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I Essentially couldn’t help but notice that the sports nutrition products that I was used to seeing just plastered across the sidelines across the postgame press conferences across every inch of professional sports. Were not in there. They were not in there and they were not being used and instead in every player’s locker, or, or even in their hands, right, because we were genuinely in a post game environment was that was products that I had never seen before. From brands I’d never heard of, that, oftentimes look more similar to prescription medicines than they did consumer products.
Jay Clouse 0:37
The Startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them.
Jay Clouse 0:49
Welcome to upside.
Eric Hornung 1:04
Hello, hello. Hello, and welcome to the upside podcast. The first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co host, Mr. trampoline park himself Jay Clouse, Jay How’s it going, man? Jumping into this interview?
Jay Clouse 1:22
Uh, yes, I’m going to do a front flip in his interview because I learned how to do that.
Eric Hornung 1:26
You learn how to do a front flip first time?
Jay Clouse 1:28
I think I had done it at a trampoline park in the past, but I definitely got a lot more reps on the front flip front this past week.
Eric Hornung 1:35
The front flip front, what a magical wondrous place. Can you do a backflip?
Jay Clouse 1:40
Never tried? That one scares me.
Eric Hornung 1:42
See, the number one rule about back flipping? is don’t be afraid.
Jay Clouse 1:46
Yeah. Right. I think that’s kind of the number one rule of anything that’s physically challenging, you kind of just have to like, go for it whole hog. You know?
Eric Hornung 1:55
I think that’s also the number one rule of anything that’s mentally challenging.
Jay Clouse 1:58
That’s true. And I would say things like front flips, some backflips are actually more mentally challenging and physically challenging. Unless you know, you, you don’t have the physical tools to do so.
Eric Hornung 2:09
Wait, you said that they are more physically challenging than mentally challenging,
Jay Clouse 2:12
No mentally challenging then physical challenging, given, you have like a certain baseline athletic ability? Um, you know, like, if I was 250 pounds, I don’t think my mindset matters all that much. I’m not going to do a front flip.
Eric Hornung 2:25
Jay Clouse 2:26
I just don’t think the physics work out. I didn’t go to physics school.
Eric Hornung 2:29
That’s true. You didn’t go to physics school.
Jay Clouse 2:31
I can tell you though, what I did learn in this whole front flip dodgeball, Frisbee, slam dunking trampoline park experience, is that you gotta stretch.
Eric Hornung 2:44
You gotta stretch. And you gotta you gotta have some sort of good. Well, we’re getting old Jay that’s the real problem.
Jay Clouse 2:50
Before and after. Because recovery time was also, bad.
Eric Hornung 2:55
And you know, how have you seen these like leg wrap things for recovery time now?
Jay Clouse 2:58
No, is that just like an ace bandage around your leg? That’s branded well?
Eric Hornung 3:02
No, it’s it’s like a very large thermal sleeve. Almost that like compresses. And I don’t know if it’s hot or cold, because I’ve never tried one. But it seem to be all the rage amongst my friends who actually work out hard.
Jay Clouse 3:16
Sounds like an ace bandage that’s branded well. I had a sleeve like that when I was in high school for my leg that I thought was bruised, turned out to be broken. and it did help.
Eric Hornung 3:26
Interesting. Yeah, so I think recovery is like one 10th the battle and uhm maybe more, I don’t know how the breakdown goes, actually, I’m not gonna I’m not gonna guess here, but you got to stretch on the upfront, you gotta recover on the back end. You can do that a couple ways. You got to stretch on the back end, you gotta use some very expensive Ace bandages, and maybe you can even use some supplements.
Jay Clouse 3:49
Speaking of supplements, today, we are speaking with Matt Wan, the founder and CEO of Momentous. Momentous is a nutritional supplement company driven by science consumed by transparency and grounded in experience. Their products are designed by the NFL, NBA and NHL human performance experts. And they have leveraged the best knowledge in sports in order to deliver innovative products that use only high quality ingredients. Absolutely no fillers are certified safe and taste phenomenal. Big claims!
Eric Hornung 4:19
How often do you drop names? Like in conversations? Are you a name dropper? I know you pretty well, but I don’t know if you’re a name dropper in casual conversation.
Jay Clouse 4:26
I’m not a name dropper, I think that name dropping is a red flag and a lot of circumstances.
Eric Hornung 4:33
Is there a name dropping equivalent when you drop, like a company name or an organization name? Or are those different? Like, Oh, I know Arnold Schwarzenegger is different than Oh, yeah. Like I know the organizers of the Arnold or no,
Jay Clouse 4:46
I think it’s relatively the same. Because anytime you’re just dropping something that has name recognition, and you’re trying to sort of leech off or siphon off some of the brand equity in that name to yourself. I don’t love that.
Eric Hornung 5:01
So what do you how do you feel about the fact that there are so many league names in this kind of introduction?
Jay Clouse 5:11
I think that because this is not like, I know this person, or, you know, I’ve spoken with this, if this is saying our experts have experience in performance from their experience in these leagues, and they are on the team, I think that’s different.
Eric Hornung 5:27
So it’s like a little bit of a nuance there. But there’s sometimes that you can use heuristics for the good. And sometimes you use heuristics, and they’re red flags.
Jay Clouse 5:37
This is more like a bonafide of your team than just like pure proximity, social proof.
Eric Hornung 5:45
Wow, this is like a fascinating psychological argument that I think we could dive way deeper into, but I’m sure if I was a listener, I’d be bored already. So let’s move on to some facts.
Jay Clouse 5:56
Some facts. Momentous was founded in 2016 was in stealth mode until late 2017. Matt co founded the company with Rob Dyrdek.
Eric Hornung 6:05
That’s a familiar name.
Jay Clouse 6:07
That’s a familiar name. Got me off my role. Speaking of role, he’s a skateboarder. And he’s also of ridiculousness fame. First product line went live in 2018. They’re a remote team based in Jackson Hole, Wyoming that I mentioned Jackson Hole, Wyoming yet remote team based in Jackson Hole, Wyoming, with members in Palo Alto, Boston and Texas, Palo Alto, but we’re going to allow it,
Eric Hornung 6:31
we’re going to allow it because they fit into our theme of remote work culture, remote work and distributed teams. So you know what, they have a couple people in Palo Alto. It’s going to happen eventually on this podcast, but they aren’t headquartered there. And they have people all over the country.
Jay Clouse 6:48
round peg in a square Jackson Hole.
Eric Hornung 6:50
Oh, man, now that’s terrible. That was so bad,
Jay Clouse 6:55
It’s pretty good. Eric, do you use supplements in your recovery after your workout, you workout more than I do?
Eric Hornung 7:00
I do work out more than you do. Although not right now. Because embarrassingly, I was lifting a mini table and strained my pec, which is like, the most embarrassing thing i think i’ve ever said publicly on this podcast, but yeah, I, I don’t really use too much post workout anymore. Because my workouts aren’t that crazy. I still do use pre workout, but not the crazier stuff that I used to use when I was younger.
Jay Clouse 7:26
All right, well, we’re about to dive into this interview with Matt, as we go through this interview, guys, if you have thoughts on it, please tweet at us @ upside FM or email us firstname.lastname@example.org. I’m sure there are a lot of folks out there who are much more knowledgeable on the supplement side than we are. And we’d love to hear your thoughts and your experiences and what this interview means to you. So reach out to us, and we’ll get into that interview right after this.
Eric Hornung 7:50
But before we do that, let’s bring in Philip Bautista. An attorney at Taft Stettinius and Hollister to teach us about trademark loft. Taft is a full service law firm known for assisting entrepreneurs across the Heartland. As a reminder, the following remarks by tax attorneys are for informational purposes only and are not legal advice. This information is not intended to create and receipt it does not constitute an attorney client relationship. No person or organization should act upon this information without first seeking professional counsel. Philip we are through the disclaimer. Thanks for coming on. How are things in Cleveland, the new home of Odell Beckham
Philip Bautista 8:26
very excited about the Browns for once.
Eric Hornung 8:30
As a native Clevelander I’m also excited about the browns.
Jay Clouse 8:33
Philip, something that comes up a lot with founders here on the show is the idea of filing a trademark. So we wanted to ask you can two trademarks coexist? And what other misconceptions are there of filing a trademark,
Philip Bautista 8:46
there is a misconception out there that a trademark owner can prevent another party from using the same or similar trademark under all circumstances. And while this may be the case for owners of famous marks, think of Nike or Gucci. That is not the case. For most marks, similar trademarks may coexist. The owners are using that for different goods or different services will have sufficiently different customers or use different trade channels. So whether similar trademarks can co exist involves a Wang of a number of different facts. But by and large, there are many instances where similar trademarks can coexist.
Eric Hornung 9:26
Awesome, very helpful if people want to learn more about Taft or yourself, where should they go?
Philip Bautista 9:33
www.taftlaw.com. I’m also on LinkedIn.
