2016-02-26 - Ethan Brown, Founder and CEO of Beyond Meat, manufacturer of plant-based meat substitutes

Ethan Brown

Reared on a dairy farm, Ethan is deeply concerned about animal welfare. Though he began his career in industry, after completing and MBA at Columbia, he founded Beyond Meat, which develops and markets plant-based meat substitutes. 

1.   Why did you discontinue your clearly successful career to establish Beyond Meat? What motivated you to take the risk?

The process was slow in that I really enjoyed the work that I had been doing in the fuel-cell sector, where I was succeeding, and I had great people around me. I was learning a lot. The experience was beneficial to my career. But I also felt a calling to solve a fundamental problem around animal protein. Eight or nine years prior to establishing Beyond Meat, I remember telling my friend that I did not understand why McDonald’s put animal protein in their burgers. People seem to enjoy everything else that goes around the meat. Though it is a vehicle for delivering flavor, meat is not the best medium. McDonald’s does not serve filet mignon. They are selling highly processed burgers and chicken using ingredients that would probably make most customers recoil if they knew what they were eating. At that point, I thought there was no reason not to create a plant-based alternative for these products and open a competitor to McDonalds.

But I did not have any background in the food or restaurant businesses. I also am from a background that resulted in the expectation that I would work on issues like global climate change through more conventional means. Building a giant tofu factory did not qualify. I initially resisted the idea, but the conviction was there. I was pulled by the call to develop plant-based meat substitutes the way a river flows around obstacles. I would read about the subject a lot at night. I would spend my spare time thinking about it. Ultimately, I began to focus on how to use technology to remove the animal from the protein part of the equation. Finally, I had learned enough about the topic and made enough connections in business and with the scientific community to leave my company. I became a consultant for them, explaining that I wanted to pursue an idea I was passionate about. In a sense, I gradually weaned myself from my previous career, transitioning into my current position.

2.  What were your initial products?

I was passionate about this process that Dr. Fu Huang Shay of the University of Missouri had devised. Through his process, he realigned the protein structure of plants so that it mimicked the structure of muscle. But even before seeing this development, I was selling the best meat replica I had ever seen by importing the product from Asia and marketing it in the United States through Whole Foods. That product was an imitation beef that we no longer sell. I demoed it at Whole Foods, learning a lot about what would be involved in convincing a consumer to eat a plant-based meat.

3.   To develop the technology for a plant-based meat replacement, you collaborated with the Universities of Missouri and Maryland, Kleiner Perkins Caufield & Byers and The Obvious Corporation. Tell me about each of these organizations and your collaboration with them. What obstacles did you encounter working together? How did you overcome them?

I first reached out to the University of Missouri. After reading some of Fu Huang Shay’s scientific papers, I called him up. Multinational corporations have large R&D budgets. Entrepreneurs have universities. If I were looking for a novel idea to pursue, I would just stroll through the engineering and chemistry buildings at any major public university. I would talk to the professors to learn about their research. They are paid to think, do research. They are not business professionals. They do not have the time nor inclination to develop a commercial product. I was able to offer them the opportunity to work with an entrepreneur to help them develop a commercial product. I cannot praise the University of Missouri enough. The university is extremely strong academically, and their staff highly ethical. I was very fortunate to be able to tie up with them.

Maryland is my home state. I was living there at the time. I went to the University of Maryland, explained the project I was working on, and told them I needed some funding. They had a program in which the state of Maryland funds professors to work on projects. I worked with Dr. Martin Low, a premier food scientist. I would work on developing the products at the University of Missouri, then take them to the University of Maryland to run them through tests there. I received grants from the state of Maryland twice to continue this development process. Dr. Shay and Dr. Low formed a good partnership of mutual respect.

In 2011, we received investment from Kleiner Perkins in what I feel was a watershed moment for the company. Kleiner is well known, and they are behind some incredible successes like Amazon and Google. I was offered more money for a smaller percentage of the company by other firms, but we decided on Kleiner because of their reach, network and vision. I have to say that they have done everything they had promised they would. Entrepreneurs often hear nightmare scenarios about venture capitalists. Beyond Meat and Kleiner push each other, but our relationship has been terrific.

The Obvious Corporation entered the picture about a year after Kleiner.

There are times that I have to take a step back. I feel like I am now part of something so much bigger than myself. We are on the right side of history. We are trying to do the right thing. Each one of the organizations has played a crucial role. If any one of them had not become involved, I do not think we would be here.

4.   You told me a little about the companies and their contributions. Can you tell me about any obstacles you encountered with them and how you overcame them?

We are a team. I played basketball, so I will give you this analogy. Five players are out on the court. If they are all happy all of the time, they probably do not have the right level of intensity. The same can be said of business. We have encountered bumps along the way, but they have strengthened our collaboration and friendship. When you bring a new partner into a relationship, they will question some of the parameters you have set up with existing parties. We have had to smooth out issues like these, and we continue to deal with them. But if I could take the court with any group of people I wanted, I would take this group. They are extraordinary.

5.   What was the purpose of the energy and environment organization you founded in your 20s? What lessons did you learn from the experience? To what extent have they helped you establish Beyond Meat?

One of the purposes was to live in Charleston, South Carolina, a town I love. More seriously, I had spent a year visiting former weapon-testing sites of the Department of Energy. I went to Oak Ridge and Rocky Flats. At the time, I was working on a paper for a professor. Massive parcels of land had been set aside for weapons, resulting in the externality that people did not use these lands. Eventually, they became these huge reserves of wild animals. No one wanted to go on these lands. I was thinking that if I were Emerson or Thoreau, and I wanted to preserve a place, I would just sprinkle a little plutonium on it.

