The $100M Mushroom Founder: You Can Do What You Love and Build a Billion Dollar Empire

The $100M Mushroom Founder: You Can Do What You Love and Build a Billion Dollar Empire Speaker 2: So how big does this vision get? Speaker 1: I mean tens of billions of dollars in annualized revenue, but. Speaker 2: That sounds nice. Tero Isokauppila is the founder of Four Sigmatic, which is a nine-figure brand that put mushrooms on the map. Speaker 1: When we, Four Sigmatic, created the original mushroom coffee 10 years ago, we were laughed at. Today, it's a $2.6 billion industry. Speaker 2: In addition to being the CEO of a nine-figure brand, Tero is now building a startup. Why are you starting over at zero? Speaker 1: I don't know, because I'm stupid. Speaker 2: He and his team have developed a mushroom blend that eats plastic. In this episode, Tero talks about his launch plan. He talks about funding the company. He talks about balancing a nine-figure brand along with a startup while raising three kids. Do you think that you have the chance to do something really special? Speaker 1: Yeah, for sure. It's working by our standards. A mistake I've done over and over again that I would encourage you to avoid and be smarter than I am is like. Speaker 2: Tero Isokauppila, you already have $100 million business. Why are you starting over at zero? Speaker 1: I don't know, because I'm stupid. I guess at this point, you're unhirable and institutionalized or something like that. Speaker 2: I can relate to that. Speaker 1: No, but in more seriousness, it comes down to, you know, seeing a problem that was unsolved. And it's same with books, like you shouldn't, it doesn't make any sense to write a book. It's so much work. Very little to no money. You should only write the book if you can't sleep at night if you don't write the book. I think it's somewhat similar with companies. Obviously, if you're in your 20s and you don't know what you don't know, it's a really fun journey to learn about life and yourself. But if you've had success, you shouldn't start the business unless you were called that you had to. Speaker 2: This hasn't been a short journey for you. Speaker 1: No. Speaker 2: Four Sigmatic, you started when? In 2012. Started in 2012. It's now a nine-figure company, but now this new company has been sort of incubating in your brain and in the office for a few years. You just needed some extra cash, so you started this thing on the side. You're CEO of a really successful brand called Four Sigmatic that most of the country in the world is familiar with, and now you're starting this new venture all the way at zero. So there has to be something bigger than money, something bigger than your board that is driving that. What is that for you? Speaker 1: Yeah, the company is called HIRO, H-I-R-O, pronounced like hero. And I started with my co-founder, Miki Akrabal. She had this vision when her son, Hiro, was born that, why aren't we harnessing baby poop? Like we use cow poop and dog poop and we use it as a fertilizer in certain cases, but we don't harness this. Speaker 2: Is that really how it started? Is that really she's like, wait a minute, this poop, we should be using this. Speaker 1: Well, that is the story she told me and everyone else. I was not there yet. Speaker 2: That could be good marketing. Speaker 1: Yeah. I was not there, but she did refer to this book called Pacha's Pajamas that I also have. It's like a kid's book and he mentions that how mushrooms can eat plastic. She was changing a lot of diapers at that point. I was like, oh, there's a lot of plastic in diapers and that was the aha moment. She worked on it for a couple of years with other people, didn't go anywhere and then she came to me as we were having our first child and I came to realize that Diapers are the number one household plastic waste item. And once you start changing them 12 times a day, you realize what a waste it is, but then also spark the idea of like, hey, I knew mushrooms can eat plastic, but it could be used for a lot of product categories. So diapers is just the kind of the entry point in a way. And just seeing is like, I kind of look at work that the work itself is for me. The salary, if I get any, is for my wife and the equity is for my kids. I wanted to offer something for my kids, and I think the world needed it. So that was the inspiration, besides a great team, because I was working full-time on Four Sigmatic. But because of the previous success Miki and I had had, we were able to raise money and hire a full-time team to actually work on it. Speaker 2: The last time you and I sat down, I asked you about some of the big steps forward that took Four Sigmatic to the brand that it is today. I'm curious, as you start a new venture over from zero, what lessons, relationships, or practices do you bring over from one success into a brand new venture? Speaker 1: Man, I feel like at Four Sigmatic, I've done every mistake and probably many times over. So there's a lot there, but they're also very different businesses, very non-competitive different industries and businesses. So some stuff doesn't transport. But what does is, I think culture and people are at the core of it. And I could do offshoots around that, like what kind of investors you bring in or decide to say no to. At HIRO, we've said no to investors. It's like, oh, that's probably not a fit. And then same with people you hire and what's the right fit between like you want someone who's scrappy, but you want someone who has relevant work experience. And that was a balancing act for Four Sigmatic. I would hire really passionate, amazing humans, but who were completely self-taught, had no clue what they're doing. And then I hired seasoned executives from big companies, but they're used to having a team of 50 people and now you don't. That was one of the main things, but yeah, culture and people are probably the main things I've learned. Speaker 2: So when you started hiring the team for HIRO, what did you prioritize? The young, scrappy people who figured it out on their own or the seasoned executives who were used to having. Speaker 1: 50 persons. You really want a balancing act of that, especially on something so mission-centric as HIRO is, trying to solve the global plastic crisis type of thing. But we hired the Ocean's 11. We hired the top PhD in this field and this person who had a 4.0 GPA at MIT in chemistry. You had to go and get the group together. Similarly, as in the movie Ocean's Eleven, you