Jay Clouse 9:35
Matt, welcome to the show.
Matt Wan 9:43
Hey guys, thanks for having me on.
Eric Hornung 9:45
We like to start on Upside with a background of the founder. Can you tell us about the history of Matt?
Matt Wan 9:51
The history of Matt, if you will, is frankly almost entirely connected to the history of Momentous I think like any consumer product company should be it’s really highly personal experience driven. This is actually a business I started working on at the end of my senior year of high school. So I had no formal business experience before starting this venture. All of my quote, experience in the space was through direct experience in sports, through exposure to training, fitness, nutrition, nutritional products, etc. And then through many, many years of what some people would say are very, very boring dinner table conversations, but I certainly didn’t find boring with my dad, who’s been a VC for since since the mid 80s. I guess it’s the only thing he’s ever done with his career. So I just sort of grew up around the entrepreneurship space. This isn’t the way I would describe it to most people. But you guys would probably be sympathetic towards it in that I literally physically grew up on Sand Hill Road. Like that was literally where our childhood home was.
Eric Hornung 10:58
That’s wild. What was the first sport you ever played?
Matt Wan 11:02
I have no idea. I did every sport growing up. Maybe soccer, something like that. That might have been the first organized sport soccer, basketball. My parents were both swimmers. So I got into swimming pretty early as well.
Eric Hornung 11:15
What’s the first sport or fitness activity that you fell in love with?
Matt Wan 11:18
That I really fell in love with I’d have to say running. I was playing all sorts of sports through elementary school and and even through high school as well. But I definitely noticed that when we had to do sprints for soccer, basketball, or when you know, you had to run two miles from warm ups or whatever it practice. I love that part.
Eric Hornung 11:39
Man that is so different than my experience playing sports.
Matt Wan 11:42
I know I but I just I love that part. I don’t know why. But I even in middle school, although I was playing football in the fall, I would still go and race the cross country races. So I had this like interesting pecking order where it was like if like, like football practice would take precedent over cross country practice. But a cross country meet would be more important than practice. And if I had a football game, then I had to miss the meet,
Eric Hornung 12:10
How big was your like high school?
Matt Wan 12:13
Yeah, that’s it. That’s actually probably a more interesting question than you think the first high school I went to, which was in Menlo Park, here in California was probably like 600, or something like that. So I don’t know, maybe that’s a medium sized High School
Jay Clouse 12:30
In a graduating class or the entire school.
Matt Wan 12:33
A whole school school? Yeah, like between 140 and 150. Great. I’d say the second high school I went to was a 100 kids total. And I think there were 26 in my graduating class. And that was because after my sophomore year of high school, my family and I moved to Jackson Hole, Wyoming.
Eric Hornung 12:55
Matt Wan 12:56
That’s a very, very fair question. It’s a place that we’ve been visiting for a long time, were really, really passionate about the outdoors about being outside. We’d started spending more and more of our summers there throughout my childhood. And I think what essentially happened was that my parents, my mom, in particular, were already planning to move there after I went to college, and just got impatient. My dad would actually probably push back a little bit on that statement by by putting in more on my mom and that we had been there for the summer, right. We’d been there through all of August, then it was time to go back to school time to go back to work. So my dad and I both came back to California. I had already like started, you know, training with the team again, my dad was back in the office. My mom, about two days before I was supposed to start my junior year in California calls us and says, okay, guys, here’s the deal. So I’ve toured the school out here.If you want to try it for a year, they’ll let you in.
Eric Hornung 14:03
They had nothing but room with 26 Kids per grade.
Matt Wan 14:06
I guess they wanted the tuition dollars. But um, yeah, they basically my mom had gone and sort of put the plan together already was just really not looking not looking to go home that year. And I agreed to try a semester at first. I was like, Well, obviously, I love Jackson, okay, a semesters, not a big deal. for five months, whatever, right? I’ll just go try that have that experience, no big deal. By the time I’d committed to that. Then my school in California said, Well, actually, if you’re going to go do this, we’d rather you do a full year. I wasn’t as excited about that. But frankly, I already sort of felt committed. But honestly, by the time I was a couple months in, I didn’t want to go back.
Eric Hornung 14:53
Matt Wan 14:55
It’s just it’s the best place in the world, man. It’s just such a different. It’s just such a different lifestyle. You know, for cross country practice. Every week, we get to go run in the National Park for winter sports you get out you get off school, an hour and a half early to go ski every day. Yeah, studied hard. But I I wanted to be outside as as many minutes of the day as I could.
Jay Clouse 15:17
What are the athletic programs like and Jackson high school where you have 100 Kids total?
Matt Wan 15:23
Interestingly, because that school was so small, we actually shared teams with the public high school, which was again, sort of closer to six or 700 Kids total. So the teams were reasonable. Interestingly enough, though, because Wyoming so small, you don’t have more than one team and a town ever. Right. So like when we had a track meet in California to race against our rival school, we literally walked to the meet. It was on the same street, right? We just walked to the other track in Jackson and Wyoming, the closest town for us, I guess what was probably our rival school was about three hours bus ride. I’d say the average ride for us on a weekend and literally every weekend was like six hours. It was it was such a culture shock for me. You can imagine like waking up on a bus, right? And looking out the field. I’ve got, you know, 40 kids on this bus who like three weeks ago I had never even seen before. And it’s just all you know, these high desert fields out the window, as long as you can see, it was it was a definitely a new experience for me.
Jay Clouse 16:37
What about your friends in in California, when you said I’m going to go to Jackson for a year? Like what did they say?
Matt Wan 16:43
Why? Why not unreasonably? But their expectation was that I was going to be back.
Jay Clouse 16:50
Are there any direct flights from the Menlo Park area to Jackson Hole?
Matt Wan 16:55
You can to SFO to Jackson direct, like during the holidays and during the peak tourist seasons in the summer. But for the most for the most part? No, you have to go through Denver or Salt Lake.
Jay Clouse 17:06
So your dad’s a VC on Sand Hill Road. And your mom says hey, we could actually just stay here in Jackson for half a year or a year. What did he do? Did he get out of the game? Or was he traveling or working remote?
Matt Wan 17:19
I mean, he can kind of work from anywhere. They’ve got an office I guess, in Palo Alto and in Boston right now. But he can kind of work from anywhere. So the the way we talk about it and pretty funny saying for quote Wyoming resonance, right is that Wyoming income tax is travel expense, meaning that he just sort of had to fly more as a result of that. You can you can take calls from anywhere, right, but to be at board meetings, etc, and get to meet companies, then you just got to get on get on a plane sometimes. And it was a lot less often that a company would be in the same area already right?
Eric Hornung 17:54
My dad was seems like he was like your dad, and that the dinner table conversations revolved heavily around business, or at least that’s what you hinted at, you kind of talk a little bit about what that was like, growing up, when VC maybe wasn’t the biggest thing and what those kind of conversations were like,
Matt Wan 18:13
it was partly me just listening in, frankly, in that he would take us to all our sports games still right on the weekends, and, you know, still still wanted to drive us to school still wanted to pick us up whenever possible. But when he was home, he would so often have like phone calls that he had to take in the car as a result of that. So I ended up like literally listening in on what must have been 1000 different interactions, not only with entrepreneurs, but even but even board calls so much. So to the point that you know, from my car seat, I could actually like, pick out other board members voices, yo, and I mean, like, Oh, that’s Fred Oh, that’s a Tom, like I knew their voices, even though I hadn’t met them.
Jay Clouse 18:58
Are there any conversations, or snippets of conversations from that that stuck out to you or that you held on to
Matt Wan 19:06
when there were decisions being made around companies, those were always the most interesting, you know, by companies, I mean, investment decisions, those were always the most interesting ones for me, when they were going back and forth on, you know, trying to justify evaluation, or put a term sheet together. And those were generally, you know, more like, you know, Monday morning calls for them. And those were, those were really interesting for me, the ones that really stuck out. And maybe maybe this isn’t what you want me to talk about. But there were maybe three or four instances where I specifically remember even though I was a very young age, that there had been an instance of, you know, some sort of sexual harassment or misconduct at one of the companies. And I remember those conversations, because it’s like, the only time I feel like I’ve seen my dad pissed off, you know, what I mean? Just like, really, really angry, sort of, you could hear it in his voice, sort of thing, not not trying to be gentle, so much anymore. And and this was, this was before, I’d say, you know, this, this culture in the workplace was much more publicly aware. But it was, you know, it was clearly still came up as a problem every now and then. And clearly something these these companies took very seriously, at least in those few instances, right, where, you know, the, without going into detail, the three instances I think of were like, I immediately think of an example where like, you know, the woman made some comment to HR, right? HR reported it. Board, or somebody there looked at it spoke to the guy. He said, Yeah, oh, it’s nothing. And then it was supposed to be nothing. And then it got to the board level, and they’re like, No, no, no, it’s never nothing. Right? And they go back. And it’s just this complete tip of the iceberg dynamic, where it starts to sort of unravel from there. And even though it it just comes off as like, one comment on the surface. It was always so remarkable. remarkable to me, how how much more there were that to these situations than people were comfortable discussing publicly, given the politics of these companies. It was really, really interesting to me, just from like a managerial perspective that, you know, how many different facets there were, and political dynamics that were in managing those situations, right. And then every one of them, of course, you know, several people were fired. It’s crazy. You can imagine for me, I’m like, 12, right? That’s like,heavy stuff.