There were two approaches to the problem. One was to spend billions of dollars on clean up so an infant could safely eat the dirt, which is the EPA standard, right? The second was to leave the lands alone as beautiful preserves for wildlife. I wrote a paper entitled “Waste to Wilderness” for a conservative think tank interested in the idea as a budget-cutting strategy. I did not care for that consideration, but they published the paper. Spending a year researching and writing this paper, I had learned a tremendous amount about what was going on with the environmental protection program by the Department of Energy. A lack of external oversight had resulted in a lot of bloated budgets. Bad decisions were being made without consideration of their full environmental impact.

For this reason, I set up an organization and raised money through the W. L. Jones Fund and the Plow Share Fund to conduct that oversight in South Carolina. This was the first non-academic project I had completed. I set up the organization from scratch. To do so, I had to conceptualize the idea, raise money, establish a board. I was also fired from my job, by the way. So I learned about dismissal, too. This experience has helped me tremendously in setting up Beyond Meat.

6.  Did you learn any particular lessons from being fired from your job?

I learned several lessons. The first was that I had given up far too much control. I tend to be a very trusting person. For this reason, though I had foreseen certain potential problems, I discounted them. I thought to myself, “We are all like-minded people. We are all after the same thing.” I naively thought nothing could go wrong. However, when you raise money, peoples’ attitudes change. This experience taught me about control. I am still learning about this issue, how to strike the right balance between trust and control.

I also learned some lessons about interacting with people. The papers I had written upset some people. The person who signed off on them had missed some critical parts because he had failed to read the documents completely. Instead of dealing with this issue graciously, I critiqued their management. That was a dumb, arrogant move. Within moments of receiving my critique, the board fired me.

7.   I understand that you are affiliated with the Quaker Church. Can you give our Japanese audience an overview of the church’s beliefs? How have these beliefs and your personal values influenced the way you do business?

I attended Quaker schools from elementary school to high school. When I return home, I attend Quaker church with my dad. I have not yet found a Quaker church to attend here. They are all far away. My beliefs definitely influence everything I do. The religion is very democratic. At service, you sit in silence for an hour. If someone is moved to speak, that person can get up and do so, but there is no pastor or minister. Quakerism is a Christian religion, but it is about your own, personal relationship with God. Service to others and nonviolence are the core beliefs. Because my dad is a philosopher, he encouraged me to think for myself, and I have a lot of beliefs different from his. I view violence against animals as wrong. Violence against a sentient being is violence. I do not think this Quaker belief applies just to humans. I have extended the thinking to a broader universe than a single species. This belief influences me every day.

8.    Last December, washoku (traditional Japanese cuisine) was added to the UNESCO Intangible Cultural Heritage assets list because of its fresh ingredients and its nutritional balance. Have you considered creating “BEYOND MEAT” products based on any Japanese foods?

In China, citizens are wary of the meat supply, and in Japan, I understand that radioactive fish contamination is a concern. We would certainly like to play a role in providing plant-based versions of these foods. We had been in discussions with one of the world’s largest tuna companies in this connection. Though those talks have recently lost steam, we are still interested in plant-based substitutes of seafood products.

9.   What advice would you give to aspiring entrepreneurs in Japan? What education and experiences do you recommend?

I have to listen to my heart first. I try to listen to what is inside me because if I am not driving from that fundamental level of commitment, I would not be able to overcome all of the obstacles. You have to have that underlying motivation. What you are trying to accomplish must be what you really aspire to, not what you think your parents or others would want you to do. You also have to take risks. You can think of a huge number of reasons not to take a risk, a huge number of justifications for not achieving a goal. Just the other day, when I was sharing my goals at a company, one of the meeting participants was pointing out reasons why some of the goals might not be attainable. No one wants to hear that negativity. I want to hear how they led the team to the end of a successful game. I love athletes like Michael Jordan, who played with a 102 degree fever. Success as an entrepreneur requires the determination to pursue goals that seem impossible.

2016-02-26- Leigh Drogen, Founder and CEO of Estimize, a New York firm that crowdsources stock data estimates

Leigh Drogen Interview

Before founding Estimize, Leigh ran Surfview Capital, a New York-based quantitative investment 

management firm. His hobbies include ice hockey and surfing. 

1. How did you conceive the idea for Estimize? Who were the first three people you told and why? How did they react?

The background begins with a personal story. I left school to work for a hedge fund here in New York, where we ran an interesting model that looked at earnings acceleration and analyst estimate revisions. We were basically searching for the confluence between those factors related to the inefficiency of the sell-side data set and all of the skew and bias wrapped up in it and momentum. We were looking for stocks that were growing quickly, companies that were flourishing, exceeding their estimates quarter after quarter. We did a good job of removing inefficiency from of that data set.

That hedge fund is where I learned why the data set was so inefficient and about all of the incentive-structure issues on the sell side. The idea for Estimize was born there in 2007 basically a year after I had begun my career. I am a member of the Millenial Generation. We believe strongly in web philosophies including openness, sharing and pseudonymity; in avoiding pay walls and crowdsourcing. These beliefs had not been brought to finance at large, definitely not to the data set that we are now developing.

Fast forwarding a couple of years, I left the hedge-fund world to work for a financial start up named Stock Twits. It was there where we built this community of people who were willing to contribute their ideas to an  open community without any direct incentive structure. This development set the stage for Estimize. Walking into a meeting one day at a large, financial-data company with a colleague is where idea struck me. Walking out of that meeting, I turned to my colleague and said, “We have to build this! This is the perfect thing for us to build.” Agreeing, he responded, “Yes, but our founder will not go for the idea.” I spent the next couple months validating the idea by talking to people in the industry. I then went to our founder at Stock Twits and told him I should build this data set. He replied, “Yes, I think it’s a really great idea, but it’s not for us.” I ended up leaving the company in 2011 to build Estimize. That’s the genesis of how I started the company.

