Building a Successful Protein Bar Brand in a Saturated Market – Will Nitze of IQBAR

Sushant Misra  

Hey there entrepreneurs, my name is Sushant, and welcome to Dropbox. This is a show where I interview successful ecommerce entrepreneurs, business executives and thought leaders, and ask them questions about their business story and also dive deep into some of the strategies and tactics that they have used to start and grow their businesses. And today, I’m really excited to welcome wil NITSA. To the show, will the founder and CEO of IQ bar IQ bar is the first nutrition bar optimized for the brain. And today, I want to ask a few questions about his entrepreneurial story, and some of the strategies and tactics that he used to start and grow his business. So thank you so much for joining me today at Trep talks.

Will Nitze of IQBAR  

Yeah, thanks for having me.

Sushant Misra  

I should I should have clarified your name did I pronounce your last name properly? Okay, cool. So let’s, uh, let’s get right into it. I’m very interested to know, you know, what motivated you to IQ create this company? IQ bar? Yeah, what was the can you share your story of entrepreneurship? How did you get started? With the business?

Will Nitze of IQBAR  

Sure. Yeah, I mean, it was a combination of a number of elements. Number one, I always wanted to start my own thing and create something from scratch and be my own boss, I just didn’t know when that would, when would be the right moment for that to happen. The second variable was, I didn’t love my job, to be honest, I didn’t hate it. But I was just not very passionate about it, I was selling software to oil and gas companies. And I got quite good at it. And I learned a ton of skills. And so I’m really glad that I, you know, worked for someone else out of college and build, build all the finance, foundational skills that I you know, anyone needs, you know, PowerPoint, Excel, how do you run a meeting? How do you write a good email? Like, how do corporate hierarchies work, all of that was important for me to learn, but I wasn’t passionate about it. And so that certainly helps. And then, you know, I, I had always been even before college had, I’d been kicking around ideas with myself with friends with my family. And finally, I got to an idea that I felt I could do an own. I could literally create the product, and basically own all phases of the business at the outset. Of course, that’s not scalable over time, but and that was in the CPG, the consumer packaged goods world and more specifically in this in the food and beverage space. And brain food was this thing that had not been done before. I was also super interested in the brain, I’d studied psychology and neuroscience in college. And so it was just kind of the confluence of a ton of different variables. At the same time, that was about 2017, early 2018.

Sushant Misra  

So how did you I mean, a protein bar if, as we think about it is quite a generic product. But your bar, of course, is created towards this specific idea of something you know, about brain nutritions? How did you really come to this idea? And how did you know that if you created this bar, this is this would be something that would actually sell in the marketplace.

Will Nitze of IQBAR  

I didn’t know. I mean, that’s kind of the beauty of entrepreneurship and the scary element. Now you can make a bunch of educated guesses. But, you know, there what we didn’t know that people wanted brain food, and ultimately, they don’t really want that they want brain and body food is something we’ve learned. So I mean, the toughest component of any startup is just starting. And you should really assume that the what you start with is not where you’re going to finish with and that you’re going to have to pivot 10 times anyway. So it’s not that daunting, that your first prototype you know, if people don’t want your first prototype, no big deal, like just pivot until they do and that’s sort of what we did into the our bars evolve over time. And then also, we’ve launched an incremental product line and we’ll launch new product lines, and we’ll probably pivot those a few times before Get product market fit.

Sushant Misra  

But your first product was really the the bar. Can you share a little bit about how did you actually come with the product itself? How did you test us that? What did you think was going to be important in the bar? I’m assuming in the in the birth fifth. nutritional content is important, but at the same time, taste and flavor is also very important.

