the door. We had our first child that year. My son Isaac was born in April 2009. You know, residency was your internship year is your toughest year, and that was the most hours I've ever worked. And then launching Orgain and getting it into stores. So it was extremely difficult, but there was just a conviction that I needed to do this, and I wanted to see it succeed. So I really dedicated every waking minute I had to it. All right.
SPEAKER_05: So you got a lot going on in 2009. By the way, your colleagues at the hospital said they were like, wait, you're launching a product at Whole Foods? Did that register with any of them, or did they just think this was like a weird side gig that you were working on, like a side hustle?
SPEAKER_02: They all thought I was crazy, really. They were barely hanging on with what they were doing with our residency. And to see that my office was full of papers and packaging and displays and things, they thought I was out of my mind. Yeah. And I mean, you kind of were, right?
SPEAKER_05: I probably was. I probably was, yeah. All right. So the product gets to Whole Foods in what, the fall of 2009? Yes. And this is a national rollout. It's not just like Whole Foods in Southern California.
SPEAKER_02: Every single Whole Foods in the United States.
SPEAKER_05: Okay. You had no budget to market this, right? Right. And they presumably wanted the price point to be fairly aggressive. So I have to assume that maybe on this first order, you weren't going to make a whole lot of money. Is that right?
SPEAKER_02: I didn't know. I had no idea. And I knew the retail price point was going to be $2.99. I knew that the check that I would get from Whole Foods may likely offset the amount of money that I was going to spend, but I just went for it. But the really amazing part is this product went on shelf with really no marketing, no know-how from my perspective. And it started to sell. And the velocities, and all of a sudden, I'm sitting at my desk and I get this email that has a purchase order.
SPEAKER_02: And it's a replenishment order for Whole Foods. And at that time, it happened much, much sooner than I thought. And quite frankly, much sooner than what Whole Foods told me. And the interesting part, I know you and I talked about, I thought this was going to be for sick patients or people dealing with cancer. That ended up not being the case at all.
SPEAKER_05: Right now, if you see a pack of Orgain, right? The grab-and-go drink, it says, organic nutrition on it, right? On the label. It says 16 grams of protein, 21 grams of carbs, whatever. Was the label like that? Were you very clear about what was in it on the label?
SPEAKER_02: It just said Orgain and it said, gain health, gain energy, gain life. And it said, organic meal replacement when we first started. And it said, high protein on the front. That was it. And we were very fortunate to start at Whole Foods because that customer picks up every product and reads the ingredients. And we wanted that. We really wanted people to pick it up and read the back.
SPEAKER_05: Yeah. All right. So this starts to sell at Whole Foods, but you're still not in it 100%. You are, but you're still doing your residency. And were you committed to finishing the residency? Yes, I was.
SPEAKER_02: I was committed to finishing the residency. As a matter of fact, my last year of residency, I became the chief resident. So I had 17 residents under me. So I very much enjoyed what I was doing. I was very good at what I was doing. And I had every intent to continue practicing medicine. And my dad was super happy. My wife is a physician's assistant. She's a PA. And both of us, upon the completion of my residency, went and worked with my father in his practice in Long Beach, California. This is in 2011?
SPEAKER_05: Right. So you started this in 2009 as a resident. You had three years of residency and you were launching this product. So that was three years of craziness.
SPEAKER_02: Three years, two sons, and Oregon being launched was, yes, it was the most difficult three years, I would say, of my life.
SPEAKER_05: Okay. So once Whole Foods made that second purchase order, you knew that you were onto something. And how quickly before you actually started to turn a profit? I mean, you had no expenses. It was you and you and you. And you had some freelance designers. But that was it. I mean, obviously, you had to make the product. But I have to imagine you were profitable pretty quickly.
SPEAKER_02: Yeah. We had essentially no overhead. I was working from home. I would also work from a coffee shop. I would work at Pete's Coffee. So we actually became profitable very early on. And it was in the first 12 months where Oregon shifted to profitability.