2.   What is Estimize's business model? What are your products? Who are your customers / your revenue source?

We are economic terrorists. Thomson Reuters, FactSet, Bloomberg, and Capital IQ all own a sell-side data set, which they guard behind a pay wall. They charge at least $1500 a month just to let you browse it. If you want to actually touch the data, you have to pay them even more. We said, “Screw all that! We’re going to make the data completely free at the front-end of the site. We are going to amass this orthogonal data set that no one else has, and we are going to own it! We are going to own all of the eyeballs.”

Then, we are going to sell the data through the back end by launching an API (Application Programming Interface) in a few weeks and using an Excel plug in. We will sell the API to large, quantitative hedge funds that do statistical arbitrage trading and other types of quantitative trading, and the Excel plug in is used by discretionary traders, analysts, PMs (Project Managers), IR (Investor Relations) professionals and anyone else who wants to incorporate our data in their Excel models. Then, we intend to build some premium, front-end analytic features available via subscription. These features will not be openly available on the front end of the website. We are also building connectivity between the buy and sell sides in regards to research. I believe that will develop into an interesting business as well.  

Our customers, the people who pay us, are large, quantitative hedge funds, asset-management firms and hedge funds on the discretionary side, investor relations representatives, and banks.

Follow-Up Question: What are you current revenues and how do you intend to grow over the next couple years?

We do not release our revenues for a good reason:  we have a few serious competitors in our space. Our current goal is focused on growing the data asset as large as possible. We aim to become the quote consensus, the distribution of estimates that everyone must use because we have a set of more accurate, more representative estimates. Eventually, our focus will shift to generating as much revenue as we possibly can, but currently the data set is the most important focus. About a year from now, we plan to really focus on revenue.  

3.   What are the top three countries contributing to your open-source platform? Do you plan to add languages other than English to broaden the field of potential contributors?

The top three countries are the U.S., obviously, followed by Canada, then Japan. Because the third largest group of contributors is in Japan, and they are working in English, we actually plan to begin building a Japanese equity-estimate data set before we even build one for Europe or Canada. After Japan, we will do China, South Korea, and Taiwan. Our next four equity data sets will be for those countries. However, before building these data sets we are going to expand our macroeconomic estimate data set from just the U.S. to international, which will include Japan.

Follow-Up Question: How do you attract analysts and others who contribute to your open-data platform? How do you manage them?

Concept marketing is our primary method of user acquisition. We have a content director who writes a lot of great research with our data, which we publish to our blog. This blog is then republished to Yahoo! Finance, Business Insider, Forbes and many other sites. These blogs quite effectively attract people who want to use the data to our site. Many eventually end up registering to contribute to the content.

We have a completely open philosophy allowing anyone and everyone to contribute to the data set. We want more and more people contributing, because we know that when we have more estimates, the accuracy of the consensus increases. We have to be careful, of course, to protect the data from those might want to damage it and safeguard it from less sophisticated people.

We employ two protection algorithms. The first is a reliability algorithm. It tests whether the information you have entered is reliable or if you are trying to game the system or otherwise contribute data that does not belong in the system. If the algorithm detects a problem, the data are not uploaded to the system. Furthermore, by the end of the day, we manually review all of these suspect estimates. We are launching our predictive analytics platform, the second algorithm, next week. This algorithm predicts which estimates are going to be more accurate for a particular earnings release, then weights them in the consensus based on their confidence level. We will be posting confidence scores ranging from 0 to 100 next to every estimate on the site.

4.   Did you always know that you someday wanted to found your own company, or did you realize that was your destiny after beginning work in a traditional company?

I’m an accidental entrepreneur. I did not initially plan to start a company. I was involved in a variety of entrepreneurial endeavors growing up like selling different products and giving tennis lessons. I never really had a regular job working for someone else. But I assumed that I was going to go work for a hedge fund, working my way up the ladder. I did that at first. Then, I was given the opportunity to work for an amazing finance technology start up. The idea to leave and start my own venture simply presented itself there; it was not an end I was striving to achieve.

Follow-Up Question:  Taking one additional step back, let me ask how you initially decided to join a hedge fund with the intention of working your way up?

I am an autodidactic, which means I do not learn well in traditional school settings. Rather, I learn best basically by reading books and following people around. I did not study finance in school. I actually studied economics and war theory. I thought I was headed for the CIA, the State Department or the Rand Corporation. I was planning on doing a Ph.D., working myself through the ranks of one of these organizations. However, I realized that I did not have the patience to endure another five years of school by the time I was half way through my undergraduate program. I was reading a lot of behavioral finance literature, especially books on different types of investment strategies. Viewing markets as a puzzle, I was interested in all of the different moving pieces, the behavior of the different groups of people. I was especially interested in how that behavior was affected by different market movements.

About this time, my father bumped into David Geller walking down the street in New York City one day. I had grown up playing tennis with him as a kid, but never knew his profession. It turned out that David, who was about 42 at the time, had been running a successful hedge fund. When they began talking about me, David remarked, “If he wants to become a trader, have him come up an interview with me.” Shortly afterward, I returned from San Diego to interview with him. One interesting aspect of the interview was that he did not any finance or math questions. The interview was quite strange, like talking to a psychologist. David asked me lots of psychological questions. When I arrived, he asked me to put together a packing box in his office, indicating that he had to take care of work in another corner of the room after which they would begin the interview. I tried to put the box together, but I could not. I could not seem to assemble it no matter what I had tried. After about a minute and a half, I went over to David to tell him that I was unable to assemble the box. Replying,”Don’t worry about it,” he began the interview.

