The Next, Episode #41

My commitment journey, flavor and nutrient density, and is software dead

Hi there, and welcome to The Next - my take on health, wellness, and company building.

In the last few years I’ve founded 3 health brands (Kettle & Fire, Perfect Keto, Surely non-alc wine), which each do tens millions in revenue. I’m now working on TrueMed, which allows health and wellness brands to accept HSA/FSA funds. Previously, I worked in tech and had no experience in CPG, DTC, or any other 3-letter industries.

If you missed past episodes, I recommend checking out Episode 37 on the bonkers Tuft’s Food Compass: the one that claims Lucky Charms are healthier than steak. Otherwise, let’s dive in! 

🆕 What’s new

As of last week, I am now a married man. 

My partner and I have been together for 7 years and were about as committed to each other as I could have imagined. Engaged, living together, bought a house together… we’d done the adulting things. Even still, I was blown away by how powerful it was to make a public commitment to her in front of friends and family. 

For a long time, I was hesitant to fully commit to the relationship. Our relationship wasn't perfect from the getgo, which - to my simple mind - meant there was no way I could fully commit. How could I commit to something not completely perfect?! 

It took me two breakups (yes, I am a dense person) to understand how silly this approach was. Like many things in life, you don’t get the benefits of doing Thing unless you’re fully and completely doing it. You don’t get strong without committing to time in the gym, you don’t get healthy without eating well, and don’t you get the relationship you want by showing up halfway. 

Advice I wish I’d internalized years ago 😬. 

Once I committed, things got hugely better. Fights about small things (me running late, for example) disappeared. Big questions got easier to navigate as a partnership, and I was amazed at the love and depth that my partner was able to bring into the relationship as soon as she felt like I was doing my part and showing up. So many of the reasons I’d doubted the relationship were gone: it turns out, they had hung around in large part because I hadn’t committed!

Startups are a lot like relationships in this way. 2016 Justin told people he was “working on” 3 different ideas. In practice, I was making zero progress and burned 6+ months with this horrible approach. it wasn't until I committed to focusing solely Kettle & Fire for *at least* 90 days that I started to make progress. And as I made progress, as I committed to just one thing, I started to grok the size of the opportunity in the bone broth space. And as I better understood the opportunity, I became more and more convinced that this was an idea worth investing my time (and 100% of my life savings) in. 

I give the same advice to friends who want to start a company. Startups are momentum plays: just choose the idea you're most excited about and put a date on the calendar for 3-6 months. At that date, you’re allowed to reflect on your commitment level. Until then, you’re explicitly NOT allowed to spend ANY time questioning "should I be chasing X idea over there?". 

By putting blinders on for a period of time, you allow yourself to dig into a problem space and spend your early time actually *working* on The Thing vs intellectualizing "is this the exact, perfect, right, and obviously huge thing I should be working on?!?". At least, that's what I've struggled with working on something new.

💪 Health stuff

Lately I’ve been thinking a lot about evolution and our food environment. Specifically, the relationship between food and nutrient density. 

Flavor is the lifeblood of our food experiences. Our tongues detect the five primary tastes - sweet, sour, salty, bitter, and umami - while the olfactory system perceives the countless volatile compounds responsible for food aromas. 

Evolution has shaped our sense of taste to guide us toward essential nutrients and away from potential toxins (1). Sweetness signaled the presence of energy-dense carbohydrates, while bitterness warned of potentially harmful compounds. The savory taste of umami (often associated with glutamate) indicated protein-rich foods, while our bodies are also built to crave salt (which is necessary to function) at times when it’s running low, and avoid it (or crave water) when exposed to too much. 

More nutrient-dense foods tend to be more flavorful because they contain a higher concentration of the natural compounds that contribute to taste, aroma, and texture. Compounds like phytonutrients (flavonoids, carotenoids, and phenolic acids) are found in plants and contribute to the color, aroma, and taste of food, as do minerals and trace elements (potassium, magnesium, etc) that influence the overall taste profile of our foods 

In short, humans have evolved to crave flavorful, nutrient-dense foods. And in today’s food environment, we get basically none of these nutrient-dense foods we are built to crave. 

Studies have shown that nutrients rapidly decay in fruits and vegetables after harvest (2). Most produce loses ~30% of its nutrients within 3 days of harvest; some produce, like spinach, can lose up to 90% of key nutrients like Vitamin C within 48 hours of being picked. 

Given the average produce you’ll find at the grocery store has been harvested 7+ days earlier, my strong suspicion is that the food we regularly consume just ain’t as nutrient-dense as it once was. 

But, things get worse! Not only does our food supply chain deliver food that’s less nutrient-dense due to nutrient decay, but the very crops we are growing are less nutrient-dense than they were decades ago. Traditional farming methods emphasized diverse, nutrient-dense crops, whereas modern agriculture prioritizes high-yielding varieties that are often less flavorful and nutritious. A study examining 43 garden crops revealed a significant decline in nutrient density over 50 years, including reductions in protein, calcium, phosphorus, iron, riboflavin, and vitamin C (3). Factors contributing to this decline include soil depletion, genetic dilution, and the prioritization of appearance and shelf life over flavor and nutrition. 

This is a topic I plan to write much more about, as it’s a deep one. But there are a few things one can do to up the nutrient intake in our foods. We can and should embrace heirloom varietials, which tend to have more rich nutrient profiles. Where possible, I’m also trying to incorporate wild and foraged foods into my diet: it’s a big reason I try to go hunting at least once per year. Shopping at farmer’s markets where you’re practically forced to buy seasonal stuff direct from your local farmer also helps quite a bit. 