had to get experts in different areas. You know, like in that movie, there's this little Asian guy who's in the circus, but he can get into tight little spots, right? So they transferred that skill into bank robbery or casino robbery, so to say. And the same thing with us, we had to like, because nobody had done what we were trying to do, we had to kind of get creative on how do we leverage skills from other industries into our needs. Speaker 2: How did you pitch the opportunity to these team members in order to persuade them to leave whatever they were doing to come join some random startup? Speaker 1: It's really twofold. The interesting thing about Mycology or Mushrooms is there's a lot of really smart people and a lot of job opportunities just because it's been this Pretty small, quiet, emerging field with cult-like experts. People who are into it are into it. In their garage, they don't have a gym, but they have a little mushroom farm that they're cultivating a new species. But there's not a lot of job opportunities for them. So some of those people just having a cool project is huge, right? Versus maybe on the business side, we have a guy from McKinsey and a guy who built Pampers Pure Diapers at P&G. It's a little bit more of a broader holistic picture of what to do. But in both cases, it's a lot about the mission. You have a chance to do something destructive and positive for the world. And that resonates with not everyone, but with the people who resonates, it resonates a lot. Speaker 2: So theoretically, from a visionary perspective, let's take the product out of it for a second. Theoretically, we could develop a diaper that leverages the bacteria of the poop. And then composts and then it goes into the landfill and eats other plastics? Is that the idea? Speaker 1: It becomes soil and then those species can eat other plastics. Speaker 2: The mushroom in the compost? Speaker 1: I mean, the diapers are made out of the most common, like 70% of plastics are made out of the same plastics as the diapers made out of. So polyethylene, polypropylene, PET. So in theory, you could then Breakdown the other plastics in the landfills. Now, landfills are contained pieces of space. They're pretty complicated by itself, how they're built. It's different than your backyard. But yeah, that's the idea. And the challenge we face is like, think of Tesla saying that we want to do self-driving. Like you, it can work 99% of the time, but if there's crash on 1% of the time, and then that's the news headline. And that's also the one is like, And that's why we're not calling it biodegradable, compostable on day one, because we don't want that lawsuit hanging over our heads, right? Speaker 2: So you've created a diaper that biodegrades. And then eats other plastics. Speaker 1: Is that right? Yeah, we're not allowed to call it biodegradable yet. We have to do more, like our goal is that it's compostable. Speaker 2: My word's not endorsed by the FDA, FTC, SEC or any other government agencies or Maha or Mega or whatever. Speaker 1: Yeah, we're hoping that by the end of the year, we can call it compostable. There's very clear definitions of each, but like today, the normal diaper takes like 300 years to break down. And Biodegradable is everything will break down in every condition in 12 months, which I believe we could do in certain conditions, but if it ends up in a landfill in Michigan versus Florida, very different conditions, right? So that's the challenge for us to validate the consistent Consistent performance of it in all conditions is kind of the challenge. Speaker 2: Do you think that you have the chance to do something really special? Speaker 1: Yeah, for sure. Speaker 2: How would you describe that? Speaker 1: HIRO is focused on a problem that's insane. And I feel like everyone kind of knows that plastics are a problem, but they don't understand the scale. Like by 2050, we're expected to have more plastic in our oceans than fish. A couple of years ago, we passed the amount where on land, there's more volume and weight of plastics today than all animals, including human weight combined. Speaker 2: More plastic waste than animals and humans? Speaker 1: Animals, yeah. About two years ago. Wow. So the problem is way bigger than we realize. And today there's no end-of-life solution for plastics. And there's many kinds of plastics and it's a very complex problem. And I'm not saying HIRO can solve all of it or even most of it, but literally there's no solution today. So A, like having a solution, especially for the number one household plastic waste item is huge. Two is we are planning to publish the paper on our research and findings, hopefully inspiring other people to innovate in fields we can't get to, right? So yeah, I think it totally can both change the world and also inspire a completely new category. Because when we, Four Sigmatic created the original mushroom coffee 10 years ago, like we were laughed at. Today, it's a $2.6 billion industry. Globally, so like, you know, you can actually move the needle with some of these things pretty quickly now. Speaker 2: So how big does this vision get? You start with diapers. Speaker 1: Yeah. Speaker 2: But where does it go from there? Speaker 1: I mean, tens of billions of dollars in annualized revenue, but. Speaker 2: That sounds nice. Speaker 1: Yeah. I've never done that. Four Sigmatic is big, not that big. Speaker 2: I mean, you start with diapers. How do you follow that up? What do you try to tackle next in order to solve the problem? Speaker 1: I mean, we've had a lot of conversation about that. You could license the technology. There's so many other plastic items that get created. You could work with governments and municipalities on the downstream, so the landfills and the sites. I feel like that's a common problem that venture-backed startup founders do. Is that in order to get the funding, in order to do the thing, they need funding. In order to get the funding, they sell the dream, the 20-year dream. But then they start believing, drinking the Kool-Aid and believing that 20-year dream. But you can't get to the 20-year dream before you do the one-year dream. Speaker 2: Yeah, you gotta sell some things before the 20-year dream can come to reality. Speaker 1: So like, oh, people, why do people always use these Elon Musk examples? But SpaceX, like, oh, you're like going to Mars. Cool. Speaker 2: I like how your brain just went to think of any other example. Well, space, no, cars, no. Speaker 