Hi there, and welcome to The Next - 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’ve bought + exited 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, I’d recommend checking out Episode 34. Otherwise, let’s dive in!

🆕 What’s new

Let’s talk about lead. The lead-crime hypothesis argues that lead exposure was largely responsible for the crime wave seen in the 80s and 90s. High levels of lead exposure for children in the 60s and 70s (via water, gasoline, paint, etc) impacted their learning ability and impulse control, which made them far more likely to commit crime later on as adults. And - once lead was largely removed from the environment - the kids who grew up without lead exposure stopped committing as many crimes, which drove the persistent decline in crime starting in the early 1990s.

This is crazy stuff. A national crime wave that killed many, hollowed out cities, changed politics… all likely due to the fact that we were poisoning our kids with lead, without even knowing!

Unfortunately, I suspect we’re doing a similar thing today. Not with lead, no. But I do think we are poisoning ourselves with any number of the 80,000+ unregulated chemicals that make their way into our water, our foods, our lotions, our soaps… pretty much everywhere. And I strongly believe that these toxic chemicals have a causal role to play in the 50%+ drop in testosterone we’ve seen in males, as well as the explosion in autism, ADHD, anxiety and many other modern maladies.

I suspect we are very early in understanding the negative impact this class of unregulated chemicals is having our on physical and emotional health, our hormones, and our behaviors. I think toxic contaminants are one of the most important issues of our time, and will have massive implications on health and society.

I’ll be writing much more about this topic in the future. But for now, I’ve taken some steps to (hopefully) lower my toxin exposure. I’ve installed a whole-home water filter, replaced a bunch of products in my house with chemical-free versions, don’t buy hot coffee in paper cups (why), and am even more strict about getting organic produce and trying to avoid the dirty dozen.

If this is a topic you’d like to learn more about, please do let me know. I’d be happy to do more research here and share findings with you all.

💪 Health stuff

A few weeks ago, a friend sent an article that perfectly summarizes a trend that I’ve been thinking about for years: the personal identification of illness with identity.

The article is worth reading as it chronicles a sick girl and her interactions with “the spoonies”: a community of hundreds of thousands of (mostly) women that write, post, and connect over their various illnesses.

Humans need community, and in so many ways it’s a good and beautiful thing when people gather to support one another in challenging times. However, in our identity-politics-ridden world, I’m seeing more people take on illness as a core part of their identity. As Cooper, the subject of the linked article, mentioned:

“Someone asked me recently, ‘Who are you outside of being sick?’ and my jaw dropped,” Jacobson said. “I had absolutely no idea how to answer that question.”

You see this everywhere in our society and in the healthcare system. They’re not temporarily sick, they’re Spoonies. People don’t have diabetes, they’re capital-D Diabetic. And as people get captured by their illnesses, as their ailments become core to their identity, well, it becomes far harder to overcome said illness!

Maybe this was fine in an era where the average American was healthy. But today, when 60% of Americans have at least one chronic disease and 90%+ of people have some level of metabolic dysfunction… people should be healthier. And I don’t think tying identity to illness will help.

For Cooper, her circle of Spoonies validated her, cheered her on, every time she shared just how sick she was. It was the bond that tied her to the community:

She joined a group message on Snapchat called Sick Bitches. “All we did was message each other about negative things that were happening, like how our hips were hurting that day or if we had a headache,” Cooper said.

It’s one thing to overcome diabetes and move from healthy to sick to healthy again. It’s an entirely different deal to move from Diabetic to not-Diabetic and lose the support of the Diabetic community in the process. Just look at the backlash Adele received after losing 100lbs (and improving her metabolic health, longevity, energy levels, etc).

Our food system today views chronic disease as fundamentally divorced from our food environment. And when our food environment creates record levels of chronic disease, well, we double down. We make people feel that their medical conditions are part of who they are, that illness is an unlucky genetic break, that a lifetime of pills and medication management is fine and normal. And once people internalize that disease is identity, fixing disease is now in the realm of changing one’s identity rather than simply realizing that most illness is caused by our shitty food system and environment.

Just imagine that every time I got a cold I identified as a “Cougher”, hung out with other Coughers online, had them supporting me on Twitter, sharing this newsletter, and so on. What are the odds I’d be highly motivated to overcome that cough? What are the odds that cough (or a version of it) would persist, would get worse?

I fall into this identity trap in other areas. For so long I’ve identified as an entrepreneur. I write about entrepreneurship, it’s my career, I invest in startups, and many of my closest friends are entrepreneurs. If everything I’m doing fails, it’d be SO HARD for me to “just” get a job. Not because I’d have a hard time getting a job (at least, I hope not 😬), but because I’d have a LOT of work to do on my sense of identity as an entrepreneur. And I’d pretty immediately be the odd one out among a set of my friends.

In the end, I think the best thing you can do to avoid this sense of self/audience capture (as I mentioned at the end of the last episode) is to keep your identity small and carefully guard the number of “I am X” you allow in your life. As Paul Graham said in his classic essay on identity:

If people can't think clearly about anything that has become part of their identity, then all other things being equal, the best plan is to let as few things into your identity as possible.

🤑 Biz stuff

A few weeks ago I fired off a tweet that got quite a strong response:

Justin Mares @jwmares

I think a lot of people are sleeping on just how big the "Boomer's retiring and selling their business" is going to be in the next decade Something like $30 trillion of SMB equity is going to change hands (or... not and shut down) Massive generational shift going on

I wasn’t kidding: I truly think the ~$30 trillion of Boomer-owned, small and medium size businesses that will sell in the next decade is one of the biggest market shifts (and opportunities) I’ll see in my lifetime. To be honest, I suspect it may be the most straightforward way to become a millionaire that exists today (though, obviously, it still ain’t easy).

