Welcome to the seventh session of our series: 'BRICK by BRICK: Building Insurgent Brands'.Join us as we talk to the brightest minds across the world about building enduring consumer brands.

Started her career at the age of 15 so that she could provide for her family.Vice President at Hooters of America by 26. President of Cinnabon at 31, in the heart of a recession.

We're thrilled to have Kat Cole join us for 2022's last session of BRICK by BRICK: Building Insurgent Brands.

As President & COO at Athletic Greens, Kat focuses on driving organizational scale, accelerating business growth and global expansion, innovation, and more.During her previous tenure as President and COOat Focus Brands LLC, she led the company’s 7 brands including Cinnabon, Auntie Anne’s, Moe’s, McAllister’s, and Jambawith over USD 1 bn in revenues.

In this session on Lessons in Leadership & Brand Building, we cover:

- Building trust in teams
- Vulnerability and openness as a leadership superpower
- Scaling yourself as a leader
- Bootstrapping Athletic greens to USD 100M in revenues
- Framework for building brands

Check out Kat's substack here:https://katcole.substack.com/

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Transcript:

Hari  

So good evening, everyone. Thank you for joining us today, on BRICK by BRICK series where we talk to the brightest minds across the world on building insurgent brands brick by brick. The topic for today is Lessons in Leadership and Brand Building. We have with us Kat Cole, President and CEO of Athletic Greens, very fast growing supplement brand in the US. Before this, she was the CEO and President of Focus Brands, which owned well known brands like Jamba, Cinnabon, et cetera. She has a very inspiring background from starting as a hostess at Hooters when she was 17 to running multi billion dollar companies. And I mean, multi billion dollars in revenues and not valuation. So these are really large businesses. Kat and I have been planning to do this session for over a year. And I'm really glad that we're finally able to do this. Thank you, Kat, excited to have you with us. To the audience throughout the conversation, if you have any questions, please put it up in the Q&A window. I've allocated 15 minutes for Q&A. So great. Thanks, Kat. Look forward to the conversation. 

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Kat Cole  

Yeah, likewise. 

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Hari  

Perfect. So you know, I think a good place to start would be your journey, you know, as we just touched upon, it's far from conventional and extremely inspiring. So I think for people who are not familiar, it will be good to start with, you know, just the highlights of your journey from from the time you're at Hooters.

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Kat Cole  

Yeah, so I started working when I was 15 years old, which is pretty early in the US even at that time. And it's because I am the child of a single parent. We left my father when I was nine years old. I have two younger sisters, I'm the oldest of three girls. And my mom had to work three jobs. And so working was not only what I saw, modelled, it was a necessity for income to support my family and to support the things I wanted to do on my own as a growing teenager, and it was a form of freedom. To me, work meant Money, money meant independence, independence meant I could live a different life than my father and his family. And so there were many things that made me love work. By the time I was 18, I had been not only working in malls selling clothes, which was my job when I was 15 and 16. I had also added in being a hostess at restaurants. It just happened to be a restaurant chain called Hooters. And then by the time I turned 18, I was a senior final grade in high school, and I was working multiple jobs including now being a waitress at Hooters and I was the first person in my family to get into college. I was an electrical engineering and computer sciences major and a psychology of women minor. My mom was a incredibly proud as you can imagine, because literally no one ever on either side of the family had ever gone to college. So this was a very big deal for our family. But a few things that are very interesting happened. When I was 18. One, I started taking on more responsibility in the restaurant when the cooks needed help, I went in the back and started working kitchen shifts when the managers needed help, I would stay and work manager shifts very quickly without asking for it or having it as a goal. Because I had worked every job in the restaurant, I knew how to run a restaurant. And I had no desires to be a restaurant manager or a restaurant executive. My dream was to get my engineering degree and then go on to law school and be a lawyer and attorney for an engineering company. And so that was waitressing. And working in restaurants was just a way to pay the bills. But I did love it while I was there. And I volunteered for every job where people needed help, which caused me to unknowingly build a resume that would set me up to actually ended up becoming a restaurant executive. So when I was 19, I'm in my first year of college, still working at Hooters working all of these jobs. And I got a phone call from the corporate office. And they were looking for employees who were already certified trainers, you know, people who trained new hires, who could do that for many roles in the restaurant. And they needed to put a team together of people like that to travel around the world, and train new team members to expand the franchise. So when I was 19, I got a phone call saying, Hey, we're building a team to go to Australia. You have been nominated by your manager as a top leading employee to go do this. Would you like to go to Australia, and I had never been on a plane. I did not have a passport. I had only been out of the state of Florida where I was living twice in my life for sports competitions as a high school student. But I said yes, it sounded like a great escape. Then I bought my first ever plane ticket, flew to Miami stood in line got my passport expedited at the US Passport Agency, and then travelled to Australia. I stayed there for 40 days, helped open train employees get the brand launched on the continent, came back thought it was a once in a lifetime opportunity. Remember, this was 1997 or 98. So you know, massive access to iPhones and the internet and online courses. None of that was a big thing then. So I had to literally come back and go to class more often just to make up what I missed for 40 days. And and then kept working and thought that was it. But it turns out Hooters as a company was growing rapidly globally, and they needed people who knew the jobs had the experience could handle the chaos. That is international franchising. And a couple months later, I was asked to go to central America and launch the franchise there. A few months after that I was asked to go to south America and launch the first of the franchise there. And before I knew it, a year had passed, I had launched the brand on four continents and in three states and I was failing college. So I dropped out of college. Because it was impossible for me to keep working and make up what I had missed. And I loved international operations. I was 19 just about to turn 20 and had been all over the world learning lessons in leadership, leading teams I had never met in languages I did not speak, communicating a brand whose name Hooters does not translate into any language. And so the the education around brand and leadership and operations was phenomenal, even though it was real world work experience. Luckily, I was offered a corporate opportunity to move to Atlanta to run all employee training for the company. So I moved when I was 20 years old, dropped out of college.