1: I actually have a good one. Colossal. You might have heard this company, really cool company. I just met the co-founder first time and they're bringing Wooly the Mammoth back. Okay. Speaker 2: As you do. Speaker 1: As you do. And super smart people, incredible cover. Speaker 2: I do appreciate that you called him Wooly the Mammoth. Speaker 1: Yeah. Speaker 2: Instead of the Wooly Mammoth. Speaker 1: Okay. Speaker 2: This is Mammoth named Wooly. Speaker 1: I'm sorry. I'm ESL, English. Actually, it's a fourth language. But you get the point. The mammoth is coming back. They're bringing back the mammoth. And the mammoth, I think the last time I was on your show, I also made a mistake. So this is a pattern. It's normal. Speaker 2: People are distracted by my good looks. Yeah, totally. Speaker 1: Yeah, I believe that. Yeah, you look great. Speaker 2: Thanks. We got lost in each other's gaze for a second. Speaker 1: For a moment. Yeah, I like that. Is that the mushrooms? Yes, could be. So they're bringing it back. But it's actually the hardest challenge because like They have to do a surrogate with an elephant, but then nobody's ever done a surrogate on an elephant in an elephant, let alone a mammoth in an elephant. It's a very complicated process. That's the big vision, but along the way, and I think these two are public knowledge, but they want to bring the Tasmanian tiger and the dodo. And those are like the Tasmanian Tigers apparently like a lot easier problem to solve. So, you know, they're going to solve that first. Speaker 2: I mean, there is a reason why the woolly mammoth died. Speaker 1: Yeah. Yeah. Speaker 2: It would be harder for them to live and A warming climate and a frozen climate. Speaker 1: Well, we'll see. Speaker 2: So I don't remember how we got to mating elephants to create extinct species, but I would like to ask you about the economics of HIRO. Speaker 1: Point is, if you're a new founder listening to this or you're even an existing founder, a mistake I've done over and over again that I would encourage you to avoid and be smarter than I am is like, Have the 10, 20-year vision, sure, but really focus on the next year to two years. A startup life is very unpredictable, and you're not going to get to even your three-year vision unless you execute on the year one. Do what you do now and crush that and then everything is optional after that and you have different doors open up, but don't get lost in the sauce too much. Speaker 2: Heroes 10 or 20-year vision is quite compelling. You create products that replace our everyday products that are actually solving a bigger problem. In the first two to three years, you got to sell some stuff. And you also got to raise capital in order to fund the development of that. You didn't raise a ton of capital for Four Sigmatic. In fact, I don't think you raised any at the beginning. It was a little bit later. So what was your approach for pursuing investors? Because both you and Mickey are successful in your own right. Somebody from the outside might say, why not fund it yourself? Why do you partner with people to throw money at it? How much did you need to raise? So this is a different approach than what you've taken in the past. What'd you do? Speaker 1: Well, we were able to raise money from really cool people that can be really helpful. So that makes raising money a lot easier because they can add more value than just capital. Now that's a champagne problem, right? The other part is biotech on both the pharma and non-pharma side in both cases is a very binary outcome. It's like power law. In the drug side, it's even crazier, but it's very expensive to get to a point to realize that it's a cul-de-sac and you achieve nothing. But if you win, you win big. Ours is not as extreme as that, but it's still a lot different than starting a supplement brand. You have to spend hundreds and hundreds of thousands, if not millions of dollars just to know if it works in two, three years of your life. In our case, It's working by our standards. Speaker 2: My first supplement brand, I ordered 100 units at $6 a unit. So my startup costs were $600. Very different than going out and developing a new strain of something that you're hoping changes the world. Speaker 1: Yeah, just the equipment and the lab are like hundreds of thousands of dollars. Speaker 2: How did you approach those people to invest in the company? Speaker 1: Um, honestly, Mickey did almost all of it. So I'll take that. Speaker 2: She's actually commented on this on the show where she says one of the smartest things she did was, I don't think she was talking about HIRO in this case, but she was saying when she went to pitch investors, She would be showing up as business Mickey and it just didn't work. It wasn't who she was. But when she started hosting dinner parties where she was showing up as herself and excitedly talking about vision, people would then ask her, how do I invest in this thing? And I found that so interesting and helpful because when you get to that heady mode of how am I going to accomplish this thing, we can overlook our greatest strengths. And that connection to our vision and passion that so welcomes in how other people can support it. Speaker 1: I hope she doesn't mind me telling this story, but there's another ripple to that same story of the dinner party. She was also an immigrant female raising money at a time where most, still today, most venture funding would go to men. And she was like, well, I could get angry of the game or I could play the game by its rules. And she got her friend, who's a British male, to explain, pitch the business, her business. He would tell the story at this dinner party with British accent and raise tons of money immediately. I find that pretty clever and creative and playing the game as is versus trying to change the game. Speaker 2: Very smart and wizardry, wizarderness. She has a lot of wizardry when it comes to that kind of stuff. Tero, the last time we were here, you talked about having three different modes that you tend to operate in, and you talked about grind mode, rest mode, and I think it was creative mode. And you made the argument that you can't be in more than one at the same time. And that was interesting to think about active rest, active creativity, choosing it, being thoughtful on it, allowing yourself to recover so that you can be creative, so that you can grind in the right direction. You've got three kids. You've got a really successful business that you're the CEO of. Now you have another startup that you're hoping inspires a new direction. For the planet, what mode are you in right now? Speaker 1: I was just telling the guy behind the camera that I'm just finishing like I'm in an eight-week weight loss period and a grind mode, and I'm heading to a family vacation after next week, and I'm going to get fat and sassy. Right now, I'm in last week of grind mode about to hit recovery, but active recovery. We're traveling with three kids, so it's not like I'm sleeping. 