The Next Brand, Episode #24
Building conviction, side hustles, and why lab-grown meat is stupid
Hi there, and welcome to The Next Brand - my take on health, wellness, and brand building.
In the last 4 years, I’ve founded 3 health brands (Kettle & Fire, Perfect Keto, Surely), which each do tens of millions in revenue. I’ve raised ~$20mm to build Kettle & Fire, gotten into 10k+ retail stores, bootstrapped Perfect Keto, launched 80+ SKUs… and have a small portfolio of Shopify apps I run on the side. Previously, I worked in tech and had no experience in CPG, DTC, or any other 3-letter industries.
If you missed past episodes, you can catch up here (Episode 21, 22, 23). Otherwise, let’s dive in!
🆕 What’s new
I turned 32 last month. And for my 32nd birthday, I decided to take the opportunity (inspired by my friend Erik Torenberg) to ask some very smart friends a question that’s been top of mind for me lately.
I wanted my friends to share their thoughts about conviction. Specifically, how they developed the conviction that a big decision in life (a new job, a relationship, starting a new company, whatever) was the right one?
The answers I got were so good, I figured I’d share them with you all!
We’ll start with the advice of one friend, K. As he said:
[To build conviction], try something with a preset amount of time and effort dedicated to an endeavor and then see what sticks. Basically, a lot of shots on goal will lead to a hit eventually. This works well with two-way door decisions (something that's not permanent) but is not so helpful with one-way door decisions like who you marry because it's not alterable, or at least has a very high switching cost.
Many of my high conviction decisions have come when I realize even a "failed" attempt yields better results than not trying. Usually that realization kicks in when I see a particular endeavor as part of a larger goal.
Another friend had a similar heuristic:
I've been trying to get into the habit of asking: Do I have enough information to make this decision vs do I have all the information to make this decision?
Reminding myself that few things are as forever as they seem when you start. You can always get a new job, shut down the company if it’s not working, or change direction in life a million ways after committing to it. I think it’s far more important to have dedication to an idea (putting in your full effort) than it is to have conviction that’s it’s the correct move. It’ll be right or it won’t, but that usually shows through in the doing.
I’ve seen this in my own life for sure. After I quit my job, I had a real problem deciding what business I wanted to start. Sure this idea is cool, but what if THAT idea will lead to perfect happiness? How do I choose?!?
Eventually, I decided to give the bone broth idea a shot for 3 months. I realized that spinning my wheels wasn’t productive, and I’d make a LOT more progress by going all-in on something for a certain period, then deciding what to do afterward. And after that initial commitment, here I am years later with a much deeper understanding and interest in food and how it impacts our health. I’d never have gotten here without first committing to that 3 month period.
Several other friends echoed my intuition that building conviction is part logical, part emotional. As my friend L said:
Conviction: I've started to rely on a simple framework. I listen close to two feelings: excitement and curiosity. I pretend I have each word tattooed, one on each wrist. Treat them like a metal detector. They will guide you in the right direction.
And lastly, several friends echoed the point that building conviction takes time, space and reflection. As one friend shared
My equation for conviction is Honest Self + Deep Reflection + Focused Priority.
Honest Self: What am I uniquely positioned to excel at?
Deep Reflection: What kind of project do I want to work on that will (1) make me happy and (2) make the world a better place
Focused Priority: Do I have room in my life to make this my #1 priority; Am I willing to reshuffle other things?
I’m grateful to my friends for sharing their thoughts on conviction, grateful for another year spinning around the sun 🌞, and grateful to all of you for taking a few minutes to read this on a monthly basis. Here’s to another good year 🥂.
💪 Health stuff
Cultured (or lab-grown) meat is all the rage. Investors poured $3.1 billion into alternative-protein startups in 2020 (and the trend has continued in 2021) and there are calls for an “Apollo Project” for meatless meat.
All the funding and buzzy press exclaiming the end of meat makes one wonder: are we in the final years of animal agriculture? Will the 2030s be spent eating Tyson Burger Vatties™, using meat from a local, artisan meat vat near you? Will we see an explosion of vat-to-table restaurants?
I suspect not. In fact, I’m going to go on record here and say that lab-grown meat is going to be a Theranos-level flop (and could include more fraud!) and just plain not work in the next decade, or possibly ever. Though I suspect that lab-grown meat will light a lot more money on fire than the comparatively-small $1.4b that Theranos raised.
After all, lab-grown meat companies have a loooong history of claiming to disrupt the meat industry and failing to launch any sort of real products. We’ve been waiting 15+ years for lab-grown meat claims to live up to the hype, and they just… haven’t.
There are many, many reasons why. As a recent post outlined (which I highly recommend reading if you’re interested in the topic), creating lab-grown meat that is even close to price-parity with real meat is hard. And expensive. And there’s currently no realistic path to making it happen.
Recently, the fake-meat nonprofit organization Good Food Institute (GFI) released a paper purporting to show how overcoming key economic and technical hurdles could lower the production price of cultured meat from $10,000+ per pound today to ~$2.50 per pound over the next nine years.