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Kat Cole  

And that began a corporate career in restaurants. So by the time I was 26, I was vice president of the company doing 800 million in annual revenue stayed in an executive role for six years and with the company in total for just over 14 opening the businesses around the world. We launched an airline, a credit card, casinos, we were fully vertically integrated. We had our own direct distribution network so even though it was Hooters this chain that was kind of funny in the marketplace, because it was fully vertically integrated. I had lifetime's worth of work experience and education in one company I ran supply chain I ran franchising operations, merchandising, I mean who's had the opportunity launching an airline. I mean, you can probably, it's maybe a few hundred people. And and so that's why I stayed so long because the learning and the growth was incredible. Eventually I was recruited into private equity, I went back to school nights and weekends to get my master's. So I have a master's in international business without an undergraduate degree, which is very unusual in the United States. Also, maybe double digit, very low double digit number of people ever who have done that got recommendations of CEOs from around the world, including people like Ted Turner, and that helped me get admitted to business school. Because I had done so much nonprofit work for them over the years, and then was recruited to become president of Cinnabon turns that global brand around out of the recession, I inherited it in 2010, still, in the heart of the recession, built a team addressed the issues launched innovation channels that were very difficult for the company, but very profitable and strategic long term, then became Group President of the parent company to launch ecommerce, consumer packaged goods, and CPG iterations of Restaurant Brands, which is now the norm this omni channel idea, but it was groundbreaking back in 2010 2011, and in a period of two years, took a division from zero revenue to 15 million in EBITDA on just under a billion in sales and then grew that to multiple billions in annual sales just from grocery and licenced product. After a couple of years doing that became Group President of the parent company. And so I was managing all nine presidents, all 80 countries, eight brands and an international division and then in the background while doing that, several things were going on one I met my husband I became a mom. I had become an angel investor and early stage companies. So I'm invested in over 80 early stage companies a mix of SMB, Small Business, Technology, CPG, but mostly better-for-you and omni channel, retail. And then I took a year off, stay there for 10 years total took a year off and started advising high growth founders people in that thing Series C D later stage hundreds of millions in revenue still growing at 100% or more year over year. And one of those founders recruited me to come help him build the business that's Athletic Greens and it is the fastest growing nutrition company in the world where we combine herbs, Ayurveda multivitamin, probiotics, phytonutrients all in one, literally one scoop, one powder, mix it in just water in the morning, and it helps people cover their nutritional bases, improves gut health provides energy and immunity. Interestingly, I'm starting to get a lot of requests from India to ship it to very wealthy people who have heard about it and are looking to be a part of this biohacking community. And And India is a very interesting market, potentially forest and all of Southeast Asia, our business is in China already growing at four digit growth rates. We over 15% of our businesses in Europe. And so we have been global from the start never had a headquarters fully grown global. We don't disclose our current annual revenue. But what I can share is we were at 160 million in annual runway in June of 21. That's what we disclosed before we raised our first ever round of external funding, the founder bootstrapped the company to 160 million in US annual sales, that's unheard of, then raised 110 million on a 1.3 billion post at the end of 2021. And what I can't share is we have far more than doubled again, since then. And we'll likely do the same next year with essentially one product in only one channel. So I come from multi channel, multi SKU multi brand and went all the way through the other extreme have an incredibly focused, complicated product that's incredibly high quality and growing through its own digital channel only. So that's where we are today. I still advise I still invest, but a little bit less as I'm focused on scaling Athletic Greens.

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Hari  

Yeah, that's amazing. And I know so many people in India that get people to, you know, get Athletic Greens from the US and heard amazing things about the product. So we'll definitely get into the Athletic Greens story in this conversation. But I first want to start with, you know, your experience in Hooters where you said you were literally launching operations in countries every 60 days. And I wanted to, you know, understand how you were able to build trust with teams in a rapid manner as you launch new operations and switch to another country every 60 days, we know how difficult it is to do this, even in a single country, but just wanted to understand your thoughts on how have you managed to do it.