Will Nitze of IQBAR  

Yeah. Yeah. I mean, this is all things I’ve learned over time, not not really that I knew from the outset. But people buy certain things with certain extra, you know, they tie expectations to form factors. So they expect certain things from, you know, a morning beverage, and they expect very different things from a protein bar and different things from a bag of chips, and so on and so forth. And so with protein bars, typically, they’re looking for dietary considerations and nutrition, right? Because if all you cared about was tasty, by a Snickers bar, you know, or if all you cared about was like the absolute freshest meal, you eat a salad. It’s why do you buy a protein vary by protein, Americans are getting certain nutritional value propositions and more specifically protein, the, and within that, you know, some people are on the plant protein bandwagon, some people are still consuming whey, whatever. And then sugar and carbohydrates are other really major ones. Fiber is kind of a third one that people tend to care about, too. But so that being said, you start to make it taste good. And there’s a whole host of other considerations, mouthfeel, and things like that, as well as cost of goods and 10 other variables, but just from a consumer standpoint, it’s really diet and, and first and foremost, protein and sugar and carbs.

Sushant Misra  

So how, how does IQ bar differentiate itself from other bars, protein bars in the market? And is your goal to to take market share from other protein bars? Like, you know, someone who is used to purchasing a certain other brand of protein bar? Is your goal? Do you like target those kinds of customers? And if your goal to say, you know, if this if this person tries IQ bar, and they know, you know, how it benefits the brain health and so forth? We can we can switch them from that bar to this bar?

Will Nitze of IQBAR  

Yeah, I mean, we definitely are trying to take market share from others. You know, in an ideal world, you’re bringing people into the market, as well. So, you know, it’s just a bar is just a shape, really, I mean, it’s just a form factor of food. And if you’re hitting on certain dietary, and also it’s, it’s convenient. And so if you’re heading on a certain dietary value propositions that are a good fit for someone, you might, you might convert them into being a bar person. But generally speaking, people, you know, either are bar people or aren’t. And so yeah, you are the low hanging fruit certainly is people who already buy bars, you can be a better more complete offering for that person, then, you know, kind of are whatever, whatever else they’ve been eating.

Sushant Misra  

Can you share a little bit about the product, the early product development process? And how did you scale that to, to make it more of a mass manufactured product? And what can other people learn or other entrepreneurs learn from that?

Will Nitze of IQBAR  

Yeah, I mean, it’s trial and error. Honestly, if I already give you one phrase that encompasses it all. It also depends on how you want to do it. Like the way I did it was I just sort of I bought a ton of bars, I looked at their ingredients, I looked through Nutritionals, I talked to as many people who had formulated it, or man and or manufactured products in the past and just sort of triangulated a ton of information. And then, you know, did a lot of Excel, Microsoft Excel work of just, here’s how, you know, here’s the inputs that would create what I think would be a great output and then you you call these ingredient companies, and you say, Hey, I’d like I’d love a sample of this. And then you get them and then you make it and then it’s terrible. And then you just shift a few things here or there and slightly less terrible. And then yeah, you keep doing that until you get to someplace where you’re like, Okay, this is actually feasible. And then you sort of have to do a little bit of rework, because then you have to go to a manufacturer and say, Hey, here’s my formulation, and they’ll say, Well, that’s not gonna work for XYZ reason, and you have to make 10 more tweaks. And then ultimately, you have something that can be that can be manufactured. And then you do manufacture it. And you get to get it out in the market, and you get 1000 responses of how it is, or how what people think of it. And then you make 10 tweaks based on that. So it’s really just constant iteration. And it’s kind of like what I was saying earlier about pivoting, it’s like, that applies also to just the quality of your product, you you want to constantly micro pivot or your product until you basically until you don’t get people complaining,

Sushant Misra  

or majority, I’m sure there’s always going to be a few people that will find something. Now, when you create, like a new flavor or something, is it still the same? Like, I’m assuming you’re not doing that tweaking anymore? If the manufacturer you’re giving them directions, and or, and they’re helping you produce new flavors and so forth?

Will Nitze of IQBAR  

actually still is me. I’m jet, we’re just now starting to transition that responsibility over to someone else. But yeah, I mean, it’s been me for forever. For a number of reasons, it’s really expensive to hire a third party to formulate products. It takes a long time, you have less control, they don’t always do it the way you want to do it. And so I’ve always taken the had the opinion that I’d rather just do the most, like learn to be an expert at the absolute most critical product related things myself. Because then, you know, you only have yourself to blame. It’s sort of like starting a software company, but not knowing how to program. I just don’t I would never want to do that.