Though the paper (of course) received a lot of buzz, the truth is their “solutions” were a lot of hype and almost no substance. For example, in the hypothetical lab-grown future that GFI laid out, there will be lab-grown meat facilities that can churn out 22 million pounds of cultured meat per year. It sounds like a lot, but when compared to the 100 billion pounds of meat produced in the US each year it’s not even a rounding error - 0.02% of domestic meat production.
When you dig into the price tag, it gets even worse. Just this single projected facility would cost $450 million to produce 22 million pounds of cultured meat, and would have to exist at a biomanufacturing scale never seen before: just one facility as described would make up a third of the entire biopharma industry’s bioreactor footprint. All this just to create one facility to make 0.02% of our nation’s meat production!
To get lab-grown meat to comprise even 10% of meat production would require something like 4000 facilities like the one above, for an estimated price tag of $1.8 trillion. For just 10% of our meat requirements!!
Beyond just cost, there are plenty of technical issues involved in scaling cultured meat production. For one, it’s challenging to give cells the nutrients they need to grow. Current cultured meat facilities “feed” their cells fetal bovine serum (FBS), blood collected from a cow fetus that’s rich in proteins and vitamins that these cells need to grow and multiply.
Not only is this philosophically challenging - how exactly does “meatless meat” work if it requires animals to function? - but there’s no clear way to create an economical growth medium for cultured cells that does not rely on animal products.
There are also very real questions around the feasibility of scaling up bioreactors at this scale. Keeping factories completely sterile will be important in any sort of scaled-up cultured meat operation. As the article says:
In cell culture, sterility is paramount. Animal cells “grow so slowly that if we get any bacteria in a culture—well, then we’ve just got a bacteria culture,” Humbird said. “Bacteria grow every 20 minutes, and the animal cells are stuck at 24 hours. You’re going to crush the culture in hours with a contamination event.”
For one, keeping a facility sterile that can churn out tens of millions of pounds of cultured meat just has not been done before. Not in food, and not in pharma. And, keeping such a hypothetical facility clean is not cheap: David Humbird, a UC Berkeley-trained chemical engineer, estimated that a Class 8 clean room big enough to produce roughly 15 million pounds of cultured meat a year would cost about $40 to $50 million dollars. That figure doesn’t reflect the cost of equipment, construction, engineering, or installation. It simply reflects the materials needed to run a sterile work environment, a clean room sitting empty.
This is important as cells have no immune system, which means that any virus or bacteria can infect and spread to every cell in a batch of cultured cells, effectively killing the batch and making it worthless.
And the Good Food Institute (and their main funders, Open Philanthropy), know this. Open Philanthropy has previously funded David Humbird to spend two years digging into assumptions and plausible costs to getting lab-grown meat closer to price parity. At the end of his research project, Humbird estimated that the lowest possible cost the cultured meat crew could expect is roughly $17 per pound. And as The Counter says:
And if $17 per pound doesn’t sound too high, consider this: The final product would be a single-cell slurry, a mix of 30 percent animal cells and 70 percent water, suitable only for ground-meat-style products like burgers and nuggets. With markups being what they are, a $17 pound of ground cultivated meat at the factory quickly becomes $40 at the grocery store—or a $100 quarter-pounder at a restaurant. Anything resembling a steak would require additional production processes, introduce new engineering challenges, and ultimately contribute additional expense.
So according to GFI, after $1.8 trillion of investment, thousands of bioreactors built, technical hurdles solved, a non-animal growth serum invented… we effectively get a shitty $17 burger patty.
It gets worse! The whole reason cultured meat is receiving so much attention and funding is due to the potentially positive environmental impact. The jury is still out, but one early study points to cultured meat having even more of a negative climate impact over hundreds of years when compared to animal agriculture (mainly because there’s no natural carbon cycle like in animal husbandry, just energy expenditure). Not to mention that beef is not, in fact, a main driver of climate change.
I get why food companies are all for this. After all, if Tyson spends $1b on a few lab-grown bioreactors (and patents a few steps along the way), they can charge a huge premium for their meat product. As Tim Hayward quips, intellectual property protections in the cultured meat space will change “meat” to “Meat™”.
At-scale cultured meat would also further our dependence on Big Food and the chemically-intensive, industrialized system of agriculture that we now have. It’d also be impossible to roll out in other countries: how on earth does GFI expect developing countries to afford a $450mm bioreactor to cover less than 1% of their protein needs? Everywhere we’ve outsourced our industrialized food system, poor health and environmental degradation has followed. This would be no different.
I just can’t help but find this whole thing almost impossibly stupid. We’re actually proposing to spend trillions of dollars to “save the planet” with a solution that can’t and won’t work, won’t scale, and that no country can afford. But sure, let’s keep tossing money at this pretend solution to make everyone feel good, cows aren’t dying, yay!
We are sick, our environment is sick, our food system sucks and makes us sicker, yet we’re stuck reading proposals to spend trillions of dollars on $17 lab-grown burgers that can’t scale, are bad for the environment and solve zero real problems. I’m all for thinking deeply about ways to improve our food system, but firmly believe that regenerative (or some other whole-ecosystem approach) is the path forward.