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Kat Cole  

There were a few ways One was, of course, first making sure that we and as a as a franchisor, and that I, as the leader on the ground, had very strong relationships with the franchisee the local. So, even if you're not in a franchise model, whoever your most senior local partner is, that relationship has got to be incredibly strong. And franchising, they're the ones who write the check for the employees, right? They're not my employees, they're the franchisees employees, they are the ones who have relationships with the local authorities, the regulatory bodies, the community, you know, all the things. And so first and foremost, that relationship must be strong, because I have no power. In a country where I don't speak the language don't know the laws don't know the customs with an auditor, or a milk vendor, who is often coming on a bicycle not coming in a truck. And so I cannot underscore that enough, like, who is that local partner? Do they have a high integrity reputation? Are they going to represent you and your brand? Well, when things are not perfect, because most of the time, they will not be especially early? And do you have an excellent relationship with them. And so thinking of all the things required to build a relationship, getting to know them, letting them get to know me, helping them when they have a moment of need, you know, all of these things it takes time. Second is once I got on the ground, to help with the opening, is doing the same with all of the people that they have hired, that are key stakeholders, but I have to do that in a matter of 24 hours, right, I don't have weeks to build a relationship. So one is let them get to know me as a person, and then try to do the same for them in a way that is culturally appropriate. And that varies from country to country. How vulnerable you know how open talking about our personal lives, but it matters, even if we can talk a little bit because people get to see there's a person behind the authority figure or the you know, the the outsider coming in. Next is show them through my actions that I am there for them. My job is literally for them to be successful. And that some days that was something as small as bringing tea, coffee doughnuts, and I didn't have to show up and say, Look, I thought so much of you that I got up early, I went to the bakery, I brought you food, all of that is obvious when they show up and I have this display for them. So through a simple act of thoughtfulness, it is I am demonstrating that I took the most valuable thing, my time. And prioritised their joy, their efficiency, and it was also selfish, I don't want them wanting to run around the corner to go to get a croissant, you know, I don't want them running to go, I want them to have everything they need right there. And I want them to know I care. So these little tiny things every day, that show through my actions, I'm here for you. That's the second thing. And the third is to hold people accountable. People don't trust leaders who can't hold boundaries, and expectations. So if some employees would come in late, or not follow the protocol in the first 24 to 36 hours, they have to witness me holding the standard, even if it means sending someone home, pulling them aside, if it's legal in the country, firing them if that's what the appropriate thing is much easier to do in some countries and and others. So this idea of trust isn't just building relationships, it is also seeing that you can lead it's I have two children, I have a three year old and a five year old. And it's very similar to how children push boundaries, not that adults push boundaries in the same way but they similarly they need to see someone creating the borders of what's acceptable. And so it's the little things, literally timeliness, following rules, protocol. Of course, kind of because we don't have that long of a relationship. So I'm being on the more caring kind and courteous side. But do those three things over and over and over in small ways, and enlarge. And, you know, I was would typically be in these countries for 30 to 40 days, sometimes a little longer. So, I become a temporary resident. And, and there are a few other things that are less operation specific or leadership specific, that are just about humans being effective in other cultures, but they are worth repeating, which is to not make assumptions, do my best to learn pieces of the language, even if it is hello, goodbye, thank you, watch body language and try to mirror it, do anything that I can to be respectful of all the what might be centuries of programming in people. And that was one of the more challenging parts, especially not just going from America to one country, but going from Argentina to China, and going from China to Montreal, and the different, you know, these are radically different experiences that I would need to adjust my own volume back to back without losing the authority and the approach, I needed to still get the job done. I couldn't flex myself so much too local ways of working, like the Bahamas, for an example where it's Island time, I couldn't flex myself so much to Island time, because otherwise the restaurant would have never gotten open, right? Because people are just like, whenever like, okay. I get it, please, could you come help me over here, even though I can I am paying them to come help over here. So the idea of respecting culture and being embedded in culture is another. And that will bridge to something that is less about building trust, and more about understanding how to tweak a brand for every culture. And there are some things that should remain the same. And there are often many things that need to be different. And if you don't do the work to figure out what that is upfront, you can be not only ineffective, maybe even embarrassed, but possibly even offensive. And everything from the name of product to the way you show imagery and pictures. To the music that you play, understanding how it is viewed in reference to local reference points, is a critical re-entry process for any any business.

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Hari  

Right? That's fascinating. And, you know, I also remember you talking about,  just how you like to see people at their potential. And, I think you often use this statement that people are magic and you want to see see them at their potential, and try to bring out the best in them. Could you speak to that?