Eric Hornung 21:42
What year did you move from Palo Alto to Wyoming?
Matt Wan 21:46
When I was sixteen, or maybe 15? Whatever year that was? What year was that? 20? 2013? 2013? Yeah.
Eric Hornung 21:57
Okay,so we’ve talked a lot about sports. And we’ve talked a lot of VC. And that seems to be the intersection of where you sit. What are we missing in this kind of dichotomous narrative fallacy that we’re probably diving down what else makes up Matt.
Matt Wan 22:10
So you know, that I’ve been really into sports from a very young age. And as a result of that, at some point in my life, I’d say specifically, in middle school, I just started taking my training a lot more seriously. And as a part of that, I started taking my nutrition really seriously as well. So I’m sort of mocked for this constantly among my friend group, you know, as being a bit of a bit of a health freak, but really I just looked at it is being authentic to, you know, the brand and the customer that we’re we’re looking to serve at this time. Funny enough, the sort of properties, my dad actually invests in our sports, props, sports and sports media related properties. So that, again, has just been, you know, a reinforcement of being around some really interesting individuals in the space, and and, frankly, being lucky to have that exposure.
Jay Clouse 22:59
So what was the moment in high school, you said, You started working on this, this plan your senior year? What was the moment where you said, you know, what, I think I’m going to start my own supplement or create my own supplement,
Matt Wan 23:12
I’m not sure that there was a moment necessarily, to be honest with you, I’d always been interested in starting a business, I’ve probably had a 100 ideas, I’ll probably have another million by the time I die. And this was one of those ideas that felt really personal to me, given how involved I felt in the space and how much personal experience I felt I had not only with these products, but just with the space and the customer in general. And it was an idea where I think like that sort of VC mindset that I was raised with, I just sort of kept poking at. And I couldn’t sort of find a reason to say no, if you will. And that was something again, I was taught from an early age, right that depending on the level, you know, the sort of type of or I should say stage company you’re investing in, right? Very often for VC, they’re not looking for a reason to do the deal. Right? They’re looking for a reason not to do the deal, they’re going to see 20 decks a day, right? They can’t try and justify each one of them, right, they need to look for a reason to not do it. And if they don’t find a reason not to do it, then they take it to the next step. And that was sort of how I approached these business ideas. And some of them went further than others. And this was one that went far enough to the point where I really felt like I had a sort of a viable concept. And I and that was the decision point for me was not Was this something I wanted to do it was more like, is this something that I want to really take seriously,
Jay Clouse 24:41
What was the original breadth of the idea because I doubt you’re just thinking I want to create an another incremental protein supplement, there’s probably more to it than that.
Matt Wan 24:52
Sure. So as I mentioned, I’ve been really fortunate to have some some pretty unique experiences within sports and professional sports in particular. And the observation that really got to me in this space was when I was fortunate enough to go inside an NFL locker room post game. And despite the many other numerous distracting activities going on in that locker room, I essentially couldn’t help but notice that the sports nutrition products that I was used to seeing just plastered across the sidelines, across the postgame press conferences across every inch of professional sports. Were not in there, they were not in there. And they were not being used. And instead in every player’s locker, or, or even in their hands, right, because we were genuinely in a post game environment was that was products that I had never seen before. From brands I’d never heard of that, oftentimes look more similar to prescription medicines than they did consumer products. And I don’t need to say that these were like literal prescriptions. I wasn’t trying to allude to steroids or something like that. I just meant to say that these were products that were you know, pharmaceutical grade, and from brands that were very, very niche, very, very high quality, and that if you wanted to go buy on, you know, forget a GNC or vitamin Shoppe, or the like, even a whole foods or some sort of high end retailer, we’re not going to be there. And so the summary, the observation was essentially that the products that professional athletes were endorsing, were not the same as the products that they were genuinely using. And that to me struck me as a really, really interesting opportunity. And that in almost every other category, you have direct transparency to what you’re using versus what you actually see the elite athlete using or the elite consumer, right, you can see directly what shoes they’re wearing on the field. Right? You can see what sort of shorts or what they’re wearing, what bike they’re wearing, whether it’s a Nike or Adidas jersey or whatever, right? It would almost be as if, when you saw LeBron, endorse, you know, some sort Kia or Hyundai at halftime that you as a consumer were like, Oh, yeah, that’s definitely what he drives home and every night, right? Nobody thinks that right? Nobody thinks that way. But when it comes to this category, that actually is genuinely how we think, right, because they’ve done such a good job branding, these branding these products. And that, again, just struck me is a really, really interesting opportunity. And I believe one of many symptoms of what I now, you know, described as a highly antiquated market.
Jay Clouse 27:27
So are you saying that the opportunity that you wanted to capture was creating a consumer brand that was the consumer brand of the high school athlete and the professional athlete?
Matt Wan 27:39
We wanted to create the product that the professional athletes, regardless of endorsement, literally wanted to buy and use every day, meaning that we wanted to create the product that they were actually authentically going to be using. And we believe that by doing that, and creating an authentic relationship there that we be able to leverage that to get the, quote, aspiring consumer, whether that’s the high school athlete, whether that is, you know, somebody or like me that’s already buying organic produce already buying grass fed meats, right, that hasn’t been taught to look for premium products in this category, that they need to be looking for something again, at a higher level here, right that guess what you pay, you pay 10 times as much for your gym membership, because you want to go to equinox, instead of 24 Hour Fitness, you pay twice as much for your produce, because you want organic produce, you paid twice as much because you you care for meat because you care how that animal was raised, etc, etc, etc. That is how every other category and health and fitness functions, but we’re asking you to do is we’re asking you to pay $2 50 for your shake, instead of one dollars 50. Because the product is qualitatively and quantitatively better than what you’re buying on a GNC shelf currently,
Eric Hornung 28:54
How do professional athletes make the decision on what they what supplements they take, like? Walk me through the decision making process,
Matt Wan 29:03
I could not have asked you to ask me a better question. Because it’s really, really key to what we actually do in terms of formulating the products. So the short answer is they oftentimes don’t have to. And that’s why they end up with a product that you and I would have never heard of right, they don’t genuinely have generally have to make that decision themselves. Because the vast majority of teams and organizations at this level have multiple people on staff whose full time job it is to make those decisions. It’s actually in the CVA, the collective bargaining agreement for the MLB , for example, that they have a registered dietitian on staff, and just as importantly, that they provide NSF certified products, which are products that have been tested for banned substances to the athletes in X number of categories. I don’t I don’t remember how many categories it is exactly. But it’s, you know, a dozen or so categories of supplements that they team is actually require to buy for these athletes. And believe it or not, Gatorade is not NSF certified, meaning Gatorade sponsors it, sponsors the league, right? And they don’t actually meet the requirements.
Jay Clouse 30:12
Where do they fall short?
Matt Wan 30:13
It’s not NSF certified, meaning it hasn’t gone through this testing process. Right? It hasn’t been tested for label accuracy. It hasn’t been tested for banned substances and heavy metals. It hasn’t been tested for you know, other sorts of contaminants look whether I said like that’s heavy metals, mycotoxins other sort of agricultural byproducts. And you know, they might listen to this and be really upset and say, Oh, you know, what we test the ingredients when they come in, we test the products, ourselves, etc. But regardless of that, the standard that the league sets, and actually the standard that every major league in the United States sets is that they only provide products that are NSF certified for sport, and Gatorade is not.
Jay Clouse 30:51
Are you telling me that when I see a bottle of yellow liquid dumped on a coach, that’s not Gatorade?
Matt Wan 30:57
Eric Hornung 30:58
It generally is.
Matt Wan 30:59
Yeah it generally is. But I would say that generally that that’s almost never the product that the dietitian on staff is recommending that the players use, that doesn’t mean that they don’t have Gatorade, right, I’m certain its Gatorade being poured on those guys.
Jay Clouse 31:13
So help me understand, you know, you walk in this locker room, and you’re seeing I don’t recognize these brands, but they’re, you know, niche, high level high performance brands. Are there big players that are in that space that already have a hold on the athlete industry.