12 hours a day, we're doing stuff, hopefully seeing the northern lights, but you know, like, yeah, I'm finishing a grind period. Speaker 2: And how do you go into recovery rest mode? When you have a business that's launching, you don't go into rest mode at the beginning of launch. So you must have had to plan and be thoughtful about this way ahead of time. Help me understand how you manage these three modes. Speaker 1: First of all, we were supposed to launch two months ago and I was supposed to go on vacation after that, but that didn't work out. The product is made in Canada and there was some customs and tariff stuff. Long story short, that was not planned. But yeah, four years of prep makes it easy that a lot of the stuff is done ahead of time and planned and it's ready to go. Secondly is that HIRO has full-time team management running it. And at the end of the day, you can't do it without the team. I'm in a fortunate enough position to have a team on both companies. And if you're starting out yourself, that is not the case. And in that case, that would not be possible. Speaker 2: So the fact that you have the support of a team overseeing operations, that's what is allowing you to go into rest mode in this instance. Speaker 1: Yeah. And in both cases, there's actually a lot of reasons why me putting more hours to Four Sigmatic doesn't actually help Four Sigmatic. Because like the quality of Four Sigmatic, it heavily relies on the quality of the I'm a senior vice president and those senior people, they're a level of people that they don't even want me. They're micromanaging and doing stuff. My job is more like customer meetings, business development, opportunities, things like that. Those are easier to juggle on and off versus their work tasks, let's say ops or social media. You're always on. You can't go on a... Take two weeks easy because people are messaging and tagging you on Instagram. You got to be on it. Or if you have to produce product, you have to produce product. And that's just not like the job description of the CEO at certain scale. Speaker 2: I felt that. At certain scale, the job changes. And where I sort of think I am is that that is beginning to evolve for me and I'm playing this interesting war slash dance of letting go of the old and pursuing the new, but also That, by its nature, requires a different level of prioritizing creative time, prioritizing rest time, because the daily grind of it is not as effective as it once was. It doesn't move the needle to the same percentage that going out and making a key relationship does at this point in my career. So I have had this voice of Tero in the back of my head once in a while say, are you in grind mode or are you in creative mode? Speaker 1: Can I give you another one? Speaker 2: Please do. Speaker 1: In the same realm, I like to look at it by this like four fields. But one is like, what's the percentage of doing versus thinking? And when you're starting, you're 90% doing and 10% thinking. And at some point, you have to consciously push yourself to spend more of your days just thinking and not doing. Because every decision you make has such an outsized impact. It's an Archimedes lever at that point when you have teams and resources and money and stuff. The other one is how internal or external you are. Are you working in the business or on the business? Customer facing versus internally facing. And there's no one right answer, but like navigating throughout the year in and out of those boxes. Because there is a point when no matter how big the company is, you got to go and work in the business with the team on something hyper-specific. And then there's a time when you go outside and sell and you don't talk to the team internally that much, but you're just out and about in the world, right? Speaker 2: Yeah. At the beginning of a launch for something like HIRO, I would think it would be more doing. So it's interesting that you are planning your own creative and recharge time right around the time of launch. What is the launch plan for the first product in HIRO? Speaker 1: It's all urn media. So the diapers don't have a lot of margin. So that's another fun curveball. Speaker 2: But advertising is limited. Speaker 1: Yeah, little to no advertising. And sure, we have to do some education around the stuff we do, but some of that is a little too highbrow. So at the end of the day, it's word of mouth, PR. And getting the product in hands of people because it's a really soft, amazing diaper. So besides the mushroom part, it's an incredible diaper. So having parents try it out is like, that's the challenge. And for Better Forwards, we actually have a little bit of a supply chain issue out of the gate. We're not even able to blow it out of the waters in the first few months, which is a nice positive constraint so that we can make sure that we optimize everything before a big hyperscaling phase. Speaker 2: With limited inventory and limited You've got to be very thoughtful about how you use that time and attention, those customers. You kind of have to milk every opportunity that you get. So what do you do or how do you think about this entry process of how you treat the customers, what you're hoping to get out of them in terms of reviews or pieces of feedback, campaigns that you run in order to hit the market that you want? What do you do to maximize that window of limited inventory and that window of earned media? Speaker 1: Two things that come to mind is the amount of dialogue that you need to have, two-way, both ways, because we don't know what messaging works. We don't know what the reception is. We've done tons of test groups and focus groups, but at the end of the day, once you are actually on the market, what the reaction is. So having active dialogue is pretty important. The other one, to your point, is it allows you to polish around The edges of retention, customer experience, customer support, ops, which