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Kat Cole  

Yeah, this is just a philosophy about humans that some disagree with. And, and usually people disagree, because they've had a set of very negative experiences. And so they have reasons to disagree. And so my experience, which is led to my belief, is that the super majority of humans truly are incredibly positive, have far more capability than they know. And it is the leaders role to help not exclusively, but to help bring that potential out. And it's interesting when you see certain athletes perform far better under different coaches. And you see, someone that may be you fired, go to another place and thrive. Right. And so what this says is, none of us are in a fixed stasis and we are all on a journey of progress. It is both what is within us and what is around us that makes the difference. And a leader is part of architecting what's around someone and and most of us have the intent to show up and be remotely good each day. Yet we have days where we are not. And so I have made the choice to see people as the potential that they bring versus see them as what they are not bringing in the moment and that is difficult sometimes, because sometimes when I'm paying a team member to deliver excellence, and what I'm getting is something less. And I need to point out that they're here. And I need them to be here that the coaching still happens. But it's how I frame it in context of what I believe is possible. And the time in which the company needs them to be here. And if I still believe it's possible in them, but the time it would take them to get here is too long. I have an obligation to the team member because I can't expect the impossible of them, and to the company to make some change, change their scope, change their role, get them out of that role in someone in so it's what do I need you to accomplish? In what time? And is that possible? And what is my role in that. And then in just regular conversations with people having people think of themselves as the journey they're on, sometimes the way I do that is sharing my earlier journey. My earlier mistakes, just as a reminder that we all it's so interesting how it's human nature, for you to compare where you are to where I am right now. The thing is, don't compare your hustle to someone else's highlight reel, right, don't compare your day to day work to someone's Instagram post or their front cover of an of a magazine, you just, it's not helpful. There's aspiration to find it, which is great. But anything more than that is not helpful. And I have simply found and it is proven through decades of psychology, that people are more likely to become the better version of themselves when they are treated as the better version of themselves than they are if they are treated as a less good version of themselves. It's just so obvious. And the ultimate analogy or example is when you have a child, an infant, that is learning to walk, when they fall. Parents don't say that's wrong, do better get right, they just keep cheering and encouraging. And they walk and they model and they see people and it is the ultimate simple reminder of the way we learn. And the way we grow now that I am also one of the toughest coaches that I know of. And so when people need to go away from the organisation, when they need to be told very clearly, their behaviour is not up to standard or not acceptable. I do not hesitate. I do not put soft, sugary language around it. I'm very direct. But the lion's share of my conversations are about helping people see what's possible and reminding them that they're on the journey there. And a phrase I use is you're on my team until you're not. So if you're on my team, get all the coaching all the possibility and at some point where I can't see that anymore, or I can't give it to you. You're not on my team anymore, right? And make it very simple. And yes, of course, there are bad actors. Yes, of course, there are people who go through very difficult times, and my view of them being very capable of more is met with disrespect or not living up to that. But that's the rare exception. And I believe that is a fair tax to pay for the benefit of the fact that I get more out of teams than most people. I don't just mean people who work for me founders that I invest in firms that I advise because my attitude and my approach is one of shoulder to shoulder, not nose to nose. We just can work through more complicated things with less friction.

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Hari  

And, you know, how does this philosophy about people translate to hiring. I'm sure the founders would really benefit from your thoughts on you know, just maybe it could be specific tactics or your mental models that you use when when hiring for for senior roles. That will be interesting.

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Kat Cole  

Yeah. Especially, I'm glad you specified senior roles, because obviously, hiring is a big span. So, my response will be focused on the most senior roles. One, if you are growing very quickly, at scale, even the most perfect senior executive hire is more likely to not be with you in four years than they are to be with you in four years. It's the nature of growth and change. So, a challenge that founders have and not just founders, anyone who's building a senior team, in a high growth company, is to first be clear of what timeframe of excellence is framing your expectations. And while most vesting schedules of equity are four years, the practical reality is two years is about all you can predict and staff for. And that violates some people's minds. But if you look at any company, you would consider the most successful in the world globally. And their, their hyper growth section of their journey. And the incredible talent that they recruited, many of whom went on to become successful founders themselves. In most cases, they were there for less than four years, and often less than three. And that is more true as the world gets faster. And so I find this very interesting and confusing. Because especially if you're using equity, as a part of the compensation package, you think very carefully about how long you want someone on the journey with you. And my point in sharing this is to simply remind you to not be delusional, and not believe that people will be with you forever, it doesn't mean have short term mindset and just recycle through. But, you know, when I joined Athletic Greens, the company, again, had been growing at triple digits, on hundreds of million in annual revenue. And almost half of the C suite, in my first year is different. The people who were there when I joined were amazing. But they came into the company, from the point where we were doing 50 million a year or 40 million a year, and they had previously been at companies that have grown to 50 or 60 million a year. And then in less than two years, we're pushing on 200 million, globally, that not everyone is going to be able to lead that next chapter. And it's not just hiring. For these senior roles that you must think about in perspective, it is also the regular coaching, development, and changing of those leaders to ask again, what does excellent look like for my next two years? Where is this person in most of their capabilities, and if most of their capabilities are somewhere lower, can make, especially if you love working with them, and you feel that there are valuable for the company? Can you get them here, in enough of those areas fast enough so that they aren't taking up a seat that you candidly should have filled with someone that can help you to the next level. But there is also the dark side of that coin. And that is shooting for someone aiming for someone that is so far down the path, that when they get into your company at the stage you are, they don't know how to function in that smaller earlier stage environment and they over build. They over build the team. They overcomplicate things because they need systems to function and directionally, they're not wrong. But the analogy I like to use the picture in my mind is every company's journey is like a ladder. And each you know, on a ladder, there's a rung and another rung and another rung. And sometimes people come in and you're at rung number three, and they need to come in and build a team for rung number 10. And rungs number four and five, aren't there yet. And so I would just caution you against any of my advice can be taken to the extreme and be the wrong advice. But these are the sort of the book ends of the practical about someone shelf life and their capability to serve your what your company needs next. But also be cautious of over over hiring or expecting something that is far beyond what makes sense for your company.