Sushant Misra  

So in terms of financing, I know you ran a very, very successful crowdfunding campaign, can you share a little bit about, you know, what went into that? What kind of preparation? What kind of marketing you did to make that campaign really successful? What can other entrepreneurs learn from it? We’re trying to do similar kinds of things.

Will Nitze of IQBAR  

Yeah, yeah, that was a while ago, and who knows if this stuff’s still relevant. But um, yeah, we did a Kickstarter, mostly because we didn’t have any money we needed to generate, it’s not even necessarily generate kick Kickstarter funds to then fund the business. Because it’s, it’s really the way we looked at it, which is how I think most people should look at it as generate a bunch of sales. So that you can, you know, establish a valuation of your company and go out and raise raise, you know, not a ton of money, but enough money to really get started. And that’s how we treated it. So yeah, I mean, that the tactics were that the problem with the things like blog posts, that you’ll read it, they all kind of say the same thing. And everyone kind of tries the same things, Facebook ads and press and none of it really works, or none of it worked in our experience. And the less sexy tactics like literally spam you know spamming everyone you’ve ever met. Anyone you’re friends with LinkedIn, friends with on LinkedIn, like kids, people, you went to middle school with, like friends and family. And it’s really a momentum game. And I think we had over half or not over half, but just about half of the backers were organic. So we just built a lot of momentum. Just from sending out email after email after email. And then, you know, we got listed as a project they love. There’s a little like banner they put on and then we’re on the front page of the New of the food section. And then all this organic traffic came in who I’ve just people who go to kickstarter.com and look for projects to back. And then we got featured in their newsletter and there’s just a couple other sort of hacks but it’s not all the traditional tactics in our experience really did not produce a positive return on investment for us.

Sushant Misra  

And was that the point that you realize that this was going to be a winner? Like was that the point where you realized that there was a product market fit? Even though you had put all that effort to drive the demand?

Will Nitze of IQBAR  

No, not at all. Because they bought thin air, they didn’t actually buy anything. I think the moment you stylish product market fit is when someone buys a product and then revise it. But it was certainly better than not having a successful campaign, it certainly allowed us to, it certainly gave credence to the idea that this was a something people wanted, at least in theory.

Sushant Misra  

And, and for one, once you had that money, and you brought the product to the market, at what point did you realize that? Okay, this is really working?

Will Nitze of IQBAR  

Um, I don’t know, sometimes I you know, you ask yourself that every day at any stage who have the, the business your business can can fail at any time, no matter what. So it’s like, it’s not working until you’ve really achieved scale. Um, but I mean, I think probably when we started generating, like, 20k 30k 40k 50k, on Amazon a month, that was the point at which I was like, okay, you know, there is a market, and we can grow that market. So I think it was really the Amazon growth, early on, that started convincing me that it was had legs.

Sushant Misra  

And that growth on Amazon, was it completely organic? Or were you doing like Amazon Marketing? Or something like

Will Nitze of IQBAR  

that? No, no, definitely. I mean, some was organic, but definitely, you know, search marketing, mostly at that, at that point. As well as just, you know, best practices, having good listings, getting reviews, etc.

Sushant Misra  

Did you ever try to go for Shark Tank? I know, I know, you you went to the venture capital route? What was the rationale behind that? Was it really just to get distribution like contacts who can get the product distributed to a lot of the retailers and so forth?

Will Nitze of IQBAR  

to different questions. The first one, did we ever go Shark Tank? No. Other we did apply, and we got to the final round. But for whatever reason, I think we were too large, maybe at the time, and it was less interesting for them. But the second question on venture capital, pretty easy, we needed money, and they have money. You know, if you could never raise money, then you would never raise money. But eventually, you get to a point where you just need X amount of dollars. And once you’re getting into the, you know, let’s say two, two and a half million dollars, it’s very hard to raise that from individuals and you sort of have to go, you have to find your way to institutions, and you want to find the best, you know, most quote, unquote, strategic institutions possible for you, you and your business?