are usually stuff is when brands launch, they put rightfully so 90% of their time into acquisition. Because they have no customers, right? Speaker 2: Yeah. Speaker 1: So and they think acquisition is the path to solve all problems. And then if you talk to brands who've been around for a little longer, they'll be like, retention is pretty important. You know, so it allows us Obviously, I would rather have unlimited inventory, so I'm not saying this is a good thing, but it allows us maybe to spend a little more time on optimizing the funnel and the customer experience before cranking it. Speaker 2: Yeah, I view those times as your opportunity to develop systems so that when you have unlimited inventory, you can scale a little bit faster. But it's also a really good opportunity for you to take the resources that you have on the team and be very thoughtful about how you interact with those customers and getting feedback from those customers and leveraging every piece of positive feedback into a piece of content that you brag about. So you make the customer the hero in the story, which generates more buzz and gets people ready for the next launch. If you can just milk that period, In which you've got some limitations, it sets you up for that second launch or the official launch once you're clear. Speaker 1: And going back to one of your earlier questions, what I learned from Four Sigmatic going to HIRO, one is having urgency in those times. Like it doesn't mean you have to grind 80 hours a week during that time period, but it's very easy when you have the constraint of inventory of customers to sit back. I hear a lot of new entrepreneurs say they don't have the money or they don't have the inventory or this and that almost as an excuse to not take action. Versus like, no, you can't take action there right now beyond a certain point, but you can take action in these other areas. So having a sense of urgency is something I've learned over the years is that even in those lulls, again, you don't need to grind 80 hours a week for that, but you need to have urgency on during those slow periods. Speaker 2: What does grind mode look like for you right now? You said that you just went through a cut. You're managing one company. You're launching another company. You don't seem stressed. Speaker 1: Yeah, more tired, right? Speaker 2: I can give you some mushroom coffee. Speaker 1: Yeah, yeah. So it varies depending on how much travel is involved because that's a big X factor. I have some travel, but the last two months I haven't had to travel, so I've been being able to really focus. But that can change everything, just as a disclaimer. For me, it's helpful when I oscillate between caloric deficit, caloric surplus, hopefully gaining some muscle, not much, but some, along the way is like that puts your body naturally in a certain, your nervous system in, you know, one of the other ways of like, do you have enough calories? Your body's telling you to, you know, pump more cortisol. And that helps me to marry those two seasons together with rest and activity. Speaker 2: The other one is, do you mean that you will cut during a grind during a grind? Speaker 1: Yeah. Then you stimulate I get that it's counterintuitive because if you're in caloric deficit and you're tight anyway and then you work hard and you're even tighter, but for me, it's almost easier to fast and have a clear mind and drink two extra cups of coffee that you normally wouldn't drink a cup of coffee and just go Crash the boards, you know, and go hard at the paint. And that is easier for me personally. And then when I know I get to chill, I can slow down, sleep, rest, recover. It is a lot easier. Same with walking, like during the time of a cut, I pump up the steps a lot. I mean, it's a great time for me to take calls or to be active and get fresh air. Speaker 2: I'm smiling because I have experienced this just accidentally, and it comes in waves. I will have times when I'm really focused on something and I'll forget to eat, or it's really easy for me to have extra calorie burn, and I can sustain that for a little bit. I can't sustain it all the time, which means to me that during those times, I might be under-recovered. Now, there's an interesting balance between just saying, I'm under-recovered. I just need to take a few days off or chill. There's something else about planning it and being strategic about it and saying, I'm going to grind for 8 to 12 weeks. And then I'm gonna take a week or two, and I'm going to refuel, and I'm going to rest, and I'm going to sleep. I am very bad at that. I'm very good at just saying, grind mode, let's go, and then, you know. 24-7. Right, and then eight weeks later, be like, I'm sad, and I don't know why I'm sad. Speaker 1: Two things why it works for me, and I'm just speaking for myself, it might not work for you, but there's like a level of FOMO or like this constant, Again, just for me is I'm questioning like, you know, should I be doing something else? And there's this self-doubt late at night. They're like, oh, am I doing the right thing? Speaker 2: That's just you. No entrepreneur has that, Tero. Speaker 1: But having that intention helps alleviate a lot of that self-doubt for me because I'm like, Yeah, you might be doing something else, but right now, this is the period, right? This is the period you're in. The other part that is easier for me is when I'm in that mode and especially if I'm eating less and pushing harder, there's something almost spiritual about that. Like that tough period. I can't remember what the Japanese word is, but they have this annual heart challenge, Misogi or Misoyogi or something like that. And they do like every year one thing hard. And you can do it twice a year. I'm not saying that, but like the point of that intensity I think helps a lot. Speaker 2: That is the single reason why I cold punch. Speaker 1: Yeah. People say it's good for other reasons. Speaker 2: I don't know. I don't care. The only reason why I do it is because it's hard. And if I do that for three minutes, Then the hard conversation that I have with an employee is a little bit easier because I have already taught my brain I can do something that I don't want to do. Speaker 1: Yes. Speaker 2: This is the reason why I wake up earlier than I want to. I hate, wait, the worst part of my day is when the alarm goes off. As soon as I'm up, I'm good. But those either 10 seconds or Twenty-five minutes that I delay getting out of bed are the