SPEAKER_05: And it was all, I mean, you could do this by yourself because Whole Foods would make more orders and then you would do the same thing. You would just have that co-packer make more product and then you would kind of, I don't know, with duct tape and glue and patchwork together like some freight trucks to distribute on.
SPEAKER_02: That's right. And deal with problems all along the way. And I'll tell you at Whole Foods about eight months into being on shelf, I remember very clearly they called me and they said, we have a problem. And I said, what is that? And they said, we're getting some complaints about your product that it's a little bit clumpy and we're not sure what's going on. And I remember getting into my car, rushing to Whole Foods, buying two chocolate, two cookies, going outside, opening it, turning it upside down so I could take a sip and nothing came out. It had solidified on shelf. And this goes back to this idea of kind of not knowing what I was doing. Like when you make a product that's shelf stable and it's 26 organic ingredients, no one had done it. So if you're not using organic ingredients, it's much easier to use like, you know, artificial gums and different things to make sure that the product stays a liquid. When you're certified organic, you're very limited on what you can use. And what happened was the product solidified on shelf. And I remember almost collapsing to the ground, realizing that that was it. I had to issue a voluntary withdrawal, which is, you know, it's not a safety issue, but you are withdrawing product from stores. How much did that cost you? That was a major hit. That was about a $50,000 withdrawal at the time, which for me was catastrophic. You just had to destroy all those products. You just throw it away.
SPEAKER_05: And how did you solve the problem? I mean, you had the ingredients, but now you had to make something that was going to last beyond six or seven months on the shelf.
SPEAKER_02: So I had to make a very tough decision. We went with my food scientist, made some adjustments, and I said like, how sure are we that this is going to work? And he said, I'm not sure. And I said, well, you know, what's the risk? And he said, I don't know. It's a risk. So I made the decision to proceed and like just put faith in that, look, the second time we've got it figured out. And it went back onto Whole Foods shelves, taking the risk. And every day I was worried for that phone call. And thankfully it didn't come.
SPEAKER_05: And it was just a slight adjustment, but the flavor profile remained the same.
SPEAKER_02: Slight adjustment, flavor profile remained the same. And we were able to, we adjusted the protein a little bit and it worked perfectly fine. But that year, you know, my worst nightmare was waking up to have that problem happen again because, you know, one, you're forgiven, two, you're permanently blocked. Right.
SPEAKER_05: That's right. Right. Whole Foods is like, they give you a couple of chances and that's it. And then you're done.
SPEAKER_02: That's it. Yeah. And quite frankly, I wouldn't have been able to afford another issue. But I took a major, major risk.
SPEAKER_05: When we come back in just a moment, Andrew takes yet another risk when he decides to pursue or gain full time and walk away from a much more stable career. Stay with us. You're listening to How I Built This.
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SPEAKER_05: Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2010 and Orgain has just come through from its first big crisis and fixed its problem with clumpy, solidified shakes. And Andrew has hit about a million dollars in sales, but he's still doing his medical residency and still doing almost everything himself.
SPEAKER_02: And one thing that happened was because I was a one man show, I was the customer service guy. So anyone that would call me, they would ask me a question, I would answer very thoroughly, give them a wonderful answer. And they would ask me, you know, what's your name? And I would say, Andrew. And they would say, OK, well, thank you so much, Andrew. But are you you're not the Andrew on the back of the package, are you? And I would say, yes, I am, actually. And you know, many people thought that was great, but others didn't think it was that great because you're not a big company anymore. Right. Are you you know, are you running this from your garage? Yes, you were. And the truth is, I was. Yes, I was.
SPEAKER_05: So when you were I guess my question is like, once you hit a million dollars in revenue, why didn't you hire somebody to run operations so you could continue focusing on your medical work?