Sushant Misra  

And did they help? Because when I was looking at your business, I mean, the one most remarkable thing that I at least found was that you had distribution in about like, 7000 different stores or something within the United States. Is that right? Yeah, yeah. So is that was that something that you did yourself? Or was Was that something that the the venture firm held? help you to do that? Because I guess that’s, that’s probably one of the main reasons why a lot of founders also go to Shark Tank. All right, just to get the help from those sharks. Get there? Yeah.

Will Nitze of IQBAR  

I mean, sort of, they go on Shark Tank because they want publicity. It’s a free commercial. And yeah, I do think like, you know, certain sharks have rapport with buyers at certain retailers. But honestly, that’s it’s not like a win to get into a retailer. necessarily. I mean, it is, if it’s a good fit, and you think you can sell well and yada yada yada, but that just being in a lot of places, is can actually put you out of business if you’re not careful. So You just want to be careful about going into the right retail chains. And you’re asking how you do it, it’s fairly basic you, you pitch to Category Manager or buyer and on they have schedules, you know, and review periods and you submit for review, and they say yes or no. And there’s an off cycle, you can pitch people off cycle. And it’s, you know, sort of like any sales cycle where you find the decision maker, you find out when they’re evaluating potential, potential solutions, and then you put your solution. And then one out of three, or one out of four of them hits and then you go into that chain of stores and do everything you can to succeed there. And just over time, you keep adding those those doors and some time subtracting doors.

Sushant Misra  

But, yeah, and you were saying that that if you’re not doing it, right, you can actually go out of business. So does that. Currently, like if it’s online, your bigger chunk of your bigger revenues or the more of the retail sites?

Will Nitze of IQBAR  

Online is the majority of the business, although it’s, it’s getting to be close to half and half. I think it’ll be closer to half and a half. And then 2022, just because of some some large brick and mortar customers that are coming online. But yeah, I mean, online is a beautiful thing. There is no review schedule, right. And, you know, you there’s a way to win online. And if you’re smart and diligent and hardworking, you can do it. You control your destiny, I guess, is what I’m trying to say a little bit more online than in brick and mortar. But it has its own challenges, you know, you’re shipping out individual parcels rather than pallets. You know, you have to advertise, which costs money, and you’re building a really like, net profitable online business is quite tough. So it’s just, there’s pros and cons to brick and mortar sales, and online. If you really want to get big and scale, to a large extent, you really have to be in both.

Sushant Misra  

So online, you would say it’s really about data optimization, like if you’re doing advertising, it’s really about getting to that level where your return on adspend is, if not positive?

Will Nitze of IQBAR  

Yeah, I mean, some people would even say you don’t even ever have to get to that point, although I think that Todd is changing. You know, if you’re like a beverage company, right, you may never turn a profit. And then you just want to get big enough to get bought. We’ve always taken a different approach and had a different philosophy of we need to have a good gross margin. And we can’t rely on artificial variables like funding and, and or acquisitions. So yeah, I mean, we, we think long and hard about all the all of our elements of our cost structure.

Sushant Misra  

Which which markets are you currently in? Are you are you selling mostly in North America? Or are you another market International? Market? Full? Yeah, the

Will Nitze of IQBAR  

vast majority in the vast, vast majority is, is North America. And really, America. There’s so many headaches with international selling, especially in the COVID era. I mean, it’s just brutal. It’s hard enough getting ingredients imported. So, you know, every country has a different set of regulations, different labeling requirements, it’s just not very scalable for a startup.

Sushant Misra  

Interesting. I saw on your website that you were using both email and SMS marketing, I’m really interested to know is his email going away SMS is the new email. Do you find SMS to be more responsive in terms of like converting fields and those kinds of things? What are your thoughts on both?