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Hari  

Yeah, no, that's, that's very useful. And, you know, switching gears, I want to spend some time on, you know, just leadership and you've spoken a lot about how scaling personally is important. And, you know, I know you have some very interesting frameworks on how you pause and reflect and you know, you grown through your career. So we'll be great to just talk through, you know, what's worked for you. And, you know, in your career in terms of just scaling personally.

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Kat Cole  

Yeah, there were a few things one. For most of us, if we have some level of success, that continues to build over time, we become blinded by our own progress. It's natural. And as a result, we have a little bit less hunger, fire in the belly urgency around some things that require it. This is just true. It is human nature, complacency, comfort, confidence that can move from confidence to complacency. And so the first step is being aware, is acknowledging. And then if you care to do something about it, then I have, which I did. I developed a few practices. And in general, they're all a version of ask answer act, I develop a list of questions to ask either myself or others, I create an environment where those questions can be candidly answered, and where I get answers that makes sense for my role to act, and then I prioritise an act. And I just keep doing it over and over. So all of my practices to address this human dynamic of complacency are some version of ask answer act. So if you forget any of the practices, just remember that the three A's, at least in English. And so one, my first practice is one where I reflect myself, and it's called the hotshot rule. You know, hotshot being a term for someone new who comes in and, you know, it's all fire that day one mentality. So the hotshot rule is simply this, I practice it every week, on Sundays, after I put my daughter down for her nap, I used to practice it quarterly, it was so powerful, that it moved to monthly and now it's weekly. So I come into my office, literally right here at this desk. And it takes two minutes, one minute, it takes far longer for me to explain the practice than it does to execute the practice. So I close my eyes, and I imagined someone I admire, nothing more specific than that someone I admire could be my mom, a coach, a celebrity, one of you a business person, one of my employees, just someone I admire. And then I envision them in my role tomorrow, I am gone. And I am an observer. They have my email, my slack, my whatsapp, my portfolio, my you know, everything. Nothing. I can't say goodbye, thank you, I'm sorry, fire the person, nothing. I'm gone. They're here. So I envision them seeing that reality. And then I ask, what is the first thing, only one thing, and the first thing that person would do to make the business better, because to me, after a number of years, while I have all kinds of challenges, I would still tell you, this is the best it's ever been, of course, it used to be much worse. That's why I started this business or came here or whatever. But to this new person, so to me best it's ever been on Friday, same Friday to that person, this is the worst it will ever be. And isn't that interesting? How our minds over time can fill the space more with, it's good and better than it was. It's good and better than it was. But what we really need is a better balance of this is the worst it will ever be. We're starting over but we get our own baggage because we are committed to some of our decisions. We're committed to some of our hires, we're committed to some of our investments. And so we have this burden, whether it's conscious or subconscious, this allegiance, this affinity, or this tie to some things that have happened, and a new person has none of those ties. They just see they literally think I am here for the sole purpose of changing things for the better. Not, I am here to mostly iterate on what's good and maybe make a few things radically better. That's where our brains go over time. And so this is just a self exercise a self coaching exercise to shake off the spider webs and get back to that day one mentality around one thing and do that regularly. So I ask what is one thing they would do it comes to mind. I take action on that and 24 hours. Then since I practice it on Sunday, on Mondays in my meetings, I always tell my team. Now, my team, I've been teaching the hotshot rule for 15 years, practising and teaching it. So I can come to my team and say I practice the hotshot rule, I realised that this is one thing I should address, here's what I've done so far. But maybe that word, that term doesn't make sense. So you can just show up to your team and say, I was thinking, I was thinking, if one of you were in my role, candidly, this is something you would take care of. And I've already sent the email or had the conversation. And I recognise it's something I should have had more energy around. And every every week, almost, when I tell my team or the key stakeholders involved in that action, someone says some version of finally, or what took you so long, because the people who are closest to the action, know what the right thing to do is long before the leader takes action. I've learned this many, many times in my life and my personal life and my professional life. There were times when I knew something, I had an insight because because I was close to the customer, or I was close to the personal situation. But the person with the authority and the language to do something about it either didn't prioritise it didn't have enough of the insights. And so the trick, being a leader is to stay as close to the people who are as close to the action as often as possible through many mechanisms, doing the work alongside them riding in the truck, answering the phones, you know, doing the things. So you're staying close to their experience over time, because over time you get disconnected. I don't care if your two weeks, two years, 20 years, you pull away. And and then finding other ways to ask. So that's one, the hotshot role. The next is what I call three questions. So when I would take over a team, I ask everyone, these three questions. And even in my company, a year later, I asked these three questions constantly, in my meetings with various people across the company, it's what's one thing we should stop doing? What's one thing we should start doing? And tell me one thing you do differently if you were me to make the company better? So it's like the hotshot rule, but I'm asking them. And I asked many people, this, customers, employees, leaders, vendors, and there are always patterns. I don't, of course, react to outliers. If someone says, Well, you could give me a million dollars like, well, you know, I'm looking for patterns that helped me prioritise bodies of work, that are predisposed to have impact, because the people who are doing the work are already seeing it thinking about it. But they lack two things I have, they lacked the language to articulate a scaled problem or a scalable solution. And they lacked the authority to do something about it. I have both of those things. They have pieces of the insights, if I find a shared insights like crowdsourcing, mapping, friction, right, mapping ideas. And so very quickly, I get a sense of patterns that I need to act on. So again, it's another ask answer act. And then the third is similar. Again, this is all very similar, but they have distinct roles, what I call monthly check ins, where I asked six questions that are more about people knowing where I am in my life, and I know where they are. This is not KPIs performance, where are you in the project? It is tell me the best part of the last 30 days as it relates to our working relationship, or your job, right, like, and I do this with my husband every month. So we do monthly check ins about us and our relationship. I do the same thing with my direct reports. So best part of the last 30 days worst part of the last 30 days, tell me one thing I can do differently to be a better partner for you. What has worried you the most in the last 30 days or wait on you the world is heavy? People worry. What are you most proud of? And what are you most grateful for? Those are the six questions all of this is in my sub stack, all my frameworks, all my practices, all the questions. I don't actively write, but I do archive my frameworks there so people can go find them, so they don't have to ask me for over email. And this monthly check in helps me stay close, even in a global fully remote environment and appreciate things that affect how my most valued relationships show up. And then for every one I have something called an mmdd log. So when I'm in hyper growth, hyper change, new team, new leader, new project, new channel, you know, lots of new and I don't want to ride the natural train of learning. I want to bullet train, I want to accelerate