David hired me as a quantitative trader, a job I loved. About a year later, when we were discussing some behavioral finance issues at lunch, he asked, “Do you remember the box?””Yes. Was there a reason you asked me to put it together?” I replied. David explained, “The box is designed so that it cannot be assembled. The activity is intended to assess how you react when you cannot solve a problem. I wanted to know if you become frustrated and smash the box or neglect to tell me about it.” David then explained that different types of psychological profiles are suited to different types of trading. What makes a person good at the type of trading his company did was not their intelligence or financial knowledge but their profile. Elaborating, David said, “If you had not said anything but simply sat their resolutely, you would probably be a good value trader. But you would not be a good quant trader. “My behavior, namely notifying him of the problem, was why he hired me.

5.   Japan’s economy seems to have become stuck since last April, when the consumption tax was increased. How would you evaluate the Japanese stock market currently compared with the US market? What Japanese companies interest you? Why?

I am not familiar with many individual Japanese companies other than Softbank and a few others. Regarding the market as a whole, I think what Abe has been able to do is interesting. He seems to have stimulated the economy and the stock market to begin growing again. However, because Japan has some serious demographic issues, I am not sure if I would be investing heavily there. I think that the economy is incredibly dynamic and the innovation amazing, but the demographics are going to hold the economy back. Consumer stocks do not do well in Japan as consumer businesses are not a growth sector.

6. What is the most challenging aspect of being an entrepreneur?

When you run a hedge fund or manage a money book at a fund, you follow a very specific strategy and process. Every single day, you execute this same strategy. Over time, you develop a rhythm, and that rhythm is what makes you effective. It’s what makes you successful. When you found a company, when you wake up every day, you have to figure it out all over again. Every day, you have to wake up and make it happen, push the work forward. But you do not always know how to do so. You have to learn so many different skills and ideas along the way, not only about how to build a business, but also about product-market fit. You also need to learn what your customers want and how to build a better platform. You have to attract people, hire them into the team, and attract investors, too. There are so many different moving parts! Figuring out how to configure them all is challenging, but also fun.

7.  What advice would you give to young business professionals, college and even high-school students interested in starting a business?

Learn how to code. My advice in a nutshell is simply that. If you can code, you can build anything. And if you can build it, you can test it. If you continue to test new things, you will eventually hit on something that works. I would suggest starting with Python or Objective C or the new, global Apple language Swift. Learn Python and Swift. If you can code mobile, specifically, iOS applications, an amazingly powerful distribution platform that allows you to gather people easily, you are set. Everything is going mobile.

8.  I understand that you are a passionate hockey player? What are your other hobbies and interests?

I surf a lot. Whenever I can take a vacation, I go chase waves. Surfing is an amazing experience that calms me down. My other passion is international relations. I still read a lot of foreign policy and research out of several think tanks. I am fascinated by the large gap between how research is done and how policy is actually created. I also read a lot of behavioral finance for pleasure. The field is so interesting. We have so much to learn about it. It’s a really fun hobby.

2016-02-25 - Yapp!, Inc. founder and CEO Maria Seidman aims to democratize software for the masses.

Maria Seidman

Maria Seidman is the founder and CEO of Yapp!, Inc., provider of a user-friendly platform for creating cell-phone applications. A Yale University graduate, Seidman has worked for both Goldman Sachs and MGM. She also boasts an MBA from Stanford University. Through Yapp!, Seidman aims to democratize software for the masses. 

1. In your LinkedIn career summary, you write, “I am an entrepreneur, mom, and recovering big company executive. I am obsessed with mobile applications and democratizing software for the masses.”

A. From what, specifically, are you recovering?

“It’s a twelve-step process…No, I’m just kidding!”

I think I am recovering from a lot of practices you adopt when you work at a big corporation with a lot of inertia, bureaucracy, and rules, not to mention inflexible thinking. When I started Yapp! I had to relearn or “unlearn” a lot of behaviors. Before I met my co-founder Luke Melia, I was busy working on how the product would look, and I had this fifty-plus page product-specification deck that I had spent countless weeks developing. That’s the way we managed products when I was at Warner Brothers working with large groups of people on multiple teams. I documented our work and had project managers who did the same for all the specifications the product might have.

But when you are a small, fast-moving start up, as soon as you finish that document, all the details become completely irrelevant. My co-founder Luke introduced me to the process of working in an agile way. As a nod to Japan and Japanese culture, we use a Kanban system to break tasks down to the smallest components possible and quickly move them through our production process. This is one example of how I had to unlearn a previous behavior and learn other new behaviors, as well as a new way of thinking about how to get work done.

B. Please tell us what being a mom and company founder at the same time is like. What are the challenges? How do you manage them?

Being a mom and founder at the same time has been a wonderful experience for me. Some view this dual role in a negative way, i.e., I am giving up time with my children to pursue something else, to become a company founder. But for me, doing both is a wonderful balancing experience. I think I would be a really awful full-time parent because I would pour all my energy and my Type-A personality into my children, something that would not be healthy for them. My kids and my work not only balance each other, but they also inform each other. At Yapp!, as we build our culture and our product, I want to be doing something that when my kids grow up, they will proud of their mom for her significant work in the world. That desire is a major motivator.