Matt Wan 31:30
There are a ton of big players. And there are a ton of big players that have a quote holes on the athlete industry, what I would say is that the players that are in the space, that that sort of corner, the market that we’re talking about, where you want to say, Hey, this is a product that the dietitians and the athletes both want to be using, right that the strength coaches want to be using, you know, with their own dollars, I probably wouldn’t say that there’s really a dominant player there. Because, you know, if I could give you one example, you’re both in front of your computers, but I don’t, I don’t want to make you, you know, go to some sort of external site. But like, one of the brands, I’d say, teams use regularly. And one of the ones that I buy a lot of my other supplements from when you know, we don’t produce it yet, is this company designs for health? I think they make really, really great products. I think they make high quality products, I think they’re honest guys. But when you look at their website, I’m not really going to have to keep explaining it. Right. It’s like, I actually think in terms of quality, that’s probably the highest quality brand on the market right now. Right. And that’s the that’s the type of product we’re creating. That is the one that’s the most direct competitor for us, again, in terms of the quality of products we’re delivering. But I can tell you on their website right now, right, it’s not a consumer brand, their main channel is selling actually through licensed practitioners. And we actually believe that given the climate right now, again, in health and fitness, that there’s a really large group of people that are willing to pay a premium for a premium pop product that already understand, right that to some extent, you get what you pay for here, you get what you pay for, particularly with things that are putting in your body. And we’re not asking for some ridiculous premium, right? It’s not it’s not nearly the sort of premium you’re getting when you’re looking at like a cold pressed, you know, juice product or something like that.
Eric Hornung 33:21
How large is that market? Like how big is this? Could this be?
Matt Wan 33:27
So when you look at let’s, let’s look at this from a couple of different angles. So when you look at the market as a whole protein powder in the United States is about 7 billion last year. So that’s not protein bars, that’s not the drinks that you buy at the gas station, that’s just the powdered stuff you associate with bodybuilders. That would be the second largest category and what they call performance nutrition, behind sports drinks, the category as a whole is probably worth closer to about 20. When you start including, like I said, sports drinks, amino acid products, energy products, and then it gets a little blurry when you get towards the line of DMS or vitamins, mineral supplements as well, right? Because then that it’s sort of hard to tell where you actually draw the line, when we look at the opportunity for this business. I think it’s clearly, you know, at scale, you know, should be able to take, take more than, you know, half a billion run rate, I think it’s clearly a large opportunity, given that what we know, publicly held companies like muscle milk have been able to sell, even just through the college market, something short of 100 million dollars a year just selling to collegiate teams. And that’s something that we’ve started doing as well. In fact, those are sort of the easiest customers for us, although the majority of our revenue is direct to consumer, and that’s the biggest lever part of our brand. And part of what we actually part of actually what separates us is that we’re actually selling directly to professional teams and customers prior to meeting that we don’t sponsor any proteins. So I can’t say where the official protein or the you know, preferred protein partner, but I can say to you, just like I can say to a consumer generally that, you know, the Yankees, the Red Sox, the Dodgers, Alabama Crimson Tide, the Eagles, the 70 sixers, the Celtics, about 50 professional teams now get as much Gatorade as they want for free, and they pay for this,
Eric Hornung 35:24
I think we’re at a place where I’d like to just kind of lay it out there. What is Momentous today,
Matt Wan 35:30
Momentous is a performance nutrition startup product launched in 2018, with a line of Grass Fed Whey Protein powders with pretty quickly expanded to include a line of plant based protein powders as well. So it’s a performance nutrition startup, primarily direct consumer.
Eric Hornung 35:46
How did you meet Rob? And how did he become the co founder?
Matt Wan 35:51
So I don’t know if the listeners have any actually context or what you’re talking about. But if you took yours, presumably you’re talking about Rob Dyrdek. So Rob is actually somebody that I met, not surprisingly, through my dad, but I knew him as an entrepreneur. He’s I knew that among many, many other companies that he’s been involved in, I knew he was the founder of a company called street league skateboarding, which is essentially, what it sounds like. It’s the professional league for skateboarding, specifically street skateboarding, which is the most popular kind. So they have all the biggest athletes in the world, all under contract compete exclusively in this series, really, really cool company, very cool events. So I knew him as that. And I tried to set up a meeting with him, I guess, actually, towards the end of 2016. Or maybe it was early 2017. Basically hoping that if I could walk out of there with a few introductions, and and maybe an interesting experience that I thought it would be a win. But we just kind of hit it off. User really, really interested in consumer brands, really, really interested in early stage startups. And we just hit it off and kept talking. And, again, this was like, I did not have a brand, I did not have a product, we did not even have a name for the company. So the reason we like to talk about Robin’s cofounders because not only has he just been a tremendous resource for me, but he really like I mean, frankly, held my hand through so much of this consumer branding process early on. I mean, when we were even just going back and forth with the agency on, you know, logo designs on name suggestions on color palettes and things like that, like the the documents would come through addressed to rob and Matt, specifically, I mean, specifically, they’d say, rd and math, but that’s fine. Same, you know, the, you know what I mean.
Jay Clouse 37:41
How did you as a high school student, early college student, how did you continue to move this ball forward, as somebody who didn’t necessarily have a background in this industry just had an interest you pull on? Rob, it seems like you later pulled on some nutrition experts? How did you get all these people to buy into you?
Matt Wan 38:01
I think that is the sort of whole story, honestly. But that’s, that’s that’s just what entrepreneurship is about, frankly, is getting people to buy into your ideas. But I actually sort of alluded to this earlier, and that, you know, the inflection point, or the, you know, aha moment for me that you were you were trying to look for, right with respect to this business was not whether or not I thought this was a great business, because that that process actually took time that really took time to sort of build the confidence in myself that yeah, this made sense. I didn’t just like think of it one day and be like, yep, that’s going to work for sure. Like I it genuinely did take time to convince myself of that the moment I think was when I guess a bit before talking to rob, and that, I felt like I had laid out of business concept that I had a lot of confidence in selling, that’s felt viable to me, but was going to need capital. And so I had a conversation with my dad at that time, a few months after graduating from high school again, where he basically said, you know, if you want to just do this for fun, and try to have an interesting learning experience, then we can try and do you know, a sort of small friends and family round, you can have a little bit of money come into this. And you can have an interesting, you know, experience. Or if you want to take it seriously, and you want to go and try and execute on this vision that you’ve laid out, then you’re going to have to go raise money. And if that’s the case, then you’re going to be playing with live ammo. So you can’t just sort of, you can’t have acid, right, you are gonna have to see this through the through to the end. And so that was the inflection point, if you will. And that was when I had to start and go getting people behind it. Right. And so Rob came in as an investor pretty early, I’d say Rob was actually almost certainly the first outside investor in this business. Right. He helped me put the whole brand together. And then I used resources again, through through my father and through the sports connections to try and get in front of people who are really qualified. So the first one I went to like, was this guy, Dave Shoals, Dave was the assistant strength coach of the 49ers at the time.
Matt Wan 40:19
Maybe he wasn’t at the time anymore, but he had been and that’s when I met him originally. Anyways, he was also formally educated in nutrition, part of his role team had been, you know, supplementation protocols and the like, working with the guys on, you know, individual nutrition plans. And so I tried to put together a group of individuals like Dave, and frankly, with Dave’s help as well, who really, really knew what they’re talking about. And we talked about these people now as the, quote, performance engineers. But specifically, what they are is a group of dietitians and strength coaches from each of the four major leagues and NCAA, who basically tell us what to put in the products, I had a reasonable idea of what kind of products I wanted to start with in this market. So I had to get a you know, sort of sign off from them. It’s like, hey, that’s not stupid. Right? Okay, cool. So if you had to give this product to your athletes tomorrow, which, for all intensive purposes you do, what would you put in it, name anything. And as a result of that, we’ve ended up with a product that we feel is extremely high quality, right, and one that we can talk about with a lot of confidence, and that it wasn’t just like, hey, it’s going to be whey protein instead of soy protein, or even it’s going to be whey isolate instead of whey concentrated because that was the that was the measure of premium at one point. It’s German cold, processed, grass fed, hormone free and antibiotic free whey isolate, because these guys literally had countries that they prefer the dairy farming practices into those in the United States. It’s, you know, magnesium glycine, as opposed to magnesium oxide in our recovery products derived host instead of fruit toast they’re incredibly specific with how they want these products, not only source but but even processed.
Eric Hornung 42:06
What do you struggle with in the early days of this company?