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Kat Cole  

the mmdd log is simply some way To map friction, so when I would open restaurants 25 years ago, this was a clipboard, literally a piece of paper, where at the end of every shift, people had to write one thing that made their day difficult. And then I would find the most commonly written things and fix it. And then if there was something that I couldn't fix, or I wouldn't fix, I had the conversation. Here's why this is the way it is, or here's why I can't fix it right away. So let's talk about what we can. Now in my company, it's Slack channels for every team. If there's not a lot of change, it's made my month difficult, or made my quarter difficult, right? You don't need to answer the question every day, if there's not a lot of change every day. But this very simple tool is game changing. For a team, one it allows you to know things you would not already know, two, it allows you to see patterns of what's affecting most people so you can prioritise investments, or energy or protocol. Three, it builds a culture that says your effectiveness is my job, I am literally asking what's in your way, and I am getting it out of your way, because your effectiveness is my job. It also builds a culture where people start to bring up what's in their way, even outside of that practice, because they know that their voice matters. And again, you put these things together, and it starts to map very clearly why I have been more effective faster with teams that I did not know, than most people around the world. There is a level of connective tissue, but and in inputs and, you know, cycles of information that are expedited, and a bias for action that doesn't get distanced from what really matters.

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Hari  

Right. I'm just conscious of time. Audience, if you have any questions, please put it up on Q&A. I'd now like to focus on Athletic Greens, Kat, as you said, you know, scaling to $160 million dollars without raising external capital is an amazing feat. What would you know, if you were to talk about the top three factors that helped Athletic Greens achieve this, what would those be?