🤑 Biz stuff
I’ve talked quite a bit about side hustles in this newsletter. However, one thing I haven’t covered is why I think they’re important and just oh so great.
A side hustle is like entrepreneurship 101. Sure there are the Bill Gates, Zucks, and Collisons out there who seem to know the massive thing they want to build by age 24. But unfortunately for my bank account, I’m not one of them.
Truthfully, if you’re interested in starting a massive company and playing the unicorn 🦄 tech game, your best bet is probably to get into tech, work with the most talented people you can at the fastest-growing company you can, and just throw yourself into the fire + force yourself to level up.
If, however, you’re more interested in entrepreneurship as an enabler of freedom… if you want financial and time freedom more than want to be a billionaire, starting with side hustles makes all the sense in the world.
I didn’t know what world-changing thing I wanted to start by 24, and in many ways am still figuring that out today. But I do know that there’s no way I’d be where I’m at now had I not started with side hustles. In fact, by the time I quit my six-figure job at the age of 24 (following the acquisition of the startup I was running growth for), I’d replaced 75% of my monthly income via my various side hustles.
Having my rent covered and extra cash coming in meant that I could go out on my own and launch Kettle & Fire with relatively high confidence that even if it didn’t work, I’d be okay. I could afford to take a few swings, have them not work out, and still pay the billz.
This is a common thing I’ve seen from many friends who successfully make it in entrepreneurship. They first work a job or consult, slowly building up valuable skills they can offer to companies and clients. Or they begin hustling on the side, doing literally whatever they can (back in my day, the hustle was often selling $2 Kindle ebooks) to make some side income.
As they build side income, they reach a point where they’ve replaced their monthly living expenses. Sure, they may not make a ton of money and eat into savings for things like travel and dinners out, but basic monthly expenses are fully spoken for.
I hit this point after launching my first Udemy course in 2012. I wasn’t exactly making a ton of money (about $2k/month). But that was enough to cover rent and a few trips to the Chipotle 3 blocks away (no guac, thank you). It was a start.
I then layered in other income streams: Airbnb, consulting, book revenue, another course I launched… and by the time I quit Rackspace I was close to $6k/month in side income. For someone who grew up worried about money and wanted to control my time, covering my monthly burn gave me the confidence that I could do pretty much whatever I wanted. All of a sudden, my approach to startup ideas went from ohmygoshthishastoworkbynextweek to a more fun, more relaxed and more enjoyable journey where I could test ideas before going all in. I had the time to be picky and wait until something really resonated, and then could go after it.
I’ve written before on the 4 kinds of side businesses you can start, and Nat Eliason has written quite a bit on building passive income. I highly recommend both.
But really, I think there’s a bigger point here. If your goal is making a career of entrepreneurship, really the only way you lose is to not start at all. I’m only 32 and have seen a majority of friends who got into entrepreneurship in their 20s now reaping the dividends. I literally had friends making $500 a month in their 20s who stuck with it and are now millionaires.
I strongly believe that just hanging around the hoop and investing in your skills, your network and your opportunity-sensing abilities pays off: it just takes time. That’s why I’m such a huge fan of side hustles, as they can enable you to hang in the game for as long as it takes for it to pay off.
😌 Dope stuff on the internet
Some of my favorite things since the last newsletter (note: I don’t get paid to recommend anything here):
📰 Article - In the wake of all that happened in 2020, this Slate Star Codex piece on the FDA is just fantastic. Not only because it’s incredibly well written (seriously - Scott is the writer I aspire to one day be), but also because of the topic’s importance following a pandemic where the actions of the slow-moving FDA killed tens of thousands of people. Highly recommend giving this a read.
📚 Book rec - I’ve spent a lot of this year reading spiritual books. First by Michael Singer, and recently finished Spiritual Enlightenment by Jed McKenna. It was… weird. But interesting. And written in an engaging, conversational way that I often find lacking in these sorts of spirituality books. Enlightenment and the spiritual path are complicated, but I found Jed’s discussions on the topic really resonated.
⌚ Cool product - Okay, so I probably do get paid to recommend this, I admit it. But the grain-free granola bars we launched at Perfect Keto are probably my favorite product PK has launched so far. If you’re interested in a keto-friendly snack or just want a clean granola bar replacement, we got you fam ✨!
🎵 Music - For more house mixes, check out this David Hohme mix. For a strange metal remix of a song about the Canadian Lewis and Clark, well, here ya go. It’s been stuck in my head for literally 3 weeks now after my brother sent it to me - consider yourself warned.
🏀 Random - I’ve gotten a lot of benefits working with a movement coach over the last few years, as it’s drastically reduced my back and neck pain. Part of that I owe to the fantastic guy I work with here in Austin, but another part is just making sure to move intentionally every day. Whether that’s yoga, ROMWOD, or The Movement Journey (who I’ve worked with virtually), I highly recommend making daily movement a part of your daily practice.
See you in a month 👋,