Matt Wan 42:09
Everything? Now, that’s, that’s the easy answer. What did I struggle with? That’s a great question. I think what I struggled with was probably the same thing, I think, is the biggest challenge for a lot of entrepreneurs and continues to be the biggest challenge for me today, which is recruiting and managing talent, I think I have a lot of confidence in our product, I have a lot of confidence in my own abilities to sell the brand and the opportunity, but to be transparent with you. I’m not naturally a really outgoing person. I’m not naturally, you know, exceptionally social. And the success of this business hinges upon my ability to manage people. Right? I am not an expert in nutrition. What did I just say? Right, we went and found a group of people who were the best experts in the space. And actually, we’re the first brand in space to collaborate with those top caliber of individuals directly. I’m not the expert there. Guess what, I’m not the expert on consumer branding, either. I had to figure out how to bring somebody like Robin to the brand, who could walk me through that process, right? And who could provide direct input and leadership for me there. I am not an expert on certainly not on social media. I’m not an expert on athlete relationships. I’m not an expert on. You know, that’s the same as influencer marketing, right. But I’m not an expert on, you know, customer acquisition online, or social media marketing, I certainly have no hint of expertise when it comes to finance, finance or accounting. So in all of those areas, the success depends upon not my ability to actually understand those concepts. Right. But my ability to work with and manage people who can do that.
Eric Hornung 43:56
How come you decided to do that on a distributed basis? You have employees not just in Jackson, and not just in Palo Alto, but you also have one in Austin? Why? Why the distributed nature of the team?
Matt Wan 44:07
There’s actually two of them in Dallas,
Eric Hornung 44:09
Matt Wan 44:10
Yeah, sorry. If they’re listening, they would want me to correct that. They’re very funny guys. The reason is because I’ve spent a lot of time around Silicon Valley, and I’m trying to make money. So I don’t want to try and I my priorities, trying to find the right people, right, my priorities, trying to find the right people. And so when we need to pay a premium for talent, that’s fine. And that’s great. But the cost of talent in the competition for it in the Bay Area is just so ridiculous. That Frankly, I think we we’ve been better off, we’ve been better off as a result of it. You know, I’m not trying to hire a programmer. Right? I was trying, what were we trying to hire? We tried to hire. Let’s take the guys in Texas, for example. Those are our two sales people right now. I could not care less whether or not they’ve worked at Facebook or Google, right, that is completely irrelevant to what we’re doing. What did we care about, we cared that they had sales experience, we cared that they were truly authentic, and actually experts in the space of the product that they were selling, right, meaning that both of them have actually have formal education and backgrounds in performance training, meaning that in essence, they’re actually not only sales people, they’re there, in some respects, they’re actually selling to their peers. So they were bringing their own networks to the table here in part of, and that’s part of what’s made us successful plus far with, you know, collegiate and professional organizations. Right. So in those instances, like it was actually, for me clearly better not to place a priority on having talent in, you know, a Silicon Valley type location.
Jay Clouse 45:52
Did you guys it sounds like you guys created the whole brand, before you had the product fully formulated is that correct?
Matt Wan 46:00
I wish that was correct. We tried to do as much as we could. And from there, you just learn as you go, does that make sense? Meaning that like, we tried to lay out as much as brand as we could, right? We tried to put together as much of our roadmap as our could we tried to put flags in the ground wherever we could. Right. And the understanding and the expectation was not that that was going to be the same two- five years from now. Right? The expectation was that to execute on our goals, we had to have something right, we had to have some clear plan and vision. And not surprisingly, as all startups, you know, do. We’ve learned and grown since then, we’ve learned by being in the market.
Jay Clouse 46:43
when Rob was helping you, with the first steps of the consumer brand new said he was kind of holding your hand and pointing through with the agencies, they’re sending these ideas. What did you ?
Matt Wan 46:52
Had a word for it? Yes.
Jay Clouse 46:54
What did you learn from him? As it relates to the importance of brand? As it comes to consumer?
Matt Wan 47:01
That’s a bit of a broad question, to be honest, I think probably the most important thing I’ve learned from Rob So far, is to be hyper focused on your consumer, not just in terms of demographics, and the like, but literally trying to hyper focus in on who exactly is the customer? Who exactly? Are you building the product and the brand for? who and how many people? Does that matter? To who does that relate to? Right? How many of those people are there? Guess what, you’ve defined this person? Don’t just tell me what kind of products they’re buying in this space? What kind of brought a product so they buying in every other consumer space? What kind of content are they consuming? How old are they? Where do they live? What do they like? What are their motivations? What are they most likely to have an occupation like, really trying to just go insanely over the top when it comes to really dialing in on who exactly the consumer is you’re looking to serve?
Jay Clouse 48:01
You talked about a lot about the athletes, you want this to be something that the athletes can use, this is a consumer brand. So how do you approach sales, and how instrumental are is the athlete side of things to making this take off in consumer,
Matt Wan 48:15
it’s everything because it’s so core to our brand, right? It’s so core to who our customer is and who we are serving, right? That they want to be using the product that they think the smartest people in the space are using. So when we talk about our, quote, core customer, that’s the person that we described as the performance professional, right, that’s literally the person that we designed the products with. And it’s the person that we designed the products for. And that is almost always somebody. And the reason we describe it as a, quote, professional, right is that’s generally somebody who is formally educated in the space who is at the top of their game, there’s not a lot of these people. So that’s not who drives the majority of our revenue, right? But it’s, it’s who we designed the products for. And that’s why it’s so, so important to us, right, in order to be authentic to that relationship, that we don’t just use professional, you know, again, dietitians and straight coaches to formulate the products, right that they actually then put their dollars and their names behind it, meaning that they didn’t just help us formulate it, it formulated, but they’re actually using their, you know, their team’s budget or their organizations budget now to buy this product instead of any other product. And in fact, they’re generally paying the premium to do so.
Eric Hornung 49:32
How does your customer base break down as in terms of percentage of revenue? I’m seeing organizations, this ideal performance professional and direct to consumer? Or is there another bucket I’m missing? And if so, how does? How does that play into like, your revenue as a percentage for each?
Matt Wan 49:50
So if you look at it from a very high level, we’re about two to one, in terms of all direct to consumer or consumer sales versus organizations b2b sales, which are primarily professional teams, collegiate teams, some very high end training facilities, like where, you know, athletes are training in the offseason, that the like, but they’re really, really connected, and that we talk about those organizations that we’re working with and selling to endlessly. Right, we talk about that endlessly, because we believe that that’s what our wider audience, right, the more side of our audience actually relates to and aspires to, right, they don’t think they’re going to be in the NFL, or they don’t think they’re going to be climbing Mount Everest skiing down, right. But they want to use whatever the products those people are using, it’s it’s not really an outside the box concept in that respect. But as a result, it’s really, really important that we are able to create relationships in that space. And we do it partly, and I guess part of the reason we be able to justify such a large percentage of our revenue there is that it’s not a loss leader, for us by any measure, you know, the product is, you know, the product moves at a different, I honestly don’t know what it is off the top of my head, it moves at a different price point when it’s bought in bulk like that, right. But we have almost the same margin to a professional team that we do to a consumer,
Eric Hornung 51:16
are you guys still iterating on the product? Or is it what it is?
Matt Wan 51:20
We’re constantly iterating on it, I’d say the biggest changes we’re going to make in terms of the product itself would likely be you know, new flavor introductions, you know, but as one example, you know, when we introduced one of the recovery products, originally, you know, we had, we included 100, or 150 milligrams of magnesium glycinate, and the product. Magnesium is incredibly important for a million different enzymatic processes in the body, but helps down regulate, you know, your central nervous system after an intense workout basically helps you get out of fight or flight mode, lowers cortisol, etc. But we had started with this magnesium glycinate. Actually, that’s six months in and on our second or third production order, we actually switched it to a magnesium citrate. This is maybe more information than you want. But the thing is that the first form is magnesium key weighted meaning bonded to the glycine amino acid. And it turns out that the NCAA does not allow the administration of quote free form amino acids. So that would be considered to some folks an invisible, meaning that we substituted it with what we felt was an extremely high quality alternative magnesium citrate, which is magnesium bonded to citric acids.
Eric Hornung 52:37
Is this something that is patentable?
Matt Wan 52:40
We don’t really want it to be, frankly, we have, you know, obviously agreements in place with our suppliers where we own the formulas, right. But we actually try to talk about our products with as much transparency as possible, because I believe that’s really, really important to what makes the product high quality in the first place. Right, that we’re not just telling you exactly how many milligrams of each ingredient are going in there. But we’re literally telling you down to the specific location itself, where each of those ingredients comes from on a map, because it’s it’s incredibly important to know where these things are coming from. Because when we’ve chosen a source, we’ve chosen it for a reason.
Eric Hornung 53:18
If you could look at two metrics in your business to say, Okay, how is my business doing? Is it healthy? Is it unhealthy? And one of those wasn’t like revenue or cash flow? Take those two out, what two metrics would you look for?
Matt Wan 53:33
not revenue and cash flow?
Eric Hornung 53:34
Matt Wan 53:35
Then the obvious ones, I’d say would be CAC and LTV. But if I could be a little more specific, maybe I would say, customer acquisition, if I could actually only pick two I’d probably say CAC on the direct consumer side. And then on the sales side, I’d want to look at like new client growth. And the reason I took out the LTV is not because it’s not important, it’s because we just see sort of less monthly fluctuation in that current then we do on things like the acquisition costs, or the consumer, you know, the client growth month over month. And also the concern for us right now, given how early stage this business is so much more about growing, right, we’re going to have tons of opportunities to increase the value that we get out of each consumer over time, particularly through new product introductions. So if I could only pick two, I’d probably be looking at on the team side, I’d be looking at new client growth and on the consumer side, but be looking at CAC.