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Kat Cole  

One would be I mean, you can't remove this from the equation. One is the product is insanely high quality. And there is evidence that it's high quality, it has 75 ingredients from around the world, whole food sourced ingredients. That is very difficult to do at scale. Because certain herbs and plants were the largest global purchaser of and while that sounds like a bragging point, that is not a good thing. You're if you grow too much, you run out, right? It's just and so that's very difficult. So that the the science that is behind the formulation and the relationships with the source farmers, producers of everything from alfalfa to probiotics, live fermented probiotics is hard work. It's really hard work. To we put ourselves through third party certifications. That 0.3% of the global supplement industry put themselves through. It is not required by any government. It is a standard though, of professional athletes and state sponsored athletes around the world. So we ensure that the people who have the strictest performance standards can take our product and Chris our founder has done that since day one. So again, it's it's for the masses but holding a standard. That is for professional performers. It proves that what we say in it is in it it proves that what we say is not in it is not in it. It holds us accountable to the quantity on the label long after it leaves the manufacturer so we actually have to put overages in the product which makes our cost of goods higher than anyone the process itself is expensive. It also means if we change one thing in the formulation and we have iterated it 52 times and never raised the price for customers. If we change one thing, it has to go back through that process 10 weeks and if anything changes, it doesn't pass we have to go back through it. So this idea of doing it right when no one's looking at a higher cost 12 years ago, you can't remove that from partly why it is so successful today. And it's so it's just the foundered standard of quality and no compromises approach to, he was counselled when he founded the company, because it is so expensive to make this product for the reasons I shared, to remove some of the ingredients, so it was less expensive. So he could take it to retail, brick and mortar retail. And he said, Nope, the whole body needs a whole connected set of nutrients and gut health products. And like nature, they work together in synergy. And so if I take out some of these things, there is a reason why when people take a multivitamin, that they don't actually feel better or different. There is a reason why people when they take live colours or probiotics, some may feel a little digestive impact, but it's not radical, more if you drink a green juice, or just eat a lot of vegetables, you don't feel the things that you feel when you layer in "AG1" by Athletic Greens into a healthy diet. It is these things together, that makes it that powerful. So again, he resisted the commercial temptation for hyper growth in retail because he was convinced that a more complex product because he had his own health challenges that he had worked with scientists and doctors to solve that that was what was 10x differentiated. So as a result, his only option 12 years ago, was DTC. highly unusual back then. No Amazon, no, just athletic greens.com. The way he built, it was working with personal trainers, and functional doctors gave it to them, they were blown away by the digestive energy and immunity impacts as well as hair, skin and nails and other effects of this combination of gut health and nutrients. So they started recommending to their clients. So this idea of trusted recommendations is a big part of the business model. It was slow, at first very slow. And then as the world became more educated on Wow, even our food in most countries is less nutrient dense than it once was. And our lives are busier, pushing us to a point where we do need that nutrient density, but the amount of food we would have to eat that that would have to be the most locally sourced is difficult for most people to do, and to keep in balance at all times in the perfect combination to get that synergy. And so supplements are what I just call help, has become a massive one of the fastest growing consumer categories around the world. But as a result, there are many bad actors, lots of stuff that has filler and isn't high quality. So it's a fast growing industry with a lot of mistrust for a very good reason. Now, connect that to Chris's choice for quality from a long time ago. He didn't know the industry would grow this fast and become so full of mistrust, but he built a company that could be resistant to it. And then you can't remove this fact as well. He is an expert, capital allocator. He knew how to manage cash, no outside funding small lines of credit or debt along the way. But this business because it the product is daily, just like working out you can't work out once you know and have a healthy life. You can't eat one healthy meal and have a healthy life. You don't take a vitamin once and live a healthy life. These are daily compounding habits. It's a subscription business. It is cheaper for the customer less expensive to have a regular recurring shipment to their home or to buy in some bulk, which also gives the company recurring revenue, like a SaaS product, but there's no gimmick. It's just that effective. And the it's so it's funny to see some people try to create subscription models and recurring revenue for something that the consumer does not want that frequently. And yet this actually is a rare match in the consumer space. a super majority of our customers, our subscribers, a super majority of the subscribers have product delivered monthly. So you have your customers from last year, staying this year, that cash cycle, as long as you invest it only in inventory and only in growth and keep your overhead very low, you can grow pretty quickly, even in a physical product inventory heavy business for a long time. Right, the challenge in 2021 Was that the growth opportunity was massive. And even he as a capital allocator. Even with a high retained subscription customer base, there's just wasn't enough cash to get enough of the inventory to grow another 200% year over year. And so that led us to our first raise of outside capital, which candidly may be the last. And and so that is the journey.

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Hari  

That's amazing.

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Kat Cole  

It's amazing. 