For much of 2021, there was more money chasing sexy startups than ever before. Because there was more demand for hot startups than there was supply, startup valuations reached historic highs. Simple supply and demand.

This supply/demand equation also goes the other way. As SMBs flood the market in the coming decade, I suspect you’ll be able to pick up some solid businesses at reasonable prices (3-5x EBITDA). In some cases where there are limited buyers (like a surf shop in Charleston, for example), you can likely get creative with stuff like seller financing, equity rollovers, debt, or joint ventures. As Sieva talks about here, you can even hit up Uncle Sam for an SBA 7(a) loan to finance most of an acquisition (though it will require a personal guarantee). Or, if you’re buying an ecommerce or SaaS business, you can use Boopos as a source of acquisition capital.

A few years back, my partner and I acquired Fomo using seller financing. We found an excited seller and worked with him to buy out the company with its own revenue. He got his time back, and we got an asset that we knew we could grow. 5 years later, we sold the business for 16x our purchase price (which I’ll talk more about in the next episode if y’all are into it).

Not only do I think there will be attractive acquisitions in this space, but I suspect there’s a lot a young, hungry operator could do to improve the operations of your standard SMB. Things like using modern marketing technology (a CRM, SMS marketing, landing pages and hyper-targeted Google Ads) aren’t yet table stakes in many SMB marketing playbooks, even though the ROI is definitely there with just a bit of marketing knowledge.

I’m also bullish on this trend because of just how much public know-how there is around running startups. In the history of startups, there has never been so much content, community, and support for running a business. When my dad was in his 30s, you’d be hard pressed to find much content at all around starting, growing and running a startup or small business. That’s emphatically changed, as there are now thousands of blogs, videos, and courses geared toward educating the wannabe entrepreneur.

Where buying and running a business 30 years ago would have been a scary undertaking, today you can go through YC Startup School and internalize many lessons from the best startup operators out there. Many of which you can apply to running your newly purchased business just a bit better than the predecessor, who likely came up with a lot less public know-how.

With buying a biz, it can also be nice to jump in and start making improvements from day 1. Starting a company from scratch can be brutal: so much of your time is spent figuring out what to build, spending months (or years) building that thing, and sloooowly building revenue and acquiring one customer after another. It can obviously work, but can also be quite a grind.

Buying a business has fewer of these challenges. Sure, there are always challenges: but to a certain kind of person, being able to jump in on day 1 and see obvious problems worth fixing, operations that can be streamlined, and changes that should be made is just a much more fun form of entrepreneurship. Hey, I felt it at Fomo - after we acquired the business, the list of things we should do was so obvious, it’s all we focused on for the first 60 days. We raised prices, rebranded the product, launched an enterprise tier… all the things we felt were no-brainers. And it worked!

Truthfully, if I were 5 years earlier in my career and still looking for my first big win, taking out an SBA loan and using that to buy a business is likely the path I’d go down. If all else fails, hey at least you can discharge that debt in bankruptcy! That’s more than I can say about my finance degree 😄.

I’m watching this space as I think it’ll be a compelling one for quite some time. And I’ve personally made an investment in Beacon, who I think is leading the charge in this market right now. As we see trillions of dollars of SMB equity turn over in the coming decades, I think we’ll see a lot of entrepreneurs win big using this strategy.

😌 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 - After reading about it for months, I pretty firmly believe that nuclear is the best path forward from an energy standpoint that exists period, end of story. It’s truly zero-carbon energy, the cheapest we have available, and modern nuclear technology has almost no safety or waste products to be concerned with. The always excellent Austin Vernon had a great overview of nuclear that I really enjoyed, and lays out a compelling case for nuclear’s comeback. I hope he’s right, as it’ll mean cheaper power, energy independence, and a greener world to boot.
📚 Book rec - I’m currently on track to read the fewest number of books I’ve ever read in a year. Candidly, I’ve found it tough to get sucked into books lately, and instead have found myself grazing multiple books at once. While I’m in this mode, I’ve found it easy to get pulled into Ken Liu’s latest book of short stories. If you’re into sci-fi, Ken is one of my favorite authors and I think you’ll really enjoy this collection.
⌚ Cool product - I’ve been getting back on my grind and getting back to doing long stretching sessions a few times a week with Pliability. It feels great and as a bonus you can often do it on phone calls that don’t require camera on 😬.
🎵 Music - This mix was fire, but I’ll be honest: I spent most of this month re-listening to the Fred Again.. Boiler Room set. And all this during a month where Lane 8 came out with a new mixtape!
🎙️ Random - I recently recorded a podcast episode on all things regenerative agriculture and fixing the food system for the Regen Brands podcast. The team did a fantastic job asking questions about the food system and really helping me share why I’m so passionate about all things regenerative agriculture. I don’t do many podcast interviews, and of the few I have done I’d have to say this is one of my favorites.
- Also, if you find the illness-as-identity stuff interesting, be sure to check out Dr. Casey Means and her podcast with Bari Weiss.
🙋‍♂️ Ask - I have a friend looking at buying a small SaaS business and running it. If you or someone you know is selling a SaaS business doing $5-100k in monthly revenue, holler! He’d love to take a look.

***

That’s all I got this month squad! As the seasons begin to change (and Austin weather becomes downright pleasant), I’m trying to think about how to spend more time outside. My outdoor desk setup is great, but I’m trying to do more. More weekends away from my phone, more strolls outside, and less time tied to a computer.

This feels like it will be a recurring theme in my 30s, and I’m open to learning from others about how to get the leverage that comes from the internet without being constantly tied to my internet devices. Cal Newport has some good stuff on the topic, but open to anything else y’all think I should read.

Otherwise, catch you in 30!

👋 Justin

The Next

The Next, Episode #35