Research has shown that no one can maintain productivity working nonstop. Everyone has to find an outlet. For some people, a particular sport or hobby serves this function. I enjoy sports and hobbies, too, but one of my main outlets that brings me joy is spending time with my family. Doing so is a way of recharging.

My third comment on the symbiotic relationship between being a parent and company founder relates to how some of my life and family experiences allow me to think better about our users. Our users are also busy parents, and they are also trying to manage all kinds of tasks using their mobile devices, our area of focus. My experiences as a parent myself help me to connect more authentically with a lot of our users.

C. What do you mean by your provocative statement “democratizing software for the masses”?  How did you become obsessed with this aspiration?

Sometimes people who lack access to something they want become obsessed with the idea of getting access. I was one of the first people to own an iPhone, and I was passionate about this new mobile device. But I also felt frustrated because I was not a developer, and I had not learned programming because my particular personality is not suited to that craft. I felt I lacked access to this amazing industry emerging right underneath my nose, and I became obsessed with this idea.

More generally, I have always been interested in this idea of taking something only a few people can access and making a version for the masses. Thinking back to my Warner Brother days, I watched what happened with YouTube from the sidelines. I was struck not only by what YouTube had achieved, but also what that achievement represented. In the past, only film makers like the ones I had worked with or television show runners could produce content for others’ consumption, but all of a sudden, that part of our lives was democratized. My LinkedIn profile comment is more specific to mobile, but more generally, related to my obsession with taking things only available to a few people and giving everyone access.

2. Obtaining an MBA at Stanford after graduating Yale, you became an analyst at no less than Goldman Sachs. Then, you worked for both MGM and Warner Brothers. Were you initially aiming for a corporate career? If so, what made you decide to become an entrepreneur? What are the pros and cons of founding a company relative to a corporate career?

When I was at Yale, I really wanted to be a journalist. I went to my English professor at the time and told him, “I know I am an economics major, but I really enjoy writing. I think I want to be a writer.” Looking at me with sad eyes, he responded, “Why don’t you pick a career that is actually going to pay the bills?” Now that I am an adult, I have some hindsight about his suggestion. What he was trying to tell me was that becoming a writer or journalist is extremely difficult. Successful writers are successful because they really cannot do anything else. By cannot, I mean that their passion is singular: They are so driven to write that they will continue to do so no matter what obstacles they face. I obviously did not have that conviction at the time that I would be able to say to him, “You not what? I don’t care if I starve. I do not care if I have to live on cup ramen. I intend to pursue a writing career no matter what!”

To be successful as a writer, this conviction is essential. It is also important to succeed as an entrepreneur. From a rational perspective, in terms of the probability of failure given the start-up failure rate, you have to really believe this is the only thing you want to be doing. It took me a while to realize that this was my particular passion.

Coming out of Yale, I had bills to pay. My parents were immigrants to the United States, so I felt a great sense of responsibility about making money right away after graduating. The sure-fire way to do that in 1999 was to work in investment banking on Wall Street. While at Goldman, I did initially have the dream of doing well there, but very quickly—a mere seven months into my employment—I realized investment banking was not for me. I did not do well in the environment, where I felt like a mere cog in the system.

Eventually, I found my way to different creative pursuits. When I wrote my essay for admission to the Stanford MBA program in 2002, which was before the iPhone, YouTube, and a lot of other transformative technologies, I explained that I wanted to focus on the intersection between how we consume media and technology. No bridge had really been made between Silicon Valley and Hollywood, and that is what I wanted to do. I tried to start a company while I was in business school. My big conclusion about that experience was that I really did not know enough about the industry to truly understand the problems that we were solving.

My idea was to enter a media company that was about to be transformed and really understand the opportunities and the marketplace. That is how I ended up at Warner Brothers, where my grand plan was to stay two years.  Then, after acquiring some experience and developing enough relationships, I was going to figure how to solve a problem they just could not. But I was having too much fun, I was advancing in the hierarchy, and it was an interesting time, so I stayed for seven years.

3. How would you describe Yapp!’s business model?  What is your “product”?  Who are your customers?  How did you conceive the idea for Yapp!?

I’ll answer your last question first to maintain chronological order. As previously mentioned, I wanted to create an application for a retreat for a women’s group in which I was involved. When I had this idea in 2010, the iPhone had already been on the market for three years, so I thought that since I could create a blog or website really easily, I should also be able to create an application even though I am not a developer. I realized that this was not the case. Few platforms were available and the ones that did exist were targeted either toward developers who did not know the language in which apps are written or at people who were willing to invest a lot of time to learn a new platform. Then, there were services that allowed you to create something that was not very useful.

The idea for my company came from this experience. The idea was not completely rational thinking about it. I could not even create a single app, so how could I expect to create an entire platform for creating applications? But as my co-founder has noted, logic is not my strong point. This realization made me aware of the need for a technical co-founder to complement my business skills. That is how I met and started working with Luke Melia.

Our product is a site where a user can create a mobile application mostly around events and groups in anywhere from a few minutes to a few weeks. The apps can be used for anything from a conference to a sales meeting, from a wedding to a sports team or book club or any other group where people need to connect, and they want to share information on schedules and events. The site is for people who do not need a full-scale application, which can cost from $50,000 to over $1,000,000. Group and event organizers and small businesses that want to involve a group of customers in sales activities are our target users.

In terms of our business model, we do offer this product for free. Teachers, classrooms, and non profits tend to use this product. We also offer Yapp!+, a premium subscription plan, where people pay $500 or $1000 per year for advanced functionality and customization. Additionally, we have a custom services group that creates apps on our platform that require more customization.

