“Have you ever had one of these RXBAR’s?” I asked the cashier as I was checking out.
“I actually haven’t, but man do they sell. People here love it and buy it all the time,” the cashier said.
I had just finished interviewing co-founder of RXBAR, Peter Rahal at his local coffee shop in the River North neighborhood of Chicago.
Three weeks prior, Peter and his partner Jared Smith sold their company to Kellogg’s for $600 million.
No venture capital or outside funding–just $5,000 invested by each founder.
The rest is history. Here’s what I learned from Peter.
-
You don’t need investors to build multimillion dollar company.
“I remember distinctly early in my business when I was asking my dad about all the investor money I needed to fulfill my vision for RXBAR. He told me very directly, ‘You need to shut up and sell 1,000 bars.’.”
That’s all Peter needed to hear. He started walking door to door to coffee shops and cross-fit centers in his neighborhood.
“We would ask to speak to the owner and ask if we could put my bars on their shelves. we gave it away for free. We didn’t care. We just wanted people to start trying them out. We made these bars by hand. There was no huge manufacturing line. It was one bar at a time.
It actually made our due diligence with Kellogg really smooth. We had a clean cap table. We were open books with them. Everything they wanted to know, we had answers for them,” Peter said.
2) Iterate and learn.
The first RXBAR packaging was built in powerpoint.
“I’m not a designer, but Jared and I knew that we needed to get to market as soon as possible, so we opened up powerpoint and created the best packaging we could. I even put my cell phone number on the package. I wanted to make sure I was accessible as possible. Feedback is how we grew,” Peter said. “We knew we were on to something pretty quickly. We went all-in [and] quit our day jobs. [We] moved our operations from mom’s basement and rented a small production space.”
After 5 iterations of packaging:
3) Believe in what you’re selling
We were sick of all these weak ingredients in protein bars. That’s when we decided to make something that was transparent. We knew the market wanted something like this. That’s why we put our core ingredients on the package. It really is NO BS.”
One thing we say is, “We tell you what’s on the inside on the outside.”
I have to say that’s probably one of the best brand promises I’ve heard in a long time.
4) Embrace your differences
“My partner Jared and I are very different. It’s a big reason why he’s been so crucial to the success of this business. I honestly don’t think we would be in business if it wasn’t for him. He enabled us to grow at the pace we are growing, without raising any capital.”
“We had manufacturing and distribution constraints, but we each played a role in solving problems.”
“These constraints helped us stay honest with ourselves, ” says Peter.
5) Culture is everything
“I don’t have a corner office. I sit with everyone else. I actually take most of my calls on speakerphone. I want to set the tone that I have nothing to hide an that we’re all in this together,” Peter said.
He also implemented dynamic job descriptions for his employees.
“Considering the growth we had in a short time frame, it’s important that the roles of our team members change as we grow. Just because you are responsible for one thing when you got hired, doesn’t mean that there aren’t other roles you can grow into. I made sure that was clear from day one.”
6) Just because you sold the company, doesn’t mean your work is done
“Some people might be surprised that I’m still working, but I love it. Also, you don’t sell your company and have LESS work. That’s not how this works! In many respects, we just got started. I still have a great job!”
“We picked [Kellogg’s] as a partner, because we felt they really understood our business, our vision and most importantly, I learned something from them every conversation I had.”