Eric Hornung 54:32
Have you felt? Or have you seen CAC rising significantly in the last 12 months?
Matt Wan 54:38
We’ve actually only been added in terms of, you know, direct to consumer marketing for I’d still say less than a year. So I wouldn’t call it quite 12 months, but we’ve actually seen it go down. The first couple months we were doing it, it was you know, I’d say we were just learning. We were learning about our consumer, we were learning about the audiences that were responding to us while we were learning about the content that they were responding to, we were learning about frequency, we were learning about the cost of inputs on the content side as well. Like I said, you know, it’s just been a tremendous learning process for me. So we’ve actually seen the numbers improved dramatically, especially over the last six months in particular, the numbers have gone from sort of bouncing up and down and generally being higher than we wanted to, to dropping into a place that we’re really excited about. And I’ve been sort of consistent and consistently trending downward. In the last, I’d say specifically, like five months, it’s been really good.
Jay Clouse 54:40
If I go to a GNC, you know, I see just a ton of these things, right? Not Not Not your type specifically. But,
Matt Wan 55:39
Ton was actually a really good word for it. Nobody’s going to get mad at me for that.
Jay Clouse 55:46
So what is the threat of a highly capitalized existing brand that is a consumer brand that isn’t in the like, the real performance space to see what you guys are doing and say, okay, they’re giving us exactly the regions and the formulations, let’s just do that and pour more cash on it what what level of risk is there for that?
Matt Wan 56:06
I’d say there’s a risk that you see a an incumbent in the space try to come up come out with a new product line, meaning as opposed to like a premium version of optimum nutrition, right, that they launched some new product line that is ultra premium, right, and tries to talk about really high quality sources tries to talk about third party certification tries to talk about their ingredient quality and the like, I think that’s always a risk. I think that’s a risk in any consumer product. I think part of what makes this business really defensible is the relationships we’ve developed within the space. And that that is so key to our brand, that you almost can’t buy a lot of those things, meaning that, you know, without trying to be, you know, sort of too disclose that were the first brand in our space to call elaborate directly with dietitians and strength coaches from each of the four major leagues. These are actual employees and professional teams that are now shareholders in our business. Right? The reason we’re able to do that is because through the network here, when the deals had to be approved by teams, GM, or for the NFL guys had to be approved by the league office, we knew those guys on a first name basis. So my dad’s actually a partial owner and a couple professional sports teams. So that, frankly, is not something that any sort of optimum nutrition brand in terms of access can just pay for. You can’t actually throw dollars at those sorts of relationships, nor can you throw dollars at some of the relationships that we’ve developed with athletes as well, where, you know, our biggest advocates in terms of athlete representation, or or even just the broader term of influencer are people that started as customers and actually ended up being investors in the brand.
Eric Hornung 58:00
I have one last question. I’m curious, because you have such a strong role model. And I guess, mentor, as a father, if there’s any piece of advice that sticks out to you that your dad gave you, that you have either strongly disagreed with, or acted against in context of this business.
Matt Wan 58:20
He told me to stay in school, and I dropped out,
Jay Clouse 58:23
what was the fallout of that?
Matt Wan 58:27
I wouldn’t say he was happy about it. I wouldn’t say that either my parents, if it was their choice entirely, would have supported that. But I think that’s, that’s out of a place of love. And out of a place of concern for me, where they don’t want to see me end up with regrets. They don’t want to see me end up unhappy, they don’t want to see me miss out on, you know, quote, childhood experiences. I also know, you know, just anecdotally that there have been people in the network that have hesitated to be, quote, too supportive, right of what I’m doing, because they didn’t want to see me drop out, right. They didn’t want to encourage that to actually happen. But I think I think it’s gotten a lot better, as businesses continued to continue on a really promising trajectory. And frankly, I just sort of accepted that as something I was going to have to live with, you know, I wasn’t making that decision. I wasn’t, look, I wasn’t making a decision to start a business to make them happy. I wasn’t making a decision even to go to school in the first place to make them happy. That’s not why I wanted to go to school, right? So when I decided not to be in school anymore, it wasn’t to me. It didn’t to me feel like I was changing that mindset, like I was doing what I wanted to do to support what I wanted to do with my life. And it’s unfortunate that not everybody would see the same side of that. But honestly, I think to say that my parents have been anything less than supportive of this would be would be wrong, I’d say. So let me let me let me clarify that supportive of me when say directly, again, directly supportive of like not being in school, but clearly overwhelmingly support me.
Eric Hornung 1:00:07
Awesome. This has been really great. Matt, thanks so much for taking the time if people want to learn more about you or Momentous after the show, where should they go?
Matt Wan 1:00:14
Livemomentous.com, is our website at livemomentous is our Instagram. On Instagram, I am generally reasonably responsive, reasonably posting photos of skiing or dogs. But I mean, look up what my handle is. It’s _Matt.wan. I need to start learning that underscore Matt two T’s dot Wan WAN and again, reasonably responsive there. Lots of cute dog photos.
Eric Hornung 1:00:43
All right, Jay. So we just spoke with Matt Wan of Momentous. And, look, that was a fun interview. But I’m not a health and wellness guy. You’re not a supplement and vitamin guy. This maybe isn’t our wheelhouse. So let’s bring in our friend, Tenika Seitz , who is really into the health and wellness scene Tenika works for Beam dental in Columbus, and also is very active on Instagram talking about health and wellness. It’s a big part of her life. And we’re happy to have her on to give us a little bit of insight into how she thinks about purchasing decisions.
Jay Clouse 1:01:19
Tenika, Welcome to the show.
Tenika Seitz 1:01:20
Thank you. Thanks for having me.
Eric Hornung 1:01:22
Tenika, we brought you on because Jay and I, as you can tell by our physique or not big fitness guys, we need a little bit of insight. Can you kind of give us your background in fitness and how you got into it?
Tenika Seitz 1:01:34
Sure. Yeah. So I first I mean, I grew up pretty active. So I was involved in sports, you know, as a kid through high school, everything like that. I wasn’t very active in college. But then after college working really hard, I needed a release. And so I started doing yoga. And that was really the beginning, I would say of my fitness journey. I started doing yoga regularly, really for the mindfulness aspect. Then from there just continued to get your become interested in fitness and everything that it can do for you know, my well being overall. Yeah. And that’s led me to just continue to be curious and research and discover just ways to overall increase my wellness.
Eric Hornung 1:02:14
How much would you say you care about fitness versus nutrition?
Tenika Seitz 1:02:18
I think that I personally care about both equally. But to me, they you can’t have one without the other. You can work workout every single day and work really hard. But if you’re not eating right, then you’re still going to feel like crap. And vice versa. If you’re eating well, but you’re not getting any physical exercise. You’re not doing that mindfulness at least once or twice a week, then you’re not really going to to feel the best that you possibly could.
Eric Hornung 1:02:45
I feel like so much out there. Like how do you know what to trust? How are you finding your research? I think there’s so many fads that go in and out. There’s so many things that are like pseudoscience, like, Who are you following? What do you look to to find out like, what’s real and fitness? And what’s real and nutrition?
Tenika Seitz 1:03:05
Yeah, for sure. That’s, I think kind of a big problem for fitness and nutrition. in general. Today, a lot of people look toward social media, or you know, just whatever the popular fad is. And you see people get really excited and spend a lot of money or energy, doing something that really might just be popular for the moment, and it actually doesn’t have as much nutritional value that it’s being sold on. So for me, I tend to do a lot of research. And I tend to experiment. That’s kind of my form of research. So I look into something and if I want to give it a try, I’ll try it out. And I try to be super mindful about it. Give it a few weeks, pay attention to my body, listen to how I’m reacting to certain things that I’m experimenting with, and then kind of go from there.
Eric Hornung 1:03:51
How are you finding things initially? before you get to the experiment stage? How does something come across your radar?
Tenika Seitz 1:03:58
Sure, I think for me, it kind of depends on what I’m interested in. I guess fixing or resolving everything for me is kind of based on what do I need to improve on my personal health? So for example, I’ve struggled with headaches, so it’s just doing research on okay, well, what could potentially be the cause of these headaches? What could potentially be the reason that I’m feeling this way in the first place? And then looking into okay, if it’s a lack of calcium or magnesium or something like that, trying to dig in a little bit there and figure out okay, well, I’m not just going to start taking calcium supplements or magnesium supplements, I want to even better understand why I might be deficient in those those vitamins in the first place.
Eric Hornung 1:04:39
Yeah, what types of supplements do you use personally right now?