4. WhatsApp and Facebook seem to be used the way LINE is used in Japan for scheduling and sharing information among groups of people.  Would you say these companies are potential competitors, or would they be potential complimentors?

I would say they are both complimentary, but sometimes competitive, too. Sometimes they are an alternative, which is slightly different from being competitive. The relationship of these companies’ products to ours all depends on what the user is attempting to accomplish. If you take Facebook for example, we work with them the way many developers do. We allow you to sign in with Facebook, incorporating your information into our application. Many of our users link their Facebook page to their app on our platform. The user lives in both places, the way a person might have a Twitter profile they may use with fans for support and to provide information and use Facebook for a different purpose.

Facebook does have a group or events type feature, but what you can do within Facebook is limited. Many people will have a Facebook group to announce events, especially to a more anonymous type of audience. But you do not see companies having sales conferences where they are discussing their strategies for meeting their quotes during the next quarter. This is an example where our service seems like the same or competitive, but is in fact, very different. The same can be said of WhatsApp. To some extent, we are both communication tools in much the same way as WhatsApp, Skype and your telephone are communication tools but used for different things. Like WhatsApp, Yapp! also includes a group messaging feature, but it is very different from WhatApp’s.

5. What companies are Yapp!’s main competitors?  How does Yapp! differentiate itself from them?

More and more competitors appear every day. The concept that you need a portfolio of application to manage your work and personal life is definitely gaining steam. Our main point of differentiation is ease of use. Yapp! is very simple to use. We compromise complexity and customization in order to provide simplicity and real ease of use. We offer fewer features than competitors, but that is because we only provide users with features we believe they need. In this respect, I think what makes us different is that you can create and publish an app on our platform faster than on any other. And we guarantee that it will always work, always be update, and the whole process will just generally be a great experience for you and your audience.

6. The 2014 Entrepreneur article about your selection as an entrepreneur of the year notes that you conceived of the idea for Yapp! when you were trying to create your own app to allow members of your women’s group to connect and plan events.  What advice would you give to women who aspire to become entrepreneurs like yourself?

I do not think there is any real difference between men and women in this regard. Once you have the idea, the next important step is finding people who will pursue that idea with you. I am a strong believer in having a cofounder, someone in the trenches with you who really shares your values. Your idea will morph and change. As it does, you will have to pivot and maneuver. If you are successful as an entrepreneur, you will have a team of people who share your values working with you, people who will go through the highs and lows with you. I think ideas are great. They are the kernel that jumpstarts the business. But once it is going, the people you are going to pursue your idea with are the number one concern.

7. Here in Japan, smart phone use is increasing and pc use declining, especially among young people, and we seem to be moving to “wearable” technologies.  Have you observed the same trend in the US?  How do you think SNS technologies, including devices, will evolve over the next five to ten years?  What will the “big picture” look like then?

Japan has always led the States in technology adoption, particular around mobile devices. Even in the U.S., over 80% of the population have a smart phone. We are near full penetration. Naturally, pc- use is declining. Wearables, however, are relatively new. The Android watches have been on the market for a while, and the arrival of the Apple watch has been announced. This market is in its early stages, particularly in the technology domain. I think we are going to see a lot of shake out of companies that do not survive. In the end, I think that there is going to be a lot of fall out. As human beings, we are not going to wear a million different devices on our bodies. Especially given the other devices in our lives and the other locations we go that are also smart equipped: our cars, thermostats, refrigerators, locks. Basically, everything around us is becoming connected. At what point is this too much? What survives and what doesn’t remains to be seen.

I also wonder what the leapfrog technology is. Are wearables a temporary technology? Are they going to be leap frogged my something else? Five to ten years is a long time. People are working on ingestibles. Other, on chemical technologies. Who knows? I am not a futurist by any stretch of the imagination. I might be proved wrong, but I am not bullish on the Apple watch. I was a very early adopter of Pebble, but I never wear it anymore because I find it very redundant with my other portable device. Pre-sales of Pebble have so far proved me wrong, so we will see!

8. What are your hobbies and interests?

I have already mentioned my family and my kids. I have a seven-and-a-half year old son and a two-year old daughter. Raising them today with all of the technology they can access and all that the future holds is a hobby and passion in itself for me. Topics like education and the effects of technology on early childhood education happen to be a personal interest, a passion that intersects with my professional life.

I am also a tennis player. I played tennis in college, and recently, I have started playing again. Now that my son is playing often, I need to brush up. I can’t let him beat me! More generally, I love all kinds of outdoor sports. They are a great outlet, an opportunity to let off steam and think of some great ideas.

2016-01-26 Honest Tea Co-Founder and CEO Seth Goldman aims to improve our health and the environment.

Seth Goldman

In 1998, Seth Goldman Co-Founded Honest Tea with Barry Nalebuff, his professor at Yale University. They sold their company to Coca Cola in 2011 for 43 million dollars. In 2013, both founders published Mission in a Bottle, a comic book chronicling their founding story. An athletic, socially minded entrepreneur, Seth Goldman aims to make an impact on peoples’ lives and the environment.

1.   After majoring in government at Harvard, you worked for Lloyd Bentsen, then-Democratic-presidential nominee Michael Dukakis’s running mate, suggesting you were initially interested in a career in government. When and why did you make the switch to business?

That’s a good question. I’m not sure if I ever consciously made a decision to switch. I can say that I may not have ruled out the possibility of politics at some point. When I was actually working in the government arena with Bentsen, although I found the work at his level was quite impactful, he was someone who had served in public office for forty years in different forms. I was interested in having a more direct impact, more immediately. Part of that, just to follow this path, involved going to work in a program in Baltimore that was the precursor to what is now known as AmeriCorps. I really felt that work was impactful. I could see tangible results and an impact on the people served. I also observed, however, that the field had a lot of emerging leaders with abundant passion but did not have the requisite management skills. That is where I decided that business school would be a useful direction for me.