Will Nitze of IQBAR  

Yeah, I’m not super qualified dance, because I don’t I don’t do much of the actual creation of the messaging or distribution of the messaging and, and measurement of it. But just generally speaking, certainly SMS has better response rates than an email. You know, on average, just because it’s newer and people are less fatigued by And it’s a quick response time and just a whole host of reasons why. And eventually, everyone will be in SMS and you’ll feel sort of set, it’ll be saturated, and then there’ll be some new thing. But generally speaking, the newer the communication factor, the higher your open rates, and higher your results will be So, um, you know, that being said, email is works, it’s still tried and true. And it’s really just a question of like, how do you communicate with people in as many ways as possible? That is, you know, maintainable as a small team. So, now Instagram, direct messaging and comment responses. And that’s another way to communicate with people. So it’s just a question of what communication methods are driving the best results?

Sushant Misra  

Are you are you trying tick tock, tick tock? Is that the new kid on the block? And it’s like really? Getting big now? I think a lot of different people are getting fulfilled from tick tock.

Will Nitze of IQBAR  

Yeah. We have dabbled in it. I’m not a tick tock user. But my wife is. And other folks I know certainly are and obviously, it’s gigantic. And and some brands have have done pretty well on it. Certainly, there’s a lot of green pasture in that space. For the taking, but it’s it’s just sort of like you definitely don’t want to do it willy nilly. You know, you want to have a strategy and and that will work for that given platform. I mean, is it excuse obviously, way, way younger? The content is completely different and shorter form, like, it’s just a different ballgame. So I think most brands just haven’t like, there isn’t a playbook for it, and therefore, a lot of brands don’t know what to do for it, and with it, right? Whereas like Instagram, it’s like, There are a zillion playbooks, however good they are, I don’t know. But it’s, um, there is a way to do it. Whereas Tic Toc, it’s kind of like the wild west right now.

Sushant Misra  

Interesting. Can you share a little bit about your warehousing? It seems like you you’re pretty big now. So do you work with like, third party logistics? Do you have your own warehouse and workers? Also wanted to know about your team, but maybe I’ll ask that afterwards?

Will Nitze of IQBAR  

Yeah, I mean, we’ve done a bunch of different types of warehouse setups, we’ve worked with three PLS, we currently operate our own warehouse. Just because we want more control over how things are kitted together and shipped out. And I want to be able to reach a person in the warehouse and change something or rush deliver something or we had enough headaches with a third party, where we just kind of determined we have to bring it under our own wing. Similar deal with supply chain, same deal. We know by all our own ingredients, everything. So again, like like, like everything else we’ve talked about, there are pluses and minuses. Now you have to hire people, and now make sure they’re busy. And you got to find the space and, you know, blah, blah, blah. But I would definitely say it was worth it.

Sushant Misra  

How big is your team? No.

Will Nitze of IQBAR  

So pretty small. We’re about 10 people,

Sushant Misra  

including the warehouse helper.

Will Nitze of IQBAR  

Yeah, I mean, there’s three folks the warehouse, I think with them or though I’ve been vehicle. Okay.

Sushant Misra  

Now, we’re going to move on to the rapid fire segment, where I’m going to ask you a few questions, and you have to answer them in one word, or as few words as possible. So the first one is, do you have any book recommendations for entrepreneurs or business professionals in 2022? And while I do,

Will Nitze of IQBAR  

do there’s just one book I read recently, I had already read it before I reread it called Traction. It’s my my all time favorite business book. Why? It’s just very like prescriptive it just tells you what What to do how to do it? And why it’s a good idea to do that. It’s there’s there’s very little fluff in it, like many business books have.

Sushant Misra  

And you thought you were able to apply some of those that information in your business.

Will Nitze of IQBAR  

I mean, it’s a it’s it’s a longer term scope in terms of like how it’s hard to implement it, it takes a long time to implement it. But yeah, I mean, certainly it’s changed the way I think about making investments in you know, advertising or entering new markets or things like that.

Sushant Misra  

An innovative product or idea in the current ecommerce retail or tech landscape that you feel excited about.

Will Nitze of IQBAR  

E commerce tech, or what was the third one?

Sushant Misra  

innovative product or idea and ecommerce retailer technology?