Tenika Seitz 1:04:44
So I’ve definitely had a pretty long supplement journey. I currently am taking a handful of things. But I would say that even for me, somebody who’s been taking supplements for probably four or five years consistently, now I still, I’m not in a place where I would say, Yep, this is great. This is what I’m going to take for the rest of my life. Because things are constantly changing with my lifestyle. So one thing that I’ve taken consistently for the past four years, and it really hasn’t wavered at all, is just once daily vitamin. And I take a once daily woman’s vitamin that includes you know, women’s health, the probiotics, it would include things to support the women’s health system, our immune system, our digestive system, things that vary just a little bit from man. And then I also personally take a B complex every single day. And those two things have been pretty consistent for the past several years. Whereas, you know, there are also a couple things that I’m taking now that currently just trying out or taking in the moment based on my lifestyle today,
Eric Hornung 1:05:46
who do you look to as like a role model in fitness or nutrition?
Tenika Seitz 1:05:51
I don’t know if I have like one specific role model or one specific person that I look to. But there are a handful of, I guess, fitness influencers that I kind of migrate toward, because I know that these individuals value the same things that I do, for example, they are only looking at all natural things, or things or supplements that are made with quality ingredients, or you know, Whole Foods, things like that.
Jay Clouse 1:06:21
Tenika, those fitness influencers tend to be like professional athletes, or they tend to be just people who really, really focused on fitness that have built their own name and brand around their lifestyle and thoughts.
Tenika Seitz 1:06:33
For me, I think it’s it’s actually tends to be the latter for no specific reason other than that’s just organically how it’s happened for me, I’m sure that there are a lot of athletes out there that my values align with, but I’ve just happened to follow along with a lot of just influencers.
Eric Hornung 1:06:51
Anecdotally, if one of your kind of group of influencers that you cared about, came out and said they were using a product, how much more likely are you to experiment with that product if they care about it, and are using it?
Tenika Seitz 1:07:06
Yeah, that’s that’s a great question. I’m actually really glad you asked that question. Because I think the biggest thing when it comes to like influence, influencer marketing, or following along with people that, you know, in general, I might be have the same values as me or tend to migrate toward the same type of product that I’m interested in and things like that, at the end of the day, every single person’s body is different. So even if I see an influencer, trying a supplement that might prompt me to then go look into it and do some research on what that supplement is, or you know, why I might be interested in it. But if I start to find out that it’s something that I don’t necessarily need, or even then if I start taking it and realize that it’s not something that is really adding to my routine, then I can determine that I don’t need to take that supplement just because somebody that I follow is
Eric Hornung 1:07:55
Awesome and Tenika, people want to find out more about you or what you’re up to where should they go?
Tenika Seitz 1:08:00
Oh, sure. I am on social media at tenikatime and email@example.com anyone wants to reach out.
Eric Hornung 1:08:11
Alright Jay, so that finishes up our interview with Matt and we just talked with Tenika. Let’s get into our supplemental section of the podcast. Let’s talk the deal memo. What do you thinking?
Jay Clouse 1:08:25
I am so mad that I could not come up with a retort to that bad. I guess it’s a good segue. But I should have had something and I didn’t have it. Yes. Let’s get into the supplemental section of our episode, the deal memo. Let’s round this out. Maybe a little bit of the recovery section here.
Eric Hornung 1:08:42
Whoo. There you go. You gave yourself a little bit of time. You worked it out, and you got to the pond. That’s the important thing here on upside.
Jay Clouse 1:08:50
I worked out and I recovered.
Eric Hornung 1:08:51
You worked out and you recovered. Man, we are on fire today. Exercising all of our hacks all of our tricks.
Jay Clouse 1:08:59
Wow. Wow. Wow. Okay, so let’s talk about Matt as a founder, shall we?
Eric Hornung 1:09:04
Let’s do it.
Jay Clouse 1:09:04
So something that stood out to me, tell me if I’m wrong, I think that’s the youngest founder, youngest guests we’ve had on the show.
Eric Hornung 1:09:10
As far as I know, we don’t usually ask age, the only reason we got to age is because I was very curious about if he had any experiences, listening to his dad on calls in the 96 to 99 2000 era, which would have been fascinating. But it turns out he was born in that era. And that was not my expectation.
Jay Clouse 1:09:30
Yeah, graduated high school sometime around, I forget the year now. But I know he dropped out of college as a freshman at Harvard, in 2016, I want to say to to pursue this full time. So I say that to preface this next comment, which is I was very, very impressed with Matt’s intelligence and intentionality for someone is a younger than us, it’s clear to me and not even that I was also incredibly impressed with his his ability to lead and get buy in from all kinds of people who are both much older and much more experienced than him. And not only was he aware that that is essentially his full time job to do that. But it’s very clearly a huge focus for him at the stage of running his business.
Eric Hornung 1:10:17
Yeah. And I thought that it showed a lot about him that his dad, who he talked about a lot throughout the interview, wanted him to stay in school to the point of people weren’t really helping him as much as they could, because they knew his dad’s wishes. And he still kind of went against that, because he knew this is the way he wanted to go. I think that shows that while he’s understanding of his scenario, and he’s leveraging the life that he was brought into. He’s not just a puppet, or a younger version of his dad kind of following the same footsteps and doing whatever he says.
Jay Clouse 1:10:54
It was incredibly apparent. I mean, even putting aside the natural benefits of the relationships you get from being born into that world.
Eric Hornung 1:11:02
Yeah, he named dropped Fred Wilson by just saying, Fred, that’s pretty dope.
Jay Clouse 1:11:07
Oh, I did not catch that, besides the relationships that he obviously has access to putting those aside, it’s very apparent that being born in Menlo Park, on Sand Hill Road, and being in that ecosystem, has a very profound effect on somebody growing up into an entrepreneurial lifestyle. Like he’s years ahead of how to think about things and how to approach things. Because he was in the car listening to his dad take calls about companies and about problems within companies. You know, that was a fascinating little aside, we took there to hear some of the things that stuck out to him were the big issues within companies that his dad had invested in and added to had to deal with over the phone. We’ve spent a year a little over a year now doing this once a week, or more on calls and talking with founders. And we don’t have the same level of experience he has just talking or hearing from founders.
Jay Clouse 1:12:02
So Eric, coming out this still from the founder perspective, what about Matt, do you think makes him the right person to run a supplement company?
Eric Hornung 1:12:11
This isn’t exactly what he said. But he opened up the interview saying, I’m running this company, which means I have to be this person. Almost it wasn’t the exact phrasing. But I think that level of determination showed through the entire interview where it’s, here’s my goal, here’s what I’m going to do, here’s what I’m going to build, and I will reach that goal, no matter what obstacles come up. So I’m going to be that person.
Jay Clouse 1:12:36
I was surprised and impressed with the humility and self awareness, he showed to say, I gotta pull in these people who are the right people, I gotta go talk to this guy who was the 49ers strength and conditioning coach and also as nutritional coach. To get this together, I’ve got to work with Rob, and let Rob hold my hand through the process of branding this thing. I think that’s a level of self awareness and humility, that not a lot of people at his have, let alone a lot of entrepreneurs. So I think that bodes really well for him as a founder.
Eric Hornung 1:13:04
One question we asked on a previous podcast, about a founder, who we thought would be very successful was, is this going to be their masterpiece? Is this company going to be the company that kind of defines them? And in our interview, Matt said, this is just one of my first hundred ideas, I’m going to have a million more. What was your take on? Is this the company? Or is this a company in Matt’s life?
Jay Clouse 1:13:33
I think it’s definitely a company. I think this has the potential, you know, little spoiler into when we talk about the opportunity, I think that has the potential to be a very successful business. But I don’t know if this is the type of business that somebody like Matt is going to want to run for 30 years, where you go through probably a different couple of product launches, and iterate on the packaging and the messaging and the marketing. But for all intents and purposes, the idea of this product is going to be mostly finished, it’s going to be finesse, as this company grows up, and I see him as somebody who’s going to figure out okay, since I’ve pulled together all the parts and pieces to make this business run, and I was kind of the glue of that I can also hire myself out of this business and go explore something else.
Eric Hornung 1:14:15
Yeah, I would agree with that. And I don’t think that’s a bad thing.
Jay Clouse 1:14:18
I don’t either. This market, moving into the opportunity, Matt mentioned us that the protein powder market is about $7 billion. He said to his estimations, this business has about a $500 million run rate potential. So right there, he’s opting himself out of what Nick Solaro or drive capital would consider a big enough market for a drive capital type investment. What is your take here on the opportunity at hand?