At business school, I realized that business could be a path to have an impact, so I went in that direction. I guess I would have returned to government had I felt that government was a way to have a more direct effect. What I have found so far is that business can help me have an impact in a self-sustaining way. When I was working in the non-profit sector, I enjoyed it, but I was always somewhat frustrated by the fact that fund raising, though required, was not necessarily linked directly to results. It was more about the funder’s opinion, their whims, and the non-profit flavor of the day. What I have come to appreciate about business is the high degree of accountability for results that it provides. No one is going to keep you in business out of the mercy of their heart. If your business is earning its keep, the market will sustain it. If you are delivering value, the market will allow you to grow and flourish. For me, that was an exciting realization.

Looking at business from the outside, I had always assumed it was full of moral compromises while government was not. Yet if we observe the way government currently operates, it seems to be riddled with compromise. To accomplish what you believe in, you have to water your aims down to an extent that they no longer resemble your original intent. What has been most satisfying for me is realizing how little compromise has been involved in building Honest Tea. It strongly delivers on the intent that is my aim. The day Honest Tea feels less satisfying, less creative, less challenging and less impactful, I might think about returning to the public sector. But here sixteen years later, I am still comfortable that this is the best use of my talents, the most effective way for me to have an impact on society.

2.   How did you come to partner with Professor Barry Nalebuff to start Honest Tea? How did he initially react when you introduced your idea? How did you structure your business relationship? If you were equal partners, how did you resolve differences or make decisions on matters about which you disagreed?

I first met Barry as his student. The dynamics with him were interesting because Barry’s personality is quite different from mine. He is much more analytical, not necessarily the type you would consider a people person, at least not at the time. He’s evolved,  but at the time, my classmates had difficulty believing that we were collaborating. Even after we had graduated, some classmates were surprised that Barry and I were working together.

But I performed well in his class. I first took Barry’s political and economic marketing course. Because I had worked in politics, I shined as a student. Both my parents had been professors like Barry. For this reason, I was not intimidated by a professor who might be a little aggressive in his questioning; I was able to hold up under the stress. At the same time, I was also working on a business plan that helped Barry appreciate that I approached problems creatively, was hard working, and had an entrepreneurial spark.

The idea for Honest Tea emerged in Barry’s competitive strategy course. While we were discussing the beverage industry, he had asked if anything was missing there. We both converged on the same need for a less sweetened drink. At the time, he suggested that we make some samples, do some focus groups, but I was too busy trying to find a job. So I said that I could not do anything then to launch this business plan. Two years later, when I came back in touch with Barry indicating my readiness to act on this idea, he was ready, too. He had been studying the tea industry, so we came up with the idea for Honest Tea, a key development.

Once we had decided we shared common interests, the biggest problem in doing more than just discussing them was deciding the right role for each of us. I went up to New Haven several times to have long talks with Barry, not about the business, the price of the product or where we are going to find a supplier, but about our working relationship and goals. Why was he doing this? Why would he want to build a business like this? What would be a successful outcome, and how would it fit into our life plans? These were the biggest questions that we had to pin down. The answers to these questions were actually critical to developing the path forward. In terms of our relationship, he was going to be the chairman of the board, and I was going to be the day-to-day executive. We called me the TeaEO, but I was, of course, the CEO.

All along the way, we encountered points of difference, but never a point or issue where we were at loggerheads. We just had to talk the issues through. We had already agreed on the major issues as a result of our previous conversations. We both knew this was a long-term build: We were not going to be able to establish the company in a few years, then flip it (sell it off). The project was going to take at least ten years. The issues we disagreed on were the little ones like labeling, what we should or should not say on the label. These problems were easy to keep in perspective. Differences in opinion about the label are not the same as questioning the direction the enterprise should take: Should we be using organic ingredients? Should we be making the products sweeter or not? We usually solved these petty disagreements by having my wife intervene.

3.  After acquiring your company Honest Tea, Coca Cola retained you as the CEO. Can you describe some of the ethical dilemmas you have faced as a champion of a healthy lifestyle working for the world’s leading producer of sweetened beverages? How have you handled these dilemmas?

I always look at the impact of what I am doing. That is how I measure results. Comparing where Honest Tea was prior to Coke’s investment to where we are now, I know that the investment marked an inflection point in our growth. During our first ten years in business, we sold 112 million bottles. In the six years since Coke’s acquisition, we have sold 888 million. We were handled by 15,000 stores, but now by about 100 thousand. Though we used to purchase about 800,000 pounds of organic ingredients annually, this year we will procure over 8 million. Clearly, we have magnified our impact significantly. I am confident saying that our scale has dramatically increased.

I have also come to appreciate that Coca Cola, a company that markets thousands of products, has some admirable, company-wide practices. As a highly diversified business, Coca Cola, naturally, faces a variety of challenges. In doing so, they have become involved in some amazing water projects. Through them, they are helping to provide more drinking water in developing nations. Coca Cola is also committed to becoming water neutral by 2020, returning as much potable water to the environment as they are using. They are interested in becoming package neutral, as well. They aim to recapture and reuse as many packaging materials as possible. A difficult step to take, this aim is a Coca Cola aspiration. It’s a path they are on rather than a destination.