most miserable time of my day, and as soon as I'm out of bed, I'm good. And if I wake up earlier than I want to and I work through that voice of, this is hard, I don't want to do it, and then I go either work out or jump in a cold bath, I'm great after that because everything else is easier at that point. And you're doing the same thing but over a period of time. I'm choosing this eight-week grind. I'm choosing this 12-week sprint. And maybe I will discover that I need to be doing something else. But for now, I actively choose this time. Is that a fair summary? Speaker 1: Totally. I don't know if it's me getting older or having kids, but I've noticed that I don't recover the same way at all anymore. What used to be that I was good with a long weekend, but right now, sometimes we went to Mexico for 10 days. I feel like it took me seven or eight days to get out of the Even my wife was saying, it's like, chill. We don't have to have a schedule. We're on a program here. We got to go there. We got to do this. It's like, no, slow down. It took me a legit week just to get into the recovery phase. Speaker 2: I can relate. What is it like for you coming out of that mode and going back to running a $100 million company and a startup and a family? Speaker 1: Out of the recovery into the work, it's pretty easy usually. A good indicator that you've had a good vacation or a slow period is that you forgot at least one password and that you're itching to get back to work because that's the beauty of the recovery into creativity. Once you fully recover, you're starting to get ideas, ideas that you want to execute, ideas or new ways of looking at the same old problem, fresh perspective because you're not so tight and locked in. I'm just eager to get going. Usually, I don't have that problem of motivation. If I have a motivation problem, that probably means that I'm still burned out or some level of exhaustion. Speaker 2: Do you feel any conflict between the company that exists and is successful versus spending your time on the project that is a new start? Do you feel any obligation to one versus the other or You have two kids vying for your attention, and one's not getting all of you. Do employees complain to you? I deal with that, and I'm running seven-figure businesses, not nine-figure businesses. Do you feel any of that tension, and how do you deal with it? Speaker 1: The other business is a zero-figure business, so technically it evens out there in the middle, so we're in the same boat. I don't, and I probably would have before having kids. So it's funny that you bring that up. But it's like, do you feel guilty you did not play with the other kid because you played with the other kid? But if you're trying to play with every kid all the time, and it's not like love. Uh, or ability to bring results is limited in that way. It helps when they're non-competitive, but their synergies, like a lot of the work I do with mushrooms or meeting people helps both companies or me having my YouTube channel. You know, can help both businesses. So the other one- That was a really keen insight. Speaker 2: Like I'm just, I'm marinating in that a little bit where sometimes I will get into this mode of if I am, even if I take a vacation, sometimes I feel like I'm letting the team down in some case. But in reality, me being at my best is good for all parties. It's good for all businesses. It's good for all team members. And that, That's number one. And so the relationship that I meet is good for all companies. The investor connection that I make is good for everything that I touch. So I appreciate that. Speaker 1: And you never know what helps who. And again, as long as they're non-competitive, like in this case, and there's a clear synergy with mushrooms. I go and speak, I have a speaking engagement in Troit and I'm speaking on stage. I don't know who I'm going to meet, what's going to happen. It's like you're talking about your journey, right? And the other thing that I've helped me is thinking of it as a test. For example, and I've done this before I had kids and before HIRO, I would consciously tell my team I'm two months off, even though in reality I'm not actually fully off, just to see what breaks. It's like a test. It's like, okay, I'm going to not be available. If it's true emergency, text me. I will be available at any point. Let's see what happens. And it's also, especially for the more senior people, they welcome it because it's like their opportunity to step up and show what they can grow. And usually you find out something that did break and you're like, well, we didn't have a system or process for that and we should probably have it because this happened. Speaker 2: When you started Four Sigmatic, I don't mean to oversimplify or to read your mind, but this was- Please do. This was a business that set you up financially, gave you your career path, developed your relationships. It was not your first go in business, but it was your first big success. Speaker 1: Correct. Speaker 2: And you received a lot of Edification, relationships for that. With HIRO, you have a problem that you're solving. This isn't about what Tero gets. This is about what you can infuse into a product and a business that creates a big impact. Are those two different drivers for you? Does it feel different to approach a business in which you may lose all the capital that was raised or it could be a big success? Is that stressful like a first startup is or is there a different energy that you bring into it? I'm just genuinely curious. Speaker 1: I don't know if something is wrong with me, but in either company, I've thought about that. I would actually argue that- What? Speaker 2: Come on. Speaker 1: Really? No. Hear me out. Why I think Four Sigmatic was successful is not that me or the founding team was smart or experienced. We were true believers that mushrooms can heal. If you would have met me then, I had very extreme beliefs about herbalism and natural healing. I mean, I still believe in it, but like at that point, it was almost like religious, right? And the belief in mushrooms, which I still have, but in a different holistic And I think that's why we were successful, not because we were seeking validation or whatever it is. It was like we truly believed in it. And I think that fueled the success. And I would argue that the worst we've done as a company, not based on P&L, but generally just the vibes, is when it became focused on trying to be the Kellogg, Nestle, whatever