SPEAKER_02: I thought I couldn't afford them. And you know, I thought again, that this was going to be a side business, I would manage it accordingly. I wouldn't even know how to hire someone. So I just kept doing it thinking like, this is going to be something you do on the side, you could manage it, you'll be fine.
SPEAKER_05: So you're running this, you're bootstrapping this. And by year two, I mean, it's the cash flow is financing the business. And it's just growing steadily, purely through just people going to Whole Foods and seeing it on the shelves?
SPEAKER_02: It was at Whole Foods going on shelf, and then I started to take this story to others. So I would take the story to Sprouts here on the West Coast, to Wegmans on the East Coast. You know, I made a listing on Amazon, I was one of the first protein companies to put an Amazon listing up. And slowly but surely, it got out there. And people would ask quite more questions, and there would be more purchase orders, and it started coming from different directions. And the business grew pretty rapidly.
SPEAKER_05: At what point, you know, did you finish your residency? You know, did you realize that maybe you need to not pursue medicine?
SPEAKER_02: I finished my residency and 2011 immediately started working with my father in his clinic in Long Beach, along with my wife, and he could not have been happier. He was just over the moon happy that I was seeing his patients, his patients were happy, the nurses were happy. You know, he had achieved his lifelong dream of his son and his daughter-in-law taking over his practice. And I would see the patients, you know, work really hard and then go home and work on organ until two or three in the morning. Wake up at six and get ready and go back to work. And it got to the point where it just wasn't sustainable. I was barely functioning. And I had to sit my dad down and tell him that, you know, I really want to take this leap of faith. I, you know, I started this company. I truly thought it was going to be a side business, but it's overtaken my life and I want to focus on it full time. What did he say? It was beyond comprehension for him. You know, he looked at me and said, you know, Andrew, I don't, I don't understand. Like you literally just spent seven years after college and you're going to go and sell milkshakes for a living like you're a doctor. This is for you. I built all of this for you. And I told him that I know and I totally understand, but I feel like I could help more people this way. I told them, you know, you and I on a very busy day, if we see 30 patients each, if we see 60 patients together, dad, like that's the most we can do, right? And he said, yeah. And I said, I think, I think with this organ thing, I think I could reach hundreds of thousands, maybe millions of people. And he didn't get it, but he, he was supportive and he said, look, you know, it's your life, but understand this, I'm slowing down. I have to sell the practice. There's no going back here. And with that, I decided to focus on organ full time. And I left the family business to focus completely on organ.
SPEAKER_05: And he, he understood, he accepted it.
SPEAKER_02: He accepted it. He didn't understand. And I'll tell you, like I started sharing with him the, the letters that were coming in, uh, some of the cancer patients that couldn't tolerate the conventional shakes that were now relying on organ as their sole source of nutrition, uh, how people were using organ and how it changed their lives. I'd say six months after that discussion, he became our, our number one fan and it was less so about the success or the revenue or anything like that. He never talked about that. Didn't care about that, but he loved the impact we were making. And he passed about six and a half years ago and he couldn't eat his last 18 months of life at all. And he sustained solely on organ, uh, those last 18 plus months of his life. He would drink five to six shakes a day and it sustained him. Wow.
SPEAKER_05: Did, did you, I mean, initially in that first year or two when you had two products on the shelf, you had vanilla and chocolate and they were meal, the advertisers meal repliers, the replacements. Did you have anyone saying to you, Hey, you've got to, you gotta have like seven, 10, 15 skews. You gotta have a bunch of different, you have a bigger product line. You can't survive with two, two products, two, two, two different flavors. That's it. You gotta, you gotta expand now.