This is a trend I suspect we’ll hear a lot more about in the years to come. Ultimately, nutrition is about nutrients. And when organically grown vegetables have nearly 2x the amount of key phytochemicals compared to conventionally grown vegetables (4), well, I suspect we have a problem. 

🤑 Biz stuff

What follows is a take I’m only about 30% confident in, but figured I’d put it out there for reactions! I hereby invoke Cunningham’s Law  😎

For decades, software has been the best sector in the world in which to invest. 4 of the 5 biggest companies in the world are tech companies. Returns for SaaS/software-focused funds (Vista, Sequoia, Thomas Bravo, etc) have been exceptional, and software businesses themselves are some of the best in the world: high margin, solid moats, etc. I’ve even dabbled in software investing myself by buying Fomo and selling it 5 years later. 

With the advent of AI, I wonder if all this is about to change. 

A decade ago, there was massive hype around direct-to-consumer (DTC) brands. It was a matter of time, the story went, until legacy brands were completely upended by DTC brands. Every legacy brand, in every category, would soon find its lunch eaten by a fast-moving, DTC equivalent. 

That’s not quite what happened. As it became easier for the average Joe to start a brand (arm the rebels!), it turned out that DTC brands weren’t the big winners. Instead, as more people could launch their own brands, the branded DTC world became more competitive, and brands themselves became far less valuable. 

The basic equation is something like:

Thing becomes easier to do → more people do it → more competition → each individual player is now less profitable and less valuable. 

I think we may be on the cusp of something similar happening in software. Traditionally, making software has been hard and required expensive developer time to churn out even relatively simple software tools. 

Now, with the rise of AI tools, it seems probable that creating software will soon be as easy as starting a DTC brand. Not so simple a caveperson could do it, but certainly simple enough that there will be tons of competition for nearly every SaaS business out there. Chat-GPT is less than 6 months old, and people are already using it to build iPhone apps, productivity apps, turn sketches into websites, and more. 

As it becomes easier to create software - and easier to clone software products that are gaining traction - I expect we’ll see a flood of software tools for every use case, every niche, every company. And while that flood will lead to record levels of consumer surplus, it also makes me pretty bearish on the economic future of the average SaaS tool. 

My guess is that SaaS broadly is about to enter hard times over the next 5 years. And that we’ll go from software businesses being amazing to a much more challenging world for software founders and investors. 

Who wins in this new era? Probably the same groups of people who won as it became easier to create DTC brand: (1) infrastructure platforms and (2) companies that own distribution. 

Infrastructure platforms will see huge returns here. Shopify and Amazon were the big winners in the “anyone can start a brand” world. Who will that be in the age of AI? My suspicion is that companies like Snowflake, Redshift, and any of the AI-as-a-service players (OpenAI, Anthropic, etc) will all do incredibly well. 

I also suspect that distribution players will do incredibly well in the coming era. As more brands were started, a larger portion of each brand’s budget went to Facebook, Google, and a long tail of influencers tasked with spreading the word about a given product. I’d expect a similar outcome in software. Outside of Facebook and Google benefitting from this, I also suspect you’ll see the rise of B2B influencers (like those Workweek manages) crop up to take advantage of this trend.

All in all, my suspicion is that monetizing SaaS will be a much harder, much less profitable game to play in the wild world of AI. And we are only just getting started. 

😌 Dope stuff on the internet

Some of my favorite things since the last newsletter:

• 📰  Article - This is a long piece, but Toby Shorin’s Life After Lifestyle was one of the most thought-provoking essays I’ve read this year. If you’re at all interested in movements, culture, commerce and the cultural zeitgeist… this one will definitely make you think. Toby also co-authored a previous piece on Headless Brands that has shaped a lot of my thinking on all things brands and community.
  

• 📚 Book rec - I’m pretty over reading books on productivity. That said, on a friend’s recommendation I picked up 4000 Weeks and quite enjoyed it. It’s a book on time management and productivity that just hit different, and was much more philosophical than tactical: something I’ve been pulled towards recently.
  

• ⌚ Cool product - I recently discovered Sealand on my most recent trip to South Africa and am totally in love. They make some of the cooler gear and apparel I’ve seen, all made from recycled/upcycled materials that was previously used on boats. Their stuff is earth-friendly, unique, and looks damn cool. 
  

• 🎵 Music  - New season, new Lane 8 mixtape. Enjoy!
  

• 🏀 Random - I’ve gotten a TON of my time back since hiring an executive assistant 4 years ago. She helps me with travel, household stuff, gifts, planning trips, managing my taxes, keeping track of my spending… the list goes on. I pretty much could not operate without her at this point.
  My friend Jonathan recently opened up more slots for his EA support service Athena. They work with the top 1% of EAs in the Philippines (who work US hours) and mean that you can get a top-tier EA for like $3k/mo. Happy to make an intro to anyone here if you’re interested in getting your time back, or take a look at the things you can do with an EA. It’s something I recommend to all my portfolio companies as it’s been transformative for me.
  

• 🙋‍♂️ Ask - Kettle & Fire is looking to further support the regenerative agriculture movement (beyond our regen line). If you know of organizations, suppliers, or any individuals we could help support with a small grant or purchasing their crops and the like, I’d love to chat! 

***

Thanks as always for taking the time to read this, and I’ll see you in a few weeks.

• Justin