4.  How did you convince Coke to invest in Honest Tea, a business so different from their own?

Coke actually reached out to us. A unit of the company that had conducted an intensive study of over 3500 beverages realized our beverages were part of a category ripe with opportunity. The team recognized we were offering a beverage they did not market, ultimately concluding we were the brand they wanted. Beginning with 3500 brands, they distilled the list to 100, then to 12, from there to 5 and finally to a single brand— Honest Tea.

5.  As I am sure you know, Japan is a huge market for green tea? Do you have any relationships with Japanese tea companies like the giant ITOEN? Do you plan to introduce green tea to the US or Honest Tea in Japan? In the former case, do you think Americans will accept green tea, which can be quite bitter and is consumed without any sweeteners?

Our green tea is much closer to the taste in Japan than other green teas in the United States. Our brand is authentic, unsweetened green tea. It’s not matcha, but it is green tea. In fact, one of our best sellers is called Just Green Tea, a green tea with a strong taste. It is not something that has immediately succeeded, but consumers’ appreciation of the product continues to grow.

We have an unusual relationship with ITOEN that is outlined in Mission in a Bottle. Someone charged with launching ITOEN in the United States came to us as an investor without disclosing his background. Because he was an investor, he had access to our business plan and financials before launching ITOEN here. When we spoke to him at the ITOEN booth at a trade show, I thought to myself, “I know that name,” only to later realize that he was our investor! He was now competing against us. This episode was one of our most disappointing encounters with investors. Naturally, we had him sell his shares, garnering a profit from our business in the process, I might add. That was our first exposure to ITOEN, which continues to be one of our competitors.

Honest Tea does not currently have any short-term plans to enter the Japanese market, but future entry would be a longer-term plan through Coca Cola. One of the current limitations is the need to produce the product there because the liquid is too heavy to ship cost efficiently. Moreover, labeling laws in Japan are extremely restrictive. We do sell our products in countries like Korea, where we are able to make use of equivalency-labeling rules, but we cannot yet distribute our products in Japan.

6.  You have already accomplished more than most at a relatively young age. What other additional goals to you aspire to accomplish over the next twenty years in your professional and personal life?

I cannot say that I have a perfectly laid out plan outlining every next step, but I want to have an impact in whatever I do. I want to be involved in issues I care about, making an impact at the highest possible level and on the largest scale possible. In addition, I will continue to pursue creative and professional challenges. In this connection, I should share the fact that I am not a golfer, neither in the literal nor figurative sense. I do not play the game of golf, and I do not aspire to be one of those people who spend their time playing golf and enjoying other pleasures that do not contribute to society. With all due respect golfers, I myself do not currently aspire to spend my later years or retirement on relaxing pastimes.

For now, I believe that continuing to build and run Honest Tea continues to be the best use of my time and talents. I can imagine that that may not be the case at some future point, either because the brand is large enough to maintain its own momentum, rendering my involvement less crucial, or because the organization has become more corporatized, reducing the impact of my voice. That is not the case now, but I am thinking this scenario could come to be. While I do not have a next step in mind if this should happen, I am certainly not unwilling to step away. Though I am not sure I have the appetite to start from scratch again, establishing another venture would be another possible option. I would not rule out any options at this point.

7.  In a 2013 Washington Post article, you were described as a guru for socially-conscious entrepreneurs aiming to change the way America eats. What other areas of American society do you feel are in need of change? How would you change them? How can entrepreneurs serve as change agents?

Clearly, the American political system is in gross need of change. I’m absolutely nauseated as I listen to the dialogue, all the grand standing and the lack of serious change. It’s an area where I do not yet have a solution. If I did, I would be trying to implement it. Every few months, I ask myself if I would be happier being part of such a divisive, toxic dialog. I see the problem, but the prospect of trying to solve it does not attract me.

There are, of course, many other areas that offer both business opportunity and the opportunity to make an impact. One is the American diet. I have already mentioned to you my involvement with Beyond Meat. I think such an enterprise is an exciting way to make more of an impact on the diet as our company is focused on beverages. Another area of interest that has come to my attention is one aspect of U.S. agriculture, though I do not have deep exposure to the industry. One issue is big agriculture’s use of chemicals and irrigation methods. But the greatest use of water and chemicals is actually not related to big agriculture but to small agriculture, namely grass. People’s front lawns are the most environmentally demanding crops in terms of water and fertilizer use. This twist is interesting and unexpected. Looking at business opportunities, we can ask how to change Americans’ desire to lay a green carpet in front of their house. As mentioned, I myself do not know the area well, nor do I have a plan for it. But an area like this where change is desperately needed definitely represents a business opportunity.

8.  Although logical, linear career planning is entrenched in U.S. culture, Stanford Education Professor Dr. John D. Krumboltz suggests that “Planned Happenstance Theory” describes career development more accurately, noting “Luck is no accident! We do not always need a plan to create a career. Instead, we need a plan to act on happenstance to transform unplanned events into career opportunity.” To what extent do you think Krumbolz’s theory applies to your career development, including the decision to start Honest Tea?

I think Professor Krumboltz’s theory is certainly relevant to me. When I graduated from Harvard with a major in government 27 years ago, if you had told me I would start a beverage company, I never would have foreseen that path. On the other hand, if you had told me that I would be running an organization focused on improving the American diet, aiming to spread more-sustainable agriculture, or extending economic opportunity to communities that lack access to it, I would have believed I might be doing anyone of these activities or all of them. I followed my passion, not a set path. I think you need a sense of where you want to go in terms of direction, but should remain open to the path, the concrete steps forward.

9.  Are you interested in someday making a film on Mission in a Bottle?

Sure. We are always interested in spreading the story. But we have not been contacted by anyone in Hollywood or had active discussions with anyone about this option.