thing, and lost. And became like very vanilla wellness. And I think authenticity in anything, especially that you eat, I guess with diapers too, because it's your baby. It's like people want to feel that you care for the right reasons, even if what you're saying is not the right thing to say, because you had no clue. Like in the beginning, we didn't even have the brand name on the packaging. Just to give you how bad we were. Like nowhere in the packaging, it said the company name. So it's really interesting. Speaker 2: And Tara, I don't mean to shit on any of your competitors, but well, here I go. Laird Super Creamer is basically just a ripoff of Four Sigmatic and nowhere in that company is there this palpable feeling or belief that this blend of mushrooms is good for you. It's just like, This is cool. And they've got 40 different SKUs, and they just seem all over the place. And the only reason why this stands out to me is because they're a publicly traded company. And so watching that as a brand launch and do what they think is best for shareholders, but not have the same type of soul that a Four Sigmatic has, I've watched what happens to that company and they're down like 95% from their highs. And from the outside perspective, it just seems obvious to me because they have 40 or 50 different SKUs. I don't really know what they stand for. That's not a company that has a clear thesis to me. It's just a bunch of products. And the way that I'm hearing you describe it is that with Four Sigmatic, even if it had been a $5 million company at its peak, there was this belief and conviction behind what you were doing. And the more that you stayed in that zone, the more the company grew. And the more that anytime you deviated from that, that's where the company sort of struggled. Speaker 1: Correct. Speaker 2: I'm processing this correctly? Speaker 1: Yeah, 100%. Yeah, very much like that. Obviously, there's a level of maturity that you have to develop, especially when you enter retail, which is more of like an oil tanker of an industry. But yeah, that was pretty much the story of Four Sigmatic in brief. Speaker 2: Do you have an opinion on Laird? Speaker 1: I actually know Laird and Gaby and I have a lot of opinions, of course, but I'm not going to say anything bad about Laird because I feel like I have some friends in the surf industry and for some weird reason, because he got towed into the wave versus paddling in, the whole surf industry likes to make fun of Laird all the time. And the surf geeks, he's the most common area of jokes. So I always felt bad. He actually kind of revolutionized surfing, but all the surfers hate him. Not all, that's unfair. Many, many. Speaker 2: All I know about the guy is that his name is on a publicly traded company. Speaker 1: Yeah. He's a surfer. Speaker 2: That's right. That's why he's famous. Speaker 1: He's actually a pretty impressive athlete and human. So I would say that of all the competitors we have, we could come up with some less impressive founders and brands. Speaker 2: They're the only reason why I bring them. Speaker 1: They're very spread, very thin into a lot of things. They try to be a lot of things for a lot of people, and they're publicly traded, and yes, the stock is down like over 90%. Speaker 2: This is what is so hard to describe, and so I choose the word the soul of a brand or the soul of a company. You can't quite put your finger on it, but there is an intent to create for a specific group of people. And what you're describing is that Four Sigmatic always had that. It always had this intent to create and serve for this group of people. And HIRO is doing the same thing. And at some point, a lot of entrepreneurs or business leaders lose it and do what is best for the numbers, which seems like the logical thing to do. And sometimes it works short term. I don't see it happen. I don't see it work long-term very often. The example I'm thinking of is when we were building Shear Strength the first time, we grew 100%, sometimes 200% per year except for one year, and it was the year in which we said, our competitors are launching these products. And they're starting to eat into market share a bit. Let's launch competitor products to them. They did not have anything to do with our core demographic or what we stood for. They were just opportunistic products. And that was the one year that we were flat. We did not grow. And we said, well, back to the thesis, back to our core customer, our core messaging. And then the company started to grow again. And that's when we had the exit. Speaker 1: Yeah, I mean, that is my experience in many ways with Four Sigmatic too, is like, there's when you're the band of pirates, there's a sheer energy that translates versus if you try to be the Navy, you're not going to have that energy. Speaker 2: It seems to me like HIRO has, is almost forced to stay in that mode because you're so focused on a problem. If the goal is to solve a problem, you've got to align all of your energies. Speaker 1: We have really rich and powerful enemies, at least, out of the gate, so if nothing else... Speaker 2: Oil companies? Speaker 1: Yeah, oil, petrochemical companies. I could name them, but you can also Google them. And then even the diaper industry is really owned by two companies, P&G with Pampers and Kimberly-Clark with Huggy. So it's a very... And landfills, by the way, one of the least regulated and stuffiest industries. I think a lot of people know the reason why, but waste management is a fun underbelly too. Speaker 2: What does the world look like if Hiro is hugely successful. Speaker 1: I actually don't think I know the answer to that. I've been thinking of the AI, which is an even bigger force multiplier. I don't think any of these AI people know how AI gets translated even in a couple of years. The cool thing is if you actually create something new, even with the mushroom coffee and mushrooms, I couldn't foresee certain changes in culture and trends. I have a theory, but I don't know if I'm even remotely close. So it will be interesting to see what that spawns out. When you change culture, You can instigate change, but you cannot control change. Then the culture takes over and it's like a force much, much greater than any single company or person. And we've seen a lot of powerful super celebrities fall down under the culture too. And I think that's just the case. Like you can influence culture, but you can't control culture. Speaker 2: What