SPEAKER_02: They did. I initially, I hired a consultant and he said, look, you need to have four or five, six flavors to get that shelf presence. You know, it's not going, you're not going to win with just chocolate and vanilla. You're going to be, you're going to look really small on shelf. You're not going to succeed. People are going to get flavor fatigue. But really I just, I went with my gut. I told them, don't you think we should truly succeed with chocolate and vanilla first before we get into other flavors or before we get into other products? But I just went with my gut and I said, look, if I want to succeed with chocolate and vanilla and if more comes from there, great, but I'm not going to do that now. I just don't even have the resources for it. All right. So from the first four years, it was you, you really, this at this point, your note,
SPEAKER_05: you're focused full time on Orgain. So who was your first hire?
SPEAKER_02: My first hire was a guy named Todd and Todd was a, you know, doing demos at Whole Foods. He was demoing this chicken pot pie and he was the strong, very fit guy. And I asked him, I said, you know, shouldn't you be demoing like protein? And I took him over to Orgain. I told him about it. It was our first hire and he helped me in kind of a lot of the day to day stuff, but also in getting the word out there for trade shows and getting the product out there. From there it was ops. I hired someone on operations to help me and then sales.
SPEAKER_05: How did you as, as, cause I think today you've got about 120 employees. We're almost about 160 today. At what point did you get an office? I mean, you were working out of your house for the first few years.
SPEAKER_05: When did you like get a separate space?
SPEAKER_02: It was about seven years in that I got an office. Wow. So we were working remotely, working from my house, working from coffee shops. So it was about six or seven years in that I got an office here in Irvine, California.
SPEAKER_05: And what point, six or seven years in, I mean, what kind of revenue were you doing by that point?
SPEAKER_02: Probably at that point, at least 50 million in revenue.
SPEAKER_05: Wow. You had a really significant business with a tiny number of people.
SPEAKER_02: Yes. You know, I think, I think we had made the Inc's, you know, 500 fastest growing company list and we had two or three people, or I wrote two or three people. We really had one.
SPEAKER_05: This is in 2013. You made that list with three employees. Yes. Including yourself. Including myself. And was at this point by 2013, you're five years in, still primarily the bulk of your revenue coming through Whole Foods purchases?
SPEAKER_02: Through Whole Foods, the natural channel, and it was ready to drink at that time. And I was trying a lot of plant-based powders at the time and they all tasted horrible to me. I remember I'd have to mix them up. They looked like cement. They tasted like, you know, cement. And I would just, you know, plug my nose and hope for the best. And I thought, someone can do this better. And I worked very, very hard with our food scientist. And around that 2013 time period, launched a plant-based protein powder that was completely innovative and disruptive. It was new to the space. Innovative in which way? It tasted delicious. It bridged the gap between like dairy protein and plant protein. And you know, I brought this product straight to Costco. But I brought it to them and I said, look, I have something here that I think is completely disruptive to the space. And they said, look, we appreciate it, but we have these dairy powders. They taste much better. And I said, I just want you to try it and give us a chance. And they tried it and they said, look, it tastes much better than other plant powders, but we have these dairy powders. They do very well for us. And I said, yeah, but that's like the muscle crowd. That's the guy that wants to bench press 350 pounds. I want to bring in an incremental audience to this aisle, like parents on the go, business professionals, people that are actually reading their labels. And she said, look, this is what I'll do for you. I'm going to give you 20 stores as a test. And it went into these 20 Costco clubs and the numbers came back and it exceeded expectations in every way. And a few weeks after that, they said, can you bring this into all clubs at Costco?
SPEAKER_05: So that happens in 2013, 2014 timeframe. And I'm curious about, I mean, obviously you've got now a team being formed, right? But I'm curious about the decisions that you made that, certainly in the first five years, when people probably came up to you and said, you should do this or you should do that, or you shouldn't do this, you shouldn't do that. What were some decisions that you made that were the result of those kinds of suggestions that you regret or you wouldn't have done? So a lot of people told me not to go to Costco.