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Hari  

Yeah. And let me try and squeeze in a couple of questions. We have our other silent audience today. So, you know, you spoke about how insanely good the quality of the product is. But you know, one of the challenges is just communicating. You know that to a first time customer and building that trust. So how did Athletic Greens pull that off? Especially given you know, you're just selling it through your own website? Which is Yeah, yeah,

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Kat Cole  

I would say we're still not as great at it as I want us to be, which, which is a testament to the product, we did a very bad job of communicating the things I just shared with all of you. Yet. People still told their friends because they felt better. But what really helped with some of those early customers themselves became well known, trusted thought leaders, Tim Ferriss who has one of the most popular set of books and podcasts. More recently, Dr. Andrew Huberman, one of the top scientific minds with the Huberman lab podcast that has global reach. These people have been customers for 10 years. So in their early days before their podcasts were big, or their books were popular. They talked about athletic rates. Then as they got bigger, when we started to see customers telling us I heard about you from Tim Ferriss, Chris being the very generous founder that he is called Tim, and said, Look, I don't want to abuse your platform. I know you're an authentic customer, and you should share in the success that you are bringing us. And so he built very generous financial structures to allow people who brought customers to share in that over time. Now, it's so funny how the world works in our brains work. But there is a downside to that, which is once you become a sponsor, or an advertiser, all of a sudden, people think well, Tim Ferriss, you're being paid to say that. So I don't know if you really believe it's a vicious cycle, that we get authentic recommendations from sports, icons, health leaders, and then we say thank you, we don't want to take advantage of you. We have a programme for you to share in that success. And then once they do, people go, I don't know if you really mean that. So it is this idea of thought partnerships, thought leaders trusted recommendations, which you can say on the extreme is influencers. Is like threading a needle, you know, it's you, you have to do it the right way with people who are true believers. So that when possible, their authenticity shines through but because you are in a financial relationship, they will always be doubted by some group and you just have to be able to stand behind. Even if people doubt that. Yes, we're paying them because you would also be complaining if we took advantage of that, right if we benefited and they didn't. Your favourite sports star, your favourite radio host. You know, if you learned they were bringing us all this business and we gave them nothing. You'd be mad about that too. And so you have to know you kind of can't win. But that helped for a while the trusted recommendations where people would say, Well, I trust him. And if Tim trusts Athletic Greens, I'm gonna give it a try. It's like our doctor's recommendations or family recommendations and then us building a better referral programme so that our own customers found it easier to talk about it. And only recently, did we start to talk about the things I talked about here. NSF or sports certification TGA registered facility 52 iterations highest commitment to quality, the actual bodies of research, double blind placebo trials, top education institutions around the world, the research behind the ingredients like only just now, are we starting to build that muscle to prove that it's not just trusted thought leaders who trust us, which is why you should trust us. But here's the research behind these three ingredients, and how they work together in these quantities. And so that's the next chapter for us is more indisputable bodies of you indicating trust with an industry that continues to be full of hype.

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Hari  

But right now, you see we're completely out of time. Just one last question, Kat. So you know, for those listening, if they want to be the next Kat Cole, what is a personality trait that that you know, that you think could help them get there?

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Kat Cole  

Yeah, and I will answer there was a question that chat channels behind. Okay. There was a there was a channel. Yes, we have partnerships. It's not really influencers, it traditional influencers are only this much for us podcast, we are the largest podcasting advertiser in the world, in the world. So it's thought leaders, right? It's not just like influencer on Instagram, that's very small for us. But people who are building authentic audiences with Thought Leadership, that and we're very early in YouTube, but it's another channel. The largest channel for us is organic search. That is the largest channel. The second largest channel is paid search. A lot of that, however, gets driven by overflow activity from podcasts. It's very light. So podcasters have a link. So Andrew Huberman will say, go to athletic greens.com, backslash Huberman for a special offer from me. And that is in attributed lower funnel channel. But that mentioned also leads to someone later going, huh? Athletic Greens. And so this idea of an ecosystem of going to where knowing who our customers are likely to value a premium nutrition product, likely to believe and appreciate its impact. And then go where those people are like, if you don't believe in supplements, I'm not going to try to get you as a customer. That's a fight. I don't need to be like, if you're the only one believe in taking vitamins, you're not my customer, ever. And I'm not worried about you. And I'm not trying to get you we're doing next year we'll be you know, somewhere close to the billion dollar annual run rate. And I only have 1% unaided awareness in the United States, right. I have a long way to go with just the people who already are far predisposed. You know, people who run marathons, if I just focused on marathon runners, I could triple the business in North America. So influencers remember, they all these channels have a downside. It's the it's the full funnel of understanding and now we're layering a little more television, a little more radio, but in thoughtful ways. Okay. So back to your question. personality traits. There are four humility, curiosity, courage, and confidence. And if you over index too much on one versus the others, you can get in trouble at various times. So really learning to build all four of those and be self aware, to know when you might be not demonstrating enough humility in the moment or enough curiosity or enough courage or enough confidence. So those are the four mindsets I call them of effective humans.

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Hari  

No, Perfect, thanks for that. Garin will make sure that we, you know, add your substack link to the transcript when we put it up. This was fantastic. Thank you so much for 

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Kat Cole  

oh, Hari, one more thing. If anyone would like AG1, send me addresses and I will do my best to get it to people as a gift. I love to send product to people so let me know. 

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Hari  

I'm sure you're gonna get a lot of love. But but thank you this was this was wonderful. Thank you, everyone for joining us and happy year end to everyone. Happy holidays. Thank you.