would you want it to look like if you could have your way and HIRO is hugely successful? Speaker 1: A thing that's been resonating a lot with me lately talking to the PhDs and scientists is inspiring a whole new field of change of this micro-remediation or using nature to heal nature. And there's so many applications and opportunities well beyond what HIRO can execute that other talented, great people could pursue. That's been a thought that's been really like heartwarming and resonating with me lately. Speaker 2: One of the things you mentioned about the oil companies and petroleum companies is you don't realize how subsidized they are, how many incentives there are to keep that machine going. And in some ways, that's a headwind to you, but in other ways, if that's what the mushrooms eat... Speaker 1: Well, that's the cool thing, which I hope is the solution that brings everybody together is a lot of sustainability brands We are very mission-centric, but they are dying on the hill that you should never have plastics. But for example, every car, like if we wouldn't have plastics on our cars, the cars would weigh five times more and we would use more either electricity or gas to drive them. Medicine, like imagine you're being sick and you go to the hospital. And they don't have sterilized needles with the syringes. Speaker 2: They're like, oh yeah, your aura is way off. I can see. Speaker 1: Yeah. And there's a lot of reasons why the world, we have a lot of silly single use plastics, but we also have like a lot of use cases for it that is just like, It's hard to replace. In a way, plastics were created because rhino horns and elephant tusks were replaced and ivory was replaced. Speaker 2: Every innovation is in response to a less efficient solution. Speaker 1: Otherwise, it would not win. Speaker 2: It changes the world and then it creates a new set of higher quality problems that people like you and me have opportunities to solve. That to me is capitalism. It evolves. So we don't get to this point in human evolution if we don't have fossil fuels and plastics. And now we have other problems that we need to solve. So you're seeing this as an opportunity to kind of bring everyone together. Speaker 1: Because it's an end-of-life solution to a problem we don't have. Instead of, like, for example, there's been a big wave over the last couple of decades to come up with these, like, alternative plastics. So if you go to the grocery store and they give you the green bag instead of the actual plastic bag, the problem is those alternative biomaterials are still plastic, essentially, but they break easier. They create more microplastics and they have other issues that they create. Most importantly, the bag breaks and your groceries are dropped on the floor because the bag is so weak. So, I think the solution I hope that we're offering is more of like bringing everybody on the same page. It's like we can use these plastic in certain areas of our life where they're truly value-added and have an end-of-life solution that's more sustainable. Speaker 2: That, to me, is what I call collaborative capitalism. There is this problem and there is a solution to it, but you don't need to make an enemy in order to create a solution. You can just create the solution. And it's good for everybody, which means consumers prefer it, which means that the other producers or contributors to the problem are glad that you exist, which means that they're likely to collaborate with you. And as a result, we take the next step forward. In our development as a species and as an economy, what asks of the audience, what requests, what would you like to see happen in the next chapter of HIRO? Where can people get in line to support the brand as investors, influencers, contributors, customers? What would you like to see happen? Speaker 1: If you have kids in diapers or you know someone in kids in diapers- Or adults in diapers, let's not discriminate. Actually, it's funny because adult diapers have now passed the baby diapers in volume of- That's why I said it. Yeah, you knew it. You knew the stats. Speaker 2: That's where I was going. Speaker 1: Yeah. It's more and more adults need diapers. So aging population and leakage. So if you know anybody that has a baby in diapers and in the future an adult in diapers, check out HIRO and hopefully you get to try it. Initially available just online on the company's website due to the limited capacity. We have a little HIRO's journey subscription you can get on. And other than that, I don't know, give mushrooms a chance. Speaker 2: Tero, it's great to see you. I'm really excited about what you're doing. Very inspired by you as an entrepreneur. Looking forward to seeing how you inspire the world and tackle this problem. Thanks for being here, man. Speaker 1: Thanks for having me on. Speaker 2: Even if you're not an entrepreneur, we create change when we vote with our dollars. Where we spend money determines where there is new innovation. So I'm curious to hear from you. What brands do you follow? What brands do you support with your dollars that are out there making a difference? I want to shine a light on brands like HIRO that are out there solving a problem and doing it in a for-profit way that is good for their shareholders, good for their employees, good for everyone who is involved. Do you have a brand that you support like that? If so, I think it would be really cool if we as a community, in the comments of this video, talked about the brands that we believe in, that we want to support. And by you leaving a comment and looking at the other comments that people leave about the brands that they support, we as a community can support the businesses that are out there creating change. Because like HIRO, Some of these companies don't have the margin to be able to advertise as aggressively as some of the big companies. They don't have the tactics or they don't have the capital. To be able to stand out in a noisy marketplace. So I consider it part of our job to shine a light on the brands and businesses that are creating change in this world. I'd like to hear who you support. Please let me and the rest of the community know in the comments of this video what businesses you support because they're creating change and creating a better world for their shareholders, their stakeholders, and the rest of the world. Thank you for watching. I'm Ryan Daniel Moran with Capitalism.com and I'll see you on the next episode. Take care.