Will Nitze of IQBAR  

Um, I think I mean, to come back to SMS, there’s just one other brand that I think does SMS really well, it it’s funny, it’s like, people are obsessed with things that are automated and tech enabled and infinitely scalable. But from our perspective, it seems like they actually have a team of people who text, SMS, respond to people. And on the face of it, it seems incredibly unscalable. But I think I you know, I don’t know I’m not done. But I think what they found is its net net on the whole, it’s, it’s actually a really good idea because it generates more purchases quicker, more loyalty, and things like that. So it’s a product actually sort of the opposite of a high tech thing I’m excited about.

Sushant Misra  

Is it a product with a method or

Will Nitze of IQBAR  

something? Yeah, it’s a it’s a consumer packaged goods company,

Sushant Misra  

a business or productivity tool or software that you would recommend or a productivity tip?

Will Nitze of IQBAR  

Oh, to get one. I wish I use more productivity tips. Yeah, I would say this is not like, and I’m certainly not the inventor of this idea. But just minimizing me like carving out, I’m still very much a practitioner, like I do things. I don’t just manage I do a lot in the business. And carving out like a half a day, or even a full day to just do one thing is just wildly more productive than doing that over four days. And so that to the extent that you can just sort of do sprints personal Sprint’s on things, and block off large chunks to your calendar. For me, that’s that’s been helpful.

Sushant Misra  

Do you have a mentor or advisor that helps you just manage your, like your self as an entrepreneur, become more effective as an entrepreneur? Or are you pretty much on your own?

Will Nitze of IQBAR  

No idea. We have investors and advisors and there are a few that have been really, really great. Um, but that, you know, they can give high level advice. You ultimately have to be your own teacher or, you know, your experiences have to be your teacher, I’ve found like, no one can really if you’re relying on other people’s advice, you’re, you’re kind of doomed I think you need to soak up knowledge and experiencial know how really rapidly and pretty much constantly such that you’re your own mentor in a weird kind of a way like you now could be a mentor to you six months ago. Because a zillion people will give you advice. And in my experience, the best entrepreneurs listen to all of it, throw away 70% of it and utilize 30% But that’s on you. You got to be smart and capable enough to do that math.

Sushant Misra  

Appear entrepreneur or business person whom you look up to or someone who inspires you.

Will Nitze of IQBAR  

I’m in certainly like the cookie cutter answers like Elon Musk or I can’t help but also be, you know, enamored with people doing just like crazy cool moonshot type product out projects. I think one of my probably my second favorite business book of all time was Shoe Dog by Phil, Phil Knight, the founder of Nike. And I don’t know, it’s just very relatable, like, she had no idea what he was doing. And he just sort of like bumbled along and figured it out step by step. And he didn’t know who to hires. We just hired two lawyers, because he thought they could generally figure stuff out. And there was no venture capital at times, he had to finance it in a really creative way to obviously a more old school startup model, because it’s been around forever. But that’s probably my favorite story of the starting of a company.

Sushant Misra  

And last question, what, what’s next for you? What? What is the end game for? For your business? Like, do you think about, you know, an exit strategy, or, you know, just continuing to grow the business?

Will Nitze of IQBAR  

I think you do, whatever it is the smartest thing to do, which is, you know, at this point in time, grow the business, launch new product lines, be successful, where you’re already selling, you know, try and build a great business. But I think it’s sort of silly when people are, you know, they say like, I’m, they reduce optionality for themselves. So yeah, I think at some point, ideally, the goal would be to be acquired, I don’t know, if we’re gonna go public or anything like that. I don’t think we’re gonna, I don’t think this will be my life’s work over the next four decades or whatever. But that how long that journey goes, and all the nitty gritty details are still very much on the table. But you know, I kind of take make a goal for the next 12 months, which is double the business. And so if you double the business, good things are gonna happen. You know, maybe that’s good things, or people try to buy you and maybe you entertain that. And maybe you don’t, because you think you can double the year after that. To sort of take it year by year is my mantra. Perfect.

Sushant Misra  

Thank you so much. Well, so that was those were all the questions that I had today. Really enjoyed speaking with you. Thank you so much for your time and sharing all the great advice, your startup entrepreneurial story. So yeah, thank you so much, again for joining Trep talks.

Will Nitze of IQBAR  

Yeah, thanks for having me.