Eric Hornung 1:14:45
Yeah, he pretty much gave us a market size, we didn’t really have to back into anything. The only way that I think you expand beyond that, or I don’t know if that’s included in this calculation, I probably should have asked is to add a lifestyle component to this business, making more than just a product business, but make it a company, my initial take on a $500 million run rate as like a 7% market shareholder, as a pretty good, pretty good sized business, I think you’re going to get a good valuation, a good acquisition out of it, if you want to, you could also just probably just meant cash flow. But the appetite for luxury goods at commodity producers is always high. That’s why Anheuser Busch bought 312 and every other craft brewery, they could it’s why you’ll see if this takes off to the level he’s thinking someone like Abbott take a stab at buying this to have a luxury good that has a higher margin. I mean, I see it as a great company that could do very well. I don’t know that it’s going to be your next multi billion dollar unicorn though.
Jay Clouse 1:15:52
Off air you and I talked about the packaging, because we both thought that the packaging was really well done. And you told a story about our x bar and their packaging. Can you tell us one who bought our x bar into what that can you just share that story with the listeners.
Eric Hornung 1:16:05
Our x bar is a fruit nut, an energy bar that’s branded as extremely healthy. When they first launched, I think they had some weird kind of packaging, and they may have gotten to select Whole Foods or all the whole foods, I’m not really sure, then they did a rebrand and they came up with a package that I’m sure you’re familiar with that is extremely simple. That says exactly what’s in each bar. They raised very little in terms of venture capital, and they sold for $600 million to Kellogg’s. So the founder owned a huge percentage of that business. And really, they didn’t change the product at all. But packaging matters. And we heard this when we talked to Karen Holland at CircleUp and when I listened to her colleague Ryan Caldbeck back on the invest like the best podcast, that packaging is actually one of the things that their algorithm looks at, does the packaging match a certain style that’s going to drive customer engagement? And I think that the packaging here on Momentous is incredible.
Jay Clouse 1:17:08
Yeah. So you know, there’s there’s an example of an acquisition who ended up buying our x bar,
Eric Hornung 1:17:13
Kellogg’s bought our x bar. And I believe I saw a report that although Kellogg’s bought them for $600 million in their first year of operations, under Kellogg’s, I think our x bar made up about 100 million of Kellogg sales. So that gives you some sort of context to the valuation, which is essentially a six x revenue multiple. So if you’re looking at 500 million run rate, that’s a $3 billion business.
Jay Clouse 1:17:39
That run rate is almost certainly predicated a little bit on the price point of Momentum, this product from what we’ve seen, is priced at about $55 to $70 per package. And in a previous article, Matt had mentioned that the he had gotten some pushback from that price point. You buy protein powders, you’ve seen price tags. What do you think about that price point?
Eric Hornung 1:18:01
Yeah, it’s high. It’s definitely high. I don’t know that high price is something that scares me as a potential investor, though. Maybe as a consumer, there’s a little bit of sticker shock up front. But there are still people who say, Hey, I won’t pay $3 for a cup of Starbucks coffee. And look how great Starbucks is doing. You know, there are people who say, yeah, coffee, that should be 50 cents, that should be 25 cents, or at McDonald’s 99 cents, why would I pay $3 for it? luxury goods are always going to have pushback on price.
Jay Clouse 1:18:35
Yeah, I’m not really afraid of it either. And I was a little surprised to see one that he mentioned it and to that, it had gotten enough pushback for him to mention it because I think the consumer behavior here for this type of avatar that I believe his customer is I think that consumer behavior exists. If you look at stores like Lululemon, for example, I can’t believe the prices for their products, I have to think that the customer avatar for Lululemon is going to be similar to that of Momentous, it may be a little bit different. Given that this product is a lot more consumable than a Lululemon, good.
Eric Hornung 1:19:08
I don’t know there’s premium products everywhere consumable and non consumable, just go to any grocer, like he mentioned in the interview. And you can pay effectively 100% more for something that’s organic, and something that’s not I remember seeing the green bell peppers last time, I went grocery shopping at Whole Foods, and they were like 99 cents for a pepper. And then if you had the organic ones, it was like 4.99 each, I was like, you’re gonna pay five times as much for something that’s organic. And a lot of that’s Amazon subsidizing green bell peppers. But still, I don’t think the idea of it being consumable versus not consumable, is a problem, the thing that I have the biggest shadow about with Momentous. And before I say it Jay, I want to hear if you can guess what you think I’m going to say?
Jay Clouse 1:20:00
I’m going to guess, competitors coming into the space with copycat products.
Eric Hornung 1:20:06
I have zero care about that.
Jay Clouse 1:20:08
Eric Hornung 1:20:09
Yeah, I that is not even a risk that’s really on my radar, premium price products alongside of it. Not a big deal. If you have copycats, it’s because you’re doing really well. And the copycats are later to you, which means that you already have the name brand, you already are making the waves. So everyone else is just trying to catch on. You’re the athlete out of the Lululemon. No one walks around wearing Athleta proudly, though they do wear it. That being said, my biggest shadow is about the underlying thesis that people want the same supplements that professional athletes use. I don’t know that the fact that someone actually uses a supplement means that I’m more likely or someone is more likely to use it. I think that what we heard from Tenika makes more sense to me, where if someone you follow uses something you’ll try it. But you want these people to be people who have a lot of content who you have a relationship with. And just because Russell Westbrook uses Momentous products, that doesn’t mean much to me. Now, if it’s Russell Westbrook, and this is the protein powder of these people, that’s a different branding story. But I don’t know there’s something about this link, that just doesn’t click with me. And I don’t really know what it is.
Jay Clouse 1:21:37
I follow you there. And I’m going to try and elucidate what you’re saying a little bit more. I think the thing that doesn’t quite click for you, is that the people generally in mass, who buy products, because athletes use them, or they think athletes use them are much more of the hardcore fan of sports. And less of the aspiring performance professional in the aspiring performance professional, is much more thoughtful and intentional about what goes into their body. And so it’s less about the name recognition. But I think it comes down to if this is a superior product, it is something that is the best thing that can go into your body, that link might exist. But I think what you’re saying is, it wouldn’t necessarily need to be that the athletes are using it. Or that wouldn’t necessarily be the driver that makes it click for that professional.
Eric Hornung 1:22:27
It’s almost like there’s a Venn diagram of athlete or someone who’s really into fitness on one side, and sports fan on the other. And you need those to overlap perfectly and find that middle ground. And those are the people who are going to want to try this, use this and have this my biggest shadow and question is how big is that overlap?
Jay Clouse 1:22:49
So Eric, what do you looking for the next 6 to 18 months from Momentous?
Eric Hornung 1:22:53
No, I just said that my biggest shadow is around the athlete and how much that actually matters. That being said, I do believe that having partnerships with as many of these teams as you can, is going to increase the chances and increase the number of people that are using your product on the professional side to increase the size of that middle of that Venn diagram as big as possible with all the different sports. So what I want to see is more headway on partnerships with teams, on partnerships with leagues, on athletes organically tweeting or talking about Momentous things that are on the athlete side, because I think the DTC side will follow if the thesis holds up. What about you?
Jay Clouse 1:23:45
I’m looking at a trend that Matt mentioned, which was declining customer acquisition cost, that on its own sounds like a really great sign. But I think that’s probably sort of a predictive arc for direct to consumer marketing early on your customer acquisition cost is high, because you don’t know what you’re doing and you’re figuring it out, then it starts to decrease. You’re like, wow, this is really great. But then you’re going to hit this time where you’re starting to saturate that audience that you’re targeting really well. Or you’re competing with other products that are similar, and you’re paying more and more to get to those incremental customers, that seems to be the DTC evolution. So I want to see how that customer acquisition cost is holding 6 to 18 months from now, how that maps to lifetime value. And I want to continue to learn more about what they’re learning about their consumer, you know, they launched this product in late 2018. They have an assumption of who their avatar is, to our point here just a couple of minutes ago. We want to see if that assumption truly holds water. And if so, how big is that market?
Eric Hornung 1:24:44
Love it. If you check out the product at livemomentous.com, we’d love to hear what you think about it. We’d love to hear what you think about this company in this opportunity and this founder. You can tweet at us at upside FM or send us something a little longer at Hello@upside.FM.
Interview begins: 09:33
Insight begins: 1:00:43
Debrief begins: 1:08:09
Matt Wan is the founder and CEO of Momentous.
Momentous is a nutritional supplement company driven by science, consumed by transparency, and grounded in experience.
With products designed by NFL, NBA, and NHL human performance experts, Momentous has leveraged the best knowledge in sports in order to deliver innovative products that only use high quality ingredients, absolutely no fillers, are certified safe, and taste phenomenal.
- Momentous CEO’s humble beginnings (9:51 & 23:12)
- The target market (23:39)
- Do professional athletes gets to decide on what supplements to take? (29:03)
- Qualities to look for a good supplement (40:19)
- How social media affects the sports consumer products (1:03:05)
- Fitness vs. Nutrition (1:02:18)
- How to be smart in taking supplements (1:03:58)
- Overview of Momentous and what can we expect from it. (1:14:45)
This episode is sponsored by Taft, Stettinius & Hollister, a full-service law firm known for assisting entrepreneurs across the Heartland.