SPEAKER_02: They said, you have to really wait. Costco can put a company out of business. You have to be very careful. And I felt the opposite. And that was one of the best decisions that I made. But I will tell you that I think generally speaking, I have a completely unfair advantage in life in that I thought that I was going to truly die. There's one day that's seared in my mind that I'll never forget as I'm thinking about it now where I had just finished radiation treatment. I remember that day I got so dizzy that I passed out and they called 911. And I'm in this ambulance. They pull out these pads. And I feel like I'm almost watching this in the third person. And I remember asking the EMT, I asked him, am I going to die? And he just looked at me and he said, hang with us here, bud. And in that moment, I was almost sure that I was going to die. And thankfully, of course, I was stabilized in the ER and obviously made it. But I gained this completely unfair advantage from that experience and cancer in general that I would always go for it. Life is short. In my mind, I've already won the game in my mind. So I'll never take the safe option to tie the game. I'm always going to go for the win. And Costco for me was going for the win.
SPEAKER_05: Yeah. And you weren't going after the muscle building crowd. You were going after a different crowd of people who were not using protein powders.
SPEAKER_02: I wanted the everyday person that would wake up and instead of bacon and sausage and whatever they'd have for breakfast, that they would wake up and have an organic protein smoothie. And that would set the tone for the day.
SPEAKER_05: Andrew, one of the things that I struggle with this a little bit, I use protein powders, including Oregon. I've used a bunch of different ones. I try them. I like experimenting with them, with the plant-based ones. But I also really do try to eat a very good diet. But I kind of struggle with this idea of powders being real foods or whole foods. I don't know. And I guess maybe it's just, look, most people don't have the time. They need to just get nutrition in them and this is a convenient way to do it. But part of me is still kind of conflicted over this idea that we can see a powdered beverage as a healthy meal.
SPEAKER_02: Yeah. And I think it's a great point. I would say that it really depends on kind of what's in that powder, right? If you could consume whole organic foods and have a perfect diet on a consistent basis, that's ideal. The next best thing is to make sure that what you consume in your body are ingredients that are food-based, that are organic, that are clean, and that are companies that are reputable. And what we do is we make sure that we are a convenient solution to your health journey. Protein is top of mind now more than anything. So getting products that have clean protein, organic protein sources that you could supplement and push up that grams of protein per day, it goes a very long way to ensuring that you're achieving your highest health.
SPEAKER_05: So you bootstrapped this company basically until for the first 10 years, until 2019 when you did sell a majority stake to a private equity firm in LA that focuses on food called Butterfly. And I have to assume because you'd been doing this for 10 years and now is a chance to take some money off the table. You'd been working really hard and I guess it was a chance for you to just kind of put some money aside.
SPEAKER_02: You know, I had gotten to the point where if something went wrong with the company, everything was on me. I was highly leveraged against my home, the bank, any kind of leverage that I could get I had. And it got to the point where the business had just grown dramatically and it was at scale. And I was looking for a partner that would allow me to kind of continue with what was most important to me. I mean, there was a list of non-negotiables. These are the things that I would need you to stay away from. These are the things that we need help on. And you know, Butterfly Equity proved to be wonderful partners in honoring that and allowing us to grow in a way that I wanted to carry out.
SPEAKER_05: I think in 2022, early 2022, Nestle, a division of Nestle, purchased a majority stake from you and from the Private Equity Group. And now they are the majority shareholders of Orgain. What does that mean? I mean, that's a huge multinational company that can really turn us into a category dominant product line.
SPEAKER_02: Yes. I mean, they're the largest food and beverage company in the world. And Orgain had reached a point where, you know, I had taken it to a certain level and we wanted to truly go global. Right. And we wanted we don't have the resources for that or to get in the medical channel. Now the thing that's most important to me is making sure that there's a mutual respect. A lot of times you hear companies that get acquired by big companies like Nestle or others and they get lost in the shuffle. I made it very clear from the beginning that products, our products cannot be compromised ever. And they recognize and appreciate it and said this is what makes Orgain special. And one of the things that was interesting that they really respected is that anyone that needed its product or needs product today that can't afford it, we give it to them for free. No questions asked. So if you're a cancer patient and can't tolerate other products and Orgain is working for you but you can't afford it for any reason, we ship it to you, no questions asked. And that was something that was extremely important to me.
SPEAKER_05: Andrew, you are still the CEO, you run the company and you have a minority stake still. You're 42 right now, I think at the time of this recording. So you're still very young. What do you think? I mean, at some point Nestle can, if they want to, just, you know, they're the boss. I mean, they can get rid of you and they can name their own CEO. I'm sure they're happy with you and your story is on the part of the company's origin, your personal story. But how long do you want to keep doing this, running the business?
SPEAKER_02: I mean, this is something that I love, right? You know, Simon Sinek says something along the lines of, you know, when you work and it's just something that you don't love, it's called stress. But when you work for something that you care about or something that you love, it's called passion. This is still very much my passion. I'd love to continue to lead and shepherd the company into what it can become, which I think we're just scratching the surface. So you know, and I'm immersed in this industry. I love the space. I started a private equity firm focused on better for you brands that I could work alongside other founders and help them realize their full potential. So I'm in this industry, I'm immersed in it, and this is what I'll be doing for the future.
SPEAKER_05: So obviously your battle with cancer was probably, I think, still the most trying period in your life. And I even hesitate to ask this, but I mean, I imagine without that experience, this company wouldn't exist.
SPEAKER_02: No, this company absolutely wouldn't exist. I wouldn't be the person that I am today. And you know, anyone that's dealing with cancer, I have a huge soft spot in my heart. I want to do anything and everything to help them because I've been there and I'm not supposed to be here, but I wouldn't do anything or realize my full potential if it wasn't for cancer, which is crazy to say now, but it's absolutely true.
SPEAKER_05: Andrew, when you look back on the journey that you've had so far, I mean, I know that the acquisition is an undisclosed amount, but based on revenue for 2022, which I think is about $700 million, reportedly, you can imagine what the company is valued at. You've made a lot of money, you've been very financially successful, and you're doing what you love. How much of where you are do you attribute to how hard you worked and how much do you think has to do with luck?
SPEAKER_02: Well, if I was to sit here and tell you that everything that I've become and everything that Orgain has become was just all a result of hard work, I'd be lying to you. I mean, I launched Orgain at the height of the recession. I had no idea what I was doing. I had no idea what I was getting into really. And I had no idea how difficult the hardships would truly be. So don't get me wrong, I can tell you with confidence that I couldn't have worked harder. I made sacrifices that I never imagined making, even, I would say, to my detriment at times. But there was certainly, just like, you know, you think about that one basketball player that runs the hardest down the court and jumps the highest and finds this perfectly placed lob in his hands every once in a while, and all he has to do is throw it in the net. And every time I found myself with an opportunity, you know, I seized it with every part of me, but with a lot of purpose and a lot of gratefulness. So I would say definitely both hard work and a few of those lucky lobs along the way.
SPEAKER_05: That's Andrew Abraham, founder and CEO of Orgain. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's totally free. This episode was produced by Liz Metzger with music composed by Ramtin Arablui. It was edited by Neva Grant with research help from Sam Paulson. Our audio engineer was Ko Takasugi Chernovan. Our production staff also includes JC Howard, Casey Herman, Kerry Thompson, Alex Chung, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. I'm Guy Raz and you've been listening to How I Built This. Hey Prime members, you can listen to How I Built This early and ad-free on Amazon Music. Download the Amazon Music app today, or you can listen early and ad-free with Wondery Plus and Apple Podcasts. If you want to show your support for our show, be sure to get your How I Built This merch and gear at WonderyShop.com. Before you go, tell us about yourself by completing a short survey at Wondery.com slash survey. Hi, I'm Lindsey Graham, the host of Wondery's podcast, American Scandal.
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